Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 12)
[2025] FCA 210
•19 March 2025
FEDERAL COURT OF AUSTRALIA
Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 12) [2025] FCA 210
File number(s): NSD 200 of 2019 Judgment of: BURLEY J Date of judgment: 19 March 2025 Catchwords: COSTS – costs of interlocutory application – costs reserved after hearing – whether interlocutory application was dominant reason for vacation of final hearing dates – effect of delay in making interlocutory application – each party to bear own costs. Legislation: Federal Court of Australia Act 1976 (Cth) ss 37M, 43 Cases cited: Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337
Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; 247 FCR 61
SARB Management Group Pty Ltd T/A Database Consultants Australia v Vehicle Monitoring Systems Pty Limited [2024] FCAFC 6; 176 IPR 391
Vehicle Monitoring Systems Pty Limited v Sarb Management Group Pty Ltd (trading as Database Consultants Australia) (No 2) [2013] FCA 395; 101 IPR 496
Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia [2020] FCA 6; 149 IPR 370
Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 2) [2020] FCA 447; 150 IPR 554
Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 3) [2020] FCA 471; 151 IPR 1
Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 4) [2020] FCA 819
Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 5) [2020] FCA 1243
Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 8) [2023] FCA 182
Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Number of paragraphs: 18 Date of last submission/s: 24 June 2024 Counsel for the Applicant: Ms P L Arcus with Ms J P S Ambikapathy Solicitor for the Applicant: Johnson Winter Slattery Counsel for the First Respondent: Ms C Cunliffe Solicitor for the First Respondent: Norton Rose Fulbright ORDERS
NSD 200 of 2019 BETWEEN: VEHICLE MONITORING SYSTEMS PTY LIMITED ACN 107 396 136
Applicant
AND: SARB MANAGEMENT GROUP PTY LTD TRADING AS DATABASE CONSULTANTS AUSTRALIA ACN 106 549 722
First Respondent
CITY OF MELBOURNE
Second Respondent
ORDER MADE BY:
BURLEY J
DATE OF ORDER:
19 MARCH 2025
THE COURT ORDERS THAT:
1.Each party bear its own costs, of the interlocutory application filed on 13 July 2020.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BURLEY J:
In the present application the parties dispute who should bear the costs of an interlocutory application that was concluded nearly five years ago.
The proceedings were commenced on 14 February 2019 and allocated to the docket of Yates J. On 13 July 2020, SARB Management Group Pty Ltd (SARB) filed an interlocutory application seeking orders that the proceedings be allocated to a docket of a judge other than Yates J and that costs of the interlocutory application be costs in the proceeding. The recusal application succeeded over the opposition of the applicant in the proceeding, Vehicle Monitoring Systems Pty Limited (VMS). Yates J determined that the costs of the application should be reserved; Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 5) [2020] FCA 1243 at [57] (Yates J) (recusal judgment).
The proceedings were then allocated to the docket of Besanko J, who heard the matter in March and April 2021 and subsequently determined that a number of the patent infringement allegations advanced by VMS succeeded; Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 8) [2023] FCA 182 at [670] (trial judgment). Besanko J dismissed a cross-claim alleging that the patents in suit were invalid; trial judgment at [671].
The respondents appealed from that decision and on 9 February 2024 the Full Court delivered its reasons, allowing the appeal in part but nonetheless finding that some valid claims had been infringed; SARB Management Group Pty Ltd T/A Database Consultants Australia v Vehicle Monitoring Systems Pty Limited [2024] FCAFC 6; 176 IPR 391 (Burley, Jackson and Downes JJ).
The question of the remaining reserved costs was allocated to my docket, Yates J having retired from the Court in December 2024. The parties have filed written submissions and agree that the dispute can be resolved on the papers.
In the recusal judgment, Yates J concluded:
57.I will make an order that the proceeding be allocated to the docket of a different Judge. SARB seeks an order that the costs of its interlocutory application be costs in the proceeding. At the present time, I am not persuaded that that order is appropriate. VMS is justified in expressing its concern that an order re-allocating the proceeding may jeopardise the presently listed hearing dates. There may be other consequences bearing upon costs. As the immediate consequences of allocating the proceeding to the docket of a different Judge are not presently known, I propose to reserve the question of costs.
SARB now submits that having succeeded in its recusal application, costs should follow the event and VMS should pay its costs of the application, VMS having opposed the application. It submits that following the recusal orders the matter was transferred to the docket of Besanko J and the matter proceeded smoothly. Although the hearing dates in October 2020 were vacated, it submits that this was not as a result of the transfer to another docket, but rather because of factors outside of the parties’ control, including the COVID-19 pandemic.
VMS contends each party should bear its own costs of the recusal application. It submits that it suffered prejudice as a result of the application because the recusal contributed to the vacation of the hearing dates, that the ultimate outcome of the proceedings was a “mixed result” and that the complexities of the costs outcome at trial are such that an order that each party bear its own costs would save time and costs, accordingly being within s 37M of the Federal Court of Australia Act 1976 (Cth). It also submits that the ordinary position that costs follow the event should not apply, because the late-brought recusal application warranted opposition, VMS submitting it acted as a useful contradictor to assist the Court in considering the question raised.
VMS relies on two affidavits sworn 15 September 2020 and 16 December 2020, by its solicitor, Andreas Piesiewicz. SARB relies on an affidavit affirmed 15 September 2020, by its solicitor, Cameron Harvey.
There is a dispute between the parties as to whether one consequence of the recusal order was the vacation of the hearing date. Within a month of judgment in the recusal application, SARB sought to vacate the hearing date and VMS sought to retain it. The evidence does not indicate that the reason Besanko J vacated the hearing was the transfer of the matter to his docket, or that VMS otherwise suffered prejudice as a result of the recusal. Although in his affidavit of 15 September 2020, Mr Piesiewicz refers to the fact that members of VMS’s legal team were “distracted” from evidence preparation by the filing of the recusal application, this was in the context of his client resisting the vacation of the hearing date and contending that VMS was able to be ready to proceed with the original trial date. Nothing in the materials suggest that the recusal application led to the application to vacate, the dominating reason for the application, and apparently its grant, being the logistical consequences flowing from the civic response to the COVID-19 pandemic.
SARB contends that VMS should bear the costs of the recusal application because VMS was active in its opposition to the application and nonetheless the application succeeded. However, at the same time it correctly concedes that no amount of consent could have avoided the need for a hearing on the application, the question of recusal being one for the Court. As Gleeson CJ, McHugh, Gummow and Hayne JJ observed in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337 at [19] (Callinan J agreeing at [182]):
Judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong. They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause. Judges do not choose their cases; and litigants do not choose their judges. If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case.
In this regard, it was appropriate for VMS to act as a contradictor, drawing to the Court’s attention matters relevant to the background to the application.
Indeed, in the recusal judgment some attention was directed towards the lateness of the application. It was noted at [1] that the proceeding had been under case management since its commencement on 14 February 2019. In the course of that management, his Honour heard and determined several interlocutory disputes between the parties: Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia [2020] FCA 6; 149 IPR 370 (application for permanent stay); Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 2) [2020] FCA 447; 150 IPR 554 (separation of determination of liability and quantum); Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 3) [2020] FCA 471; 151 IPR 1 (application to set aside a subpoena); Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 4) [2020] FCA 819 (application for non-standard discovery).
His Honour records at [3] that at the first case management hearing held on 18 March 2019, junior counsel for SARB raised the possibility that such an application might be made, but no formal steps were taken in that regard until 13 July 2020, when the present interlocutory application was filed and well after the proceedings had been listed for final hearing in October 2020. VMS’ opposition to the interlocutory application included complaint that SARB had been dilatory in bringing the application. His Honour notes that the basis for the recusal application was that he had in his decision in Vehicle Monitoring Systems Pty Limited v Sarb Management Group Pty Ltd (trading as Database Consultants Australia) (No 2) [2013] FCA 395; 101 IPR 496, which he called the 2013 reasons, made findings going to the construction of a patent, the complete specification of which bore a close correlation to the specification of the patents in suit at issue in the proceedings then before him (recusal judgment at [13]). After analysing the issues in the then present case, his Honour concluded that they were likely to bring into question the correctness of critical findings of fact or of mixed fact and law that he made in the 2013 proceedings (recusal judgment at [29]) such that there might be a genuine perception, reasonably held, that he might not consider those questions afresh with a mind open to persuasion (recusal judgment at [49]).
Having reached this conclusion Yates J added:
52.I am troubled by the fact that SARB’s interlocutory application has only been brought recently. It has sought to justify the timing of its application by arguing that an earlier application would have been premature (for example, VMS’s estoppel allegations were only pleaded, and Mr Spirovski’s affidavit was only filed, earlier this year). Even so, I think it was plainly on the cards that, to the extent that there was an overlap of issues between the first proceeding and this proceeding, VMS would appeal, in this proceeding, to the earlier findings I had made in the 2013 reasons. SARB must have known that its response to that appeal would be substantially along the lines of the arguments it now raises.
53.This prospect was sufficiently in SARB’s contemplation at the first case management hearing on 18 March 2019 for it to foreshadow the bringing of such an application. Indeed, at that time the substance of the submissions it was proposing to advance at the hearing of its interlocutory application for a permanent stay of this proceeding (leading to VMS (No 1)) as to the close similarity between the complete specifications of the 354 patent, 110 patent and 924 patent, must have been top of mind. And yet it was some five months after I had listed the hearing of the proceeding before me, and some 16 months after the first case management hearing, that SARB filed its present interlocutory application.
54.In my view, SARB could have, and should have, moved much earlier than it did. There was no need for it to await the completion of the timetabling steps of the orders I made on 14 February 2020 (designed to bring the proceeding into readiness for hearing) before raising with the Court again the concerns that it obviously entertained. There was ample opportunity for SARB to air those concerns more fully after judgment was given in VMS (No 1) on 10 January 2020. Indeed, it should have done so at the first case management hearing after that judgment was given, when I expressed my determination to have the proceeding listed for hearing as soon as reasonably possible.
55.That said, I do not think that these observations warrant a different decision on my part. Having come to the decision which I think should be made, I do not believe that I should resile from giving effect to it simply because of the delay on SARB’s part to which I have referred. VMS and SARB are fierce competitors and no strangers to litigation against each other in this Court in respect of their respective parking overstay systems. The interests of justice will certainly not be served if the ultimate result of the present proceeding, which is a further episode in the disputes between them, is tainted by an apprehension of bias on the part of the Court.
His Honour rejected a submission made on behalf of VMS that SARB had waived its entitlement to bring the present application (recusal judgment at [56]). He then reserved the question of costs, noting the points set out in [57] of the recusal judgment, which is quoted in [4] above.
The discretion regarding the allocation of costs is well established. Section 43 of the Federal Court of Australia Act 1976 (Cth) gives the Court a wide discretion in awarding costs. The exercise of the Court's discretion is not without principles or practices; it must be exercised judicially; Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; 247 FCR 61 at [305].
In the present case, my view is that the correct outcome should be that there be no order as to costs. Although SARB succeeded in the recusal application, the application was brought very late. A hearing before the Court was necessary, regardless of VMS’ attitude to it. VMS was entitled to appraise the Court of its legitimate concerns regarding the timing of the application against the background of the proceedings as a whole. Ultimately, Yates J decided that he should recuse himself, however, he considered that the issues that gave rise to the application could and should have been brought before the Court much earlier. I have no doubt that by leaving it so late, SARB caused VMS to be distracted at a point in time when it could have otherwise been preparing for the final hearing. Although I do not consider it appropriate that SARB pay VMS’ costs of the recusal application, the circumstances are such that I do not consider that SARB’s costs should fall to be paid by VMS. Each party should bear its own costs.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley. Associate:
Dated: 19 March 2025
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