Abbey Laboratories Pty Ltd v Virbac [2025] FCA 1427 | Case summary

(a) costs be determined by a Registrar of the Court on a lump sum basis in accordance with the procedures specified in the Federal Court Costs Practice Note (GPN-Costs) (Costs Practice Note);

(b) the Respondent/Cross-Claimant file and serve its material in support of lump sum costs claim in accordance with paras 4.10 - 4.12 of the Costs Practice Note within 40 days of the date of these Orders;

(c) within 21 days of the Respondent/Cross-Claimant's service of its Costs Summary, the Applicant/Cross-Respondents file and serve any Costs Response in accordance with paras 4.13-4.14 of the Costs Practice Note; and

(d) the Registrar be directed pursuant to r 1.37 of the Federal Court Rules 2011 (Cth) to determine the quantum of the lump sum for costs payable in such manner as he or she deems fit including, if thought appropriate, on the papers.

In Abbey Laboratories Pty Ltd v Virbac (Australia) Pty Ltd (No 3) [2025] FCA 1179 (the Principal Judgment) at [220], I expressed the preliminary view that Virbac is entitled to its costs of the proceedings, and I set a timetable for affidavits and written submissions on the question of costs, which I anticipated deciding on the papers. Defined terms used in the Principal Judgment have the same meaning in this judgment.
Virbac seeks an order for costs, to be assessed on a lump sum basis if not agreed. Abbey submits that the order for costs in Virbac's favour should be discounted in two ways: first, by 17% in view of the fact that I found claims 19, 20 and 21 of the Patent to be invalid (and 17% represents three out of the seventeen claims asserted by Virbac against Abbey); and second, in relation to Abbey's costs of proving publication and ascertainment of the EE Injection Data Sheet and EE Injection Label as elements of its case on alleged lack of an inventive step, by reason of Virbac not having admitted certain facts set out in notices to admit issued by Abbey. Abbey also seeks an order expressly preserving the effect of costs orders already made in the proceedings, but I do not regard that as necessary as the costs orders which I now make are subject to costs orders already made in the proceedings. Abbey also seeks a stay of the assessment of costs.
Dealing first with Abbey's claim for a 17% discount, there is no warrant for any discount, let alone a discount in the amount contended for by Abbey. As I said in the Principal Judgment at [219], Abbey's very limited measure of success in relation to claims 19 to 21 was a pyrrhic victory for Abbey. The findings in relation to those claims had no effect on the overall result in the proceeding. Further, the issues arising specifically on claims 19 to 21 were not readily separable or significant in the context of the proceeding as a whole, and only a negligible amount of time and effort appeared to have been devoted to them. The circumstances do not warrant any apportionment of costs in relation to that issue.
Turning then to the notices to admit, r 22.03 of the Federal Court Rules 2011 (Cth) (the Rules) provides relevantly that if a party serves a notice of dispute, disputing the truth of any fact specified in a notice to admit, and the truth of that fact is proved, the party that served the notice of dispute must pay the costs of proving the truth of the fact. That rule, however, is subject to r 1.35 to the effect that the Court may make an order that is inconsistent with the Rules, and in that event the order will prevail.
In my view, it is appropriate to make an order that is inconsistent with r 22.03. Abbey's submissions refer to enquiries having to be made by Abbey's solicitors with a third party, Merial, which was the manufacturer of the relevant product, and also the Internet Archive in relation to the facts on which it sought admissions. The fact that it appeared necessary to make such enquiries in order to prove the facts sought to be admitted indicates the reasonableness of Virbac taking the position it did. The facts sought to be proved were not matters within Virbac's knowledge, and I regard it as having been reasonable for Virbac to wait and see Abbey's evidence in support of those matters before admitting them in advance of the trial. The facts concerned matters such as the ingredients of certain Merial products or involved matters of New Zealand law. In addition, when Virbac served a notice to dispute on 4 July 2024, it also sent a letter explaining the basis of Virbac's non-admission. One of the matters referred to was that the EE Injection Data Sheet, which was defined in the notice to admit, referred to a different product on pages 2-6 (being the Eclipse Pour On product) compared to page 1 (relating to the EE Injection product). After receiving Abbey's evidence in chief, Virbac decided that it would not contest the relevant facts. That strikes me as a justifiable and proper approach for Virbac to have taken. While I accept that proof of the relevant facts has occasioned considerable costs on the part of Abbey, I do not regard it as appropriate either to make special provision for those costs in favour of Abbey or to apply the general rule in r 22.03.
As to Abbey's claim for a stay of the costs assessment, I do not regard that as justified. There is no suggestion that Virbac would not readily be able to repay any costs agreed or quantified. In the event that Abbey's appeal is successful and the costs orders are set aside or varied, it would be open to the Court to make a costs order in favour of Abbey to compensate it for any costs that may have been thrown away by Abbey having been put to the expense of the relatively quick process of quantifying the lump sum order for costs. I therefore reject Abbey's claim for a stay.

Abbey Laboratories Pty Ltd v Virbac

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Judgment (5 paragraphs)

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