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[2018] FCAFC 112
mixed. The appellant is to pay 70% of the respondents' costs of the appeal (including the notice of contention) and the cross-appeal, to be taxed if not agreed.
1 cited instrument linked from this judgment.
After winning most but not all points in a trade mark battle on appeal, the respondents asked for their full legal costs to be paid by the loser on a higher 'indemnity' rate because the other side had turned down two offers to settle. The judges said no to the higher rate because the offers asked for too much - like forcing a name change that the court case itself wouldn't have required - and the loser had good reasons to think it could win some points. But the winner still got most of their costs: the loser has to pay 70% of them at the normal rate.
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2,634 words · generated 24/04/2026
The underlying dispute concerned trade mark rights in the word "Anchorage" and related phrases in Australia and other jurisdictions. Anchorage Capital Partners Pty Limited (the appellant) had registered the mark ANCHORAGE CAPITAL PARTNERS in Australia. The respondents, ACPA Pty Ltd and Anchorage Capital Group LLC, had applied to register ANCHORAGE, ANCHORAGE CAPITAL and ANCHORAGE CAPITAL GROUP. At first instance the primary judge found infringement by the second respondent, ordered cancellation of the appellant's registration, and awarded indemnity costs against the appellant from 18 June 2014 onward. On appeal the Full Court in [2018] FCAFC 6 allowed the appeal in part, overturned the general indemnity costs order from 18 June 2014, found that the second respondent had infringed but upheld certain defences, and dealt with rectification and ownership issues. The respondents succeeded on their cross-appeal in part.
Following delivery of those substantive reasons on 2 February 2018, the Court directed the parties to file written submissions on costs. The respondents sought indemnity costs under r 40.02 of the Federal Court Rules 2011 (Cth), arguing that the appellant's rejection of two settlement offers made in July 2016 was unreasonable. The First Offer (22 July 2016) required the appellant to allow the respondents' Australian applications to proceed to registration without opposition, assign its own registration, change its corporate and fund names to remove all "Anchorage" references (including overseas), pay $2.3 million towards first-instance costs, pay $67,000 towards appeal costs, and discontinue the appeal. The Second Offer (29 July 2016) proposed co-existence of trade mark rights in "Anchorage", "Anchorage Capital" and "Anchorage Capital Partners" across Australia, Hong Kong, Singapore and New Zealand, with the appellant paying $3 million in costs (described as a $600,000 discount) and both sides discontinuing the appeal and cross-appeal. Both letters were marked "without prejudice save as to costs" and the Second Offer was open for only a few hours on the day it was sent.
The appellant rejected both offers, contending that the name-change requirement could not be an outcome of the proceedings even if the respondents were wholly successful. In its costs submissions the appellant sought an order that it pay only 60% of the respondents' party-and-party costs to reflect its success on multiple issues. The Full Court (Nicholas, Yates and Beach JJ) determined the costs application on the papers. It refused indemnity costs, finding the rejection was not unreasonable, and instead ordered the appellant to pay 70% of the respondents' costs of the appeal (including the notice of contention) and the cross-appeal on a party-and-party basis. The reasons comprise only 24 paragraphs but address both the indemnity-costs principles and the discretionary apportionment exercise under s 43 of the Federal Court of Australia Act 1976 (Cth).
The Court began from the settled position that costs follow the event on a party-and-party basis unless there is a special or unusual feature justifying a different order (Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 at 152, cited at [5]). Indemnity costs are not awarded merely because a party receives an offer more favourable than the final result; the critical question is whether rejection was unreasonable when viewed in light of the circumstances existing at the time (Black v Lipovac (1998) 217 ALR 386 at 432; CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Ltd [2008] FCAFC 173 at [75], both cited at [6]).
Applying the non-exhaustive Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435 factors at [7], the Court found the offers did not place the appellant in a substantially better position than it achieved on appeal. There was no evidence that the costs calculations in the offers (performed on a solicitor-client basis and assuming the primary judge's indemnity costs order would stand) produced a better net costs outcome once the general indemnity costs order from 18 June 2014 was overturned at [233] and [240] of the Appeal Reasons ([14]). The proceeding was at a preliminary stage on 18 June 2014 with no discovery or evidence exchanged, and the estoppel case on which indemnity costs remained was narrow. The Court therefore concluded it was "unlikely that the appellant's costs position following the appeal is any worse than it would have been had it accepted either of the respondents' offers" ([14]).
The offers were also found not to involve "any real compromise on the respondents' part" ([16]). The First Offer required the appellant to abandon its appeal, pay more in costs than ultimately ordered, surrender rights to the "Anchorage" marks overseas, and assist the respondents to obtain Australian and foreign rights they were not entitled to as relief in the proceeding. The Second Offer, while allowing co-existence, still required a $3 million payment larger than the final costs liability and operated on terms the respondents could not have obtained at trial. At the time the offers were received, at least some grounds of appeal (particularly the "turnaround proviso" point on ownership) were "more than reasonably arguable" ([17]). Pre-litigation discussions, other settlement attempts and a statement by the appellant's chairman that the name would be changed if unsuccessful were held to have "no real bearing" on the reasonableness of rejecting the specific July 2016 terms ([15]).
On the alternative party-and-party application, the Court accepted that the respondents were substantially successful but that the appellant had succeeded on discrete, significant issues: overturning the general indemnity costs order (grounds 19–23), the second respondent's infringement (grounds 11–15), defences under ss 122(1)(a), (f), (fa) and s 124, the contention that s 88(1)(a) confers no discretion to cancel a registration, and additional offers-of-compromise arguments ([20]). These issues occupied close to half the written submissions and a significant proportion of oral argument ([21]). Citing Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 at [3] and Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53, the Court exercised its "absolute and unfettered" but judicial discretion under s 43 to award the respondents "most of their costs" with a 30% reduction, producing the 70% order ([22]–[23]). The notice of contention grounds, though largely unsuccessful, were small in compass and overlapped with the cross-appeal, so no further discrete discount was warranted ([19]).
Prior to this judgment the principles governing indemnity costs for rejected offers were well settled. Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233 identified an imprudent refusal of a compromise offer as a classic category for indemnity costs. Hazeldene's Chicken Farm supplied the six commonly-cited factors for assessing unreasonableness. Black v Lipovac and CGU Insurance emphasised that unreasonableness is not determined solely by whether the offeror ultimately obtains a better result; a broader inquiry is required. On apportionment, Firebird and Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61 confirmed that the ordinary "costs follow the event" rule may yield to partial costs orders or percentage reductions where a successful party has lost on discrete, time-consuming issues.
This judgment does not change those principles. It applies them rigorously to a factual scenario in which the offers sought relief (name change, overseas assignments, rights not available at trial) exceeding the respondents' entitlement in the proceeding. The Court reinforced that the Hazeldene factors are not exhaustive and that the "broad-ranging inquiry" contemplated by r 25.14(2) (analogously) extends to whether an offer involves "real compromise" ([8], [16]). On apportionment the decision illustrates that even where one side is "substantially successful on appeal and cross-appeal" ([2]), a 30% reduction remains available when the losing party has succeeded on issues that consumed roughly half the submissions and oral time. The 70% figure is therefore presented as an impressionistic but judicially formed apportionment rather than a mechanical split. Post-judgment, practitioners now have a Full Court example of offers being scrutinised for whether they require capitulation on matters outside the litigation's legitimate scope, and of the Court declining to treat pre-litigation statements or other settlement overtures as rendering an otherwise reasonable rejection unreasonable.
Paragraph [6]: "A well-established circumstance justifying an award of indemnity costs is an imprudent refusal of an offer to compromise… a key question is whether the offeree's refusal of the offer was 'unreasonable' when viewed in light of the circumstances existing at the time the offer was rejected."
Translation: The judges are saying that simply losing after turning down an offer does not trigger the higher indemnity rate. The question is whether, on the day you said no, a reasonable person in your position would have accepted. Later cases cannot be judged with hindsight.
Paragraph [8]: "An unsuccessful party is not liable to pay indemnity costs merely because it received an offer to settle on terms more favourable than it achieved at trial… assessment of the 'unreasonableness' of an offeree's refusal of a settlement offer is a broad-ranging inquiry that is not restricted to consideration of the extent or quantum of the compromise offered."
Translation: Even if you end up worse off, that alone does not prove you acted unreasonably. The Court will look at timing, how clear the offer was, your prospects, how much real give-and-take there was, and other surrounding circumstances. This passage directly rejects a mechanical "better off" test.
Paragraph [14]: "There is no evidence before us establishing that this is the case. The cost calculations in the respondents' letters… have been performed on a solicitor/client basis and proceed on the assumption that the primary judge's award of indemnity costs after 11pm on 18 June 2014 would not be overturned on appeal… Given the appellant's success in overturning the primary judge's general indemnity costs award from 18 June 2014, we think it is unlikely that the appellant's costs position following the appeal is any worse than it would have been had it accepted either of the respondents' offers."
Translation: The respondents' "you would have been better off" argument failed because their own offer letters assumed they would keep the full first-instance indemnity costs order. Once that order was overturned on appeal, the appellant's net costs position was not demonstrably worse. This shows offers must be calibrated to realistic appeal outcomes.
Paragraph [16]: "In all the circumstances, we are not persuaded that it was unreasonable for the appellant to reject the First or Second Offers or that either of them involved any real compromise on the respondents' part. On the contrary, the offers required the appellant to abandon their appeal, pay a larger sum of costs than they were ultimately ordered to pay, forego their rights in relation to the 'Anchorage' marks overseas and grant to the respondents… trade mark rights… which they were not entitled to obtain as relief in the proceeding."
Translation: The offers were not genuine attempts to split the difference; they were effectively demands for total surrender plus extras the Court could never have ordered. A party is entitled to reject such an offer without fear of indemnity costs. This is the clearest statement that "real compromise" is a threshold requirement.
Paragraph [23]: "Our impression, having regard to the number and significance of these issues and the time devoted to them by the parties in oral and written submissions, is that a fair apportionment is to allow a reduction of 30% of the respondents' costs…"
Translation: The judges did not undertake a line-by-line taxation. They formed a holistic view of the proportion of work attributable to the appellant's successful points and applied a round-figure discount. This approach is typical of appellate costs decisions and avoids satellite litigation.
This decision is likely to be invoked whenever a party seeks indemnity costs on the basis of rejected Calderbank or without-prejudice-save-as-to-costs letters and the offers (a) sought relief the offering party could not have obtained at trial, (b) required the offeree to surrender rights outside the jurisdiction or the scope of the pleaded dispute, or (c) were predicated on assumptions (such as retention of a first-instance indemnity costs order) that were later falsified on appeal. It will also apply where the offeree can point to reasonably arguable grounds that in fact succeeded, or where the costs calculations in the offer letters are not proved on an apples-to-apples basis with the final orders.
On apportionment, the case stands for the proposition that a percentage reduction (here 30%) is appropriate when the ultimately unsuccessful party has succeeded on a suite of discrete but significant issues that consumed roughly half the written and oral argument. Fact patterns involving trade mark infringement, rectification, ownership, multiple statutory defences and layered costs arguments are classic triggers. The judgment is especially relevant where the notice of contention or cross-appeal overlaps with the appeal proper, making issue-by-issue costs orders impractical. Because the offers were made after the appeal had been commenced but before hearing, the case also illustrates that late-stage offers must still satisfy the "real compromise" threshold even if they contain a costs discount.
Although the judgment is from 2018 and therefore post-dates many of the authorities it cites, its treatment of those authorities has become part of the orthodox line of Full Court reasoning on costs. Subsequent decisions have continued to cite Hazeldene's Chicken Farm through the lens of this case when emphasising that the inquiry is "broad-ranging" and not limited to quantum of compromise. The explicit requirement that an offer involve "real compromise" rather than total capitulation plus extraneous demands has been picked up in later single-judge and Full Court rulings dealing with IP and commercial litigation. The 70% apportionment, arrived at by reference to the proportion of submissions and hearing time, is routinely cited as an example of the judicial "impression" method endorsed in Idenix and Firebird. Courts have followed the distinction drawn at [15] that pre-litigation conduct or statements by officers do not automatically colour the reasonableness of rejecting later formal offers. The case has not been distinguished on its core propositions; rather it is treated as an application of long-standing principles to a concrete set of offers that went too far. No subsequent authority has suggested that the 30% reduction methodology was erroneous or that the Court misapplied the Re Wilcox starting point.
The judgment leaves open the precise evidentiary threshold for proving that an offer would have produced a "substantially better" costs outcome. The respondents' failure to adduce evidence beyond their own letters was fatal at [14], but the Court did not prescribe what sort of comparative costs report or expert evidence would suffice. Another open question is the weight to be given to the brevity of time allowed for acceptance; the Second Offer was open only until 5 pm on the day it was sent, yet the Court did not rest its decision on that point alone. The interaction between "real compromise" and offers that seek to resolve multi-jurisdictional disputes (Hong Kong, Singapore, New Zealand) in a single Australian proceeding remains fact-sensitive and not exhaustively defined. On apportionment, the Court used an impressionistic 30% reduction rather than a granular issue-by-issue analysis; the circumstances in which a court will refuse any apportionment despite success on discrete issues (as the respondents urged at [19]) are not closed off. Finally, the decision does not address whether an offer that is open for an unreasonably short time but otherwise contains real compromise can ever ground indemnity costs. These edges will require further litigation to sharpen. Most practitioners still under-appreciate that an offer can be "more favourable" in dollar terms yet fail the unreasonableness test if it demands concessions the offering party could never have obtained at trial; this judgment is a powerful corrective on that point.
THE COURT: 1 On 2 February 2018 we delivered our reasons for judgment in this matter (Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6, the "Appeal Reasons"). We directed the parties to file written submissions in relation to costs which they have now done. 2 The respondents seek an order under r 40.02 of the Federal Court Rules 2011 ("FCRs") that the appellant pay the respondents' costs of the appeal and cross-appeal on an indemnity basis. The respondents contend that the appellant unreasonably failed to accept the respondents' offers to settle the appeal and cross-appeal in its letters to the appellant dated 22 July 2016 ("First Offer") and 29 July 2016 ("Second Offer"). The respondents alternatively seek an order under r 40.01 of the FCRs that the appellant pay their costs of defending the appeal, and of the cross-appeal, on a party and party basis with no discount or apportionment. 3 The appellant, for its part, submits that its refusal to accept the offers was not unreasonable. It proposes orders that it pay the respondents' costs on a party and party basis but discounted by 40% to reflect its success on particular issues in the proceeding. 4 For the reasons which follow, we do not accept that the appellant's rejection of the First and Second Offers warrants an award of indemnity costs. We are not satisfied that it was unreasonable or imprudent for the appellant to reject those offers. Furthermore, in view of the extent of the issues upon which the appellant failed and the respondents succeeded, we think it is appropriate that the appellant pay 70% of the respondents' costs of the appeal and cross-appeal.
Indemnity Costs 5 Section 43 of the Federal Court of Australia Act 1976 (Cth) confers a broad discretion on the Court to award costs in proceedings. In Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151, Black CJ at 152 stated the principles applicable to a claim for indemnity costs: …it is well established that the starting point for any consideration of an application for indemnity costs is that in the ordinary case costs will follow the event and the Court will order the unsuccessful party to pay the costs of the successful party, on a party and party basis, a basis which will fall short of complete indemnity. Nevertheless, the Court has an absolute and unfettered jurisdiction in awarding costs, although the discretion must be exercised judicially. So indemnity costs may properly be awarded where there is some special or unusual feature in the case justifying the Court in exercising the discretion in that way. 6 A well-established circumstance justifying an award of indemnity costs is an imprudent refusal of an offer to compromise (Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233 per Sheppard J). In such cases, a key question is whether the offeree's refusal of the offer was "unreasonable" when viewed in light of the circumstances existing at the time the offer was rejected (Black v Lipovac & Ors (1998) 217 ALR 386 at 432 per Miles, Heerey and Madgwick JJ; CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Ltd [2008] FCAFC 173 at [75] per Moore, Finn and Jessup JJ). 7 The circumstances to be taken into account in determining whether rejection of an offer was "unreasonable" cannot be stated exhaustively but may include, for example: (a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d) the offeree's prospects of success, assessed as at the date of the offer; (e) the clarity with which the terms of the offer were expressed; and (f) whether the offer foreshadowed an application for an indemnity costs in the event of the offeree rejecting it. (Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435 at [25] per Warren CJ, Maxwell P and Harper AJA; Beling v Sixty International S.A. (No 2) [2015] FCA 355 at [25] per Mortimer J). 8 An unsuccessful party is not liable to pay indemnity costs merely because it received an offer to settle on terms more favourable than it achieved at trial and rejected that offer (CGU Insurance at [75]; Black at [217]-[218]). As we observed in the Appeal Reasons, albeit in the context of r 25.14(2) of the FCRs, assessment of the "unreasonableness" of an offeree's refusal of a settlement offer is a broad-ranging inquiry that is not restricted to consideration of the extent or quantum of the compromise offered. 9 Turning to the present case, the respondents' First Offer appeared in a letter dated 22 July 2016 from the respondents' solicitors to the appellant's solicitors, marked "without prejudice save as to costs". The offer was in the following terms: Our clients are prepared to explore settlement on the following terms: 1. Our client pursues its Australian trade mark applications for ANCHORAGE (No 1624500), ANCHORAGE CAPITAL (No 1624502) and ANCHORAGE CAPITAL GROUP (No 1624503) (the Australian Marks) to registration; 2. Your client agrees not to oppose or challenge the Australian Marks, and provides all necessary consents to allow them to proceed to grant; 3. Your client assigns to Anchorage Capital Group LLC its trade registration for ANCHORAGE CAPITAL PARTNERS (No 1425921) at your client's own expense; 4. Your client agrees to change its name, and the name of its funds, at your client's own expense, such that they do not include any of the following words (and your client agrees to immediately cease and forever refrain from using the following words in Australia or elsewhere, including to assign any trade mark applications or registrations for or including of Australia to Anchorage Capital Group LLC) ANCHORAGE, ANCHORAGE CAPITAL, ANCHORAGE CAPITAL GROUP, ANCHORAGE CAPITAL PARTNERS [and 10 other phrases incorporating the word "Anchorage"] 5. Your client pay our clients $2,300,000 on account of costs incurred at first instance. This sum represents our clients' costs to date, with around a $1 million discount reflecting the benefit of resolution at this time and in recognition of your client changing its name. 6. Your client pay our client $67,000 representing approximately 50% of their costs incurred to date in relation to the Appeal/Cross-Appeal; and 7. Your client discontinues its Appeal and our clients discontinue their Cross-Appeal. 10 The letter went on to suggest that the above terms would need to be reduced into a formal written agreement. The offer was open for acceptance until 4pm on 28 July 2016. 11 On 27 July 2016, the appellant's solicitors sent a letter to the respondents' solicitors rejecting the First Offer and proposing a counter offer. In this letter, the appellant noted that the effect of the First Offer was to require the appellant to change its name and that this "was not an outcome which can follow in the proceedings, even if your clients are wholly successful". 12 On 29 July 2016, the respondents' solicitors, in a letter marked "without prejudice save as to costs", proposed the Second Offer. This offer involved the parties settling the proceedings on the basis that they would both enjoy co-existing trade mark rights in "Anchorage", "Anchorage Capital" and "Anchorage Capital Partners" in Australia, Hong Kong, Singapore and New Zealand and the appellant would pay $3 million in costs (said to be a discount of approximately $600,000 on the respondents' actual costs) to the respondents. The offer was subject to the parties agreeing on contractual terms acceptable to the respondents. It was open for acceptance at 5pm the same day the letter was sent. 13 The respondents submit that the appellant's rejection of these offers was unreasonable because each of them offered the appellant a better outcome than it obtained on appeal. In relation to the First Offer, they say the appellant was offered a substantial reduction in costs and the appellant did not achieve any better position in relation to its trade marks on appeal. In relation to the Second Offer, they say the appellant was offered a substantial costs reduction and, in view of the respondents' success on their cross-appeal, the appellant is in a materially worse position vis-à-vis its trade marks following the appeal. 14 We should say at this point that we do not accept the respondents' submission that the appellant would have been in a substantially better position in relation to costs had it accepted either the First or Second Offer instead of proceeding with the appeal. There is no evidence before us establishing that this is the case. The cost calculations in the respondents' letters of 22 and 29 July 2016 have been performed on a solicitor/client basis and proceed on the assumption that the primary judge's award of indemnity costs after 11pm on 18 June 2014 would not be overturned on appeal. As we observed at [233] and [240] of the Appeal Reasons, the proceeding as at 18 June 2014 was at a very preliminary stage. The parties had not given discovery, had not exchanged written evidence, and the trial in December 2014 and January and February 2015 had not commenced. It is apparent from the primary judge's reasons that the appellant's estoppel case (in respect of which an indemnity cost order remains) was limited to three purported acts of acquiescence and we do not accept that this issue is likely to account for a significant proportion of the respondents' first instance costs. Given the appellant's success in overturning the primary judge's general indemnity costs award from 18 June 2014, we think it is unlikely that the appellant's costs position following the appeal is any worse than it would have been had it accepted either of the respondents' offers. 15 The respondents also submitted that the appellant's refusal to accept the First and Second Offers should be assessed having regard to other contextual factors, including pre-litigation discussions between the parties, the respondents' other settlement attempts and a statement by the appellant's chairman, Mr Phil Cave, that he would take steps to change the appellant's name if the appellant was unsuccessful in the proceeding. We do not think these factors have any real bearing on whether or not it was unreasonable for the appellant not to accept the particular terms of the First or Second Offers at the time those offers were made. The fact that the appellant's chairman gave the evidence that he gave in late 2014 and the fact that there were pre-litigation discussions and other settlement approaches between the parties does not make it unreasonable for the appellant to reject the particular terms offered to it in July 2016. 16 In all the circumstances, we are not persuaded that it was unreasonable for the appellant to reject the First or Second Offers or that either of them involved any real compromise on the respondents' part. On the contrary, the offers required the appellant to abandon their appeal, pay a larger sum of costs than they were ultimately ordered to pay, forego their rights in relation to the "Anchorage" marks overseas and grant to the respondents, or assist the respondents in obtaining, trade mark rights in Australia, Singapore, Hong Kong and New Zealand which they were not entitled to obtain as relief in the proceeding. We agree with the appellant's submission that, in many respects, the appellant is in a better position following the appeal than it would have been had it accepted either offer. 17 Furthermore, it seems to us that, at the time the offers were received, at least some of the grounds of appeal relied upon by the appellant were more than reasonably arguable. This is certainly true of the appellant's case that, in considering the question of ownership, the primary judge did not appear to have regard to the "turnaround proviso" when determining whether the second respondent was the first to use the registered marks (or other substantially identical marks) in Australia in respect of the registered services. 18 In the result, we are not satisfied that it was unreasonable for the appellant to refuse the respondents' offers and the appellant's rejection of them does not warrant an award of indemnity costs.
Party and Party Costs 19 The respondents alternatively seek their costs on a party and party basis. They contend that, given their overall success in the appeal and cross-appeal, it is not appropriate to apportion costs on the basis of particular issues in the proceeding (cf NV Sumatra Tobacco Trading v British American Tobacco Services [2011] FCA 1295 at [17]). The respondents also observe that the grounds raised in the notice of contention (upon which they were largely unsuccessful) occupied only a small portion of the appeal and overlapped with those addressed in the cross appeal (cf Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment (No 2) [2017] FCAFC 158 at [12]). They submit that costs should not be apportioned or reduced in those circumstances. 20 The appellant, by contrast, observes that it was successful in its appeal against the primary judge's indemnity cost order (grounds 19 to 23 of the amended notice of appeal) and that a significant number of other issues in the appeal and cross appeal were determined in the appellant's favour. These included: (a) the second respondent's infringement of the registered marks (grounds 11 to 15 of the amended notice of appeal); (b) the second respondent's defences under ss 122(1)(a),(f) and (fa) (grounds 16 to 18 of the amended notice of appeal); (c) the second respondent's defences under s 124 (ground 3(a) of the amended notice of appeal); (d) the respondents' contention that s 88(1)(a) does not confer a discretion on the Court to cancel a trade mark registration (ground 1 of the notice of contention); and (e) the respondents' contention that indemnity costs should be ordered on the basis of additional offers of compromise (ground 4 of the notice of contention and ground 5 of the notice of cross-appeal). 21 The appellant estimates that close to half of the parties' written submissions and a significant proportion of the parties' oral submissions addressed issues determined in the appellant's favour. 22 As we have noted above, the Court has an absolute and unfettered jurisdiction in awarding costs, although the discretion must be exercised judicially. The Full Court recently observed in Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 at [3]: 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) 247 FCR 61 at [305] per Bennett, Besanko and Beach JJ). The ordinary rule is that costs follow the event, although a successful party may be awarded less than its costs, or costs may be apportioned, based upon success on the issues (Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 327 ALR 192; [2015] HCA 53 at [6] per French CJ, Kiefel, Nettle and Gordon JJ; Les Laboratoires Servier at [297] to [298] and [303]). 23 We are of the view that the respondents should have most of their costs but that there should be a percentage reduction to take account of the issues upon which the respondents failed and the appellant succeeded. Our impression, having regard to the number and significance of these issues and the time devoted to them by the parties in oral and written submissions, is that a fair apportionment is to allow a reduction of 30% of the respondents' costs of the appeal (including the notice of contention) and cross-appeal. 24 There will be orders accordingly. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Nicholas, Yates and Beach.
Anchorage Capital Partners Pty Limited
ACPA Pty Ltd
(1998) 217 ALR 386
(1993) 46 FCR 225
(2005) 13 VR 435
(1996) 72 FCR 151
(2016) 247 FCR 61
(2015) 327 ALR 192
The appellant is to pay 70% of the respondents' costs of the appeal (including the notice of contention) and the cross-appeal, to be taxed if not agreed.