Consideration
9 While Edgetec has succeeded in these proceedings, I do not consider the position taken by the respondents in their defence of the proceedings was so "groundless", "fanciful" or "hopeless" (to use some well known descriptors) that they were completely unjustified in pursuing that defence. Two examples will suffice. First, the side by side comparison of a trade mark and a sign to determine whether they are substantially identical is not an empirical process. Very often it is a matter of degree. That was particularly so in this case when it came to the three domain names: see at [2012] FCA 281 at [19]. Similar considerations apply to the comparison between the trade mark use of Edgetec's marks on Zippykerb's website and the countervailing non-trade mark use of them elsewhere on that website: see at [2012] FCA 281 at [39]. In other words, I do not consider the respondent's failure in defending these proceedings fairly leads to the conclusion that their defence was so weak that they were acting unreasonably in pursuing it.
10 On the items of conduct identified by Edgetec's counsel, three observations are pertinent. First, the terms of the interlocutory injunction sought and obtained by Edgetec in March 2011 were expressed to prevent the respondents from "infringing" Edgetec's trade marks. With the benefit of hindsight, the difficulties with the terms of that injunction are obvious. It contained within it a premise that was the main point of contention in the whole proceedings, viz whether or not the respondents were, indeed, infringing Edgetec's trade marks. In other words, it presumed at the interlocutory stage success at the final judgment stage in the proceedings. To be effective, it should have been directed to specific identifiable conduct, for example, restraining the use of particular words or signs on Zippykerb's website. In this respect, the observations of Callinan J in Members of the Yorta Yorta Aboriginal Community v State of Victoria (2002) 214 CLR 422; [2002] HCA 58 are worth mentioning (at [176]):
Orders of courts, whether made in equity or in common law, to be enforceable need to be framed with clarity. Parties placed under curial obligations to do, or abstain from doing acts need to know with certainty what their obligations are. … Furthermore, a defendant will ordinarily not be in contempt for failure to comply with an ambiguous and imprecise undertaking, and by analogy, order.
(Footnotes and case references omitted)
11 Secondly, while the apparent conflict between the statement made by the sole director of Zippykerb about the Zippykerb website and the position subsequently taken in Zippykerb's pleadings is troubling, without conducting an inquiry to determine what the true position is, I do not consider it is appropriate for me to rely upon that apparent conflict in assessing whether to make this order for indemnity costs. Any number of satisfactory explanations may be provided for it, including mistake, or forensic choice.
12 Finally, it is significant, in my view, that Edgetec has produced no evidence that it was required to incur any significant additional costs as a result of any of the items of conduct identified by it, over and above those that it would have incurred in the ordinary course of pursuing these proceedings. On this aspect, it is well to recall that the function of any costs order is compensatory, rather than punitive: see Latoudis v Casey (1990) 170 CLR 534 at 543 per Mason CJ, 563 per Toohey J and 567 per McHugh J. This applies equally to an award of indemnity costs: see Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [44] per Gaudron and Gummow JJ.