Glueck v Stang

REASONS FOR JUDGMENT 1 The applicant (Mr Glueck) commenced this proceeding on 6 June 2007 against Maurice Stang as respondent, Stephen Kritzler as second respondent, Novapharm Research (Australia) Pty Limited as third respondent, Hyo Sang Kwon as fourth respondent, Carol Ditterick as the fifth respondent and Aeris Technologies Limited as sixth respondent. There was a discontinuance against the fourth and sixth respondents. Initially, Rhodes Legal represented Mr Glueck. The proceeding relates to a patent held by the third respondent (Novapharm). 2 There was a hearing on 18 February 2008 of various motions and that led to a judgment being given on 27 February 2008: see Glueck v Stang and Others [2008] FCA 148. Order 6 made on 27 February 2008 was that Mr Glueck pay the costs of the first, second, third and fifth respondents of the three motions. 3 On 12 March 2008 NOT Lawyers came to represent Mr Glueck in place of Rhodes Legal. On 14 March 2008 Mr Glueck filed a notice of motion seeking leave to file an amended application and an amended statement of claim. On 7 April 2008 the costs that Mr Glueck was ordered to pay by Order 6 made on 27 February 2008 were quantified at $33,000 and they were ordered to be paid by 9 May 2008. 4 On 21 May 2008 NOT Lawyers ceased to represent Mr Glueck and he has been unrepresented since then. On 30 May 2008 Mr Glueck filed and served an amended application and amended statement of claim. On 6 June 2008 Mr Glueck paid the costs of $33,000. 5 On 18 June 2008 Mr Glueck was given leave to file in court a further amended statement of claim against the first, second, third and fifth respondents. The document that he filed was entitled "New Amended Statement of Claim". There was also a direction that Mr Glueck file and serve particulars of the grounds of invalidity of the patent on or before 25 June 2008. On 25 June 2008 Mr Glueck served particulars of the grounds of invalidity of the patent, entitled "Response to the Court Order of 18 June 2008". 6 On 27 June 2008, the proceeding was dismissed as against the first, second and fifth respondents. In addition, it was dismissed generally in so far as it sought the relief in paragraphs 3, 4 and 5 of the amended application that had been filed on 30 May 2008, and paragraphs 2(b) and (c) of the particulars of alleged invalidity were struck out. 7 Generally speaking, since that time, the proceeding has continued simply as an application for revocation of the patent, as between Mr Glueck as applicant and Novapharm as the only remaining respondent. 8 There is no reason why the usual order should not be made that Mr Glueck pay the costs of the first, second and fifth respondents. He joined those three individuals and proceeded against them until the order was made on 27 June 2008 dismissing the proceeding as against them. They will have no ongoing role in the proceeding and it is appropriate that their costs be quantified now and that they be made payable now. 9 On 27 June 2008, following discussion between the bench and senior counsel representing Novapharm, I requested that Novapharm provide to Mr Glueck a marked‑up version of the further amended statement of claim leaving only those claims which related to the question of revocation of the patent. Spruson & Ferguson, the solicitors for Novapharm forwarded to Mr Glueck on 3 July 2008 a document purporting to meet that request. However, Mr Glueck did not consent to Novapharm's proposal and instead proposed an alternative second further amended statement of claim and a further amended application. 10 Novapharm resisted Mr Glueck's proposal and the granting of leave to him to file his documents. On 23 July 2008, after some initial opposition by Mr Glueck, he consented to orders being made to the effect that the second further amended statement of claim in the form that Spruson & Ferguson had sent to him be filed. The document was in fact filed on that date. That is the current pleading of Mr Glueck's claim. 11 The question of costs to the extent not covered by existing orders was listed for hearing and it is to these costs that the present reasons for judgment relate. 12 There is before the Court a lengthy affidavit of Simon Dudley Williams sworn 25 August 2008 annexing all debit notes issued by Spruson & Ferguson Lawyers. The evidence shows that they already allow for a reduction of 15 percent of the usual professional fees (excluding disbursements) by way of a discount in respect of work carried out on behalf of Novapharm and the other former respondents whom they represented. The evidence shows that from the commencement of the proceeding to 27 June 2008 when the proceeding was dismissed against the first, second and fifth respondents, the total amount of costs incurred (inclusive of GST) was $191,715.76. 13 This amount includes costs and disbursements the subject of the costs order made on 27 February 2008 which were quantified in a sum of $33,000 by a consent order made on 7 April 2008. The amount of costs which resulted in the figure of $33,000 was in fact, on a solicitor/client basis, $76,000 (inclusive of GST), covering the period from the date of Mr Glueck's amended notice of motion dated 25 October 2007 to 19 March 2008. If one deducts that figure of $76,000 from the amount of $191,715.76 previously mentioned, the balance, on a solicitor/client basis, is $115,715.76. This is the balance (on a solicitor/client basis) of the costs incurred by Novapharm and the first, second and fifth respondents down to 27 June 2008. If one puts to one side Novapharm on the basis that one-quarter of the costs is attributable to it, the remaining three-quarters, being $86,786.82, represents the costs of the first, second and fifth respondents, again on a solicitor/client basis. If this amount were to be notionally "taxed" on a party/party basis reducing it by one-third, the amount of party/party costs remaining would be $57,857.88. In other words, this amount represents the party/party costs of the first, second and fifth respondents other than their three quarters share of the costs covered by the order of 27 February 2008 that were quantified on 7 April 2008. 14 Mr Williams, whose affidavit shows that he has had in excess of 25 years' experience in intellectual property litigation matters generally, including taxation of costs, expresses the opinion that the amount of $57,857.88 represents a fair quantification of the party/party costs and disbursements that the first, second and fifth respondents incurred from the commencement of the proceeding to 27 June 2008 but excluding their share of the costs the subject of a costs order made on 27 February 2008 and quantified on 7 April 2008. I think that there should be an order in favour of the former first, second and fifth respondents in that amount and that the amount should be made payable now. 15 The position of Novapharm is in a way a little more complex. Mr Williams estimates that from 30 May 2008 to 23 July 2008, Novapharm has incurred total costs and disbursements (including unbilled work in progress to date) calculated on a solicitor/client basis of $22,271.65 (inclusive of GST). 16 The way in which the figure of $22,271.65 is arrived at is that two periods have to be considered - the period from 30 May 2008 to 27 June 2008 when the three individuals were still parties and the period from 27 June 2008 to 23 July 2008 when Novapharm alone remained a respondent. In relation to the former period, the amount of costs attributable to Novapharm is one-quarter of $14,096.33, that is, $3524.08. In relation to the second period, the amount is $18,747.57. If the amount of $22,271.65 is notionally "taxed" on a party/party basis by being reduced by one‑third, the resulting amount is $14,847.76. 17 Mr Williams again expresses the opinion that this amount of $14,847.76 represents a fair quantification of the party/party costs and disbursements that Novapharm has thrown away by reason of Mr Glueck's amendments from 30 May 2008 up to and including 23 July 2008 when his second further amended statement of claim was filed. 18 I think it proper that an order be made quantifying Novapharm's costs at $14,847.76 accordingly. 19 There is, however, a question whether Mr Glueck should be ordered to pay that sum of $14,847.76 at this stage. The proceeding is continuing as against Novapharm. Much may depend on how early a hearing date can be given to the proceeding. At this point I think it appropriate not to make an order that that amount be paid forthwith but that Novapharm have leave to reapply for such an order. 20 I have today made orders in accordance with these reasons. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.