THAWLEY J:
1 On 9 December 2019 reasons were delivered in relation to the question of liability of the respondent to the applicant for infringement of copyright in certain works, being photographs and floor plans, the subject of a separate question: Hardingham v RP Data Pty Limited [2019] FCA 2075. On 17 December 2019 orders were made dismissing the application and dealing with costs. The applicant has appealed on the question of liability and the cross-respondent, Realestate.com.au Pty Ltd (REA), has cross-appealed on the question of costs.
2 By an interlocutory application filed on 16 April 2020, the applicants seek a stay of orders for costs until the disposal of their appeal from the order dismissing the application. Pursuant to those orders for costs, the applicants have been ordered to pay the costs of the respondent, RP Data Pty Limited, and certain costs of REA.
3 Two further events became apparent for the first time at the hearing of this interlocutory application. First, RP Data has filed an application for security for costs of the appeal. The Court was informed that this application has been docketed to Burley J and is yet to be heard. However, his Honour has made certain orders in relation to case management of that application.
4 Secondly, RP Data has filed an application in which it seeks a supplemental order that the costs of the trial be borne by a litigation funder. That application, although I do not have a copy before me, would ordinarily need to be filed in these proceedings. It is not known whether that application has been docketed, but it might be that the application is docketed to me.
5 On this application for a stay, the applicants relied on affidavits of Mr Hardingham filed in the proceedings and on a further affidavit of Mr Hardingham of 16 April 2020. This second affidavit addresses the financial position of Mr Hardingham (the first applicant) and Real Estate Marketing Australia (REMA) (the second applicant).
6 I accept Mr Hardingham's evidence that REMA's business has been significantly disrupted as a consequence of the COVID-19 pandemic. That business involves being retained by real estate agents to take photographs and create floor plans for the sale and lease of property. It might be that REMA's business has been able to improve since the date of the affidavit of 16 April 2020, but I accept that its business is likely to have been significantly affected.
7 The evidence establishes that the applicants were funded by a litigation funder at trial. Whatever the precise arrangement was, it did not cover the applicants for costs orders made against them. There is no longer any litigation funding and the appeal is being prosecuted on a speculative basis by counsel and their instructing solicitors.
8 I accept on the basis of Mr Hardingham's evidence that the applicants have insufficient assets to meet the costs orders which have been made. Mr Hardingham has stated that, if the costs orders made in respect of the proceedings are not stayed, REMA would be insolvent and he would have no alternative other than to place REMA into liquidation and to apply for bankruptcy. I accept that evidence. The consequence is that, if a stay were not granted, it is likely that the applicants would not be able to prosecute the appeal.
9 RP Data correctly points out that a trustee in bankruptcy or liquidator might choose to prosecute the appeal. However, that does not alter the fact that the applicants themselves would not be able to prosecute the appeal.
10 In addition to these matters, the applicants refer to the fact that REA, the cross-respondent, has appealed in relation to costs. The applicants were ordered to pay the cross-respondent's costs of the cross-claim except the cross-respondent's costs of and incidental to the hearing of the separate question for the reasons given in Hardingham v RP Data Pty Limited (No 2) [2019] FCA 2138.
11 The applicants submit that a significant amount of time could effectively be wasted in pursuing the lump sum costs order process which has been referred to a Registrar of the Court. If the appeal is successful and the costs orders reversed or altered, this time could be seen as wasted. On this point, RP Data submits that the Registrar's time will not be wasted because the Registrar is complying with an order of the Court. I reject that submission. Occupying the time of a Registrar on determining a lump sum costs order which might be reversed is plainly a matter which can be taken into account in considering whether or not to exercise the discretion to grant a stay.
12 The applicants submit that they have an arguable appeal. Predictably, RP Data submits that they do not. Having read the submissions of the parties and in particular the grounds of appeal, my view is that the grounds of appeal are at least sufficiently arguable to warrant granting a stay.
13 RP Data relies on the proposition that, ordinarily, "a successful litigant is entitled to the fruits of its judgment". However, the judgment in favour of RP Data has borne no fruit. RP Data was successful in defending the proceeding on the basis it was not liable. It has obtained a costs order in its favour which might ultimately cover a portion of its costs.
14 RP Data also submits that the only thing established by the applicants is that they are both impecunious and that they might be bankrupt or wound up before the appeal is determined and that this is not a reason to grant a stay. The evidence establishes that REMA was significantly adversely affected by the COVID-19 pandemic and the associated impact that has had on the real estate industry. It is a matter of common knowledge that restrictions are lifting and that activity in the real estate industry in New South Wales is increasing. Inspection of properties, for example, are able to be conducted on a less restricted basis than has been the case. RP Data has, as mentioned, applied for security for costs of the appeal and that application has not been heard. RP Data wished this application to be heard notwithstanding its application for security for costs, even though the Court suggested it was appropriate for this application for a stay and the application for security for costs to be determined together. Senior Counsel for RP Data indicated his client was content to wear any adverse consequences of that forensic decision.
15 If anything, the evidence establishes a better prospect of recovery of costs for RP Data if the appeal process continues, which it likely would not if the costs orders are not stayed.
16 In my view, the appropriate exercise of discretion is to make orders which have the effect of granting a stay until after the appeal and cross-appeal are heard or until further order, but which cater for the fact that the appeal and cross-appeal may be dismissed and permit the determination of costs to continue thereafter. It would always be open for the stay orders or the orders that I make today to be reviewed by one or other party raising the issue with Burley J in the context of the security for costs application.
17 The applicants seek costs of the interlocutory application. The respondent submits that it should not be required to pay costs of the interlocutory application and that the costs should be reserved to abide by the outcome of the appeal. The ordinary rule is that the successful party on a discrete issue is entitled to costs and in my view there is no reason to depart from that rule in the present case. Accordingly, I order that the respondent pay the applicants' costs of the interlocutory application as between the applicant and the respondent.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley.