Instyle Contract Textiles Pty Limited v Good Environmental Choice Services Pty Ltd

REASONS FOR JUDGMENT 1 A question of costs remains outstanding in relation to the hearing of four motions in respect of which orders have now been made following the publication of written reasons for judgment: see Instyle Contract Textiles Pty Limited v Good Environmental Choice Services Pty Ltd (No 2) [2010] FCA 38 and Instyle Contract Textiles Pty Limited v Good Environmental Choice Services Pty Ltd (No 3) [2010] FCA 466). I will use, in these reasons, the abbreviations used in the previously published reasons. 2 Pursuant to orders made on 14 May 2010 the parties have exchanged written submissions on this question. In summary, the applicant submits that the appropriate order in respect of all motions is that costs be costs in the proceeding. On the other hand, the respondents submit that the appropriate order in respect of all motions is that the applicant pay the respondents' costs. To give recognition to one issue on which the applicant was successful, the respondents submit, in the alternative, that an appropriate order would be that the applicant pay 95% of the respondents' costs. In essence, they say that they should have their costs and that, at most, those costs should be discounted by no more than a small percentage sum. 3 The motions sought various forms of relief and raised a number of issues. I will not seek, in these reasons, to detail again the matters that were in contest. It is sufficient to note that they are summarised in [1]-[12] of Reasons (No 2). The applicant was successful in obtaining leave to file an amended application and a second further amended statement of claim. It was, however, unsuccessful in obtaining the interim injunctive relief it sought in each of paragraphs 3 and 5 of the principal motion. It was also unsuccessful in obtaining the interim injunctive relief it sought in paragraph 4 of the principal motion, although, in weighing the balance of convenience, I took into account the fact that the respondents were prepared to give an undertaking to the Court which, in the end result, I found to be appropriate and acceptable in form. Finally, the applicant was unsuccessful in obtaining the relief sought in paragraphs 6 to 9 of the principal motion concerning, principally, whether a question should be tried separately and before all other questions and issues in the proceeding. In sum, the applicant's successes were relatively limited. 4 Dealing with the matters on which the applicant was successful, the respondents submit that the debate over the amendments to the pleadings occupied virtually no time in the hearing or in written submissions. I accept that submission. 5 With respect to the interim injunctive relief sought in paragraph 4 of the principal motion, and the Court's acceptance of the undertaking ultimately proffered to the Court, the applicant submits that the restraint secured by the undertaking is substantially similar to the restraint that was sought in paragraph 4 of the principal motion, the only substantive difference being that, instead of being restrained until further order from publishing or republishing certain statements, the respondents have undertaken to refrain from publishing or republishing those statements without giving notice of their intention to do so, thereby affording the applicant the opportunity to make further application for interim relief, should it consider that course to be necessary. The applicant submits that: (a) the respondents only proffered an undertaking in that regard on the day prior to the hearing, and thus too late to reduce costs; (b) the undertaking proffered at that time did not include GECA as a party giving the undertaking; (c) the undertaking proffered at that time was not proffered as an undertaking to the Court; and (d) the undertaking as then proffered was narrower in scope than the undertaking finally accepted by the Court. 6 The respondents take issue with a number of these submissions, particularly as they concern the nature and scope of the undertaking that was originally proffered. They also point out that, in fact, an undertaking was proffered, without prejudice as to costs, on or about 2 December 2009 and later repeated as an open offer on 8 December 2009 (the day before the commencement of the hearing). 7 But for the proffering of the undertaking in the form set out in [159] of Reasons (No 2), I would have granted limited interim injunctive relief to the applicant, albeit not in the form sought in paragraph 4 of the principal motion. In my view there is substance in the applicant's submission concerning the scope of the undertaking as originally proffered, both as to its terms and the fact that it was not proffered by GECA. By the same token, notwithstanding that in my view an acceptable form of undertaking was ultimately proffered by the respondents during the course of the hearing, the applicant persevered for an order in the form sought in paragraph 4 of the principal motion, which I would not have granted. In those circumstances, had the controversy between the parties been limited to the matter raised by the relief sought in paragraph 4 of the principal motion, and not concerned any other matter in respect of which relief had been sought in that motion, it would have been appropriate to order that each party bear its own costs, because this would reflect the measure of success that each party had with respect to the determination of that matter. In my view that consideration should be reflected in the costs order that I will now make. 8 I should note that the applicant also made a general submission to the effect that there was substantial identity between the interim injunctive relief it sought and the final injunctive relief it seeks, and that its application for interim relief in that regard is "not properly a separable part of the proceedings". Thus, the applicant submits, the costs of the application for interim injunctive relief should be costs in the proceeding, regardless of its outcome. I reject that submission. By seeking interim injunctive relief, largely unsuccessfully, the applicant has imposed a cost burden on the respondents which they should not bear in any event. 9 With respect to its application for the determination of a separate question, the applicant submits that, although it was unsuccessful in obtaining any of the relief it sought, its application was in respect of the preferable way in which to conduct a final hearing and was, therefore, in the nature of seeking directions for the efficient and just disposal of the proceeding. The applicant submits that the costs of that application are inherently connected to the disposal of the proceeding and so should be costs in the proceeding. In that connection it submits that I should exercise the discretion with respect to costs in the same manner as Sackville J did in Clarkel Holdings Pty Ltd (in Liq) v Kelly [1999] FCA 1266. 10 I am not persuaded that that would be an appropriate exercise of the discretion in the present case. The issue raised was one that was opposed, for good reason, by the respondents at the outset, was covered in written submissions, was the subject of debate in oral submissions, and was later supplemented by further substantial written submissions. The order for costs should reflect those circumstances. The contest was of a magnitude that cannot be characterised as simply seeking directions for the efficient and just disposal of the proceeding. 11 The applicant also points to what it submits to be the late filing of the respondents' cross-claims as impacting on its subsequent decision not to press the relief it claimed in paragraphs 6 and 7 of the principal motion. However, the filing of the respondents' cross-claims did not alter the nature of the debate; it merely postponed its finalisation. 12 I am of the view that the order for costs sought by the applicant should not be made and that there should be an order providing for payment of the respondents' costs. However, a discount should be applied to reflect what I would regard to be the applicant's success and, hence, the respondents' lack of success, in relation to the issues raised. The applicant should pay 80% of the respondents' costs. 13 As I stated in [178] of Reasons (No 2), the costs of hearing the ancillary motions should fall as costs of and incidental to the principal motion. I will make orders accordingly. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.