McD Asia Pacific LLC v Hungry Jack's Pty Ltd

1. The Applicants pay 70% of the costs of the proceedings.
2. Pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth), the costs referred to in Order 1 be paid to the Respondent in a lump sum.
3. If the parties do not agree within 30 days of these Orders on the amount of the lump sum to be paid, the matter be referred to a Registrar of the Court to determine the quantum of costs in such a manner as the Registrar sees fit, including, if appropriate, on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BURLEY J: 1 Following delivery of judgment in McD Asia Pacific LLD v Hungry Jack's Pty Ltd [2023] FCA 1412 the parties are in dispute as to the appropriate costs order to be made. These reasons assume familiarity with the judgment and adopt the abbreviations used in it. 2 In the judgment, I found that McDonald's failed in its trade mark infringement action brought against Hungry Jack's in respect of the BIG MAC and MEGA MAC trade marks, and also failed in its challenge to the validity of the BIG JACK registered trade mark, save for a small number of the goods in respect of which the BIG JACK was registered. However, it succeeded in its ACL claim concerning the 25% more Aussie beef representation. 3 McDonald's submits that the costs should be awarded according to the success or failure of each aspect of the case, with the result that it should bear the costs of its trade mark infringement and cancellation claims, there be no order as to costs of the cross-claim and Hungry Jack's should bear the costs of the ACL claim. Hungry Jack's submits that costs should be determined on a single event basis with the result that McDonald's should pay 75% of the costs of the proceedings to date. 4 The principles concerning the payment of costs are uncontroversial and do not require repetition; see, for example, Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 (Nicholas, Beach and Burley JJ) at [3]. 5 In the present case, the points of difference between the parties tend to be more practical than substantive. Neither disputes that a fair outcome should ensure that each party pay the other party's costs of the part of their case that failed. McDonald's submits that this is best achieved by making separate costs orders, because the Court will not be asked to speculate as to the relative amounts of costs which may have been incurred by the parties on particular claims or issues. Further, given the separate and distinct nature of the trade mark related actions on the one hand, and the ACL claim on the other, the process of disentangling the costs for each should, McDonald's submits, be relatively straightforward. Hungry Jack's contends that it enjoyed a 'real practical success' in the litigation and that a broad brush approach to the litigation as a single costs event is the better way to proceed. It disputes that the assessment of costs will be straightforward, as McDonald's contends. 6 Whilst there are aspects of both sides of the debate that commend themselves, in my view, in this case the approach contended for by Hungry Jack's represents the best way to do justice between the parties. I do not think that separate costs orders, to be taxed if not agreed, are likely to produce a more efficient means of apportionment between the parties. In fact, the process of disentangling the costs associated with each "event" - in circumstances where it is likely that the preparation for the trial by solicitors and witnesses alike overlapped - is likely to be far more complicated, and productive of additional costs, than awarding costs on a single event basis. In this regard, in the circumstances of the present case, I favour the broad brush approach; see, for example, Phonographic Performance Company of Australia Limited v Copyright Tribunal of Australia (Costs) [2019] FCAFC 192 at [10] (Besanko, Middleton and Burley JJ). 7 As to the apportionment, Hungry Jack's was entirely successful in defending the trade mark infringement case, which represented a large proportion of the case advanced by McDonald's in terms of the time in court, the evidence and the submissions. The evidence involved in the ACL claim in respect of which it was unsuccessful was relatively less. Balancing the two against each other, in my view it is appropriate that McDonald's pay 70% of Hungry Jack's costs. 8 Having regard to the simplicity of the award, in my view it is appropriate that, in the event that the parties cannot agree on costs, they be paid in a lump sum in accordance with r 40.02(b) of the Federal Court Rules 2011 (Cth). 9 Accordingly, I will order that: (1) the applicants pay 70% the costs of the proceedings; (2) pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth), the costs referred to in Order 1 be paid to the respondent in a lump sum; and (3) if the parties do not agree within 30 days of these orders on the amount of the lump sum to be paid, the matter be referred to a Registrar of the Court to determine the quantum of costs in such a manner as the Registrar sees fit, including, if considered appropriate, on the papers. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley.