Phonographic Performance Company of Australia Limited v Copyright Tribunal of Australia

1. The first applicant pay 50% of the second respondent's costs of the proceedings on a party and party basis, fixed as a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth), to be agreed between those parties or, failing agreement, to be determined by a Registrar of the Court in accordance with the procedure specified in the Federal Court Costs Practice Note (GPN-Costs).
2. The second respondent pay 70% of the second to fourth applicants' costs (excluding the costs of their joinder application) on a party and party basis, fixed as a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth), to be agreed between those parties or, failing agreement, to be determined by a Registrar of the Court in accordance with the procedure specified in the Federal Court Costs Practice Note (GPN-Costs). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT: 1 On 6 June 2019, the Court delivered judgment in Phonographic Performance Company of Australia Limited v Copyright Tribunal of Australia [2019] FCAFC 95; 368 ALR 203 (substantive judgment), allowing the application in part. The parties were given the opportunity to provide submissions as to costs, which they have done, and which we now address. These reasons assume familiarity with the substantive judgment and adopt the defined terms used therein. 2 The substantive proceedings involved an application for judicial review of a decision of the Tribunal to vary a licence scheme referred to it under s 154(4) of the Copyright Act 1968 (Cth) (the Act). PPCA advanced its arguments by reference to five issues which are identified in [16] of the substantive judgment. Issues 1 - 4 broadly challenged the reasoning and conclusions of the Tribunal insofar as they concerned the quantum of the percentage increase in licence fees to be awarded under the licence scheme referred to it. The final issue, the Power Issue, concerned whether or not the Tribunal had erred in concluding that the scheme could incorporate non-PPCA rights. PPCA and Foxtel made submissions on each of those five issues. The Majors were limited by order of the Court to making submissions on the Power Issue. The Court found that PPCA failed on Issues 1 - 4 but that it and the Majors succeeded on the Power Issue. 3 The parties make competing submissions concerning costs. The Majors contend that Foxtel should pay their costs. This is because they had success in the sole issue in the proceeding in which they were involved, and made the bulk of the submissions in their interest to the Court in relation to that subject. 4 Foxtel contends that PPCA should pay 65% of its costs. It submits that this proposal reflects the fact that PPCA had only partial success, having failed in respect of its broad-reaching attacks on the Tribunal's determination of price. It also reflects the fact that the Power Issue was quite separate to Issues 1 - 4, which occupied a significant amount of effort (as reflected by an analysis of the paragraphs of submissions and pages of transcript devoted to each). Foxtel further contends that it should not be obliged to pay any of the Majors' costs, given that the Majors are in a position akin to an intervener in proceedings, that the Majors' interests coincided and overlapped with those of PPCA insofar as they concerned the Power Issue, and that in the application for joinder, the Majors indicated that they were prepared to be joined to the proceeding on a no-costs basis. 5 PPCA submits that there should be no order as to costs. It contends that it was successful on the Power Issue and that the remaining issues should be taken together as one. Having succeeded on half of the case, but failed on the other, the appropriate order is that neither side pay the other's costs. It further submits that Foxtel's analysis of the amount of submissions and transcript pages is incomplete, as it did not take the oral submissions of the Majors on the Power Issue into account, and when one does, the pages of transcript devoted to the Power Issue and to the Issues 1 - 4 are roughly equal. 6 In GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Limited v Generic Partners Pty Limited (No 2) [2018] FCAFC 100, the Full Court said: 5 The discretion of the Court in relation to costs is well established. As the Full Court recently observed in Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 ('Idenix') at [3]: …Section 43 of the Federal Court of Australia Act 1976 (Cth) gives the Court a wide discretion in awarding costs. The exercise of the Court's discretion is not without principles or practices; it must be exercised judicially (Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61 at [305] per Bennett, Besanko and Beach JJ). The ordinary rule is that costs follow the event, although a successful party may be awarded less than its costs, or costs may be apportioned, based upon success on the issues (Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 327 ALR 192; [2015] HCA 53 at [6] per French CJ, Kiefel, Nettle and Gordon JJ; Les Laboratoires Servier at [297] to [298] and [303]). 6 Every case must be decided on its own facts. There is no doubt that this Court could address the costs of the appeals and the cross appeals compendiously. In Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (No 3) [2014] FCAFC 126 ('Sanofi-Aventis') the Full Court addressed the costs of the appeal and cross-appeal together at [26], despite Apotex failing in its challenge to validity on various grounds (see at [8]). In Tramanco Pty Ltd v BPW Transpec Pty Ltd (No 2) [2014] FCAFC 58 ('Tramanco') the Full Court similarly dealt with costs compendiously (at [13]), and noted the difficulties with disentangling the costs of different issues (at [12]). 7 Further, a percentage reduction approach may also be appropriate in some cases. Such an approach was adopted in Idenix and in Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd (No 2) [2017] FCAFC 158. 7 In the present case, in our view there were broadly two aspects of the case, being the Power Issue, and Issues 1 - 4 which concerned variously expressed challenges to the reasoning and approach of the Tribunal. The Majors were confined in their challenge to the first of these, and advanced oral and written submissions on that subject. The case advanced by PPCA extended to Issues 1 - 4, upon which it was unsuccessful. Had the PPCA been the only applicant, then orders that allocated costs recognising the relative success of each party would have been made. The position is complicated by the involvement of the Majors, whose substantial commercial interest in the Power Issue resulted in that being the only aspect of the proceedings in which it was involved. They and PPCA sensibly divided their time in submissions to ensure that there was no untoward repetition on the Power Issue. 8 The result is that the Majors were successful insofar as their interests were concerned, because they demonstrated that the scheme ordered by the Tribunal incorrectly included the licence of rights to which they had not consented. PPCA was also successful on that issue, but unsuccessful on the balance of the issues that it advanced. 9 Overall, Foxtel had a significant measure of success against PPCA, because the Tribunal's determination as to the quantum of the percentage increase of licence fees was not dislodged. However, PPCA was always going to, and did advance the Power Issue and it too had a measure of success. In the normal course, the Majors would have their costs on a party-party basis from Foxtel, they having succeeded on the only issue of concern to them. However, we accept that some accommodation should be made to ensure that Foxtel is not penalised in any costs order by the fact that there was in effect double representation insofar as the Power Issue was concerned. The relevant principle is that the Court will not normally allow more than one set of costs to successful litigants where there is no possible conflict of interest between them in the presentation of their cases; CHF16 v Minister for Immigration and Border Protection (No 2) [2017] FCAFC 215; 257 FCR 161 at [18]. We reject Foxtel's submission to the effect that the Majors conceded in the course of their joinder application that there should be no costs order in their favour. This does not reflect the flow of argument on that occasion. 10 Taking a broad brush approach to the assessment (as the parties urged), we consider that Foxtel is entitled to about 60% of its overall costs, having regard to the significance of issues 1 - 4. This will be met by 50% of its costs paid by PPCA, a reduction that is offset by an order that Foxtel pay 70%, rather than 100%, of the Majors' costs. That offset is necessary, because had the Majors not intervened, PPCA would have advanced the Power Issue and been entitled to a reduction accordingly. The fact that PPCA and the Majors sensibly agreed to divide the time in argument between them should not result in an adverse costs consequence to PPCA. Furthermore, whilst the Majors were granted leave to participate in the proceedings, their joinder should not disadvantage Foxtel in relation to the costs outcome. 11 The parties all urged that costs be awarded in a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth). In our view this is appropriate. It is to be hoped that the parties will be able to agree to the amounts to be paid, but in the event that they are not, we will order that the quantum of costs be determined by a Registrar of the Court in accordance with the procedure specified in the Court's Costs Practice Note. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Besanko, Middleton and Burley.