Polo/Lauren Company L.P. v Ziliani Holdings Pty Ltd

REASONS FOR JUDGMENT 1 On 18 December 2008 we dismissed the appeal with no order as to costs. When the judgment was delivered the appellant sought, and was granted, leave to put on further submissions on the question of costs. Those submissions were received on 19 December 2008. Submissions on behalf of the second respondent were received on 6 January 2009. Generally, it is undesirable that parties seek to raise questions of costs in this way: Fisse v Secretary, Department of Treasury (No 2) [2008] FCAFC 200 at [4]. 2 The primary judge found, as we did, that the appellant's allegation that its copyright had been infringed could not be sustained. His Honour did so because he concluded that the Logo was a label. If it had been necessary he would have concluded that the first respondent was entitled to rely upon the defence afforded by s 77 of the Copyright Act 1968 (Cth), that is, the design/copyright overlap defence. 3 In the event, the trial judge dismissed the appellant's application with costs. Since we also concluded that the Logo was a label we dismissed the appeal. It was not necessary, strictly, for us to express a view on the design/copyright overlap issue, but we nevertheless made detailed observations about it, all of which were, however, obiter dicta. We concluded, contrary to the trial judge, that the first respondent would not have been entitled to rely upon that defence if it had otherwise failed on the label defence. The second respondent was represented by counsel acting pro bono and did not seek his costs of the appeal. The first respondent did not take part in the appeal. In the circumstances, we made no order as to costs. 4 The appellant does not seek to disturb that conclusion. Rather, it seeks to have the Court set aside the trial judge's original order that the appellant pay the respondent's costs and to order, in lieu thereof, that each party pay its own costs. This should be, so the argument ran, because each party had succeeded on one of the two issues. Of course, this is not a true costs question in this Court but rather an appeal from the trial judge's discretionary costs order. No such order is sought in the amended notice of appeal; nor is there any ground for such an order suggested therein. Strictly, therefore, there is nothing before this Court but the bare application made in open court. 5 That would be sufficient to dispose of the matter. However, even apart from such a procedural deficiency we would reach the same conclusion. This is because, as a matter of formality, the design/copyright overlap was not determined either by the trial judge or by us. All of the remarks which were made both at first instance and on appeal on this issue were obiter dicta. No orders were made as a result of those conclusions. In that circumstance, we do not think that the premise upon which the present application rests is sound for there was no "success" on the second issue. 6 Quite apart from that consideration we would decline to interfere with the trial judge's costs order for two other reasons. First, the design/copyright issue was itself divided into two further issues viz the question of the applicability of the s 77 defence to secondary infringement and the issue as to the proper construction of s 77. The appellant only succeeded on the second of these issues. Its victory was, therefore, less than full. Secondly, costs ordinarily follow the event in the absence of special circumstances: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234-235. We do not think that the current proceedings disclose the presence of any such circumstances. The application is refused. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and Justices Jacobson and Perram.