Probiotec Limited v The University of Melbourne

THE PLEADED CASE INVOLVING THE PROBIOTEC PARTIES 15 The Probiotec parties were not made parties to the proceedings until joined as cross respondents to the University parties' cross-claim pursuant to an order made by the primary judge on 24 June 2005, almost twelve months after the proceedings commenced. He directed all of the cross-respondents to file and serve defences to the second further amended cross-claims by 8 July 2005 and to give discovery in relation to the new issues raised by the amendment. 16 When the matter next returned to court on 1 July 2005, Probiotec Australia and Pharmaction jointly and severally undertook without admissions as to liability that whilst any allegation was made by the University parties in the proceedings (or any appeal) that any one or more of the valid claims in the Phosphopeptide patent or the hypersensitivity patents had been infringed by the manufacture, supply, offer for sale or for sale of any of Topacal C-5, Dentacal and Phoscal powder as manufactured after March 2004 in the manner alleged in the second further amended cross-claim, they would not engage in any such activity without the licence or approval of Recaldent or any authorised licensee. And, they undertook that in the event that it was finally determined that either of them had infringed any of the asserted claims in respect of either of those two patents, it or they would consent in order to pay, at the election of the University parties, damages or an account of profits in relation to the manufacture and sale of the 4,940 bottles of Topacal C-5. 17 His Honour also noted that neither Probiotec nor Probiotec Pharmaceuticals would take any further part in the proceedings other than complying with their respective obligations to file a defence and give discovery under the orders made on 24 June 2005. He ordered that other than in relation to those matters, Probiotec and Probiotec Pharmaceuticals 'be excused from taking any further part in the proceedings except to be heard on costs'. 18 The University parties' second further amended cross-claim was filed on 11 July 2005. It alleged, relevantly, that: · since about December 2003 or January 2004, Probiotec had managed or controlled the infringing activities of Phoscal Holdings, including the sublicensing by Phoscal Holdings or its agents of a number of entities to manufacture, supply and/or sell products incorporating Phoscal powder in Australia; · since March 2004 Probiotec was entitled to receive $15,000 a month from NSI for the provision by Probiotec to NSI of services relating to the manufacture, offer for sale and or sale of NSI's products including Dentacal and Topacal C; · from a date unknown to the University parties, Probiotec, and since July 2004 Pharmaction and Probiotec Pharmaceuticals, or their agents had manufactured, offered to sell, supplied, sold and/or offered for sale Topacal C and Denatcal, and because Phoscal was contained in Topacal C-5 and Dentacal, those activities amounted to an infringement of the complex patent; · each of the Probiotec parties manufactured, offered to supply, sold and/or offered for sale one or more of Topacal C-5, Dentacal and Phoscal powder, infringed the phosphopeptide patent and, threatened and intended, unless restrained, to continue to engage in the infringements; · the Probiotec parties infringed the phosphopeptide and complex patents by making the admitted sales of the 4,940 bottles of Topacal C-5; · Probiotec parties had infringed or authorised or been an accessory to the infringement of each of the phosphopeptide and complex patents and had aided, abetted, counselled and/or procured infringement of each patent by Phoscal Holdings and unless restrained each Probiotec party threatened and intended to continue to engage in such activities; 19 On 22 July 2005, the primary judge ordered that Pharmaction be joined as a cross-respondent to the cross-claim for infringement and directed that it file and serve a defence by 27 July 2005. Pharmaction was also directed to give discovery in relation to the new issues introduced by the amendments alleging patent infringement in the second further amended cross-claim. His Honour then noted that the University parties had indicated that should they be successful in relation to the invalidity case they would seek third-party costs against each of the cross-respondents in relation to the costs of the invalidity case. The Court was informed that on 25 July 2005 Pharmaction gave a letter of undertaking, but the details of that were not provided. 20 In their defences to the University parties' cross-claim, each of the Probiotec parties had denied the University parties' pleading alleging validity of the complex patent. So had the NSI parties. Also, the Probiotec parties did not admit the validity of the phosphopeptide patent. But, in response to the infringement cross-claim, NSI Dental alone filed its own cross-claim challenging the validity of each of the patents, the infringement of which founded the University parties' cross-claim. NSI Dental had filed particulars of invalidity of the complex, hypersensitivity, caries inhibition and phosphopeptides patents. The final version of NSI Dental's particulars was the fifth further amended particulars of invalidity filed on 8 December 2005. 21 None of the Probiotec parties was a party to NSI Dental's invalidity cross-claim. And, the Probiotec parties denied the allegations that they had any ongoing intention to pursue infringing conduct. They referred to their various undertakings. They had already admitted the occurrence of the activities in 2004 said to prove infringement. 22 When the final hearing commenced before his Honour on 28 November 2005 counsel appeared for the three Probiotec parties (Probiotec, Pharmaction and Probiotec Pharmaceuticals) for the limited purpose of making formal admissions and proffering a revised set of undertakings to the Court. They said that that was the only role the Probiotec parties would play in the proceedings, other than on the question of costs. Later, on 2 December 2005 all cross-respondents to the infringement claim made a number of further admissions and gave further undertakings. On 8 December 2005, the NSI parties narrowed the invalidity cross-claim to challenge only the complex patent. These steps had the effect of recognising: · the validity of each of the phosphopeptide, the dental calculus, the hypersensitivity and the caries inhibition patents; · the previous admissions of infringement of the phosphopeptide patent by the Probiotec parties in respect of the manufacture and sale of the 4,940 bottles of Topacal-C5 and their liability to damages or an account of profits in respect of this infringement.

PRIMARY JUDGMENT 23 His Honour heard the trial over 10 days. The primary judge, in substance, upheld all claims of infringement against, relevantly, the Probiotec parties. He found that the complex patent and the phosphopeptide patent were valid (NSI Dental Pty Ltd v The University of Melbourne [2006] FCA 1216). He granted injunctions restraining all the cross-respondents (the NSI parties and the Probiotec parties) from infringing both patents or being accessorially involved in their infringement. 24 His Honour said that in the principal proceedings, the University parties had claimed that since 1999 the NSI parties had been selling products which infringed the four patents (phosphopeptide, dental calculus, dentinal hypersensitivity and complex). They had claimed in correspondence sent to the NSI parties in June 2004 that each of those patents had been infringed. In their initial cross-claim, the University parties claimed for infringement of the caries inhibition patent (which expired on 4 March 2002), the dental calculus patent, the dentinal hypersensitivity patent and the complex patent. The claim for infringement of the dental calculus patent was abandoned by the University parties in late 2004. And, only when the second further amended cross-claim was filed on 8 July 2005 did the University parties first make a claim that the NSI parties' products infringed the phosphopeptide patent. 25 His Honour noted that as a result of admissions and undertakings made by the NSI parties for the purposes of the proceedings, only the validity of the complex patent was challenged at the final hearing. He said that because of the admissions and undertakings made by the NSI parties on 2 December 2005 a number of matters were not in issue, including the infringement and validity of the phosphopeptide, dentinal hypersensitivity and caries inhibition patents. That had the consequence of leaving in dispute at the trial questions of: · the validity of a number of claims made in the complex patent; · infringement of those claims as a result of the manufacture, sale and or distribution of Topacal C-5, Dentacal and Phoscal powder; · whether the University parties had made unjustified threats of infringement; and · whether some of the NSI parties had infringed Pt V of the Trade Practices Act 1974 (Cth). 26 I interpolate that it is apparent from the above that the Probiotec parties had formally denied in their defences the validity of the complex patent and had not admitted the validity of the phosphopeptide patent but had taken no active role in the litigation at any stage. 27 His Honour found that since approximately January 2004 Probiotec had had management control of Phoscal Holdings and had owned a significant number of shares in that company. Although he did not further explain that finding in his reasons it must have been based on the evidence that since about December 2003 Probiotec had owned approximately 25.6% of the shares in Phoscal Holdings. The primary judge found that the relevant products in dispute were Phoscal powder, Topacal C-5 and Dentacal. He noted that Phoscal powder had been made by corporations which were not parties to the proceedings since at least 2000 but that NSI had admitted that it or its agents had offered to supply and had supplied Phoscal powder in Australia. He noted the further admissions of supply by Topacal Pty Limited of Phoscal powder in about 2000 and early 2001 and its other dealings with Phoscal powder prior to 2004. He found that the existence of Phoscal powder as a product of NSI had not been made known to the University parties until interlocutory applications were made in the course of the proceedings in 2004. His Honour also noted that admissions had been made by the NSI parties which accepted the University parties' allegations of the composition of Topacal C, Dentacal and Phoscal powder. 28 His Honour found the patents were valid and, based on those admissions, that those products infringed them. It is not necessary here to go into detail of the various issues or their disposition in the principal judgement.

COSTS JUDGMENT 29 After the primary judge published his principal judgment, the University parties claimed costs against both the NSI parties and the Probiotec parties. The University parties alleged that all the cross-respondents were jointly and severally liable for all costs that they had incurred. However, by the time of the costs application, the NSI parties were no longer legally represented and did not appear at that hearing, although they filed written submissions to which his Honour had regard. 30 His Honour noted that the Probiotec parties had argued that even though relief had been granted against them they should not be liable for costs on the basis that they had taken no active part in the proceedings. 31 The primary judge found that the Probiotec parties: · were not claimants on NSI's claim challenging the validity of the University parties' patents; · took no active part in argument or the conduct of the principal proceedings. 32 However, his Honour held that because the Probiotec parties had denied infringement and asserted invalidity (in the event infringement was proved) they were content to allow the NSI parties to put their case and to rely on the same submissions which the NSI parties advanced. He concluded that when regard was had to the limited and conditional nature of the undertakings by the Probiotec parties and their failure to withdraw their pleadings as to invalidity, their approach to the litigation was not simply one of submitting parties. He held that because the Probiotec parties had put the University parties to proof of their claims of infringement and had denied the validity of the complex patent '… the general principle applies, namely that costs will follow the event'. He found that the University parties were 'therefore … entitled to their costs against the Probiotec parties including costs on the question of validity and infringement'. 33 The primary judge said that the principles in Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 192-193 per Mason CJ and Deane J were '… not relevant to the present circumstances'. Instead, his Honour held it to be settled law that liability for payment of a costs order was ordinarily joint and several. He found that the Probiotec parties had not raised separate and distinct defences or incurred costs that could not be attributed to the joint conduct of all of the cross-respondents to the infringement claim in the course of the proceedings. He relied on Stumm v Dixon & Co (1889) 22 QBD 529 at 533-534 per Lord Esher MR and on Thiess Watkins White Constructions Limited (in Liq) v Witan Nominees (1985) Pty Ltd [1992] 2 Qd R 452 at 453 per Cooper J. 34 The primary judge observed he had made final orders enjoining all the cross-respondents in relation to the issues fought at the trial on the questions of infringement and validity. He said that in order to make good their case on the pleadings, it was necessary for the University parties to prove the involvement of the Probiotec parties in the infringements claimed. He noted that no director of any of the Probiotec parties had given evidence about the relationship between the NSI parties and the Probiotec parties at the trial or until after the 20 March 2007 hearing on costs. He said that it was necessary for the University parties to counter the pleaded allegations of invalidity and that it was '… appropriate [for them] to obtain a Court order, especially having regard to the fact that the undertaking as to conduct was given without admission' by the Probiotec parties. 35 His Honour also noted that after the hearing on costs Mr Stringer, the chief executive officer of Probiotec, had filed an affidavit on 21 March 2007 giving a detailed history. Mr Stringer stated that he had been the Probiotec officer responsible for giving instructions to its solicitors in the present proceedings. He stated that he had never given instructions to Spruson & Ferguson that the Probiotec parties wished to dispute the validity of the University parties' patents or to assist the NSI parties in their contest of the validity of those patents. He said that his instructions were reflected in Spruson & Ferguson's letter to Freehills of 17 September 2004 to which I have referred above. 36 In view of the conclusion which his Honour reached and the reasons which he gave, he said that the contents of Mr Stringer's affidavit did not persuade him that the Probiotec parties should not be jointly and severally liable with the NSI parties for costs. He considered the evidence and submissions of the parties. He had particular regard to the pleadings and nature and form of the undertakings relied on by the Probiotec parties. 37 In the event his Honour ordered that all the cross-respondents were jointly and severally liable for the costs incurred by the University parties in respect of the claim for unjustified threats, the cross-claim for patent infringement and the cross-claim for patent invalidity.

CONSIDERATION 38 The liability for costs which his Honour imposed on Probiotec parties extended well beyond the issues on which they had been sued and about which they put the University parties to proof by the formal denials and non-admissions in their defences. 39 The primary judge's order for costs against the Probiotec parties: · made the Probiotec parties liable for the costs of the whole of the proceedings on the issues nominated. These included the costs of the proceedings for the year prior to any of the Probiotec parties being joined to those proceedings; · made the Probiotec parties liable for costs that extended considerably beyond the issues which had been pleaded against them in the second further amended cross-claim. Thus, the costs order included those costs incurred by the University parties litigating the claims of unjustified threats made by the NSI parties in the original application and statement of claim and NSI's cross-claim for patent invalidity. The Probiotec parties had denied the validity of the complex patent in their defences, but they did not seek to prove substantively that the patent itself was invalid, or bring a cross-claim for patent invalidity; · did not reflect his findings that the Probiotec parties had not taken an active role in the proceedings and had done no more than file defences. Those defences contained denials of the validity of the complex patent (unsupported by any evidence led by the Probiotec parties) and non-admissions as to the validity of the phosphopeptide patent (which was not an issue in the final hearing in any event); · imposed liability on them for the costs of a 10 day trial and preparation extending for over a year before they were joined. At the first opportunity they had submitted, in effect, to the outcome of the fight between the NSI and University parties. In effect, they had said that they were to take no part in the proceedings. And they adhered to that position, except that pursuant to orders they filed defences which formally put in issue two of the validity patents which were, in any event, being challenged substantively by the NSI parties. The Probiotec parties also gave discovery.

ARGUMENTS ON APPEAL 40 The Probiotec parties advanced three principal arguments as to why the primary judge's discretion to order that they be jointly and severally liable with the NSI parties for costs miscarried, namely: 1. His Honour dealt with the whole of the costs of the proceedings without any attempt to differentiate in respect of the time periods during which the Probiotec parties were not a party. They argued that he simply applied a rule that costs followed the event, without any regard to whether the Probiotec parties had caused the incurring of the costs. They contended that it was not appropriate to exercise the discretion to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth) ('the Act') in order to compensate the University parties for costs which the Probiotec parties had not caused them to incur. 2. The primary judge dealt with the whole of the costs without recognising that the issues raised on the invalidity cross-claim brought by NSI were not relevant to issues raised for infringements of the patents against the Probiotec parties in the second further amended cross-claim. 3. His Honour adopted an approach that costs simply followed the event unless the Probiotec parties demonstrated that special circumstances existed so as to warrant departure from that rule. They argued that his Honour wrongly focused on the formality of the pleadings and failed to identify, by way of any findings, a causal link between the conduct of the Probiotec parties and the incurring of the costs by the University parties. Alternatively the Probiotec parties argued that the primary judge wrongly characterised the fact that they took no actual part in the conduct of the proceedings and thereby acquiesced in the result as somehow causative of the University parties incurring costs. They contended that the University parties' costs of proving an undefended claim of infringement against them were radically different from, and less than, the University parties' costs of fighting fully contested proceedings against the NSI parties even though some, but not all, of the issues were the same (e.g. NSI's cross-claim for invalidity). 41 The University parties argued that the discretion to order costs was a broad one and that its overriding purpose was to indemnify a successful party. They relied upon the approach taken by his Honour that where there were multiple defendants or respondents, they were jointly and severally liable for an order for costs if they acted together unless there was some factor present by virtue of which one could distinguish between those parties. They submitted that his Honour was correct in applying Lord Esher MR's approach in Stumm 22 QBD at 533-534. In essence, the University parties said that the primary judge had found that the Probiotec parties had left the NSI parties to engage in the active contest at the trial. They pointed out that the undertakings which were offered by the Probiotec parties at various times had significant deficiencies. They said that because those undertakings were unsatisfactory it was reasonable for the University parties not to have accepted them. For example, they noted that the undertakings were all made without admissions. Moreover, they pointed out that the undertakings given to the Court on 1 July 2005 did not refer to the complex patent, which was ultimately the only patent the validity of which was challenged in the proceedings. The University parties argued, with some force, that it had been necessary to join the Probiotec parties in order to obtain the benefit of an enforceable order for damages or an account of profits against them and they were entitled to an authoritative determination by the Court that the Probiotec parties had in fact infringed the University parties' patents. 42 The University parties accepted that the Probiotec parties had only commenced any alleged infringement activity in late 2003 or early 2004 and then only as a result of their arrangements with some of the NSI parties. But the University parties noted that two of the directors of the Probiotec parties, Messrs Stringer and Gunter, were also directors of a number of the NSI parties. Messrs Stringer and Gunter had been appointed as directors of NSI on 3 March 2004 of Phoscal Holdings on 15 March 2004 and of Pharmaction on 11 July 2005. 43 The Probiotec parties asserted that the stance they had taken in the proceedings amounted to a submitting appearance. In my view, that argument confused their express reluctance to become involved in the active conduct of the litigation with their pleaded and actual stance. First, they did not submit simply to any order which the court might make except as to costs. That is the common understanding of a submitting appearance. Rather, in the proffered inter parties' undertakings which were given in September 2004, the Probiotec parties made no admissions. They stated that they would not participate as an active party in any proceedings and, if infringement were established against them, would submit to an order for damages or an account of profits. Secondly, the Probiotec parties failed to make admissions or offer undertakings in respect of the complex patent when they became parties to the proceedings in July 2005 or later. Again, the limited undertakings which they offered were without admissions. However, even though the undertakings offered by the Probiotec parties were made without admissions in respect of the other patents to which they referred, the defences filed by the Probiotec parties did not put the validity of those other patents in issue. Thirdly, they filed defences in which they denied the validity of the complex patent and did not admit the validity of the phosphopeptide patent. 44 Those stances necessarily required the University parties, first, to join the Probiotec parties to proceedings so as to be entitled to authoritative and binding of orders of the Court against them, and, secondly, to prove or be put to proof of the validity of the two patents.

PRINCIPLES FOR EXERCISE OF POWER AS TO COSTS 45 His Honour's discretion fell to be exercised having regard to the requirements of s 43 of the Act. That provides relevantly: '43 Costs (1) Subject to subsection (1A), the Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs shall not be awarded. .... (2) Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.' 46 The words of s 43(2) create a discretion as to costs which is unconfined. The section derives directly from the Judicature Acts 1873 (s 49)and 1890 (s 5) (UK): see Donald Campbell & Co Ltd v Pollak [1927] AC 732 at 805. A similar discretion was conferred on the Land and Environment Court of New South Wales by s 69(2) of the Land and Environment Court Act 1979 (NSW) and the operation of that section was considered in Oshlack v Richmond River Council (1998) 193 CLR 72. There is no automatic rule that costs always follow the event: Foots v Southern Cross Mine Management Pty Ltd (2007) 241 ALR 32 at 39-40 [26]-[27], 41 [34] per Gleeson CJ, Gummow, Hayne and Crennan JJ. 47 It is inappropriate to read a provision, such as s 43(2) of the Act, which confers jurisdiction or grants powers to a court, by making conditions or imposing limitations which are not to be found in the words used: Oshlack 193 CLR at 81 [21] per Gaudron and Gummow JJ; see also Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 421. Gaudron and Gummow JJ observed that the section contained no positive indication of the considerations upon which the Court is to determine by whom and to what extent costs are to be paid. They said that the power conferred by the section was to be exercised judicially, namely not arbitrarily, capriciously or so as to frustrate the legislative intent. But, they applied the well-known principle of statutory construction identified by Dixon J in Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505, that the discretion was unconfined, except insofar as 'the subject matter and the scope and purpose' of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be 'definitely extraneous to any objects the legislature could have had in view': Oshlack 193 CLR at 81 [22]. 48 There is no absolute rule that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party with respect to the exercise of a power conferred by a provision such as s 43: Oshlack 193 CLR at 88 [40] per Gaudron and Gummow JJ. And, there is no absolute rule that the sole purpose of a costs order is to compensate one party at the expense of another under the Judicature Act system, such as is provided by s 43 of the Act: Oshlack 193 CLR at 89 [43]. The general power conferred by a provision like s 43 is not to be narrowly construed. On the other hand, where there has been some delinquency on the part of an unsuccessful party, the Court has power to order costs against that party, and sometimes on a scale greater than party/party costs: Oshlack 193 CLR at 89 [44] per Gaudron and Gummow JJ. 49 The other member of the majority in Oshlack 193 CLR 72 was Kirby J. He pointed out that the discretion under a provision such as s 43 of the Act was not absolute or unfettered because the Court or Tribunal was still obliged to act judicially. That requirement controlled its application in the particular case. Nonetheless, considerations which might provide guidance to the primary decision-maker could not be rigidly applied, because to do so would negate the very discretion which the section conferred in large terms: Oshlack 193 CLR at 120-122 [134 esp at par 3] per Kirby J. He said that the general purpose of an order for costs in favour of a successful party was to provide compensation in the form of a partial indemnity for the costs incurred. The ordinary principle observed in civil litigation in Australia was that legal costs would usually be ordered in favour of the successful party. And, he noted that the compensatory principle could not be treated as an absolute rule, otherwise the discretion, conferred in unqualified terms, will become shackled and confined: Oshlack 193 CLR at 121 [134; par 4]. 50 Brennan CJ and McHugh J dissented. The Chief Justice was in general agreement with McHugh J but noted that costs were awarded to indemnify a successful party in litigation, not by way of punishment of an unsuccessful party: Oshlack 193 CLR at 75 [1] and [3]. McHugh J also acknowledged that the discretion, although broadly stated was not unqualified and could not be exercised capriciously. He, like Kirby J, acknowledged that the discretion had to be exercised judicially in accordance with established principles and factors directly connected with the litigation: Oshlack 193 CLR at 96 [65]. And, he noted that the most important factor which courts had viewed as guiding the exercise of the discretion to award costs was the actual result of the litigation: Oshlack 193 CLR at 96 [66]. McHugh J said that the primary purpose of award of costs was to indemnify the successful party, referring to Latoudis v Casey (1990) 170 CLR 534 at 543 per Mason CJ, 562-563 per Toohey J and 566-567 per McHugh J and Cachia v Hanes (1994) 179 CLR 403 at 410 per Mason CJ, Brennan, Deane, Dawson and McHugh JJ. 51 In Cachia 179 CLR at 410-411, the majority held that costs were awarded by way of indemnity, or more accurately, partial indemnity for professional legal costs actually incurred in the conduct of litigation. They said that the costs were never intended to be comprehensive compensation for any loss suffered by a litigant. 52 In Knight 174 CLR at 189-190 per Mason CJ and Deane J, at 202 per Dawson J, at 205 per Gaudron J it was held that the jurisdiction of courts to order costs against a person who was not a party according to the record of the court, extended to someone who was the 'real party' or the 'effective litigant standing behind an actual party'. Indeed, Mason CJ and Deane J said that the jurisdiction was not limited to parties on the record but had to be 'exercised responsibly', that is judicially and in accordance with general legal principles relating to the award of costs: Knight 174 CLR at 190, 192 per Mason CJ and Deane J, see also at 203 per Dawson J, 205 per Gaudron J.

THE PRIMARY JUDGE'S DISCRETION MISCARRIED 53 In my opinion, the costs order made by his Honour against the Probiotec parties was erroneous within the principles in House v The King (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. His Honour, as the trial and docket judge, was able to observe the course of the proceedings both before and during the trial. But, the conduct of the Probiotec parties was separate from that of the NSI parties. The Probiotec parties did not participate relevantly in the trial. They had withdrawn from the conduct of the proceedings at the first directions hearings after they were joined as parties. The primary judge said that the principles in Knight 174 CLR 178 were not relevant. Thus, he did not approach the exercise of his discretion under s 43(2) on the basis that even though, as he found, the Probiotec parties '… took no active part in argument or in the conduct of the proceeding', they were the or a 'real party' or the or an 'effective litigant standing behind an actual party' (Knight 174 CLR at 190, 202, 205). 54 His Honour made his order on the basis that it was settled law that liability for payment of a costs order was ordinarily joint and several. However, that principle does not condition the circumstances in which the order should be made. Rather, joint and several liability is the consequence of an order once it is made in unqualified terms against more than one party. It is not a principle affecting the exercise of the discretion to impose the order in the first place. In my opinion, the primary judge erred because he treated the legal consequence of an order which was joint and several as a basis for considering that it was just and appropriate to make the order against the Probiotec parties who were formal but unsuccessful parties to the cross-claim. The primary judge also had regard to the fact that the Probiotec parties intended to take advantage of any success NSI parties had. The Probiotec parties had been joined as parties and had put on formal defences. No doubt, proof of the case to establish validity of the patents on an uncontested basis, had the NSI parties not participated, would have required the University parties to incur some costs which could have been awarded against the Probiotec parties. But those costs would not have amounted to anything like the costs of the fully contested proceedings and trial in which the Probiotec parties took no substantive part at all. The Probiotec parties did not cause the University parties to incur those additional and substantial costs. 55 His Honour also reasoned that the Probiotec parties did not raise a separate and distinct defence which had incurred costs that '… could not be attributed to the joint conduct of the cross-respondents in the course of the action'. His Honour had found expressly that the Probiotec parties had taken no real part in the matter, but he gave no reason for his finding that there was 'joint conduct' by them with the NSI parties. In coming to that conclusion his Honour applied remarks of Lord Esher MR in Stumm 22 QBD at 533-534 who held that on a taxation of a costs order, the taxing master was bound to apply the following as a rule of law: 'When an action is tried against two or more defendants, and any defendant separates in his defence, and the judgment is against all, the law is that each of them is liable for the damages awarded by the judgment, and each of them is liable to the plaintiff for all costs taxed on his behalf as properly incurred by him in the maintenance of his action, except as to costs caused to him by so much of the separate defence of any defendant as is, and can only be, a defence for that defendant as distinguished from other defendants. With regard to such costs so caused to the plaintiff, he is entitled by law to recover them against that defendant alone who has so caused him to incur them. In such case the taxation before the master should be one taxation, with all the parties present; there should be only one allocatur, but the master, on being satisfied that a part of the costs came within the rule above enunciated should mark them on the margin and on the postea accordingly.' 56 The other member of the English Court of Appeal in Stumm 22 QBD 529 was Fry LJ. He disagreed with the formulation of such a rule of law because as he pointed out, correctly in my opinion, the Judicature Act provided that costs were in the discretion of the Court or Judge: Stumm 22 QBD at 535. Fry LJ said, distinguishing the situation under the then rules of court applicable for trial by jury, that where costs were to follow the event, unless the judge or court, for good cause otherwise ordered, the discretion as to costs was vested in the judge or court, not the taxing master. He said (Stumm 22 QBD at 536): 'If natural justice requires that one defendant should not be liable for the costs occasioned solely by the act of the other defendant - and I agree with the Master of the Rolls on that point - justice will be done if the Court or judge be asked to do it, but it cannot be done by the master. In my opinion the effect of the rule which has been laid down by the Master of the Rolls would be to vest in the master a discretion which by virtue of the rule belongs only to the judge. For these reasons I am unable to concur in the judgment of the Master of the Rolls.' 57 The point which Fry LJ made in his disagreement with the Master of the Rolls was that there should be no 'rule' because the analogue of s 43(2) of the Act vested a discretion in the judge to be applied to the justice of the case. It was for the judge to mould the order, as opposed to laying down a rule to be applied by a taxing officer in all situations. 58 That case was decided in a different procedural context. I am of opinion that there is no rule of law of the kind asserted by Lord Esher MR applicable to the exercise of the discretion to order costs under s 43(2) of the Act. 59 The Probiotec parties argued that departures from a general rule had been recognized in other cases such as Dansk Rekylriffel Syndikat Aktieselskab v Snell [1908]2 Ch 127 at 138. There, Neville J declined to make the 'usual order' that costs be taxed against both defendants jointly where one defendant in an action for royalties for the exploitation of a patent did not appear or did not defend and the other defendant did. He said the 'usual order' would result in a defendant who had either not appeared or not put in a defence being rendered liable by the action of his co-defendant to pay costs over which the inactive defendant had no control. It would be unjust for the non-appearing party to be rendered liable to costs by the action of his co-defendant, which he was powerless to prevent, and that '… some alteration in the form of the order which is made in cases of that kind ought to be adopted'. Again, his Lordship appears to have proceeded upon a 'usual order' from which departure was necessary. 60 The decision in Oshlack 193 CLR 72 made clear that the award of costs under s 43(2) of the Act and its analogues is a discretionary exercise which depends upon the facts of each case. While courts can identify factors which are relevant to consider in exercising the discretion conferred by s 43(2), they cannot impose or apply particular factors as an inflexible rule. Of course, a wholly successful party will usually be entitled to costs because the justice of the usual case, prima facie, suggests that this will be appropriate. 61 In light of the errors of principle to which the primary judge had regard, the discretion under s 43(2) falls to be re-exercised by this Court.

RELATIONSHIP OF CLAIMS MADE IN THE LITIGATION 62 A factor which may be relevant in the exercise of a discretionary judgment in making an order for costs is the responsibility of the party against whom the order is sought for the costs incurred by the successful party. Evaluating that responsibility may require an examination of not only the nature and degree of the involvement of each of the parties, but of the essential claims themselves. Where the validity of a patent is in issue in litigation, the ways in which the issue arose, was contested and may impact on the various parties, ordinarily, will be significant factors in the formation of the discretionary judgment to order costs under provisions such as s 43(2) of the Act. 63 Under s 121 of the Patents Act, a defendant to infringement proceedings is entitled to apply by way of counterclaim for revocation of the patent. Likewise, it is a defence to an infringement proceeding to deny validity of the patent: Baygol Pty Limited v Huntsman Chemical Co Australia Pty Limited t/a RMAX [2004] FCA 1248 at [31] per Tamberlin J. In Baygol [2004] FCA 1248 at [31]-[34], Tamberlin J examined the legislative history of the relationship between a cross-claim and a defence in proceedings for infringement and revocation of a patent. He concluded that revocation proceedings could be instituted as a defence to an infringement action. But, he pointed out that in each case it was a question of ascertaining the substance and effect of the revocation suit so as to determine whether in truth it was defensive in character, because if successful, the infringement action would be defeated. Such a characterisation had importance on the question of the provision of security for costs in that case and others, such as Farmitalia Carlo Erba SrL v Delta West Pty Ltd (1994) 28 IPR 336 at 339-341 per Heerey J. 64 In Farmitalia 28 IPR at 339 Heerey J recognised that the formality of pleadings or the position of parties in litigation may not be determinative of the substance of their position and role in litigation. A person who initiates proceedings may sometimes be, in effect, the true defendant, although the form of the proceedings might not suggest that to be so. So in Willey v Synan (1935) 54 CLR 175 a collector of customs relied on his statutory power to issue a notice to the plaintiff requiring him to commence an action for the recovery of seized silver coins if he were to forestall a statutory condemnation of them. Once the action was commenced, the collector of customs sought security for costs against the foreign plaintiff. The Court concluded that in effect, the collector was the real actor and the initiator of the proceedings, because the notice was a step taken by him to obtain a condemnation of the goods: Willey 54 CLR at 179-180 per Latham CJ, 185-186 per Dixon J, with whom Rich J agreed. Dixon J said (Willey 54 CLR at 186): 'I do not think we should be influenced by the consideration that in all probability the plaintiff would have brought an action even if the Collector had not proceeded under sec. 207. In fact he did so proceed and thus made it necessary for the plaintiff to sue or allow the forfeiture to take place.' 65 Here, the Probiotec parties, when informed of the possibility that they were infringing, relevantly offered undertakings in September 2004 not to continue with their previous activity that may have been infringement of, relevantly, the complex patent and the phosphopeptide patent unless, in effect, the Court found those patents to be invalid. His Honour did not make any finding that the Probiotec parties acted contrary to that undertaking. It may be that the Topacal C links on Probiotec's website in 2005 referred to a product which, at that time, infringed the patent. There was no express finding that it did although the primary judge made a declaration that the Probiotec parties had infringed the complex patent. However, the issue of the website link did not have a substantive impact on the conduct of the trial or the appeal. 66 The University parties were unable to point to material in the evidence which demonstrated any substantive involvement by the Probiotec parties in the conduct of the controversy before the primary judge. However, the University parties argued that some authorities had upheld cost orders of the kind made by the primary judge against a party joined late who had been found liable with others who had been defendants throughout the litigation: see e.g. Thorpe Nominees Pty Ltd v Henderson & Lahey [1988] 2 Qd R 216. There, Derrington J with whom Matthews and Thomas JJ agreed on this question, held that a party joined as a defendant on the fifth day of the trial was properly ordered to pay the plaintiff's costs of the whole proceedings. But there, critically, the party had been joined previously as a third party to a cross-claim. It had fully participated in the defence of the cross-claim which raised, in substance, the same issues as were ultimately found in the plaintiff's favour to warrant the joint order for costs against all defendants, despite the late formal joinder of the third party as an actual defendant to the principal claim. 67 In Caboolture Park Shopping Centre Pty Ltd (in Liq) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 at 230 Lee, Hill and Cooper JJ said that s 43 of the Act evinced a clear intent of the Parliament "to provide sufficient jurisdiction and adequate powers to enable the Court to quiet the controversies exposed in proceedings brought before it and to better exercise its jurisdiction." 68 There are cases in which the Court will make orders against third parties to litigation as in Knight 174 CLR at 178. Here, the Probiotec parties, while actually joined as cross-respondents, were in a position which was somewhat analogous to that of a non-party because they did not take any active role in the litigation. Some guidance as to the appropriate approach to the award of costs in this context can be gleaned from considerations which the Court may take into account in awarding costs against non-parties. In Vestris v Cashman (1998) 72 SASR 449, Doyle CJ, Olsson and Lander JJ upheld an order for costs made against a third party. Doyle CJ agreed with both of the other judgments. Olsson and Lander JJ each recognised that the mere fact that the non-party may have benefited from the litigation, by itself, was not a proper basis for an adverse exercise of the discretion against the non-party. They applied the decision of Gobbo J in Bischof v Adams [1992] 2 VR 198: Vestris 72 SASR at 457 per Olsson J, 467, 468 per Lander J. Their Honours pointed to a wide variety of factors, without being exhaustive, which may bear on an appropriate exercise of jurisdiction to order the payment of costs. This simply re-emphasised the classically discretionary nature of an order for costs and the substantial advantage which a trial judge has in arriving at a decision as to the appropriate exercise of the discretion having regard to the way in which the litigation has been conducted before him or her. In addition, in most cases, the existence of docket management by trial judges in this Court, extends that advantage to the pre-trial stages of the litigation. 69 In Kebaro Pty Ltd v Saunders [2003] FCAFC 5 at [103], Beaumont, Sundberg and Hely JJ said, after a detailed review of the authorities in relation to the power to order costs against a non-party: 'In our opinion, the authorities establish, on the foregoing analysis, the following propositions: · A non-party costs order is exceptional relief, although some categories of factual situations are now recognised as within the discretion, for example, the situation described by Mason CJ and Deane J in Knight at 192-193. The width of the jurisdiction is illustrated by a recent English decision that there can be circumstances in which it would be appropriate to order costs in favour of a non-party against a party (see Individual Homes v Macbreams Investments, 23 October 2002, High Court of Justice Chancery Division at 8). · Whilst such an order is extraordinary, the categories of case are not closed, although in order to warrant its exercise, a sufficiently close connection, or as Gobbo J [ in Bischof [1992] 2 VR at 204-205] expressed it, a "real and direct and ... material" connection with the principal litigation, must be demonstrated; in the words of Callinan J [in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406 at 414 [37]], the non-party can fairly be liable if adjudged by its conduct, to be a real party to the litigation, even if not the real party.' 70 However, the University parties did not suggest that the principles for the award of costs against non-parties applied to the resolution of their application that the Probiotec parties pay the costs ordered against them.

HOW SHOULD COSTS BE BORNE? 71 I consider that the Probiotec parties did not play any substantive role in the proceedings or contribute significantly to the overall costs of the proceedings. Their defences required issues affecting them to be determined, which were also common to some other respondents. But, as in Willey 54 CLR 175 the University parties were in the position of the real actor as between them and the Probiotec parties. The University parties sought to assert and enforce their rights under the various patents. Even if the Probiotec parties had completely submitted to any order of the Court and had consented to having judgment entered against them, it would not have been appropriate for the Court to make such orders declaring the patents valid merely in default of their appearance or by consent, since the claim against the NSI parties still had to be litigated. The Probiotec parties put the University parties to formal, not fully contested, proof of the validity of the complex and phosphopeptide patents. They said that they would abide the result of the proceedings fought out by the NSI parties. 72 I am of opinion that it would be unjust to subject the Probiotec parties to an order for costs in respect of the whole of the infringement proceedings. They had not been joined for the first year of the proceedings, in which considerable costs would have been incurred preparing for two hearings, each of which was vacated. There are thus strong reasons against making any order for costs against them in respect of that period at least: cp: Gore v Justice Corporation (2002) 119 FCR 429 at 449 [53] per O'Loughlin, Whitlam and Marshall JJ; Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 WLR 2807 at 2814 [18]-[20] per Lord Brown of Eaton-under-Heywood. It was open to the University parties to have joined the Probiotec parties at any time. If they were to be made liable for costs for the period of a year prior to their joinder to the proceedings, some basis beyond the ultimate orders vindicating the University parties' rights would be required. In my opinion the orders visited upon the Probiotec parties created substantial injustice to them. The University parties have not been able to point to any factors which justify such a result. 73 In most proceedings where one party fails, it will be 'usual' and just to order that party to pay the successful party's costs. Often it will be unexceptionable for the Court to proceed upon the basis that the successful party should have the benefit of an order for costs in that party's favour because the substantive decision of the proceedings warrants that outcome. But, there was a marked difference here between the positions of the NSI parties, who were active protagonists in the battle, and the Probiotec parties, who were found by his Honour to have taken 'no active part in argument or in the conduct of the proceeding' (NSI Dental [2007] FCA 523 at [23]). In my opinion, the Probiotec parties did not put the University parties to the expense of the fully contested hearing conducted against the NSI parties. Once the Probiotec parties had pleaded a denial of the validity of the complex patent and had not admitted the validity of the phosphopeptide patent, the University parties were obliged to prove their validity as against them. But that proof would have been in an uncontested trial had the NSI parties not been actively pursuing their similar defences and the separate invalidity proceedings. The costs which were incurred by the University parties were due largely to the extensive contest fought out between them and the NSI parties in which the Probiotec parties took no part. There is no basis to throw onto the Probiotec parties the whole burden of costs based on the conduct of the NSI parties. 74 Here, on the evidence and the material before his Honour, the Probiotec parties took the position that they did not believe that they had done anything wrong in relation to the complex patent or the phosphopeptide patent, but they did not wish to pursue those activities unless the Court held, in litigation being contested by the NSI parties, that those patents were invalid. In other words, the Probiotec parties indicated that, subject to their formal pleading denying and not admitting validity of the two patents, they acquiesced in the result of the proceedings, and would abide his Honour's decision. The Probiotec parties did stand to gain if the NSI parties were successful, but there is no evidence of the Probiotec parties acting so as to cause the NSI parties to conduct the litigation in a way in which made it appropriate to order that all the relevant costs be also payable by the Probiotec parties. 75 In reaching this finding I am mindful that there were commercial relationships between some of the NSI parties and some of the Probiotec companies. But, those relationships did not constitute the Probiotec parties as the 'real' party. Nor did they establish a causative reason for the incurring by the University parties of the costs of fighting the proceedings involving the NSI parties. 76 As Lord Brown said in Dymocks [2004] 1 WLR at 2815 [25] (having referred to Knight 174 CLR 178; Gore 119 FCR 429 and Kebaro [2003] FCAFC 5, among other cases)in relation to making costs orders against a non-party: 'The ultimate question in any such "exceptional" case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against.' 77 I consider that it would be just to allow the appeal and vary his Honour's order so that the Probiotec parties pay 10%, rather than 100%, of the costs that he ordered them to pay. Having regard to the whole of the matters before the Court, this would have the effect that the Probiotec parties will pay approximately for the costs of preparing for and conducting a one day uncontested trial. It is not possible to dissect with any scientific accuracy some more precise means of allocating a just distribution of the costs. The participation of the Probiotec parties required some work to be done in any event by the University parties to satisfy his Honour that they were liable to the extent he found. Although I have disagreed with his Honour's decision that the Probiotec parties were responsible for the University parties' costs of their defence of NSI's claims for unjustified threats and its cross claim for patent invalidity, I think that the moulding the order for costs in the way I have done will result in a fair outcome. I recognise that this method of assessment involves some imprecision, but it is unavoidable in a case like this. 78 The Probiotec parties should have the costs of the appeal. 79 During the course of argument there was a question raised as to whether the Probiotec parties required leave to appeal from the order for costs on the basis that it may be interlocutory. The Court indicated then that if leave were required it would be granted. Under s 43, the primary judge had jurisdiction to order costs. A judgment under s 24(1)(a) of the Federal Court of Australia Act includes an order. My prima facie view is that the costs order made by his Honour was a final order made in exercise of the jurisdiction under s 43. It was intended to, and did, finally dispose of the controversy as to costs between the parties. It formed a part of the final orders disposing of the proceedings. No order was made by the primary judge for a separate question under O 29 r 2 to determine costs. Rather his Honour followed a procedure which is frequently used after decisions on complex issues are delivered. He heard the parties on the final orders for costs as an incident of the grant of final relief. Moreover, the University parties did not file any objection as to the competency of the appeal and the Court did not hear full argument on the point. Since I would have granted leave in any event, this is not an appropriate matter in which to decide whether leave to appeal is necessary from a final order for costs. I consider that it is appropriate to decide the appeal on the issues litigated and to note that no objection to competency was filed or sought to be filed. 80 In those circumstances it is not necessary to consider whether leave to appeal is necessary. 81 Lastly, the Probiotec parties served the NSI parties with the notice of appeal, The NSI parties went into liquidation in March and April 2007. In the afternoon of the hearing the liquidators wrote to the Probiotec parties' solicitors, after the Court had raised the matter that the orders sought in the appeal affected the NSI parties earlier in the day during argument, and stated that they would not be attending. In my opinion, the Probiotec parties should have leave to proceed against the NSI parties under s 471B of the Corporations Act 2001 (Cth) provided that the orders I would make allowing the appeal, to the extent they are enforceable against the NSI parties, not be enforced against them without the leave of a judge.

I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Rares.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

PROBIOTEC PHARMACEUTICALS PTY LTD (ACN 100 307 195)

NSI DENTAL PTY LTD (IN LIQUIDATION) (ACN 108 218 104)

PACIFIC BIOLINK PTY LTD (IN LIQUIDATION) (ACN 075 264 112)

PHOSCAL HOLDINGS PTY LTD (IN LIQUIDATION) (ACN 091 503 374)

REASONS FOR JUDGMENT BESANKO J 82 I agree with the orders proposed in the reasons of Rares J and I agree with the substance of those reasons, subject to one matter. I would wish to state my own reasons for concluding that the primary Judge erred in exercising the discretion as to costs in a manner which warrants the intervention of this Court. 83 The primary Judge approached the exercise of his discretion as to costs by first referring to what he called the general rule or principle that costs follow the event unless there are special circumstances. The primary Judge concluded that: 1. the undertakings given by the Probiotec parties were conditional in that they were without admissions and were only to continue until the outcome of the proceedings and "even then only in the event that they were unsuccessful in their defence"; 2. the Probiotec parties intended to and did take advantage of the invalidity claim and non-infringement submissions advanced on behalf of the NSI parties; and 3. the Probiotec parties' non-infringement defence in relation to the patent involved "by its nature, substance and effect a consideration of the patent's validity in a real sense". 84 The primary Judge said that the approach taken by the Probiotec parties was not one of a submitting party and he concluded that the University parties were entitled to their costs against the Probiotec parties including costs on the questions of invalidity and infringement. 85 The primary Judge then said that it was settled law that liability for the payment of a costs order is ordinarily joint and several. He referred to the following passage from the reasons for judgment of Lord Esher MR in Stumm v Dixon & Co (1889) 22 QBD 529 (at 533-534): 'When an action is tried against two or more defendants, and any defendant separates in his defence, as the judgment is against all, the law is that each of them is liable for the damages awarded by the judgment, and each of them is liable to the plaintiff for all costs taxed on his behalf as properly incurred by him in the maintenance of his action, except as to costs caused to him by so much of the separate defence of any defendant as is [and can only be] a defence for that defendant as distinguished from other defendants.'

86 The primary Judge omitted from the passage he quoted the words I have put in brackets. 87 The primary Judge expressed the view that it could not be said that the Probiotec parties had raised a separate and distinct defence which had incurred costs that could not be attributed to the joint conduct of the cross-respondents in the course of the action. It is not clear to me what the primary Judge had in mind in referring to the "joint" conduct of the cross-respondents in the course of the action. On any view, the conduct of the Probiotec parties in the course of the action was very different from that of the NSI parties. 88 The primary Judge then referred to the fact that in terms of substantive orders the final orders were made against all cross-respondents, that it was necessary for the University parties to prove the involvement of the Probiotec parties and that it was necessary for the University parties to "counter the allegation of invalidity and appropriate to obtain a Court order, especially having regard to the fact that the undertaking as to conduct was given without admission". 89 In my respectful opinion the primary Judge did not consider, or at least did not consider adequately in the sense of taking into account all relevant considerations, the possibility of awarding costs against the Probiotec parties on a different basis from the award against the NSI parties and that error warrants the intervention of this Court. 90 In Stumm v Dixon 22 QBD 529 the Court of Appeal was comprised of two members, Lord Esher MR, who upheld the decision of the Divisional Court, and Fry LJ, who would have overturned it. The difference between the two members of the Court was not in the formulation of the general rule in cases in which there are two or more unsuccessful defendants but, rather, as to the power of a taxing master to allocate costs between defendants in a case where the judgment or order is for the plaintiff "with costs" (see Hobson v W C Leng & Co [1914] 3 KB 1245). 91 Stumm v Dixon was decided over one hundred years ago in quite a different procedural context. Generally speaking, litigation today is a good deal more complex and expensive than it was in the late 19th century. On more than one occasion in recent times, the High Court has emphasised the breadth of the discretion given by sections like s 43(2) of the Federal Court of Australia Act 1976 (Cth): Oshlack v Richmond River Council (1998) 193 CLR 72 at 81 [21]-[22], 88-9 [40]-[41] per Gaudron and Gummow JJ; Foots v Southern Cross Mine Management Pty Ltd (2007) 241 ALR 32 39-40 at [26] per Gleeson CJ, Gummow, Hayne and Crennan JJ. These considerations and the fact that the purpose of an award of costs is to indemnify the successful party (Oshlack 193 CLR at 97 [67] per McHugh J) lead me to conclude that when considering the appropriate order as to costs in the case of two or more unsuccessful respondents it is appropriate to consider not only whether one respondent has put forward a separate defence but also any other factors relevant to that respondent's conduct and the effect of that conduct on the incurring of costs by the applicant. No doubt the fact that one of two unsuccessful respondents puts forward a separate defence will remain an important consideration and to that extent the rule enunciated by Lord Esher MR continues to be of application. However, the observations of Lord Esher MR should not be taken to limit the matters which may be considered to whether or not one of the unsuccessful respondents has filed a separate defence. 92 There were reasons in this case why the Probiotec parties could not escape an order for costs being made against them. Those reasons were identified by the primary Judge. However, in my respectful opinion, the primary Judge failed to consider whether the Probiotec parties should be liable for all or for only part of the costs of the University parties by reference to all the relevant considerations raised in the circumstances of this case.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko J.

Counsel for the Appellant: PW Taylor SC and M Dawson

Solicitor for the Appellant: Church & Grace

Counsel for the First and Second Respondents: SCG Burley and P Argus

Solicitor for the First and Second Respondents: Freehills

The Third, Fourth, Fifth, Sixth and Seventh Respondents did not appear.

Date of Hearing: 5 November 2007

Date of Judgment: 8 February 2008