RB (Hygiene Home) Australia Pty Ltd v Proctor & Gamble Australia Pty Limited

1. Subject to the operation of the costs orders already made: (a) the respondent pay 70% of the applicant's costs of the application; and (b) the cross-respondent pay the cross-claimant's costs of the cross-claim. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

YATES J: 1 On 30 November 2023, I made declarations that the respondent (and cross-claimant) (PG) and the applicant (and cross-respondent) (RB) had each contravened the Australian Consumer Law (the ACL) in relation to the supply of certain dishwashing tablets in certain packaging: RB (Hygiene Home) Australia Pty Ltd v Proctor & Gamble Australia Pty Limited (No 2) [2023] FCA 1491 (RB v PG (No 2)). The following reasons assume familiarity with RB v PG (No 2). 2 At that time I made those declarations, I said that final injunctive relief was also appropriate. I expressed a provisional view about the form of those injunctions: see RB v PG (No 2) at [232] in relation to PG, and RB v PG (No 2) at [233] - [234] in relation to RB. I said that I would hear the parties on that question as well as on the question of costs. I made orders for the filing of submissions on both questions and said that, unless the parties requested an oral hearing, I would proceed to a determination on the papers. 3 The parties made no substantive submissions on the form of the injunctions I had proposed. However, RB stated that it wished to be heard on the question as to when the injunctions against it should come into effect. 4 RB's position was that these injunctions should not take effect until 22 January 2024 so as to allow it time to sticker the offending packaging while allowing its current supply to continue. PG opposed such an order, contending that the injunctions against RB should have immediate effect. 5 I listed that question for hearing on 18 December 2023. At that time, I was persuaded that the injunctions against RB in respect of the supply of Finish Ultimate Plus in the Finish Ultimate Plus packaging (Sch 3 to RB v PG (No 2)) and Finish 0% in the Finish 0% packaging (Sch 4 to RB v PG (No 2)) should not take effect until 22 January 2024. In coming to that decision, I had regard to an affidavit made by Azizul Haque (RB's Supply Services Director). I also had regard to the comments I made in RB v PG (No 2) at [107] - [109] in respect of the Finish Ultimate Plus packaging, and the fact that the Finish 0% has already been on the market for more than two and a half years without complaint from PG or any other person. I made orders accordingly. 6 The remaining question to be determined is the appropriate order for costs. In RB v PG (No 2) I expressed the provisional view that PG should pay the costs of RB's application and that RB should pay the cost of PG's cross-claim, subject to any orders for costs already made. A number of previous costs orders have been made. There are two orders that I should address. 7 The first is Order 3 made on 28 April 2023. This order was that the costs of the application for interim injunctive relief that RB had brought against PG be RB's costs in the cause: RB (Hygiene Home) Australia Pty Ltd v Proctor & Gamble Australia Pty Limited [2023] FCA 383. As RB has succeeded in its claim for final injunctive relief in respect of the subject matter of its claim for interim injunctive relief, PG must now pay RB's costs of the application for interim injunctive relief. 8 The second is Order 6(d) made on 14 July 2023. The effect of this order was that, subject to further order, the parties pay the costs of the product testing (to which they had agreed) in equal shares. That testing is discussed in RB v PG (No 2) at [122] - [146]. There has been no "further order" and the parties do not suggest that a "further order" be made. 9 RB accepts that the costs orders I proposed should be made. PG contends that different orders should be made. 10 In this regard, PG contends that, in respect of the costs of the application, it should pay RB's costs of the application for interim injunctive relief and that, save for the costs of the testing (which will be governed by Order 6(d) made on 14 July 2023), RB should pay 70% of its (PG's) costs. Alternatively, PG contends that if the Court is not persuaded that RB should pay more than 50% of PG's costs, the parties bear their own costs of the application. PG submits that RB should pay PG's costs of the cross-claim, given that PG was wholly successful on that claim. 11 PG's submissions on these matters are as follows. 12 Following the grant of interim injunctive relief, PG ceased to supply its Miracle product (Miracle) in its original packaging from 30 April 2023. It contends that there is no evidence of supply of Miracle in its original packaging after mid-June 2023. On 16 June 2023, RB added a claim in respect of PG's supply of Miracle in its revised packaging. 13 RB's case was that, by supplying Miracle in its original packaging and in its revised packaging, PG had made three representations. At the commencement of the trial, RB abandoned its case on one of these representations: RB v PG (No 2) at [12]. Although RB's case in respect of Miracle's original packaging succeeded (on one of the representations and partially on the remaining representation), its case in respect of Miracle's revised packaging failed. 14 PG contends that much of the evidence in the application was filed in respect of the application for the interlocutory injunction (which costs it accepts it should pay). However, it also contends that almost all the evidence that was filed after the application for interim injunctive relief was either directed to Miracle's revised packaging or to Miracle's original and revised packaging, with very little of it directed to just the original packaging. PG also contends that the focus of the trial was Miracle's revised packaging. Therefore, according to PG, after the application for interim injunctive relief, most of the costs of the parties in respect of the application were incurred in relation to Miracle's revised packaging, on which case RB failed. 15 PG relies on a further matter. On 1 September 2023, it served a notice of offer to compromise under r 25.01(1) of the Federal Court Rules 2011 (Cth) (the Rules). PG accepts that the terms of this offer are not sufficient to enliven a costs order under r 25.14 of the Rules. It submits, however, that, in the exercise of the Court's broad discretion on the question of costs, the making of the offer to compromise should be taken into account. This is because RB, acting reasonably, should have accepted the offer as it was close, in substance, to the final outcome of the case. 16 RB resists the costs of the application being dealt with in this way. It disputes PG's contentions that, following the grant of interim injunctive relief, the focus of the application was Miracle's revised packaging and that most of the costs were incurred in respect of RB's case on Miracle's revised packaging. RB submits that its case on Miracle's original packaging not only remained but was expanded by reference to a further pleaded representation. The fact that the trial itself focused on Miracle's revised packaging was only due to the fact that, at the commencement of the trial, PG offered an undertaking in respect of future supply using Miracle's original packaging and stated in its opening submissions that "the Court need only consider the updated stickered packaging" (i.e., the revised packaging). 17 RB submits that most of the costs of the application were incurred in respect of the joint testing and experts report, which were necessary for its case on Miracle's original packaging and revised packaging. It submits that its case on Miracle's revised packaging involved little additional evidence and little in the way of further submissions. 18 RB submits, further, that PG's reliance on its offer of compromise does not assist its claim for costs. 19 I am not persuaded by PG's submissions on this question. PG persisted with its defence of Miracle's original packaging up to the point of trial. Even though, at that point, it offered an undertaking not to further supply Miracle in its original packaging, the undertaking was expressed to be "without admission of liability". As I observed in RB v PG (No 2) at [11], given the basis on which the undertaking was proffered, it was still necessary for the Court to consider whether, by supplying dishwashing tablets in Miracle's original packaging, PG had contravened the ACL as alleged. Therefore, this part of RB's application was not "off the table". In fact, a declaration of contravention was made in respect of this packaging and an injunction has now been granted which extends beyond the supply of Miracle in its original packaging. That injunction includes a restraint in respect of the making of two representations, one of which was not the subject of the application for interim injunctive relief. 20 In these circumstances I do not accept that it is appropriate that an order be made requiring RB to pay any part of PG's costs of the application. Further, I am satisfied that RB is entitled to an order for costs in its favour. The only question is whether I should deviate from the provisional view I expressed in RB v PG (No 2) at [235] and apply some discount to the costs that PG should bear. 21 Although RB abandoned its case in respect of one pleaded representation and partially succeeded on another, I am not persuaded that these matters are of such consequence that they warrant a discount. The fact that RB's case on Miracle's revised packaging did not succeed is of greater significance. As to the offer to compromise, RB was not obliged to accept it and I do not think that the fact that an offer was made and rejected has any real bearing on the question I must now decide. 22 After considering the parties' submissions on this question, I am persuaded that some discount from RB's costs of the application is warranted. In my assessment, the discount should be 30%. 23 Finally, I observe that Cheeseman J (when sitting as the Commercial and Corporations Duty Judge in New South Wales) reserved the question of costs of a case management hearing before her Honour on 4 May 2023. The parties have not addressed me on the reserved question. In the circumstances, there will be no order for costs in respect of that hearing. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Yates.