FEDERAL COURT OF AUSTRALIA

Australian Drainage Modules Pty Ltd v Urriola [2001] FCA 1506

Federal Court of Australia Act 1976 (Cth) s 43

Patents Act 1990 (Cth) s 160

Yates Property Corp Pty Ltd v Boland (2000) 179 ALR 664

AUSTRALIAN DRAINAGE MODULES PTY LIMITED v

HUMBERTO URRIOLA

N 291 OF 2001

TAMBERLIN J

SYDNEY

18 OCTOBER 2001

THE COURT ORDERS THAT:

1.         The orders as to costs made by the Commissioner of Patents on the hearing below be vacated.

2.         The respondent pay the applicant’s costs of the proceeding before the Commissioner of Patents.

3.         There be no order as to the costs of the application for an extension of time.

4.         The respondent pay the applicant’s costs of the appeal in this Court.

5.         In relation to any other party to the proceeding before the Commissioner of Patents, no order as to costs be made except to vacate the order made by the Commissioner of Patents.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR DECISION ON COSTS

1                     The applicant appealed from a decision of the delegate of the Commissioner of Patents (“the Commissioner”), given on 22 February 2001, directing that the respondent’s patent application be sealed.

2                     The notice of appeal was filed out of time and the leave of the Court was sought to extend the time until 24 March 2001.  On 10 May 2001, I made an order extending the time for filing and serving the notice of appeal.  Also on that day, I made orders by consent as to the future progress of the matter and stood the matter over for further directions at 9.30am on 27 July 2001.  On 15 August 2001, the respondent withdrew patent application number 704302, which was the subject of the proceeding.  On 8 October 2001, I ordered, by consent, that the appeal be dismissed and reserved the question of costs. 

3                     When the matter came before me on 18 October 2001, I had received written submissions from the parties in relation to costs and considered the evidence placed before me in relation to this question.

4                     Under s 43 of the Federal Court of Australia Act 1976 (Cth) (“the FCAA”) the Court has jurisdiction to award costs.  This is an unfettered discretionary power but must be exercised in a judicial manner in accordance with settled principles.  The primary principle is that costs follow the outcome unless there are particular circumstances which justify departure from this general rule.  Under O 62 r 6 of the Federal Court Rules (“the FCR”), a party to a proceeding in the Court, in the absence of any agreement between the parties, or any other provision, is not entitled to recover costs except under an order of the Court.

5                     Under s 160 of the Patents Act 1990 (Cth) (“the PA”), the Federal Court has power on an appeal from a decision or direction of the Commissioner to affirm, reverse or vary the Commissioner’s decision or direction and to order a party to pay costs to another party.  The appeal is by way of re-hearing.  Further evidence can be admitted and examination and cross-examination of further witnesses can be allowed.  It is clear from s 160 that the Court has power on appeal to try questions of fact.

6                     In relation to the costs below, I consider that the determination of the proceeding has occurred because of the withdrawal of the application by the respondent.  If this decision had been taken at an earlier stage, then the appeal would not have been necessary.  In these circumstances, I consider that costs should follow the substantial outcome and the respondent should pay the costs of the applicant in relation to the appeal.

7                     In relation to the notice of motion for an extension of time, I consider that there should be no order as to costs, having regard to the late stage of the withdrawal of the application for grant but also bearing in mind that the applicant did not comply with the FCR and sought an extension of time from the Court.  In those circumstances, it is reasonable that each party should bear its own costs.

8                     In relation to the proceeding before the Commissioner, I am satisfied that there is power in the Court to vary the order for costs made by the Commissioner to the respondent, which was successful in that proceeding.  In light of the withdrawal of the patent application, I consider that the costs order made by the Commissioner should be vacated as against all parties to that proceeding and I also consider that the respondent should pay the applicant’s costs in relation to that proceeding.  I am not satisfied that any other party to the proceeding before the Commissioner should be liable for the respondent’s costs.

9                     It is neither necessary nor appropriate for the Court on the present appeal to consider or to make a determination as to the substantive merits of the matter before determining the appropriate order as to costs: see Yates Property Corp Pty Ltd v Boland (2000) 179 ALR 664 at 667 and the decisions cited in that judgment.

10                  In the present case, since the parties have consented to the dismissal of the appeal, it is not appropriate, in my view, for the Court to set aside the substantive decision of the Commissioner in relation to the determination in favour of the respondent.  That application has been withdrawn so that the proceedings which have taken place to date have resulted in a situation where the applicant has succeeded in substance and where the proceedings would not have been necessary had the respondent made its election not to proceed at an earlier point in time

11                  Accordingly, for the above reasons and taking into account the respective conduct of other parties in light of the withdrawal of the application, I made the following orders as to costs:

1.         The orders as to costs made by the Commissioner on the hearing below are vacated.

2.         The respondent is to pay the applicant’s costs of the proceeding before the Commissioner.

3.         There is no order as to the costs of the application for an extension of time.

4.         The respondent is to pay the applicant’s costs of the appeal in this Court.

5.         In relation to any other party to the proceeding before the Commissioner, there is no order as to costs except to vacate the order made by the Commissioner.

Associate:

Dated:              12 November 2001