FEDERAL COURT OF AUSTRALIA

Sony Computer Entertainment Australia Pty Ltd v Dannoun (No 2)

[2001] FCA 1530

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LIMITED

(ACN 077 583 183) & ANOR v MOHAMED SAMIR DANNOUN & ANOR

N 243 OF 2000

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LIMITED

(ACN 077 583 183) & ANOR v MOHAMED SAMIR DANNOUN

N 965 OF 2000

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LIMITED

(ACN 077 583 183) & ANOR v MOHAMED SAMIR DANNOUN

N 973 OF 2000

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LIMITED

(ACN 077 583 183) & ANOR v MOHAMED SAMIR DANNOUN

N 974 OF 2000

SONY COMPUTER ENTERTAINMENT AUSTRALIA PTY LIMITED

(ACN 077 583 183) & ANOR v MOHAMED SAMIR DANNOUN & ORS

N 83 OF 2001

LINDGREN J

29 OCTOBER 2001

SYDNEY

THE COURT ORDERS THAT:

1.         The first respondent pay the applicants’ costs of the proceeding to date on an indemnity basis, that is, all the costs incurred by the applicants of and incidental to the proceeding except any costs unreasonably incurred and costs unreasonable in amount.

2.         Pursuant to Order 62 rule 3(2) of the Federal Court Rules, the applicants have leave to tax the costs the subject of this Order.

3.         Such costs be paid forthwith after taxation.

4.         The provisions of Order 62 rule 36A of the Federal Court Rules do not apply.

5.         The proceeding stand over to 9.30 am on 14 November 2001 before Lindgren J for further directions regarding the outstanding issues of pecuniary relief.

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

THE COURT ORDERS THAT:

1.         The respondent pay the applicants’ costs of the proceeding on an indemnity basis, that is, all the costs incurred by the applicants of and incidental to the proceeding except any costs unreasonably incurred and costs unreasonable in amount.

2.         The provisions of Order 62 rule 36A of the Federal Court Rules do not apply.

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

THE COURT ORDERS THAT:

1.         The respondent pay the applicants’ costs of the proceeding on an indemnity basis, that is, all the costs incurred by the applicants of and incidental to the proceeding except any costs unreasonably incurred and costs unreasonable in amount.

2.         The provisions of Order 62 rule 36A of the Federal Court Rules do not apply.

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

THE COURT ORDERS THAT:

1.         The respondent pay the applicants’ costs of the proceeding on an indemnity basis, that is, all the costs incurred by the applicants of and incidental to the proceeding except any costs unreasonably incurred and costs unreasonable in amount.

2.         The provisions of Order 62 rule 36A of the Federal Court Rules do not apply.

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

THE COURT ORDERS THAT:

1.         The respondents pay the applicants’ costs of the proceeding on an indemnity basis, that is, all the costs incurred by the applicants of and incidental to the proceeding except any costs unreasonably incurred and costs unreasonable in amount.

2.         The provisions of Order 62 rule 36A of the Federal Court Rules do not apply.

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

REASONS FOR JUDGMENT (No 2)

1                     I gave judgment in these five proceedings on the infringement issues on 29 August 2001 (Sony Computer Entertainment Australia Pty Ltd v Dannoun [2001] FCA 1235).  I reserved my decision on the question of costs as the applicants wished to submit that costs should be awarded in their favour on an indemnity basis.

2                     I will not repeat the factual background or attempt to summarise my earlier reasons for judgment which I will treat as read and as forming part of the reasons for my decision on the present application for indemnity costs.

3                     It is clear that the applicants are entitled to an order for costs in all five proceedings, the only issue being whether those costs should be on the usual party and party basis or on an indemnity basis.

4                     The question of the circumstances in which costs should be awarded on an indemnity basis has been discussed in many cases, recently in this Court by me in NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480 and by Katz J in Waverley Council v Refkin Pty Ltd [2001] FCA 1469.  I will not refer to the various judicial formulations to date of the grounds on which it is proper to award costs on an indemnity basis.  It suffices that I acknowledge that the circumstances must be “special”, must take the case out of the “ordinary” category of case, and must involve behaviour associated with the conduct of the proceeding by the person sought to be made liable which is so unreasonable as to make it unjust that the other party should be limited in its recovery to party and party costs.

5                     The particular circumstances on which the applicants rely here in relation to all three of Mr Dannoun, Ms Diab and Mr Haddad are that:

·        they defended the proceedings in wilful disregard of facts known to them and now found to have been without foundation; 

·        they denied allegations which should never have been denied;

·        in their conduct as parties and as witnesses they showed a disregard for the rights of the applicants and the position of the Court in seeking to ascertain the truth; and

·        in consequence of these matters, there has been an undue extension of the hearing time and a significant increase in the costs incurred by the applicants.

In my opinion, these grounds are made out as my earlier reasons for judgment demonstrate and, on this basis, I will make the orders sought.

6                     In addition, there are particular circumstances which apply to Mr Dannoun.  I refer to his use of aliases.  Although, on one view, it could be said his conduct in that respect was antecedent to the proceedings and therefore was not behaviour relevantly associated with his conduct of them, I think it was so closely connected in point of time and in purpose (to prevent his being sued) with the commencement of them, that it is relevant to the question of indemnity costs.  In any event, of course, it becomes relevant by reason of his testimonial denial that he was the person who had used the various aliases.

7                     The respondents have appeared this morning and have made a short written submission as to why an order for indemnity costs should not be made.  They refer to their poor financial circumstances.  I have explained that their ability to pay is not relevant to the question whether costs should be ordered on an indemnity basis, but that they will be entitled to apply in due course, once the applicants’ costs have been taxed, for an order permitting them to pay by instalments. 

8                     For the above reasons I make orders in accordance with short minutes of order initialled by me and placed with the papers in each of the five proceedings.

9                     [The orders appear at the front of these reasons for judgment.]

Associate:

Dated:              5 November 2001

Proceeding N 243 of 2000

Proceedings N 965, N 973 and N 974 of 2000

Proceeding N 83 of 2001