FEDERAL COURT OF AUSTRALIA

Visible Results Properties Inc v Sushi Train (Australia) Pty Limited [2007] FCA 514

VISIBLE RESULTS PROPERTIES, VISIBLE RESULTS AUSTRALIA PTY LIMITED AND VISIBLE RESULTS ASIA PACIFIC LIMITED v SUSHI TRAIN (AUSTRALIA) PTY LIMITED

NSD 460 OF 2004

ALLSOP J

16 APRIL 2007

SYDNEY

THE COURT ORDERS THAT:

1.                  The applicants pay the respondent’s costs of the application.

2.                  The cross-claimant pay the cross-respondent’s costs of the cross-claim. 

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

REASONS FOR JUDGMENT

1                     On 7 February 2007 I made orders and published reasons in this matter.  I gave the parties time to file submissions on costs.  The parties sought further time.  They have now filed submissions.

2                     The submissions of the respondent were directed first to a disagreement with the suggested form of order in [75] of my reasons.  It was suggested that the distinction made in the costs order should not be by reference to issues of novelty and anticipation, but by reference to the process filed: the application and the cross-claim.  Without going into the matter in any detail, I am content to proceed on the basis suggested by the respondent and not opposed by the applicants, that there be a division of costs based on the process filed.  I think it would be substantially identical to that which I identified, but given the terms of submissions I will accede to the manner in which the parties prefer to approach the question.

3                     The only substantive difference between the parties is whether or not the applicants should pay the respondent’s costs of the application on an indemnity basis or the usual party/party basis.

4                     I do not think that this is an appropriate case in which to order indemnity costs.  The respondent says that it is appropriate to have the applicants pay its costs on an indemnity basis because of the several offers made by it which were rejected.  The respondent submits that the applicants were unreasonable in rejecting the offers made by the respondent.  The first offer was made on 10 August 2004.  That offer was that the applicants discontinue the proceeding and pay the costs of the respondent up to the filing and serving of the amended defence and cross-claim.  This was followed on 6 September 2004 with a document said to be an offer to settle in accordance with Order 23 rule 3 and Order 41.  This offer was that the applicants discontinue the action and pay the costs of the respondent on an indemnity basis.  The third offer was made on 11 March 2005.  In this offer, the respondent suggested resolution of the matter by the dismissal of the claim and the cross-claim and each party paying its own costs.

5                     In essence, none of the respondent’s offers were other than a substantial assertion of the proposition that it would win, though the last offer can be seen to have made some comment on costs.  All three offers combined the fate of the application and cross-claim.  The respondent has won; however, only partially.  I do not think that any of the offers contained any sufficient element of compromise to make the award of indemnity costs by reason of the dismissal of the application just or fair. 

6                     The discretion in relation to costs pursuant to s 43 of the Federal Court of Australia Act 1976 (Cth) is wide.  In my view, the appropriate order for costs is that the applicants pay the respondent’s costs of the application and the respondent cross-claimant pay the applicants’ costs of the cross claim on a party/party basis.  Thus, I will simply make orders that each pays the costs of the other in respect of the relevant process.

Associate:

Dated:         16 April 2007