REASONS FOR JUDGMENT

1                     On 7 October 2010 I dismissed the applicant’s motion for interlocutory relief (Bavarian Hospitality Group Pty Ltd v SakeSake Izakaya Pty Limited [2010] FCA 1102).

2                     The outstanding issue is the costs of this unsuccessful interlocutory application.  Both parties sought an opportunity to file further submissions in support of their competing contentions.  The applicant submitted that there should be no  order as to costs so that the default provision in O 62 r 29 of the Federal Court Rules would apply (the costs of the interlocutory application will be the successful party’s costs in the cause).  The respondent sought an order for costs in its favour, the costs to be taxable forthwith under O 62 r 3.  Both parties claim that the weight of authority favours their contention.

3                     Costs are in the court’s discretion.  In the present case, although I accepted the existence of a prima facie case (at [21] of the principal reasons), I declined to characterise it as very strong or very weak.  This is because I was satisfied that the balance of convenience weighed heavily in the respondent’s favour (at [35]).

4                     By the interlocutory application the applicant sought to establish a new status quo rather than to preserve the existing state of affairs.  The applicant did so because it had sat on its hands for at least three months while the respondent opened its business and started to trade.  It did so, it must be inferred, knowing that the effect of the interlocutory order sought would cause serious hardship to the respondent, assuming the respondent’s enterprise to be a normal commercial venture.  The applicant failed in its application.

5                     In these circumstances, the ordinary compensatory principle should operate.  The applicant should pay the respondent’s costs.  The respondent would not have incurred those costs but for the applicant’s decision to make its application in the circumstances described.  I see no reason, moreover, why the respondent should not be permitted to tax its costs forthwith.  The applicant was wholly unsuccessful.  The interlocutory application foundered on the balance of convenience.  Those issues are unrelated to the case to be determined at trial.  The respondent’s funds are apparently more limited than those of the applicant.  These circumstances, taken with the real weakness of the applicant’s case on the balance of convenience, indicate that it is appropriate to otherwise order under O 62 r (3).

Associate:

Dated:         22 October 2010