Federal Court of Australia

Scidera, Inc. v Meat and Livestock Australia Limited (No 4) [2026] FCA 1257

ORDERS

THE COURT ORDERS THAT:

1.    The first respondent’s interlocutory application dated 29 July 2026 (the application) be allowed.

2.    The first respondent is granted leave to file and serve the Notice of Cross-claim and the Statement of Cross-claim, substantially in the form set out in Annexure BME-1 to the affidavit of Bridie Margaret Egan affirmed on 29 July 2026, within seven days from the date of these orders.

3.    The first respondent’s cross-claim be stayed until the determination of all issues of liability and validity in the proceeding, or until further order.

4.    Any party wishing to take any further step in the first respondent’s cross-claim prior to the determination of liability and patent validity issues apply on notice.

5.    The first respondent pays the second respondent’s costs of the application, in the sum of $25,000, to be payable within 14 days from the date of these orders.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

ROFE J:

1.    Introduction

1    These reasons concern an interlocutory application filed by the first respondent, Meat and Livestock Australia Limited (MLA), on 29 July 2026. By that application, MLA seeks leave to file and serve a Notice of Cross-claim and Statement of Cross-claim in the form set out in Annexure BME-1 to the affidavit of Bridie Margaret Egan affirmed on 29 July 2026 (together, the proposed cross-claim) against the second respondent, Agricultural Business Research Institute (ABRI).

1.1    Background

2    These proceedings have a lengthy procedural history, having been commenced on 1 December 2023.

3    On 21 November 2025, orders were made providing for the filing of any cross-claims by the respondents by 19 February 2026. The respondents thereafter commenced the following cross-claims:

(a)    ABRI on 19 February 2026, against the applicant, Scidera, Inc.;

(b)    the third respondent, Zoetis Australia Pty Ltd, on 23 February 2026, against Scidera;

(c)    the sixth respondent, Genotyping Australia Pty Ltd trading as Xytovet, on 23 February 2026, against MLA, ABRI, DataGene Limited, Australian Wagyu Association Ltd, University of New England (UNE) and The State of New South Wales; and

(d)    the fifth respondent, DataGene, on 3 March 2026, against Scidera.

4    Since the filing of those cross-claims, case management orders have been made for the progression of each claim and the relevant pleadings have been filed.

5    Relevantly, the matter is listed for a five-week trial commencing on 6 September 2027. The trial will concern issues of liability (including Xytovet’s cross-claim), patent validity and any entitlement to additional damages. Questions concerning the quantification of pecuniary relief will be determined separately pursuant to r 30.01 of the Federal Court Rules 2011 (Cth).

6    Despite exchanged correspondence, the parties were unable to agree on the appropriate course in relation to the proposed cross-claim. MLA therefore filed the present interlocutory application seeking leave to file and serve the proposed cross-claim.

7    Following a case management hearing on 6 August 2026, directions were made for the filing of evidence, submissions in chief and in response, and costs summaries in relation to the application. Those materials were subsequently filed, and the application was set to be determined on the papers.

8    On 21 August 2026, my chambers received correspondence from MLA’s solicitors enclosing short submissions in reply, the filing of which was not contemplated by the orders of 6 August 2026. In that correspondence, MLA noted that it had previously foreshadowed that, if ABRI sought a stay of the proposed cross-claim, it would seek to be heard on that application. MLA submitted that ABRI had only formally sought a stay in its submissions filed on 19 August 2026 and requested a hearing if the Court were minded to make the stay order proposed by ABRI. MLA also provided short submissions opposing any stay of the proposed cross-claim. Having regard to the nature of the issues raised, I have considered those submissions in determining the application on the papers.

1.2    The proposed cross-claim

9    MLA contends that the proposed cross-claim raises a “very limited” question of contractual construction concerning the scope and operation of the indemnity in cl 14.1 of the Analytical Software Licence Agreement between MLA, UNE and the New South Wales Department of Primary Industries (as it was then called) (together, the Owners) dated 27 March 2018 (2018 Licence) as varied from time to time.

10    Clause 14.1 of the 2018 Licence provides the following:

14    Liability

14.1    ABRI indemnifies the Owners against all damages, losses, costs and expenses suffered or incurred by any of them arising out of any:

14.1.1    breach by ABRI of this agreement; or

14.1.2    negligent or unlawful act or omission of ABRI in connection with this agreement; or

14.1.3    the Commercialisation of the Analytical Software and Enabling Tools by ABRI (and any of its sublicensees) or the use of the Analytical Software or Enabling Tools by any third person.

11    I will refer to this clause as the Indemnity.

12    The 2018 Licence has subsequently been amended by five deeds of variations, the last of which, dated 4 August 2025, made some amendments to cl 14.1.

13    The proposed cross-claim alleges that:

(a)    ABRI has Commercialised the Analytical Software and Enabling Tools (as those terms are defined in the 2018 Licence). Scidera and Xytovet have each made claims against MLA in the proceeding arising out of that Commercialisation, or alternatively, arising out of unlawful acts or omissions of ABRI in connection with the 2018 Licence; and

(b)    by reason of the Indemnity, ABRI must indemnify MLA for any damages, losses, costs and expenses suffered or incurred by MLA, including the legal costs incurred in responding to Scidera’s and Xytovet’s claims and any amounts that MLA is ordered to pay in the proceeding and interest (together, Damages and Costs).

2.    Applicable principles

14    The principles applicable to the determination of the application before the Court are not disputed between the parties.

15    Division 15.1 of the Rules governs cross-claims. Relevantly, r 15.01 states:

15.01    Cross-claim by respondent

A respondent may make a cross‑claim in a proceeding:

(a)    against an applicant—for any relief to which the respondent would be entitled against the applicant in a separate proceeding; or

(b)    against any other respondent or person—for any relief, including for contribution or indemnity, that is related to the subject of the proceeding.

(Emphasis added.)

16    Rule 15.04 provides that a notice of cross-claim must be filed at the same time as the respondent’s defence, or the respondent’s affidavit in reply to the applicant’s affidavit in the principal proceeding. Where a respondent seeks to bring a cross-claim outside that period, r 15.05 requires the respondent to apply to the Court for leave to file a Notice of Cross-Claim.

17    The principles governing the grant of leave under r 15.05 are relevantly the same as those applicable to an application for leave to amend pleadings: Rush v Nationwide News Pty Ltd (No 2) (2018) 359 ALR 564 at [87] (Wigney J). Relevantly, his Honour stated:

The principles that are applicable to the grant of leave to file a cross-claim out of time are relevantly the same as those that apply in the case of applications for leave to amend. Relevant considerations include: whether the subject matter of the claim fell within the Court’s jurisdiction; the extent of the delay; whether an acceptable explanation has been provided for the delay; any prejudice to the other party or parties occasioned by the delay; the merits or strength of the proposed cross-claim; the degree of connection between the proposed cross-claim and the subject matter of the principal proceedings; and the desirability that all disputed matters between the parties connected with the subject matter of the proceedings be dealt with in the main trial.

(Citations omitted.)

18    Consideration as to whether leave should be granted is undertaken alongside the Court’s overarching purpose in ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act). In determining whether leave ought be granted under r 15.05 of the Rules, the Court must have regard to the overarching purpose of facilitating the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible, and the obligation on parties and their legal representatives to conduct proceedings consistently with that purpose.

3.    Submissions

3.1    Delay

19    MLA submits that any delay on its part in bringing the proposed cross-claim is explicable. It accepts that it has been aware of the Indemnity in cl 14.1 of the 2018 Licence since the licence was executed on 27 March 2018 but contends that there was no reason to file a cross-claim when it filed its defence on 30 May 2025 because it had no reason to believe that ABRI would dispute the operation of the Indemnity.

20    MLA maintains that, absent such a dispute, there was no need for a cross-claim because ABRI could satisfy any liability under the Indemnity following the conclusion of the proceeding. MLA contends that the position changed upon receipt of correspondence dated 19 March 2026 from Norton Rose Fulbright, the solicitors on record for ABRI, in response to MLA’s notification of ABRI’s liability under the Indemnity on 11 March 2026. ABRI’s solicitors’ response indicated that there was no basis for MLA to assume that the operation of cl 14.1.3 of the 2018 Licence, and ABRI’s liability in that respect, was not in dispute.

21    MLA submits that it thereafter proceeded in accordance with the dispute resolution requirements in cl 18 of the 2018 Licence before seeking leave to bring the proposed cross-claim, which states the following:

18    Dispute Resolution

18.1    The parties must, without delay and in good faith, attempt to resolve any dispute which arises out of or in connection with this agreement prior to commencing any proceedings.

22    MLA further submits that, if leave is refused, it will be required to commence separate proceedings against ABRI in the Supreme Court of New South Wales, resulting in additional cost and delay for both the parties and the Court. It also maintains that the proposed cross-claim can readily be accommodated within the present proceeding and will neither disturb the current timetable nor extend the trial listed to commence on 6 September 2027.

23    MLA asserts that much of ABRI’s opposition appears to be directed to the burden imposed by Scidera’s claims, the various invalidity cross-claims and Xytovet’s cross-claim, rather than any burden occasioned by the proposed cross-claim itself.

24    ABRI, on its part, submits that MLA’s explanation should not be accepted. It notes that MLA has long been aware of both the Indemnity and the claims potentially engaging its operation.

25    In particular, ABRI submits that MLA was aware of Scidera’s claims against it by at least 8 October 2021 yet did not raise the scope or operation of the Indemnity with ABRI at that time. Nor did MLA do so following the commencement of the proceeding on 1 December 2023, upon filing its defence on 30 May 2025, or before the deadline of 19 February 2026 by which cross-claims were required to be filed pursuant to orders made on 21 November 2025.

26    ABRI observes that, while the other respondents filed cross-claims between 19 February and 3 March 2026, MLA remained silent as to any claim against ABRI. It was not until 11 March 2026, after the relevant deadlines for cross-claims and defences had passed, more than two years after commencement of the proceeding and almost four and a half years after MLA was first put on notice of Scidera’s claims, that MLA first asserted that ABRI was liable to it pursuant to the Indemnity.

27    ABRI submits that MLA’s asserted assumption that ABRI would simply accept liability under the Indemnity without dispute is not a satisfactory explanation for that delay. It further submits that MLA cannot rely upon the contractual dispute resolution process to excuse the delay, given that MLA did not raise the Indemnity with ABRI until 11 March 2026.

28    There is force in ABRI’s submission that MLA has delayed in asserting its claim under the Indemnity. MLA’s explanation for the delay is that a dispute concerning the operation of the Indemnity did not crystallise until ABRI indicated that MLA’s entitlement to rely upon the provision was contested. ABRI’s indication was made in response to MLA’s letter on 11 March 2026. There is no explanation as to why MLA was content to assume there was no dispute about the Indemnity until the letter of 11 March 2026.

3.2    Prejudice

29    MLA submits that the proposed cross-claim gives rise to a confined question concerning the scope and operation of the Indemnity and that any prejudice asserted by ABRI is overstated. In MLA’s view, this issue is capable of being determined largely by reference to the terms of the 2018 Licence given that it is a “very limited question of contractual interpretation”. MLA submits that it only requires an assessment of the clear, ordinary meaning of the terms in the 2018 Licence and therefore does not require substantial additional discovery or evidence. MLA further submits that any additional evidentiary steps could readily be accommodated within the existing timetable for the proceeding.

30    MLA submits that the proposed cross-claim will not occasion prejudice to ABRI or any other party and that any inconvenience is outweighed by the benefits of having the dispute determined within the present proceeding. In its submissions in reply, MLA further submits that any stay of the proposed cross-claim would itself result in prejudice. Noting that liability and quantum have already been bifurcated in the proceeding, MLA maintains that it seeks only a determination of liability under the Indemnity, and that there may ultimately be no separate determination of quantum if the claims brought by Scidera and Xytovet are unsuccessful. MLA also submits that there is substantial overlap between the factual matters, causation issues and legal questions arising in the proceeding and those arising under the proposed cross-claim, such that deferring the proposed cross-claim may result in duplicated costs and resources and require a further liability hearing at a later date.

31    In contrast, ABRI contends that the proposed cross-claim raises distinct factual and legal issues from those arising in the principal proceeding and that its determination will require consideration of matters relating to the parties’ intentions and the surrounding commercial context of the 2018 Licence. ABRI submits that these issues differ from the patent infringement and validity issues arising in the proceeding and are likely to require different witnesses, document investigations and separate legal argument.

32    ABRI further submits that, if the proposed cross-claim is permitted to proceed as part of the present liability timetable, it will be required to devote additional time and resources to identifying relevant witnesses, including former personnel, locating and reviewing documents concerning the negotiation and operation of the 2018 Licence, and preparing evidence that would not otherwise be required.

33    ABRI also notes that it is a controlled entity of UNE, a public university and the Fifth Cross-Respondent to Xytovet’s proposed cross-claim. UNE established ABRI in 1970 to facilitate the transfer of technological advancements developed by the university to the Australian agricultural and rural industries. Since 1985, ABRI has purportedly commercialised BREEDPLAN on a not-for-profit basis for the benefit of the Australian beef industry. ABRI submits that both it and UNE are public, not-for-profit institutions operating with limited and stretched resources. In those circumstances, ABRI contends that it would suffer significant prejudice if the proposed cross-claim were permitted to proceed as part of the liability phase of this proceeding.

3.3    Overlap between the proceeding and the proposed cross-claim

34    MLA submits that there is a substantial overlap between the issues raised in the proceeding and those arising under the proposed cross-claim such that it favours the grant of leave to file the proposed cross-claim. It contends that the allegations advanced by Scidera and Xytovet arise from the conduct said to engage the Indemnity and that the outcome of the proceeding will inform the outcome of the proposed cross-claim. MLA notes that Xytovet’s cross-claim is premised on Xytovet’s participation in the BREEDPLAN system as a beef genomic testing laboratory and arises from the allegations made by Scidera in the proceeding

35    MLA further submits that, if its claim under the Indemnity is successful, the outcome of the proceeding will inform its outcome irrespective of whether Scidera’s and Xytovet’s claims against MLA succeed. MLA submits that, if those claims are successful, the quantum recoverable under the Indemnity would include any amount MLA is ordered to pay together with any unrecovered costs incurred by MLA. Conversely, if the claims against MLA are unsuccessful, the amount recoverable under the Indemnity would be limited to any costs incurred by MLA that could not be recovered against Scidera and Xytovet. It therefore submits that the factual, causation and legal issues raised by the proposed cross-claim are directly linked to those already pleaded in the proceeding and that it is desirable that all disputes between the parties be dealt with concurrently.

36    MLA further submits that the factual, causation and legal issues raised by the proposed cross-claim are directly linked to those already pleaded in the proceeding and that it is therefore desirable that all disputes between the parties be dealt with concurrently. MLA maintains that, if leave is refused, it will be required to commence separate proceedings in the Supreme Court, giving rise to duplicated costs and judicial consideration of substantially overlapping issues. Moreover, a concurrent proceeding would require case management coordination with this proceeding.

37    ABRI submits that the proposed cross-claim raises issues that are separate and distinct from those arising in the proceeding. In particular, ABRI contends that the proposed cross-claim concerns the construction and operation of the 2018 Licence and will require consideration of matters relating to the parties’ intentions and the surrounding commercial context of that agreement.

38    ABRI emphasises that, unlike the patent infringement and validity issues arising in the proceeding, the proposed cross-claim raises questions concerning the proper construction of the Indemnity, including the circumstances in which it was agreed and the conduct to which it applies. ABRI contends that the determination of those issues is likely to require separate factual inquiries, different witnesses and separate legal argument. ABRI further submits that, even if leave were granted to file and serve the proposed cross-claim, there is no present necessity for it to be determined together with the principal proceeding and that it should instead be stayed pending the determination of the liability and validity issues presently before the Court.

3.4    Merits of the proposed cross-claim

39    MLA submits that the proposed cross-claim is not one of mere assertion and raises a genuine dispute between the parties concerning the scope and operation of the Indemnity contained in cl 14.1 of the 2018 Licence. Relevantly, cl 1.1 of the 2018 Licence provides the following definitions:

Commercialise means to commercially use, market, distribute, sell, license, provide a service or otherwise exploit and includes the provision of Beef Genetic Evaluation Services […]

Analytical Software means the software package (including updates, modifications and enhancements) which estimates animals’ genetic merit and which is comprised of:

(a) the BREEDPLAN Software;

(b) the BreedObject Software;

(c) the TakeStock Software; and

(d) the Data Audit Software.

but does not include any software associated with data receival, storage or reporting (including via the web) developed by ABRI, but integral to the delivery of Beef Genetic Evaluation Services […]

Enabling Tools means the software for construction of genomic relationship matrices, and for parentage and breed composition estimation supporting the operation of the BREEDPLAN software, but not any stand-alone breed composition and parent verification and discovery software […]

40    MLA contends that the proper construction of the Indemnity is apparent from the clear and ordinary meaning of the contractual language and that the allegations advanced by Scidera and Xytovet against MLA arise from conduct falling within the categories identified in cl 14.1. On that basis, MLA submits that ABRI is liable to indemnify it in respect of any damages, losses, costs and expenses falling within the terms of the Indemnity. MLA further notes that ABRI has not identified any reason why the Indemnity should not be given its ordinary meaning.

41    ABRI accepts that there is a real dispute between the parties concerning the scope and operation of the Indemnity. However, it submits that the merits of the proposed cross-claim are not as straightforward as MLA contends. ABRI notes that MLA’s submissions do not address how the claims brought by Scidera and Xytovet against MLA engage an indemnity directed to acts or omissions of ABRI or the commercialisation of the relevant software by ABRI. ABRI further contends that questions concerning the proper construction of the 2018 Licence remain in dispute and that the strength of the proposed cross-claim is not such as to favour the grant of leave.

42    Notwithstanding those matters, ABRI accepts that the proposed cross-claim raises a genuine controversy between the parties concerning the scope and operation of the Indemnity.

4.    Consideration

43    Having considered the competing submissions, I am satisfied that MLA should be granted leave to file and serve the proposed cross-claim. While the parties differ as to the appropriate management of the proposed cross-claim, ABRI does not dispute that there is a real controversy between the parties concerning the scope and operation of the Indemnity. As such, it can be fairly stated that the true dispute concerns the future conduct of the proposed cross-claim; namely, whether it should proceed concurrently with the principal proceeding and the existing cross-claims or whether its further conduct should be deferred pending the determination of the liability and validity issues.

44    Although the orders made on 6 August 2026 did not provide for submissions in reply, MLA subsequently elected to file further written submissions addressing the stay issue. Those submissions have been considered. In those circumstances, MLA has had a proper opportunity to be heard on the question of a stay. As the parties’ respective positions have been fully articulated in writing, I am not persuaded that a further oral hearing would materially assist in the determination of the issue. To the contrary, convening a further interlocutory hearing would occasion additional cost and delay in an already complex and longstanding proceeding. Consistently with the overarching purpose under ss 37M and 37N of the Federal Court Act, I consider it appropriate to determine the question on the papers.

45    Nor do I regard the absence of a formal application pursuant to r 17.01 of the Rules as carrying significant weight. The proposed cross-claim is not yet a live pleading. The Court is presently concerned with whether leave should be granted and, if so, the manner in which the proceeding should thereafter be managed. The question of whether the proposed cross-claim should proceed immediately or be deferred is therefore properly before the Court in the exercise of its case management powers.

46    A significant thrust of ABRI’s submissions concerns the burden that participation in the proposed cross-claim would impose upon its resources. Those submissions should not be dismissed merely because ABRI is not a natural person. In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, the High Court considered provisions relating to amending pleadings in the Court Procedures Rules 2006 (ACT). The High Court acknowledged that corporations may themselves experience significant burdens arising from litigation, including the diversion of resources and the need to commit personnel and attention to the proceeding: at [101] (Gummow, Hayne, Crennan, Kiefel and Bell JJ). Their Honours further recognised at [93] that delay and the demands of litigation may affect not only the parties before the Court but also other litigants seeking the timely resolution of their disputes.

47    Those observations have particular resonance in the present case. ABRI is a not-for-profit entity and a controlled entity of UNE. Accepting that fact does not mean that ABRI’s resource concerns alone are determinative. However, they are legitimate matters to take into account in considering whether the immediate prosecution of the proposed cross-claim would advance, or impede, the efficient and proportionate conduct of the proceeding.

48    Moreover, at [98] of Aon, the High Court explained that the “just resolution” of proceedings encompasses considerations of speed, efficiency and cost:

[…] Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule’s reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.

49    Those observations are apposite in the present case. The issue is not whether MLA raises an arguable indemnity claim. Plainly, it does. Nor is it whether the controversy between MLA and ABRI should be litigated at all. Rather, the question is whether, having regard to the stage of the proceeding, the issues presently directed for trial and the efficient administration of justice, the proposed cross-claim should be prosecuted immediately or deferred as a matter of case management.

50    I accept that the outcome of the proceeding will substantially inform the outcome of the proposed cross-claim and that there is some overlap between the factual matters and legal issues raised by each. Further, it is well established that case-management considerations are not an end in themselves and “[…] should not supplant the [Court’s fundamental task] of doing justice between the parties according to law”: Aon at [30] (French CJ). Nevertheless, the proposed cross-claim raises discrete contractual questions concerning the construction and operation of the Indemnity that are not necessary to the determination of the liability and validity issues presently before the Court. Further, according to ABRI, it remains possible that the determination of those questions will require evidence, witnesses and document investigations not presently contemplated by the existing timetable.

51    The proceeding is already substantial in scope and complexity, involving multiple parties, multiple cross-claims and significant interlocutory activity. In those circumstances, I consider it appropriate to avoid introducing additional issues that have the potential to complicate, distract from, or delay the efficient determination of the liability issues presently directed for trial.

52    I have also considered MLA’s submissions in reply, including its contention that liability and quantum have already been bifurcated, that there may ultimately be no need for a separate determination of quantum, and that deferring the proposed cross-claim may result in some duplication of costs and resources. Those submissions have force. However, I am not satisfied that they outweigh the case management considerations favouring the deferral of the proposed cross-claim. The preferable course is to permit the proposed cross-claim to be brought within the proceeding whilst deferring its further conduct until the liability and validity issues have been determined. The proposed cross-claim raises a relatively confined construction question that can be dealt with after the liability and validity issues are determined. At that time, MLA and ABRI are likely to have an idea of the scale of the claim on the Indemnity. More particularly, whether it is limited to the costs unrecoverable from the unsuccessful parties, or whether it includes damages and costs of the successful parties and MLA’s own costs.

53    In my view, that outcome best accords with the overarching purpose in ss 37M and 37N of the Federal Court Act. It permits the controversy between MLA and ABRI to remain before this Court, avoids the need for separate proceedings in another forum and preserves the Court’s ability to determine the future management of the proposed cross-claim in light of the outcome of the liability and validity issues. The appropriate disposition is therefore to grant leave to file and serve the proposed cross-claim whilst staying its further conduct pending the determination of those issues.

54    I will now turn to costs. Although MLA has obtained leave to file and serve the proposed cross-claim, that fact alone does not determine the appropriate costs order. In circumstances where the orders ultimately made substantially reflect the position advanced by ABRI, it is necessary to consider the parties’ competing submissions on costs.

5.    Costs

55    As I have discussed, this application arises against the background of an already complex and longstanding proceeding that has already involved numerous interlocutory applications and an extensive case management regime. Given the procedural history of the matter, the existing trial timetable and the scale of the proceeding, the Court expects the parties to adopt a practical and cooperative approach to procedural issues of this kind. It was for that reason that the parties were directed to file short summaries of their respective costs of the application, in accordance with paragraph 3 of the Intellectual Property Practice Note – Standard Directions for Australian Patent Proceedings (IP-2) (Standard Directions Practice Note).

56    The issue raised by the application was a confined one. It arose in circumstances where the proceeding is already proceeding towards a lengthy trial and significant work remains to be undertaken by the parties. While MLA submitted that the current five-week trial estimate is “liberal”, given the number of parties and issues in dispute, that is not an optimistic characterisation. Aside from the principal proceeding, there are currently four cross-claims on foot, with a proposed fifth.

57    Both parties filed statements of costs and disbursements in accordance with the Standard Directions Practice Note, signed by partners of their respective law firms. MLA claims costs and disbursements totalling just over $40,000. It submits that it made its position regarding the proposed cross-claim clear in correspondence prior to filing the application and that the application was necessitated by ABRI’s opposition to the proposed cross-claim. ABRI claims costs of approximately just under $33,000. It submits that MLA’s delay in bringing the application was substantial and unexplained, that no compelling reason was identified for the proposed cross-claim to be determined as part of the liability phase of the proceeding, and that MLA unreasonably rejected proposals that the proposed cross-claim either be the subject of a standstill arrangement or be filed and stayed pending determination of the liability and validity issues in the principal proceeding.

58    Before addressing the disposition, it is necessary to make some observations concerning the costs incurred in connection with this application and the expectations reflected in the Standard Directions Practice Note. Those directions are not merely administrative. They are intended to promote the efficient, proportionate and economical conduct of patent litigation by requiring parties to identify the matters genuinely in dispute and to approach interlocutory issues practically and cooperatively. That obligation assumes particular importance in a proceeding of this scale, involving multiple parties, multiple cross-claims, an extensive case management regime and a lengthy trial. The Court should not be required to devote disproportionate time and public resources to resolving a procedural dispute capable of sensible resolution between the parties. Nor should parties incur costs out of all proportion to the confined issue requiring determination. As French CJ observed in Aon at [5], the just resolution of proceedings requires regard not only to the parties’ immediate interests, but also to delay, expense and the efficient use of judicial resources.

59    In the present case, ABRI proposed two practical mechanisms by which MLA could preserve and advance its proposed cross-claim without increasing the immediate burden and complexity of the proceeding: first, a standstill arrangement and, subsequently, leave to file the proposed cross-claim accompanied by a stay. The latter position substantially reflects the outcome ultimately reached by the Court.

60    In those circumstances, the costs generated by the continuing dispute cannot properly be regarded as a necessary consequence of MLA obtaining leave to file and serve the proposed cross-claim. Rather, those costs were incurred because MLA persisted in seeking the immediate prosecution of the proposed cross-claim notwithstanding the practical alternatives proposed by ABRI. That approach did not reflect the cooperative and proportionate conduct contemplated by the Standard Directions Practice Note.

61    In the result, subject to a modest deduction to reflect that some costs would inevitably have been incurred in correspondence in any event, ABRI should have its costs of the application. I will therefore order that MLA pay ABRI’s costs of the application fixed in the sum of $25,000, payable within 14 days of the date of these reasons.

6.    Disposition

62    For those reasons, MLA should be granted leave to file and serve the proposed cross-claim. However, its further conduct should be deferred pending the determination of the liability and validity issues presently before the Court. That course preserves the controversy between MLA and ABRI concerning the Indemnity while avoiding the introduction of issues that may complicate or delay the determination of the matters presently directed for trial.

63    Although MLA has obtained leave to file and serve the proposed cross-claim, that was not the principal controversy ultimately dividing the parties. ABRI’s position was that, if the proposed cross-claim were permitted to be brought, its further conduct should be deferred. The substance of the orders ultimately made reflects that position.

Associate:

Dated:    27 August 2026

SCHEDULE OF PARTIES