Federal Court of Australia

The Pops Group Pty Ltd as trustee for The Pool Shops Trust v Pro Pool Services Pty Ltd (No 3) [2026] FCA 1303

ORDERS

THE COURT ORDERS THAT:

1.    The first respondent pay two thirds of the applicant’s costs of the proceedings on the standard basis, to be taxed after the determination of any appeal.

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

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    On 16 July 2026, this Court delivered judgment on the merits of these proceedings, finding that the first respondent, Pro Pool Services Pty Ltd (PPS), infringed the registered trade marks of the applicant, Pool Pro: The Pops Group Pty Ltd as trustee for The Pool Shops Trust v Pro Pool Services Pty Ltd (No 2) [2026] FCA 912 (J). Orders were made inviting further written submissions on the question of costs.

2    PPS, by its submissions filed on 31 July 2026 with the assistance of newly retained Counsel, seeks a 75% reduction of the applicant’s costs. It submits that, whilst the applicant was successful in obtaining relief, the proceedings were conducted in an unsatisfactory and unreasonable manner and brought in an inappropriate forum. Conversely, the applicant seeks its costs of the proceedings on the standard basis. It contests the allegation that it acted unreasonably in its conduct of the proceedings.

3    The substantive orders made on 16 July 2026 were stayed on 19 August 2026, pending determination of an appeal instituted by PPS. Nonetheless, it is appropriate to deal with the question of the costs of the proceedings at first instance. For the reasons which follow, the applicant’s costs should be reduced, but only by one third.

Relevant principles

4    Section 43(2) of the Federal Court of Australia Act 1976 (Cth) gives this Court a wide discretion in relation to costs, though it must be exercised judicially: Idenix Pharmaceuticals LLC v Gilead Sciences Pty Ltd (No 2) [2018] FCAFC 7 [3]. As part of that discretion, the Court may, in certain circumstances, depart from the ordinary rule that costs follow the event and order that costs be apportioned based upon the parties’ success on each issue raised: see, for example, Plaintiff M76/2013 v Minister for Immigration, Multicultural Affairs and Citizenship (2013) 251 CLR 322, 393 [241].

5    Additionally, r 40.08 of the Federal Court Rules 2011 (Cth) (FCR) provides:

40.08    Reduction in costs otherwise payable

A party other than in a proceeding under the Admiralty Act 1988 may apply to the Court for an order that any costs and disbursements payable to another party in the proceeding be reduced by an amount to be specified by the Court if:

(a)    the applicant has claimed a money sum or damages and has been awarded a sum of less than $100,000; or

(b)     the proceeding (including a cross-claim) could more suitably have been brought in another court or tribunal.

6    The effect of r 40.08 is to enliven a discretion to reduce costs in circumstances where damages are awarded in an amount less than $100,000, or where the Court is satisfied that the proceedings could more suitably have been filed in another Court, for example, the Federal Circuit and Family Court of Australia (Division 2) (FCFCOA): Umoona Tjutagku Health Service Aboriginal Corporation v Walsh (2019) 268 FCR 401, 418 [57] (Umoona Tjutagku). Its purpose is to dissuade the bringing of proceedings in the Federal Court that may more appropriately be brought elsewhere, and to penalise those who, through “oversight or incompetence”, bring and continue proceedings in an inappropriate Court: Loyola v Cryeng Pty Ltd (No 2) [2012] FCAFC 98 [15] (Loyola); Umoona Tjutagku 419 [59], citing Magenta Nominees Pty Ltd v Richard Ellis (Western Australia) Pty Ltd [1994] FCA 302 [10]. The particular expertise of this Court in the subject matter of the dispute is a factor relevant to that consideration: Umoona Tjutagku 419 [59].

Should the applicant’s costs be reduced?

7    In its written submissions, PPS advances two grounds upon which it contends the applicant’s costs ought to be reduced. Firstly, it submits that the applicant’s conduct in various aspects of the proceedings caused it to incur substantial unnecessary costs, thereby justifying a reduction pursuant to the Court’s general discretion. Second, it contends that, in any event, costs should be reduced pursuant to FCR r 40.08, because the applicant obtained an award of damages of less than $100,000, and the proceedings could more suitably have been brought in the FCFCOA.

The conduct of the proceedings

8    As to the first submission, PPS contends that the applicant acted inefficiently and incurred unreasonable costs in respect of its concise statements, claim for relief, evidence, and application for summary judgment.

Concise statements

9    The applicant chose to file a concise statement in support of its originating application, rather than a formal statement of claim. This had the result that the claims were advanced with a distinct lack of specificity, which in turn produced unfortunate results. For one, it was unclear whether the trade mark infringement claim concerned PPS’s use of “Pro Pool Services”, or the shorthand “Pro Pool”: J [30] – [36]. That issue ultimately resulted in the applicant incurring unnecessary cost, as its Counsel spent a not insignificant portion of the hearing presenting submissions which were outside the scope of the case advanced in the concise statement: see, for example, J [36], [52].

10    Conversely, notwithstanding that the applicant chose to file a concise statement, its replies to PPS’s concise statement in response appear to have adopted a formalistic approach to pleading. In particular, the replies contained express denials and contentions that some responses ought to be struck out, which were unnecessary given that the ordinary rules of pleading do not apply to concise statements: see Tzaros v ServiceNow Australia Pty Ltd [2025] FCA 1633 [40]. Moreover, and in any event, express denials are not necessary in replies given the effect of FCR r 16.11, which provides that a joinder of issue is implied in relation to any allegation of fact in a defence, and each allegation of fact is taken to be denied.

11    It is not unfair to observe that these difficulties might not have been encountered had the applicant simply filed a proper statement of claim at the outset, or, at the very least, drawn its concise statement with greater care and specificity. In circumstances where the underlying factual matrix of the dispute was not seriously contested, it would not have been a particularly onerous task to draw a proper pleading. This is a factor which weighs in favour of ordering a reduction in the applicant’s costs.

Claim for relief

12    PPS submits that the applicant’s claim for relief was “exaggerated”, in that it sought exemplary damages for passing off and additional damages for trade mark infringement without alleging the necessary facts, or providing relevant evidence, in support of such claims. It surmises that the applicant may have done so merely to inflate the damages claimed so as to justify commencing proceedings in this Court (see infra [22] – [23]).

13    Placing the speculative latter point to one side, there is force in the submission that the applicant sought, yet did not seriously pursue, exemplary and additional damages. That is particularly so for the claim for additional damages under the Trade Marks Act 1995 (Cth) (Trade Marks Act), as the applicant did not expressly allege in its concise statement any particular conduct of PPS or its director, Mr Sharp, which amounted to flagrancy. However, it does not necessarily follow that the applicant unreasonably incurred costs. Indeed, had the applicant fully and properly pursued its claims for exemplary and additional damages, it would almost certainly have incurred more costs. Further, given PPS was legally unrepresented in the proceedings, it could not have incurred any unnecessary legal costs by reason of the applicant’s conduct. As such, though this factor is relevant to the question of whether a reduction should be ordered, it does not weigh strongly in favour of any such reduction.

Evidence

14    The next matter to which PPS refers is the evidence filed by the applicant in the proceedings. The Court Book in this case comprised approximately 1,300 pages of affidavit material, of which just 73 were attributable to PPS. In particular, the Court Book contained an affidavit of the applicant’s director, Mr Sean Ralph, which annexed the entire Pool Pro product catalogue and comprised approximately 458 pages. The contents of that affidavit were only tangentially relevant to the true issues in dispute. As such, in circumstances where the background facts of the case were not in contest (see J [6] – [27]) and the issues in dispute primarily concerned the legal effect of PPS’s conduct, the affidavit material filed by the applicant was excessive.

15    Moreover, the applicant also procured evidence from an expert forensic accountant, Mr Mark Lipson, to support its claim for damages for trade mark infringement pursuant to the user principle. That evidence was rejected in its entirety, because it adopted an incorrect assumption that the user principle accounted for “lost profit” on Pool Pro product sales via PPS, and thereby inflated the amount of damages claimed: J [183] – [187]. In general terms, the applicant should not be entitled to recover the costs it incurred in procuring that evidence.

16    These matters weigh in favour of a reduction of the applicant’s costs.

Summary judgment application

17    Finally, PPS refers to the unsuccessful summary judgment application brought by the applicant in early 2025: The Pops Group Pty Ltd as trustee for The Pool Shops Trust v Pro Pool Services Pty Ltd [2025] FCA 136 (The Pops Group (No 1)). The costs of that application were reserved on 4 February 2025. It is appropriate to deal with them here, as costs in the first instance proceedings, given that PPS was legally unrepresented at the hearing of that application and is, therefore, not entitled to an award of legal costs, despite successfully defending it.

18    It is not unfair to observe that the application for summary judgment had exceptionally limited prospects of success. As was observed in The Pops Group (No 1) at [4], the very nature of the case being advanced – namely, where a mark is said to be substantially identical with, or deceptively similar to, a registered trade mark – necessarily required a reconciliation of diverging submissions about the character of the marks in question, and the application of substantial case law relating to the operation of several sections of the Trade Marks Act. In those circumstances, it was not a case suitable for resolution by summary judgment: The Pops Group (No 1) [4], [11] – [16].

19    Moreover, it was observed at the hearing of the application that it appeared to have been brought in the hope that it would not be defended: The Pops Group (No 1) [11]. That is not an appropriate basis on which a summary judgment application should be made, and conduct of that ilk ought to be discouraged.

20    These matters also weigh in favour of ordering a reduction in the applicant’s costs.

Inappropriate forum

21    Separately, PPS seeks to invoke FCR r 40.08, which provides that the Court may order a reduction of any award of costs if the applicant obtains compensatory relief of less than $100,000, or the proceedings could more suitably have been brought in another court or tribunal.

22    Here, the first alternative limb of r 40.08 is satisfied, as the applicant was awarded only a sum of $60,000: J [187]. It may also be arguable that the proceedings could have been brought in the FCFCOA, which shares concurrent jurisdiction with this Court in relation to matters arising under the Trade Marks Act and the Australian Consumer Law: see Trade Marks Act s 191A; Competition and Consumer Act 2010 (Cth) s 138A. However, given the overall complexity of the case and the particular expertise of this Court in intellectual property disputes, it is unlikely that the proceedings could more suitably have been brought in the FCFCOA. Nevertheless, given the first limb of r 40.08 is satisfied, the Court’s discretion to reduce the applicant’s costs is enlivened.

23    The applicant submits that the discretion should not be exercised because it would be inconsistent with the purpose of r 40.08 to do so, as its decision to file and maintain the proceedings in this Court was an informed one, and not one made “through oversight or incompetence”: Loyola [15] (see supra [7]). In particular, it submits that, upon the retirement of one of the FCFCOA’s intellectual property specialist judges, Judge Baird, in August 2024, “the role of allocating IP matters … did not appear to continue”, and accordingly, it considered the continuation of the proceedings – which were initially commenced in June 2024 – in the Federal Court to be appropriate. That submission is unpersuasive. A party’s external view of the administrative processes of a court does not materially assist in determining whether the discretion under r 40.08 should be exercised. Whatever may have been the applicant’s understanding of internal FCFCOA processes in August 2024, it does not assist in resolving the question of whether the Court’s discretion is appropriately exercised in this case.

24    The applicant also submits that it had an arguable case in respect of its claim for ordinary damages in excess of $100,000, and for additional damages. That can be rejected for the reasons given at J [180] – [187] and [189] – [193]. The former claim suffered from a fundamental misconception as to the effect of the user principle, and the latter was not particularised beyond mere assertion, nor supported by any evidence.

25    It follows that, in the circumstances of this case, there is good cause for exercising the Court’s discretion under r 40.08 to reduce the costs payable to the applicant.

The appropriate order

26    For all the foregoing reasons, it is clear that the applicant did not prosecute its case in an efficient manner. PPS has identified that the circumstances warrant a reduction of the applicant’s costs of the proceedings, pursuant to either the general power of the Court to make orders as to costs, or the specific power contained in FCR r 40.08.

27    However, the circumstances of this case do not warrant a reduction to the extent contended for by PPS. This is for two reasons. Firstly, it must be borne in mind that some of the difficulties which arose throughout these proceedings were attributable, in no small part, to the fact that PPS elected not to obtain legal representation. Indeed, some of the matters which have now attracted criticism by PPS’s newly retained Counsel may well have been addressed earlier had it been represented. That consideration tells against a reduction of the magnitude sought.

28    Second, it will be recalled that PPS’s director, Mr Sharp, did not appear to be interested in engaging constructively with the applicant or in the proceedings more generally. His response to a cease and desist letter from the applicant is extracted at J [189]. This conduct effectively left the applicant with little choice but to have its trade mark rights vindicated by this Court. That is another circumstance which undermines the extent of the reduction sought by PPS.

29    Therefore, it is appropriate to order a more modest reduction in the applicant’s costs than that for which PPS contends. Ultimately, the applicant was required to apply to the Court to vindicate its rights under the Trade Marks Act and Australian Consumer Law, and was substantially successful in doing so. The claims in respect of which it was not successful, being for passing off and for additional damages under the Trade Marks Act, did not receive substantial attention in the pleadings, evidence and submissions, both written and oral. As such, any reduction of more than 50% would not be justified. Having regard to the extent to which the matters identified in these reasons may have caused the applicant to incur unnecessary costs, it is appropriate that there be a one third reduction.

Conclusion

30    In the result, the appropriate order is that PPS pay two thirds of the applicant’s costs of the proceedings, assessed on the standard basis.

Associate:    

Dated:    4 September 2026