Pinnacle Runway Pty Ltd v Triangl Limited (No 3)

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judgment Date: 25 September 2020
• Neutral Citation: [2020] FCA 1379
• Date: 25 September 2020

FEDERAL COURT OF AUSTRALIA

Pinnacle Runway Pty Ltd v Triangl Limited (No 3) [2020] FCA 1379

File number:	VID 794 of 2016
Judgment of:	MURPHY J
Date of judgment:	25 September 2020
Catchwords:	COSTS – indemnity costs – where respondent successful in defence of claim of trade mark infringement and applicant successful in cross-claim – discretion as to costs – whether rejection of settlement offers unreasonable or imprudent – applicable principles in relation to indemnity costs – where settlement offers placed the offeree in a substantially better position than it achieved at trial – indemnity costs ordered
Legislation:	Federal Court of Australia Act 1976 (Cth) ss 37M, 37N, 43 Trade Marks Act 1995 (Cth) s 58 Federal Court Rules 2011 rr 25.03, 25.14, 40.02 , 40.08
Cases cited:	Anchorage Capital Partners Pty Limited v ACPA Pty Ltd (No 2) [2018] FCAFC 112 Bing! Software Pty Ltd v Bing Technologies Pty Ltd (No 1) (2008) 79 IPR 454 Black v Tomislav Lipovac BHNF Maria Lipovac [1990] FCA 699; (1998) ALR 386 Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd [2018] FCA 892 Damorgold Pty Ltd v. Blindware Pty Ltd (No 2) [2018] FCA 364 Eskine v 72-74 Gordon Crescent Lane Cove Pty Ltd [2019] FCAFC 73 Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) (2015) 327 ALR 192; [2015] HCA 53 GM Global Technology Operations LLC v. S.S.S. Auto Parts Pty Ltd (No.2) (Costs) [2019] FCA 1813 Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 Kismet International Pty Ltd v Guano Fertiliser Sales Pty Ltd (No 2) [2013] FCA 705 Les Laboratoires Servier v Apotex Pty Ltd (2016) 247 FCR 61 Magenta Nominees Pty Ltd v Richard Ellis (Western Australia) Pty Ltd [1994] FCA 302 Mowie Fisheries Pty Ltd v Switzerland Insurance Australia Ltd [1996] FCA 931 Ofria v Cameron (No 2) [2008] NSWCA 242 Pinnacle Runway Pty Ltd v Triangl Limited & Anor [2019] FCA 1662 SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323
Division:	General Division
Registry:	Victoria
National Practice Area:	Intellectual Property
Sub-area:	Trade Marks
Number of paragraphs:	133
Date of last submissions:	7 November 2019
Date of hearing:	Heard on the papers
Counsel for the Applicant/Cross-Respondent:	Mr T Cordiner QC and Mr A Sykes
Solicitor for the Applicant/Cross-Respondent:	Actuate IP
Counsel for the Respondents/Cross-Claimant:	Mr N Murray SC and Ms F St John
Solicitor for the Respondents/Cross-Claimant:	Corrs Chambers Westgarth

ORDERS

		VID 794 of 2016
BETWEEN:	PINNACLE RUNWAY PTY LTD Applicant
AND:	TRIANGL LIMITED First Respondent ; TRIANGL GROUP LIMITED Second Respondent
AND BETWEEN:	TRIANGL GROUP LIMITED Cross-Claimant
AND:	PINNACLE RUNWAY PTY LTD Cross-Respondent

order made by:	MURPHY J
DATE OF ORDER:	25 september 2020

THE COURT ORDERS THAT:

1. The Applicant pay the Second Respondent’s costs of and associated with the application alleging trade mark infringement (the infringement claim):

(a) for the period from the commencement of the infringement claim against the Second Respondent until 12 February 2018, on a party-party basis; and

(b) for the period from 13 February 2018, on an indemnity basis;

as agreed or assessed.

2. The Second Respondent pay the Applicant’s costs of and associated with the cross-claim for the period up to 12 February 2018 on a party and party basis, as agreed or assessed. Thereafter each party bear their own costs.

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

REASONS FOR JUDGMENT

MURPHY J

INTRODUCTION

1 As I said in Pinnacle Runway Pty Ltd v Triangl Limited & Anor [2019] FCA 1662 (the liability judgment or LJ) these were ill-advised proceedings and there is no clear winner. The applicant and cross-respondent, Pinnacle Runway Pty Ltd (Pinnacle) alleged but failed to establish that the second respondent and cross-claimant, Triangl Group Limited (Triangl), infringed its registered trade mark, DELPHINE (the infringement claim). Triangl alleged but failed to establish that Pinnacle’s registration of the DELPHINE trade mark should be cancelled on the basis that Pinnacle was not the first to use it (the cross-claim). Further, even if Pinnacle had been successful in the infringement claim, its damages entitlements would not have been worth the powder and shot. As I said (at LJ [2]):

Pinnacle spent many times more in legal costs in bringing the claim than it could ever have reasonably hoped to recover by way of damages. Triangl spent many times more defending the claim and bringing the cross-claim than it could have possibly been required to pay in damages. This unfortunate litigation involved substantial expenditure of the parties’ and Court resources and, for reasons which are unclear, the parties were unable to reach a commercial settlement.

2 These reasons concern the legal costs incurred by the parties. I have delayed in making a decision regarding costs as it seemed a better use of my time to await the decision of the Full Court in the appeal which has been commenced, given that costs are likely to follow the event. The hearing of the appeal has however been delayed, and it is plain from the submissions that because the costs incurred by the parties are so substantial in comparison to the damages that could have been recovered, the issue of costs looms large in the appeal. In response to a communication from my chambers both parties said that they would prefer the decision on costs to be made before the appeal is heard, and I have accordingly turned to the question. Unfortunately, I neglected to place a limit on the length of the costs submissions to be filed, and the parties filed costs submissions together with affidavits and annexures running to a total of 83 pages. As a result, to deal with the parties’ various arguments these reasons are lengthier than I would have wished.

3 In summary, having been successful in the infringement claim Triangl seeks an order for its costs in that proceeding on an indemnity basis, and if not on a party-party basis. It seeks that the costs of the cross-claim lie where they fall. However, if the Court considers that Pinnacle should have its costs of successfully defending the cross-claim, Triangl argues they should be reduced to the Federal Circuit Court (FCC) Scale. Pinnacle’s primary contention is that the Court should award it 25% of the difference between the, as asserted, higher costs incurred by Triangl for the whole proceeding (both the infringement claim and the cross-claim) as compared to Pinnacle’s costs for the whole proceeding. If not, it having been successful in...