Pinnacle Runway Pty Ltd v Triangl Limited

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judgment Date: 19 October 2022
• Neutral Citation: [2022] FCA 1246
• Date: 19 October 2022

Federal Court of Australia

Pinnacle Runway Pty Ltd v Triangl Limited [2022] FCA 1246

File number(s):	VID 794 of 2016
Judgment of:	MURPHY J
Date of judgment:	19 October 2022
Catchwords:	COSTS – lump-sum costs procedure – whether the second respondent ought to provide the applicant with source material verifying the costs and disbursements claimed – where the source material is sought to verify the apportionment of costs between two related proceedings.
Legislation:	Federal Court of Australia Act 1976 (Cth) ss 37M, 37N
Cases cited:	Bayley & Associates Pty Ltd v DBR Australia Pty Ltd [2014] FCA 346 Paciocco v Australia and New Zealand Banking Group Ltd (No 2) [2017] FCAFC 146 Pinnacle Runway Pty Ltd v Triangl Limited (No 3)[2020] FCA 1379 Pinnacle Runway Pty Ltd v Triangl Limited [2019] FCA 1662; 375 ALR 251
Division:	General Division
Registry:	Victoria
National Practice Area:	Intellectual Property
Sub-area:	To be Completed for Commercial and Corporations, and IP NPAs
Number of paragraphs:	26
Date of hearing:	Determined on the papers
Date of last submission/s:	3 March 2022
Counsel for the Applicant:	Mr A Sykes
Solicitor for the Applicant:	Actuate IP
Counsel for the Second Respondent:	Ms M J Evetts
Solicitor for the Second Respondent:	Corrs Chambers Westgarth

ORDERS

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

order made by:	MURPHY J
DATE OF ORDER:	19 October 2022

THE COURT ORDERS THAT:

1. The Second Respondent is not, at this stage, required to provide the Applicant with the source material requested by the Applicant, namely copies of tax invoices, itemised narrations and receipts for the payment of the costs and disbursements of the trademark infringement claim and the cross-claim in order to verify apportionment between the costs and disbursements of those respective proceedings.

2. Order 3 of the Orders of Justice Murphy dated 3 October 2022 be vacated.

3. The parties shall file their Costs Summary and Costs Response respectively in accordance with Orders 2 and 4 of the Orders of Justice Murphy dated 3 October 2022.

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

REASONS FOR JUDGMENT

MURPHY J:

1. In the liability judgment in this matter (Pinnacle Runway Pty Ltd v Triangl Limited [2019] FCA 1662; 375 ALR 251) the Court held that: (a) the applicant, Pinnacle Runway Pty Ltd, failed to establish its claim that the second respondent, Triangl Group Limited, had infringed its registered trade mark, DELPHINE; and (b) that Triangl failed to establish its cross-claim that Pinnacle’s registration of the DELPHINE mark should be cancelled on the basis that Pinnacle was not the first to use it. In the liability judgment at [2] the Court described the litigation as “unfortunate”, said that there was no clear winner, and noted the parties had expended many times more in legal costs in bringing and defending the claim and cross-claim than could have ever been payable for damages if the infringement claim had been successful. For reasons which were then unclear, the parties had been unable to reach a commercial settlement.

2. Pinnacle lodged an appeal against the order dismissing its infringement claim. While the appeal was on foot the parties sought a decision in relation to the costs of the infringement claim and cross-claim. I delayed determining that application as it seemed a better use of my time to await the decision of the Full Court in the appeal, given that costs were likely to follow the event.

3. The hearing of the appeal was, however, delayed and the parties then sought that I deliver a decision on costs before the appeal was heard. The Court delivered judgment on the question of costs in Pinnacle Runway Pty Ltd v Triangl Limited (No 3) [2020] FCA 1379), and made orders for:

1. Pinnacle to pay Triangl’s costs of the infringement claim on a party-party basis from Pinnacle’s commencement of that proceeding through to 12 February 2018, and thereafter on an indemnity basis; and

2. Triangl pay Pinnacle’s costs of the cross-claim on a party-party basis for the period from the commencement of that proceeding through to 12 February 2018, and thereafter each party to bear their own costs.

4. On 7 December 2020, Pinnacle discontinued the appeal. Triangl consented to the discontinuance on the basis that Pinnacle pay its costs of the appeal, with the amount of such costs to be agreed or otherwise taxed. On 25 May 2021, the parties reached agreement regarding Triangl’s costs of the appeal.

5. On or about 24 February 2022, the parties reached agreement regarding Pinnacle’s costs in the cross-claim (which are to be met by Triangl).

6. The parties were unable to agree regarding Triangl’s costs in the infringement claim (which are to be met by Pinnacle).

7. On 2 March 2022, the Court made orders by consent for the costs in the infringement claim to be the subject of a lump-sum costs award and for a timetable for Triangl to file and serve its evidence including a Costs Summary, and for Pinnacle to file and serve its evidence including a Costs Response, by way of affidavit in accordance with paragraphs [4.10]-[4.14] of the Costs Practice Note (GPN-Costs). The orders provide for the Registrar determine the amount of the lump-sum costs in such a manner as he or she sees fit, including if considered appropriate, on the papers.

8. The parties are in dispute as to whether Triangl ought provide Pinnacle with “source material, namely copies of tax invoices, itemised narrations and receipts for payment of the costs and disbursements of the infringement claim and the cross-claim in order to verify the apportionment between the costs and the disbursements of those respective proceedings which will be claimed in [Triangl’s] Costs Summary”. That issue was left for determination by the Court, on the papers. These reasons concern that issue.

Pinnacle’s submissions

9. Pinnacle contends that Triangl performed a substantial level of work in relation to its cross-claim which Triangl is not entitled to recover from Pinnacle in the infringement claim. It submits that a significant proportion of the costs incurred by Triangl are likely to be mixed costs, attributable in part to both the infringement claim and the cross-claim. It says that while 80% of the liability judgment dealt with the infringement claim only, and 20% dealt with the cross-claim, that division does not reflect the extent of work which was done by the parties in respect of the two claims, particularly in light of the withdrawal of various aspects of Triangl’s cross-claim shortly prior to and during the trial.

10. Pinnacle submits that an order requiring Triangl to provide the source material will permit it to meaningfully assess Triangl’s costs in the infringement claim and carefully apportion Triangl’s costs between the infringement proceeding and the cross-claim. It says that the source material should be provided so that it can assess the degree of apportionment applied between the two proceedings as that will have a significant impact on: (a) Pinnacle’s formulation of an appropriate settlement offer in relation to costs; and/or (b) Pinnacle’s ultimate costs liability.

11. Pinnacle submits that it has a genuine concern that the apportionment applied by Triangl in relation to costs in the infringement claim (which Triangl is entitled to recover) and costs...