Probiotec Limited v The University of Melbourne [2008] FCAFC 5

FEDERAL COURT OF AUSTRALIA

Probiotec Limited v The University of Melbourne [2008] FCAFC 5

COSTS – Appeal from decision of a single judge – discretion to award costs under s 43(2) Federal Court of Australia Act 1976 (Cth) – factors in exercise of discretion – where respondents to claim of unjustified threats brought cross-claim for infringement of patents – where new parties joined much later as respondents to cross-claim – where cross-claim not actively defended by newly joined cross-respondents – where defence of inactive cross-respondents denied infringement and validity of patent – where cross-claimants successful against all cross-respondents – where active and inactive cross-respondents made liable jointly and severally for cross-claimant's costs – where primary judge held it to be settled law that liability for payment of costs order ordinarily joint and several – where primary judge considered whether inactive cross-respondents raised a separate and distinct defence – whether inactive cross-respondents submitting parties – whether exercise of discretion to award costs miscarried

Held: inactive cross-respondents not submitting parties in circumstances – discretion to award costs pursuant to s 43(2) Federal Court of Australia Act 1976 (Cth) is broad – no automatic rules for exercise of discretion – need for order to be just in circumstances of particular case – lack of separate and distinct defence not determinative of whether liability for payment of costs order should be joint and several – exercise of discretion miscarried – no sufficient basis for making inactive cross-claimants liable for costs of proceedings in period prior to their joinder – defence of inactive cross-respondents – cross-claimants had to prove case in greater detail in any event because of stance of active cross-respondents – appeal allowed – liability of inactive cross-respondents to pay costs reduced to 10 percent on joint and several basis with active cross-respondents