SUDGMENT. No. AOL Red nar NOT FOR CIRCULATION CATCHWORDS PRACTICE AND PROCEDURE - Orders made by Supreme Court for inquiry as to damages or account of profits - application for stay of orders pending hearing of appeal to Federal Court - costs incurred by parties in course of inquiry as to damages or account of profits - decision as to application for stay as matter for Court in exercise of its discretion. DECOR CORPORATION PTY. LIMITED (formerly BRIAN DAVIES CO. PTY. LIMITED) & ANOR, v. DART INDUSTRIES INCORPORAT VG63 of 1988 LOCKHART J. 3 MARCH 1988 MELBOURNE NOT FOR CIRCULATION IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No. VG 63 of 1988 ) ) GENERAL DIVISION BETWEEN : DECOR CORPORATION PTY. LIMITED (formerly BRIAN DAVIES COQ. PTY. LIMITED) & ANOR. Applicant AND: DART INDUSTRIES INCORPORATED Respondent JUDGE MAKING ORDER: LOCKHART J. DATE OF ORDER: 3 MARCH 1988 WHERE ORDER MADE: MELBOURNE MINUTE OF ORDERS THE COURT ORDERS THAT: 1. Upon the appellants by their counsel undertaking to the Court that all infringing articles the subject of order number 2 of the Supreme Court of Victoria made on 4 February 1988 in proceeding number IP26 of 1981 shall remain in their possession, power, custody or control until the determination of this appeal or further order, the Court orders that the operation of order number 2 made by the Supreme Court be stayed until the determination of the appeal or further order. The notice of motion of 22 dismissed. Costs of the motion shall be appeal. Settlement and entry of orders the Federal Court Rules. February 1988 otherwise the respondent's costs in 1s dealt with in Order 36 be the of NOT FOR CIRCULATION IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No. VG 63 of 1988 wee evn GENERAL DIVISION BETWEEN : DECOR CORPORATION PTY. LIMITED (formerly BRIAN DAVIES CO. Pry. LIMITED & ANOR. Applicant AND: DART INDUSTRIES INCORPORATED Respondent COURT: LOCKHART J. DATE: 3 MARCH 1988 REASONS FOR INTERLOCUTORY JUDGMENT LOCKHART J. This is a motion to stay the operation of certain orders made by the Supreme Court of Victoria (King J.) on 4 February this year. King J. made orders ina patent infringement action and granted injunctions against the defendants in the Supreme Court proceedings: Decor Corporation Pty Limited and Ryan Tooling Industries Pty Limited. The injunctions in effect restrained the defendants from infringing certain claims of letters patent. His Honour also ordered the defendants to deliver up infringing articles to the plaintiff: Dart Industries Incorporated. His Honour further ordered that there be an inquiry as to damages, or, at the plaintiff's option, an account of profits made by the defendants or each of them by infringement of the claims of the letters patent. Certain other orders were made by his Honour which are not presently relevant. The unsuccessful parties lodged an appeal from the Supreme Court's order to this Court by notice of appeal filed on 18 February this year. The appeal will be heard in due course by this Court. The appellants, being the former defendants, seek orders staying the operation of two of the orders of the Supreme Court to which I have already referred. The orders in issue are the order for delivery up and the order for an inquiry as to damages or an account of profits. The respondent to the appeal (the plaintiff in the action in the Supreme Court) consents to the stay of the order for delivery up pending the determination of the appeal, but opposes the stay of the inquiry as to damages or account of profits. It has been argued on behalf of the appellants, in support of the stay, that unless the stay is granted the inquiry as to damages or account of profits will proceed in the Supreme Court and in consequence the appellants will incur costs. The appellants argue that those costs or some component of them may be thrown away 1n the event of the appeal succeeding. In particular it is said that, even if the appeal is successful and the Supreme Court makes orders for costs in favour of the appellants, there will still be a difference between party-party and solicitor-and-client costs in relation to the anquiry or account. The appellants argue that such difference will not be recoverable from the respondent. It is also said in support of the motion that the curial history of the matter in the Supreme Court was rather leisurely because neither party sought to have 1t otherwise. It is said that the appeal may be heard before this Court ina fairly short space of time and that in those circumstances the respondent would sustain little prejudice 1f the stay is granted. It is also said that the relevant patent has expired. Indeed, it appears to have expired less than two weeks after the date of the Supreme Court's order. Hence the inquiry as to damages or account of profits will presumably relate to the period commencing with the infringement and concluding with the grant of the injunctions. I have been referred to various cases which it is unnecessary for me to detail. However, I refer briefly to the decision of Dawson J. in Federal Commissioner of Taxation v. Myer Emporium Limited (1986) 64 ALR 325. The facts of that case appear clearly from the headnote and from his Honour's reasons for judgment. It seems to me that those facts involved a quite different situation from that which exists here. In any event, the decision as to an application for a stay is ultimately a matter for the court in the exercise of its discretion. Although the dates upon which the appeal will be heard by this Court are not yet established I see no reason why the appeal would not be heard this year if the parties proceed with due diligence. If the appeal is dismissed then the inquiry as to damages or account of profits will continue and time will not be lost if a stay is refused at this stage. However, if a stay is granted, time will be lost in the event that the appeal fails. In the event that the inquiry as to damages or account of profits proceeds there will be costs incurred by both parties. But, if the appeal is allowed, orders for the costs of the inquiry or account will be made by the Supreme Court in the exercise of its discretion. The Supreme Court may be expected to have regard to the circumstances as it then sees them. It is true that the difference between party-party and solicitor-client costs may have to be absorbed by the successful appellant in those circumstances, although I note that in appropriate cases courts may make orders for costs on a solicitor-client basis. But I discount that consideration for present purposes. Having considered all the relevant evidence and the submissions that have been made, I have concluded that this 1s not a case where it is appropriate to stay the operation of the Supreme Court's order for the inquiry as to damages or the account of profits. The inquiry or account should proceed in the normal course. Accordingly, the Court makes the following orders. Upon the appellants by their counsel undertaking to the Court that all infringing articles the subject of order number 2 of the Supreme Court of Victoria made on 4 February 1988 in proceeding number IP26 of 1981 shall remain in their possession, power, custody or control until the determination of the appeal or further order the Court orders that the operation of order number 2 made by the Supreme Court be stayed until the determination of the appeal or further order. The notice of motion of 22 February 1988 otherwise be dismissed. As 1t was acknowledged by both parties that the respondent had indicated before the notice of motion was filed in this proceeding that it would consent toa stay of the Supreme Court's order for delivery up, the appropriate order for costs is that the costs of the Motion should be the respondent's costs in the appeal and I s0 order. I certify that this and the preceding four (4) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart. Associate A TRock— Date: 3 March 1988