IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No NG922 of 1993 ) GENERAL DIVISION ) BETWEEN: COLUMBIA PICTURES INDUSTRIES INC Applicant AND: STEPHEN RICHARD KUCKINS Respondent CORAM: HILL J PLACE: SYDNEY DATED: 21 APRIL 1995 REASONS FOR JUDGMENT The applicant in the present proceedings, which concluded some days ago, now seeks indemnity costs from the respondent. The application for indemnity costs is put on two bases. First, the applicant provided to the respondent in the form of a certificate of ownership of copyright and a representation by the solicitors that there had been no change since the certificate - the issue of ownership. Notwithstanding that information being provided, the respondent sought to put the applicant to strict proof of the ownership of the copyright. Without traversing the whole of the correspondence, it claimed that it was not satisfied because it had sought a "certified copy" of the certificate and a statement by a director or other authorised person to the effect of there being no change. To rely upon the fact that a photocopy only of the certificate was produced does not, in my view, in any way engender sympathy to the respondent. It must be pointed out that Gummow J on 18 March 1994 specifically noted that if the respondent were to put in issue the ownership of copyright and failed to make good that claim, an award of costs on an indemnity basis would likely be made against it. Notwithstanding that warning, the respondents did and no doubt considerable expense was incurred in producing an affidavit or affidavits setting out the chain of title in the various forms that were the subject of the proceedings. In these circumstances it seems to me appropriate that the respondent pay the applicant's costs of, and associated with, that proof on an indemnity basis. The second basis upon which the application for indemnity costs was made was that suggested by Woodward J in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, namely the case where the proceedings were commenced in wilful disregard of known facts or clearly established law or in circumstances where it is clear that the case had no chance of success. By the time of the hearing all but one of the respondent's defences had been abandoned, the only defence remaining relevant to the question whether damages should be awarded or whether an accounting of profits should be given, was the question of knowledge of the respondent. It became apparent during the course of cross-examination that the respondent clearly had that knowledge. No doubt it is for this reason that the respondent ultimately conceded that it would assent to orders being made against it. Although power to order indemnity costs is one which must be carefully exercised in accordance with the tests set out by Sheppard J in Colgate Palmolive Co v Cussons Pty Limited (1993) 118 ALR 248, in which the comments of Woodward J in Fountain were approved, the present seems to me to be an appropriate case. Application is also made that the indemnity costs include the costs of two American lawyers employed in-house by the respondent in investigating and assembling the material necessary to prove ownership and subsistence of copyright as ultimately contained in Mr Grossman's affidavit. Although the persons concerned may be lawyers they were, in assembling the information, acting as employees of the respondent and in the circumstances it seems to me that the respondent is in no different position to any litigant in person who might employ persons to perform work, whether legally qualified or not. Generally speaking the indemnity for costs is for costs actually spent on legal services rather than the costs of employees who may happen to be lawyers. In these circumstances I would order that the respondent pay the applicant's costs of the application on an indemnity basis but those costs not to include the costs of Maggie Hiem and Rani Cherkoori in investigating and assembling material necessary to prove ownership and subsistence of copyright as contained in the affidavit of Mr Grossman. By consent I will make the orders contained in the short minutes of order which I have initialled and dated and placed with the papers. The matter will be stood over until 16 June 1995. I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Hill. Associate: Date: Counsel and Solicitors PW Gray instructed by for Applicants: Townsend Partners Counsel and Solicitors F Lever instructed by for Respondent: Russel Kennedy Date of Hearing: 21 April 1995 Date Judgment Delivered: 21 April 1995