FEDERAL COURT OF AUSTRALIA ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc [2000] FCA 1569 ICI CHEMICALS & POLYMERS LIMITED v THE LUBRIZOL CORPORATION INC N 1384 OF 1999 WOOLWORTHS LIMITED AND AUSTRAL REFRIGERATION PTY LIMITED AND WOOLWORTHS (VICTORIA) PTY LTD AND LAWRENCE REFRIGERATION PTY LTD v THE LUBRIZOL CORPORATION INC N 1385 OF 1999 LEE, HEEREY AND LEHANE JJ 3 NOVEMBER 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1384 OF 1999 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ICI CHEMICALS & POLYMERS LIMITED APPELLANT AND CROSS‑RESPONDENT AND: THE LUBRIZOL CORPORATION INC RESPONDENT AND CROSS‑APPELLANT N 1385 OF 1999 BETWEEN: WOOLWORTHS LIMITED (ACN 000 014 675) FIRST APPELLANT AND FIRST CROSS‑RESPONDENT AUSTRAL REFRIGERATION PTY LIMITED (ACN 001 702 594) SECOND APPELLANT AND SECOND CROSS‑RESPONDENT WOOLWORTHS (VICTORIA) PTY LIMITED (ACN 004 177 155) THIRD APPELLANT AND THIRD CROSS‑RESPONDENT LAWRENCE REFRIGERATION PTY LIMITED (ACN 005 912 176) FOURTH APPELLANT AND FOURTH CROSS‑RESPONDENT AND: THE LUBRIZOL CORPORATION INC RESPONDENT AND CROSS‑APPELLANT JUDGES: LEE, HEEREY AND LEHANE JJ DATE OF ORDER: 3 NOVEMBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. In proceeding N 1384 of 1999, order 5 made by the primary judge on 5 November 2000 in proceeding NG 190 of 1997 be varied so as to read: "The Applicant is to pay the Respondent's costs of the proceedings up to and including 5 November 1999 other than its costs of the application for amendment." 2. In proceeding N 1385 of 1999, order 2 made by the primary judge on 5 November 1999 in proceeding NG 552 of 1997 be varied so as to read: "The Respondents/Cross‑Claimants are to pay the Applicant's/ Cross‑Respondent's costs of the proceedings up to and including 5 November 1999 other than its costs of the application for amendment." Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1384 OF 1999 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ICI CHEMICALS & POLYMERS LIMITED APPELLANT AND CROSS‑RESPONDENT AND: THE LUBRIZOL CORPORATION INC RESPONDENT AND CROSS‑APPELLANT N 1385 OF 1999 BETWEEN: WOOLWORTHS LIMITED (ACN 000 014 675) FIRST APPELLANT AND FIRST CROSS‑RESPONDENT AUSTRAL REFRIGERATION PTY LIMITED (ACN 001 702 594) SECOND APPELLANT AND SECOND CROSS‑RESPONDENT WOOLWORTHS (VICTORIA) PTY LIMITED (ACN 004 177 155) THIRD APPELLANT AND THIRD CROSS‑RESPONDENT LAWRENCE REFRIGERATION PTY LIMITED (ACN 005 912 176) FOURTH APPELLANT AND FOURTH CROSS‑RESPONDENT AND: THE LUBRIZOL CORPORATION INC RESPONDENT AND CROSS‑APPELLANT JUDGES: LEE, HEEREY AND LEHANE JJ DATE: 3 NOVEMBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT: 1 We delivered reasons for judgment on the substance of these appeals on 20 September 2000. We shall refer to those as the principal reasons. The order of the Court was that in each proceeding the respondent and cross‑appellant file and serve draft short minutes of the orders for which it contended, consistently with the principal reasons. Draft short minutes were filed. To the extent that they were uncontroversial (having regard to the principal reasons), final orders have been made. 2 There was, however, controversy as to the orders to be made for payment of the costs of the proceedings under appeal. In accordance with an agreed timetable, each party has made written submissions. It is unnecessary, in order to resolve the remaining issues, to describe again the proceedings or the circumstances from which they arose: we have done that sufficiently in the principal reasons. We shall use, in these reasons, the terminology adopted in the principal reasons. 3 Before the primary judge, Lubrizol succeeded on all the validity issues in relation to the remaining claims (that is, the claims of the patent other than those which we described, in the principal reasons, as the abandoned claims) other than fair basing. It succeeded also on infringement. Having failed on fair basing, Lubrizol elected to seek an order for amendment of the patent. The appellants opposed the making of such an order; though the primary judge found that in certain respects Lubrizol's conduct was not beyond criticism, he held that the proposed amendment was allowable and, as a matter of discretion, should be ordered. The question of costs, therefore, fell to be considered in the following circumstances. Lubrizol accepted that it should bear the costs of the proceedings in relation to claim 1 (principal among the abandoned claims) up to the date of abandonment, 23 October 1998; in the March reasons, the primary judge had held that Lubrizol should succeed on all issues but fair basing; in the May reasons, his Honour had affirmed his earlier decision on the question of fair basing; then, in the October reasons, Lubrizol had succeeded in its application to amend. The primary judge found that the appellants' conduct in opposing amendment was justified and reasonable and that they should, prima facie, have their costs of that application. Overall, his Honour took the view that justice would be served by requiring the appellants to pay the costs of the proceedings up to and including 31 March 1999 (the date of delivery of the March reasons), and Lubrizol to pay the costs of the further hearing on fair basing (which led to the May reasons) and of the application to amend, but without any allowance for the costs of claims based on the abandoned claims. 4 Lubrizol now contends that the appellants should be ordered to pay all of Lubrizol's costs of each of the proceedings under appeal. That is put on the basis that Lubrizol has succeeded on all issues agitated between the parties; the appellants ought not reap any advantage, in relation to the costs of opposing the amendment application, from their success at trial on fair basing since, but for that success, the amendment application would have been bound to succeed; and the costs occasioned by claims based on the abandoned claims must be so small as not to justify a departure from the ordinary rule that costs would follow the event. Accordingly, Lubrizol seeks, in place of the relevant orders made by the primary judge, an order in each proceeding that the appellants pay Lubrizol's costs of that proceeding up to and including 5 November 1999 (the day on which the November reasons were delivered). 5 The appellants, on the other hand, contend that there should be no departure from the orders made by the primary judge. In particular, they contend that Lubrizol elected not immediately to challenge, on appeal, his Honour's decision on fair basing, but rather to seek amendment. They were entitled to oppose the amendment and did so properly. Amendments are never permitted "as of course". Lubrizol's conduct in maintaining the abandoned claims was criticised by the primary judge. Thus, the appellants should maintain the benefit of the order that Lubrizol pay their costs of the amendment application and, given that Lubrizol was in any event not entitled to its costs of claims based on the abandoned claims, the primary judge's orders should simply stand. If, on the other hand, the Court took the view that the orders should be reconsidered, the matter should be remitted to the primary judge: the Full Court was in no position to make an assessment of the costs attributable to claims based on the abandoned claims. 6 In our view, there is nothing to be said for a proposal that the questions of costs be remitted for further consideration, so as to impose on the parties the burden of yet further costs, in circumstances where, though the litigation was complex, its outcome is quite straightforward. It is evident – a glance at the section of the principal reasons dealing with novelty will demonstrate why – that the costs of claims based on the abandoned claims could not, in the scheme of things, have been particularly large; but some account should be taken of the abandonment of those claims relatively late in the day. On the other hand, we do not think it is reasonable that the appellants should have their costs of a hearing on the question of amendment, the difficulty and complexity of which was largely attributable to their success on fair basing, a success to which, on appeal, they have been held not to be entitled. But we find little attraction, either, in the proposition that Lubrizol should have an order for payment of its costs of an amendment to excise claims which, although it must have been evident that they could not stand, had nevertheless been deliberately maintained for a considerable period. 7 As has often, but truly, been said, scientific precision cannot be achieved in deciding questions such as the present. Our conclusion is that justice overall will be served by an order to the effect that the appellants are to pay Lubrizol's costs of each proceeding up to and including 5 November 1999 other than its costs of the application to amend, leaving each party to pay its own costs of that application. 8 Accordingly, in proceeding N 1384 of 1999 the order of the Court will be that order 5 made by the primary judge on 5 November 1999 in proceeding NG 190 of 1997 is varied so as to read: "The Applicant is to pay the Respondent's costs of the proceedings up to and including 5 November 1999 other than its costs of the application for amendment." In proceeding N 1385 of 1999 the order is that order 2 made on 5 November 1999 in proceeding NG 552 of 1997 is varied so that the order reads as follows: "The Respondents/Cross‑Claimants are to pay the Applicant's/ Cross‑Respondent's costs of the proceedings up to and including 5 November 1999 other than its costs of the application for amendment." I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Court. Associate: Dated: 3 November 2000 Counsel for the Appellants: D K Catterns QC R Cobden Solicitor for the Appellants: Blake Dawson Waldron Counsel for the Respondent: DM Yates SC JT Gleeson Solicitor for the Respondent: Coudert Brothers Date of Hearing: 10, 11 and 12 May 2000 Date of Judgment: 3 November 2000