FEDERAL COURT OF AUSTRALIA Copyright Agency Limited v University of Adelaide [2000] FCA 1894 COPYRIGHT AGENCY LIMITED & ORS v UNIVERSITY OF ADELAIDE & ORS N 776 OF 1999 LINDGREN J 21 DECEMBER 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 776 OF 1999 BETWEEN: COPYRIGHT AGENCY LIMITED & ORS APPLICANTS AND: THE UNIVERSITY OF ADELAIDE & ORS RESPONDENTS JUDGE: LINDGREN J DATE OF ORDER: 21 DECEMBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The parties file and serve submissions by 31 January 2000 as to which one or more of the three courses identified in the Reasons for Judgment of Lindgren J dated 21 December 2000 should now be followed. 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 776 OF 1999 BETWEEN: COPYRIGHT AGENCY LIMITED & ORS APPLICANTS AND: THE UNIVERSITY OF ADELAIDE & ORS RESPONDENTS JUDGE: LINDGREN J DATE: 21 DECEMBER 2000 PLACE: SYDNEY REASONS FOR JUDGMENT INTRODUCTION 1 The respondents ("the Universities") comprise thirty-seven universities. By notice of motion filed on 3 November 2000, the applicants (for convenience, "CAL") seek an order that the proceeding be dismissed in respect of all of them except for Charles Sturt University and the University of Sydney, and an order that "there be no order as to costs". The dispute relates to the costs aspect: the Universities seek an order that CAL pay their costs of the proceeding to date, except the costs of a certain cross-claim referred to below, as to which the parties agree there should be no order for costs. 2 By another notice of motion filed on 21 November 2000, CAL seeks leave to file and serve an amended statement of claim in the form annexed to the notice of motion, which, unlike the original statement of claim, makes allegations against only the two universities mentioned. The parties now agree that CAL should have leave to file an amended statement of claim. 3 By a notice of motion filed on 30 October 2000, the respondents seek an order that the proceeding be dismissed pursuant to Order 20 rule 2 of the Federal Court Rules and that CAL pay the Universities' costs. Again, the parties are now in general agreement that in the light of the granting of leave to file an amended statement of claim, the proceeding should not be summarily dismissed. In the result, the only issue on the motions calling for resolution is that of costs. 4 The present proceeding arises out of proceedings between the parties in the Australian Copyright Tribunal, reported, in part, at Copyright Agency Limited v University of Adelaide (1999) 42 IPR 529 as to the determination of equitable remuneration under subs 135ZW(2) and s 153C of the Copyright Act 1968 (Cth) ("the Act"), and at Copyright Agency Limited v University of Adelaide (1999) 45 IPR 383, as to the determination of a sampling system under subs 135ZW(3) and s 153D of the Act. 5 The present proceeding arises out of two issues which arose before the Tribunal: (a) the extent to which copying by the Universities for "course packs" for external students came within Part VB of the Act and gave rise to a right to remuneration (as CAL contends) or came within s 40 of the Act, in particular, subs 40(1A) (a fair dealing with a literary work, other than lecture notes, "for the purpose of, or associated with, an approved course of study or research by an enrolled external student of an educational institution") (as the Universities contend), and therefore does not give rise to a right to remuneration; and (b) the extent to which staff copying came within Part VB of the Act (as CAL contends) or within s 40 of the Act (as the Universities contend). 6 These two legal issues could not be resolved in the Tribunal. On 10 August 1999, CAL commenced this proceeding. CAL was the applicant and the Universities were the respondents. CAL sought a declaration that by making copies of 213 works specified in two schedules to the application, the respective Universities had infringed the copyright in the works. The seeking of this declaratory relief and the defences to be raised to it were no doubt intended to raise for decision the two issues mentioned above. 7 The application filed on 10 August 1999 also sought relief in relation to an "Interim Sampling and Collection Agreement" dated 20 January 1998 between CAL, the Australian Vice Chancellors' Committee and the Universities ("the Agreement"). CAL sought a declaration that the Tribunal had certain powers in proceeding CT 5 of 1996 or CT 4 of 1997, or that the Agreement had the effect that the Universities were not entitled to contend that the Tribunal did not have such powers or were estopped from so contending. 8 In an affidavit sworn 21 November 2000, Peter Christopher Banki, the solicitor for CAL, stated, inter alia, as follows: "10. During the course of the Copyright Tribunal Proceedings, I believe the parties came to the view that the most appropriate manner in which to resolve these questions was to seek to have the matter determined by this Court. 11. These proceedings were commenced with a selection of what was intended by CAL to be a draft set of instances from the records of copying obtained during the sampling of University copying. The draft was revised in December 1999, however the revised set of instances was nominated only by CAL, and was still intended by CAL to be a draft. At each stage of the discussions concerning the instances to be selected, CAL invited the Universities to nominate their own instances. It was contemplated by CAL, and understood by me, that when CAL and the Universities had each nominated their set of instances, then the parties would review and comment on each other's nominated instances and negotiate a final set of instances to be determined by this Court." Essential to CAL's position in relation to the costs issue mentioned later is that the proceeding was in the nature of a test case. Annexed to Mr Banki's affidavit is a course of correspondence extending from 23 August 1999 to 14 September 2000. The correspondence shows that the parties were attempting to agree upon the inclusion of examples to test issues which could be resolved only by the Court. For example, in a letter dated 23 August 1999, the solicitor for the Universities advised Mr Banki: "I am also instructed to liaise with you to consider the inclusion of examples to test infringement liability and defence issues, and with regard to matters on either side which may not need to be proved. We should perhaps meet to flesh out the process for achieving this. The Universities will consider their position with regard to the degree to which any judgment in the Federal Court proceedings might be applicable more generally after this initial process is complete." 9 On 7 September 1999, this proceeding was first before the Court constituted by Burchett J for directions (and proceeding CT 4 of 1997 was before his Honour as President of the Tribunal). The Court made directions by consent for the further conduct of the proceeding. The directions included a direction that CAL provide to the Universities a proposed amended application and file and serve a statement of claim and that the Universities file defences. Senior counsel for CAL stated to Burchett J: "As your Honour can see, we are happy to say they show our friends being able to work with us on trying to get a convenient set of examples to test the issues." 10 On 18 November 1999 the proceeding was before Sackville J for further directions. Counsel for the Universities indicated that the Universities had seen a draft statement of claim and had raised objections to it, principally on the basis that no copyright owners were applicants. The solicitor for CAL (Mr Banki) informed the Court that the "essence of [the] toing and froing" had been the schedule of examples, as distinct from the actual text of the pleading. In relation to a revised schedule, Mr Banki said: "This list [sic – comes] after a considerable amount of workĽIt's a completely different list your Honour. We've made some changes in the selectionĽwe have replaced this list [the original list] which was completed in some hasteĽto get the proceedings goingĽSo, now we've got a fresh list." Mr Banki summarised CAL's view of the arrangements made between the parties prior to 18 November as to the preparation of the schedule and the selection of instances of copying to be considered by the Court, as follows: "What was intended, in my submission, by Order 1 [made on 7 September 1999] and the reason it says draft is because we were to – by arrangement between us – prepare another list, this list. Then in order 3 it was intended that Mr Cobden's clients would respond and would say, we've got a few extra we'd like to add, we think this one should come out and we will co-operate with each other to end up with a list that both parties thought would test the questions." 11 The following exchanges also occurred at the directions hearing: "MR BANKI: As I understand it, your Honour, what we are trying to do is arrive at a number of instances which this list represents which represent copying for external students and copying for staff which will test the legal questions involved, namely and essentially whether these are all licensed copies under part VB of the Act or whether the universities can write some of their fair dealing exceptions and have the benefit of them as far as that copy is concerned. HIS HONOUR: Are you saying you are not getting co-operation from the respondents? MR BANKI: I'm hoping that it can still be done in a co-operative manner and if Mr Cobden was willing to propose that his clients do what was originally intended: make some suggestions on the list, do some work on the schedule which is at the heart of it, then that's the way to progress the matter rather than to say, you come up with your list and then we'll think about it. That was never the way these proceedings were --- HIS HONOUR: In any event, whatever the difficulties are you going to have to formulate your case and indicate what it is that you wish to be included in the statement of claim that provides the foundation for the issues that the court is going to have to determine. MR BANKI: I accept that, your Honour." "HIS HONOUR: I'm not discouraging co-operation, of course, you should co-operate and if you can resolve it, fine but I think the sensible thing from the court's point of view is to assume, taking a dismal view of mankind, that there won't be agreement and then, if there is agreement we'll all get a pleasant surprise and things will be resolved." 12 On 2 December 1999 CAL filed an amended application and a statement of claim. (Later, on 1 February 2000, this amended application was replaced by a corrected copy also entitled "amended application", which overcame the fact that due to oversight, pars 6, 7 and 8 had been omitted from the version filed on 2 December 1999 – it will be convenient for me to deal with the corrected copy filed in court on 1 February 2000 as if it had been filed on 2 December 1999.) The amended application added many individuals and companies as applicants in order to overcome an objection made by the Universities that CAL lacked title to sue for infringement of copyright. This was sought to be achieved by freshly entitling the proceeding in the form "Copyright Agency Limited and the Persons Listed in Columns 5 and 6 of the Schedule to this Application". Apparently the persons identified in columns 5 and 6 of the schedule were publishers and authors. In the statement of claim CAL did not plead "the contract issue". 13 The persons listed as authors included the Hon Justices Gaudron and Kirby of the High Court of Australia and the late Dame Roma Mitchell, former Governor of South Australia. The Universities' solicitors took the position that it was unlikely that those persons had agreed to become applicants in copyright proceedings against the Universities. They asked CAL's solicitors to confirm that CAL had had the written authority of all the persons listed in the 5th and 6th columns of the schedule to include them as applicants. The Universities indicated by their Solicitors' letter dated 21 January 2000 that they expected to file their defence and cross-claim during the course of the following week and that the proposed cross-claim would raise issues relating to the Agreement that CAL had now decided not to plead. 14 Importantly, the amended application replaced the previous two schedules listing 213 works with a single schedule listing 42 works. There is affidavit evidence of Anne Maree Flahvin and Georgina Maree Foster, solicitors employed by the solicitors for the Universities, of the work they did in relation to the 42 instances over a period from December 1999 to September 2000 in the case of Ms Flahvin, and from late March 2000 to mid August 2000 in the case of Ms Foster. 15 On 1 February 2000 (when the corrected version of the amended application was filed in court), counsel for the Universities informed Burchett J as follows in relation to the amended statement of claim: "What's happened with the amendment, your Honour,…is that the application is now confined to throwing up examples of copying that will test various matters such as fair dealing, external students, that kind of thing which have been to-ing and fro-ing for quite a long time before your Honour, and it's thrown up through use of the schedule that is attached and I won't take your Honour to the statement of claim, but it refers to publishers and authors who are in columns 5 and 6 and who are also, according to the heading, the parties to the proceeding. What we are doing, your Honour, is working through all these examples which are examples taken from the records maintained by A.C. Nielsen of past copying. So that if your Honour were to turn – I will take your Honour to my favourite page which is on page 10 of the schedule, items 34 and onwards, there are publishers and authors. What we are doing is first of all going to each of these examples, speaking to the persons in question who were involved in the putting together of the course pack for example, finding out the circumstances about it, seeing whether it throws up the question involved, the external student question or the photocopier near the closed reserve question or something, in a way that we'd like to see it thrown up or just in a way that CAL would like to see it thrown up. We will then be in a position either to file a more helpful defence in due course and I will take your Honour to the short minutes shortly or to put up our own example that will throw up the question under a different light. As we do that, we're just finding out whether for example it really is going to be necessary to have Kirby J, Dame Roma Mitchell and Gaudron J as parties because if the matter were to go on, well, they're listed as authors. If the matter were to go on that might effect – not in Dame Roma's case, but in the other cases, the composition of any ultimate tribunal. So we're going to discuss that with Mr Banki and with Mr Catterns,Ľ". [Mr Catterns QC appeared for CAL instructed by Mr Banki] 16 On the hearing of the present motions, counsel for the Universities makes the point that nothing was said on 1 February 2000 to suggest that CAL had not selected the 42 examples "seriously" or that the Universities should not be studying them and "testing" them. Counsel for the Universities stated at the directions hearing on 1 February 2000 that the task it was undertaking (examining CAL's examples) would enable them "to file a more helpful defence in due course." 17 The directions that Burchett J made on 1 February 2000 were as follows: "1. EXTEND time for the Respondents to file and serve their Defence and any Cross-Claim to 4 February 2000. 2. GRANT leave to the Respondents to file and serve an amended Defence and any further Cross-Claim to 2 March 2000. 3. STAND over the matter to 9.30am on 3 March 2000 before Burchett J for further directions." 18 The reasons for the apparently "curious directions" was explained by counsel for the Universities to Burchett J: the Universities would raise in their defence immediately the contract issues, but would need more time to be sure that CAL's 42 examples were appropriate ones to test the issues the parties desired to have resolved and, in particular, whether further examples would be necessary for that purpose. 19 On 3 March 2000, the Universities by their defence and cross-claim raised a range of issues relating to agreements between the parties and other matters that touched on retrospectivity. 20 The proceeding was again before Burchett J on 3 March 2000 when counsel for the Universities stated that the Universities had filed their defence and cross-claim (they did so in court on 3 March), and continued as follows: "The other part of the case is that which is raised by the application which is a series of copyright examples to test whether certain types of copying do or don't fall within or otherwise Part VB. That is the part of the case where there remains a bit of a concern about who the applicants are because the applicants are a collection of authors and publishersĽand I raised on the last occasion the problem that, among those identified, are Gaudron and Kirby JJ. We have had some discussions with CAL about that and that will be sorted out. It is not quite sorted out yet. We also heard I think in the last couple of days from CAL the classification of the examples that they have chosen and that are annexed to the application. That is to say this example raises this issue under that section [apparently a reference to Part VB], which has made our task which remains to find our own examples if we want competing examples. That simplified our task considerably. We had hoped to have made some progress on that by today but we haven't and we would like another month to consider that and to come up with our own examples. That is the first thing and that is the only thing that really remains to be done before we can come back and have a sensible discussion with your Honour as to how that proceeding is then going to unfold, whether there is a separate issue in it somewhere and otherwise how we take it forward to hearing." When seeking leave to file in court the Universities' defence and cross-claim, counsel for the Universities said that the document was of a "slightly preliminary nature" and would be replaced by a further one that raised the Universities' own "copyright examples". 21 On 3 March, 30 March and 19 May 2000 the matters were again before both the Tribunal and the Court, constituted, in the former case, by Burchett P, and in the latter by Burchett J. On 7 June, the solicitors for the Universities wrote to CAL's solicitors advising that their consideration of CAL's 42 examples was "substantially completed". On 23 June, CAL's solicitors wrote to the Universities' solicitors requesting them to specify the nature of examples which the Universities contended should be added to CAL's 42. 22 On 4 August 2000, counsel for the Universities informed the Court that the matters raised by the cross-claim were no longer alive and that the Universities sought leave to discontinue their cross-claim. That leave was granted on the basis, as agreed by the parties, that CAL and the Universities were to bear their respective costs of the cross-claim. 23 There was further reference on 4 August to the question of the 42 instances thrown up by the schedule to the amended application. The solicitor for CAL stated: "Your Honour might recall that part of this exercise by Mr Cobden's clients was to see if there were other instances which should form part of this test. Now we had anticipated that the universities would have a range of other instances and that we might also have some and together we might arrive at a fair bundle. Now that this has taken place, CAL would want to reconsider the instances which are presently before the court, because they are now almost a year old in most cases. There's a limit on our part and I'm not sure whether that will be opposed when it happens or not,Ľ" Counsel for the Universities asked that the proceeding be stood over for a period "to enable [the] further examples issue to be sorted out" and to give the parties an opportunity to confer about how the matter would progress in the absence of the cross-claim. 24 On the hearing of the present motions, counsel for the Universities submits that the directions hearing of 4 August 2000 was the first occasion on which CAL indicated that it might have some other instances and that the parties might together "arrive at a fair bundle". Counsel for the Universities also submits that the suggestion that reconsideration of the instances was compelled by the fact that they were "almost a year old in most cases" does not bear logical scrutiny, since the appropriateness of the 42 instances to test the issues could not have diminished by the passage of time. Counsel for the Universities submits: "What this does show however, is the first hint of what was to come – the revelation that the instances were in fact carelessly chosen." 25 The proceeding was again before Burchett J on 1 September 2000. CAL's solicitor had prepared short minutes of proposed orders and explained as follows: "What's contemplated is that the amended application will be further amended by the revision of the schedule and that it won't be necessary to file an amended statement of claim as a result of that. It just narrows the number of instances. Your Honour might recall there are some 30 or 40 instances that were chosen pretty much at random when the proceeding began. We can refine those now to quite a short list. Then maybe one or two new ones. We will write to Mr Cobden's clients about that in the next week or so. We thought we could do that by 14 September." (The reference to "30 or 40 instances" was no doubt a reference to the 42 instances referred to in the schedule annexed to the amended application, but "when the proceeding began" there had been 213 instances referred to in the two schedules annexed to the original application.) 26 The solicitor for CAL proposed directions that, inter alia, CAL file and serve a further amended application by 14 September and that the Universities file and serve their defence and any cross-claim by 6 October. Counsel for the Universities indicated that the proposed directions presented no problem for the Universities, but later stated that there was an issue of any costs thrown away by reason of the amendment. 27 On 13 September 2000 CAL filed and served a further amended application alleging infringement only by Charles Sturt University and the University of Sydney and only in relation to six works. The Universities have not subsequently filed any defence or cross-claim. 28 On 29 September 2000, the Universities' solicitors wrote to CAL's solicitors making a number of complaints. Of present relevance was their insistence that CAL discontinue against the 35 Universities not involved in the six instances now relied on by CAL. 29 On 5 October 2000 the solicitors for CAL wrote a lengthy letter to the solicitors for the Universities. The letter outlined CAL's case. It included the following statements: "We filed our client's application on 10 August 1999. The instances in the schedule were selected quickly, and at random, but in that manner to allow the proceedings to commence without delay." The letter traced the history of the proceeding and emphasised CAL's contention that down to 4 August 2000 CAL had understood that the Universities might provide alternative instances to CAL's 42. 30 On 30 October 2000 the proceeding was before me. Senior counsel for CAL informed me that the Universities were seeking an order that his client pay their costs as a result of CAL's discontinuance against 35 of their number. Counsel for the Universities foreshadowed his argument that the schedules had "changed dramatically on two occasions" and that the Universities would be seeking an order for costs. outline of submissions Outline of Universities' submissions 31 In their written submissions, the Universities submit as follows: "35. In essence the history outlined above yields the following propositions: · CAL chose a first set of examples with which it did not proceed. It amended by replacing the schedule giving that set of examples by a different set on 2 December 1999. · In any event, in the absence of some indication that such a set of examples should not be taken seriously, a litigant in the position of the Universities is not only entitled, but is obliged, to treat such instances as being properly put forward as the foundation of an applicant's case, and to investigate and prepare its response to that case appropriately. · It is in the nature of any copyright case where a defence of fair dealing is to be raised – as was always contemplated here – that an investigation of the instances of copying put forward by the applicant needs to be undertaken before a full and proper defence raising the fair dealing defences can be filed. Thus, it is always contemplated in a copyright case that may raise a fair dealing issue that a respondent will undertake a significant amount of work upon receipt of the first pleading. · Far from diverting the Universities from this usual course, CAL's behaviour reinforced that this is what the Universities should do: · First, it was always plainly contemplated that the Universities would investigate the instances given in order to add any of their own that they felt better illustrated the issues, or further issues. That necessarily carries with it an implication that the examples would be taken seriously. · Secondly, a first round of instances was withdrawn by CAL and replaced with a second round. Again, this suggests, assuming in CAL's favour that it was understood that the first draft had been put together in some haste, that at least the second one had been put together with some care. · Thirdly, that impression was reinforced by CAL specifically saying to Sackville J that the second list had been prepared "after a considerable amount of work". · The Court was informed, in the presence and hearing of the legal representatives for CAL, that the instances contained in the second version of the Schedules were not only being examined, they were "being worked through"; that the Universities were "going to each of the examples"; "speaking to the persons involved"; and a range of other activities that plainly involved significant effort and cost. CAL sat by when the Court was informed of this, without at any time saying that the conduct was premature, or that it was being undertaken in respect of instances of copying that would not, in due course, be maintained in the case. · In fact, having engendered an impression both on the part of the Court and on the part of the Universities that the second round of instances, on which the Universities were expending a large amount of effort, time and cost, were seriously put forward by CAL, it then on 4 August 2000, for the first time, indicated that it wished to reconsider the instances. · Finally, on 9 September 2000 CAL described the previously selected instances as being "chosen pretty much at random", contrary to what it had previously indicated. In effect, whatever the outcome of the Universities' notice of motion to strike out the Statement of Claim (see below), CAL is in effect starting from scratch by selecting fresh (or a limited number of) instances applying to only two Universities, as opposed to examples chosen "pretty much at random", and is completely repleading its case. In such circumstances, any litigant in the position of the universities is entitled to its costs thrown away. In the particular circumstances set out above, the costs thrown away are in effect the totality of the costs to date (other than those on the Cross-Claim which are dealt with above at paras 25-26). The Universities would be entitled in any ordinary proceedings to have the whole of their costs. In proceedings where not only was the impression fostered that the second set of examples had been carefully chosen, but CAL sat by knowing that the Universities were doing intensive work on those examples, only later to reveal that they were carelessly chosen, the usual approach to costs is all the more reinforced. The Universities should get an order for CAL to pay all their costs in the proceedings to date. Despite the circumstances set out above, the Universities seek those costs only on a party/party basis. However, in light of the circumstances set out above, those costs should be taxable and payable forthwith." Outline of CAL's submissions 32 CAL submits as follows: "17. CAL respectfully submits that the usual costs consequences which follow the removal of parties should not follow in the present very special case: (a) the proceedings are, in effect, a continuation of the Tribunal proceedings, to which each Respondent is a party and in which the usual practice is not to order costs; (b) the case is a test case; (c) the Respondents knew from the time of filing of the Application with its schedule in its various forms, (i) that only six universities were proper Respondents (note that each University was a cross-claimant); and (ii) that the schedule was not final and that some instances were to be added or deleted, with possible consequences as to which Universities did the acts said to infringe; (d) the Respondents did not complain about the constitution of the proceedings as to the Respondents until 29 September 2000, although they did challenge, in effect, CAL's authority to represent all copyright owner's then in the schedule." CAL submits that it would have been premature for the Universities to prepare evidence based on the 42 instances since it had always been made clear that the schedule of instances was proposed first to be agreed on by the parties. 33 CAL also responds to the Universities' submissions along the following lines. The work described in the affidavits of Ms Flahvin and Ms Foster both sworn 23 November 2000 should be seen, not to relate to the preparation of a substantive defence, but as being: "to seek to ascertain what legal issues were intended to be raised by CAL by each copying instance put forward, with a view to considering whether the instances put forward by CAL adequately tested all the legal issues which the Universities wanted to see tested" and "to assist in the preparation of the Universities' defence." In its submissions, CAL also refers to par 14 of Ms Flahvin's affidavit of 23 November 2000 which is as follows: "In the period from May 2000 to September 2000 I undertook further work in respect of the instances of copying referred to in the CAL schedule. This work included considering and discussing with counsel whether all of the legal issues which the Universities wished to see tested in these proceedings were raised by the instances contained in the CAL schedule, as well as considering and discussing with counsel the various defences which were raised by the factual circumstances surrounding each instance of copying." CAL says that in the event the Universities did not file a pro forma defence, or any defence, by 4 February 2000, but filed their defence and cross-claim on 3 March 2000 – one day after the substantive defence was due. That defence did not plead a fair dealing defence or, indeed, any substantive defence. CAL submits that it follows that as at March 2000, it was entitled to regard the Universities' defence as intended to be either: (a) their substantive defence; or (b) a pro forma defence, but without reference to a time for later amendment. CAL accepts that on its view of the proceeding as a cooperative test case, it was probably appropriate to regard the defence as a "pro forma". CAL submits that if the defence was intended to be a substantive defence, since it contained no pleading of subs 40(1A) (in respect of copying for external students) or s 40 (in respect of copying by staff) all the work described in Ms Flahvin's and Ms Foster's affidavits was irrelevant and misconceived because it was not related to any issue in the proceeding. If, on the other hand, the defence was intended to be a pro forma defence, then consistently with the proceeding's being a cooperative test case, CAL would (according to the submission) have agreed to the Universities' amending their defence at some subsequent time to plead those provisions, as the Universities thought appropriate, in respect of an agreed schedule of instances. 34 CAL submits that it was only by 4 August 2000 when the Universities discontinued their cross-claim, that it became apparent to CAL that the Universities no longer regarded the proceeding as a cooperative test case with an agreed schedule, testing matters each side wanted tested. Accordingly, so CAL submits, after 4 August 2000 it chose to simplify the case to test the issues in a simple way which raised the issues it considered appropriate, with the resulting current amendments to the application and statement of claim. Accordingly, work done by the Universities with respect to matters not pleaded was wasted and should not be laid at CAL's door. That work related either to: (a) instances to be put forward to test adequately all issues; or (b) the preparation of the Universities' defence, that is, potential fair dealing defences. As the case has been pleaded until today, the Universities have not suggested adding or subtracting instances with a view to an appropriate testing of issues, or filed any pleading to which any of the work referred to in the affidavits mentioned is relevant. 35 Accordingly, CAL submits either that it should, in the usual way, be ordered to pay the costs occasioned by the amendment for which it now seeks leave, that is, the Universities' costs of filing a new defence to the amended statement of claim, or that those costs (or the costs of the proceeding to date) should be reserved. reasoning 36 I have found the costs issue posed for decision a difficult one. If CAL had adhered to its 42 instances and the Universities had suggested to CAL that 36 of them were inappropriate, leaving the six that CAL itself now proposes as the only appropriate ones, and CAL had accepted the Universities' suggestion, it would apparently be common ground that the Universities would not be entitled to an order for costs in respect of its work of considering and taking instructions in relation to the 42. The reason is that the background to the proceeding is that the parties were to cooperate with one another to arrive at agreed examples that would be appropriate to permit the legal issues between them to be resolved. Why should CAL be worse off in the events that have happened, in particular, by reason of having itself recognised that 36 of the 42 instances are inappropriate? 37 Again, if CAL had, prior to action, suggested the 42 instances, and, during or after the examination of them by the Universities, CAL had abandoned 36 of them, it would apparently be common ground that CAL should not be ordered to pay the Universities' costs of the examination of the 42. Why should CAL be worse off in the events which have happened? 38 Yet it seems unfair to the Universities that CAL should have proposed apparently seriously and after due thought the 42 instances and stood by while the Universities investigated them, then suddenly abandoned 36 of them before the Universities announced their position in relation to any of the 42. I do not know what stance the Universities would have taken in relation to the 42. Perhaps they would have opposed the inclusion of the very 36 that CAL has abandoned and been content for CAL's application to go forward in relation to the remaining six. Perhaps, on the other hand, the Universities would have found some or all of the 36 acceptable. Perhaps they will yet contend that some of the 36 instances now abandoned by CAL should be taken into account in the proceeding after all. 39 A matter that is not dealt with adequately by the existing evidence is the question of the process by which CAL chose the 42 instances. So far as the evidence reveals, they were chosen at random and the first time CAL gave serious consideration to the process of selection was when it settled upon the six instances of copying on which it now wishes to rely. But it is difficult to accept that CAL chose the 42 instances at random: after all, it arrived at the 42 by abandoning 171 of the original 213. 40 Several courses suggest themselves. One is to order CAL to pay some proportion of the Universities' costs of examining the 42 instances. The proportion would allow for the fact that the proceeding was in the nature of a "test" case and that the Universities must reasonably have expected to have to bear some of the cost considering the appropriateness of the instances suggested by CAL in order to arrive at an agreement with CAL. On the other hand, the course mentioned would take into account my view that on the existing evidence CAL does not appear to have taken any care in selecting its 42 instances not to put the Universities to unnecessary cost. 41 An alternative course is to reserve the question of costs until at least the Universities' defence is filed and it is known for certain whether the Universities wish to challenge any of the six remaining instances or wish to suggest others, even some of the 36 abandoned by CAL. 42 A third possible course is to invite the parties to file further evidence and to make further submissions addressing the questions which I have raised above and on which the existing evidence is silent. 43 I think that the appropriate course to follow at this stage is to invite the parties to make short written submissions as to the course or courses they contend should be followed. conclusion 44 There will be a direction that the parties file and serve written submissions by 31 January 2001 as to which one or more of the three courses identified above the respective parties contend should be followed. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 21 December 2000 Counsel for the Applicants: Mr D K Catterns QC Solicitor for the Applicants: Banki Haddock Fiora Counsel for the Respondents: Mr R Cobden Solicitor for the Respondents: Baker and McKenzie Date of Hearing: 8 December 2000 Date of Judgment: 21 December 2000