FEDERAL COURT OF AUSTRALIA Stamina Software Pty Limited v Austec Pacific Pty Limited [2004] FCA 1166 STAMINA SOFTWARE PTY LIMITED v AUSTEC PACIFIC PTY LIMITED N453 OF 2004 EMMETT J 7 MAY 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N453 OF 2004 BETWEEN: STAMINA SOFTWARE PTY LIMITED APPLICANT AND: AUSTEC PACIFIC PTY LIMITED RESPONDENT JUDGE: EMMETT J DATE OF ORDER: 7 MAY 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. If, on or before 28 May 2004, a proceeding is commenced against the present respondent seeking substantive relief in relation to the matters alleged in the affidavit of Christopher Griffiths sworn 24 March 2004, then the costs of this proceeding will abide the outcome of the substantive proceeding and shall be at the Court's discretion in that substantive proceeding. 2. If no such application is commenced, then the applicant shall pay the respondent's costs of this proceeding. 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 N453 OF 2004 BETWEEN: STAMINA SOFTWARE PTY LIMITED APPLICANT AND: AUSTEC PACIFIC PTY LIMITED RESPONDENT JUDGE: EMMETT J DATE: 7 MAY 2004 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This application was brought pursuant to O 15A r 6 of the Federal Court Rules. Order 15A r 6 relevantly provides that where there is reasonable cause to believe that the applicant may have the right to obtain relief from the person, and after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding to obtain that relief, and there is reasonable cause to believe that that person is likely to have possession of documents relating to the question of whether the applicant has the right to obtain the relief, the Court may order that person to give discovery to the applicant of such documents. 2 The applicant is a supplier of computer software programs and a developer of specialist software products. In the late 1980s the applicant entered into arrangements with a company called Austec Services Pty Limited, the principal of which was Mr David Mitchell. The applicant is concerned that there have been infringements of its copyright in relation to its software programs. It engaged in correspondence in late 2000 and early 2001 with solicitors acting for either Austec Services Pty Limited or the present respondent, Austec Pacific Pty Limited, or both. 3 The applicant or its solicitors mistakenly believed that the present respondent, Austec Pacific Pty Limited, was the same company as Austec Services Pty Limited after a change of name. That is not so. However, in the affidavits filed in support of this application assertions were made to the effect that the two companies were one and the same. That mistake was drawn to the attention of the applicant's solicitors by a letter written a few days before the first return date. One explanation for the late notification is that the proceedings were not served at the registered office of the respondent, but apparently served elsewhere. Nevertheless, the respondent appeared through counsel. 4 At the first directions hearing, directions were given for the respondent to file an affidavit disclosing certain information. That direction was complied with to the extent that an affidavit was filed setting out the correct position concerning the identity of the two companies to which I have referred. The affidavit indicated that the respondent does not have possession, care or control of any of the documents sought in the application except for those in two categories. Following the service of that affidavit, the applicant has discontinued the proceeding. The question now arises as to who should bear the costs of the proceeding. 5 The applicant is content for the Court to make an order along the lines of those regularly made in proceedings of this nature to the effect that, if a proceeding is commenced against the respondent in the Court within a reasonable time making allegations of the nature referred to in the affidavits in support of the application, then the costs of the parties of this proceeding should be treated as their costs of that new proceeding to abide the outcome of that proceeding at the discretion of the judge who deals with that fresh proceeding. 6 However, if no such proceeding is commenced within a reasonable time, then the applicant would pay the respondent's costs of this proceeding. I have indicated in the circumstances of this case 21 days would be a reasonable period of time and counsel for the applicant accepts that indication. However, counsel for the respondent contends that the commencement of this proceeding was completely unjustified and unreasonable to the extent that it is appropriate to make a special order for the costs of the proceeding at this stage, namely that the respondent be entitled to its costs on an indemnity basis. 7 It is unusual for such an order to be made. Such an order is made, however, where a successful party is able to demonstrate that the unsuccessful party commenced a proceeding that should never have been commenced or continued with the prosecution of a proceeding after it was quite apparent that it was doomed to failure. However, this is not a case where the applicant commenced a proceeding against the wrong respondent. Certainly, it is the case that the proceeding was commenced under a misapprehension that the present respondent was the same company that had dealings with the applicant in the late 1980s and early 1990s. 8 Nevertheless, it is apparent from the balance of the affidavits filed in support of the application that the concern of the applicant is that the present respondent may have been guilty of an infringement of copyright. To that extent, there is no doubt that the applicant, so far as it is concerned, has commenced the proceeding against the correct respondent. Whether it ultimately has a claim against the respondent is not for determination here. However, I am not persuaded that the commencement of the proceeding against the present respondent was unreasonable. The mere fact that the application fails is not of itself an indication that the commencement of the proceeding and its prosecution were unreasonable. 9 Indeed, the affidavit that has been filed is an answer to the claim, in one sense. That is to say, the claim was for discovery of such documents as were in the care, custody and control of the respondent. That disclosure has been given. If it turns out that the applicant has no cause of action against the respondent, then it will bear the costs of this application. However, as I have said, the mere fact that one does not get documents that disclose a cause of action is not a reason for making a special order as to costs. The appropriate order, in my view, is that the applicant would pay the respondent's costs on the ordinary basis. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett . Associate: Dated: 7 September 2004 Counsel for the Applicant: Mr M R Tyson Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondent: Mr C M Cook Solicitor for the Respondent: Graham & Associates Date of Hearing: 7 May 2004 Date of Judgment: 7 May 2004