FEDERAL COURT OF AUSTRALIA Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2015] FCA 746 Citation: Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2015] FCA 746 Parties: ACCOR AUSTRALIA & NEW ZEALAND HOSPITALITY PTY LTD and CAIRNS HARBOUR LIGHTS PTY LTD v LIV PTY LTD ACN 093 688 576, IVANA PATALANO and ELISE WYANDRA WARRING ALSO KNOWN AS ELISE BRADNAM; ELISE WYANDRA WARRING ALSO KNOWN AS ELISE BRADNAM and IVANA PATALANO; CAIRNS HARBOUR LIGHTS PTY LTD and ACCOR AUSTRALIA & NEW ZEALAND HOSPITALITY PTY LTD File number: QUD 762 of 2012 Judge: RANGIAH J Date of judgment: 22 July 2015 Catchwords: COSTS – apportionment of costs – appropriate order for costs when neither party wholly successful – where applicants partially successful in principal application – where respondents partially successful in cross-claim Legislation: Federal Court of Australia Act 1976 (Cth) s 43 Cases cited: Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 cited Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 3) [2007] FCAFC 119 cited Dias Aluminium Products Pty Ltd v Ullrich Aluminium Pty Ltd (No 2) (2005) 225 ALR 569; [2005] FCA 1400 cited Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 cited Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748 cited Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited (No 2) [2013] FCA 609 cited Roadshow Films Pty Ltd v iiNet Ltd (No 4) (2010) 269 ALR 606 at 610–613; [2010] FCA 645 cited Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 cited Date of hearing: 16 July 2015 Date of orders: 21 July 2015 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 16 Counsel for the Applicants: Mr B Gardiner Solicitor for the Applicants: King & Wood Mallesons Counsel for the First and Second Respondents: Mr P O'Shea QC with Mr AM Musgrave Solicitor for the First and Second Respondents: Morrow Petersen Solicitors Counsel for the Third Respondent: Mr P O'Shea QC with Mr AM Musgrave Solicitor for the Third Respondent: Kinneally Miley Law IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 762 of 2012 BETWEEN: ACCOR AUSTRALIA & NEW ZEALAND HOSPITALITY PTY LTD First Applicant CAIRNS HARBOUR LIGHTS PTY LTD Second Applicant ELISE WYANDRA WARRING ALSO KNOWN AS ELISE BRADNAM First Cross-Claimant IVANA PATALANO Second Cross-Claimant AND: LIV PTY LTD ACN 093 688 576 First Respondent IVANA PATALANO Second Respondent ELISE WYANDRA WARRING ALSO KNOWN AS ELISE BRADNAM Third Respondent CAIRNS HARBOUR LIGHTS PTY LTD First Cross-Respondent ACCOR AUSTRALIA & NEW ZEALAND HOSPITALITY PTY LTD Second Cross-Respondent JUDGE: RANGIAH J DATE OF ORDER: 21 July 2015 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Pursuant to s 88(1)(a) of the Trade Marks Act 1995 (Cth) ("the Act"), the Register maintained under the Act be rectified by cancelling the registration of Australian Trade Mark No 1295197 (Cairns Harbour Lights). 2. Pursuant to s 88(1)(b) of the Act, the Register maintained under the Act be rectified by amending the registration of Australian Trade Mark No 1281759 (Harbour Lights) such that the following services within class 36 are removed from the registration: (a) agency services for the leasing of real estate property; (b) apartment letting agency; (c) apartment rental services; (d) rental of apartments; and (e) rental of accommodation. 3. Pursuant to s 88(1)(b) of the Act, the Register maintained under the Act be rectified by amending the registration of Australian Trade Mark No 1281759 (Harbour Lights) such that the following services within class 43 are removed from the registration: (a) accommodation letting agency services (holiday apartments); (b) accommodation reservation services; and (c) booking services for accommodation. 4. The operation of Orders 1, 2 and 3 be stayed for: (a) 21 days from the date of these orders; or (b) in the event that the applicants within that time file a notice of appeal, until orders are made for the final determination of that appeal or earlier order of the court discharging this order. 5. The first respondent be permanently restrained from using: (a) "Harbour Lights Cairns"; and (b) "cairnsharbourlights.com.au"; and (c) "harbourlightscairns.com.au"; and (d) "harbourlightscairns.com", as a trade mark to promote or advertise any hotel accommodation services in Australia including via websites; and from using "Harbour Lights Apartments" as a trade mark to promote or advertise any commercial real estate agency services in Australia, including via websites. 6. On the expiration of 14 days from the date of this order, the first respondent be permanently restrained, in relation to the letting of apartments located in the Harbour Lights Community Titles Scheme No 36769 and the Harbour Lights Community Titles Schemes No 36770, from: (a) representing that the first respondent's business provides five star hotel services or the benefits of five star hotel services; (b) representing to users of the following websites that the user is booking a hotel room: (i) HotelClub.com; (ii) Hotels.com; (iii) Agoda.com; (iv) Expedia.com.au; and (v) Orbitz.com; and (c) representing to users of the internet that the first respondent's listing for "Cairns Luxury Apartments" is a listing for a hotel room which has an accommodation manager situated within the same property as the room. 7. The application is otherwise dismissed. 8. The cross claim is otherwise dismissed. 9. The matter be listed for directions for the taking of an account of profits on a date to be fixed. 10. The applicants pay 40% of the respondents' costs of the proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 762 of 2012 BETWEEN: ACCOR AUSTRALIA & NEW ZEALAND HOSPITALITY PTY LTD First Applicant CAIRNS HARBOUR LIGHTS PTY LTD Second Applicant ELISE WYANDRA WARRING ALSO KNOWN AS ELISE BRADNAM First Cross-Claimant IVANA PATALANO Second Cross-Claimant AND: LIV PTY LTD ACN 093 688 576 First Respondent IVANA PATALANO Second Respondent ELISE WYANDRA WARRING ALSO KNOWN AS ELISE BRADNAM Third Respondent CAIRNS HARBOUR LIGHTS PTY LTD First Cross-Respondent ACCOR AUSTRALIA & NEW ZEALAND HOSPITALITY PTY LTD Second Cross-Respondent JUDGE: RANGIAH J DATE: 22 July 2015 PLACE: BRISBANE REASONS FOR JUDGMENT 1 The applicants commenced proceedings against the respondents alleging that the respondents had infringed the applicants' trade marks and had engaged in misleading or deceptive conduct. The second and third respondents cross-claimed for rectification of the Register of Trade Marks by cancelling, removing or amending the relevant entries. 2 On 5 June 2015 I gave reasons for judgment in respect of the principal application and the cross-claim: Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2015] FCA 554. The applicants were partially successful in the principal application. The respondents were partially successful in the cross-claim. 3 I have now heard submissions as to the appropriate orders and costs. I make the orders set out in the preceding pages. These are my reasons for the costs order. 4 In the principal application, the applicants succeeded in proving infringements of their trade marks in respect of 5 of the 49 allegations of infringement that they pursued. They also succeeded against the first respondent in respect of 2 of the 16 categories of representations which they alleged were misleading or deceptive. The claim of misleading or deceptive conduct against the third respondent was abandoned. 5 As to the cross-claim, the respondents have succeeded in obtaining an order that the Register be rectified by removing the trade mark CAIRNS HARBOUR LIGHTS. They have also succeeded in obtaining an order that the entry for HARBOUR LIGHTS be amended so that a number of the types of services in respect of which that trade mark is registered are deleted. The applicants have, however, achieved some limited success in that they have maintained the registration of HARBOUR LIGHTS in respect of several types of services. 6 The applicants submit that the respondents should pay 70% of the applicants' costs of the proceeding. The respondents submit the applicants should pay 100% of their costs of the proceeding. It seems to me that the parties' submissions tend to focus on their own success and largely ignore the success of the opposing parties. It is apparent that the mere fact that a party succeeds in part of its case will not necessarily result in that party being awarded costs or immunise that party from paying the opposite party's costs. 7 Section 43 of the Federal Court of Australia Act 1976 (Cth) provides, relevantly: (2) Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge. (3) Without limiting the discretion of the Court or a Judge in relation to costs, the Court or Judge may do any of the following: … (b) make different awards of costs in relation to different parts of the proceeding; (c) order the parties to bear costs in specified proportions; … (e) award costs in favour of or against a party whether or not the party is successful in the proceeding; 8 The discretion to award costs is broad and unfettered, save that it must be exercised judicially: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 [9], per Black CJ and French J. Ultimately, the Court is required to determine the appropriate order in the interests of justice: Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited (No 2) [2013] FCA 609 at [11] per Cowdroy J. 9 In Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 3) [2007] FCAFC 119, the Full Court said at [11]: The usual practice is that costs follow the event and the Court will order the recovery of costs by the successful party on a party-party basis but success or failure on separate issues may lead the court to engage in a process of apportionment…It is appropriate that, where one party, although successful overall, raised and pursued unsuccessful grounds or abandoned grounds that the other party was expected to meet in preparation of and in the course of the hearing, and as a consequence costs have been thrown away or incurred, such costs should be paid by the successful party. (Citations omitted.) 10 In Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748, Toohey J stated the principles as follows at 48,136: 1. Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order. 2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed. 3. A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs of them. In this sense, "issue" does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law. (Citations omitted.) 11 In Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261, the Full Court said at 272: Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation. (See also see Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 at [2]–[5]; Roadshow Films Pty Ltd v iiNet Ltd (No 4) (2010) 269 ALR 606 at 610–613; [2010] FCA 645, per Cowdroy J; Dias Aluminium Products Pty Ltd v Ullrich Aluminium Pty Ltd (No 2) (2005) 225 ALR 569 at 570; [2005] FCA 1400, per Crennan J). 12 This is a case in which each side achieved partial success, although the respondents have been substantially more successful than the applicants. It would not be just to order that the respondents pay 100% of the applicants' costs of the principal claim, nor to order that the applicants pay 100% of the respondents' costs of the cross-claim. 13 Neither would it be appropriate to order that the parties pay costs according to their success or failure upon particular issues. There is a substantial overlap between many of the issues in the principal application and the cross-claim. It would be a difficult and a costly exercise for a taxing officer to attempt to divide costs between particular issues. 14 In these circumstances, it is appropriate to take a broad brush approach to the apportionment of costs. I consider that the respondents have been substantially successful in the proceeding as a whole. Taking into account the evidence led, the claims made, the extent of the submissions made in relation to those claims and the extent of the parties' successes and failures, I consider that the applicants should pay 70% of the respondents' costs and the respondents should pay 30% of the applicants' costs. These figures should be set-off against each other. The applicants should pay 40% of the respondents' costs. 15 I have considered whether different costs orders should be made in relation to the different respondents. While the applicants were not successful against the second respondent, the second respondent is the sole director and shareholder of the first respondent and was a witness, and the first and second respondents had common representation. It seems unlikely that significantly less costs would have been incurred if the second respondent had not been included as a party. The applicants have been somewhat less successful against the third respondent than the first respondent. However, I do not think the difference is so significant that it is necessary or appropriate to make different orders in respect of the third respondent. 16 For these reasons, I have ordered that the applicants pay 40% of the respondents' costs. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah. Associate: Dated: 22 July 2015