FEDERAL COURT OF AUSTRALIA Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd (No 2) [2016] FCA 896 File number: VID 261 of 2015 Judge: MOSHINSKY J Date of judgment: 5 August 2016 Legislation: Federal Court Rules, rr 28.02, 40.08 Trade Marks Act 1995 (Cth), s 129 Cases cited: Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820 Date of hearing: Determined on the papers Date of last submissions: 2 August 2016 Registry: Victoria Division: General Division National Practice Area: Intellectual Property Sub-area: Trade Marks Category: No Catchwords Number of paragraphs: 8 Solicitor for the Applicants/ Cross-respondents: Mr J Omond, Omond & Co. Counsel for the Respondents/ Cross-claimant: Mr CD Golvan QC with Mr P Creighton-Selvay Solicitor for the Respondents/Cross-claimant: HWL Ebsworth ORDERS VID 261 of 2015 BETWEEN: STONE & WOOD GROUP PTY LTD (ACN 124 373 324) First Applicant STONE & WOOD BREWING PTY LTD (ACN 124 487 510) Second Applicant AND: INTELLECTUAL PROPERTY DEVELOPMENT CORPORATION PTY LTD (ACN 116 569 665) First Respondent ELIXIR SIGNATURE PTY LTD (ACN 135 297 988) Second Respondent AND BETWEEN: ELIXIR SIGNATURE PTY LTD (ACN 135 297 988) Cross-Claimant AND: STONE & WOOD GROUP PTY LTD (ACN 124 373 324) (and another named in the Schedule) First Cross-Respondent JUDGE: MOSHINSKY J DATE OF ORDER: 5 AUGUST 2016 THE COURT DECLARES THAT: 1. By letters from their solicitors dated 26 February 2015 and 15 April 2015, the first and second cross-respondents (Stone & Wood) made groundless threats against the cross-claimant (Elixir) to bring an action for infringement of Australian Trade Mark No. 1395188 within the meaning of section 129 of the Trade Marks Act 1995 (Cth). THE COURT ORDERS THAT: 2. Stone & Wood pay Elixir's costs of the cross-claim up until and including 21 July 2016 (the day on which judgment on the cross-claim was pronounced in favour of Elixir), to be taxed if not agreed. 3. Costs after 21 July 2016 in relation to the cross-claim be reserved. THE COURT ORDERS BY CONSENT THAT: 4. Pursuant to rule 28.02 of the Federal Court Rules, all remaining issues in relation to the cross-claim be referred to mediation by a Registrar of the Court. The mediation shall be conducted on a date convenient to the parties. In the event that the matter does not settle at the conclusion of the mediation, the Registrar conduct a case management conference immediately following the mediation to consider the most economic and efficient means of bringing all remaining issues in relation to the cross-claim to trial and of conducting the trial, at which conference the Registrar may give further directions. The mediator is to report the result of the mediation or case management conference to the Court. 5. Order 4 be stayed: (a) initially for a period of 21 days from 21 July 2016; and (b) if an appeal is lodged in respect of the cross-claim within that period, until determination of that appeal or further order. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MOSHINSKY J: 1 On 21 July 2016, I gave judgment in relation to liability (but not quantum) in this matter: Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820 (the Reasons). These reasons should be read together with the Reasons. I adopt the abbreviations used in the Reasons. 2 As noted in the Reasons at [244], Elixir sought the opportunity to make submissions as to the form of orders to be made in relation to the cross-claim following the publication of reasons. I therefore ordered, in relation to the cross-claim, that the parties submit agreed minutes of proposed orders and that, if they could not agree, each party provide its minutes of proposed orders, together with a short outline of submissions. The parties were in agreement as to some, but not all, of the orders to be made. They have each filed minutes of proposed orders and a short outline of submissions. The parties were content for me to deal with the matter on the papers. 3 The parties were in agreement as to the form of declaration to be made to give effect to the Reasons, namely a declaration to the effect that, by letters from their solicitors dated 26 February 2015 and 15 April 2015, Stone & Wood made groundless threats against Elixir to bring an action for infringement of Australian Trade Mark No. 1395188 within the meaning of s 129 of the Trade Marks Act. A declaration to this effect reflects the Reasons. Further, s 129(2) provides that a purpose of the action is to obtain a declaration to this effect. I will therefore make such a declaration. 4 In relation to costs, Elixir seeks an order that Stone & Wood pay Elixir's costs of the cross-claim up until and including 21 July 2016 (the day on which judgment on the cross-claim was pronounced in favour of Elixir). Stone & Wood seeks to qualify the costs order (which was order 4 in the minutes of proposed orders) by making it subject to two further orders as follows: 5. If, following the determination of all remaining issues in relation to the Cross-Claim, Elixir is awarded a sum of less than $100,000 in damages, Stone & Wood may file an application pursuant to Rule 40.08 of the Federal Court Rules that any costs and disbursements payable to Elixir pursuant to Order 4 be reduced by an amount to be specified by the Court. 6. Order 4 be stayed: (a) initially until the determination of all remaining issues in relation to the Cross-Claim; and (b) if, following the determination of all remaining issues in relation to the Cross-Claim, Elixir is awarded a sum of less than $100,000 in damages, until determination of any application filed by Stone & Wood pursuant to Order 5. 5 In support of these proposed orders, Stone & Wood submits that if there is to be a taxation of costs on the cross-claim, it should be on all relevant issues; it would be inefficient, and an inappropriate use of the resources of the parties and the Court, to have multiple taxations of costs in the proceeding; the outcome of the quantum phase of the proceeding may impact significantly on the amount of costs that should be awarded to Elixir – for example, those costs might properly be reduced (either under the Court's general discretion as to costs or pursuant to r 40.08 of the Federal Court Rules) if the damages awarded are nominal or low; accordingly, it is undesirable to tax Elixir's costs of the cross-claim until quantum has been determined and the cross-respondents have had the opportunity to pursue any application as to the reduction of costs that they consider appropriate. 6 In my view, there should be a costs order in favour of Elixir in relation to the cross-claim up until and including 21 July 2016. Elixir was successful in its cross-claim. I do not think reason is shown to depart from the normal rule that costs follow the event. Elixir has established an entitlement to a declaration, which is one of the forms of relief specifically referred to in s 129(2) of the Trade Marks Act. It has, therefore, succeeded in the cross-claim. Elixir's claim for damages is a separate stage of the proceeding and the costs of this stage will need to be addressed separately in due course. This may include an application under r 40.08 in respect of those costs. Further, I do not think reason is shown to stay the costs order in relation to the cross-claim. No stay has been sought or ordered in relation to the costs of the principal claim. 7 For these reasons, I will make a costs order in favour of Elixir in relation to the cross-claim up until and including 21 July 2016 and I will not make this order subject to the two additional orders sought by Stone & Wood. The parties were in agreement that the costs after 21 July 2016 in relation to the cross-claim be reserved. I will also make this order. 8 The parties also sought, by consent, orders for mediation of the remaining issues in the cross-claim. I will make those consent orders. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky. Associate: Dated: 5 August 2016 SCHEDULE OF PARTIES VID 261 of 2015 Cross-Respondents Second Cross-Respondent STONE & WOOD BREWING PTY LTD (ACN 124 487 510)