Chhabra v McPherson as Trustee for the McPherson Practice Trust (No 2) [2019] FCA 448

Chhabra v McPherson as Trustee for the McPherson Practice Trust (No 2) [2019] FCA 448

The applicants' failure to accept the respondents' offer was unreasonable because the offer was a genuine and substantial compromise, the fundamental defects in the applicants' claims concerning copyright ownership and termination of the respondents' licence were matters known or knowable to the applicants and were specifically drawn to their attention, and the discontinuance of the defensive cross-claim did not significantly change the nature of the litigation. Indemnity costs were therefore appropriate after 11.00 am on 4 May 2017, but the respondents had to pay the applicants' costs occasioned by the cross-claim because it was unnecessary and misconceived.

Jurisdiction
Australia
Judgment Date
03 April 2019
Procedural Posture
Costs Application in Federal Court Intellectual Property Proceeding / Post Judgment Costs Determination After Dismissal of the Applicants' Amended Originating Application
Outcome
Respondents awarded costs of the applicants' application, including indemnity costs after 11.00 am on 4 May 2017, subject to paying the applicants' costs occasioned by the cross-claim.
Legal Topics
['indemnity Costs' 'offer of Compromise' 'calderbank Offer' 'unreasonable Failure to Accept Offer' 'discontinued Cross Claim' 'copyright Ownership' 'licence to Use Trade Indicia']
['costs' 'intellectual Property' 'copyright' 'australian Consumer Law' 'passing Off'] ['indemnity Costs' 'offer of Compromise' 'calderbank Offer' 'unreasonable Failure to Accept Offer' 'discontinued Cross Claim' 'copyright Ownership' 'licence to Use Trade Indicia']

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Procedural Posture

Costs Application in Federal Court Intellectual Property Proceeding / Post Judgment Costs Determination After Dismissal of the Applicants' Amended Originating Application

Legal Issues

  1. 1 ["Whether the applicants unreasonably failed to accept the respondents' offer of compromise dated 2 May 2017." 'Whether the respondents were entitled to indemnity costs after 11.00 am on 4 May 2017 under r 25.14(2) of the Federal Court Rules 2011 or s 43 of the Federal Court of Australia Act 1976 (Cth).' "Whether the respondents should pay the applicants' costs occasioned by the filing of the respondents' cross-claim."]

Ratio Decidendi

The applicants' failure to accept the respondents' offer was unreasonable because the offer was a genuine and substantial compromise, the fundamental defects in the applicants' claims concerning copyright ownership and termination of the respondents' licence were matters known or knowable to the applicants and were specifically drawn to their attention, and the discontinuance of the defensive cross-claim did not significantly change the nature of the litigation. Indemnity costs were therefore appropriate after 11.00 am on 4 May 2017, but the respondents had to pay the applicants' costs occasioned by the cross-claim because it was unnecessary and misconceived.

Court Disposition

Respondents awarded costs of the applicants' application, including indemnity costs after 11.00 am on 4 May 2017, subject to paying the applicants' costs occasioned by the cross-claim.

Orders

  • ["The respondents pay the applicants' costs occasioned by the filing of the respondents' cross-claim." "Subject to Order 1, the applicants pay the respondents' costs before 11.00 am on 4 May 2017, on a party and party basis." "Subject to Order 1, the applicants pay the respondents' costs after 11.00 am on 4 May...