Ladakh Pty Ltd v CAO and Anor (No.2)

[2010] FMCA 968

FEDERAL MAGISTRATES COURT OF AUSTRALIA

LADAKH PTY LTD v CAO & ANOR (No.2) [2010] FMCA 968

COPYRIGHT – Ruling on whether costs should be taxed pursuant to Federal Court Rules.

Federal Magistrates Court Rules 2001, r.21.10

Applicant: LADAKH PTY LTD (A.C.N. 079 120 595)

First Respondent: JING CAO

Second Respondent: JIANFENG LI

File Number: MLG 158 of 2010

Judgment of: Burchardt FM

Hearing date: 26 November 2010

Date of Last Submission: 26 November 2010

Delivered at: Melbourne

Delivered on: 26 November 2010

REPRESENTATION

Counsel for the Applicant: Mr J. Feder

Solicitors for the Applicant: Middletons

Counsel for the Respondents: No appearance

Solicitors for the Respondents: Austin Haworth & Lexon Legal

ORDERS

1. The Respondents pay the Applicant:

   (a)Damages of $350 for loss of sales;

   (b)Damages of $10,000 for damage to reputation;

   (c)Additional damages of $30,000 pursuant to s.115 of the Copyright Act 1968.

2. The Respondents pay the Applicant’s costs to be taxed in default of agreement pursuant to the Federal Court Rules.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 158 of 2010

LADAKH PTY LTD (A.C.N. 079 120 595)

Applicant

And

JING CAO

First Respondent

JIANFENG LI

Second Respondent

REASONS FOR JUDGMENT

(Ruling)

1. This is a ruling as to the basis upon which costs should be ordered in this proceeding.  On 3 November 2010, I delivered my judgment. At paragraph 161 of the Reasons for Judgment, I said this about the issue of costs:

   “The respondents will pay the applicant’s costs of the proceeding.  In the circumstances of this case and the particular complexities it gave rise to, in my view, these should be taxed in default of agreement on the Federal Court scale.”

   That is actually a misnomer.  It should have been pursuant to Federal Court Rules.  

2. The respondents sought leave to file submissions about the basis upon which costs should be ordered, and written submissions were received on 9 November 2010 from them. The respondents pointed out that the matter had been appropriately commenced in this Court, that only copyright had been pleaded, and submitted that nothing in the circumstances of the case was sufficient to justify making an order other than the usual recovery of costs, which is how it was described in the Court, as required pursuant to r.21.10 of the Federal Magistrates Court Rules 2001.  The applicant’s written submissions filed on

   
   

   17 November 2010 set out the Court’s powers.  It was submitted that this was a complex case and it was issued in the appropriate Court and that the applicant should not face financial penalty for having to recover only pursuant to the Federal Magistrates Court scale.  

3. It is important to remember that each case turns on its own facts and circumstances.  Costs are discretionary.  The power to award costs must be exercised judicially, but it is not otherwise subject to any superarching discretionary mandatory considerations.  I note that in paragraph 6 of the applicant’s submissions, it is asserted that the proceeding was filed in this Court to avoid a penalty that would occur in the Federal Court if damages were less than $100,000 or if the Federal Court thought that claim was an inappropriate one for the Federal Court.  In paragraph 7, the applicant says that it was appropriate as a result of these considerations to issue in this Court. 

4. I do not accept those submissions.  This Court is the inferior Federal Court.  Like all such Courts, it is cheaper to litigate in than superior courts.  It is not, in my view, generally open to applicants to choose this Court and then seek to, as it were, retain superior Court costs scales.  If you issue in this Court, prima facie you will recover your costs on the Federal Magistrates Court scale.  But in this case, the matter was more complex than usual.  Issues of proof in particular were far more complex then in the normal run of copyright cases.  These were all ultimately matters of impression, but taken overall, I regard the Federal Court Rules as being appropriate to apply; so the Court’s order will be made in those terms.  

I certify that the preceding four (4) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Date:  26 November 2010