7.9.1 Principles in Awarding Costs

Also in this Chapter:

• 7.9.1 Principles in Awarding Costs
• ​​​​​​​7.9.3 Awarding Costs, Taxation
• 7.9.4 Security for Costs
• 7.9.5 Exemplary Situations in Awarding Costs

Note: This information applies to awards of costs whether made before, on or after 15 April 2013.

The Federal Court in Patent Gesellschaft AG v Saudi Livestock Transport and Trading 33 IPR 461 set out a number of principles relevant to the award of costs:

1. As a general proposition, in the absence of special circumstances, costs follow the event but the costs should reflect the degree of success obtained and the successful party may be ordered to pay some costs in respect of unsuccessful aspects of the case. - Hughes v Western Australian Cricket Association Inc (1986) 66 ALR 660; ATPR 40-748, Ruddock v Vardalis [2001] FCA 1865.  Relevant matters in relation to this issue include: relative failures and successes of the parties, time spent on particular issues, the interrelationship between issues, and the level of involvement of the various parties in leading evidence and making submissions at the hearing. – H Lundbeck A/S v Alphapharm Pty Ltd (No 2) [2009] FCAFC 118.
2. The community's interest in economy and efficiency in litigation may be reflected in qualification of the presumption that a successful party is entitled to its costs. - Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261.
3. The costs order in a patent case should, where appropriate, reflect the extent to which significant sums of costs have been thrown away by reason of one party, albeit successful overall, raising and pursuing unsuccessful points. - C Van Der Lely NV v Ruston's Engineering Co [1993] RPC 45.
4. Where a successful party raises issues or allegations improperly or unreasonably, the court may not only deprive him of costs but might order him to pay the whole or part of the unsuccessful party's costs. - Rediffusion Simulation Ltd v Link-Miles Ltd [1993] FSR 369.
5. However, a successful party who neither improperly nor unreasonably raised issues or made allegations on which he failed ought not to be ordered to pay any part of the unsuccessful party's costs. - Rediffusion Simulation Ltd v Link-Miles Ltd [1993] FSR 369

In relation to proceedings discontinued before hearing or determination:

“It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a court determining how the costs of the proceedings should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial” Aussie Red Equipment Pty Ltd v Antsent Pty Ltd [2001] FCA 1641

However in this regard the courts have recognised a distinction between cases where it can be said that one party has effectively surrendered to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that no issue remains except that of costs.  The first type generally will attract the usual award of costs, for example where an opposition or an opposed application is withdrawn.  The second type generally will not attract an award of costs unless it is apparent that one party was almost certain to have succeeded or the conduct of a party otherwise makes an award of costs appropriate. (Kiama Council v Grant [2006] NSWLEC 96, Super Internet Site System Pty Ltd v Sensis Pty Ltd [2006] APO 27, Amgen, Inc. v Genentech, Inc. [2016] APO 15)