Intellectual Property Law Update – Stay of Costs Orders Pending Appeal

Intellectual Property
M Marcus
C Cunliffe 2
Marcus Fleming Headshot 1

Henley Arch Pty Ltd v Henley Construction Pty Ltd (No 3) [2022] FCA 408


Practice and Procedure – Stay of Costs Orders Pending Appeal

Summary

Justice Anderson granted the stay of his orders that Henley Construction Pty Ltd pay Henley Arch Pty Ltd’s costs in relation to the principal proceedings. His Honour’s decision in the matter had been appealed and by ordering a stay, his Honour was influenced by his view that the appeals would be determined this year, that Henley Construction had the financial resources to meet any costs order such that prejudice to Henley Arch would be minimal, and it would be a waste of the Court’s resources in the event the appeals were successful.

Detail

By interlocutory application, the Respondents and Cross-claimant (Henley Construction) sought a stay of orders made by Anderson J in the principal proceeding that Henley Construction pay Henley Arch Pty Ltd’s costs of the principal proceeding.

Citing Justice Goldberg in Australian Workers’ Union v Pilkington (Aust) Ltd (2000) 101 FCR 35, Justice Anderson noted that the Court’s discretion to grant a stay is “only circumscribed by the need to be satisfied that there be a reason sufficient in the circumstances to warrant the exercise of the discretion in favour of the grant of a stay.” Justice Anderson then examined the principles to be applied in considering a stay that had more recently been considered by Katzmann J in In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd (No 2) [2020] FCA 772 at [25], noting among other things:

  • a stay should not be granted unless the appeal is at least arguable, although speculation as to its prospects of success is usually inappropriate;
  • but without more, an arguable case is not sufficient justification for a stay; and
  • a substantial factor in favour of a stay is the risk that, without a stay, the appeal would be rendered nugatory.

In this case, Anderson J granted the stay for the following reasons:

  • it was likely that the appeals will be determined this year (the appeals are to be heard on 5 and 6 May 2022);
  • Henley Construction has the financial resources to meet the costs orders (evidence of their financial standing had been filed);
  • in such circumstances, the prejudice to Henley Arch is minimal; and
  • the costs of assessing the lump sum costs orders are likely to be not inconsiderable and will occupy the resources of the Court in the form of the Registrar’s time to hear and determine the Costs Orders which will be wasted in the event the appeals are successful.

The authors note that this case sits in stark contrast to the decision of Halley J in Energy Beverages LLC v Cantarella Bros Pty Ltd (No. 2) [2022] FCA 394 where the Court refused a stay of the costs order. In that case the Court focussed on the fact that there was no suggestion that Cantarella could not repay any costs in the event the appeals were successful, and it noted that the fact that time and money could be wasted on reaching agreement on costs or taxing costs might be thought to be an inevitable consequence of any appeal.

M Marcus

Melissa Marcus practises in defamation law and all aspects of intellectual property

C Cunliffe 2

Clare Cunliffe practises in intellectual property and general commercial litigation

Marcus Fleming Headshot 1

Marcus Fleming practises in commercial litigation, with a particular focus on intellectual property law

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