Colgate Palmolive Co and Another v Cussons Pty Ltd

Note: The form of the order is subject to the entry in the Court's records.

Note: This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. This judgment concerns an application by the father that the mother pay his costs for the period of 7 January 2025 to 21 May 2025 on an indemnity basis in the sum of $59,000, and in relation to this costs application on an indemnity basis in the sum of $13,000. In the alternative the husband seeks those costs on the usual party-party basis.

1. The circumstances of the case are outlined in the interim judgment of 9 May 2025. The general circumstances were that the mother had sought to take the children to Country B for a short visit. In the absence of parenting proceedings, she secured the father's agreement to the travel on her giving of an undertaking in respect of returning the children.
2. Despite that undertaking, the mother did not return the children to Australia as agreed, but instead took the children to Country C, taking steps to enrol them in school there, and to retain them in Country C. This step was concealed from the father, however the father discovered that it had taken place.
3. This necessitated the father preparing a Hague application and commencing proceedings for the return of the children to Australia.
4. The mother initially opposed the return of the children, indicating that she would commence proceedings in Country C in order to retain them there.
5. The proceedings were listed for interim determination on 9 May 2025.
6. In advance of the interim hearing the parties exchanged offers that each provided for the return of the children. They differed as to the timing of return, the care arrangements for the children on return, and as to the size of a bond to be filed by the mother.
7. On 9 May 2025 interim orders were made that provided for the prompt return of the children, for them to live primarily with the father following that return, but without any provision for a bond. By consent, orders were also made for the father to engage in hair follicle testing. The interim orders did not wholly adopt any parties' position, either in respect of timing or bond, but adopted the father's proposal for the living arrangements for the children on their return to Australia.

1. The husband relied upon the following documents:

(a) Application in a Proceeding filed 6 June 2025;

(b) Affidavit of Mr Lindsey filed 6 June 2025 and corresponding Exhibit Book;

(c) Affidavit of Mr Lindsey filed 6 May 2025;

(d) Financial Statement filed 14 August 2025;

(e) Reasons for Judgment of Gill J dated 9 May 2025;

(f) Outline of Case Document (Interim Hearing) filed 7 May 2025; and

(g) Tender Bundle filed 6 June 2025.

(a) Response to an Application in a Proceeding filed 28 August 2025;

(b) Amended Response to Initiating Application filed 29 August 2025;

(c) Financial Statement filed 29 August 2025;

(d) Outline of Case Document (Interim Hearing) filed 8 May 2025; and

(e) Affidavit of Ms Faye filed 6 May 2025.

1. Costs are governed by the operation of s 114UB of the Family Law Act 1975 (Cth) which provides a starting point that each party should bear his or her own costs, unless circumstances are established, pursuant to ss 114UB(2) and (3) that justify the making of a costs order.
2. In Kohan & Kohan [1992] FamCA 116; (1993) FLC 92-340, the Full Court observed that:

The intent... is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the court may make such order as the court considers just.

1. In I & I (No 2) (1995) FLC 92-625 at [5] the Full Court held that the relevant matters "must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs".
2. Of the circumstances contained at s 114UB(3) the parties emphasised their financial circumstances, conduct in relation to the proceedings, whether a party has been wholly unsuccessful, offers in writing that were made, and other matters related to the circumstances of the father's application.
3. As to financial circumstances, neither party appears to be in a strong position, each with limited assets, and with income being exceeded by expenses that appears reasonable at face value. Neither party will easily meet their own costs, or the costs of the other. However, as identified by the Full Court in Nada & Nettle (Costs) [2014] FamCAFC 207; (2014) FLC 93-612, impecuniosity is not a bar to making a costs order where the circumstances otherwise support such an order.
4. As to conduct of the proceedings, the matters relied upon by the father relate to the circumstances of the retention of the children and the movement of the children to Country C, and the circumstances of deception that surrounded that conduct. This is an aspect that better sits within the consideration of "other matters" rather than conduct of the proceedings. Rather than being conduct in relation to the proceedings, it was conduct that necessitated the bringing of proceedings, including requiring the ultimately unpursued Hague aspect of the proceedings. Acknowledging that no part of the consideration of costs is about punishment, it should still be observed that it was the conduct of the mother that necessitated the bringing of the proceedings, and that the conduct of the father in bringing the proceedings was a reasonable and proportionate response to those circumstances.
5. Neither party has been wholly unsuccessful. It may be observed that the mother was largely unsuccessful, the relief being granted to the father approximating his application.
6. In respect of offers, each party made offers in writing proximate to the interim hearing that differed largely in respect of the timing of the return of the children and as to the provision of a bond. The orders made no provision for a bond, and adopted neither of the timetables proposed by the parties as to the children's return, although the orders were far closer to the timing proposed by the father.
7. The father has also made offers in writing to resolve the costs aspect of this dispute.

DISCUSSION AS TO WHETHER A COSTS ORDER SHOULD BE MADE

1. Of the circumstances identified by the parties, it is the conduct of the mother in unreasonably necessitating the father to prepare for a Hague application, and to commence proceedings that carries the greatest weight.
2. Although the mother is of limited financial circumstances, it may be observed that the father is as well, leading to minimal weight being given to this factor.
3. The circumstances justify an order that the mother pay the father's costs, both in relation to the preparation in respect of a potential Hague application, and in respect of these proceedings more directly.

1. It should be recognised that a departure from party-party costs marks a sharp departure from the usual approach. Such a sharp departure typically requires exceptional circumstances to justify it.
2. The principles to be applied are neatly set out by the Full Court in Quickley & Pelissier [2016] FamCAFC 124 at [119]:

We then turn to consider whether costs should be awarded on a party/party or indemnity basis.

In Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 at 256, Sheppard J referred to the "settled practice" that where a court orders one party to pay another party's costs, the order is for costs to be paid on a party/party basis. His Honour also said "there should be some special or unusual feature in the case to justify the court in departing from the ordinary practice" at 257.

In an appropriate case the court has a discretion to order costs on an indemnity basis. An order made in the exercise of that discretion is a very great departure from the normal approach and the circumstances justifying the departure should be of an exceptional kind (Kohan and Kohan [1992] FamCA 116; (1993) FLC 92-340).

In the recent case of Madin & Palis (Costs) [2016] FamCAFC 25 this Court made reference to the increasing number of applications for indemnity costs and said at [23]:

Finally, we take the opportunity to observe that in so far as the appellant sought an order for indemnity costs, applications for such costs should only be made, and such costs will only be ordered, in the most extreme cases. This is particularly so having regard to the fact that the primary rule in this jurisdiction is that each party should pay their own costs.

1. In Kohan & Kohan [1992] FamCA 116; (1993) FLC 92-340, the Full Court, in observing that indemnity costs are the exception, said that:

[T]he court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind.

1. The principles in Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 119 CLR 118 are also usefully discussed in Munday v Bowman (1997) FLC 92-784_._ In that judgment, Holden CJ extracted a series of circumstances which have been thought to warrant the exercise of the discretion to award costs on an indemnity basis, being:[1]

(a) Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts: see Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397.

(b) Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud: see Fountain Selected Meats (Sales) Pty Ltd .

(c) Evidence of particular misconduct causing loss of time to the court and to other parties: see Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (French J, Fed C of A, 3 May 1991, unreported).

(d) The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions: see Ragatta Developments Pty Ltd v Westpac Banking Corporation (Davies J, Fed C of A, 5 March 1993, unreported).

(e) An imprudent refusal of an offer to compromise.

1. It ought, however, to be noted that in citing such examples, Holden CJ was dealing with extremes. For example, in relation to the "no chance of success" example Holden CJ indicated that the conduct was to be such as to allow a finding of "ulterior motive" or "wilful disregard of known facts".[2] That is, it is not sufficient to reflect that the application had a low chance of success, but rather that the prospective lack of success was so stark as to require the inference that the application was occasioned by an ulterior motive.
2. The mother's initial response seeking to retain the children in Country C should be seen to have been without merit. The mother ameliorated this position recognising that the children would be returned to Australia, but disagreeing in relation to timing and the arrangements on their return. Her position in relation to these matters is not marked by the same unreasonableness that characterised her earlier response.
3. Although her conduct in retaining the children inconsistently with her undertaking, her removal of the children to Country C, and her deception warrant a costs order, they do not bear sufficient weight to result in an indemnity costs order.

1. The father has made multiple offers to resolve the costs proceedings, at a rate far less than the indemnity costs sought by him, including most recently, for a sum of $25,000, a sum far less than half of the indemnity amount sought.
2. In the circumstances of the costs incurred in relation to the substantive proceedings these offers carry weight. The circumstances of the application for costs and the offers are of sufficient combined weight to justify an order for costs, albeit on a party-party basis rather than on an indemnity basis.

I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill.

[1] Munday v Bowman (1997) FLC 92-784 at 84,660.

[2] Munday v Bowman (1997) FLC 92-784 at 84,660.