Colgate-Palmolive Co 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 the pseudonym Zha & Wun has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. On 13 June 2025 this Court made orders which included the dismissal of appeal NAA 277 of 2024. Consequent upon that outcome, on 10 July 2025 the first respondent husband made an application for his costs of the appeal; and on 11 July 2025 the second to fourth respondents also made an application for their costs of the appeal. In both cases the respondent on the applications is the wife, the appellant in the substantive appeal. On 13 August 2025 the wife filed Responses to both applications. All parties have filed written submissions. Contrary to the terms of the wife's filed responses, her written submissions state that she does not oppose the making of a costs order, rather she merely wishes to be heard about its nature, form and quantum.

(a) The wife pay costs of $184,194.39, referrable to costs incurred in the period 22 October 2024 to 31 March 2025; and

(b) Indemnity costs of $74,996.57 referrable to the costs incurred in the period 1 April 2025 to the conclusion of the appeal.

1. In the alternative to the relief set out above the husband seeks that the wife pay costs in the sum of $234,149.14.
2. The husband also seeks costs of the costs application.
3. The wife's concession does not absolve us of the obligation to find justifying circumstances and we conclude that the fact that the wife was wholly unsuccessful and the fact of the husband having made an offer of compromise are sufficient justifying circumstances to depart from the usual rule.
4. These applications are governed by the provisions of s 114UB of the Family Law Act 1975 (Cth) ("the Act"). Section 114UB(1) provides that each party should ordinarily meet his or her own costs. We may depart from that position by operation of s 114UB(2), which refers to making such order as the Court considers just and departing from the position established by s 114(UB)(1) where "there are circumstances that justify" that approach. In approaching the task, we are required to have regard to the matters in s 114UB(3). The establishment of one of the matters in s 114UB(3) does not require departure from the usual rule since the discretion to order or refuse to order costs remains. Costs may be ordered if "just" in all the circumstances: Hogan and Hogan [1986] FamCA 34; (1986) FLC 91-704.
5. The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules") provide various bases upon which an order for costs may be calculated. Those are set out in r 12.17.
6. As to indemnity costs, in Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 ("Colgate-Palmolive") at 233, Sheppard J stated:
   1. ...The tests have been variously put. The Court of Appeal in Andrews v Barnes at 141 said the court had a general and discretionary power to award costs as between solicitor and client "as and when the justice of the case might so require". Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v Preston at 637; namely, there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at p 8) in Tetijo, "The categories in which the discretion may be exercised are not closed". Davies J expressed (at p 6) similar views in Ragata.
   2. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes [1989] FCA 540; (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; at 724 (Court of Appeal); (unreported, Court of Appeal, NSW, Kirby P, Priestly JA, Cripps JA, No 40744/1992, 27 September 1993) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in ). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.
7. In Prantage & Prantage [2013] FamCAFC 105; (2013) FLC 93-544 the majority (Thackray and Ryan JJ, with whom Murphy J agreed) held that the principles set out by Sheppard J in Colgate-Palmolive were applicable to costs applications in this Court.
8. Claims for indemnity costs are a departure from the ordinary practice, generally characterised as "exceptional": Kohan and Kohan [1992] FamCA 116; (1993) FLC 92-340.
9. The wife opposes an order for indemnity costs.
10. The husband submits that the particular case warrants an award of indemnity costs as and from the expiry date of an offer of settlement. The terms of the offer of settlement were:

The respondents propose to resolve proceedings on the following terms:

1. Notice of appeal filed 22 October 2024 be dismissed;

2. Application in an Appeal filed 17 February 2025 be dismissed;

3. Application in an Appeal (second) filed 17 February 2025 be dismissed;

1. That each party pay their own costs of an[d] incidental to these proceedings including any costs arising from the Application in an Appeal filed 28 February 2025.

This offer is submitted on behalf of all respondents and is open for acceptance until 4:00pm on Friday, 28 March 2025 at which time the offer is withdrawn and no longer available for acceptance.

This letter is sent in accordance with the principles in Calderbank v Calderbank [1976] Fam 93. This letter will be relied upon by the respondents for any application they may make in respect of costs.

(Annexure "1" to the affidavit of the husband filed 10 July 2025)

1. An offer of settlement is a relevant consideration under s 114UB(3) of the Act. The husband submits that the wife's refusal of the above offer of settlement was imprudent in so far as, having regard to the legal fees to be incurred in continuation of the appeal, the wife would have been in a better position had she accepted the husband's offer.
2. The wife submits at [8(c)] of her written submissions that as the offer of settlement was on behalf of only one party to the appeal its acceptance would not necessarily have ended the matter. However, that submission appears to be mistaken since the letter dated 13 March 2025 purports to be on behalf of all respondents.
3. The fact that an offer was made is relevant but not determinative. In the circumstances of this case, we do not think that the wife's failure to accept that offer is a sufficient basis for the award of indemnity costs. While her appeal was dismissed, we are of the view that it was properly brought and arguable.
4. We do not consider that the wife's conduct of the appeal itself warrants a departure from the usual rule that costs are calculated on a party/party basis. To the extent that the husband submitted that failure to make discovery of her litigation elsewhere and documents obtained in those proceedings were relevant, we consider that those actions are better considered in light of the submission that she did not seek to reopen the proceedings, then reserved, rather than being matters which relate to the conduct of the appeal.
5. The application for indemnity costs is refused. It falls then to consider the husband's application for costs in the sum of $234,149.14, said to be the amount calculated in accordance with the scale set out in the Rules.
6. The wife says that some adjustment should be made to those scale costs to raise the following issues:

(a) The claims for amounts at scale which are greater than those actually invoiced;

(b) Questions about the reasonableness and proportionately of the amount of preparation time claimed;

(c) Appropriateness of the engagement of two senior counsel (and interstate counsel);

(d) Whether some tasks should be charged at the solicitor's rate (or alternatively at a clerk's rate);

(e) Whether the scale has been properly applied;

(f) Whether or not matters which are solicitor/client costs as opposed to party/party costs have been included in the calculation;

(g) Whether individual items at scale would be considered reasonable and proportionate;

(h) Whether the costs of the two recusal applications should be excluded (and in that regard whether there should be a discount to the amounts referrable to the first day of hearing by reason of the time undertaken to prosecute the unsuccessful recusal application on that day); and

(i) Whether the time taken by counsel to undertake certain tasks was excessive.

1. The matters which are set out in the wife's written submissions persuade us that this is not a matter where we could safely adjudicate all disputes and as a consequence, notwithstanding a fervent desire to avoid satellite litigation, we are persuaded that the appropriate course is for us to make an order that the wife pay the husband's costs on a party/party basis as agreed or assessed (excluding any fees referable to the recusal applications) and for this to also apply to the application for costs of the costs application. The matters set out above (and reflected in the wife's orders sought at 2(a)-(c) of her Response to the husband's Application in an Appeal) are appropriate matters for costs assessment. The costs of the recusal application may be considered separately.
2. There were two recusal applications in this case - the first resulted in an order whereby Howard J recused himself; the second application for Aldridge J to recuse himself was dismissed. There are no factors identified by the evidence or the submissions which persuade us that the usual rule should not apply to those applications and accordingly it is appropriate that each party meet his or her own costs of the recusal applications.

Application by the second to fourth respondents

(a) Costs of $1,255.53 for the period 22 October 2024 to 7 November 2024; and

(b) Indemnity costs of $185,102.35 for the period 7 November 2024 to 13 June 2025.

1. In the alternative to the relief set out above, they seek the following:

Alternative position

1. An order that the Appellant pay the Second, Third and Fourth Respondents' costs of the appeal as follows:

   1. For the period from 22 October 2024 to 13 March 2025 assessed on the ordinary basis in the sum of $46,619.16;

   2. For the period from 14 March 2025 to the determination of the appeal on 13 June 2025 assessed on the indemnity basis in the sum of $11,418.00.

Further alternative position

1. An order that the Appellant pay the Second, Third and Fourth Respondents' costs of the appeal assessed on the ordinary basis in the sum of $114.102.00.

Further further alternative position

1. An order that the Appellant pay the Second, Third and Fourth Respondents' costs of the appeal on a basis, and in a sum as the Court thinks fit.

(As per the original)

1. They also seek their costs of the costs application.
2. The wife does not oppose the making of an order for costs in favour of the second to fourth respondents.
3. The wife seeks to be heard about the basis upon which the costs of the second to fourth respondents are ordered.
4. On 7 November 2024 the second to fourth respondents served an offer to resolve the appeal. The offer was made after the appeal was filed but before the first procedural hearing. The timing of the offer was such that had it been accepted, very little work would have been undertaken in respect of the appeal at that point. The offer was in the following terms:
   1. Our clients offer to compromise the whole of the Appeal against them on the following terms:

(a) The parties consent to the Court making the following orders:

(i) The Notice of Appeal as against the Second Respondent, Third Respondent and Fourth Respondent be dismissed.

(ii) There be no order as to costs of the Appeal as between the Applicant, the Second Respondent, the Third Respondent and the Fourth Respondent, with the intent that each party pay his, her or its costs.

(b) Within 28 days of acceptance of this offer:

(i) The Second Respondent is to pay the Applicant $2,000;

(ii) The Third Respondent is to pay the Applicant $2,000; and

(iii) The Fourth Respondent is to pay the Applicant $2,000.

(c) Upon payment of each of the sums set out in 3(b) above, the Applicant is to release those of the Second Respondent, the Third Respondent and the Fourth Respondent who make such payment from any and all claims, actions, proceedings, suits, causes of action, demands, and complaints, whether at law in equity or under statute, wheresoever and whensoever arising in relation to the subject matter of the Appeal and the proceedings from which the Appeal has been brought.

1. To be clear, acceptance of this offer would not amount to a resolution of the costs applications argued before [the primary judge] on 7 November 2024.
2. This offer is open for acceptance in writing, addressed to this firm, until 4.00 pm on 12 December 2024, at which time it is withdrawn.
3. This offer is capable of immediate acceptance and does not require any further document to be entered into or executed by the parties for there to be a binding agreement between the parties.

(Exhibit "[ER]-1/1-3" to the affidavit of the solicitor for the second to fourth respondents filed 11 July 2025)

1. The offer constitutes justifying circumstances to support the making of a costs order. The question then is on what basis? The second to fourth respondents seek indemnity costs.
2. The principles which apply to claims for indemnity costs have been discussed above. The facts of this case do not persuade us that the second to fourth respondents should be indemnified.
3. The submissions made by the wife regarding the application of the second to fourth respondents raise the following matters relating to the reasonableness and proportionality of the claim:

(a) Whether the fees are party/party or solicitor/client;

(b) The narrower scope of the work relating to the appeal as it related to the interests of the second to fourth respondents; and

(c) Reasonableness of disbursement costs for printing.

1. The desirability of fixing costs is outweighed in this case by the significant areas of dispute which make assessment the most appropriate course. However, given the wife's consent to the amount sought for the period 14 March to 13 June 2025, we will order those costs in a fixed sum. It is appropriate that the costs of the costs application be met by the wife, but in the circumstances outlined above that will be as agreed or assessed.

1. The wife seeks that any costs orders in the appeal be set off against costs which were ordered in the primary proceedings. This is a reasonable request. The respondents oppose this course on the basis that they assert an entitlement to receive their costs of the appeal (while the costs orders against them are being assessed). Given that we have made orders which require agreement or assessment of the appeal costs, we see no reason not to permit the set off sought by the wife.

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