Colgate -Palmolive Co v Cussons Pty Ltd

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 Rapallino & Dekker has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth)

1. This judgment concerns costs in circumstances where the appellant's appeal was wholly dismissed. Orders were made for the parties to file written submissions as to costs.

1. The appellant filed her initial costs submissions on 26 February 2025.
2. In those submissions the appellant asserted financial hardship, contending that her expenses exceeded her income. The bulk of the submissions were, however, directed to an attack on the primary judgment and were irrelevant to the issue of costs. A third element of the submissions was a seeming attempt to have the finalised appeal reopened for the adducing of further evidence. Even if such a course was open, costs submissions are not the appropriate method by which to make this request.
3. After making various assertions as to hardship, and directed to the re-litigation of the primary matter, the appellant sought an order for costs in her favour.

1. The respondent's submissions, filed 24 February 2025, noted financial circumstances that favour the appellant, including superior income and the property settlement that favoured her by some $240,000 over that received by the respondent.
2. The respondent emphasised the manner in which the appellant conducted the appeal, which included making scandalous allegations against the primary judge in prosecution of the appellant's claim that the primary judge was biased, a claim that lacked any merit.
3. The respondent produced two letters from his lawyers to the appellant that he styled as open offers in respect of the appeal. Neither contained an offer. However, each pointed to weaknesses in the appellant's case, each identified the anticipated costs to the completion of the appeal, and each warned that if the appeal continued the respondent would seek indemnity costs.
4. The respondent seeks costs on an indemnity basis in the sum of $40,532.60, or in the alternative on a party and party basis in the sum of $32,354, in accordance with Sch 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules").

1. In her reply filed 12 March 2025, the appellant contended that the property settlement was less favourable to her than appears on its face; reargued a number of matters from the appeal; claimed that her arguments on appeal were justified in the circumstances; and observed that the respondent could have, but chose not to, use legal aid. The appellant further characterised the respondent's claim for costs as punitive.

1. Section 117 of the Family Law Act 1975 (Cth) ("the Act") sets out the default position being a general rule that each party bears their own costs, subject to circumstances justifying otherwise. In Kohan and Kohan [1992] FamCA 116; (1993) FLC 92-340 ("Kohan"), the Full Court observed that (at 79,614):

The intent of s117(1) and 117(2) 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 Penfold v Penfold (1980) 144 CLR 311, the High Court considered that whilst justifying circumstances, as identified in s 117, must be determined to enable a costs order to be made, no "additional or special onus" is placed upon applicants in their pursuit of costs (at 315).
2. The precondition to making an order for costs is the finding that there are circumstances justifying the making of an order for costs. Once these are found, the default position yields to the Court's discretion to award costs as it considers just.
3. The relevant considerations to assess the circumstances are set out at s 117(2A) of the Act as follows:

(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:

(a) the financial circumstances of each of the parties to the proceedings;

(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;

(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

(g) such other matters as the court considers relevant.

1. In Hawkins v Roe [2012] FamCAFC 77; (2012) 47 Fam LR 526, May and Ainslie-Wallace JJ observed that (at [18]):

The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in In the Marriage of I and I (No 2) [1995] FamCA 80; (1995) 22 Fam LR 557; (1995) FLC 92-625 the Full Court of this court held that the relevant matters in s 117(2A) "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". That is not to say that one single matter may not ultimately be determinative...

1. Of the considerations, it may be observed that the appellant has constrained financial circumstances. However, the most dominant consideration is the lack of success of the appellant, seen in the context of the manner of her conduct of the appeal. The grounds of appeal were unmeritorious. They pursued a mix of allegations of actual bias and misconduct on the part of the primary judge that should not have been made, and unsubstantiated claims that her lawyers were working for the respondent's lawyers, accompanied by incomprehensible assertions.
2. Despite limitations in the appellant's financial circumstances, the balance of the considerations point to the appropriateness of an order for costs against the appellant. The question that then arises is as to the basis of such an order.

1. The respondent seeks costs on an indemnity basis.
2. The principles to be applied in relation to indemnity costs were neatly set out by the Full Court in Quickley & Pelissier [2016] FamCAFC 124 as follows:
   1. We then turn to consider whether costs should be awarded on a party/party or indemnity basis.
   2. In Colgate Palmolive Co and Another v Cussons Pty Ltd [1993] FCA 536; (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.
   3. 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).
   4. 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 Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225 at 234, Sheppard J held that "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". His Honour helpfully set out some of the circumstances that could give rise to such an order, including (at 233-234):
   • The making of allegations of fraud knowing them to be false, and the making of irrelevant allegations of fraud.
   • Evidence of particular misconduct that causes loss of time to the court and the other parties.
   • The fact that the proceedings were commenced for some ulterior motive.
   • The fact that the proceedings were commenced in wilful disregard of known facts or clearly established law.
   • The making of allegations that ought never to have been made or the undue prolongation of a case by groundless contentions.
   • An imprudent refusal of an offer to compromise.
   • An award of costs on an indemnity basis against a contemnor.
2. In Kohan, the Full Court, in observing that indemnity costs are the exception, said that (at 79,614):

...the 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. It follows that to justify costs other than on a party and party basis it is necessary that the respondent demonstrate exceptional circumstances. However, it should also be acknowledged that indemnity costs are not awarded on a punitive basis, but rather on the basis that the circumstances warrant the recipient of costs to be compensated at a rate above the usual party and party costs.
2. In aid of a characterisation that the circumstances are exceptional, the respondent submitted that the appellant's conduct fell into a number of the categories described by Sheppard J, namely:
   • Commencing or continuing proceedings in circumstances where, properly advised, the appellant should have known that she had no prospects for success.
   • Making allegations of fraud knowing them to be false, and the making of irrelevant allegations of fraud.
   • Engaging in misconduct causing a loss of time to the Court.
   • The making of allegations which ought never to have been made, or the prolonging of proceedings by making groundless contentions.
   • Imprudently failing to accept an offer of compromise.
3. Of those it can be concluded that the appellant pursued groundless allegations that should not have been made, in circumstances where, were she properly advised, she would have known that the allegations and the appeal had no prospects for success. This is further emphasised as, in relation to the bias claim, the appellant conceded in court that a central plank to her argument, being the emailing of the judgment to particular recipients, was "no big deal". In the appellant's later written submissions she attempted to justify this concession, submitting that it should not be characterised as an "admission that the procedural breach was insignificant" (appellant's written submission filed 12 March 2025, paragraph 10). Rather, it was argued that it was merely an indication of how the appellant was actively prioritising arguments which had a more "immediate and substantial financial impact". This attempt should be rejected and viewed as nothing more than an attempt to 'walk back' her earlier concession. The allegations of misconduct made against the primary judge were made without any adequate basis. The appeal was wholly unmeritorious and wholly unsuccessful.
4. This combination is sufficient to characterise the appellant's conduct of the proceedings as so exceptional as to warrant indemnity costs.

1. The respondent's schedule of costs filed 24 February 2025 provided two totals for the costs incurred_._ The first, based upon Sch 3 of the Rules and prepared on a party and party basis, discloses costs in an amount of $32,354, inclusive of counsel's fees. The second is headed indemnity costs and contains amounts exceeding the scale in Sch 3 and additional items, generally of the nature of solicitor-client costs, excluded from the first schedule. It totals $40,532.60.
2. The confused complexity imposed on the appeal by the appellant explains the extent of the costs. The efforts necessary to deal with the allegations made, and to deal with the incomprehensibility of the grounds and arguments posed by the appellant explain the extent of the costs claimed, which are reasonable in those circumstances.

1. An order will be made for the payment of indemnity costs fixed in the sum of $40,532.60. Given the limitations in the appellant's financial circumstances, the appellant will be given 60 days to make the payment rather than the 30 days sought by the respondent.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldridge, Gill & Strum.