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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth)

1. The husband and wife are parties to proceedings for financial adjustment orders following the breakdown of their relationship.
2. I made interim orders, including injunctions, relating in the main to the husband and corporate entities in which the husband has an interest on 26 March 2025.
3. There were three applications in a proceeding filed by the wife on 19 February, 28 March and 7 April 2025 relating to disclosure and injunctions and costs.
4. The wife seeks costs arising out of those applications.
5. Both parties seek costs of this costs application.

1. The proceedings commenced on 31 January 2019. There has been significant delay occasioned by the parties' inability to progress valuation issues.
2. The wife has raised issues relating to the extent of the husband's disclosure.
3. These reasons should be read with my reasons in Suvari & Suvari (No 2) [2025] FedCFamC1F 223.

1. The general rule is that each party pays his or her own costs: s 117(1) of the Family Law Act 1975 (Cth) ("the Act").
2. The wife seeks a departure from the usual rule, such the husband pay her costs of the various applications. The husband seeks that the usual rule apply in respect of those applications.
3. Section 117(2) of the Act creates exceptions to the usual rule. It provides:

(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

1. Both provisions read together make clear that, while the general rule in family law proceedings is that each party bears his or her own costs, the Court may order a party to pay the costs of another where there are circumstances justifying the making of such an order.
2. Regard must be had to the considerations set out in s 117(2A) of the Act in determining whether or not to order a party to pay the costs of another. For the wife to be successful in her costs application, she must establish that the justice of the case requires an order for costs, by reference to the non-exhaustive list of statutory considerations set out in s 117(2A) of the Act:

(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. No one factor under s 117(2A) prevails over any of the other factors. It is a matter of weight that is accorded to each of the relevant factors in the judge's discretion (Medlon & Medlon (No 6) (Indemnity Costs) [2015] FamCAFC 157; (2015) FLC 93-664 per Strickland J).
2. While there is "nothing to prevent any factor being the sole foundation for an order for costs" being made (Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish [2005] FamCA 158; (2005) 33 Fam LR 123 at [41]) the factor must constitute the justifying circumstances.
3. In some cases, the justifying circumstances may be the financial circumstances of each of the parties.
4. The manner in which costs are to be assessed is dealt with in r 12.17(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules"), which provides:

(1) The court may order that a party is entitled to costs:

(a) of a specific amount; or

(b) as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or

(c) to be calculated in accordance with the method stated in the order; or

(d) for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.

1. Rule 12.17(3) sets out matters that may be considered in the determination of the quantum of costs, providing that:

(3) In making an order under subrule (1), the court may consider the following:

(a) the importance, complexity or difficulty of the issues;

(b) the reasonableness of each party's behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);

(c) the rates ordinarily payable to lawyers in comparable proceedings;

(d) whether a lawyer's conduct has been improper, unfair, unreasonable or disproportionate;

(e) the time properly spent on the proceedings, or in complying with pre-action procedures;

(f) whether expenses (paid or payable) are fair, reasonable and proportionate.

1. The provisions of the Act and the Rules confer a broad discretion on a judge hearing and determining a costs application.

1. The wife's application in a proceeding, as clarified by her written submissions filed on the same date, sought costs as follows:
   1. Costs on an indemnity basis in respect to her Application in a Proceeding filed on 19 February 2025 in the fixed sum of $32,241.38, which includes disbursements in the sum of $7,150 and $11,000 which is the costs of counsel to advise in relation to the application and for counsel to prepare and appear at the interim hearing on 26 March 2025, or alternatively an amount of $28,719.54 on a party/party basis, or alternatively such sum as ordered by the Court.
   2. Costs on an indemnity basis in respect to her Application in a Proceeding filed on 28 March 2025 in the fixed sum of $10,571.44, which includes disbursements of Counsel in the sum of $3,850 to prepare and appear at the interim hearing on 31 March 2025, or alternatively an amount fixed at $8,891.08 on a party/party basis, or alternatively such sum as ordered by the Court.
   3. Costs on an indemnity basis in respect to her Application in a Proceeding filed on 7 April 2025 in the sum of $3,432, or alternatively such sum as the Court determines.
2. The husband's response to the wife's application in a proceeding sought dismissal of the wife's application.
3. Each party seeks his or her costs of this application.
4. It is useful to consider the application in the following steps:

(1) Has the applicant established that one of the matters in s 117(2A) applies in this case?

(2) If the answer to the first question is yes, then does that finding create a circumstance departing from the usual rule?

(3) If the answer to the second question is yes, on what basis would it be appropriate to make an award of costs?

1. The circumstances in s117(2A)(a) are relevant to this case. The husband is in a stronger financial position than the wife. Each party asserts that he or she is responsible for meeting the expenses of the parties' children and I am not in a position at this interlocutory stage to determine this matter.
2. On 27 March 2025 the husband filed and served a costs notice. It recorded the husband having paid $422,317.36 by way of legal costs and disbursements. The source of funds was described as "personal funds". Costs notices are filed by the parties in respect of all court events because of the requirement in Rule 12.06 of the Rules. The requirement to identify the source of funds arises from Rule 12.06(6). The wife also filed a costs notice on 27 March 2025 by which it is plain that the predominant source of her legals fees has been from borrowings. This difference arises from the husband's significantly greater access to funds and is relevant to my determination.
3. Section 117(2A)(c) has application to the facts of this case. The duty to provide disclosure is an ongoing one and the wife brought proceedings upon being informed on 10 February 2025 that the husband had appointed a restructuring practitioner to a number of his entities including Suvari Pty Ltd.
4. The wife draws attention to the existence of an order dated 30 May 2022 which restrained the husband from dealing with the assets of Suvari Pty Ltd except in the ordinary course of business or with the consent of the wife.
5. I am not prepared to conclude that the appointment of the restructuring practitioner was other than in the ordinary course of business. However, it was certainly a matter which required prompt disclosure.
6. It follows that I accept that there are some matters which relate to the husband's conduct with regard to these proceedings which are relevant to assessment of whether costs should be awarded:

(a) The appointment of the restructuring practitioner occurred on 16 January 2025. The husband notified the wife on 10 February 2025. That was not timely. It occurred immediately prior to a case management listing.

(b) An order was made on 26 March 2025 restraining the husband from dealing with $250,000 and requiring him to deposit those funds in a controlled monies account. While I accept there were some practical difficulties in setting up the account, the husband indicated that part of the reasons for delay including his having fallen asleep, while feeling unwell and mistakenly transferring monies to the wrong account. The delay required the matter be relisted.

1. By combination of the parties' disparate financial positions and considerations of the husband's conduct in particular in respect of disclosure, I find that there are justifying circumstances for a departure from the usual rule.
2. In Prantage & Prantage [2013] FamCAFC 105; (2013) FLC 93-544 the Full Court of the Family Court (as it then was) confirmed that indemnity costs should only be awarded if the case has some special or unusual feature. Those special or unusual features were the subject of comment by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd [1968] HCA 62; [1993] 119 CLR 118 ("Colgate-Palmolive Co"). That decision was the subject of consideration by Holden CJ in Munday v Bowman (1997) FLC 92-784 ("Munday v Bowman") at 84,660 where his Honour provided the following non-exhaustive examples of special or unusual features:

(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.

(b) Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.

(c) Evidence of particular misconduct causing loss of time to the court and to other parties.

(d) The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.

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

(Citations omitted)

1. I am not persuaded that the husband's conduct falls into the category that warrants him meeting the wife's costs on an indemnity basis having regard to the above authorities.
2. Accordingly, I propose to make an order that the husband pay the wife's costs of and incidental to the Applications in a Proceeding dated 19 February 2025 and 28 March 2025 on a party/party basis. The costs of the costs application itself should be paid at the scale set out in Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
3. I accept it may be preferable for the parties to have certainty about quantum as opposed to requiring the reach agreement or proceed to assessment. The wife asked that costs be fixed.
4. The applicant sought orders in a fixed amount on a party/party basis (in the alternative to indemnity costs). The Rules and case law permit the making of an order for costs in a fixed sum: Pascoe & Larsen (No 2) [2022] FedCFamC1A 126; Graham & Squibb [2019] FamCAFC 33; (2019) FLC 93-892. In circumstances where the husband and wife have been engaged in litigation over a long period it is appropriate to adopt the approach taken by the Full Court in Warbrick & Warbrick (No. 2) (2021) FLC 94-030 where the Full Court observed that it did "not intend to permit the costs question to become, in effect, satellite litigation" at [13].
5. I have the invoices of the wife's solicitor and barrister which have been used to calculate the sum sought on a party/party basis. The invoice dated 26 February 2025 includes considerable work unrelated to the applications in a proceeding, including in respect of expert evidence. While the exercise is imprecise, doing the best I can the sums of $1,040 and $780 relate to the first application a proceeding. On the invoice dated 31 March 2025 the party/party costs which appear to relate to the subsequent application in a proceeding are $3,432, $2,059.20, $1,716 and $1,320. To those fees should be aided counsel fees of $14,850. Accordingly, the total amount is $25,197.20. I will order that the husband pay the wife's costs fixed in the sum of $25,000 in respect of the Applications dated 19 February 2025 and 28 March 2025.

I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie.