Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5)

• Jurisdiction: Australia Federal only
• Judgment Date: 19 March 2021
• Neutral Citation: [2021] FCA 246
• Court: Federal Court
• Date: 19 March 2021

Federal Court of Australia

Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246

File number:	NSD 2510 of 2013
Judgment of:	WIGNEY J
Date of judgment:	19 March 2021
Catchwords:	COSTS – Application for indemnity costs by successful respondent against applicant – where applicant, the Australian Competition and Consumer Commission, is a regulator – relevant principles regarding order for costs – whether Court should exercise its discretion to award costs other than on a party and party basis – whether ACCC should have been aware that its proceeding was “hopeless” and “bound to fail” before commencing proceeding – whether ACCC’s action against respondent was justified and reasonable in the circumstances – whether action against respondent was a circumstantial case where strength or weakness of proceeding could only be assessed once entire evidence had been presented – where litigation involved public interest – where ACCC had previously settled with other respondents in the proceeding also alleged to have engaged in collusive arrangements in contravention of Trade Practices Act 1974 (Cth) (now Competition and Consumer Act 2010 (Cth)) – order for indemnity costs not warranted – application dismissed
Legislation:	Federal Court of Australia Act 1976 (Cth) Federal Court Rules 2011 (Cth), rr 40.01, 40.02(a), 40.02(b), Sch 1 Trade Practices Act 1974 (Cth) (repealed), ss 45(2)(a)(i)-(ii), 45(2)(b)(i)-(ii), 44ZZRK
Cases cited:	Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd [2005] FCA 860 Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 4) (2017) 353 ALR 460; [2017] FCA 1590 Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2019] FCAFC 83 Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2020] FCA 598 Australian Competition and Consumer Commission v Leahy Petroleum Pty Limited [2007] FCA 1844 Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union (No 4) [2018] FCA 684 Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Ltd) (No 2) [2007] FCA 179 Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 Hamod v New South Wales (2002) 188 ALR 659; [2002] FCAFC 97 Henke v Carter [2002] FCA 492 J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 Kazal v Independent Commission Against Corruption and Ors (No 2) [2020] NSWSC 17 King v Yurisich (No 2) [2007] FCAFC 51 Latoudis v Casey (1990) 170 CLR 534 LFDB v SM (No 2) [2017] FCAFC 207 Mango Boulevard Pty Ltd v Whitton [2015] FCA 1352 Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 Re Kingsheath Club of the Clubs Ltd (in liq) [2003] FCA 1589 Seven Network Ltd v News Ltd (2009) 182 FCR 160; [2009] FCAFC 166 Smolle v Australian and New Zealand Banking Group Ltd (No 2) [2007] FCA 1967 Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Economic Regulator, Competition and Access
Number of paragraphs:	59
Date of last submissions:	4 March 2020
Date of hearing:	11 March 2020
Counsel for the Applicant:	Dr R C A Higgins SC with Mr I J M Ahmed
Solicitor for the Applicant:	Norton Rose Fulbright
Counsel for the Second Respondent:	Mr M R Scott QC with Mr A D Barraclough
Solicitor for the Second Respondent:	Allens

ORDERS

		NSD 2510 of 2013
BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant
AND:	PZ CUSSONS AUSTRALIA PTY LTD (ACN 004 164 827) Second Respondent

order made by:	WIGNEY J
DATE OF ORDER:	19 March 2021

THE COURT ORDERS THAT:

1. The interlocutory application filed by the second respondent on 1 February 2018 be dismissed.

2. The second respondent pay the applicant’s costs of and associated with the interlocutory application.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

WIGNEY J:

1. By judgment handed down on 22 December 2017, the Court dismissed the proceeding commenced by the Australian Competition and Consumer Commission in which it was alleged that PZ Cussons Australia Pty Ltd had contravened ss 45(2)(a)(i) and (ii), s 45(2)(b)(i) and (ii) and 44ZZRK of the Trade Practices Act 1974 (Cth) (now the Competition and Consumer Act 2010 (Cth)): Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 4) (2017) 353 ALR 460; [2017] FCA 1590 (Judgment). The Commission was ordered to pay Cussons’ costs. An appeal from that judgment brought by the Commission was subsequently dismissed with costs: Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2019] FCAFC 83 (Appeal Judgment). An application by Cussons that its costs of the appeal be assessed or paid on an indemnity basis was subsequently dismissed: Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2020] FCA 598.

2. Cussons filed an interlocutory application seeking an order that the Commission pay its costs of the proceeding at first instance on an indemnity basis and that the costs in that regard be awarded in a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth). The hearing of that application was deferred until after the handing down of the Appeal Judgment. The evidence filed in support of the application comprised an affidavit sworn by one of Cussons’ solicitors which included a chronological summary of some of the key events in the Commission’s investigation and annexed some correspondence between the parties or their solicitors.

3. The argument advanced by Cussons in support of an indemnity costs order was, in essence, that the Commission’s case was “hopeless” and “bound to fail” and that the Commission should have been aware of that, or at least of the “inherent and objective weakness” in its case against Cussons, before it commenced the proceeding. The Commission’s pursuit of the case in those circumstances was said to have been both unjustified and unreasonable such as to warrant a departure from the usual rule that costs be assessed on a party and party basis.

4. For its part, the Commission acknowledged that it had comprehensively lost at first instance, but submitted that there was no special or unusual feature which justified the exceptional award of indemnity costs. It contended that its case against Cussons was a circumstantial case, the strength or weakness of which could only be assessed once the evidence in its entirety had been adduced. The Commission also pointed to the public interest nature of the litigation and to the fact that the other parties to the alleged collusive arrangements had settled with it and had made admissions which supported the reasonableness of its case against Cussons.

5. While the...