Stack v Marshall[2023] QDC 46

DISTRICT COURT OF QUEENSLAND

1. [1]
   Following judgment for the plaintiff, the parties were invited to provide submissions as to interest and costs.^[1]  Submissions have been received on behalf of the plaintiff who seeks an order for indemnity costs against the defendant because the nature of the proceeding is one that would engage the court’s discretion to make an order for indemnity costs.
2. [2]
   No submissions have been made by the defendant.
3. [3]
   I consider it appropriate that the defendant pay the plaintiff’s costs (including any reserved costs) on the indemnity basis.  I do so for these brief reasons.
4. [4]
   The plaintiff was not only successful in her action against the defendant, but she was also successful on the defendant’s counterclaim.  The counterclaim was dismissed on the basis of insufficient evidence.^[2]
5. [5]
   In accordance with r 681 of the Uniform Civil Procedure Rules 1999 (UCPR), costs should follow the event.^[3]  Insofar as the discretion to award indemnity costs, the plaintiff has relied upon two principal arguments.  First, the defendant held the plaintiff’s property (being the sale proceeds) on trust.  The defendant refused to return the funds and owed a fiduciary duty to the plaintiff.  In those circumstances, it was submitted that it was appropriate to make an order to put the plaintiff as closely as she can be put as if the breach had not occurred.  Breaches of duty as a trustee have been a basis to make an indemnity costs order to preserve the fund for the benefit of the beneficiaries.^[4] 
6. [6]
   The second principal argument relied upon by the plaintiff was that the case advanced by the defendant was “so devoid of reality that it could only have been advanced in wilful disregard of the known facts”.^[5]  Relevantly, it was highlighted that the court should form “… such an adverse view of the merits of the case advanced by [the defendant] that it concludes that the case must have been advanced in wilful disregard of the known facts or clearly established law, or should it never have been run …”.^[6] 
7. [7]
   At trial, I ultimately formed the view, based on the evidence, that it was highly fanciful on the defendant’s case that the plaintiff would voluntarily have gifted the funds to the defendant.^[7]  It seems appropriate, and I am satisfied, that the discretion is engaged to order indemnity costs.  Additionally, I am satisfied that an order for indemnity costs should be made in these proceedings given the plaintiff made an offer of compromise to the defendant to settle the proceedings and beat the offer of settlement.^[8]  A plaintiff who beats an offer of settlement is, on the face of it, entitled to indemnity costs in the proceedings.^[9]  There is nothing before me to demonstrate that an order other than that should be made.  I do accept that in the present instance the offer was not done under r 360 UCPR but is a Calderbank offer.  It nonetheless justifies an order for indemnity costs, because, it seems to me that in the absence of contrary evidence, the defendant should have accepted the offer.   Further, I am not persuaded that there was a fairly arguable case for the defendant which would preclude or justify an order other than indemnity costs for the entire proceedings.^[10]
8. [8]
   Therefore, the order is that the defendant pay the plaintiff’s costs (including any reserved costs) on the indemnity basis.