Dawson v Public Trustee of Queensland (No. 2)

The case of Dawson v Public Trustee of Queensland (No. 2) involved the plaintiff bringing a claim against the first and second defendants for various relief concerning a property previously owned by a family member. The first and second defendants successfully applied to have the claim against them dismissed and sought costs from the plaintiff. The court had to determine whether the plaintiff should pay the costs of the first defendant on the standard basis, and whether the plaintiff should pay the second defendant’s costs on an indemnity basis. The second defendant had provided correspondence to the court showing that the plaintiff had been informed that their claim was untenable several years prior to the claim being brought.

The court considered the discretion to award indemnity costs in cases where a party has proceeded with a claim despite being informed it is untenable. The court found that the second defendant had provided sufficient evidence to support an indemnity costs order. The court noted that the plaintiff’s claim was without merit and was pursued despite clear warnings, justifying an indemnity costs order. Regarding the first defendant, the court found that the circumstances did not warrant an indemnity costs order, but the standard costs order was appropriate.

The court ordered that the plaintiff pay the first defendant’s costs on the standard basis. Additionally, the court ordered that the plaintiff pay the second defendant’s costs limited to work performed by its employees, along with outlays and expenses including counsel’s fees, all on the indemnity basis. This decision underscores the court's power to award indemnity costs when a claim is pursued despite clear warnings of its untenability.