Deep Cycle Systems Pty Ltd v Fischer (No. 2) - [2025] QDC 61

DISTRICT COURT OF QUEENSLAND

CITATION:

Deep Cycle Systems Pty Ltd v Fischer (No. 2) [2025] QDC 61

PARTIES:

DEEP CYCLE SYSTEMS PTY LTD

(plaintiff)

v

STEFAN FISCHER

(defendant)

FILE NO:

1169 of 2024.

DIVISION:

Civil

PROCEEDING:

Costs application.

ORIGINATING COURT:

Brisbane District Court

DELIVERED ON:

23 May 2025

DELIVERED AT:

Mackay

HEARING DATE:

Heard on the papers.

JUDGE:

Byrne KC, DCJ

ORDER:

1. The Claim is dismissed.

2. The plaintiff pay the defendant’s costs of and incidental to the proceeding, on the standard basis, as assessed or agreed.

CATCHWORDS:

DEFAMATION – ACTIONS FOR DEFAMATION – COSTS – INDEMNITY COSTS – where the plaintiff commenced proceedings seeking damages in defamation – where the proceedings were effectively dismissed when the plaintiff was found to not be an excluded corporation under s 9(2) of the Defamation Act 2005 (Qld) – where the defendant provided the plaintiff a proposed order as to costs following the ruling – where the plaintiff did not consent to the proposed order – where the defendant now applies for costs ordered on an indemnity basis either under s. 40 of the Defamation Act 2005 or on common law principles – whether costs should be ordered on an indemnity basis in the circumstances.

LEGISLATION:

Defamation Act 2005 (Qld), ss 9, 40.

CASES:
di Carlo v Dubois [2002] QCA 225.
Deep Cycle Systems Pty Ltd v Fischer [2025] QDC 25.
Fair Work Ombudsman v Priority Matters Pty Ltd & Anor [2016] FCCA 1474.
LPD Holdings (Aust) Pty Ltd v Phillips, Hickey & Toigo [2013] QCA 305.
Oshlack v Richmond River Council (1998) 193 CLR 72.

COUNSEL:
Ms L. Brabazon for the plaintiff.

Mr. J. Castelan for the defendant.

SOLICITORS:
Twomey Dispute Lawyers for the plaintiff.

NetCounsel Lawyers for the defendant.

Introduction

The plaintiff commenced proceedings seeking damages in defamation. On 11 March 2025 I found that the plaintiff was not an excluded corporation within the meaning of that term at s 9 of the Defamation Act 2005.[1] The effect of that ruling was to terminate the proceedings, although I did not make that order as the issue before me was determined on a separate question hearing (“the excluded corporation hearing”).
[1]Deep Cycle Systems Pty Ltd v Fischer [2025] QDC 25.
The defendant now seeks his costs of the whole of the proceeding on the indemnity basis, justified either pursuant to s 40 of the Defamation Act, or at common law.
The plaintiff accepts that the proceeding should be dismissed and accepts that it should be ordered to pay the costs of and incidental to the excluded corporation hearing on the standard basis, but otherwise submits that the parties should bear their own costs of the proceeding.
Further factual material
An amount of inter-parties’ correspondence was filed on this costs application. It is unnecessary to recite it in detail, but it can be said that there were relevant communications by the defendant, and denials by the plaintiff, about the excluded corporation…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] QDC 61
Decision Date: 23 May 2025

CaseChat Overview and Summary

In Deep Cycle Systems Pty Ltd v Fischer, the defendant sought indemnity costs from the plaintiff after the court dismissed the plaintiff's defamation proceedings. The court found that the plaintiff was not an excluded corporation under the Defamation Act 2005, which led to the dismissal of the case. The defendant had previously offered a settlement, proposing that the plaintiff pay $70,000 in costs, but the plaintiff refused this offer. The defendant then applied for indemnity costs under section 40 of the Defamation Act or at common law.

The court considered whether the defendant's settlement offer was reasonable and whether the plaintiff unreasonably refused the offer. The settlement offer was made before the proceedings were determined, fulfilling the first requirement under section 40(2)(b) of the Act. The court needed to determine whether the settlement offer was reasonable in terms of the costs proposal, not the entire proceedings. Given that the only remaining issue was the costs, the court focused on the reasonableness of the settlement offer regarding the costs.

The court found that the settlement offer was reasonable, and the plaintiff unreasonably refused it. Therefore, the court ordered the plaintiff to pay the defendant's costs of the proceeding on the indemnity basis. The plaintiff was also ordered to pay the defendant's costs of and incidental to the excluded corporation hearing on the standard basis.

The court dismissed the claim and ordered the plaintiff to pay the defendant’s costs of and incidental to the proceeding on the standard basis, as assessed or agreed.

Orders

Orders of the court

1. The Claim is dismissed.

2. The plaintiff pay the defendant’s costs of and incidental to the proceeding, on the standard basis, as assessed or agreed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The plaintiff commenced proceedings seeking damages in defamation. On 11 March 2025 I found that the plaintiff was not an excluded corporation within the meaning of that term at s 9 of the Defamation Act 2005.[1] The effect of that ruling was to terminate the proceedings, although I did not make that order as the issue before me was determined on a separate question hearing (“the excluded corporation hearing”). [1]Deep Cycle Systems Pty Ltd v Fischer [2025] QDC 25. The defendant now seeks his costs of the whole of the proceeding on the indemnity basis, justified either pursuant to s 40 of the Defamation Act, or at common law. The plaintiff accepts that the proceeding should be dismissed and accepts that it should be ordered to pay the costs of and incidental to the excluded corporation hearing on the standard basis, but otherwise submits that the parties should bear their own costs of the proceeding.Further factual material An amount of inter-parties’ correspondence was filed on this costs application. It is unnecessary to recite it in detail, but it can be said that there were relevant communications by the defendant, and denials by the plaintiff, about the excluded corporation question, and that the plaintiff indicated an intention to oppose the granting of the excluded corporation hearing. On the day that application was heard, it did eventually consent to the hearing being conducted. There were a number of other issues raised in the correspondence which need not be directly considered, but do include the issue of a separate question hearing for the issue of serious harm. Also, on 11 March 2025, but after the judgment was delivered, the defendant’s solicitors wrote to the plaintiff’s solicitors indicating that the defendant would agree to the following orders being made:1. That the proceeding be dismissed.2. That the plaintiff pay the defendant’s costs of and incidental to the proceeding to be taxed on the standard basis in default of agreement.Or2. That the plaintiff pay the defendant’s costs of and incidental to the proceeding in the sum of $70,000. It was noted that if the offer was not accepted, the defendant intended to seek indemnity costs. The proposal was to remain open for three days, which was ultimately extended by a further four days. It was not accepted. There is no suggestion that any earlier offer had been made by the defendant.The offer under s 40 of the Defamation Act Section 40(2)(b) of the Defamation Act mandates an indemnity costs order in favour of the defendant if the court is satisfied that the plaintiff unreasonably failed to accept the settlement offer of 11 March 2025, unless the interests of justice require otherwise. To qualify, the settlement offer must be made before the proceedings are determined, and be a reasonable offer at the time it was made.[2] [2]Section 40(3) of the Defamation Act. As the proceedings had not been formally dismissed at the time of the primary judgment, the first limb is satisfied. However, as the only dispute remaining between the parties was that of costs, the issue of reasonableness relates to the form and contents of the costs order, not the reasonableness of commencing and continuing with the proceeding overall.

CITATION:	Deep Cycle Systems Pty Ltd v Fischer (No. 2) [2025] QDC 61
PARTIES:	DEEP CYCLE SYSTEMS PTY LTD (plaintiff) v STEFAN FISCHER (defendant)
FILE NO:	1169 of 2024.
DIVISION:	Civil
PROCEEDING:	Costs application.
ORIGINATING COURT:	Brisbane District Court
DELIVERED ON:	23 May 2025
DELIVERED AT:	Mackay
HEARING DATE:	Heard on the papers.
JUDGE:	Byrne KC, DCJ
ORDER:	1. The Claim is dismissed. 2. The plaintiff pay the defendant’s costs of and incidental to the proceeding, on the standard basis, as assessed or agreed.
CATCHWORDS:	DEFAMATION – ACTIONS FOR DEFAMATION – COSTS – INDEMNITY COSTS – where the plaintiff commenced proceedings seeking damages in defamation – where the proceedings were effectively dismissed when the plaintiff was found to not be an excluded corporation under s 9(2) of the Defamation Act 2005 (Qld) – where the defendant provided the plaintiff a proposed order as to costs following the ruling – where the plaintiff did not consent to the proposed order – where the defendant now applies for costs ordered on an indemnity basis either under s. 40 of the Defamation Act 2005 or on common law principles – whether costs should be ordered on an indemnity basis in the circumstances.
LEGISLATION:	Defamation Act 2005 (Qld), ss 9, 40.
CASES:	di Carlo v Dubois [2002] QCA 225. Deep Cycle Systems Pty Ltd v Fischer [2025] QDC 25. Fair Work Ombudsman v Priority Matters Pty Ltd & Anor [2016] FCCA 1474. LPD Holdings (Aust) Pty Ltd v Phillips, Hickey & Toigo [2013] QCA 305. Oshlack v Richmond River Council (1998) 193 CLR 72.
COUNSEL:	Ms L. Brabazon for the plaintiff. Mr. J. Castelan for the defendant.
SOLICITORS:	Twomey Dispute Lawyers for the plaintiff. NetCounsel Lawyers for the defendant.