Ultra Tune Properties (Qld) No 2 Pty Ltd v DNR1 Pty Ltd (No 2)

The matter before the court involved Ultra Tune Properties (Qld) No 2 Pty Ltd, the plaintiff, and DNR1 Pty Ltd, the defendant. The dispute revolved around a claim by the plaintiff for damages related to an alleged breach of a lease agreement. The case was heard in the Queensland Civil and Administrative Tribunal (QCAT). The defendant had successfully defended the claim, and as a result, judgment was entered in its favour, with the plaintiff ordered to pay the defendant's costs on the standard basis. The defendant then sought an order for indemnity costs, arguing that the plaintiff's conduct in the proceedings and its refusal to accept a settlement offer constituted plainly unreasonable behaviour warranting such an order.

The court was tasked with determining whether the plaintiff's conduct and refusal to settle were indeed plainly unreasonable. The court considered the factors relevant to indemnity costs, including whether the plaintiff had a reasonable prospect of success and whether the plaintiff's conduct was unreasonable in light of the circumstances at the time. The court also examined the nature and conduct of the proceedings, including the plaintiff's refusal to accept the defendant's settlement offer. The court concluded that while the plaintiff's conduct may have been unreasonable, it did not reach the threshold of being plainly unreasonable. The court found that the plaintiff had a reasonable prospect of success, and the refusal to settle was not without justification.

The court dismissed the defendant's application to vacate or vary the costs order. The court held that the plaintiff's conduct, while unreasonable, did not warrant an order for indemnity costs. The court emphasised that indemnity costs should only be awarded in cases of particularly egregious conduct, and this case did not meet that standard. The court's decision underscored the importance of considering the totality of the circumstances and the reasonable prospect of success when determining whether indemnity costs are appropriate.