Zhao v T R & K R Shipton Pty Ltd

The proceeding before the Court of Appeal of Queensland concerned an appeal by the plaintiff, Ms Zhao, against orders made by the primary judge in relation to costs. The dispute arose from earlier proceedings where Ms Zhao had sought to recover damages for personal injury sustained in a motor vehicle accident. The primary judge had dismissed Ms Zhao's claim and ordered her to pay the defendant's costs on an indemnity basis.

The central legal issue before the Court of Appeal was whether the primary judge had erred in ordering Ms Zhao to pay the defendant's costs on an indemnity basis. This required the court to consider the circumstances under which an award of indemnity costs is appropriate, particularly in cases where a claim is found to be "hopeless" or lacking in reasonable prospects of success.

The Court of Appeal upheld the primary judge's decision, finding that Ms Zhao's claim was indeed hopeless and that the primary judge had not erred in exercising their discretion to award indemnity costs. The court reasoned that Ms Zhao had pursued her claim despite clear evidence that undermined its prospects of success, and that her conduct in the litigation justified the imposition of indemnity costs. The court noted that such an order is an exception to the usual rule that costs follow the event and should be reserved for cases where there are exceptional circumstances.

Consequently, the appeal was dismissed, and Ms Zhao was ordered to pay the defendant's costs of the appeal on an indemnity basis.