Background
After trial, Ryan J had ordered Xuefei Wang to pay Junjie Ou equitable compensation of $900,346 plus interest. The court had found that a Deed of Gift signed by Ou was a sham document used by Wang to deceive Australian authorities. Wang unsuccessfully relied on the deed in defending the claim.
The costs issue arose because Ou had made a $900,000 settlement offer under Chapter 9, Part 5 of the Uniform Civil Procedure Rules 1999 (Qld). Wang rejected it, and Ou obtained a better result at trial. Ou therefore sought indemnity costs from the date of the offer.
The Court’s Holding
The Court refused to award indemnity costs. The offer did not comply with rule 355(1) because it was not open for acceptance for at least 14 days after service, and the Court had no power to extend that period. Wang had also sought more time to obtain legal advice while self-represented, but Ou declined the request.
More fundamentally, Ryan J held that indemnity costs were inappropriate because Ou had signed the sham Deed of Gift knowing it did not reflect the parties’ transaction and had been recklessly indifferent to Wang’s dishonest use of it. His conduct enabled the trial to proceed as it did. Wang was ordered to pay Ou $1,116,072.59, including $215,726.59 interest calculated to 24 August 2026, and the proceedings’ costs, including reserved costs, on the standard basis.
Key Takeaways
- A formal settlement offer must comply strictly with the UCPR’s minimum acceptance period to attract its costs consequences.
- A party’s own involvement in dishonest underlying conduct may make indemnity costs inappropriate, even after a better-than-offer trial result.
- Costs remained payable by the unsuccessful defendant, but only on the standard basis.
Why It Matters
The decision illustrates that a rejected settlement offer does not automatically justify indemnity costs. Technical non-compliance with offer rules can defeat the usual costs consequences, while discretionary considerations remain important.
It also shows that courts may take account of the successful party’s contribution to the circumstances generating the litigation when determining whether an enhanced costs order is fair.