Background
The plaintiffs, Jessica and Kristian Beck, contracted to purchase a residential property from Nadine and Michael Kucks for $1,210,000. The Kucks believed they were selling for $1,355,000 and refused to complete the transaction, asserting grounds including unilateral mistake, unconscientious advantage, estoppel, and misleading or deceptive conduct. In the primary judgment (Beck v Kucks [2026] QSC 35, delivered 19 March 2026), Wilson J rejected all of the defendants’ arguments, found the contract remained on foot, and ordered specific performance with settlement by 31 March 2026, together with damages of $13,850.41 representing rental costs the Becks incurred between the contracted settlement date and actual settlement.
The only question remaining for determination was costs: the Becks sought an order that the Kucks pay their costs on an indemnity basis, relying on clause 9.8 of the standard REIQ contract, which provides that the buyer may claim damages for any loss suffered as a result of the seller’s default, “including its legal costs on an indemnity basis.” The Kucks contended that costs should be assessed on the standard basis, or, in the alternative, that any indemnity assessment should be confined to the discrete damages component of the claim rather than the proceeding as a whole.
The matter was determined on the papers by Wilson J.
The Court’s Holding
Wilson J ordered that the defendants pay the plaintiffs’ costs of the entire proceeding on an indemnity basis. The Court held that, on its plain terms, clause 9.8 of the REIQ contract plainly and unambiguously entitled the Becks to their legal costs on an indemnity basis as a component of damages flowing from the Kucks’ default. Applying the test in Chen v Kevin McNamara & Son Pty Ltd (No 2) [2012] VSCA 229 and following the recent Queensland Supreme Court decision in Storey v Britton [No 3] [2025] QSC 307, the Court found there was no discretionary consideration that militated against giving effect to the contractual bargain on costs.
The defendants’ argument that indemnity costs should be limited to the damages component of the claim — because the clause’s entitlement is expressed as a component of a damages claim — was rejected. Wilson J reasoned that both specific performance and damages had been awarded to remedy the defendants’ default, and that there was no principled basis for confining the indemnity assessment to only the damages portion. The Court noted that in Storey v Britton [No 3], Freeburn J had ordered indemnity costs for the entire proceeding even though only specific performance (not damages) was ultimately awarded there.
The defendants’ suggestion that their genuine but mistaken belief about the sale price, and their reliance on real estate agents, constituted a discretionary factor against indemnity costs was also rejected. Wilson J found no reason to depart from the parties’ contractual agreement as to costs.
Key Takeaways
- Clause 9.8 of the standard REIQ contract — which entitles a buyer to claim damages for loss resulting from the seller’s default, “including its legal costs on an indemnity basis” — will ordinarily be given effect by Queensland courts, provided damages have been claimed, as the parties will be taken to have plainly and unambiguously contracted for indemnity costs.
- A seller’s genuine mistake about the contract price, and reliance on intermediaries such as real estate agents, does not constitute a discretionary factor sufficient to override a clear contractual costs provision.
- Where both specific performance and damages are awarded, the indemnity costs entitlement applies to the whole proceeding, not merely to the discrete damages component; and following Storey v Britton [No 3], the same result may follow even where only specific performance is awarded.
- Courts retain a discretion as to costs and are not bound to give effect to a contractual indemnity costs clause, but absent some positive countervailing discretionary consideration, they will generally honour the parties’ bargain.
Why It Matters
This decision confirms and reinforces the approach taken in Storey v Britton [No 3] [2025] QSC 307, providing practitioners and parties transacting on the standard REIQ contract with greater certainty that a defaulting seller faces a real risk of indemnity costs exposure wherever the buyer claims — and succeeds in — a claim for damages under clause 9.8. The decision also forecloses the argument that indemnity costs should be apportioned only to the damages component of a claim where specific performance is sought alongside damages: both forms of relief arising from the same default attract the indemnity regime.
For conveyancing practitioners advising sellers in disputed contract situations, Beck v Kucks underscores the importance of early advice about the full costs consequences of resisting completion, particularly where the contractual basis for any defence is uncertain. The case also illustrates the limited utility of discretionary arguments based on innocent mistake or third-party reliance when the contractual text is unambiguous.