Background
The plaintiff, Mr. Dennison, was injured when he rode his bicycle into a temporary mesh barricade on a footpath. He sued the Brisbane City Council (BCC) for negligence. In the principal judgment, the court found that the BCC had been negligent in failing to properly warn path users of the hazard and that, but for a statutory defence, it would have awarded Mr. Dennison damages of $675,926.77.
However, the BCC ultimately succeeded at trial by relying on section 36 of the Civil Liability Act 2003 (Qld). This provision shields public authorities from liability unless their conduct was so unreasonable that no similar authority could have considered it a reasonable exercise of its functions. The court found Mr. Dennison had not met this high threshold. This subsequent judgment addresses only the question of legal costs.
The BCC, as the successful party, argued it should receive its costs, preferably on a higher “indemnity” basis because the plaintiff had rejected two settlement offers. The plaintiff countered that a special costs order was warranted because the BCC only raised the winning s 36 defence on 19 December 2024, very late in the proceedings and long after the settlement offers had been made.
The Court’s Holding
Justice Crowley held that the BCC was not entitled to indemnity costs. The court found the plaintiff’s rejection of the BCC’s offers—one for $NIL and a later “walk away” offer where each party would bear its own costs—was not unreasonable. The reasonableness of rejecting an offer is assessed based on the circumstances at the time it is made. When the offers were presented, the BCC had not yet pleaded its winning s 36 defence. In fact, at the time of the second offer, the prevailing case law supported the plaintiff’s argument that s 36 did not apply to his claim.
Despite the BCC being the ultimately successful party, the court exercised its discretion to depart from the general rule that “costs follow the event” (i.e., the winner gets their costs). The judge noted that the BCC had lost on every other issue related to liability (negligence, causation, and the facts of the accident) and had compelled the plaintiff to litigate these matters extensively. A substantial part of the litigation costs were therefore consumed by issues on which the BCC failed.
Given the BCC’s very late introduction of its only successful argument, the court found it would be unjust to award the BCC all of its costs. The court ordered that there be no order as to costs for the period before the s 36 defence was pleaded (19 December 2024). For the period after that date, the plaintiff was ordered to pay only 50 percent of the BCC’s costs on the standard basis.
Key Takeaways
- A successful party may be deprived of some or all of its costs if its winning argument is raised very late in the proceedings.
- The reasonableness of rejecting a settlement offer is judged based on the case as pleaded and the law as understood at the time of the offer, not with the benefit of hindsight from a final judgment.
- Courts can and will make apportioned or issue-based costs orders to ensure a just result where a successful party loses on multiple, significant issues that it forced the other side to litigate.
Why It Matters
This decision is a significant reminder that litigation conduct has serious costs consequences. A defendant who holds a “silver bullet” defence cannot wait until the last minute to deploy it and still expect to recover all their legal fees if they win. The ruling emphasizes the court’s broad discretion to ensure fairness, looking beyond the final outcome to how the parties conducted the case. It incentivizes all parties, including public authorities, to plead their full case early and avoid running up costs on issues they are likely to lose, reinforcing that the “winner takes all” approach to costs is not absolute and can be displaced in the interests of justice.