Neubauer v Amaca Pty Ltd [2026] QSC 64

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - RELEVANT CONSIDERATIONS GENERALLY - where judgment was entered in favour of the plaintiff following a civil jury trial - where the plaintiff made an offer to settle the action which was not accepted by the defendant and the offer was not less favourable than the judgment sum - where the plaintiff contends that pursuant to r 360(2) of the Uniform Civil Procedure Rules 1999 (Qld) the defendant should be ordered to pay the plaintiff's costs on the standard basis up to and including the date of the offer and on an indemnity basis thereafter - where the defendant says that the offer could not reasonably have been accepted at the time it was made - where evidence served after the date of the offer - where plaintiff became unavailable to be cross-examined as a result of incapacity on the morning of the first day of trial - where documentary evidence admitted under s 92 of the Evidence Act 1977 as a result of plaintiff's unfitness - whether another order for costs, other than indemnity costs from the date of the offer, is appropriate in the circumstances - where indemnity costs ordered.

Bankier v HAP 2 Pty Ltd (No 3) [2019] QSC 186, applied.

Bosk v Burgess & Anor (2022) 100 MVR 52, cited.

Castro v Hillery [2002] QCA 359; [2003] 1 Qd R 651, cited.

Hughes v Grogan & Anor [2007] QSC 078, cited.

Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721

Martin v Rowling [2004] QSC 286, cited.

Morgan v Johnson [1998] NSWSC 367; (1998) 44 NSWLR 578, applied.

New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100, cited.

Nominal Defendant (New South Wales) v Cortrip Investments Pty Ltd (1989) 10 MVR 511, cited.

Schimke v Clements [2011] QSC 208, cited.

Roger Quick and David Garsworthy, Quick on Costs (Thomson Reuters, rev e, 2025)

[1] On 26 February 2026, after a civil jury trial, judgment was entered in favour of the plaintiff against the defendant in the sum of $1,111,200.

[2] On 19 December 2025 the plaintiff made an offer pursuant to r 353 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) to settle his action for a sum of $1,000,000 plus costs. The defendant did not accept that offer.

[3] The plaintiff seeks standard costs to the date of the offer and indemnity costs thereafter.

[4] It is unnecessary for me to decide anything in respect of costs between the defendant and the third parties, the costs having been agreed between them. That agreement in reflected in Order 2 above.

[5] Rule 360 UCPR provides:

(a) the plaintiff makes an offer that is not accepted by the defendant; and

(b) the plaintiff obtains an order no less favourable than the offer; and

(c) the court is satisfied that the plaintiff was at all material times willing and able to carry out what was proposed in the offer.

(2) Unless the defendant shows another order for costs is appropriate in the circumstances, the court must order the defendant to pay the plaintiff's costs -

(a) calculated on the standard basis, up to and including the day of service of the offer; and

(b) calculated on the indemnity basis, after the day of service of the offer."

[6] The plaintiff therefore seeks an order pursuant to r 360(2) of the UCPR that the defendant should be ordered to pay the plaintiff's costs:

(a) on the standard basis up to and including 19 December 2025; and

(b) on the indemnity basis from 20 December 2025.

(a) the offer was made in accordance with r 353 UCPR;

(b) the offer was not accepted by the defendant;

(c) the verdict was not less favourable in accordance with r 360(1)(a) UCPR; and

(d) the plaintiff was at all material times willing and able to carry out the offer in accordance with r 360(1)(b) UCPR.

[8] The defendant contends that "another order for costs is appropriate in the circumstances" in accordance with r 360(2) and seeks an order that the defendant pay the plaintiff's costs on a standard basis.

[9] These reasons proceed on the basis that, unless the defendant shows another order for costs is appropriate in the circumstances, the court "must order" costs on the basis sought by the plaintiff at paragraph [6] above.[1]

[10] The defendant opposes the indemnity costs order which the plaintiff seeks on the basis that another order is appropriate in these circumstances (r 360(2) UCPR) because:

(a) there was a significant volume of evidence served and relied upon by the plaintiff which was not delivered until after the offer was made;

(b) the unusual circumstances in which the trial was conducted whereby the plaintiff gave his evidence-in-chief by way of affidavit but was not available for cross-examination because he was not fit to do so; and

(c) the ultimate outcome achieved by the plaintiff was not significantly more than the amount of the offer.

[11] Before the court makes another order, it should be borne in mind:[2]

(a) the purpose of the rule is to encourage the proper compromise of litigation, in the private interests of individual litigants and the public interest in the prompt and economical disposition of litigation;[3]

(b) the aim is to oblige the offeree to give serious consideration to the risk involved in non-acceptance;[4]

(c) the prima facie consequence of non-acceptance will be that the rule will be invoked against the non-accepting party;[5]

(d) lying behind the rule is the common knowledge that "litigation is inescapably chancy."[6] For this reason, the ordinary rule is to apply in the ordinary case;

(e) the mere fact that it was reasonable for the litigant to take the view it did in rejecting the offer is not enough to displace the rule;[7] and

(f) the discretion to displace the rule is a judicial one, requiring the private and public purpose of the rule to be borne in mind.[8]

[12] Those principles from Morgan have been followed in this court.[9]

[13] It is true that the plaintiff served a number of experts' reports after his offer of $1,000,000 was made including:

(a) report of Mr Hoey (occupational therapist) dated 22 January 2026;

(b) report of Mr Kottek (occupational hygienist) dated 4 February 2026;

(c) report of Dr Heiner (thoracic physician) dated 10 February 2026;

(d) report of Mr Hoey (occupational therapist) dated 15 February 2026;

(e) report of Dr Hohenberg (geriatrician) dated 15 February 2026; and

(f) report of Professor Klebe (professor of pathology) dated 15 February 2026.

[14] Professor Klebe's reports can be ignored for the purposes of this analysis, it containing only some correction of typographical errors. Mr Kottek's report was addressed to the issue of liability, an issue on which the defendant ultimately admitted breach, but not exposure. Neither is likely to have affected the defendant's assessment of damages at the date of the offer.

[15] The balance of the reports however, each served after the offer was made, might have been more material to the outcome reached by the jury.

[16] For example, Dr Heiner's first report of 22 May 2025 provided evidence that most people who suffer from mesothelioma have a life expectancy of six to nine months from date of diagnosis and up to 12 months from the date of first symptoms. The plaintiff had a date of diagnosis in February 2025. At the date of the offer, he was close to the limits of his life expectancy. The supplementary report of 10 February 2026 identified a life expectancy of 9 to 12 months from the date of that report. The plaintiff had therefore substantially exceeded Dr Heiner's original life expectation assessment.

[17] Dr Heiner's opinion however was but one, amongst the others including Associate Professor Jermaine Coward who, prior to the offer, expressed the opinion that the plaintiff had gained some radiological and clinical benefit from a few months of immunotherapy. That opinion suggested that the unfavourable life expectancy prognosis was not the only prognosis. In short, before the offer was made, there was competing evidence as to life expectancy. The defendant can be expected to have taken that competing evidence into account.

[18] The defendant submits that the change in life expectancy likely impacted the award for general damages, but more significantly, the care and assistance claim to which Mr Hoey's evidence was directed in his reports of January and February 2026. In a jury trial, where there are no reasons, it is not always possible to know what effect particular evidence had. Prior to the offer, Mr Hoey's evidence was that the plaintiff had the need of 25 hours per week of care and assistance. That did not change markedly in his supplementary reports, although his oral evidence in fact decreased that assessment.

[19] On balance in my view, while there is some point to be made about the changing life expectancy evidence, it is not so significant that the defendant could not reasonably have taken that uncertainty into account. That is particularly so in a jury trial, where precision of assessment is always less likely.

[20] The second issue the defendant relies upon is the late unavailability of the plaintiff for cross-examination.

[21] The circumstances surrounding this issue are somewhat unusual, and could not have been known to the defendant in advance of the trial. An order had been made that the plaintiff provide evidence-in-chief by way of affidavit on 11 February 2026 and that affidavit was served on 12 February 2026. On the morning of the trial the plaintiff then served a medical report indicating that the plaintiff was not fit to give evidence at the trial and ultimately, that evidence having been accepted, his affidavit was admitted under s 92 of the Evidence Act 1977 (Qld) without him being able to be cross-examined.

[22] That was a substantial disadvantage to the defendant to deprive it of the opportunity for cross-examination.[10] However persons suffering from fatal illnesses such as this plaintiff can be affected by changes to their health, and their capacity, at very short notice. That is a matter of common experience which the defendant was well able to take into account. I do not consider that is a significant matter against a grant of indemnity costs. In any event, it is the very satisfaction of the criteria of s 92 of the Evidence Act which led to the admission of the evidence without the plaintiff being available for cross-examination. That being the effect of the section, the prejudice from restricting the right to cross-examine arose from the normal operation of the rules of evidence.

[23] Finally, the defendant submits that the amount by which the plaintiff beat his offer, $111,200 was a marginal improvement on his offer in the circumstances. That might be true if it is considered in the context of beating the offer by some 11 per cent, but it can hardly be thought that $111,200 is a sum of money rightly considered by members of the community to be 'marginal' as submitted by the defendant. In any event, no authority was cited for the proposition that to beat an offer by only a marginal amount was a sufficient basis to displace r 360(2) that the court 'must order' costs on the indemnity basis. Indeed, the words "an order no less favourable than the offer" would tend to suggest that even truly marginally better offers would still, prima facie, invoke the rule.

[24] On balance I do not consider that the defendant has shown that another order for costs is appropriate in the circumstances contemplated by r 360(2) of the UCPR.

[25] In the circumstances, there should be an order for the defendant to pay the plaintiff's costs on a standard basis up to 19 December 2025 and on the indemnity basis thereafter.

[1] Bankier v HAP 2 Pty Ltd (No 3) [2019] QSC 186 at [8]; See also Castro v Hillery [2002] QCA 359; [2003] 1 Qd R 651 at [79].

[2] Roger Quick and David Garsworthy, Quick on Costs (Thomson Reuters, rev ed, 2025), 340.330; see also Morgan v Johnson [1998] NSWSC 367; (1998) 44 NSWLR 578.

[3] Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 725-726.

[5] New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100 at 102.

[9] Hughes v Grogan & Anor [2007] QSC 078 at [12]; Martin v Rowling [2004] QSC 286 at [14]; Bosk v Burgess & Anor (2022) 100 MVR 52 at [85]; Schimke v Clements [2011] QSC 208 at [5].

[10] Nominal Defendant (New South Wales) v Cortrip Investments Pty Ltd (1989) 10 MVR 511 at 512.