Deputy Commissioner of Taxation v Guljas [2026] QDC 13

DISTRICT COURT OF QUEENSLAND CITATION: Deputy Commissioner of Taxation v Guljas [2026] QDC 13 PARTIES: DEPUTY COMMISSIONER OF TAXATION (plaintiff) & JAISON GULJAS (defendant) FILE NO/S: BD666/25 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 16 February 2026 DELIVERED AT: Brisbane HEARING DATE: Final submissions received 15 December 2025 JUDGE: Grigg DCJ ORDER: 1. The Plaintiff pay the Defendant’s costs of and incidental to the Application dated 11 September 2025 on a standard basis. CATCHWORDS: PROCEDURE – COSTS – INDEMNITY COSTS – RELEVANT CONSIDERATIONS GENERALLY – where the plaintiff declined to amend their pleadings – where an order was made for the plaintiff to amend their pleadings – whether the plaintiff’s argument against amending their pleadings justified the award of costs on an indemnity basis LEGISLATION: Tax Administration Act 1953 (Cth) Uniform Civil Procedure Rules 1999 (Qld) CASES: Australian Competition and Consumer Commission v Colgate- Palmolive Pty Ltd [2020] FCA 598 -- 1 of 21 -- 2 Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 Oshlack v Richard River Council (1998) 193 CLR 72; [1998] HCA 11 Smits v Tabone [2007] QCA 337 The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] 2 Qd R 356; [2009] QSC 84 COUNSEL: M. J. Downes for the defendant SOLICITORS: A. M. Roberson of ATO Litigation Services for the plaintiff Davey & Associates or the defendant Introduction [1] The plaintiff, the Deputy Commissioner of Taxation (DCT), seeks to recover a director penalty from the defendant, Mr Guljas, pursuant to section 269-20 of Schedule 1 of the Tax Administration Act 1953 (Cth) (TAA). On 11 September 2025 the defendant applied for orders requiring the plaintiff to amend her Statement of Claim and provide further and better particulars. [2] When this interlocutory application came on for hearing, the court was required to determine two primary questions: (a) Should the DCT be directed to file an amended statement of claim that pleads the material facts of the DCT giving a director penalty notice (DPN) to Mr Guljas? (b) Should the DCT be directed to provide particulars of paragraphs 5, 13 and 14 of her statement of claim? [3] The plaintiff’s position was that the material facts of the DCT giving a director penalty notice (DPN) to Mr Guljas did not need to be pleaded [4] After discussion at the hearing, the plaintiff agreed to provide further particulars relating to paragraphs 5, 13 and 14 of the statement of claim, and I made an order to that effect. [5] Following the hearing, I made an order that the plaintiff file and serve an Amended Statement of Claim on or before 8 December 2025 to include the material facts of the plaintiff giving a director penalty notice to the defendant. -- 2 of 21 -- 2 [6] After that decision, I permitted the parties to address me on costs. [7] The defendant submits that the plaintiff should pay his costs in this proceeding to date on the standard basis up to 30 September 2025 and on the indemnity basis thereafter. [8] The plaintiff submits there is no reason to depart from the normal order that costs be paid on a standard basis. General Cost Principles [9] The starting point is that costs usually follow the event and are ordered to be paid on a standard basis.1 However, costs may be ordered to be paid on an indemnity basis under rule 704(1) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). [10] The issue is whether the circumstances of this matter warrant an indemnity, as opposed to a standard, costs order. [11] Principles relevant to the exercise of a discretion to order indemnity costs are set out in numerous authorities including Smits v Tabone [2007] QCA 337 (Smits). In Smits, Cullinane J summarised the principles by reference to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 as follows: 42. The normal order for costs is on the standard basis, and some special reason is required for any departure from that. 43. Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 discussed the subject generally and identified categories of cases in which it would be appropriate to make such an order. These categories were not meant to be exhaustive: "Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I[sic] instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp (supra)); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davis J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (unreported, Court of Appeal, NSW, Kirby P, Priestley JA, Cripps JA, No 40744/1992, 27 September 1993) and an award of costs of an indemnity basis against a 1 Uniform Civil Procedure Rules 1999 r 702 (‘UCPR’). -- 3 of 21 -- 3 contemnor (eg Megarry V-C in EMI Records (supra)). Other categories of cases are to be found in the reports." 44. In Rosniak v Government Insurance Office (1997) 41 NSWLR 608, the New South Wales Court of Appeal sounded a cautious note at 616: "… the Court requires some evidence of unreasonable conduct, albeit that it need not rise as high or vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity. Any shift to a general or common rule that indemnity costs should be the order of the day is a matter for the legislature or the rule-maker." 45. In Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359, Powell J expressed the view that an order for indemnity costs was warranted where in effect the proceedings had no reasonable prospect of success. 46. Rolfe A/JA (as he then was) in Huntsman Chemical Co Australia Ltd v International Pools Australia Pty Ltd (1995) 36 NSWLR 242 at 273 after reviewing the authorities said: "In my opinion the authorities support the proposition that where a party persists in a hopeless case, that justifies, for all the reasons given, the making of an order for costs on an indemnity basis." 47. See also cases such as Di Carlo v Dubois & Ors [2002] QCA 225. (emphasis added) [12] Unreasonable conduct alone is not sufficient. Conduct which justifies a departure from the ordinary order as to costs has been described as a “high hurdle to surmount”.2 [13] Indemnity costs may be ordered if a party’s conduct caused unnecessary inconvenience and expense to the defendant. The discretion to award indemnity costs might be exercised where there is what is referred to as a “relevant delinquency”: Oshlack v Richard River Council [1998] HCA 11; (1998) 193 CLR 72, at [44]. In Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009, Ward CJ explained that ““relevant delinquency” does not mean moral delinquency or some ethical shortcoming, but delinquency bearing a relevant relation to the conduct of the case”.3 Ward CJ set out circumstances in which indemnity costs may be awarded, including:4 “… where a party has made allegations that ought never to have been made; where an action has been commenced or continued where the plaintiff, properly advised, should have known the applicant had no chance of success; and where proceedings have been commenced in wilful disregard of known facts or clearly established law. An award of indemnity costs serves the purpose of compensating a party fully for costs incurred when the 2 Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2020] FCA 598 at [17]. 3 Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009 at [45]. 4 Ibid. -- 4 of 21 -- 4 Court takes the view that it was unreasonable for the party against whom the order was made to have subjected the innocent party to the expenditure of the case.” (emphasis added) [14] Martin J in The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] QSC 84; [2009] 2 Qd R 356, observed that the discretion to order costs must be exercised judicially in accordance with general legal principles pertaining to the law of costs. The exercise of the discretion comes down to a “fact-specific inquiry informed by various relevant considerations”.5 [15] Each case must be considered on its own facts. [16] Was the plaintiff’s conduct unreasonable enough to depart from the ordinary order as to costs? Consideration [17] Pleadings must include particulars necessary to:6 (a) define the issues for, and prevent surprise at, the trial; and (b) enable the opposite party to plead; and (c) support a matter specifically pleaded under rule 150. [18] The defendant submitted the plaintiff did not engage with him in a meaningful way regarding the pleading issue. The defendant submitted that it invited the plaintiff to amend its statement of claim on 4 occasions and invited the plaintiff to provide the necessary particulars on 3 occasions. Despite the provision of some particulars, the defendant considered the plaintiff did not address his concerns regarding the pleading of the giving of the DPN. [19] The plaintiff disputes the assertion she did not engage with the defendant and identifies that: (a) she filed answers to the defendant’s request for further and better particulars on 22 September 2025. (b) On 23 September 2025, the plaintiff, in correspondence, advised the defendant that the DPN was given to him on 7 November 2022 by post to the address recorded for him in ASIC’s records and provided a copy of the relevant DPN. 5 The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] QSC 84; 2 Qd R 356 at [38]. 6 UCPR r 157. -- 5 of 21 -- 5 (c) further responses to the defendant’s request for particulars issued on 29 September 2025. [20] In my view, the matters identified by the plaintiff demonstrate the plaintiff was engaging with the defendant. [21] On 30 September 2025, the defendant offered to consent to orders that the plaintiff file and serve an Amended Statement of Claim to plead the DPN issue and provide particulars of paragraphs 5, 13 and 14 of the Statement of Claim. The defendant did not seek any costs in the draft consent order. The plaintiff rejected that offer on 1 October 2025. [22] The defendant contends that, by the plaintiff’s failure to comply with rule 445 of the UCPR, the failure to respond to the defendant at all prior to filing the application, and its conduct of the application, the plaintiff should be ordered to pay the defendant’s costs on an indemnity basis. [23] The defendant submits the special or unusual feature which justifies a special cost order is the plaintiff’s entrenched opposition and imprudent refusal to compromise. [24] Ultimately, the defendant’s real complaint is that the plaintiff disagreed with his position. [25] This matter bears no relationship to matters where the merits of entire claims are in issue, where one party has repeatedly caused significant delay in the proceeding of the matter, or maintained a position which is undefendable. [26] It just so happened that the plaintiff had a different view on the method or mechanism under which that information around the giving of the DPN needed to be imparted to the defendant. [27] The plaintiff identified that the defendant filed the Application only one day after the time nominated by him in his UCPR rule 444 letter issued on 5 September 2025. That letter nominated the minimum time for a response of three business days. This is not a demonstration of significant delay or reluctance on the part of the plaintiff. [28] The Application was filed only 7 days after the defendant’s first correspondence to the plaintiff on 4 September 2025. There was no basis, as suggested by the defendant, -- 6 of 21 -- 6 that the defendant was concerned the plaintiff would have moved for default judgment prior to having given reasonable notice in a response to the defendant’s requests. There is no suggestion of this in any of the correspondence. [29] There is nothing in the communications between the parties in the lead up to the application which demonstrates the plaintiff’s refusal to accept the defendant’s offers were imprudent or irrational. [30] This is not a case where the plaintiff’s case demonstrates no reasonable cause of action, or where their refusal to provide the amended pleading was due to anything other than genuine contention that she was not required to do so. The plaintiff had an arguable, albeit unsuccessful, position. It was not wholly without merit. The plaintiff noted that the defendant did not identify, and the Court’s reasons did not find, any directly applicable authority which meant that the Plaintiff’s position and arguments were untenable. [31] I do not find the conduct of the plaintiff in resisting the application was unreasonable in the sense required to constitute relevant conduct that would be sufficient to justify the awarding of costs on an indemnity basis. [32] As reiterated by the plaintiff, the primary purpose in ordering the amended pleading was not due to any negative assessment of the merits of the matter but to facilitate the just and expedient resolution of the issues in dispute having regard to the specific facts of the case. Conclusion [33] The plaintiff’s conduct in maintaining no amendment was required to its pleading has not resulted in undue prolongation of the matter. There were merits to both sides’ arguments. The plaintiff provided detailed submissions and references to explain its reasoning. That fact that I found in against the plaintiff does not automatically result in an indemnity cost order being made. [34] There is no demonstrated basis to depart from the ordinary rule that the defendant’s costs should paid on the standard basis. [35] The plaintiff should pay the defendant’s costs of, and incidental to, the Application on a standard basis. -- 7 of 21 -- DISTRICT COURT OF QUEENSLAND CITATION: Deputy Commissioner of Taxation v Guljas [2026] QDC 13 PARTIES: DEPUTY COMMISSIONER OF TAXATION (plaintiff) & JAISON GULJAS (defendant) FILE NO/S: BD666/25 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 16 February 2026 DELIVERED AT: Brisbane HEARING DATE: Final submissions received 15 December 2025 JUDGE: Grigg DCJ ORDER: 1. The Plaintiff pay the Defendant’s costs of and incidental to the Application dated 11 September 2025 on a standard basis. CATCHWORDS: PROCEDURE – COSTS – INDEMNITY COSTS – RELEVANT CONSIDERATIONS GENERALLY – where the plaintiff declined to amend their pleadings – where an order was made for the plaintiff to amend their pleadings – whether the plaintiff’s argument against amending their pleadings justified the award of costs on an indemnity basis LEGISLATION: Tax Administration Act 1953 (Cth) Uniform Civil Procedure Rules 1999 (Qld) CASES: Australian Competition and Consumer Commission v Colgate- Palmolive Pty Ltd [2020] FCA 598 -- 8 of 21 -- 2 Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 Oshlack v Richard River Council (1998) 193 CLR 72; [1998] HCA 11 Smits v Tabone [2007] QCA 337 The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] 2 Qd R 356; [2009] QSC 84 COUNSEL: M. J. Downes for the defendant SOLICITORS: A. M. Roberson of ATO Litigation Services for the plaintiff Davey & Associates or the defendant Introduction [1] The plaintiff, the Deputy Commissioner of Taxation (DCT), seeks to recover a director penalty from the defendant, Mr Guljas, pursuant to section 269-20 of Schedule 1 of the Tax Administration Act 1953 (Cth) (TAA). On 11 September 2025 the defendant applied for orders requiring the plaintiff to amend her Statement of Claim and provide further and better particulars. [2] When this interlocutory application came on for hearing, the court was required to determine two primary questions: (a) Should the DCT be directed to file an amended statement of claim that pleads the material facts of the DCT giving a director penalty notice (DPN) to Mr Guljas? (b) Should the DCT be directed to provide particulars of paragraphs 5, 13 and 14 of her statement of claim? [3] The plaintiff’s position was that the material facts of the DCT giving a director penalty notice (DPN) to Mr Guljas did not need to be pleaded [4] After discussion at the hearing, the plaintiff agreed to provide further particulars relating to paragraphs 5, 13 and 14 of the statement of claim, and I made an order to that effect. [5] Following the hearing, I made an order that the plaintiff file and serve an Amended Statement of Claim on or before 8 December 2025 to include the material facts of the plaintiff giving a director penalty notice to the defendant. -- 9 of 21 -- 2 [6] After that decision, I permitted the parties to address me on costs. [7] The defendant submits that the plaintiff should pay his costs in this proceeding to date on the standard basis up to 30 September 2025 and on the indemnity basis thereafter. [8] The plaintiff submits there is no reason to depart from the normal order that costs be paid on a standard basis. General Cost Principles [9] The starting point is that costs usually follow the event and are ordered to be paid on a standard basis.1 However, costs may be ordered to be paid on an indemnity basis under rule 704(1) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). [10] The issue is whether the circumstances of this matter warrant an indemnity, as opposed to a standard, costs order. [11] Principles relevant to the exercise of a discretion to order indemnity costs are set out in numerous authorities including Smits v Tabone [2007] QCA 337 (Smits). In Smits, Cullinane J summarised the principles by reference to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 as follows: 42. The normal order for costs is on the standard basis, and some special reason is required for any departure from that. 43. Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 discussed the subject generally and identified categories of cases in which it would be appropriate to make such an order. These categories were not meant to be exhaustive: "Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I[sic] instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp (supra)); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davis J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (unreported, Court of Appeal, NSW, Kirby P, Priestley JA, Cripps JA, No 40744/1992, 27 September 1993) and an award of costs of an indemnity basis against a 1 Uniform Civil Procedure Rules 1999 r 702 (‘UCPR’). -- 10 of 21 -- 3 contemnor (eg Megarry V-C in EMI Records (supra)). Other categories of cases are to be found in the reports." 44. In Rosniak v Government Insurance Office (1997) 41 NSWLR 608, the New South Wales Court of Appeal sounded a cautious note at 616: "… the Court requires some evidence of unreasonable conduct, albeit that it need not rise as high or vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity. Any shift to a general or common rule that indemnity costs should be the order of the day is a matter for the legislature or the rule-maker." 45. In Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359, Powell J expressed the view that an order for indemnity costs was warranted where in effect the proceedings had no reasonable prospect of success. 46. Rolfe A/JA (as he then was) in Huntsman Chemical Co Australia Ltd v International Pools Australia Pty Ltd (1995) 36 NSWLR 242 at 273 after reviewing the authorities said: "In my opinion the authorities support the proposition that where a party persists in a hopeless case, that justifies, for all the reasons given, the making of an order for costs on an indemnity basis." 47. See also cases such as Di Carlo v Dubois & Ors [2002] QCA 225. (emphasis added) [12] Unreasonable conduct alone is not sufficient. Conduct which justifies a departure from the ordinary order as to costs has been described as a “high hurdle to surmount”.2 [13] Indemnity costs may be ordered if a party’s conduct caused unnecessary inconvenience and expense to the defendant. The discretion to award indemnity costs might be exercised where there is what is referred to as a “relevant delinquency”: Oshlack v Richard River Council [1998] HCA 11; (1998) 193 CLR 72, at [44]. In Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009, Ward CJ explained that ““relevant delinquency” does not mean moral delinquency or some ethical shortcoming, but delinquency bearing a relevant relation to the conduct of the case”.3 Ward CJ set out circumstances in which indemnity costs may be awarded, including:4 “… where a party has made allegations that ought never to have been made; where an action has been commenced or continued where the plaintiff, properly advised, should have known the applicant had no chance of success; and where proceedings have been commenced in wilful disregard of known facts or clearly established law. An award of indemnity costs serves the purpose of compensating a party fully for costs incurred when the 2 Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2020] FCA 598 at [17]. 3 Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009 at [45]. 4 Ibid. -- 11 of 21 -- 4 Court takes the view that it was unreasonable for the party against whom the order was made to have subjected the innocent party to the expenditure of the case.” (emphasis added) [14] Martin J in The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] QSC 84; [2009] 2 Qd R 356, observed that the discretion to order costs must be exercised judicially in accordance with general legal principles pertaining to the law of costs. The exercise of the discretion comes down to a “fact-specific inquiry informed by various relevant considerations”.5 [15] Each case must be considered on its own facts. [16] Was the plaintiff’s conduct unreasonable enough to depart from the ordinary order as to costs? Consideration [17] Pleadings must include particulars necessary to:6 (a) define the issues for, and prevent surprise at, the trial; and (b) enable the opposite party to plead; and (c) support a matter specifically pleaded under rule 150. [18] The defendant submitted the plaintiff did not engage with him in a meaningful way regarding the pleading issue. The defendant submitted that it invited the plaintiff to amend its statement of claim on 4 occasions and invited the plaintiff to provide the necessary particulars on 3 occasions. Despite the provision of some particulars, the defendant considered the plaintiff did not address his concerns regarding the pleading of the giving of the DPN. [19] The plaintiff disputes the assertion she did not engage with the defendant and identifies that: (a) she filed answers to the defendant’s request for further and better particulars on 22 September 2025. (b) On 23 September 2025, the plaintiff, in correspondence, advised the defendant that the DPN was given to him on 7 November 2022 by post to the address recorded for him in ASIC’s records and provided a copy of the relevant DPN. 5 The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] QSC 84; 2 Qd R 356 at [38]. 6 UCPR r 157. -- 12 of 21 -- 5 (c) further responses to the defendant’s request for particulars issued on 29 September 2025. [20] In my view, the matters identified by the plaintiff demonstrate the plaintiff was engaging with the defendant. [21] On 30 September 2025, the defendant offered to consent to orders that the plaintiff file and serve an Amended Statement of Claim to plead the DPN issue and provide particulars of paragraphs 5, 13 and 14 of the Statement of Claim. The defendant did not seek any costs in the draft consent order. The plaintiff rejected that offer on 1 October 2025. [22] The defendant contends that, by the plaintiff’s failure to comply with rule 445 of the UCPR, the failure to respond to the defendant at all prior to filing the application, and its conduct of the application, the plaintiff should be ordered to pay the defendant’s costs on an indemnity basis. [23] The defendant submits the special or unusual feature which justifies a special cost order is the plaintiff’s entrenched opposition and imprudent refusal to compromise. [24] Ultimately, the defendant’s real complaint is that the plaintiff disagreed with his position. [25] This matter bears no relationship to matters where the merits of entire claims are in issue, where one party has repeatedly caused significant delay in the proceeding of the matter, or maintained a position which is undefendable. [26] It just so happened that the plaintiff had a different view on the method or mechanism under which that information around the giving of the DPN needed to be imparted to the defendant. [27] The plaintiff identified that the defendant filed the Application only one day after the time nominated by him in his UCPR rule 444 letter issued on 5 September 2025. That letter nominated the minimum time for a response of three business days. This is not a demonstration of significant delay or reluctance on the part of the plaintiff. [28] The Application was filed only 7 days after the defendant’s first correspondence to the plaintiff on 4 September 2025. There was no basis, as suggested by the defendant, -- 13 of 21 -- 6 that the defendant was concerned the plaintiff would have moved for default judgment prior to having given reasonable notice in a response to the defendant’s requests. There is no suggestion of this in any of the correspondence. [29] There is nothing in the communications between the parties in the lead up to the application which demonstrates the plaintiff’s refusal to accept the defendant’s offers were imprudent or irrational. [30] This is not a case where the plaintiff’s case demonstrates no reasonable cause of action, or where their refusal to provide the amended pleading was due to anything other than genuine contention that she was not required to do so. The plaintiff had an arguable, albeit unsuccessful, position. It was not wholly without merit. The plaintiff noted that the defendant did not identify, and the Court’s reasons did not find, any directly applicable authority which meant that the Plaintiff’s position and arguments were untenable. [31] I do not find the conduct of the plaintiff in resisting the application was unreasonable in the sense required to constitute relevant conduct that would be sufficient to justify the awarding of costs on an indemnity basis. [32] As reiterated by the plaintiff, the primary purpose in ordering the amended pleading was not due to any negative assessment of the merits of the matter but to facilitate the just and expedient resolution of the issues in dispute having regard to the specific facts of the case. Conclusion [33] The plaintiff’s conduct in maintaining no amendment was required to its pleading has not resulted in undue prolongation of the matter. There were merits to both sides’ arguments. The plaintiff provided detailed submissions and references to explain its reasoning. That fact that I found in against the plaintiff does not automatically result in an indemnity cost order being made. [34] There is no demonstrated basis to depart from the ordinary rule that the defendant’s costs should paid on the standard basis. [35] The plaintiff should pay the defendant’s costs of, and incidental to, the Application on a standard basis. -- 14 of 21 -- DISTRICT COURT OF QUEENSLAND CITATION: Deputy Commissioner of Taxation v Guljas [2026] QDC 13 PARTIES: DEPUTY COMMISSIONER OF TAXATION (plaintiff) & JAISON GULJAS (defendant) FILE NO/S: BD666/25 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 16 February 2026 DELIVERED AT: Brisbane HEARING DATE: Final submissions received 15 December 2025 JUDGE: Grigg DCJ ORDER: 1. The Plaintiff pay the Defendant’s costs of and incidental to the Application dated 11 September 2025 on a standard basis. CATCHWORDS: PROCEDURE – COSTS – INDEMNITY COSTS – RELEVANT CONSIDERATIONS GENERALLY – where the plaintiff declined to amend their pleadings – where an order was made for the plaintiff to amend their pleadings – whether the plaintiff’s argument against amending their pleadings justified the award of costs on an indemnity basis LEGISLATION: Tax Administration Act 1953 (Cth) Uniform Civil Procedure Rules 1999 (Qld) CASES: Australian Competition and Consumer Commission v Colgate- Palmolive Pty Ltd [2020] FCA 598 -- 15 of 21 -- 2 Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 801 Oshlack v Richard River Council (1998) 193 CLR 72; [1998] HCA 11 Smits v Tabone [2007] QCA 337 The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] 2 Qd R 356; [2009] QSC 84 COUNSEL: M. J. Downes for the defendant SOLICITORS: A. M. Roberson of ATO Litigation Services for the plaintiff Davey & Associates or the defendant Introduction [1] The plaintiff, the Deputy Commissioner of Taxation (DCT), seeks to recover a director penalty from the defendant, Mr Guljas, pursuant to section 269-20 of Schedule 1 of the Tax Administration Act 1953 (Cth) (TAA). On 11 September 2025 the defendant applied for orders requiring the plaintiff to amend her Statement of Claim and provide further and better particulars. [2] When this interlocutory application came on for hearing, the court was required to determine two primary questions: (a) Should the DCT be directed to file an amended statement of claim that pleads the material facts of the DCT giving a director penalty notice (DPN) to Mr Guljas? (b) Should the DCT be directed to provide particulars of paragraphs 5, 13 and 14 of her statement of claim? [3] The plaintiff’s position was that the material facts of the DCT giving a director penalty notice (DPN) to Mr Guljas did not need to be pleaded [4] After discussion at the hearing, the plaintiff agreed to provide further particulars relating to paragraphs 5, 13 and 14 of the statement of claim, and I made an order to that effect. [5] Following the hearing, I made an order that the plaintiff file and serve an Amended Statement of Claim on or before 8 December 2025 to include the material facts of the plaintiff giving a director penalty notice to the defendant. -- 16 of 21 -- 2 [6] After that decision, I permitted the parties to address me on costs. [7] The defendant submits that the plaintiff should pay his costs in this proceeding to date on the standard basis up to 30 September 2025 and on the indemnity basis thereafter. [8] The plaintiff submits there is no reason to depart from the normal order that costs be paid on a standard basis. General Cost Principles [9] The starting point is that costs usually follow the event and are ordered to be paid on a standard basis.1 However, costs may be ordered to be paid on an indemnity basis under rule 704(1) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). [10] The issue is whether the circumstances of this matter warrant an indemnity, as opposed to a standard, costs order. [11] Principles relevant to the exercise of a discretion to order indemnity costs are set out in numerous authorities including Smits v Tabone [2007] QCA 337 (Smits). In Smits, Cullinane J summarised the principles by reference to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 as follows: 42. The normal order for costs is on the standard basis, and some special reason is required for any departure from that. 43. Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 discussed the subject generally and identified categories of cases in which it would be appropriate to make such an order. These categories were not meant to be exhaustive: "Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I[sic] instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp (supra)); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davis J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (unreported, Court of Appeal, NSW, Kirby P, Priestley JA, Cripps JA, No 40744/1992, 27 September 1993) and an award of costs of an indemnity basis against a 1 Uniform Civil Procedure Rules 1999 r 702 (‘UCPR’). -- 17 of 21 -- 3 contemnor (eg Megarry V-C in EMI Records (supra)). Other categories of cases are to be found in the reports." 44. In Rosniak v Government Insurance Office (1997) 41 NSWLR 608, the New South Wales Court of Appeal sounded a cautious note at 616: "… the Court requires some evidence of unreasonable conduct, albeit that it need not rise as high or vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity. Any shift to a general or common rule that indemnity costs should be the order of the day is a matter for the legislature or the rule-maker." 45. In Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359, Powell J expressed the view that an order for indemnity costs was warranted where in effect the proceedings had no reasonable prospect of success. 46. Rolfe A/JA (as he then was) in Huntsman Chemical Co Australia Ltd v International Pools Australia Pty Ltd (1995) 36 NSWLR 242 at 273 after reviewing the authorities said: "In my opinion the authorities support the proposition that where a party persists in a hopeless case, that justifies, for all the reasons given, the making of an order for costs on an indemnity basis." 47. See also cases such as Di Carlo v Dubois & Ors [2002] QCA 225. (emphasis added) [12] Unreasonable conduct alone is not sufficient. Conduct which justifies a departure from the ordinary order as to costs has been described as a “high hurdle to surmount”.2 [13] Indemnity costs may be ordered if a party’s conduct caused unnecessary inconvenience and expense to the defendant. The discretion to award indemnity costs might be exercised where there is what is referred to as a “relevant delinquency”: Oshlack v Richard River Council [1998] HCA 11; (1998) 193 CLR 72, at [44]. In Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009, Ward CJ explained that ““relevant delinquency” does not mean moral delinquency or some ethical shortcoming, but delinquency bearing a relevant relation to the conduct of the case”.3 Ward CJ set out circumstances in which indemnity costs may be awarded, including:4 “… where a party has made allegations that ought never to have been made; where an action has been commenced or continued where the plaintiff, properly advised, should have known the applicant had no chance of success; and where proceedings have been commenced in wilful disregard of known facts or clearly established law. An award of indemnity costs serves the purpose of compensating a party fully for costs incurred when the 2 Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2020] FCA 598 at [17]. 3 Bale v Kimberley Developments Pty Ltd (No 2) [2022] NSWSC 1009 at [45]. 4 Ibid. -- 18 of 21 -- 4 Court takes the view that it was unreasonable for the party against whom the order was made to have subjected the innocent party to the expenditure of the case.” (emphasis added) [14] Martin J in The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] QSC 84; [2009] 2 Qd R 356, observed that the discretion to order costs must be exercised judicially in accordance with general legal principles pertaining to the law of costs. The exercise of the discretion comes down to a “fact-specific inquiry informed by various relevant considerations”.5 [15] Each case must be considered on its own facts. [16] Was the plaintiff’s conduct unreasonable enough to depart from the ordinary order as to costs? Consideration [17] Pleadings must include particulars necessary to:6 (a) define the issues for, and prevent surprise at, the trial; and (b) enable the opposite party to plead; and (c) support a matter specifically pleaded under rule 150. [18] The defendant submitted the plaintiff did not engage with him in a meaningful way regarding the pleading issue. The defendant submitted that it invited the plaintiff to amend its statement of claim on 4 occasions and invited the plaintiff to provide the necessary particulars on 3 occasions. Despite the provision of some particulars, the defendant considered the plaintiff did not address his concerns regarding the pleading of the giving of the DPN. [19] The plaintiff disputes the assertion she did not engage with the defendant and identifies that: (a) she filed answers to the defendant’s request for further and better particulars on 22 September 2025. (b) On 23 September 2025, the plaintiff, in correspondence, advised the defendant that the DPN was given to him on 7 November 2022 by post to the address recorded for him in ASIC’s records and provided a copy of the relevant DPN. 5 The Beach Retreat Pty Ltd v Mooloolaba Marina Ltd [2009] QSC 84; 2 Qd R 356 at [38]. 6 UCPR r 157. -- 19 of 21 -- 5 (c) further responses to the defendant’s request for particulars issued on 29 September 2025. [20] In my view, the matters identified by the plaintiff demonstrate the plaintiff was engaging with the defendant. [21] On 30 September 2025, the defendant offered to consent to orders that the plaintiff file and serve an Amended Statement of Claim to plead the DPN issue and provide particulars of paragraphs 5, 13 and 14 of the Statement of Claim. The defendant did not seek any costs in the draft consent order. The plaintiff rejected that offer on 1 October 2025. [22] The defendant contends that, by the plaintiff’s failure to comply with rule 445 of the UCPR, the failure to respond to the defendant at all prior to filing the application, and its conduct of the application, the plaintiff should be ordered to pay the defendant’s costs on an indemnity basis. [23] The defendant submits the special or unusual feature which justifies a special cost order is the plaintiff’s entrenched opposition and imprudent refusal to compromise. [24] Ultimately, the defendant’s real complaint is that the plaintiff disagreed with his position. [25] This matter bears no relationship to matters where the merits of entire claims are in issue, where one party has repeatedly caused significant delay in the proceeding of the matter, or maintained a position which is undefendable. [26] It just so happened that the plaintiff had a different view on the method or mechanism under which that information around the giving of the DPN needed to be imparted to the defendant. [27] The plaintiff identified that the defendant filed the Application only one day after the time nominated by him in his UCPR rule 444 letter issued on 5 September 2025. That letter nominated the minimum time for a response of three business days. This is not a demonstration of significant delay or reluctance on the part of the plaintiff. [28] The Application was filed only 7 days after the defendant’s first correspondence to the plaintiff on 4 September 2025. There was no basis, as suggested by the defendant, -- 20 of 21 -- 6 that the defendant was concerned the plaintiff would have moved for default judgment prior to having given reasonable notice in a response to the defendant’s requests. There is no suggestion of this in any of the correspondence. [29] There is nothing in the communications between the parties in the lead up to the application which demonstrates the plaintiff’s refusal to accept the defendant’s offers were imprudent or irrational. [30] This is not a case where the plaintiff’s case demonstrates no reasonable cause of action, or where their refusal to provide the amended pleading was due to anything other than genuine contention that she was not required to do so. The plaintiff had an arguable, albeit unsuccessful, position. It was not wholly without merit. The plaintiff noted that the defendant did not identify, and the Court’s reasons did not find, any directly applicable authority which meant that the Plaintiff’s position and arguments were untenable. [31] I do not find the conduct of the plaintiff in resisting the application was unreasonable in the sense required to constitute relevant conduct that would be sufficient to justify the awarding of costs on an indemnity basis. [32] As reiterated by the plaintiff, the primary purpose in ordering the amended pleading was not due to any negative assessment of the merits of the matter but to facilitate the just and expedient resolution of the issues in dispute having regard to the specific facts of the case. Conclusion [33] The plaintiff’s conduct in maintaining no amendment was required to its pleading has not resulted in undue prolongation of the matter. There were merits to both sides’ arguments. The plaintiff provided detailed submissions and references to explain its reasoning. That fact that I found in against the plaintiff does not automatically result in an indemnity cost order being made. [34] There is no demonstrated basis to depart from the ordinary rule that the defendant’s costs should paid on the standard basis. [35] The plaintiff should pay the defendant’s costs of, and incidental to, the Application on a standard basis. -- 21 of 21 --