Underlying suit alleged contractual breach, negligence, deceptive conduct
Following the dismissal of claims against Philips Electronics Australia Limited, Queensland’s Supreme Court ordered the unsuccessful plaintiff to pay its costs of the proceeding on the standard basis until 8 November 2024 and on the indemnity basis afterward.
The plaintiff in QRAD Pty Ltd v Philips Electronics Australia Limited [2026] QSC 5, owned a magnetic resonance imaging (MRI) machine that quenched five times.
The plaintiff claimed damages from the first defendant, Philips – the machine’s manufacturer, supplier, and servicer – for repair, replacement, and business interruption costs arising from the machine’s offline status during certain periods.
Specifically, the plaintiff claimed:
On 28 November 2025, the Supreme Court dismissed the plaintiff’s claims, granted Philips’ counterclaim, awarded Philips $557,488.79 plus interest, and issued directions about the costs of proceeding.
Philips wanted the plaintiff to pay its indemnity costs from either:
The plaintiff accepted that it should pay the first defendant’s costs of the proceeding. However, the plaintiff alleged that it should pay standard costs in relation to both offers and that it reasonably rejected both at the times made.
According to the plaintiff, at the time of the formal offer, it had an outstanding request for Philips to submit data logs of the machine, which the plaintiff’s expert had advised would be helpful.
The Supreme Court of Queensland ordered the plaintiff to pay the first defendant standard costs of the proceeding, including reserved costs, until 8 November 2024, and indemnity costs thereafter.
The Supreme Court noted that the parties did not assert that this case met the requirements of r 361A(1) of the Uniform Civil Procedure Rules 1999 (UCPR).
Thus, according to the Supreme Court, the plaintiff should, by default, pay the first defendant’s indemnity costs from the date of the service of the offer unless a standard costs order was appropriate.
In the circumstances, the Supreme Court saw no reason to interfere with the regular operation of the rules. The Supreme Court determined that this case met the requirements of r 361A(1) UCPR and that no other order under r 361A(2) UCPR was appropriate.
In response to the plaintiff’s argument about data logs, the Supreme Court noted that the first defendant did not send the logs until after the offer’s expiry.
The Supreme Court acknowledged that an outstanding disclosure at the time of the making of an offer might be a reason to consider the rejection of the offer reasonable in some cases. However, the Supreme Court ruled that this case was different.
The Supreme Court noted that the plaintiff’s case failed primarily because the first defendant did not owe the duties it allegedly owed to the plaintiff and allegedly breached and because the first defendant did not make misrepresentations.
The Supreme Court added that the data logs were not directly relevant to determining the case.
