Cape Byron Power 1 Pty Ltd v Downer Energy Systems Pty Limited

Cape Byron Power 1 Pty Ltd v Downer Energy Systems Pty Limited involved a complex dispute between the plaintiffs and the defendants. The plaintiffs, Cape Byron Power 1 Pty Ltd and others, sought damages and other remedies against the defendants for alleged breaches of contract and other wrongs. The case was heard in the Supreme Court of New South Wales, where the plaintiffs were successful on some claims but not others. The central issues for the court were the determination of the appropriate percentage reduction of the plaintiffs’ costs, the applicability of indemnity costs, and the enforceability of a contractual right to indemnity costs.

The court first considered the appropriate percentage reduction of the plaintiffs' costs, given their partial success. The plaintiffs proposed a 10 per cent reduction while the defendants suggested a 30 per cent reduction. The court concluded that an 85 per cent recovery was appropriate, balancing the plaintiffs' success on the most substantial issues against their failure on some claims. Next, regarding indemnity costs, the court examined the Calderbank offer made by the plaintiffs and whether it was more favourable than the judgment. The court determined that the judgment was more favourable to the plaintiffs in terms of costs incurred at the time of the offer, and it was not unreasonable for the defendants to reject the offer. Lastly, the court considered whether to enforce a contractual right to indemnity costs as per a Deed of Guarantee. The court found that the Deed did not plainly and unambiguously provide for indemnity costs and that the plaintiffs had not foreshadowed such a claim. Therefore, the court declined to exercise its discretion to award indemnity costs on this basis.

The court made several orders. The first and second defendants were ordered to pay 85 per cent of the first plaintiffs' costs on the standard basis, while the third defendant was ordered to pay 85 per cent of the first plaintiffs' costs on the indemnity basis. Specific costs associated with certain affidavits were excluded from the costs orders. Finally, the third plaintiff was ordered to pay the first and second defendants’ costs of defending the third plaintiff's claims on the standard basis.