Coyte v Norman; Centre Capital (Newcastle) Pty Ltd v B Scorer

The case of Coyte v Norman; Centre Capital (Newcastle) Pty Ltd v B Scorer involved complex issues of costs and declarations in relation to two distinct proceedings. In the first proceeding, the plaintiffs/cross-defendants had failed in their claim but succeeded in defending a cross-claim. They sought an order for costs on the basis that they were substantially successful in defending the cross-claim, arguing that they were in effect defendants who had successfully defended against the cross-claim. They also sought indemnity costs based on a rejected Calderbank offer. The second proceeding involved the plaintiffs seeking a declaration of breach of director’s duty against the defendant, although they did not succeed in establishing any claim for loss.

The court was tasked with determining whether the plaintiffs/cross-defendants were entitled to costs following the events in both the statement of claim and the cross-claim. The court needed to assess whether it was unreasonable for the cross-claimants to reject the Calderbank offer and, if so, whether this justified an order for indemnity costs. Additionally, the court had to decide whether the plaintiffs in the second proceeding were entitled to costs given their success in establishing a breach of director’s duty but their failure to establish any claim for loss. Finally, the court needed to consider whether a declaration of breach of director’s duty should be made, given that it would lack utility and be prefatory to a claim for damages.

In its decision, the court held that the plaintiffs/cross-defendants were not entitled to indemnity costs based on the rejected Calderbank offer, as it was not unreasonable for the cross-claimants to reject it. Regarding the second proceeding, the court found that the plaintiffs were entitled to costs for their success in establishing a breach of director’s duty, despite their failure to establish any claim for loss. The court also determined that a declaration of breach of director’s duty should not be made, as it would lack utility and be prefatory to a claim for damages.

The court made orders that the plaintiffs/cross-defendants were not entitled to indemnity costs, and that the plaintiffs in the second proceeding were entitled to costs. Additionally, the court declined to make a declaration of breach of director’s duty.