Amaca Pty Ltd v CSR Ltd (Costs ruling) - [2018] VSC 67

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

S CI 2003 05689

AMACA PTY LTD (ACN 000 035 512) (Under NSW Administered Winding Up)		Plaintiff
v
CSR LTD (ACN 000 001 276)		First Defendant
and
BRADFORD INSULATION INDUSTRIES PTY LTD (ACN 000 078 357)	Second Defendant

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JUDGE:	MACAULAY J
WHERE HELD:	Melbourne
DATE OF HEARING:	31 January 2018
DATE OF JUDGMENT:	21 February 2018
CASE MAY BE CITED AS:	Amaca Pty Ltd v CSR Ltd & Anor (Costs ruling)
MEDIUM NEUTRAL CITATION:	[2018] VSC 67

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COSTS – Proceeding settled on terms the defendants will pay the plaintiff’s costs to be agreed or as determined by the Court – Application for indemnity costs – Where the defendants rejected the plaintiff’s earlier offers of compromise – Where the settlement sum was significantly greater than the rejected offers – Whether a court can award indemnity costs after a ‘no less favourable’ settlement outcome – Supreme Court Act 1986, s 24(1) – Supreme Court (General Civil Procedure) Rules 2015, rr 63.28 and 63.31 – Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298 considered – Ugly TribeCo Pty Ltd v Sikola [2001] VSC 189 considered – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Ruskin QC with Mr D Wallis	DLA Piper Australia
For the Defendants	Mr B F Quinn QC with Mr B Barr	Collin Biggers & Paisley

HIS HONOUR:

Introduction

A question of principle arising from this application is whether a plaintiff who obtains by settlement a litigation outcome more favourable than one it had previously offered to accept should be awarded indemnity costs from the date of its offer. That question arises in the context briefly described below.

Insulation products manufactured by a partnership comprising James Hardie Industries Ltd, now Amaca Pty Ltd (Amaca), and CSR Ltd (CSR) were installed in various power stations operated by the State Electricity Commission of Victoria (SECV). Amaca contributed money to the settlement of claims brought by persons who claimed to have contracted dust diseases from inhaling asbestos dust emanating from insulation at the SECV’s installations. In this proceeding, Amaca (as plaintiff) sought contribution from its former partner, CSR (the defendant), toward the settlement monies it paid to 204 such claimants.

On 21 October 2015 I gave reasons for judgment in respect of eight of the 204 contribution claims,[1] having earlier decided to hear and determine those eight claims as separate questions under r 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules). I did so in the hope that by determining those eight claims, selected by the parties as giving rise to many of the disputed questions inherent in the remaining body of claims, the parties might be assisted in resolving many if not all of the remaining claims. It was agreed by the parties that I would not determine the costs of resolving the eight claims…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] VSC 67
Decision Date: 21 February 2018

CaseChat Overview and Summary

Amaca Pty Ltd initiated legal action against CSR Ltd, and the dispute was settled on terms where CSR Ltd agreed to pay Amaca Pty Ltd’s costs, to be either mutually agreed upon or determined by the court. Amaca Pty Ltd subsequently applied for indemnity costs, citing that CSR Ltd had previously rejected earlier offers of compromise that were significantly lower than the settlement sum. The central legal issue was whether the court could award indemnity costs under the circumstances, despite the settlement resulting in a more favourable outcome for Amaca Pty Ltd than the rejected offers.

The court considered relevant statutes and rules, including sections of the Supreme Court Act 1986 and rules under the Supreme Court (General Civil Procedure) Rules 2015. It also examined the cases of Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) and Ugly Tribe Co Pty Ltd v Sikola. The court determined that the statutory provisions and precedents did not support the award of indemnity costs where the settlement resulted in a more favourable outcome for the plaintiff than the earlier rejected offers. As such, the application for indemnity costs was refused.

The court ruled that the settlement terms, whereby CSR Ltd agreed to pay Amaca Pty Ltd’s costs, were to be determined by the court if not mutually agreed. Given the refusal of the application for indemnity costs, the parties were left to resolve the quantum of costs in accordance with the settlement terms. The court’s decision highlighted the importance of the terms of settlement and the limitations on awarding indemnity costs when the settlement outcome is not less favourable to the plaintiff.

Orders