Michael H O'Brien v Commonwealth of Australia - [2000] NSWDDT 2

CITATION: Michael H O'Brien v Commonwealth of Australia [2000] NSWDDT 2

PARTIES: Michael H O'Brien

Commonwealth of Australia

TITLE OF COURT: Dust Diseases Tribunal of New South Wales

JURISDICTION: Original

MATTER NO/S: 203 of 1998

DELIVERED ON: 18 July 2000

DELIVERED AT: Sydney

HEARING DATE: 18 July 2000

JUDGMENT OF: O'Meally P

NUMBER OF PARAGRAPHS: 18

CATCHWORDS: Dust Diseases Proceedings - Supreme Court Rules Pt 52 r 22(4) - indemnity costs - offer of compromise - statement of claim amended by consent after offer - amendment altered basis of offer of compromise - judgment significantly in excess of offer of compromise - judgment not on the claim to which the offer related - indemnity costs refused

Dust Diseases Proceedings - application for stay - Dust Diseases Tribunal Act s 32 - party dissatisfied in point of law may appeal to Court of Appeal - excessive damages a point of law - no objection taken to quantum of general damages - special damages appropriately proportionate to general damages - stay refused

REPRESENTATION
PLAINTIFF
J L Sharpe instructed by Turner Freeman

DEFENDANT
G P F Rundle instructed by the Australian Government Solicitor

Dust Diseases Tribunal of New South Wales

Matter No 203 of 1998

Michael H O'Brien

Commonwealth of Australia

18 July 2000

JUDGMENT
O'MEALLY J

On 12 July last I entered judgment for the plaintiff for provisional damages in the sum of $362,804.35. Now before me is an application by the plaintiff for indemnity costs and an application by the defendant for a stay.
On 13 March 2000 the plaintiff made an offer to compromise his claim by accepting the sum of $160,000 plus costs. The offer was expressed to be made in accordance with Pt 22 of the Supreme Court Rules which have been adopted and apply in the Tribunal. That notice was served in accordance with Pt 52 r 22(4) which relevantly provides:
(4) Where an offer is made by a plaintiff and not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim to which the offer relates no less favourable to the plaintiff than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall, subject to rule 33, be entitled to an order against the defendant for the plaintiff's costs in respect of the claim from the day on which the offer was made, assessed on an indemnity basis in addition to his costs incurred before and on that day, assessed on a party and party basis.
The plaintiff says, because he recovered judgment for a sum greater than his offer of compromise, he is entitled to costs assessed from 13 March 2000 on an indemnity basis in addition to the costs incurred before and on that day.
The plaintiff's claim was one for provisional damages pursuant to s 11A of the Dust Diseases Tribunal Act (the Act). The plaintiff's proceedings commenced by the filing of a statement of claim on 24 November 1998. Paragraph 9 of the statement of claim recited that the plaintiff claimed provisional damages for asbestos related pleural disease, pleural thickening, asbestos related pleural plaques and folded atelectasis. It also recited that pursuant to s 11A he sought to claim further damages should he develop any of asbestosis, mesothelioma, asbestos induced carcinoma or lung cancer.
The hearing of the plaintiff's action began on 9 March 2000.
For reasons which are now unnecessary to relate the hearing was interrupted and resumed on 20 June 2000. On 13 June 2000 the plaintiff gave notice to the defendant that he would seek to amend the statement of claim so as to claim provisional damages as well for asbestosis, and consequentially the claim for further damages in respect of asbestosis would be deleted. On 20 June 2000 the plaintiff's statement of claim was amended with the consent of the defendant, so that the dust related conditions in respect of which the plaintiff sought provisional damages were pleural disease, pleural thickening, asbestos related pleural plaques, folded atelectasis and asbestosis. The dust related conditions in respect of which he sought to claim further damages in the future, if they developed, then were any of mesothelioma, asbestos induced carcinoma or lung cancer.
The principles applying to indemnity costs are set out in the judgment of Mason P in Morgan v Johnson (1998) 44 NSWLR 578 at 581 to 582. They are awarded to encourage settlement on a realistic basis and thus to save court time and the expenses of litigation. The award of indemnity costs involves the exercise of a discretion which, of course, must be exercised judicially. The question is not whether a plaintiff has proved an entitlement to an order for indemnity costs, but whether a defendant has dislodged the plaintiff's right to such an order; neither is the question to be treated as if the order were penal rather than compensatory (see Kirby P and Meagher JA in Marsland v Andjelic [No 2] (1993) 32 NSWLR 649 at 654).
It is plainly correct that the plaintiff recovered judgment for an amount significantly in excess of his offer of compromise, but, as it seems to me, the question here to be considered is whether the plaintiff has obtained a “judgment on the claim to which the offer relates” greater than the offer. The relevant words are the claim to which the offer relates. A number of authorities have been referred to me. These, it is said, lead to the conclusion that the phrase means the claim brought by the plaintiff as distinct from the matters in respect of which his claim is brought; that is to say the plaintiff's claim should be regarded as a claim for damages for dust related disease rather than one for damages for asbestos related pleural disease, pleural thickening, asbestos related pleural plaques and folded atelectasis.
The cases to which I have been referred involved claims for damages in respect of single events or a series of single events. They were not, nor could they have been, claims for provisional damages. Provisional damages are available only in the Dust Diseases Tribunal.
At the times the offer of compromise were made and expired there was no claim by the plaintiff for damages for asbestosis. In Ettingshausen v Australian Consolidated Press Ltd (1995) 38 NSWLR 404, speaking of the rule relating to offers of compromise, Gleeson CJ and Priestley JA said at 408: “It is not a compromise of a hearing, or of one round in a bout of litigation. The appellant had only one claim, and it was that which he offered to compromise”. Though Kirby P was in dissent as to whether indemnity costs should be awarded he did consider the meaning to be assigned to the word “claim”. At 417 he said: “The “claim” in this context is not defined. But, clearly enough, it refers to the claim as expressed in the statement of claim.” As I read the majority judgment there was no disagreement with that view.
My view is that the claim which the plaintiff offered to compromise is not the claim upon which he recovered judgment. It is, however, argued for the plaintiff that that is not the end of the matter, and if the plaintiff's entitlement to provisional damages, disregarding that component awarded for asbestosis, exceeded the offer then he is entitled to an order for indemnity costs. Such a course was said to have been followed by Dunford J in Van Doore v Mendez & Ors [No 2] (unreported, NSWSC, 30 June 1997, 13772 of 1990). In that case, after issuing a statement of claim, the plaintiff amended the Pt 33 r 8A particulars claiming damages for matters which had not been included at the time an offer of compromise had been made. It was a personal injury case. Consequent upon injury the plaintiff claimed damages, amongst other things, for home alteration, home maintenance and holiday expenses which had not been included in the Pt 33 particulars at the time the offer of compromise was made. Notwithstanding that, his Honour thought it appropriate to make an order for indemnity costs and did so. He did consider that amendments to Pt 33 particulars after an offer of compromise could be significant, because such an amendment could amount to changing the basis on which the offer of compromise had been made. In the circumstances of that case his Honour was of the view that the amendments did not amount to changing the basis on which the offer of compromise had been made.
In this case the amendment to the statement of claim did amount to changing the basis on which the offer of compromise had been made.
The defendant, however, says the fact that the claim was for provisional damages pursuant to s 11A of the Act distinguished it from the type of claim referred to at 408 of Ettingshausen; that is to say it was not an offer to compromise only one claim, for here the plaintiff has claimed, and has been given the opportunity to return to the Tribunal to claim further damages in the event that certain other dust related conditions, or any of them, develop.
I do not agree that an order for indemnity costs may not be made in a case where provisional damages have been awarded. Subject to any appeal which might be made this litigation is complete. If the plaintiff develops any of the specified dust related conditions he will need to commence fresh proceedings to claim further damages. This case was not “one round in a bout of litigation” and if the plaintiff does seek further damages he will be making a further claim.
I am of the view that no order for indemnity costs should be made. The fact that a plaintiff may return at a later stage for further damages does not destroy the entitlement to indemnity costs in an appropriate case. In this case the plaintiff has failed to obtain indemnity costs because the claim upon which he made the offer of compromise was not the claim upon which he was awarded damages.
The defendant has applied for a stay on the ground that the amounts awarded for special damages are excessive. S 32 of the Act relevantly provides:
(1) If a party to any proceedings before the Tribunal is dissatisfied in point of law with a decision of the Tribunal, the party may appeal against the decision to the Court of Appeal.
The award of damages which are excessive is an error of law in respect of which an appeal lies.
The amounts ordered for special damages are, in my view, appropriately proportionate to the amount of general damages awarded and take account of limitations and disability which now are caused and in the future will be caused by obstructive disease and by restrictive disease. By reason of the concession that no objection is taken to the amount awarded for general damages I find it difficult to see that the special damages are excessive. If I be wrong in this, I think the appropriate course for the defendant to pursue is to apply for a stay to the Court of Appeal; but nothing has been placed before me to move me to grant a stay.
In view of the fact that the application brought by each party has been dismissed I think it appropriate to make no order for costs of this application, but upon that I shall hear counsel.
[COUNSEL ADDRSSED]
I am not persuaded that I should alter my preliminary view and the order is that each party will bear his and its costs of the applications heard today.

Mr J L Sharpe instructed by Turner Freeman appeared for the plaintiff

Mr G P F Rundle instructed by Australian Government Solicitor appeared for the defendant