(re Dawson) Novek v Amaca Pty Limited (2)

[2008] NSWDDT 15

Dust Diseases Tribunal

of New South Wales

CITATION:	(re Dawson) Novek v Amaca Pty Limited (2) [2008] NSWDDT 15
PARTIES:	Carina Maria Novek as legal personal representative of the Estate of the Late Margaret Denise Dawson Amaca Pty Limited
MATTER NUMBER(S):	7152 of 2007
JUDGMENT OF:	Kearns J
CATCHWORDS:	DUST DISEASES TRIBUNAL :- costs indemnity costs Calderbank offer reserved costs conduct of the parties
DATES OF HEARING:	20 May 2008
DATE OF JUDGMENT:	26 May 2008
LEGAL REPRESENTATIVES:	Ms A Katzmann SC, instructed by Turner Freeman, appeared for the plaintiff. Mr D Russell SC, instructed by DLA Phillips Fox, appeared for the defendant.

JUDGMENT:

1. On 25 May 2008, there were two applications argued before me, though no notices of motion had been filed.

Plaintiff’s application for indemnity costs

2. The first was the plaintiff’s application for indemnity costs. On 22 January 2008, the plaintiff made a Calderbank offer to settle for $500,000 plus costs. The letter was a standard Calderbank letter and no point is taken as to any inadequacy in its form. The application was resisted essentially on three bases:

(1) the stage of the proceedings when the offer was made;

(2) the short time that the offer was left open for acceptance;

(3) the defendant’s prospects of success and the genuineness and force of its arguments.

3. I do not think any of those three bases, either alone or together, warrant denying the plaintiff the relief she seeks. By 22 January 2008, the matter had been listed for hearing on 7 and 8 February 2008. On 22 January 2008, the hearing was brought forward to 24 January 2008. It was brought forward, I assume, because of a deterioration in Mrs Dawson’s health.

4. By 22 January 2008, the whole of the plaintiff’s affidavit evidence had been served. True it is that, when the offer was made, the defendant had not had an opportunity to cross-examine the deponents and the offer was to expire before that could occur. There is nothing novel in that. Offers of compromise and Calderbank offers are frequently, indeed mostly, made and lapse before evidence is taken and I do not see that as a basis for refusing the plaintiff’s application.

5. The offer allowed the defendant two days or less in which to accept it. It was made on 22 January. It was to lapse on 24 January at 10.00am. I do not think this is an unreasonable time in the circumstances for the defendant to consider the offer. It made no protest about the inadequacy of the time. If it did not know the value of the case then, it never would. The defendant must have been fully prepared for hearing before the offer was made. It went to mediation, apparently in good faith and fully on top of the case, in November 2007. By 22 January, it had received the totality of the plaintiff’s affidavit evidence. It should have needed less than one day to make up its mind whether or not to accept the offer.

6. There is no doubt the defendant had prospects of success on the s.15B point. Indeed, there could be nothing wrong with its being advised, if it was, that it had reasonable prospects of success. It may even receive that advice as to the prospects of a successful appeal. There was no guidance in the cases as to how the section should be interpreted. The defendant’s arguments were strong arguments.

7. None of this, in my view, goes in any way towards depriving the plaintiff of an indemnity order. These were all matters the defendant undoubtedly weighed in considering the offer and it decided to take the risk of conducting the litigation. The plaintiff should not be deprived of the appropriate compensatory order for the result of that risk going against the defendant.

The plaintiff is entitled to indemnity costs.

The second application

8. The second application centred around costs reserved by Curtis J on 20 December 2007. They were costs of a motion by the plaintiff seeking relief as follows:

(1) severance of the s.15B issue so that it could be determined separately as a matter of law by the Tribunal;

(2) discovery;

(3) interrogatories.

9. The plaintiff obtained its relief as to discovery and interrogatories and should have costs associated with that. That leaves the question as to the costs of the motion related to the s.15B issue. It is necessary to set out some history which I do in chronological form with some commentary. Reference to AJG and to CGG are references to the plaintiff’s solicitor and the defendant’s solicitor respectively.

10. 24 May 2007 - Statement of Claim filed.

11. 26 September 2007 - service of plaintiff’s particulars and affidavit of 26 September.

Letter from AJG to CGG seeking removal of the matter from the claims resolution process (CRP) as not suitable for mediation apparently because of a substantial claim under s.15B.

12. 2 November 2007 - letter AJG to CGG pointing out failure of the defendant to file its reply and notifying of intention to apply to remove from CRP under clause 22(1)(c) of the Dust Diseases Tribunal Regulation 2007.

Further letter with unsealed notice of motion and affidavit and notifying that matter before the President on 5 November.

13. 5 November 2007 - defendant’s reply. As the filing of this reply was now done, this rectified the defendant’s failure to that point and took away the plaintiff’s ground under clause 22(1)(c).

Attached to defendant’s reply was an occupational therapy report. It dealt with the s.15B claim raising some of the matters that were argued before me at the main hearing.

Before the President, the plaintiff argued for removal from the CRP on the basis of the ambit of the dispute. Defendant opposed this, thereby making it not possible for the Tribunal to make an order under any provision of clause 22.

Defendant stated that, subject to proof of exposure, the only issue was damages.

14. 6 November 2007 - amended reply. It contained an admission consistent with the concession before O’Meally P, but added a requirement of the need to prove the diagnosis of mesothelioma.

15. 8 November 2007 - letter AJG to CGG stating reasons why the matter should go to trial rather than mediation. In my view, these were sound reasons and always remained so.

16. 13 November 2007 - letter CGG to AJG. Diagnosis of mesothelioma admitted and admissions made consistent with that before O’Meally P on 5 November 2007.

17. 15 November 2007 - defendant’s second amended reply. This document outlined in essence the arguments on s.15B that were presented to me.

Letter to AJG to CGG. This was a long letter. It included the substantive terms of clause 22(1)(b) that the claim raised novel issues that were unlikely to be resolved by the CRP. In my view, that assertion was undoubtedly correct and that remained so.

18. 16 November 2007 - letter CGG to AJG. This asserted that the defendant did not believe that the claim raised a novel issue. This assertion is frankly contrary to the argument as presented to me, contrary to the submission that was made in relation to the indemnity costs application and contrary to the fact.

19. The arguments that were put before me were to the effect that there was no guidance as to how this section was to be interpreted and that on its proper construction it could not apply to grant relief in the circumstances of this case. This was because of the care being provided by somebody who was not the primary care giver. It was crystal clear all along, in my view, that the claim did raise novel issues.

20. The defendant’s assertion that the claim did not raise novel issues was incorrect and its resistance to the plaintiff’s assertion kept the matter in the CRP. Had the defendant been realistic in acknowledging the novelty of the claim, the matter would have been before a judge of the Tribunal earlier than it was.

21. 19 November 2007 - mediation.

22. 22 November 2007 - Certificate of mediator that, subject to proof of exposure, the only issue is damages, the parties agreed that the plaintiff suffers mesothelioma and “All other facts relevant to the issue of damages remain in dispute”. This last observation cannot have been correct in a literal sense. If it was, it does no credit to the defendant for reasons I explain in paragraph 25.

23. 6 December 2007 - letter AJG to CGG. Notice of intention to seek separate determination of the s.15B issue.

Letter CGG to AJG. Opposes separate determination. The plaintiff’s claim under s.15B was “only one of a number of contentious issues in the matter”. This is a fairly amazing assertion as not one other contentious issue was disclosed with this assertion.

Letter AJG to CGG pointing out that there were no other contentious issues.

Further letter AJG to CGG enclosing notice of motion and affidavit.

24. In my view, it was not unreasonable at this stage that the plaintiff took the course that it did. The entitlement to s.15B damages was always going to be an issue. The defendant had not ostensibly shown any sign of moving on that point. It had a perfectly legitimate right to take the view that the plaintiff was not entitled to s.15B damages and to stick with that view. It was not legitimate for it, however, to raise false issues such as “a number of contentious issues”. When it raised that point, that was in the face of a certificate of the mediator that, subject to proof of exposure, the only issue was damages. The only issue of any significance on damages was the entitlement to s.15B damages.

25. 7 December 2007 - notice of motion.

Letter CGG to AJG asserting that all facts relating to damages are in dispute.

This was a reliance on the mediator’s certificate and, indeed, it was emphasised in the letter by the defendant. It cannot have been correct in any real sense.

The heads of damage as claimed by the plaintiff were:

- general damages and interest thereon. There was no doubt about the plaintiff’s entitlement, nor issue about most (if not all) of the facts relevant to that entitlement;

- loss of expectation of life and interest thereon. I cannot believe there was any issue about the facts relating to this entitlement, nor even quantum;

- past out-of-pocket expenses. I cannot believe there was any serious issue about the plaintiff’s entitlement to these or the quantum thereof. A legal issue arose later as to the correct basis for ascertaining certain hospital expenses, but that was not an issue at the time and it was soon resolved. Not surprisingly, this head of damage was ultimately disposed of in the way it is done in practically every case, that is, by agreement;

- past care and service and interest thereon. If there was any issue on this, it must have been a fairly insignificant one. This Tribunal is well versed in the need for care that mesothelioma victims have and so, too, are practitioners in the jurisdiction;

- section 15B damages. This was always going to be the issue.

At the time of writing the letter of 7 December 2007, there would have been two further heads of damage, being future out-of-pocket expenses and future care and services. The issues on those heads would have been within a fairly narrow compass.

To rely on the mediator’s certificate that “All other facts relevant to the issue of damages remain in dispute” is an example of the defendant’s failure to come to grips in an open way with what the real issues were. If this had been under case management by the President, one could expect that the defendant would have been asked to clarify precisely what those issues were. It never did so with the plaintiff’s solicitors.

Letter AJG to CGG pointing to clause 22(1)(b) and relying on telephone conversations to the effect that the defendant would allow nothing for s.15B damages and asking the defendant to identify what the contentious issues were.

26. 10 December 2007 - orders for discovery and interrogatories as sought in the notice of motion were made. Balance of motion stood over to 20 December.

Matter listed for hearing on 7 and 8 February 2008.

27. 13 December 2007 - service of amended notice of motion. The amendment is not relevant for present purposes.

28. 14 December 2007 - defence.

29. 17 December 2007 - letter CGG to AJG. This letter includes the following paragraph:

“You have asserted in correspondence dated 7 December 2007 that the Defendant says that the Plaintiff has no entitlement in law to Section 15B damages. With respect, that is not the Defendant’s position.

1 Pages 28 and 29 of the Second Defendant’s Amended Reply filed on 15 November 2007 set out the Defendant’s contentions. To make it abundantly clear, the Defendant says:

2 The facts which would found a claim for s.15B damages in relation to the two existing grandchildren are in dispute. However, the Defendant does not assert that there is no entitlement in law to such damages, simply that the facts as presently known do not support a finding of entitlement to damages.”

At one level, the assertion in this paragraph that the defendant was not disputing that the plaintiff had no entitlement in law to s.15B damages may be seen as somewhat disingenuous. At another level, it shows a lack of clarity in the defendant’s stance on this issue. One fact, “as presently known” to the defendant was that Mrs Dawson was not the primary carer of the grandchildren and that Mr and Mrs Novek were. That was an immutable fact and it was the basis for the defendant’s lead submission in this case that the plaintiff had no entitlement to s.15B damages, because the children were dependent on their parents and not on Mrs Dawson.

The letter disputed that the separation of the issue was the appropriate way to go. The matter would never have come to this point if the defendant had accepted the reality of the novelty of this claim from the outset, a reality ultimately that it pressed, even as late as the argument on costs, that this was indeed a novel claim.

Letter AJG to CGG reiterating that separation of the issue was the appropriate way to go.

30. 18 December 2007 - service of affidavits of Mrs Dawson and Mrs Novek.

31. 19 December 2007 - letter CGG to AJG on whether deponents were required for cross-examination and pointing out the distinction between whether the issue should be separated and the hearing of the issue if it was separated.

Letter AJG to CGG expressing, in light of the distinction, the uncertainty as to what might occur if orders were made separating the issue and, in particular, when it would be likely to be heard. That uncertainty prompted an offer that the notice of motion be stood over to the trial date with costs reserved.

32. 20 December 2007 - defendant agrees to notice of motion being stood over with costs reserved and order so made.

33. It will be evident from commentary I have made in the course of that chronology that I consider that the defendant took an unrealistic and unreasonable view in relation to the most efficient way of dealing with the issues in this case. The claim clearly was novel. The defendant’s assertions to the contrary frustrated attempts to have the matter heard before a judge with promptness. Apart from some general assertions that it was willing to negotiate in good faith, the defendant’s approach to this matter was that the plaintiff had no entitlement to s.15B damages and its conduct throughout was consistent with that. It is not to be criticised for taking that view or maintaining that stance. It is to be criticised, however, for not being realistic in that and acknowledging that the matter, being a novel one, should have been before a judge. The plaintiff’s motion seeking severance of the issue may not have been appropriate, but it should never have been forced into a position of even thinking about making such an application.

I consider the plaintiff is entitled to the costs that were reserved.

34. Orders

(1) Defendant to pay the plaintiff’s costs, including the costs reserved on 20 December 2007, on the ordinary basis up to 22 January 2008 and on an indemnity basis from 23 January 2008.

(2) Defendant to pay the plaintiff’s costs of 22 May 2008.