(Re: Macri) ACN 000 343 019 Pty Limited v Cigna Insurance Asia Pacific Limited

[2005] NSWDDT 62

Dust Diseases Tribunal

of New South Wales

CITATION:	(Re: Macri) ACN 000 343 019 Pty Limited v Cigna Insurance Asia Pacific Limited and Anor [2005] NSWDDT 62
PARTIES:	(Re: James Macri) ACN 000 343 019 Pty Limited (formerly Fire Control Pty Limited) Cigna Insurance Asia Pacific Limited CGU Insurance Ltd (formerly Commercial Union Insurance Limited) Amaca Pty Limited CSR Limited Bradford Insulation Industries Pty Limited
MATTER NUMBER(S):	DDT 116/97/1
JUDGMENT OF:	Duck J
CATCHWORDS:	Miscellaneous Matters :-
LEGISLATION CITED:	s 5 Law Reform (Miscellaneous Provisions) Act 1946
CASES CITED:	Seven Network Limited v News Limited (No 4) [2005] FCA 244 (16 March 2005); Baxter v Obacelo Pty Limited (2001) 205 CLR 635; Jameson and Anor v Central Electricity Generating Board (2000) 1 AC 455; Babcock International Limited v Earing Energy and Babcock Australia Limited (2001) NSW DDT 4 (14 May 2001); Boyle v State Rail Authority (1997) 14 NSW CCR 374
DATES OF HEARING:	17 November 2005
DATE OF JUDGMENT:	11/24/2005
LEGAL REPRESENTATIVES:	FOR APPLICANT: Mr E G H Cox instructed by Makinson and D'Apice FOR RESPONDENT: Ms T Moisidis instructed by Goldrick Farrell Mullan

JUDGMENT:

12

Dust Diseases Tribunal of New South Wales

Matter No DDT116 of 1997/1

(Re: James Macri) (Settled 10/10/05)

ACN 000 343 019 Pty Limited (formerly Fire Control Pty Limited)

(Cross Claimant)

v

Cigna Insurance Asia Pacific Limited

(First Cross Defendant)

and

CGU Insurance Ltd (formerly Commercial Union Insurance Limited) (Discontinued 18/2/05)

(Second Cross Defendant)

and

Amaca Pty Limited (Settled 17/10/05)

(Third Cross Defendant)

and

CSR Limited

(Fourth Cross Defendant)

and

Bradford Insulation Industries Pty Limited

(Fifth Cross Defendant)

24 November 2005

DUCK J

1. The Fifth Cross Defendant, Bradford Insulation Industries Pty Limited (“BI”)moves the Tribunal for summary dismissal of the cross claim against it or alternatively for a stay of proceedings. It does so because the cross claimant (which was formerly known as Fire Control Pty Limited) (“Fire Control”) accepted an offer from the third cross defendant Amaca Pty Limited (“Amaca”) of contribution to any monies it might have to pay to the plaintiff of 50 per cent thereof. In addition costs were to be assessed and paid. It is the contention of the Fifth Cross Defendant that by reason of the settlement the cross claimant has obtained full satisfaction of its rights to contribution from other tortfeasors.

2. To understand the application it is useful to set out a short history of the proceedings.

3. The plaintiff, James Macri filed a statement of claim on 11 August 1997 pursuant to which he sought damages from the defendant Fire Control. He alleged exposure to asbestos in the course of his employment between 1968 and 1972. He claimed that as a result of that exposure he now suffers from asbestosis.

4. On 3 April 1998 Fire Control filed a cross claim against Cigna Insurance Limited and Commercial Union Insurance Limited. In the cross claim the cross claimant pleaded that the first cross defendant was its insurer for the period 1 January 1968 to 15 May 1971 and that the second cross defendant was its insurer from 16 May 1971 to 31 December 1972.

5. On 16 December 1998 the plaintiff filed an amended statement of claim pursuant to which he sought provisional damages rather than damages.

6. At some stage prior to November 1994 the name of the defendant was changed from Fire Control Pty Limited to ACN 000 343 019 Pty Limited.

7. On 31 January 2005 an amended cross claim was filed which added a third cross defendant Amaca Pty Limited. Amaca was sued as the successor to the rights and liabilities of James Hardie and Coy Pty Limited which was pleaded to be a supplier of asbestos products to the defendant cross claimant.

8. On 11 February 2005 the cross claim was discontinued against the second cross defendant Commercial Union Insurance Limited.

9. On 3 June 2005 the third cross defendant Amaca offered to settle the cross claim against it. The terms of the settlement will need to be examined shortly. The substance of the offer was that Amaca was willing to contribute 50 per cent of any damages and costs which may be awarded to the plaintiff against the defendant cross claimant (see AX2).

10. On 29 June 2005 the solicitors for the cross claimant accepted the offer to contribute which had been made by Amaca’s solicitors although the question of costs remained outstanding.

11. On 30 June 2005 the matter was listed for directions. Two things were done at the directions hearing:

i The timetable previously ordered on 23 May 2005 which was to govern the proceedings between the cross claimant and the third cross defendant was altered so that time for taking each of the steps set out in the timetable was extended by six weeks.
ii Leave was granted to the cross claimant to file an amended cross claim adding two further cross defendants.

12. On the 14 July 2005 a second amended cross claim was filed pursuant to the leave granted by Judge O’Meally which added CSR Limited [“CSR”] as fourth cross defendant and Bradford Insulation Industries Pty Limited [“BI”] as fifth cross defendant. They were sued, broadly speaking, as the suppliers of asbestos products. It was alleged that there was a partnership between the third cross defendant Amaca and the fourth cross defendant CSR which sold its products to the fifth cross defendant BI.

13. On 22 August 2005 a second cross claim was filed by Amaca against CSR. It pleaded a partnership between the two arising from a Deed of Agreement dated 24 September 1964 which, it was pleaded, continued until May 1974 ie the period over which the agreement had effect embraced the period during which the plaintiff was employed by the defendant cross claimant. The cross claim alleged rights said to have arisen from the Deed of Agreement. It also pleaded negligence against CSR. The remedy sought was either contribution or indemnity.

14. On 10 October 2005 the plaintiff’s claim for provisional damages against the defendant settled for $120,000 plus costs. Orders were also made pursuant to s 11A Dust Diseases Tribunal Act 1989 in respect of further medical conditions which might arise as a result of the plaintiff’s exposure to asbestos.

15. On 17 October 2005 orders were made to give effect to the settlement of the cross claim brought against the third cross defendant Amaca. Pursuant to the orders the third cross defendant was required to pay $60,000 plus half the plaintiff’s costs.

16. It is submitted and I accept that the principles to be applied on a summary dismissal application are conveniently and clearly set out in the judgment of Sackville J in Seven Network Limited v News Limited (No 4) [2005] FCA 244 (16 March 2005).

At paragraph 17 the following appears:

There was no serious dispute as to the principles to be applied on a summary dismissal application. It is only a very clear case indeed that will justify the summary intervention of the Court, since litigants are not to be deprived the right to submit genuine controversies for determination: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 , at 91-92, per Dixon J. Accordingly, the power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 , at 129-130, per Barwick CJ; Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 , at 99, per curiam. A Full Court of this Court in Australian Building Industries Pty Ltd v Stramit Corporation Ltd [1997] FCA 1318 , approved the formulation of Millett J in Lonrho Plc v Fayed (No 2)[1992] 1 WLR (Ch D), at 5 as follows:
‘A plaintiff is entitled to pursue a claim in these courts however implausible and however improbable his chances of success. Unless the defendant can demonstrate shortly and conclusively that the plaintiff’s claim is bound to fail or is otherwise objectionable as an abuse of process of the court, it must be allowed to proceed to trial.’ (Emphasis added.)
In the present proceedings there has been no suggestion that this exposition of principle is in any way incorrect.

17. It has been common ground that this application depends upon resolution of the question: Did the cross claimant obtain full satisfaction of its entitlement to cross claim against any other concurrent tortfeasor by virtue of the settlement it reached with Amaca [see generally Baxter v Obacelo Pty Limited (2001) 205 CLR 635; (2001) 76 ALJR 114 and Jameson and Anor v Central Electricity Generating Board (2000) 1 AC 455] The following passage from Baxter v Obacelo provides guidance. In respect of that case and the case of Jameson it is to be remembered that what was there being considered was a plaintiff’s claim against joint tortfeasors (Baxter) and a plaintiff’s claim against several concurrent tort feasors (Jameson). The cases were not directly concerned with claims for contribution. Nonetheless they provide guidance.

18. Gleeson CJ and Callinan J in Baxter [at para 43] referred with approval to the judgment of Lord Hope in Jameson as follows:

Lord Hope of Craighead, with whom Lord Browne-Wilkinson and Lord Hoffmann agreed, treated the outcome as turning upon the meaning and effect of the agreement by which the first action was settled. His Lordship, who used the expression “concurrent tortfeasor” in contradistinction to joint tortfeasor, said:

“…The causes of action are indeed separate. And it is clear that an agreement reached between the plaintiff and one concurrent tortfeasor cannot extinguish the plaintiff’s claim against the other concurrent tortfeasor if his claim for damages has still not been satisfied. The critical question ……is whether the claim has in fact been satisfied. I think that the answer to it will be found by examining the terms of the agreement and comparing it with what has been claimed. The significance of the agreement is to be found in the effect which the parties intended to give to it. The fact that it has been entered into by way of a compromise in order to conclude a settlement forms part of the background. But the extent of the element of compromise will vary from case to case.”(Emphasis added.)

19. It is convenient then to examine the pleadings in the present case. The amended cross claim pursuant to which Amaca was added as a cross defendant, which was filed on 31 January 2005 contained the following paragraphs inter alia:

20. The remedies sought were:

(i) Indemnity and/or contribution together with costs and interest for any damages awarded to the plaintiff as joint or concurrent tortfeasor pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946;

(ii) Damages together with costs and interest for the breach of duty of care;

(iii) Cross claimants costs in defending these proceedings.

21. It is important to note the allegations in paragraphs 13 and 15. It is asserted by Fire Control against Amaca that Amaca supplied Fire Control with asbestos products including but not limited to Asbestolux Sheets, FR board and K-lite. At 15 it is asserted that Amaca supplied asbestos products to Fire Control including the products referred to in 13 but not necessarily limited to them.

22. It was accepted on the hearing of the application that the product supplied by BI, which it had acquired from the partnership between Amaca and CSR, was K-Lite. It was pleaded in effect that Amaca had responsibility for the supply of K-Lite through the partnership via the fifth cross defendant and also for the supply of other asbestos products independently of the partnership. The activities of Amaca on one hand, and those of the fifth cross defendant on the other, were not coextensive.

23. It is convenient to turn to the second amended cross claim filed 14 July 2005 pursuant to which CSR Limited and Bradford Insulation Industrial Pty Limited were added as a fourth and fifth cross defendants respectively. That pleading alleges inter alia:

16. The Cross Claimant says that by virtue of an agreement reached in 1958 between James Hardie and Co Pty Ltd and the Cape Asbestos Company Ltd James Hardie was authorised to manufacture asbestolux in Australia and under that agreement the asbestolux was required to be produced using 100% amosite.

Particulars

(a) Agreement between James Hardie & Co Pty Ltd and the Cape Asbestos Company Ltd dated 1958.

© After 30 June 1974 until 31 December 1976 all the K-Lite it used in the manufacture of fire doors was manufactured and supplied by Amaca.

24. The allegation against BI was made in the following terms:-

25. The allegations made by the cross claimant against the fourth and fifth cross defendants amplify, to some extent, the allegations pleaded against Amaca the third cross defendant.

26. It may be noted that the cross claim against the fourth cross defendant CSR, has been settled and orders made recently to give effect to that settlement.

27. Amaca’s offer to settle the cross claim was made by way of a court document entitled Offer to Contribute. The substance of the document was in the following terms:

To: The Cross Claimant:

and costs which may be awarded to the Plaintiff in these proceedings.

This offer is made in accordance with Part 2 of the Rules. This offer is to

remain open for 28 days.

DATED: 3 June 2005

28. The offer was apparently conveyed accompanied by a letter bearing date 6 June 2005. On 17 June 2005 the solicitors acting for Fire Control wrote to Messrs Holman Webb the solicitors for Amaca as follows:

We refer to your letter dated 6 June 2005. Your client’s offer to contribute does not address the issue of costs (on the cross claim). Is you (sic) client prepared to pay the costs incurred by our client on the cross claim against your client?

29. On 29 June 2005 Fire Control’s solicitors Messrs Goldrick Farrell Mullan wrote again to Messrs Holman Webb a letter in the following terms:

We refer to our letter dated 17 June and note we have not received a reply. We are nevertheless instructed to accept your client’s Offer to Contribute 50% as set out on your letter dated 6 June 2005.

That means the only issue outstanding is costs. If your client agrees to pay our client’s costs on the Cross Claim so far as they relate to your client Terms can be filed. Note that we don’t have instructions about costs yet but we would recommend a figure of $1,000. Would you wish to draft the Terms of Settlement?

30. BI filed a Notice of Appearance on 12 August 2005.

31. On 15 August 2005 Fire Control’s solicitors wrote to Makinson and D’Apice solicitors for BI sending copies of all the pleadings in the matter including a copy of the Offer to Contribute made by Amaca together with copies of requests for particulars and particulars furnished, and copies of medical reports supplied by both the plaintiff and the defendant’s experts. There is a date stamp on the copy of that letter which is annexed to AX1 suggesting that the letter was received by Makinson and D’Apice on 16 August 2005.

32. The second cross claim by Amaca against CSR which is referred to above was filed on 22 August 2005.

33. The present application was filed on 7 October 2005, that is, before the plaintiff’s claim against the defendant had been settled and before any orders had been made to give effect to settlement of the cross claim by Fire Control against Amaca. Whether BI was eager, on the one hand, or opportunistic on the other is a matter for speculation.

What to make of the pleadings?

34. It is clear that Fire Control alleges it was supplied with asbestos products by both Amaca and BI. They were different products. There is nothing in the pleading to suggest that Fire Control was party to or indeed aware of arrangements between CSR, BI and Amaca at the time of supply.

35. In this regard it may be noted that the respondent tendered, without objection, an affidavit of Robert Cecil Burns sworn 10 October 1985. The affidavit was obviously prepared for Supreme Court proceedings in 1985. A copy of it has been in possession of both applicant and respondent to the present application. Mr Burns has since died. He was the Divisional Chief Executive of Fire Control Group and an employee of Wormald International (Aust) Pty Limited. Fire Control was apparently taken over by Wormald International around 1969. Paragraph 7 of the affidavit is in the following terms:

During the late 60’s and early 70’s James Hardie & Bradford Insulation Industries supplied different product to Fire Control. Those two companies supplied the bulk of the asbestos insulation material. I would estimate that approximately 60% of the asbestos insulation material used in fire doors was supplied by James Hardie Pty Limited. About 25% of the material was supplied by Bradford Insulation Industries.

36. It would appear then consistently with what is pleaded that Fire Control were supplied with asbestos product by both Amaca and BI.

37. Rights of action for contribution against concurrent tortfeasors are separate rights of action. See Babcock International Limited v Earing Energy and Babcock Australia Limited (2001) NSW DDT 4 (14 May 2001) Curtis J at para 36 and the authorities there referred to. See too in this regard Baxter v Obacelo Pty Limited Gummow and Hayne JJ at para 56, and Gleeson CJ and Callinan J at para 43 quoted above.

38. Further it is not uncommon for cross claims to be brought against different concurrent tortfeasors at different times. Hence if it were the intention of the parties to the settlement between Fire Control and Amaca that the settlement was in some way to prevent the exercise by Fire Control of its rights in other causes of action against other tortfeasors one might have expected someone to say so. This did not happen. That is the first point.

39. Secondly the terms the parties did use were those of contribution towards Fire Control’s liability to the plaintiff.

40. Thirdly, what was being offered was a contribution of 50% of the Defendant’s liability to the Plaintiff. That left 50% to be dealt with in some other way.

41. I think it reasonably plain that what Amaca was attempting to settle was nothing to do with any outstanding rights of action which might reside in Fire Control. This is because both of things the parties did say in reaching their agreement and the things that they did not say. I am comfortably satisfied that the cross claimant’s rights against concurrent tortfeasors were not intended to be extinguished by the settlement with Amaca.

42. Submissions were made that the applicant bore the onus of proving the absence of satisfaction in the settlement. See Boyle v State Rail Authority (1997) 14 NSW CCR 374. The facts emerging from the settlement are clear enough. There is no need to resort to questions of onus of proof to come to a proper conclusion. Further in this regard it is instructive to remember that what Johns J was dealing with in Boyle was a circumstance in which a plaintiff had settled against eight of nine defendants and sought to continue against the ninth. What His Honour said was:

The question, I suppose, arises in this instance as to which of the parties would bear the onus. It would seem to me that, in the absence of evidence, there is a presumption that there has been full value.
And a little later at 379 G the following appears:

What is not present before the court are the terms of settlement between the parties to determine whether there is any indication that the judgments concerned were or were not to be regarded as full satisfaction of the plaintiff’s claim for all of the loss from the injury which he has sustained.

In this case such evidence as is available has been produced. Later at 381 D Johns J said:

In those circumstances and for those reasons, I must therefore conclude that there is insufficient evidence before me that the plaintiff, in receiving the amounts of the settlement against the eight defendants, received them otherwise than as full compensation or satisfaction for his claim.

43. By way of summary:

1. The facts in Boyle were different.

2. There is in this case evidence of the settlement.

3. The evidence which is available makes it clear that in accepting Amaca’s offer neither Fire Control nor Amaca was intending that the settlement should satisfy all of Fire Control’s causes of action against all concurrent tortfeasors.

44. Further it ought be observed that Boyle was quoted with approval in Jameson not on the point relating to onus of proof but rather as authority accepting the principle that whether or not a claimant had received full satisfaction is to be found in the words of the settlement: see Lord Hope at 475; and that a plaintiff is not entitled to be compensated twice over: Lord Clyde at 483.

45. A submission has been made that it would be unconscionable to permit Fire Control to cross claim against BI because in effect it is permitting a second claim indirectly against Amaca. In a circumstance in which Fire Control has a separate cause of action against BI (at least as far as the pleadings go), and the fact that the double satisfaction principle is not engaged in this case, the fact that there may be contractual rights to indemnity or otherwise in favour of BI against Amaca or CSR or both of them cannot serve to prevent Fire Control from exercising its rights against BI. The question of unconscionability does not arise.

46. I dismiss the application . Order the applicant to pay the respondent’s costs.
Mr E G H Cox instructed by Makinson and D’Apice appeared for the applicant.
Ms T Moisidis instructed by Goldrick Farrell Mullan appeared for the respondent.