(Re Nicholson) Amaca Pty Ltd v Harry Daines Pty Ltd
[2011] NSWDDT 3
•19 April 2011
Dust Diseases Tribunal
New South Wales
Medium Neutral Citation: (Re Nicholson) Amaca Pty Ltd v Harry Daines Pty Ltd [2011] NSWDDT 3 Hearing dates: 19 April 2011 Decision date: 19 April 2011 Before: O'Meally P Decision: Cross-Claim dismissed
Catchwords: DUST DISEASES TRIBUNAL - Application for costs - Statement of Claim issued by plaintiff - Defendant issues cross-claim - Contribution determination - Cross-defendant accepts determination of Contributions Assessor - Plaintiff settles action with defendant - Order made that cross-defendant pay its assessed proportion of damages to plaintiff - Whether cross-claimant entitled to costs against cross-defendant in absence of judgment - Costs not awarded Legislation Cited: Dust Diseases Tribunal Regulation 2001
Dust Diseases Tribunal Regulation 2007
Dust Diseases Tribunal (Standard Presumptions - Apportionment) Order 2007
Law Reform (Miscellaneous Provisions) Act 1946
Uniform Civil Procedure Act 2005
Uniform Civil Procedure Rules 2005Cases Cited: Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin [1997] HCA 6
Power Technologies Pty Ltd v Energy Australia [2010] NSWCA 107
(Re Olsen) Eraring Energy v Babcock Australia Pty Ltd [2006] NSWDDT 8
QBE Insurance (Australia) Ltd v Wallaby Grip Ltd and Ors (2007) NSWCA 43; 4 DDCR 331Category: Procedural and other rulings Parties: Amaca Pty Ltd (Cross-Claimant Applicant)
Harry Daines Pty Ltd (Cross-Defendant Respondent)Representation: Cross-Claimant Applicant - J C Sheller
Cross Defendant Respondent - D T Miller
Cross-Claimant Applicant- DLA Phillips Fox
Cross-Defendant Respondent- Moray & Agnew
File Number(s): 284/2010/1
RULING
O'MEALLY P
The Claims Resolution Process (CRP) established by amendments in 2005 to the Dust Diseases Regulation 2001 and continued by the Dust Diseases Tribunal Regulation 2007 (the Regulation) continues to cause confusion, difficulty and surprise. This application is no exception.
On 18 October 2010 one Glen Nicholson (the plaintiff) commenced proceedings in the Tribunal against Amaca Pty Ltd (Amaca). His Statement of Claim alleged that in the employ of Harry Daines Pty Ltd (Harry Daines) he was exposed to asbestos dust and fibre which he inhaled and as a result contracted malignant mesothelioma. He alleged the dust and fibre came from products manufactured by Amaca.
On 1 December 2010 Amaca issued a cross-claim against Harry Daines pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 alleging that, if sued by the plaintiff, it would have been liable to him in respect of the damage he suffered.
The court file contains no Defence by Amaca to the plaintiff's Statement of Claim, nor a Defence by Harry Daines to Amaca's Cross-Claim, and, by reason of provisions of the Regulation, none was then required. However, in compliance with the requirements of the Regulation, Amaca did file a Reply to the plaintiff's Statement of Particulars. The CRP applied to the plaintiff's claim and it became subject to Div 4 of the Regulation. On filing and service of the Cross-Claim, these proceedings became subject to Div 5 as well. Division 4 relates to mediation and Div 5 to contribution between defendants (and for the purposes of that Division defendants includes cross-defendants).
On 2 February 2011 a Contributions Assessor, applying the standard presumptions in the Dust Diseases Tribunal (Standard Presumptions - Apportionment) Order 2007 , determined that Amaca should contribute 60 per cent of the plaintiff's damages and Harry Daines 40 per cent.
On 24 February 2011 a mediation took place. It was unsuccessful. Nevertheless, Harry Daines accepted the determination of the Contributions Assessor while maintaining it had no liability to contribute to the plaintiff's damages.
On 5 April 2011 the plaintiff and Amaca reached agreement that the action should be settled and on 11 April 2011 judgment was entered in favour of the plaintiff in the sum of $275,000. On the same day, immediately after judgment was entered, Harry Daines consented to an order that it pay to the plaintiff the sum of $110,000, being 40 per cent of $275,000 and such an order was made. Judgment was not entered in the cross-claim. Harry Daines then resisted an order that it pay Amaca's costs.
It should, however, be noted that in earlier correspondence passing between the solicitors for Harry Daines and Amaca, Harry Daines at all stages disputed that it would have been liable if sued by the plaintiff and asserted it was not liable to contribute the damages paid to the plaintiff by Amaca. Its position is encapsulated in annexures E and G to the affidavit of Stephen David Taylor-Jones sworn for the purposes of this application.
Amaca now claims the costs of the cross-claim against Harry Daines while, for its part, Harry Daines seeks costs of this application.
The question I think can be resolved by considering whether, as Amaca submits is its entitlement, it may have judgment on the cross-claim. Mr Miller of counsel for Harry Daines says that Amaca is not entitled to judgment because there has been no hearing on the merits, and, in accordance with what was said by McHugh J in the High Court of Australia in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6, I would not make an order for costs unless there had been a hearing on the merits. His Honour said:
In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make the costs order.
The effect of a contributions determination when there is either an agreement or a determination is provided for by cl 52 of the Regulation. Relevantly, that clause provides:
52
(1) An agreement or determination as to apportionment among defendants for the purposes of this Division is conclusively binding on the defendants for the purposes of the settlement, or determination by the Tribunal, of the plaintiff's claim and payment of the plaintiff's damages.
(2) The agreement or determination is not binding for the purposes of the subsequent taking, or determination by the Tribunal, of a dispute between defendants as to apportionment.
(3) If a defendant disputes the contribution that the defendant is liable to make to damages recovered by the plaintiff and the judgment of the Tribunal in the dispute does not result in the defendant materially improving the defendant's position, the defendant is liable to pay the costs of each other party to the dispute occasioned by the dispute, assessed on an indemnity basis.
Aspects of the Regulation were considered by the Court of Appeal in Power Technologies Pty Ltd v Energy Australia [2010] NSWCA 107. Speaking of apportionment following a contributions assessment Sackville A-JA said at [95]:
...an original defendant may recover the contribution due from a cross-defendant or another original defendant pursuant to an apportionment made by a Contributions Assessor. Where an original defendant has filed a cross-claim (as it must if it seeks contribution under the CRP against a third party not named as an original defendant in the plaintiff's proceedings), it can seek the contribution due under an apportionment determination in the course of the cross-claim. However, any order for payment of money by the cross-defendant, made in reliance on the apportionment determination, can have no greater effect than provided by cl 44(1).
Here it should be observed his Honour was referring to cl 44(1) of the Regulation of 2001 which was repeated in the Regulation of 2007 as cl 52(1). His Honour went on to say:
That is, the order can be made only for the purposes of settlement or determination of the plaintiff's claims . [Emphasis added by Sackville A-JA]
In [99] he said:
In my opinion, Div 5 is not intended to give the defendant/cross-claimant a forensic advantage by allowing it to obtain an order on the basis of the apportionment determination, discontinue the cross-claim and force the cross-defendant to bear the burden of displacing the Contribution Assessor's determination. If the defendant/cross-claimant pursues the cross-claim to finality, but fails to establish that the cross-defendant is liable to contribute to the plaintiff's damages, the basis of the defendant/cross-claimant's entitlement to retain the moneys paid by the cross-defendant on a provisional basis is removed.
Harry Daines submits that the Regulation does not permit recovery of costs on a cross-claim following completion of a plaintiff's proceedings where, as here, no final judgment has been entered on the contribution claim. It submits that what cl 52 does do is to provide that the payment of money to or on behalf of the plaintiff is made on an interim basis only; it does not entitle a cross-claimant to judgment against a cross defendant, but prescribes only an interim right of contribution.
Mr Sheller, for Amaca, submits that his client is entitled to judgment on the cross-claim. Had there been a hearing on the merits and had it been found that Harry Daines was a person who if sued by the plaintiff would have been liable to him, then Amaca would have been entitled to judgment.
In (Re Olsen) Eraring Energy v Babcock Australia Pty Ltd [2006] NSWDDT 8, I expressed a view contrary to the view I now hold. That decision was made before the decision of the Court of Appeal in Power Technologies and without the benefit of argument addressed to me today.
Until the decision of the Court of Appeal in Power Technologies it was thought that following a determination by a Contributions Assessor "the Tribunal is entitled and bound to give effect to such a determination by entering appropriate verdicts and judgments" per Handley A-JA in QBE Insurance (Australia) Ltd v Wallaby Grip Ltd and Ors (2007) NSWCA 43 at [36]; 4 DDCR 331 .
In Power Technologies Allsop P said at [3]
The parts of the judgment of Handley AJA in QBE Insurance v Wallaby Grip [2007] NSWCA43; 4 DDCR 331 that may have lead to the learned primary judge to the erroneous conclusion to which he came can be found at 4 DDCR 338-339 [37]-[40]. These were obiter comments superfluous to Handley AJA's reasoning that the second objection (referred to in [27] of his reasons), that the summary determination of the opponents' contributions would be futile, should be rejected.
Bearing in mind the peculiarities of the CRP and conscious of many of its unconsidered consequences, I am of the view that it does not authorise the entry of judgment in the circumstances of this cross-claim. It is my view, as a general rule to which there may be exceptions, that a cross-claimant will be entitled to costs of a cross-claim where a cross-claim is disposed of on the merits or where there is an initial and continuing refusal to accept the determination of the Contributions Assessor which leads to a cross-claimant incurring costs. Neither occurred here.
The question now is what to do with Amaca's Cross-Claim.
Rule 42.19 of the Uniform Civil Procedure Rules 2005 (UCPR) relevantly provides:
(1) This rule applies to proceedings that are discontinued by the plaintiff, as referred to in rule 12.1.
(2) Unless the court orders otherwise or the notice referred to in rule 12.1 (2) otherwise provides, the plaintiff must pay such of the defendant's costs as, at the date on which the notice of discontinuance was filed, had been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued.
No Notice of Discontinuance has been filed.
Rule 42.20 of the UCPR relevantly provides:
(1) If the court makes an order for the dismissal of proceedings, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, then, unless the court orders otherwise, the plaintiff must pay the defendant's costs of the proceedings to the extent to which they have been dismissed.
By S 3 of the Civil Procedure Act 2005 , plaintiff includes cross-claimant and defendant includes cross-defendant.
The course open to the Tribunal now is to permit the cross-claim to be discontinued or to dismiss it. Amaca has not applied for leave to discontinue its cross-claim. It wants judgment, but may not have it. By reason of the agreement of 24 February 2011 between Harry Daines and Amaca concerning the payment of the agreed proportion of the plaintiff's judgment sum the appropriate course, in my view, is to dismiss the cross-claim with no order as to costs. Amaca's cross-claim did not proceed.
Amaca should pay Harry Daines' costs of this application as agreed or assessed.
Decision last updated: 18 May 2011
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