Webber v Comcare (No. 2)

[2018] NSWDDT 12

Dust Diseases Tribunal

New South Wales

Medium Neutral Citation:	Webber v Comcare (No. 2) [2018] NSWDDT 12
Hearing dates:	14 December 2018
Date of orders:	20 December 2018
Decision date:	20 December 2018
Before:	Russell SC DCJ
Decision:	(1)   Dismiss the plaintiff’s application for indemnity costs. (2)   Order each party to pay his or its own costs of the further costs application made on 14 December 2018.
Catchwords:	COSTS – Calderbank offer – whether sufficient time allowed for consideration, having regard to time when crucial evidence was served – whether rejection of the offer was unreasonable given that there was a complex and novel legal issue in the case.
Cases Cited:	Commonwealth v Gretton [2008] NSWCA 117 County Securities Pty Limited v Challenger Group Holdings Pty Limited (No. 2) [2008] NSWCA 273 Equity 8 Pty Limited v Shaw Stockbroking Limited [2007] NSWSC 503 Evans Shire Council v Richardson (No. 2) [2006] NSWCA 61 King Network Group Pty Limited v Club of the Clubs Pty Limited (No. 2) MGICA (1992) Pty Limited v Kenny & Good Pty Limited (No. 2) (1996) 70 FCR 236 Nationwide News Pty Limited v Naidu [2007] NSWCA 377; (2007) 71 NSWLR 471 Ofria v Cameron (No. 2) [2008] NSWCA 242 Vale v Eggins (No. 2) [2007] NSWCA 12 Webber v Comcare [2018] NSW DDT 10
Category:	Costs
Parties:	Kevin Webber (Plaintiff) Comcare (Defendant)
Representation:	Counsel: A Giurtalis (Plaintiff) G Watson SC (Defendant)   Solicitors: Maurice Blackburn (Plaintiff) Australian Government Solicitor (Defendant)
File Number(s):	DDT 164/2018

Judgment

1. On 11 December 2018 I gave judgment for the plaintiff against the defendant for $1,101,685 – Webber v Comcare [2018] NSWDDT 10. I ordered the defendant to pay the plaintiff’s costs and granted leave to approach my Associate within three days if any party wished to contend for a different order on costs. The plaintiff and the defendant appeared before me on 14 December 2018, when the plaintiff sought an order that the costs payable by the defendant be costs on an ordinary basis up to 28 November 2018 and thereafter such costs should be payable on an indemnity basis. That was opposed by the defendant.

2. The basis for the application was an email sent by the solicitor for the plaintiff to the solicitor for the defendant at 4.09pm on Wednesday, 28 November 2018. The email referred to a conversation between senior counsel earlier in the day and said:

“We confirm that the offer put was $950,000 plus costs and disbursements. This offer is open for acceptance until 4.00pm (Sydney time) Thursday, 29 November 2018.

Please note that this offer is made pursuant to the principles in Calderbank v Calderbank [1975] 3 All ER 333.”

3. The solicitor for the defendant responded at 9.11am on Thursday, 29 November 2018 as follows:

“I am instructed to reject that offer and to re-open Comcare’s Offer of Compromise of $700,000 for acceptance until 4.00pm tomorrow.”

4. Mr Giurtalis, who appeared for the plaintiff, submitted that the email offer was a genuine compromise, that it was made at an appropriate stage in the proceedings, that the time allowed for acceptance was reasonable and that the offer was clearly rejected well within that time.

5. Mr Watson SC for the defendant submitted:

1. The offer was not a proper Calderbank offer, as Calderbank offers normally involve some sort of exposition as to why settlement for that sum is reasonable;

2. By sending the offer in that form the plaintiff had attempted to “side step” the Offer of Compromise procedure under the Rules;

3. The offer had to be rejected the next morning if the defendant was going to do something to extend its Offer of Compromise;

4. The offer was not a large compromise and while it was less than the Tribunal awarded, it was not much less.

Background

6. The parties appeared before the Tribunal on 12 November 2018 when an application was made to take the plaintiff’s evidence urgently in Darwin. This appearance was immediately after a mediation which was unsuccessful. The matter was therefore out of the Claims Resolution Process and the plaintiff was entitled to seek a hearing date.

7. On 12 November 2018 I listed the matter for hearing on 3, 5 and 7 December 2018, which were dates suitable to the parties. I made directions for the service of evidence and referred the matter to the President for consideration of the Tribunal taking the evidence of the plaintiff and his daughter in Darwin on 3 December 2018. Because a choice of law issue was on foot between the parties, I directed the parties to file and serve, by 30 November 2018, written submissions on the law to be applied to the heads of damage, given that the plaintiff was exposed to asbestos in New South Wales, the Northern Territory and Queensland.

8. The matter came before me again on 22 November 2018 for directions. The defendant was directed to file a Defence that day. The plaintiff was directed to file and serve a second affidavit by the plaintiff and an affidavit by the plaintiff’s daughter by 26 November 2018. The plaintiff was directed to serve all medical evidence to be relied upon by 26 November 2018. The matter was stood over to 28 November 2018 for directions.

9. The matter came before the Tribunal again for directions on 28 November 2018 and 30 November 2018. By this time all the evidence had been served, on both sides. The written submissions on choice of law had also been served and provided to the court. The President had approved the taking of the plaintiff’s evidence in Darwin. In order to use the extensive travel time to and from Darwin effectively, the parties provided to the Tribunal copies of all documents to be tendered, in PDF form.

10. The hearing took place in Darwin on 3 December 2018 and continued in Sydney on 5 and 7 December 2018 when judgment was reserved. As previously recited, judgment was delivered on 11 December 2018.

Calderbank principles

11. The party making a Calderbank offer bears the persuasive burden of satisfying the court to exercise its discretion in their favour: Evans Shire Council v Richardson (No. 2) [2006] NSWCA 61 at [26]; Commonwealth v Gretton [2008] NSWCA 117 at [46].

12. The Calderbank offer must be shown to have been a genuine offer of compromise: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [21]-[24].

13. It must be demonstrated that the rejection of the offer was unreasonable: Ofria v Cameron (No. 2) [2008] NSWCA 242 at [20]; County Securities Pty Limited v Challenger Group Holdings Pty Limited (No. 2) [2008] NSWCA 273 at [31]-[33].

14. The determination of whether rejection of that offer was unreasonable is an evaluative judgment, to be made by reference to the terms of the offer and all the relevant surrounding circumstances: King Network Group Pty Limited v Club of the Clubs Pty Limited (No. 2) [2009] NSWCA 204 at [11].

15. If all relevant evidence had not been served before the offer, or if the full parameters of the dispute were uncertain at the time of the offer, those matters could be taken into account on evaluating whether the rejection of the offer was unreasonable: Vale v Eggins (No. 2) [2007] NSWCA 12 at [22]; Equity 8 Pty Limited v Shaw Stockbroking Limited [2007] NSWSC 503 at [42].

16. Another relevant factor is the complexity of the issues: MGICA (1992) Pty Limited v Kenny & Good Pty Limited (No. 2) (1996) 70 FCR 236; Nationwide News Pty Limited v Naidu [2007] NSWCA 377; (2007) 71 NSWLR 471.

Consideration

17. Besides the legal issue concerning choice of laws, there was a significant factual issue concerning the quantification of damages for loss of capacity to provide gratuitous domestic services, whichever law applied.

18. The plaintiff’s first affidavit was affirmed on 5 July 2018. It gave only broad brush evidence concerning assistance provided by the plaintiff to his wife, who suffers from dementia. A second affidavit was affirmed on 28 November 2018. This gave much more detail about that issue. An affidavit was also sworn on that day by the plaintiff’s daughter Ms Dyer. This affidavit provided more information, and corroborated the evidence of the plaintiff concerning the care he had given to his wife.

19. I do not know when these two affidavits were served. If they had not been served by the time of the email offer made on 28 November 2018, then it could not be said that the defendant was in possession of all of the information it needed to make an assessment of the reasonableness of the plaintiff’s offer. Even if those affidavits were served on the same day, and prior to, the email offer by the plaintiff, that did not give the defendant much time to evaluate that new and detailed evidence, as well as considering the offer made by the plaintiff.

20. I will take into account those matters in assessing whether or not the rejection of the offer early on 29 November 2018 was unreasonable.

21. This was a case where a novel question of law arose. The plaintiff served for several decades in the RAAF and was extensively exposed to asbestos dust during his service in New South Wales and in the Northern Territory. In my primary judgment I found that an assessment of damages had to be made under both systems of law, as the lex loci delicti of the exposure in New South Wales was New South Wales law and the lex loci delicti of exposure in the Northern Territory was Northern Territory law.

22. The parties were well aware of the choice of law issue. It had been ventilated in their preliminary written submissions which I had ordered.

23. The researches of both sides produced no authority, binding upon this Tribunal, which decided the point. Nor did my own researches. In the end result I rejected the submission put for the plaintiff that only New South Wales law applied and I rejected the submission put by the defendant that only Northern Territory law apply.

24. This difficult choice of laws issue, upon which there was no guiding authority, has to be taken into account in assessing whether or not it was unreasonable of the defendant to reject the plaintiff’s offer.

25. The plaintiff’s offer was a figure which, in the end result, was $150,000 below the judgment sum awarded. I do regard a differential of $150,000 as demonstrating a genuine compromise. It is a large amount of money. However, the correspondence discloses that the defendant had served an Offer of compromise upon the plaintiff for $700,000, presumably plus costs. If only Northern Territory law applied, the $700,000 figure was above the damages which would have been awarded under that system of law. This is a demonstration that the defendant was attempting to achieve a settlement by its own offer.

26. When the legal issue was so uncertain, I do not think that it can be said that it was unreasonable of the defendant to reject the plaintiff’s offer.

27. For completeness, I reject the submission for the defendant that it was necessary in this case for a Calderbank offer to set out some sort of summary or argument as to why the offer is a genuine compromise. By the time this offer was made, the battle lines were well and truly drawn, and there was no explanation by the plaintiff required to enable the defendant to properly evaluate the offer.

28. Taking into account the complexity of the legal issue involved, and taking into account the communication of the offer on the same day that the detailed evidence of the plaintiff concerning quantification of damages for loss of capacity to provide gratuitous domestic services was supplied, I do not think that it can be said that the rejection of the offer was unreasonable. I therefore decline the plaintiff’s application to award indemnity costs after 28 November 2018.

29. A reading of the transcript of 14 December 2018 (pp 149-150) will demonstrate that neither the plaintiff nor the defendant focussed upon the key issue in relation to a Calderbank offer – whether rejection of the offer was unreasonable in the circumstances. I therefore propose to order that each party bear their own costs of the costs argument.

Orders

30. My orders are:

1. Dismiss the plaintiff’s application for indemnity costs.

2. Order each party to pay his or its own costs of the further costs application made on 14 December 2018.

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Decision last updated: 20 December 2018