Amaca Pty Limited v CSR Limited

Supreme Court of Victoria|2017-11-29|Before: Mr J

Solicitors: Mills Oakley (cross-claimant) Colin Biggers & Paisley (cross-defendant) File Number(s): 135/2017/CC1

Judgment

In these proceedings Ms Anne Maree Peck sued Amaca Pty Limited seeking damages for her disease of mesothelioma. That action was settled by a Consent Order filed in court on 23 October 2017.
Amaca Pty Limited ("Amaca") filed a cross-claim against CSR Limited ("CSR") seeking contribution from CSR as a joint tortfeasor, and also as a partner in a business (Hardie-BI) which produced asbestos insulation products. Ms Peck alleged that she was exposed to dust from Hardie-BI products.
The cross-claim was settled by an Order filed in the Tribunal on 23 October 2017. By consent the Tribunal ordered pursuant to clause 56 of the Dust Diseases Tribunal Regulation 2013 that CSR pay 30% of the judgment sum (entered in favour of the plaintiff and against Amaca) directly to the plaintiff's solicitor. An order was also made by consent pursuant to clause 56 that CSR pay to Amaca 30% of the plaintiff's costs as agreed or assessed.
The Order noted that the following issues were agreed between Amaca and CSR: 1. Apportionment; 2. Reasonableness of the plaintiff's settlement.
Finally, the Order noted that CSR disputed that Amaca was entitled to contribution from CSR towards Amaca's defence costs, as pleaded in paragraph 13 of the cross-claim brought by Amaca against CSR. The parties agreed that the remaining issue would be dealt with on the papers, after written submissions were filed for each party.

AMACA'S SUBMISSIONS

The written submissions for Amaca dated 7 November 2017 made it plain that Amaca sought contribution of 30% towards its own costs of defending Ms Peck's claim. It sought those costs on the basis that Amaca and CSR were under a coordinate liability which arose in circumstances of the existence of the partnership agreement between them, and also under the Partnership Act 1892.
The Amaca written submissions referred to the decision of the Supreme Court of Victoria in Amaca Pty Limited v CSR Limited [2015] VSC 582. In that case the trial judge noted that Amaca and CSR were partners in relation to the manufacture and supply of Hardie-BI products. The trial judge found that based on equitable principles CSR was obliged to contribute towards Amaca's defence costs. While there was an appeal to the Victorian Court of Appeal, the appeal did not challenge the trial judge's findings in relation to the obligation of CSR to contribute towards Amaca's defence costs.

CSR'S SUBMISSIONS

CSR's written submissions filed on 20 November 2017 accepted that Amaca was entitled to a contribution to its defence costs. CSR said that Amaca had to show that it had reasonably incurred those costs to establish and quantify any liability that arose from the operation of the Hardie-BI partnership.
The CSR submissions pointed out that the 30% contribution to damages and plaintiff's costs was simply the acceptance and formalisation of a 30% allocation of liability reached by a Contributions Assessor under the Dust Diseases Tribunal Regulation 2013.
The CSR submissions concluded as follows: "CSR submits that the appropriate order is that CSR pay Amaca 50% of legal costs and expenses incurred by Amaca to the extent that those costs and expenses are attributable to the plaintiff's inhalation of asbestos dust and fibre from partnership products. The quantum of those costs should be the subject of a costs assessment. The 'rough and ready' approach of the Regulation in relation to satisfaction of a plaintiff's claim should give way to the detail and certainty a proper costs assessment process would provide in so far as a claim for contribution to costs is concerned."
The CSR written submissions pointed out that the plaintiff's claim involved an allegation against Amaca of, not only exposure to dust from Hardie-BI insulation products, but also exposure to dust from asbestos cement building products for which Amaca alone was liable.

AMACA'S SUBMISSIONS IN REPLY

Amaca submitted that it would be unnecessarily onerous to expect a costs assessor to differentiate between Amaca's building products and the Hardie-BI insulation products.

CONSIDERATION

Section 98 of the Civil Procedure Act 2005 confers an unlimited power to determine costs in proceedings. That power is discretionary. The court has full power to determine by whom, to whom and to what extent costs are to be paid.
The only issue left for determination on the papers is the form of the order which should be made against CSR and in favour of Amaca. The submission of CSR, that it is not appropriate simply to pick the 30% figure selected by the Contributions Assessor, has some force. Not only is this percentage "rough and ready", according to the decision of the Court of Appeal cited in the submissions, but the Contributions Assessor reached her determination based upon matters prescribed by regulation which can produce a result not necessarily reflective of the actual exposure to each product. It cannot be said that the 30% apportionment reached by the Contributions Assessor necessarily reflects the appropriate percentage of defence costs to be paid by CSR.
Courts have sometimes been reluctant to embark upon determining costs issues. In Herbert v Tamworth City Council (No.4) [2004] NSWSC 394; 60 NSWLR 476 Justice Sperling said at [32]: "The plaintiff sought a further order, or failing that, a recommendation that the plaintiff's costs should include the costs of briefing two counsel, including senior counsel. It was submitted that the court is better able to assess the merits on this issue than a costs assessor would be. The scheme for assessment of costs by costs assessors involves the assessor making decisions which involve the trial in detail. I am not persuaded that it is appropriate for the court to involve itself in deciding questions of that kind which, under the scheme, are intended to be dealt with by costs assessors."
That case concerned an application for costs after a full trial. In the present case there was no trial, as the plaintiff's claim against Amaca settled. However, there was no doubt evidence and documentary material known to the parties but not to the Tribunal. The Tribunal never had to receive or examine any of that material because of the settlement. It would be inappropriate for the Tribunal to now conduct a "trial within a trial" to determine the appropriate contribution which CSR should make to Amaca's defence costs.
A costs assessor would be at a similar disadvantage. There is no transcript of evidence and there were no exhibits for a costs assessor to look at. The costs assessor would not be "making decisions which involve the trial in detail", to pick up the phrase in the decision cited above.
It would be unfortunate in the extreme if these two well-resourced parties spent more money on legal costs to determine an issue which could be sorted out if they embraced the notion of compromise. To order a costs assessment would add further cost and delay to the finalisation of these proceedings.
Section 60 of the Civil Procedure Act 2005 provides: "In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute."
The obligation imposed by this section may be resorted to in connection with the exercise of the costs discretion under s 98 of the Civil Procedure Act - Ritchie's Uniform Civil Procedure NSW [S 60.10].
The only issue left between the parties in this case is the quantum of defence costs which should be borne by CSR. The differential between the outcome of the order sought by the cross-claimant and the order sought by the cross-defendant in relation to the quantum of costs is unknown. It may be very small.
To refer the matter to a costs assessor would be to impose on the parties a cost which is disproportionate to the importance and complexity of the quantum of the defence costs to be borne by the cross-defendant. I decline to make the order in the form sought by the cross-defendant. While the 30% proportion determined by the Contributions Assessor might be "rough and ready" it is to be noted that the cross-defendant accepted that proportion in relation to a relatively large judgment in favour of the plaintiff, and in relation to the plaintiff's own costs, which would probably be greater than the defence costs. In those circumstances I think that justice would be done by imposing that 30% figure on the defence costs issue, and saving both parties the further delay and cost involved in a costs assessment.

ORDERS

Order that the cross-defendant pay 30% of the cross-claimant's costs of defending the plaintiff's claim.
Order that the cross-defendant pay the cross-claimant's costs of the cross-claim.
Order that the cross-defendant pay the cross-claimant's costs of the determination of the issue of defence costs of the cross-claim.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 November 2017

At a glance

Court

Decision date

Before

Source

Judgment (8 paragraphs)

Parties

Cases Cited (1)