Amaca Pty Ltd v Mathwin

Dust Diseases Tribunal Act 1989 LEGISLATION CITED: Dust Diseases Tribunal Rules Supreme Court Rules 1970

Australian Coal and Shale Employees' Federation v The Commonwealth [1953] HCA 25; (1953) 94 CLR 621 House v The King [1936] HCA 40; (1936) 55 CLR 499 CASES CITED: Mathwin v Amaca Pty Ltd [2004] NSWDDT 49 Morgan v Johnson (1998) 44 NSWLR 578 NSW Insurance Ministerial Corp v Reeve (1993) 42 NSWLR 100

Amaca Pty Ltd (Claimant) PARTIES: Stephen Paul Mathwin (as Legal personal representative of the Estate of the Late John Mathwin) (Opponent)

E G H Cox (Claimant) COUNSEL: A J Leslie QC (Opponent)

Holman Webb (Claimant) SOLICITORS: Turner Freeman Lawyers (Opponent)

LOWER COURT JURISDICTION: Dust Diseases Tribunal

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40053/05 DDT 123/04

GILES JA McCOLL JA GZELL J

Tuesday, 25 October 2005 AMACA PTY LTD v Stephen Paul MATHWIN (as legal personal representative of the Estate of the Late John Mathwin) Judgment

1 GILES JA: I agree with McColl JA. 2 McCOLL JA: This application for leave to appeal was heard on 20 October 2005. The Court dismissed the application with costs. These are the reasons for that decision.

Statement of the case 3 On 21 April 2004 John Mathwin (the "deceased") commenced proceedings in the Dust Diseases Tribunal against Amaca Pty Ltd, the claimant, seeking to recover damages for injuries caused by the disease of mesothelioma he claimed he contracted as a result of inhaling asbestos fibres from products manufactured by the claimant. The deceased gave evidence in the proceedings in Adelaide on 17 June 2004. He died on 18 June 2004. 4 On a date which the evidence does not disclose, but which was prior to 27 October 2004, Stephen Mathwin, the deceased's legal personal representative was substituted as the plaintiff in the proceedings: SCR Pt 8 r 10(2) which applied to the Tribunal (Dust Diseases Tribunal Rules, cl 2(1) as then in force). 5 The parties attempted to settled the matter. On 4 June 2004, the deceased made an offer of $530,000 plus costs of $40,000. On 9 June 2004 the claimant served an offer of compromise pursuant to SCR Pt 22 in the sum of $170,000 plus costs. The offer was expressed to be open for 28 days: SCR Pt 22 r 3(3). On 18 June 2004, the deceased's solicitors made a verbal offer to settle the matter for $450,000, presumably inclusive of costs. On 27 October 2004, after he was substituted as the plaintiff, the opponent made a further offer of $260,000 plus costs of $46,000. On 1 November 2004 the claimant made a Calderbank offer in the sum of $180,000 plus costs. On 5 November 2004 the solicitors for the opponent responded with an offer of $200,000 plus costs. 6 The matter did not settle. It proceeded to a final hearing in Adelaide on 17 November 2004. Liability was not in issue. The hearing occupied one day. Judgment was reserved and delivered on 7 December 2004. The primary judge awarded the opponent $158,454.85 damages: Mathwin v Amaca Pty Ltd [2004] NSWDDT 49. As is apparent, that amount was not more favourable to the opponent than the claimant's offer of compromise. Accordingly the claimant sought an order that the opponent pay its costs from 9 June 2004, the date of the offer of compromise, until judgment on a party-party basis: SCR Pt 52A r 22(6). 7 The primary judge delivered a second judgment on 9 December 2004 (the "costs judgment") in which he acceded to the claimant's application for the period 9 June to 5 November 2004. He rejected it for the period 5 November 2004 to 17 November 2004. The claimant's application for leave to appeal concerns the appropriate costs order for that period of approximately 2 weeks. It seeks to argue that the primary judge ought also to have ordered the opponent to pay its costs for that period on a party-party basis. It was common ground that the approximate amount of costs incurred by the claimant in this period was $10 - 15,000.

8 The claimant requires leave to appeal because it seeks to appeal from a decision as to costs only: s 32(4)(b), Dust Diseases Tribunal Act 1989. Its application is confined to a complaint that the primary judge erred in law: s 32(1) of the Act.

The primary judgment 9 Before the primary judge the opponent resisted the costs order the claimant sought on several bases, only one of which remains relevant. He submitted that the primary judge should exercise the discretion in SCR Pt 52A r 22(6) to "otherwise order" party-party costs. He submitted his 5 November 2004 offer was reasonable, as it was only $20,000 more than the claimant's last offer and was, apparently comparable with, or not substantially different from, previous damages awards made by the primary judge. 10 The primary judge apparently acceded to the opponent's submission. He commented adversely about two components of the offers made by the deceased prior to his death: first that they included a claim for lost superannuation entitlements which his Honour regarded as "without legal merit" (at [2]) and, secondly, a future Griffiths v Kerkemeyer claim which he said was (at [5]) "specious". He described the opponent's first offer of $260,000 plus costs of $46,000 as "also unreasonable" without elaboration. He said (at [7]) the opponent's 5 November 2004 offer was the first time the plaintiff had put a reasonable offer. 11 The primary judge concluded that the opponent had acted unreasonably prior to 5 November 2004 by making the offers of $530,000, $450,000 and $260,000. He concluded that, as the 5 November 2004 offer was reasonable, the opponent had not acted unreasonably from that date. 12 It was on this basis, apparently, that his Honour ordered the opponent to pay the claimant's costs from 9 June to 5 November 2004 on a party-party basis. He exercised his discretion to "otherwise order" in respect of the period 5 November 2004 until 17 November 2004 and ordered the claimant to pay the opponent's costs for that period on a party-party basis.

Issues on appeal 13 The claimant seeks leave to appeal to agitate three points. First, that the primary judge failed to give adequate reasons for concluding it should pay the opponent's costs after 5 November 2004. Secondly, that the primary judge erred in that he failed to consider whether there were "special or unusual features or exceptional circumstances" to "otherwise order" within the meaning of SCR Pt 52A r 22(6). Thirdly, that the primary judge erred in finding that the opponent's 5 November 2004 offer was a basis for departing from the SCR Pt 52A r 22(6) "presumption". 14 When the matter was called on the Court asked Mr Cox, who appeared for the claimant, to demonstrate why leave should be given. Mr Cox's argument, in essence, was that the primary judge had erred in law in that he had applied the wrong test in exercising his power under SCR Pt 52A r 22(6). He submitted that if that error was not corrected it would set a dangerous precedent in the Tribunal which would render the offer of compromise procedure nugatory. He contended that the purpose of SCR Pt 22 was to put a premium on reasonable offers and that a court should only depart from the presumption in favour of a party-party costs order under Pt 59A r 22(6) where there were exceptional circumstances: Morgan v Johnson (1998) 44 NSWLR 578 at 582 per Mason P (with whom Sheller JA agreed); NSW Insurance Ministerial Corp v Reeve (1993) 42 NSWLR 100. 15 He argued that leave ought be granted so that the primary judge's approach did not set a precedent in a "small specialist Tribunal". 16 Mr Leslie QC, who appeared for the opponent, submitted that leave to appeal should not to be granted as no prima facie error was exposed in the primary judge's reasons which would attract appellate review of a discretionary decision: House v The King [1936] HCA 40; (1936) 55 CLR 499; Australian Coal and Shale Employees' Federation v The Commonwealth [1953] HCA 25; (1953) 94 CLR 621.

Decision 17 It is strongly arguable that the primary judge applied the wrong test in exercising his discretion under SCR Pt 52A r 22(6). It was not open to his Honour to depart from the prima facie consequence of the opponent's non-acceptance of the claimant's offer of compromise unless exceptional circumstances were identified. He departed from the prima facie approach because he found the opponent's 5 November 2004 offer was a reasonable one. That appears to have been an irrelevant consideration which would make his Honour's exercise of his discretion open to appellate review. 18 It is not sufficient, however, that the claimant identify an arguably, even strongly arguable, erroneous approach to SCR Pt 59A r 22(6) in order to attract a grant of leave to appeal. It is necessary, too, that the error results in substantial injustice. 19 There is no suggestion that the primary judge's approach is one which has set the precedent the claimant fears. As far as the material before the Court reveals, his Honour's approach is a "one-off". The period in respect of which the claimant has suffered an adverse costs order is short. The amount at issue is small. While the question of the proper application of SCR Pt 52A r 22(6) is important, the tests to be applied in the exercise of that power are well established. 20 The primary judge's approach is not to be endorsed. However, the claimant has not demonstrated that the case warrants a grant of leave to appeal. 21 GZELL J: I agree with McColl JA.

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.