CSR Limited v Amaca Pty Limited

CATCHWORDS: COSTS - proceedings remitted for further hearing on issue not yet litigated- outstanding Calderbank offer- judge on remitter to determine costs of hearing at first instance

LEGISLATION CITED: Law Reform (Miscellaneous Provisions) Act 1946, s 5

PARTIES: CSR Limited (Appellant) Amaca Pty Limited (Respondent)

COUNSEL: F Corsaro SC; B Bradley (Appellant) GM Watson SC; JC Sheller (Respondent)

SOLICITORS: Leigh Virtue & Associates (Appellant) DLA Phillips Fox (Respondent)

LOWER COURT JURISDICTION: Dust Diseases Tribunal of New South Wales

LOWER COURT DATE OF DECISION: 8 August 2007

LOWER COURT MEDIUM NEUTRAL CITATION: (Re Jones-Mashman) Amaca PL v CSR Ltd [2007] NSWDDT 17

• 5 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40664/07

BEAZLEY JA GILES JA YOUNG CJ in EQ

10 March 2009 CSR Limited v Amaca Pty Limited (No 2) Judgment 1 THE COURT: On 3 December 2008, the Court delivered its judgment in this matter, in which it allowed the appeal by CSR Limited (CSR) from a decision of O'Meally P in the Dust Diseases Tribunal of New South Wales (the Tribunal). The proceedings before O'Meally P involved the determination of a cross-claim by the respondent Amaca Pty Limited (Amaca) against CSR. 2 The proceedings in which the cross-claim had been brought involved a claim for damages by Mr Jones-Mashman against Amaca. Mr Jones-Mashman suffered from mesothelioma, which he contended had been caused by the negligence of employers of his stepfather. Mr Jones-Mashman's proceedings were settled. 3 Subsequently, the employers issued cross-claims against a number of parties, including Amaca (formerly James Hardie & Coy Pty Limited), as supplier of the asbestos material to which Mr Jones-Mashman's stepfather had been exposed. Amaca settled that cross-claim, consenting to judgment for $270,000, which represented 30 per cent of the damages and costs payable to Mr Jones-Mashman. Amaca then filed a cross-claim against CSR, claiming one-half of the judgment sum from CSR on the basis it was entitled to an indemnity under the provisions of a Deed of Partnership the parties had entered into in 1964. In the alternative, Amaca claimed an entitlement to this sum by way of contribution from CSR as a partner. 4 This Court determined that any indemnity to which Amaca might have been entitled under the provisions of the Deed of Partnership was terminated by the provisions of the terms of release contained in the Deed of Dissolution of the partnership. Accordingly, the Court allowed the appeal. 5 At the conclusion of its judgment, the Court noted that Amaca had asked that, should the appeal be allowed, the matter be remitted to the Tribunal to enable it to pursue other rights to contribution that it might have. CSR did not argue against this course, although it contended that there was a question as to whether the Tribunal had jurisdiction to deal with equitable rights of contribution. The Court remitted the matter to the Tribunal to allow Amaca to pursue such other rights to contribution that it might have. 6 Having regard to the success of CSR on the appeal, the Court ordered Amaca to pay CSR's costs of the appeal. It also ordered that Amaca pay CSR's costs "to date at first instance". The Court did not give reasons for that order. However, it would be apparent from the discussion in the Court's judgment as to the reasons for remitter that it considered the issues which had been litigated before the Tribunal up to that point had been dealt with in the appeal and that questions relating to other rights, such as contribution, had not been litigated. That issue was distinct from the matters litigated to that point. Accordingly, the Court considered it was appropriate that Amaca pay the costs up to that point. 7 By notice of motion filed on 17 December 2008, Amaca seeks an order that the costs order be rescinded and in lieu thereof the following orders be made: "1.1 Order [Amaca] to pay [CSR's] costs of the appeal; and

1.2 Order the costs of the hearing at first instance be determined at the conclusion of the remitted hearing." 8 In brief, Amaca seeks to have the question of costs of the hearing at first instance determined at the conclusion of the remitted hearing. CSR opposes the application. Amaca's arguments in support of its notice of motion are in short compass and it is convenient to reproduce them in the terms made in the written submissions. 9 Amaca contended that there is no reason at this point to order that Amaca be liable for all costs at first instance, because the following matters could be relevant to a decision in respect of such costs: "(a) Amaca's claim could succeed. In that event, it should be entitled to most, if not all, of the costs incurred so far at first instance;

(b) As far as the matter at first instance has gone to date, CSR has failed on a number of issues. For example, CSR put Amaca to proof on the exposure of Mr Jones-Mashman to asbestos. CSR lost. CSR put in issue the supply of partnership products to the relevant power stations. CSR lost. It would be inappropriate for CSR to recover costs on these issues, especially if Amaca is ultimately successful. These are matters which could be considered by the remitter judge.

(c) Things might change before or during the remitted hearing. For example, CSR could change its position in relation to its defence of the proceedings - CSR might bring a claim for statutory contribution under s.5 of the Law Reform (Miscellaneous Provisions) Act 1946. There could be other changes, not presently obvious, but which can be taken into account by the remitter judge.

(d) Amaca might achieve a result which enables it to rely upon an offer of compromise which it made in an attempt to resolve the proceedings, at an early date and for a relatively paltry sum." 10 It was submitted that these matters would be more appropriately dealt with by a judge on the remitted hearing, who would be able to adjudicate in the context of the overall result of the proceedings. 11 CSR contended that it is not appropriate for the question of costs to be determined on the remitted hearing. It submitted that Amaca chose the manner in which it conducted the proceedings below and confined its case to a claim for indemnity based on the Deed of Partnership. At trial at first instance, O'Meally P was expressly invited not to devote time to the question of equitable contribution. It follows, on CSR's submission, that the issue for remitter is a separate and distinct issue, whereas the costs incurred to date have been advanced on the matter which has now been determined against Amaca by this Court. CSR submitted, therefore, that it should have the benefit of an order in respect of the costs incurred to date at first instance. CSR contended that such costs as might be incurred on the remitter relate to the distinct issue of equitable contribution, in respect of which discrete facts and legal principles will be involved. 12 This Court, when it remits proceedings for further hearing or re-determination, frequently orders that the costs of the first proceedings be in the discretion of the remitter judge. However, when the remitted matter relates to a distinct issue, then there may be no reason why the successful party on the appeal ought not to have its costs at trial to date. In this case, the trial judge ordered a verdict on the cross-claim and did not decide any question relating to equitable contribution or any other claim. The trial judge, presumably on the basis that he considered the proceedings were at an end, made an order for costs. 13 The Court has found two matters to be persuasive in its determination that CSR's application should be acceded to. The first is that Amaca made an offer of compromise in the matter. If Amaca is successful on any remitted issue, then the offer of compromise may affect the costs order that would properly be made in respect of the proceedings as a whole. Of itself, that is probably sufficient for the Court to vary its order. Secondly, the court dealing with the remitted proceedings is likely to have a better overview of all matters in issue and thus a better appreciation than this Court is able to have as to how the costs discretion ought to be exercised. 14 The application as to the costs at first instance was not foreshadowed during the course of the appeal, as it should have been, with the consequence that the range of considerations that are now evident was not fully brought out at that time. This Court is not able to readily determine what order for costs ought to be made on the proceedings as a whole, having regard to the bifurcated manner in which the proceedings have been conducted to date. It follows, therefore, that the question of costs at first instance should be remitted for determination by the trial judge who has the conduct of the remitted hearing. 15 In these circumstances, the Court rescinds order (4) made on 3 December 2008 and in lieu thereof makes the following orders:

2. The costs of the hearing at first instance be determined by the judge conducting the remitted hearing;

3. Amaca pay CSR's costs of this notice of motion. **********

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