Dasreef Pty Limited v Hawchar

Dasreef Pty Limited v Hawchar - [2010] NSWCA 154 - NSWCA 2010 case summary — Zoe

[25]

Held (per Allsop P, Basten and Campbell JJA agreeing): (i) Dr Basden had relevant expertise to provide an opinion about the concentration of silica dust in Mr Hawchar's work environment. That his opinion was not based on precise measurement, but was an inexact estimate drawn from experience did not make his opinion inadmissible. That his opinion was based on assumptions of Mr Hawchar working in a tent did not undermine the legitimacy of his opinion to a point of such inutility to make it inadmissible. (ii) The primary judge did not err in drawing on his experience in a specialist tribunal. (iii) As to Mr Rogers not being called to give evidence, it was a legitimate conclusion to be drawn by the primary judge that his evidence would not have assisted Dasreef in that regard. (iv) While it can be expected that Mr Hawchar would have undergone some exposure to silica dust if Dasreef had not been negligent, there was no evidence as to what that was. The primary judge legitimately approached the matter on the basis that, factually, all Mr Hawchar's exposure at Dasreef was through Dasreef's negligence. (v) It was open to the primary judge to refuse to award indemnity costs for an exceptional case and to avoid substantial injustice. However, the primary judge erred in reasoning that the liability judgment gave rise to issue estoppels which prevented Dasreef from denying Mr Hawchar's entitlement to workers' compensation benefits for scleroderma and denying any future claim for damages for "scleroderma lung" that such condition was caused by Dasreef's breach of duty. Both parties appreciated that an acceptance of the offer would have put Mr Hawchar in a detrimental position in relation to the workers' compensation regime. Both sides were aware that Mr Hawchar was not claiming damages for scleroderma other than on the basis that scleroderma was a dust disease. (vi) An arbitrary view as to the sum Mr Hawchar should obtain from judgment is a consideration foreign to the exercise of the power as to costs. (vii) Because the incorrect finding of issue estoppels was important to the reasoning of the primary judge on costs and there being doubt as to how the primary judge approached the question as to how much Mr Hawchar should obtain from the judgment, the question of costs should be remitted to the primary judge for reconsideration.

[36]

Breaches of duties or obligations pursuant to the Occupational Health & Safety Act 2000." 8 The breaches of the statutory duty case were founded on a number of particularised allegations that included an allegation of a failure to ensure that Mr Hawchar was not exposed to airborne concentrations of silica dust that exceeded the relevant standard. 9 The appellant submitted that the only case run by Mr Hawchar below (either at common law or for breach of statutory duty) was to the effect that the relevant standard (being 0.2 mg/m3 over an eight hour time-weighted average for five working days) was exceeded by Dasreef in Mr Hawchar's working conditions. Mr Hawchar submitted that the case pleaded was wider than this and that a more general complaint was made about the excessive levels of respirable silica dust in his work environment. The debate becomes relevant at various points to which I will come. The judgment of Curtis J as to liability 10 The primary judge concluded that Mr Hawchar was a worker. There was no appeal against this finding. 11 The primary judge also concluded that scleroderma, from which Mr Hawchar was suffering, was not a "dust disease" as defined under the Workers' Compensation (Dust Diseases) Act 1942 (NSW). This conclusion, against which there was no cross-appeal, meant that the regime provided for under the Workers Compensation Act 1987 (NSW) (the "WC Act") for work injuries applied to this disease. The consequence of this conclusion for the running of Mr Hawchar's case will be discussed in due course. 12 The primary contest between the parties at the hearing that was relevant on appeal was whether the silicosis suffered by Mr Hawchar was caused by Mr Hawchar's work at Dasreef, and more specifically by Dasreef's breach of duty owed to Mr Hawchar to exercise reasonable care in the provision of a safe system of work. 13 The primary judge first examined the question of exposure by reference to the evidence of Mr Hawchar, which, with the exception of one matter, he accepted; of Mr Yousef, who was a co-worker of Mr Hawchar; of Mr Buono, the owner of a nearby factory; of Dr Leu and of Mr Hayek, the principal of Dasreef. The primary judge's findings on exposure were set out at [55]-[58] of his reasons: "[55] Before coming to Australia, Mr Hawchar worked part-time with stonemasons for a period of one year. In this work he was exposed to the inhalation of respirable silica generated from work by hand tools upon sandstone.

[49]

" 18 From these standards, the primary judge summarised the heart of the case against Dasreef, on Dr Basden's evidence, at [72]-[73] of his reasons, as follows: "[72] In accordance with this standard the concentration of airborne particulates inhaled by Mr Hawchar from inside his mask should not exceed the proclaimed concentration standard of 0.2 mg/m 3 of respirable particles. Dr Basden says that the actual dust concentrations generated in Mr Hawchar's breathing zone generated by the cutting wheel of the angle grinder 'Most certainly would not be from half to two ten-thousands of a gram per cubic metre of air, but more realistically would be of the order of a thousand or more times these values [0.2g] or even approaching one gram, or thereabouts, per cubic metre. ' [73] Dr Basden says that the minimum protection factor required by the standard in order to protect Mr Hawchar was well in excess of 100 plus, and could realistically approach 1000, and that the only suitable type of respirator would be a Powered Air Purifying Respirator fitted with a PAPR-P3 filter. He says that there are … many such respirators available in Australia." 19 The primary judge then at [74]-[81] of his reasons described the submissions of Dasreef as to the lack of qualifications of Dr Basden. Given the centrality of this same debate to the resolution of the appeal, it is helpful to set out all these paragraphs of his Honour's reasons, notwithstanding their length: "[74] In cross-examination Mr Parker SC for Dasreef established that while Dr Basden had experience in measuring the atmospheric concentration and respirable fractions of a number of dusts, he has not measured the respirable fraction of dry ground sandstone. He has measured respirable concentrations of dust in the vicinity of wet cutting of sandstone and of silica on construction sites. On one occasion he observed the dust generated by the application of the grinding wheel to sandstone, and he has seen a video of this process tendered in evidence by the defendant. He said that from his experience in observation and measurement he was able to form an opinion based on those observations alone, within general parameters.

[81]

[94] It is now apparent that the exposure in Lebanon is also a contributory cause, although, being far less intense, I believe it to be a minor cause." 24 At this point, it should be noted that it was submitted on behalf of Mr Hawchar that even if Dr Basden's evidence was wrongly admitted, there was ample evidence upon which to support a conclusion that Mr Hawchar's exposure at Dasreef was excessive and caused by breach of duty. One matter to which attention was directed in this regard was the rapid on-set of his disease leading to the inference that exposures to which Mr Hawchar was subjected were very high. The difficulty with this approach is that it is not how the primary judge approached the matter. Dr Basden's evidence was important to the primary judge's reasoning. It was not the only material or consideration that the primary judge relied upon for his conclusion as to breach, but it was at the centre of his reasons. Further factual analysis would need to be undertaken to reach the conclusion asserted, absent reliance on Dr Basden's evidence. That is not the function of this Court in an appeal under s 32. There may be circumstances where the demonstration of legal error in the Tribunal does not, on the facts found by the Tribunal, persuade this Court of the materiality or operativeness of any such error: Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; 259 ALR 616 at [16] and [145]. Nevertheless, in an appeal under s 32, this Court does not undertake an evaluation of the evidence in order to assess the correctness of an alternative factual hypothesis that might support the orders made, as it might do in considering a notice of contention under an appeal governed by the Supreme Court Act 1970 (NSW), s 75A. 25 The primary judge then, at [95] of his reasons, made findings about silicosis as a divisible disease, as follows: "Silicosis is a divisible disease. In accordance with my earlier findings as to relative concentrations of exposure, I find that as to 20 parts in 23 the silicosis was caused by Mr Hawchar's work at Dasreef." 26 A further complaint made on appeal was that the primary judge did not further divide the disease and reduce Dasreef's proportion for so-called non-negligent exposure. It was submitted that there was a degree of exposure for which Dasreef could not be criticised (that is below the 0.2 mg/m3 standard) and it should receive a "credit" for that. 27 The primary judge then, at [96]-[153], dealt with the disease of scleroderma, the medical evidence in relation thereto and the relationship between the silica dust, silicosis and scleroderma in terms to which it is unnecessary to refer. 28 At [154]-[155], the primary judge then set out his conclusions on breach of duty as follows: " Did Mr Hawchar's injuries result from a breach of duty by Dasreef? [154] Because Dasreef does not rely on allegations of contributory negligence it is unnecessary that I address statutory breaches of duty.

[88]

His asserted lack of experience 33 The objection to the evidence of Dr Basden and the ruling upon it by the primary judge were not clearly revealed by the record of the hearing. It was submitted that all of Dr Basden's evidence was taken on the voir dire. It was accepted by Dasreef, however, that the primary judge's utilisation of Dr Basden's evidence was an implicit ruling on that evidence and the admission of the evidence on the voir dire as evidence in the proceedings. 34 I am content to work on that basis. Mr Hawchar did not oppose that course. Nevertheless, with all due respect to the experienced counsel who ran the hearing and to the very experienced primary judge, and without intending any personal criticism, it should be said that the admission and rejection of evidence and the reasons therefore (if given) are important matters of record in any trial, but in particular one where the rights of the parties to appeal are limited as they are under the DDT Act, s 32. Rulings on evidence and associated steps (such as giving reasons, to the extent they may be given, taking evidence on the voir dire and adopting evidence taken on the voir dire into the evidence in the hearing proper) should be clearly recorded, so that the rights of appeal of the parties are not compromised. 35 The opinion of Dr Basden referred to by the primary judge at [72] of his reasons ([18] above) was said by the appellant not to be one which he could give because of a lack of relevant expertise in measurement of silica in dust. 36 Dr Basden's expertise has been and had to be assessed by reference to the totality of evidence given by him. The primary judge referred to that expertise at [60]-[63] of his reasons ([16] above). His Honour also referred to parts of the cross-examination at [74]-[81] of his reasons ([19] above). It would be burdensome to set out, verbatim, all the examination and cross-examination. There was, however, ample material from Dr Basden's evidence to support the conclusion that he had the relevant expertise to proffer an opinion concerning the measurement of silica dust in the way he did. 37 The material recited by the primary judge is sufficient to permit that conclusion. Dr Basden stated clearly that he had undertaken work in the past to determine the amount of dust in many situations. He said that he had measured dust clouds. He said his opinion was just the sort of opinion that he has drawn in the past on many occasions. If he was accepted in this evidence (as he was) his experience was established. Dr Basden's oral evidence was contained over forty pages at the hearing on 5 November 2008. It revealed a deep and extensive experience with dust, including silica dust, in industrial and occupational health and safety contexts. This involved measurement, ventilation and personal protection equipment. He was clearly familiar with measurement techniques. I would particularly refer to the following pages of the transcript (using Black Book references and trial transcript pages in parentheses): Black 145 (193), 150 (198), 151 (199), 153 (201), 154 (202), 156 (204), 157 (205), 159 (207), 160 (208) to 166 (214), 168 (216) and 170 (218) to 173 (221). 38 Whether or not the opinion was acceptable or whether it suffered any particular defect is another thing. Dr Basden had the background and relevant expertise to proffer an opinion about the concentration of airborne silica dust.

[89]

The asserted lack of expressed reasoning 39 The appellant submitted that, conformably with the reasons of Heydon JA (as his Honour then was) in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705, the opinion in the report of Dr Basden relied upon by the primary judge just was not rationally explained by Dr Basden. The report itself contained some (though limited) elucidation of the basis of the conclusion. The opinion must, however, be assessed in the light of the whole of Dr Basden's evidence. Dr Basden was given assumptions that included the following: "Mr Hawchar is suffering from silicosis allegedly contracted through the inhalation of silica bearing dust, while in the employment of the defendant between 21 October 1999 and May, 2005. During this period Mr Hawchar was employed as a stone worker who was involved in cutting and laying stone, usually sandstone. Depending on the nature of the job, Mr Hawchar on a daily basis spent from one hour to all day cutting stone, usually standstone, and generally by power tools. This operation generated large quantities of airborne dust. While performing this work, Mr Hawchar at all times wore a mask provided by his employer, but he alleges that dust penetrated these masks because of gaps between them and his face. Mr Hawchar also alleges that about 20 to 30 times each year during the period of his employment he worked within a plastic enclosure or 'tent', erected to minimise the spread of fugitive dust to neighbouring properties. One side of this enclosure or tent was fitted with an exhaust fan to remove the dust therefrom, but nevertheless Mr Hawchar claims that in spite of this the enclosure only served to concentrate the dust in his working / breathing zone. He further alleges that due to the increased concentration of dust he would have to take a break approximately every hour because of troubled breathing." He also saw the DVD which was in evidence showing cutting of sandstone at Dasreef's premises. 40 In his report, Dr Basden said: "… The actual dust concentrations generated in Mr Hawchar's breathing zone, which would be no more than 50 or 60 cm from the cutting wheel (as indicated by the photograph supplied; c.f. paragraph 8 above), presumably were never measured with the appropriate instruments while work was in progress. However, it most certainly would not be from half to two ten-thousandths of a gram per cubic metre of air, but more realistically would be of the order of a thousand or more times these values or even approaching one gram, or thereabouts, per cubic metre. (Only once can I recall actually observing sandstone being dry-cut in the open air by portable powered angle grinders, at a monument being erected at the entrance to a country town in NSW. Each of the two operators was enveloped by dense clouds of highly visible fugitive dust, and neither was wearing a respirator of any type! In the case of Mr Hawchar, the defendant found it necessary to erect a 'tent' fitted with an exhaust fan 'to attempt to minimize the dust pollution caused to neighbouring properties when the stone was being cut', which indicates the production of considerable quantities of visible dust). It should be noted that not all of the dust in the visible clouds being generated by the cutting wheels would be in the 'respirable' size range, which means an equivalent aerodynamic diameter (EAD) of below 4 μ m. The actual clouds would consist of particles from about 20 or perhaps 30 μ m downwards, as larger ones will settle rapidly by gravity and not remain in the airborne state. However, a considerable proportion of the size distribution of the suspension would be 4 μ m and below, and hence would constitute the 'respirable' fraction of the dust cloud." (emphasis in original)

[91]

The removal of assumptions supporting the evidence 45 The appellant submitted that various concessions made by Dr Basden destroyed the foundation of his evidence thus making it inadmissible. 46 First, it was submitted that his evidence was that his opinion was founded on Mr Hawchar working in a tent. The findings by his Honour about the use of the tent were that this occurred on only two or three occasions. These findings, it was submitted, destroyed Dr Basden's evidence. That is not how Dr Basden's evidence should be read. In the relevant passages in the Black Book at 184-185 (232-233), Dr Basden was referring to the assumptions in his report that I have earlier set out ([39] above). Though the frequency of the use of the tent was falsified by the primary judge's findings, Dr Basden's evidence should not be read as only directed to measurement in a tent. Its legitimacy was not undermined to a point of such inutility as to make it inadmissible: cf Makita at [85] and Rhoden v Wingate [2002] NSWCA 165. It is unnecessary to explore any debate as to the residual operation of the basis rule under the Evidence Act 1995 (NSW) that may perhaps be seen to arise from an application of Makita: see generally S Odgers, Uniform Evidence Law (8th Ed, Thomson Reuters) at 323-327 [1.3.4320]. The difference between Dr Basden's assumption about the tent and the facts as found would not be sufficient under the basis rule to make inadmissible his opinion: Ramsay v Watson [1961] HCA 65; 108 CLR 642 and Paric v John Holland (Constructions) Pty Ltd [1985] HCA 58; 59 ALJR 844 at 846. As Samuels JA said in the Court of Appeal in Paric ((1984) 2 NSWLR 505 at 509-510) the importance of any discrepancies between what is assumed and what is proved is for the tribunal of fact to assess. This was discussed by Beaumont J in Trade Practices Commission v Arnotts Limited (No 5) (1990) 21 FCR 324 at 326-330, which was approved by Gleeson CJ (with whom Mahoney JA and Studdert J agreed) in Perry v R (1990) 49 A Crim R 243 at 249. 47 Secondly, on a number of occasions, such as in the passages referred to and cited by the primary judge at [74]-[76] of his reasons (see [19] above), Dr Basden expressed qualification as to the difficulty or impossibility of precise measurement. That did not destroy the validity of his opinion. The opinion was intended as an estimate.

[92]

The relevance of Mr Hawchar's silicosis - how the case was run and the experience of the judge in a specialist court 48 The complaint as to [87] of the primary judge's reasons (see [21] above) was partly based on how it was said the case was run and partly on what was said to be the legal flaw in the approach. 49 As to the former, contrary to the submission of the appellant, the case was run by reference simply to excessive levels of dust. That is made clear by the pleadings to which I have referred. The statement of the primary judge is within the particulars and in accordance with the medical evidence of Dr Henderson on 3 November 2008, as follows: "Q. Let me ask you this question, suppose that Mr Hawchar had been presented to you without any history of above background silica exposure, would you[r] diagnosis still be silicosis. A. Other factors radiologically would enter into the differential diagnosis but if, as a pathologist, I were given, say, a lobe of his lung and I were able to examine that and I detected multiple silicotic nodules then I would make a diagnosis [of] silicosis and if there were no history I would indicate that a history of exposure must have been overlooked, there must have been a history of exposure to above background concentrations of crystalline silica particles in the atmosphere. After all, the appearances of silicotic nodules are very characteristic. … Q. My question is, are you able to quantify what excessive means in that context. A. I cannot draw sharp boundaries in this respect and the [dose] response relationships are less well defined than they are, for example, for asbestos dust inhalation and asbestosis. However, when I've used the word, excessive, there I've done it in the context that silica is the most abundant mineral in the earth's crust in its various forms and that we all have inhaled silica containing dust so that the diagnosis of silicosis requires the demonstration of excessive above-background silica dust exposure either high-intensity exposure for short periods of time or lower but excessive inhalation for more protracted periods of times so that you need to take into account the occupational history if you are dealing with a clinical diagnosis of silicosis. Having said that, I cannot put numerical values on this, all I would say [is] that usually the disease is the outcome of often times intense exposure over a period of a few years or of a less intense exposure over more protracted periods of time. Q. But excessive means above background. A. It means well above background. Q. How far above background. A. Again, I cannot put a numerical quantifier on that, all I would say is substantially or highly above background. Q. You are unable to quantify it. A. I would not try and quantify it in numerical terms. I don't think one can do so as a matter of biological observation. Biology doesn't have sharp boundaries between significant and non-significant effects in terms of numerical quantifiers. Q. If this man had been presented to you and his history had been, instead of what you have been provided with, that he had worked for three months about 20 years before as a labourer in a stone masonry business, would that or could that qualify as giving rise to excessive exposure of the sort referred to in your definition?"

[93]

This was reflected in the primary judge's findings at [93] of his reasons. 50 By referring to the evidence I am not intending to find facts. Rather, the pleadings, the evidence and the primary judge's approach all reflect an approach to the case other than one based on precise measurement. Thus, the first basis of the argument for error in [87] falls away. 51 The second basis was a challenge to the primary judge's ability to use his position in a specialised court. The legitimacy of a judge of the Dust Diseases Tribunal taking account of his experience in understanding a dust disease is established by ICI Australia Operations Pty Ltd v Workcover Authority of New South Wales [2004] NSWCA 55; 60 NSWLR 18 at 62-65 [216]-[234] (per McColl JA, with whom Mason P agreed and Meagher JA generally agreed); and JLT Scaffolding (International) Pty Ltd (In Liq) v Silva (Court of Appeal, 30 March 1994, unreported) at 12 per Kirby P. 52 Dasreef sought to distinguish the line of authority applied in ICI to tribunals, such as the Workers Compensation Commission, that had particular administrative responsibilities. No such distinction need be drawn. It was not drawn in ICI, which concerned the Dust Diseases Tribunal. 53 The distinction, drawn by the learned author of Cross on Evidence (7th Ed) and referred to by McColl JA in ICI at 64 [229] and by Beazley JA in Wallaby Grip (BAE) Pty Ltd v Macleay Area Health Service (1998) 17 NSWCCR 335 at 365, between (a) a specialist tribunal drawing on its experience to enable it to understand quickly the evidence and to draw appropriate inferences from the evidence and (b) special knowledge that permits it to assert the existence of particular facts (in the latter case, procedural fairness requiring the parties to be given an opportunity to deal with the fact) can be seen as a legitimate one. It does not, however, affect the legitimacy of the approach of the primary judge here. The case was run on the basis contended for by Mr Hawchar - that there was excessive silica dust, that his exposure was heavy and that, as Dr Henderson said, his silicosis tended to support a conclusion that Mr Hawchar was exposed to excessive, in the sense of unsafe, levels of silica. The primary judge's remarks in [87] can be seen to be using his expertise to draw more readily conclusions from what appeared in the evidence. 54 Nothing in Strinic v Singh [2009] NSWCA 15; 74 NSWLR 419 is to the contrary of this approach. Indeed, in Strinic at [58], Beazley JA (with whose reasons Ipp JA and Basten JA agreed) noted the principles and practices that apply in specialist courts, referring to JLT Scaffolding, and distinguished the position of the District Court as a court of general statutory jurisdiction.

[96]

Costs 61 There was debate about the need for Dasreef to seek leave to appeal on the question of costs if (as in my view should be the case) the substantive grounds of appeal fail. Wheeler v Somerfield [1966] 2 QB 94 is authority for the proposition that an appeal which contains bona fide substantive grounds, which fail, as well as grounds relating to costs, is not an appeal as to costs alone. Wheeler has been applied in relation to the Supreme Court Act 1970 (NSW) s 101(2)(c): Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 at [100]. The relevant provision here, the DDT Act, s 32(4)(b), is relevantly the same as s 101(2)(c). (This is to be distinguished from the position under the Administrative Decisions Tribunal Act 1997 (NSW), s 119(1A)(c) which refers to "a decision as to costs". Under that provision leave would be required irrespective of the existence of other bona fide substantive grounds: World Best Holding Limited v Sarker [2010] NSWCA 24 at [1], [2] and [102]-[103] and McGuirk v University of New South Wales [2010] NSWCA 1.) Thus, leave was not required. 62 It is necessary to commence by saying something about the significance of the scleroderma claim and the primary judge's approach to it. 63 If (as the primary judge found) the scleroderma condition was not a defined dust disease, any damages for the causation of it would come to be assessed under the regime provided for workplace injuries under the WC Act. The primary judge made detailed findings as to the causal relationship between Dasreef's breach of duty, Mr Hawchar's silicosis and his scleroderma: see [96]-[153] and [155] of the principal judgment. There was no complaint about any aspect of these findings. That, however, was explained by the fact that notwithstanding the apparent success of Mr Hawchar in relation to scleroderma, he sought to withdraw his claim for recovery of damages in respect of it. 64 At [168]-[170] of his reasons the primary judge described Mr Hawchar's position if, as he so found, scleroderma was not a dust disease: "[168] A problem arises because, Mr Hawchar, in the event that I find that his entitlement to damages in respect of scleroderma is governed by the Workers' Compensation Act 1987 wishes to waive this entitlement, so that he recovers no damages.

[102]

(b) award further damages at a future date if the injured person does develop another dust-related condition." 72 Ground 3 of the amended notice of appeal complained about the making of order 4. No submissions were put in support of that ground. 73 The primary judge came to the question of costs in the above context. 74 Offers of compromise (under the Dust Diseases Tribunal Regulations 2007 and a "Calderbank letter") had been made on 8 October 2008 in the sum of $500,000 clear of workers compensation payments paid to date, plus costs as agreed or taxed. The Dust Diseases Tribunal Regulations 2007, reg 88 provided that a person in Mr Hawchar's position should pay indemnity costs thereafter if he obtained an order or judgment less favourable than as contained in such a letter of offer, unless the Tribunal otherwise ordered in an exceptional case and for the avoidance of substantial injustice. 75 The primary judge concluded, correctly, that the orders were, in their terms, less favourable than the offers. Nevertheless, the primary judge concluded, at [2] of his costs judgment, that it was an exceptional case and to avoid substantial injustice to Mr Hawchar he would not award indemnity costs. 76 The primary judge set out his reasons for so concluding at [38]-[40] of the costs judgment as follows: "[38] I regard the following matters as relevant to the exercise of my discretion: (a) The rejection of the offer was reasonable in circumstances where the plaintiff renounced any claim to damages assessed pursuant to the Workers Compensation Act 1987. (b) The pleadings raised a factual contest as to whether Mr Hawchar's disease of scleroderma resulted from exposure to silica dust in the course of his employment by the defendant. (c) At the time the offer was made and refused, the defendant had served no medical opinion disputing the causation of scleroderma. (d) The plaintiff's success on that issue secured a contested order that he may claim further damages in the event that he contracts scleroderma lung. (e) The litigation has also secured the plaintiff's valuable continuing workers' compensation entitlements, without the additional expense of further litigation, which would mirror the evidence and arguments canvassed in this action. (f) Every witness both lay and expert, called in the plaintiff's case was required to rebut the pleaded defence that Mr Hawchar's silicosis was not caused by his work with the defendant. This was the pleaded issue upon which the plaintiff succeeded at trial, and in respect to which he recovered damages. The additional evidence given by the medical experts relating to the aetiology of scleroderma did not greatly increase the cost of the trial, and, in so far as it did, that increase was proportional to the advantage gained by the plaintiff. [39] I have concluded that this is an exceptional case, and, to avoid substantial injustice: I decline to order that the plaintiff pay the defendant's costs from the day following the offer of compromise. [40] In reliance upon the same considerations I decline to give effect to the Calderbank offer."

[104]

[13] The finding on causation ' necessarily established…the legal foundation' for the order that further damages may be made with respect to scleroderma lung ( Blair v Curran (1939) 62 CLR 464)." 79 With respect, this reasoning is incorrect. The scleroderma claim was dismissed. The findings in relation to scleroderma were obiter dicta and were not necessary findings in relation to any order that was made. Mr Hawchar will not have the benefit of issue estoppels in future litigation, other than by reference to his silicosis and to the making of the order under s 11A. Mr Hawchar was entitled to an order under s 11A which may be of utility to him in due course. In a limited way there were issue estoppels concerning the order pursuant to this provision. The making of the order under s 11A would bind the parties in the future as to the existence of the preconditions for the operation of the section: that it had been proved that there was a chance that at some time in the future Mr Hawchar would develop another dust related condition as a result or partly as a result of Dasreef's breach of duty. Such an order, whether interlocutory or final is of a character capable of creating estoppels: K R Handley, Spencer Bower and Handley: Res Judicata (4th Ed, LexisNexis) at [5.31]. However, it is not correct to say, as his Honour did, that Mr Hawchar had an advantage from the running of the case by reason of issue estoppels on the causal relationship between Dasreef's breach of duty, Mr Hawchar's silicosis and his scleroderma, beyond what was necessary to establish the preconditions of the making of the order under s 11A. On appeal, no wider notion of issue estoppel was pressed by Mr Hawchar. 80 Nevertheless, there were powerful reasons for his Honour's discretion being exercised in the way it was. Not least of these reasons was the fact that acceptance of the offer would have led to a consequence in relation to the WC Act of significant detriment to Mr Hawchar. It was perfectly understandable that he would reject the offers. It is unnecessary to explain the comparative worth of the two regimes in detail. It is sufficient to note that the correspondence of the solicitors and the conduct of the parties in the litigation reflect an appreciation of the position. Though the words of the regulation were satisfied in that the offers, in their terms, were better than the order, looked at in the broad, Mr Hawchar would have been significantly worse off by accepting the offer than he was by refusing it and retaining his workers compensation rights. Such could not legitimately be disputed. It was the reason why Dasreef was so eager to waive all its rights to have Mr Hawchar gain the "benefit" of damages under the WC Act regime. The importance of the jurisdictional fact (as to whether his scleroderma was a dust disease) placed him in peril of claiming or not claiming damages for that condition. 81 Dasreef sought to amend its notice of appeal by adding a ground which complained about [38(a)] of the costs judgment in the following terms: "To the extent that the trial judge's statements that the plaintiff 'renounced any claim to work injury damages' (at [38 (a)]) and that the defendant knew this (at [47]) represented findings of fact as to the parties' intentions and knowledge at relevant times for the purpose of the exercise of the costs discretion, such findings of fact were not reasonably open on the evidence." The amendment was ultimately not opposed.

[108]

86 Dasreef also complained that in the primary judge's reasoning as to what was "exceptional" and "substantial injustice", its position was not taken into account in a balanced way. I do not agree. It is unnecessary to set out the totality of his Honour's reasons in the costs judgment. An important question to which his Honour directed attention was the degree of success that Mr Hawchar obtained in the running of the case. As his Honour said in [38(f)], on most of the issues in the case Mr Hawchar was successful. He lost in relation to the question of scleroderma being covered by the DDT Act regime. However, he gained the benefit of an order under s 11A, albeit not with the so-called issue estoppels found by his Honour. In circumstances where Mr Hawchar was placed at that risk by one issue and the overwhelming benefit to him of not accepting the offer, as both sides to the litigation would have appreciated, there were powerful reasons, on the facts as found, for his Honour to exercise the discretion in the way he did. 87 It is certainly the case that the s 11A order was only introduced into the litigation by amendment to the statement of claim made in May 2009 at the invitation of the primary judge after he had reserved judgment. It was not a claim made at the time Mr Hawchar rejected the offer. 88 Similar complaints were made about the refusal of the primary judge to order costs in relation to the dismissal of the scleroderma claim under the Uniform Civil Procedure Rules, r 42.20 (1). Under that provision, 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 otherwise orders, the plaintiff must pay the defendant's costs of the proceedings to the extent to which they have been dismissed. The primary judge, in identifying the good reason for departure, emphasised the value of the WC Act rights that would be lost by an acceptance by Mr Hawchar of damages under the modified workers compensation regime should he be unsuccessful (as he was) in his primary proposition that scleroderma was a dust disease within the meaning of the Workers Compensation (Dust Diseases) Act 1942. 89 The primary judge stated that throughout the trial Mr Hawchar's counsel maintained that the plaintiff sought no award of damages in respect of scleroderma if those damages were to be assessed pursuant to the modified common law damages regime. There was some debate about that at the appeal. I have already referred to the pre-trial correspondence. It is fair to say, that the underlining reality of the nature of what Mr Hawchar was pressing would have been clear to all who were involved in the case. That is, it was clear that unless scleroderma was a dust disease as defined it was manifestly not in Mr Hawchar's interest to press for damages for that condition. Ordinarily, that would place a plaintiff in a difficult position given that damages for personal injury are assessed once and for all. However, the plaintiff's position was ameliorated by the terms of s 11A which preserved the opportunity for later litigation. In any event, the conduct of the parties of the litigation reflected a clear awareness on both sides of the lack of utility to Mr Hawchar of a claim for damages for scleroderma unless he was correct in his submission that it was a defined dust disease. At [53] of the costs judgment the primary judge said: "[53] In determining whether the plaintiff has provided good reason for departure from an order that he pay the defendant's costs in relation to his claim for damages for scleroderma, I am entitled to look at the 'whole landscape comprising the course of the proceedings'. In this regard I take into account the conduct of the defendant which belatedly put in issue the medical basis upon which the plaintiff's entitlement to workers' compensation benefits depended, the overall result achieved by the plaintiff in recovering damages and preserving those rights, the success of the plaintiff in establishing a contingent right to damages for scleroderma lung, and the relatively modest increase in the costs of the trial occasioned by the ventilation of the scleroderma issue in addition to the silicosis issue upon which the plaintiff succeeded. I have concluded that these circumstances justify departure from an order in accordance with the rule."

[109]

90 These are legitimate considerations for the exercise of discretion under UCPR, r 42.20 (1). They do not, in my view, reflect any misapprehension of the proper scope of the discretion. 91 The primary judge was of the view that Dasreef should pay the costs incurred in the ventilation of the medical issues in the course of the trial. However, his Honour was of the view that the assessment of damages at common law in respect of scleroderma was clearly separable. In these circumstances, he felt it appropriate that Mr Hawchar should pay such costs as were incurred by Dasreef in obtaining reports from a forensic accountant and from the occupational therapist: see [55]-[56]. 92 His Honour also found it appropriate that the plaintiff should pay the defendant's costs incurred in the preparation of written submissions upon the medico-legal question whether scleroderma was a dust disease and upon the assessment of damages in the event that the plaintiff succeeded in his claim for common law damages for scleroderma. 93 The primary judge then said at [59]: "[59] The plaintiff recovered a modest verdict, which should not be excessively depleted by the liability to pay costs the quantum of which he could not control. The costs orders in the defendant's favour should not reduce his damages below $100,000." This led to the order numbered 7 ([1] above) which, in terms, gave effect to the primary judge's express desire in [59] to ensure that the defendant should not have damages reduced below $100,000. 94 Complaint is made about this capping on the basis that it reflected the taking into account of an arbitrary and extraneous consideration beyond that which was proper in awarding costs. 95 The terms of [59] tend to indicate that the primary judge was influenced by a desire to see Mr Hawchar take $100,000 from the litigation, irrespective of the costs to which Dasreef might legitimately be entitled under the balance of his reasons. Such an approach would see Dasreef's entitlements to costs (as found by his Honour) limited by a view that the plaintiff should have a verdict of an arbitrarily chosen sum. If this is what the primary judge did, it reveals an error of approach. 96 Paragraph 59 should, of course, be read in the light of the whole of the costs judgment. The primary judge was of the view that there was only a modest increase in the costs of the trial occasioned by the ventilation of the scleroderma issue: see [53] of the costs judgment. It may be that his Honour concluded that a reasonable assessment of those costs was something in the order that he identified. No attempt was made before us to demonstrate the level of costs in the case by reference to the division of responsibility for issues otherwise made by his Honour. 97 Dasreef is either entitled to some costs or not. Those costs could be assessed or limited by the judge by reference to relevant considerations such as the matters in [53] of the costs judgment. His Honour could also have regard to notions of proportionality and reasonableness of the parties' conduct in how the case was run in assessing what, in all the circumstances, was an appropriate sum to award for costs: see in particular, the Civil Procedure Act 2005 (NSW), s 60. But an arbitrary and isolated view as to how much Mr Hawchar should take away "in his hand" would be, in my view, a consideration foreign to the exercise of the power as to costs. 98 I am, however, unclear as to what his Honour has done in that regard. Given, if I may say so respectfully, this lack of clarity concerning the last part of his Honour's costs judgment and in the light of the error of principle in relation to the question of issue estoppel, to which I have earlier referred and which was important to his Honour's reasoning on costs otherwise, I would set aside the costs orders and remit them to the primary judge for reconsideration. I would hear the parties on costs in the appeal. 99 The orders that I would make are:

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Cases Cited (14)