E M Baldwin & Sons Ltd v Plane & Anor; Jsekarb Pty Ltd v Plane & Anor [1999] NSWCA 130 | Case summary

1 MEAGHER JA: I agree with Fitzgerald JA. 2 BEAZLEY JA: I agree with Fitzgerald JA. 3 FITZGERALD JA: Late last year, Mr Plane died from mesothelioma caused by asbestos fibre which he inhaled in the course of his employment by E M Baldwin & Sons Pty Ltd from 1942 to 1989. His inhalation of asbestos fibre probably started in about 1948 and ceased no later than 1983. His working life had finished before his mesothelioma was diagnosed, and it is not now disputed that the amount of his damages is only $165,138.40. Both the Dust Diseases Tribunal and this Court held that Baldwin and Jsekarb Pty Ltd are liable to Mr Plane, or rather now to his estate. The Tribunal held, and this Court confirmed, that asbestos fibre from brake blocks which Jsekarb manufactured and supplied to Baldwin contributed to Mr Plane's mesothelioma. Jsekarb has applied to the High Court for special leave to appeal. 4 Mr Plane's solicitors, who are now acting for his estate, estimate that his "… costs and disbursements in relation to the Dust Diseases Tribunal proceedings and the Court of Appeal proceedings total close to $500,000". Some might think it strange that the estate of a workman who died of a disease undoubtedly caused by his employment should be confronted with a bill for legal costs which are a multiple of his damages. Nonetheless, additional legal costs are still being incurred. In addition to Jsekarb's application for special leave to the High Court, the parties are continuing their dispute in this Court, this time in relation to the costs orders which should be made concerning the proceedings in the Dust Diseases Tribunal and this Court, including the motions now before the Court. 5 Mr Plane's estate seeks orders that each of Baldwin and Jsekarb pay his costs, including the costs of the present motions, assessed on an indemnity basis from 5pm on 2 March 1998, or from 5pm on 11 March 1998, or from 30 June 1998. Baldwin seeks orders that it pay 50% of Mr Plane's costs incurred prior to 5pm on 11 March 1998 assessed on a party and party basis, and that Jsekarb pay 50% of Mr Plane's costs incurred before 5pm on 2 March 1998 assessed on a party/party basis, 50% of his costs incurred between 5pm on 2 March 1998 and 5pm on 11 March 1998 assessed on an indemnity basis, and the whole of Mr Plane's costs and the whole of Baldwin's costs, both assessed on an indemnity basis, after 5pm on 11 March 1998. Jsekarb opposes any order that it pay costs assessed on an indemnity basis. 6 The proceeding in the Dust Diseases Tribunal was commenced in September 1997 and concluded on 26 March 1998 at the end of a 17 day hearing. The appeal to this Court occupied three days in July 1998, and the oral submissions then made were accompanied by voluminous written submissions, with further written submissions made subsequently. 7 The first unsuccessful attempt to compromise the litigation was made by Mr Plane's solicitors on 24 November 1997. Jsekarb's solicitors made an offer to settle Mr Plane's claim against it on 18 December 1997 which was open for acceptance until 10am on 24 February 1998. On 25 February 1998, Jsekarb's solicitors made another offer of settlement which was open for acceptance until 10am on 2 March 1998. At that time, Jsekarb was prepared to pay its own costs, said to "… currently amount to over $60,000…", if Mr Plane agreed to judgment being entered against him in favour of Jsekarb. 8 On the afternoon of 2 March 1998, Mr Plane's solicitors gave Jsekarb's solicitors approximately one hour to accept an offer dismissing his claim against Jsekarb on the basis that it pay "$30,000 … towards [his] costs of the proceedings as against [Jsekarb]". The same offer had been orally communicated by Mr Plane's counsel to Jsekarb's counsel at the Dust Diseases Tribunal earlier that day. In my opinion, Jsekarb's omission to accept that offer within the brief period for which it was open does not justify an order that it pay costs assessed on an indemnity basis from that time. 9 Further negotiations took place as the proceeding in the Dust Diseases Tribunal continued. It is necessary to refer to only some of the potentially material events. 10 On 6 March 1998, Baldwin made an offer to Mr Plane, which Jsekarb endorsed. The offer involved payments by Baldwin to Mr Plane for his claim and costs and payment by Jsekarb of its own costs. Baldwin's offer expired at 10am on 9 March 1998. 11 By 11 March 1998, the eighth day of the hearing in the Dust Diseases Tribunal, Mr Plane and Baldwin had negotiated a mutually satisfactory compromise under which Baldwin would pay Mr Plane's claim and costs and his claim against Jsekarb would be dismissed provided it paid its own costs. Consistently with such an agreement, cross-claims between Baldwin and Jsekarb would also be dismissed, with each paying its own costs. Although negotiations continued after 11 March 1998, there was no formal offer available for acceptance by Jsekarb except perhaps for a brief period on that day. Jsekarb persisted in a requirement for a payment towards its costs, initially of $40,000 and later finally reduced to $5000. 12 It is unnecessary to discuss the numerous authorities referred to. As Jsekarb submitted, the Court must make a discretionary judgment, which requires it to decide what is just and equitable in all the circumstances. It is not disputed that the reasonableness or unreasonableness of Jsekarb's attitude is an important, if not a decisive, matter in deciding whether it should pay costs assessed on an indemnity basis after 11 March 1998. 13 On that day, the proceeding in the Dust Diseases Tribunal was continuing, and Jsekarb was of opinion that it would succeed based on its misunderstanding of earlier decisions of this Court and its appreciation of its epidemiological evidence. Further, it had incurred considerable costs since its earlier offer to compromise on the basis that it would pay its own costs had been rejected. In particular, the trial had proceeded to the point at which Jsekarb was obliged to bring its overseas expert witnesses to Australia. Finally, although it was aware that a compromise involving it obtaining judgment provided it paid its own costs could be negotiated, no offer was available to Jsekarb for acceptance between 11 March and the end of the Dust Diseases Tribunal proceeding. 14 In my opinion, it would be an undesirable extension of the circumstances in which costs are ordered to be assessed on an indemnity basis to make such an order against Jsekarb in respect of all costs payable after 11 March 1998 in this case. Although it is perhaps not a matter of special significance, Jsekarb was not the only party which was intransigent in the material period. As earlier noted, Jsekarb's final position was that it would compromise provided that $5000 was paid towards its costs. It is difficult to comprehend that such a small sum was allowed by any of the parties to prevent the compromise of their complex and expensive litigation. 15 Finally, Mr Plane's estate submitted that both Baldwin and Jsekarb should, in any event, indemnify it in respect of the costs of the appeal after 30 June 1998, when Mr Plane offered by way of compromise to accept $130,000 plus costs to be assessed. 16 Mr Plane's offer of 30 June 1998 to accept the sum of $130,000 plus costs in satisfaction of his claim was made separately to each of Baldwin and Jsekarb. Unless the judgment of this Court is set aside by the High Court, Mr Plane's estate is entitled to recover considerably more than $130,000 plus costs from each of those parties. It seems to me of little, if any, present significance that, if either Baldwin or Jsekarb had accepted Mr Plane's offer of 30 June 1998 and the other had not done so or even if both had accepted the offer, the partial compromise would not have finally resolved the litigation but would have left issues for resolution between Baldwin and Jsekarb. That was not a matter with which Mr Plane was required to be concerned. Both Baldwin and Jsekarb could have accepted Mr Plane's offer of compromise and continued to litigate between themselves to have their respective proportional responsibilities for Mr Plane's damages determined. 17 In my opinion, in these circumstances, Mr Plane's estate is entitled to have the costs of the appeal to this Court after 30 June 1998 assessed on an indemnity basis. There is no sufficient reason to exclude the present motions from that entitlement. 18 Accordingly, the orders which I propose are as follows: (a) Baldwin's motion filed 1 February 1999 be dismissed with costs; (b) Baldwin and Jsekarb pay the costs of the motions by Mr Plane's estate filed 2 February 1999; and (c) Costs ordered to be paid by Baldwin and Jsekarb to Mr Plane's estate incurred after 30 June 1998 be assessed on an indemnity basis.

E M Baldwin & Sons Ltd v Plane & Anor; Jsekarb Pty Ltd v Plane & Anor

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Judgment (9 paragraphs)