Hamerco Pty Ltd v Cosentino Australia Pty Ltd; re Browne [2026] NSWDDT 3

(1) Grinding, polishing, sawing, cutting, drilling, sanding, shaving and sculpting and otherwise working with stone products which contained crystalline silica.

(2) Working in proximity to other workers who were performing processes which included grinding, polishing, sawing, cutting, drilling, sanding, shaving and sculpting and otherwise working with stone products which contained crystalline silica.

(3) Working in areas where the floors and surfaces were contaminated with dust and debris containing crystalline silica.

(4) Working in areas where the airspaces were contaminated with airborne RCS.

1. The third to eighth defendants sued by Mr Browne were alleged to be suppliers of stone products to both the first defendant and to Hamerco: see par 30 of the Further Amended Statement of Claim.
2. Mr Browne did not sue Cosentino and did not allege in his pleading that he was exposed to RCS from Cosentino products.
3. Hamerco filed a Second Cross-Claim seeking contribution from the six suppliers who were defendants to Mr Browne's claim. It also sued Cosentino (named as the fifth cross-defendant). Hamerco alleged that Mr Browne was exposed to RCS from Cosentino products, as well as to dust from products supplied by the third to eighth defendants.
4. In a Defence to the Second Cross-Claim, Cosentino admitted that between 30 March 2011 and November 2022 it supplied engineered stone products to Hamerco.
5. The plaintiff's claim and the two cross-claims were set down for hearing for three weeks, commencing on 7 April 2026.
6. When the matters were called on for hearing, Senior Counsel for the first and second defendants indicated that the plaintiff's action against all eight defendants had been settled, although precise terms were yet to be finalised. Senior Counsel also indicated that the first cross-claim had been settled in its entirety. Senior Counsel informed the court that Hamerco had settled the second cross-claim against six of the seven cross-defendants sued, but had not settled with Cosentino. The outstanding issue in relation to Cosentino was costs.
7. Senior Counsel characterised the settlements reached as ones which gave the plaintiff 100 per cent of the damages to which he was entitled. It was submitted that in those circumstances it was "inutile" for Hamerco to pursue the cross-claim against Cosentino.

1. Senior Counsel applied for an order dismissing Hamerco's cross-claim against Cosentino. Counsel for Cosentino indicated that there was no opposition to that course. Consequently, a formal order was made dismissing the second cross-claim against the fifth cross-defendant.
2. The power to make such an order is found in r 29.8 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) which provides as follows:

29.8 Dismissal of proceedings on plaintiff's application

(1) On the application of the plaintiff in any proceedings, the court may make an order for the dismissal of the proceedings to the extent to which they concern--

(a) the whole or any part of the plaintiff's claim for relief, and

(b) any cause of action relevant to that claim or part of the claim.

(2) Subject to subrule (3), such an order may be made at any time.

(3) In the case of a trial with a jury, such an order may be made only if the application for the order is made before the jury gives a verdict.

1. In those circumstances, the court was required to have regard to r 42.20 of the UCPR which provides as follows:

42.20 Dismissal of proceedings etc

(1) 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 orders otherwise, the plaintiff must pay the defendant's costs of the proceedings to the extent to which they have been dismissed.

(2) If the court makes an order striking out a defence, 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 orders otherwise, the defendant must pay the plaintiff's costs of the proceedings in relation to those matters in respect of which the defence has been struck out.

1. Rule 42.20 does not create a presumption that costs will be ordered against a party seeking dismissal of an action: Fordyce v Fordham [2006] NSWCA 274; (2006) 47 NSWLR 497 at [84]. What the rule says is that the plaintiff must pay the defendant's costs of the proceedings "unless the court orders otherwise".
2. Where proceedings have been settled without a hearing on the merits, and the parties have acted reasonably in commencing or defending the proceeding, the proper exercise of the costs discretion will usually mean that the court will make no order as to costs: re Minister for Immigration & Ethnic Affairs: ex parte Lai Quin [1997] HCA 6; (1997) 186 CLR 622 at 624-625.
3. The court must be satisfied that the conduct of the parties continues to be reasonable "until the litigation was settled or its further prosecution became futile": Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84 at [30].
4. The court should not undertake a hypothetical trial of the matter, under the guise of a costs application, in order to determine the likely outcome of litigation: Nichols at [3], [31] - [32].
5. It is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the court's discretion otherwise than by an award of costs to the successful party: One.Tel Ltd v Deputy Commissioner of Taxation [2000] FCA 548; (2000) 101 FCR 548 at [6].
6. The decision of the Court of Appeal in Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302 has some similarities with the facts of the present proceedings. There were fourteen defendants in the proceedings. The hearing was set down for six weeks, but after five days, some of the defendants accepted that judgments should be entered against them. One defendant, Edwards Maddigan Torzillo Briggs Pty Ltd (EMTB), was prepared to settle on the basis of a judgment in its favour but contended that its costs should be paid by the plaintiff. The acceptance of liability by the defendants who conceded that there should be judgments against them was adequate for the plaintiff's purposes. There was nothing to be gained by continuing the proceedings against the other defendants, including EMTB. Thus the proceedings against the other defendants were brought to an end without there being any determination on the merits of the plaintiff's claim against EMTB.
7. The Court of Appeal approved of the factors taken into account by the trial judge, who made an order that both parties bear their own costs. These factors were:

(1) The issue of the liability of EMTB was not to be fought out because the plaintiff had received a 100 per cent outcome in her favour and no purpose was to be served by continuing the trial so as to determine the liability of other defendants.

(2) It was eminently reasonable for the plaintiff to have joined all of the defendants to the action.

(3) It was impossible for the court to say whether or not EMTB would have been completely exonerated from liability, but the court was satisfied that, at the very least, the plaintiff had an arguable case against EMTB.

1. The opinion of the Court of Appeal, expressed by Davies AJA at [17], with whom Mason P and Meagher JA agreed, was as follows:

"In my opinion, the facts which his Honour took into account were relevant to his assessment of costs. The order which he made was an order that was open to him. Of particular importance is the point that, once the litigation had reached the point that no purpose would be served by determining the liability of defendants other than the four defendants, who were prepared to accept judgment against them, his Honour had to make an assessment of costs in the absence of a finding of liability."

1. Counsel for Cosentino accepted that a relevant factor was whether Hamerco acted reasonably in continuing the proceedings. Counsel pointed to the fact that Cosentino was never a party to the plaintiff's proceedings, and thus the plaintiff did not make an allegation that he was exposed to Cosentino engineered stone. Counsel accepted that the Tribunal was not required to review swathes of evidence.
2. Counsel for Cosentino submitted that Hamerco could not have shown that exposure to Cosentino products caused the plaintiff's condition.
3. Counsel for Cosentino also submitted that an Offer Of Compromise and three Calderbank letters were relevant to whether or not Hamerco acted reasonably.

Did Hamerco have an arguable case against Cosentino?

1. It is correct, as submitted by counsel for Cosentino, that Mr Browne did not nominate Cosentino as a supplier to Hamerco. Hamerco did make that allegation against Cosentino, presumably based upon provable facts. As it turned out, Cosentino accepted that it did supply engineered stone products to Hamerco over a considerable period of time.
2. While Mr Browne did not say that he was exposed to Cosentino products he did say that there were four ways in which he was exposed to RCS during his employment at Hamerco: see par 10 of the Further Amended Statement of Claim, which has been summarised above. Three of the four ways in which Mr Browne said he was exposed did not involve him working directly with engineered stone products. Broadly put, the allegation of Mr Browne was that at Hamerco he worked in a miasma of dust, some of which came from his own work, some of which came from work done by others, and some of which was simply in the air or on surfaces at the Hamerco premises.
3. In those circumstances, Hamerco did have an arguable case against Cosentino. It is of course impossible to assess the strength of that case, or whether Hamerco would have succeeded in its claim against Cosentino.

1. While Hamerco did ask for its cross-claim against Cosentino to be dismissed, that could not be regarded as a surrender. There was a supervening event which led to the application for dismissal of the claim. That event was the settlement achieved by Mr Browne with the eight defendants he sued, which all parties regarded as providing Mr Browne with 100 per cent of "full value" for his damages. In turn, Hamerco was content with the contribution which was to be made by all other defendants to any damages awarded against Hamerco. The supervening event meant that there was no utility in pursuing the claim against Cosentino, because Mr Browne was being fully compensated, and Hamerco was being fully compensated, in the sense of receiving appropriate contribution from each of the other suppliers.

Was it reasonable for Hamerco to continue the proceedings?

1. The settlement of Mr Browne's claim, the first cross-claim, and the second cross-claim with all cross-defendants apart from Cosentino, was achieved at some time between 26 March 2026 and the first day of hearing being 7 April 2026. On 26 March 2026 all parties appeared before me at 4pm for a directions hearing, requested by the parties. Directions were made for steps to be taken prior to the trial. Obviously at that date there had been no settlement reached. The first and second defendants were to serve an affidavit by 27 March 2026. The fourth defendant was to serve an affidavit by its general manager by 31 March 2026. Liberty to apply was granted, but no liberty was exercised to relist the matter in the period between the directions hearing on 26 March 2026 and the first day of trial. That is another indication that the eventual settlement was reached at a stage shortly before the commencement of the trial. Correspondence tendered by Cosentino (CX 1 p 64) says that settlement was reached on the afternoon of 31 March 2026. This left two working days before the trial, taking into account the public holidays over Easter.
2. In those circumstances, I find that it was reasonable for Hamerco to continue the proceedings, up to the time when settlement was reached and there was no longer any utility in pursuing Cosentino on the second cross-claim.

1. Counsel for Cosentino submitted that Cosentino should have an order for costs because of an Offer of Compromise dated 8 April 2024 (CX 1, pp 15-16).
2. The offer made in that document was as follows:

(1) Verdict and Judgment for the fifth cross-defendant to the second cross-claim.

(2) Each of the fifth cross-defendant and the cross-claimant to pay its own costs.

1. The Offer of Compromise was in a form prescribed by cl 86 of the Dust Diseases Tribunal Regulation 2019 (NSW) (the DDT Regulation). Such offers can be made on a cross-claim, as "plaintiff" includes a cross-claimant and "defendant" includes a cross-defendant: cl 87 of the DDT Regulation.
2. Counsel for Cosentino submitted that cl 90 of the DDT Regulation applied, because the offer was made by a cross-defendant, but was not accepted by the cross-claimant, and the cross-claimant obtained an order or judgment on the claim concerned as favourable to the cross-claimant, or less favourable to the cross-claimant, than the terms of the offer. If cl 90 applies, then the cross-claimant is usually entitled to an order against the cross-defendant for costs on a party-party basis until the date of the offer of compromise, and thereafter the cross-defendant is entitled to an indemnity costs order. Such an order should be made "unless the Tribunal orders otherwise in an exceptional case and for the avoidance of substantial injustice": cl 90(2) of the DDT Regulation.
3. In my view the provisions regarding Offers of Compromise contained in Pt 5 of the DDT Regulation are designed to operate where there has been a hearing on the merits and the court has given a decision based upon the evidence heard. The purpose of serving an offer of compromise is to attempt to settle the matter, with cost consequences to flow if a better result than the offer is not achieved.
4. I am reinforced in reaching that view by cl 95 of the DDT Regulation. This provides that an offer of compromise can only be disclosed to the Tribunal in the limited circumstances set out in cl 95(3) of the DDT Regulation. The third scenario in the subrule is "after all questions of liability and relief have been determined, to the extent necessary to determine questions as to costs". What is contemplated is a trial on the merits, so that it can be said whether a party has achieved a result which is less or more favourable than the offer. The dismissal of the claim against Cosentino, without a hearing on the merits, means that an Offer of Compromise has no role to play in the determination of costs.
5. For these reasons, I find that the Offer of Compromise does not provide a basis for making a costs order, let alone an indemnity costs order, in favour of Cosentino.

1. The first Calderbank offer was made in a letter dated 8 April 2024 (CX 1, pp 17-18). This was a covering letter enclosing the Offer of Compromise. The letter, in the alternative, converted the offer made in the Offer of Compromise to a Calderbank offer. As is usual with Calderbank offers, the basis for the recipient of the offer to consider acceptance was set out in the letter.
2. It was pointed out that the plaintiff himself did not say that he worked with engineered stone products supplied by Cosentino. The letter said that it was "impossible" for Hamerco's case to succeed against Cosentino. On that basis, Cosentino invited Hamerco to consent to a dismissal of the second cross-claim against Cosentino with each party to bear its own costs.
3. As found above, Hamerco had an arguable case against Cosentino, based upon the supply of Cosentino engineered stone products to Hamerco, and the exposure of Mr Browne at the Hamerco premises, which arose not only from working with particular products, but from just being in the general vicinity of RCS generated in the factory. I have characterised the Hamerco case against Cosentino as "arguable". Success was most certainly not "impossible". To assert that is to ignore the evidence that Cosentino did supply engineered stone to Hamerco, and that Mr Browne in his pleading identified four sources of RCS during his Hamerco employment.
4. The first Calderbank offer stated that if Hamerco chose not to accept the offer and received "a less favourable result at the hearing of the matter" Cosentino would tender a copy of the letter in support of an application for indemnity costs from the date of the letter. The reference to "the hearing of the matter" is understandable, as the first Calderbank offer made specific reference to some, but not all, of the evidence which would be called at a hearing. Cosentino asserted that such evidence would result in Hamerco failing in its claim against Cosentino. This is an indication that the Calderbank offer was intended to operate if, after there was a hearing and a judgment on the merits based upon the evidence, Hamerco received a less favourable result than the Cosentino offer.
5. The second Calderbank offer was made by a letter dated 6 November 2024 (CX 1, pp 19-20). Curiously, the letter refers to the provisions of cl 88 of the DDT Regulation. Presumably this sentence was carried over from the first Calderbank letter.
6. The basis for the recipient of the offer to consider the offer was set out in six numbered paragraphs in the letter. It was again pointed out that the plaintiff himself did not say that he worked with engineered stone products supplied by Cosentino during his employment with Hamerco. Further, Cosentino was only incorporated on 30 March 2011, so it could not have been a supplier to the first defendant. This meant that Mr Browne did not have exposure to Cosentino products when employed by the first defendant.
7. The letter characterised Hamerco's case against Cosentino as "hopeless". Cosentino invited Hamerco to consent to a dismissal of the second cross-claim against Cosentino with each party to bear its own costs. As found above, Hamerco had an arguable case against Cosentino, based upon the supply of Cosentino engineered stone products to Hamerco, and the exposure of Mr Browne at the Hamerco premises, which arose not only from working with particular products, but from just being in the general vicinity of RCS generated in the factory. The Hamerco case against Cosentino was "arguable" and it most certainly was not "hopeless". To assert that the case was hopeless is to ignore the evidence that Cosentino did supply engineered stone to Hamerco, and that Mr Browne in his pleading identified four sources of RCS during his Hamerco employment.
8. The second Calderbank offer also stated that if Hamerco chose not to accept the offer and received "a less favourable result at the hearing of the matter" Cosentino would tender a copy of the letter in support of an application for indemnity costs from the date of the letter. The second Calderbank letter made specific reference to some, but not all, of the evidence which would be called at a hearing. Cosentino asserted that such evidence would result in Hamerco failing in its claim against Cosentino. This is an indication that the Calderbank offer was intended to operate if Hamerco received a less favourable result than the Cosentino offer, after there was a hearing and a judgment on the merits based upon the evidence.
9. The third Calderbank offer is a letter dated 16 March 2026 (CX 1, pp 44-45). The letter again notes that Mr Browne himself will not give evidence that he worked with Cosentino engineered stone products. There is criticism of the quality of other evidence apparently served by Hamerco. The letter gives notice that in a final attempt to resolve the matter, Cosentino will bear its own costs of the second cross-claim, provided that a verdict and judgment in its favour is entered.
10. Again, the letter refers to the provisions of cl 88 of the DDT Regulation. Presumably this sentence was carried over from previous iterations. The letter again refers to the prospect of Hamerco "receiving a less favourable result at the hearing of the matter". Once again, the letter is premised upon there being a hearing on the merits, and has no work to do in the circumstances where a full settlement has been achieved between the plaintiff and the eight defendants to the plaintiff's claim, which has meant that there is no utility in Hamerco pursuing the cross-claim against Cosentino.
11. For these reasons, I find that none of the three Calderbank letters provide a basis for making a costs order, let alone an indemnity costs order, in favour of Cosentino.

1. For reasons set out above, I will "otherwise order" within the meaning of r 42.20 of the UCPR. Hamerco and Cosentino must pay their own costs of and incidental to the second cross-claim.
2. The order of the Tribunal is:

(1) Order the cross-claimant Hamerco Pty Ltd and the fifth cross-defendant Cosentino Australia Pty Ltd to pay their own costs of and incidental to the second cross-claim.