Piatti v ACN 000 246 542 Pty Ltd & Anor

The Offer of Compromise

1. The Offer Of Compromise was dated 3 July 2019 and was in the form prescribed by the Dust Diseases Tribunal Regulation 2013 (NSW). It offered to settle for judgment for the plaintiff in the sum of $1,050,000. The closing date for acceptance of the offer was said to be "seven days after the date on which this offer is made". Thus on its face the offer was open until 10 July 2019.
2. However, the offer was extended until close of business on 31 July 2019 (see the letter dated 11 July 2019 from the solicitors for the first defendant to the solicitors for the second defendant and the solicitors for the cross-defendant, annexed to MFI 7).

Clause 90 of the Dust Diseases Tribunal Regulation 2013

1. Clause 90 provides as follows: "(1) This clause applies if the offer concerned is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim concerned no less favourable to the plaintiff than the terms of the offer. (2) Unless the Tribunal orders otherwise in an exceptional case and for the avoidance of substantial injustice, the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim: (a) assessed on a party and party basis up to the time from which those costs are to be assessed on an indemnity basis under paragraph (b), and (b) assessed on an indemnity basis: (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and (ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made. (3) If the Tribunal in an exceptional case and for the avoidance of substantial injustice otherwise orders as referred to in subclause (1), the Tribunal must give its reasons for so ordering."
2. Clause 90 is significantly different to r 42.14 of the Uniform Civil Procedure Rules 2005, which applies in civil cases heard outside the Dust Diseases Tribunal. It simply provides that the plaintiff is entitled to indemnity costs after the date of an Offer Of Compromise "unless the court orders otherwise". The additional qualifying words "in an exceptional case and for the avoidance of substantial injustice" are not part of r 42.14. Those words were in some of the rules in the repealed District Court Rules 1973 and the Supreme Court Rules 1970. Authorities in relation to those rules are thus of assistance in applying cl 90.
3. Clause 90(2) speaks of an entitlement to an order for indemnity costs, "unless the Tribunal orders otherwise in an exceptional case and for the avoidance of substantial injustice".

Submissions for the Second Defendant

1. The written submissions for the second defendant were marked as MFI 5 and MFI 6.
2. Senior counsel for the second defendant conceded that prima facie cl 90 applies, as the judgment is "no less favourable" to the plaintiff than the terms of the offer. The Offer Of Compromise exceeded the judgment amount by the relatively small figure of $7,748.84. Nevertheless, the plaintiff has obtained a judgment on the claim "no less favourable to the plaintiff than the terms of the offer". The entitlement to an order for indemnity costs is triggered, subject to consideration of whether the Tribunal should otherwise order.
3. Senior counsel for the second defendant submitted that the s 15B damages were based substantially on the affidavit evidence of the plaintiff - paras [76]-[78] and [108] of the Primary Judgment. He submitted that this evidence was not served until on or after 26 July 2019 and further submitted that this was after the Offer Of Compromise had expired.
4. The Second Defendant submitted that the service of the affidavit evidence in support of the s 15B claim constituted a material change in the plaintiff's case. However, the plaintiff had always made a s 15B claim, but did not complete its evidence until service of the affidavit of Mr Piatti.
5. The second defendant's submissions on the s 15B claim included the following: 1. A claim under s 15B was analogous to a claim for the loss of capacity to earn, and thus pursuant to s 2(2)(a)(ii) of the Law Reform (Miscellaneous Provisions) Act 1944 (NSW), such a claim did not survive for the benefit of the estate; 2. In the alternative, there was no entitlement to s 15B damages for any period after the death of the deceased in the "lost years", as there was "relevantly a loss of capacity to provide a service at a time when the claim is no longer alive, and no longer requires any particular capacity". 3. In the alternative, if damages were to be awarded under s 15B they should be assessed on the basis that: 1. They should be awarded for 8 hours per day (MFI 2, para 20); 2. They should be awarded only for the life expectancy of Ms Piatti, being a period of 12 months from the date of trial (MFI 2, para 23); 3. A discount of 40% for the vicissitudes of life would be appropriate (MFI 2, para 24).
6. In summary, the submissions made for the second defendant at trial were that, for legal reasons, no damages whatsoever should be awarded, or in the alternative, that a figure of 8 hours per day for 12 months discounted by 40% should be awarded.
7. Since the second defendant was determined to run the two legal arguments at trial, in the hope that the result would be that there were no s 15B damages, it cannot be heard to say now that the service of the affidavit of Mr Piatti would have made any difference to the way in which it ran the case, or the way in which it considered the Offer Of Compromise. Even after the service of the affidavit of Mr Piatti, the primary submission of the second defendant was that s 15B damages were nil, or in the alternative were a figure much less than half of the final award.
8. If this were a case where the only issue on s 15B was the assessment of damages, and the plaintiff's success resulted from evidence served after the expiry of an Offer Of Compromise, there would be a strong argument for the second defendant that this was a case which was exceptional, and a case where substantial injustice would be caused to the second defendant by the late service of evidence - Vale v Eggins (No. 2) [2007] NSWCA 12. In my view it is not such a case. As I have pointed out, even after the evidence of Mr Piatti was served, the second defendant raised two legal arguments to the effect that there should be no damages at all under s 15B. It is not a case where the second defendant did not have a proper opportunity to consider the Offer Of Compromise, because evidence had not been served which justified the figure in the Offer Of Compromise. No submission or suggestion was made that had such evidence been served at an earlier point in time, serious consideration would have been given to the Offer Of Compromise made by the plaintiff. The second defendant's submissions, both on liability and on quantum, relied entirely on its own perception of the law in relation to the survival of s 15B damages, and the evidence put forward for the second defendant on quantum, largely contained in the reports of Dr Obeid.

Submissions of the First Defendant

1. The written submissions for the first defendant were marked as MFI 7.
2. The first defendant submitted that the Offer Of Compromise did not involve a genuine compromise, as the offer was "a mere $7,748.84" less than the judgment given for the plaintiff. The written submissions pointed out that the offer was 0.73% below the final judgment.
3. The written submissions cited Justice Giles in Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368: "Compromise connotes that a party give something away. A plaintiff with a strong case, or a plaintiff with a firm belief in the strength of its case, is perfectly entitled to discount its claim by only a dollar, but it does not in any real sense give anything away, and I do not think that it can claim to have placed itself in a more favourable position in relation to costs unless it does so."
4. It is to be noted that the decision of Justice Giles was in the context of a case where liability only was in issue, and "a plaintiff could make an offer of compromise one dollar less than the agreed or acknowledged quantum and thereafter litigate liability entirely at the expense of the defendant even though there were genuine questions between them as to liability" - at 368C. His Honour also referred to the earlier decision of Justice Rogers in Tickell v Trifleska Pty Ltd (1990) 25 NSWLR 353, where the plaintiff made an offer to settle for the whole amount claimed together with interest, and upon obtaining a judgment to that effect, sought indemnity costs pursuant to the offer to settle for, in effect, everything.
5. The present case is nothing like those two examples, which were commercial disputes where quantum was not in issue. The plaintiff in this case had always put his claim for s 15B damages on the basis of 24 hours per day. The plaintiff's case in that regard did not succeed. It would be different if the parties had agreed on a figure for damages, and then litigated liability. The authorities referred to by the first defendant would indicate that in those circumstances, an offer very slightly less than the agreed figure for damages would not constitute a genuine Offer Of Compromise.
6. Counsel for the first defendant submitted that it could not be said that a reduction of $7,748.84 could be regarded as "giving anything away". I reject that submission. What the plaintiff gave away by making that Offer Of Compromise was its case (which was arguable on the facts but which did not find favour in the Primary Judgment) that s 15B damages should be assessed on the basis of 24 hours of services per day. Against that background, the Offer Of Compromise was a significant compromise on the part of the plaintiff.
7. Counsel for the first defendant also submitted that s 60 of the Civil Procedure Act 2005 (NSW) requires the court to resolve issues between the parties proportionate to the importance and complexity of the subject matter in dispute. There was no elucidation of why s 60 had any bearing upon the present costs issue.
8. Counsel for the first defendant submitted that in the defence of these proceedings the second defendant wished to examine the appropriate interpretation of s 15B, and thus "the first defendant should not be penalised with an indemnity costs order due to the approach adopted by the second defendant". The problem with this submission is that the first defendant supported and adopted the submissions of the second defendant in relation to the proper interpretation of s 15B. It cannot now be heard to say that these submissions were all the second defendant's idea, and that it should not bear the consequence of the plaintiff obtaining a result better than the Offer Of Compromise.
9. Finally, counsel for the first defendant made a submission in relation to what was said to be a Calderbank offer made by the first defendant to the second defendant and dated 11 July 2019. This is not a matter which falls for determination in the present judgment. Firstly, this matter was not the subject of the grant of leave. Secondly, a cursory examination of that Calderbank offer suggests that it may only be relevant in the long run, after determination of any cross-claim and apportionment between the two defendants. It is not an offer which can be properly considered now and I decline to do so.

Submissions of the Plaintiff

1. The plaintiff's submission on costs was marked as MFI 8. The plaintiff submitted that at trial he achieved an outcome which was "no less favourable" than the terms of the offer. It was submitted that this entitled the plaintiff to an indemnity costs order, and that this was not an exceptional case and there was no substantial injustice which had to be avoided by the Tribunal otherwise ordering.
2. Counsel for the plaintiff pointed out that the Offer Of Compromise was still on foot when Mr Piatti's affidavit was served on 26 July 2019, and that the second defendant's submissions in this regard were thus incorrect. It was also pointed out that neither defendant sought a further extension of the offer following receipt of the affidavit. Counsel submitted that the affidavit of Mr Piatti did not materially change the plaintiff's claim for s 15B damages. That claim had always been particularised as a claim for 24-hour care. The evidence in support of that claim, served well prior to 26 July 2019, compromised: 1. the Form 1 Statement of Particulars served on 6 November 2018; 2. the affidavit of the deceased sworn 19 April 2018; 3. the report of Dr Ho dated 31 May 2018; 4. the opinion of Dr Ho, arising from a consultation on 4 April 2016, that Ms Piatti was in need of "constant supervision and assistance".
3. Counsel submitted that since the second defendant wished to run a legal argument about the proper construction of s 15B, it could not now complain, as by doing so it had accepted the risk that Mr Piatti might beat the Offer Of Compromise and be awarded indemnity costs. Counsel also challenged the notion advanced by the first defendant that because the plaintiff beat his offer by just over $7,000, his offer was not a genuine Offer Of Compromise. It was submitted that cl 90 requires the plaintiff to achieve a result that was "no less favourable" than the Offer Of Compromise, and not a result which was substantially better. It was also pointed out that in the context of the circumstances of the deceased, and Ms Piatti, $7,000 was a not insignificant sum of money.
4. I accept all of the submissions of the plaintiff summarised above. This is not an exceptional case, and it is not necessary to make an order otherwise than for indemnity costs, to avoid any substantial injustice. There is none.

Conclusion and Orders

1. I make the following findings against both defendants: 1. The plaintiff obtained an order on his claim no less favourable to him than the terms of the Offer Of Compromise dated 3 July 2019; 2. The plaintiff is entitled to an order against the defendants for costs on an indemnity basis after 3 July 2019, unless the Tribunal orders otherwise in accordance with cl 90(2) of the Dust Diseases Tribunal Regulation 2013; 3. This is not an exceptional case which would lead the Tribunal to otherwise order; 4. There is no substantial injustice to the defendants which calls for the Tribunal to otherwise order; 5. In the circumstances, the plaintiff is entitled to an order for indemnity costs against the defendants after 3 July 2019.
2. My orders are: 1. Order that the costs payable by the defendants to the plaintiff are to be assessed on the ordinary basis up to and including 3 July 2019; and thereafter on an indemnity basis. 2. Order the defendants to pay the plaintiff's costs of this costs determination; such costs to be assessed on an indemnity basis as they post-date 3 July 2019.

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. Decision last updated: 06 September 2019