Amaca Pty Limited v Harry Daines Pty Limited, unreported DTT, 19 April 2011

Re: Nicholsen

Introduction

This decision delivered on 19 April 2011 by President O'Meally of the Dust Diseases Tribunal of New South Wales held that a cross-claimant is not entitled to the costs of pursing a cross-claim for contribution unless a judgment is entered (by agreement / consent or following a trial) or the crossdefendant agrees to pay the costs of the claim.

Claims for damages for asbestos diseases are subject to a mandatory case management scheme pursuant to the Dust Diseases Tribunal Regulation 2007 which includes a protocol for apportioning contribution between defendants / cross defendants on an interim basis. Historically, there was uncertainty as to whether the cross-claimant was entitled to costs when the parties did not dispute the contribution as determined on an interim basis. Indeed, in at least one 'old' authority (Olsen) President O'Meally determined that the cross-claimant was entitled to judgment and costs where the interim determination was not disputed. Subsequent appellate consideration of the operation of the Regulation (Millard) determined that a cross claimant was not entitled to a judgment on an interim determination of contribution but rather the determination gave rise to a statutory right to obtain the contribution. The question of the costs entitlement was reconsidered in the light of that judgment.

Legislative framework

Asbestos personal injury cases in New South Wales are subject to the Regulation. The Regulation requires parties to attempt settlement with the plaintiff at an early stage. In order to promote early settlement, the Claims Resolution Process imposes an interim contribution protocol upon defendants and cross-defendants. Contribution is determined by a Contributions Assessor in accordance with the Regulation based on presumptions contained in an Order.

The 'defendant parties' are required to pay the plaintiff's settlement or judgment in accordance with shares as assessed in a Contributions Assessment Determination. Any party not satisfied with the Determination may dispute it, following the completion of the plaintiff's case. This results in the contribution proceedings being litigated in the traditional fashion to judgment.

In the event of a settlement or judgment, a plaintiff is entitled to a judgment against the defendant(s). Absent a dispute of the Determination, the defendant is entitled to contribution from the cross defendant(s) in the shares prescribed by the Determination by operation of the Regulation enforceable pursuant to the Civil Procedure Act.

The facts

  • Mr Nicholsen alleged that he developed mesothelioma as a consequence of inhalation of asbestos dust in the course of employment by Daines, emanating from Amaca's building products. He commenced proceedings in the Tribunal against Amaca seeking damages. Amaca cross-claimed against Daines claiming contribution
  • The proceedings were subject to the Regulation and, in due course, a Determination apportioned liability to contribute to Mr Nicholsen's settlement / damages at 60% / 40%
  • The plaintiff's claim was settled at a figure satisfactory to both Amaca and Daines. Neither Amaca nor Daines proposed to dispute the Determination

  • Judgment was entered in favour of Mr Nicholsen against Amaca. Amaca sought judgment against Daines in the sum representing 40% of the settlement figure plus costs of the cross-claim. Daines refused to consent to the entry of judgment nor to pay Amaca's costs of the cross-claim.

    Rather Daines consented to an order that it pay its share as assessed by the Determination in accordance with the Regulation pursuant to the Civil Procedure Act

  • The question of entitlement to costs was argued.

Argument

Amaca argued that in effect, its cross-claim had achieved a 'result' being a recovery of 40% of the settlement figure from Daines and as such, it was entitled to both a judgment in that sum and also costs of the cross-claim.

The argument as regards any entitlement to a judgment was inconsistent with New South Wales Court of Appeal Authority (Millard) and the President accepted Daines' argument that absent consent or litigation of the contribution claimed by Amaca against Daines to completion, a cross-claimant such as Amaca was not entitled to a judgment against a crossdefendant such as Daines.

Rather, as Amaca did not propose to pursue its cross-claim against Daines further (it being satisfied with the Determination), Daines successfully submitted that the appropriate order was for the Tribunal to dismiss Amaca's cross-claim.

Daines further argued that in order for a costs order to be made, it was necessary for a final determination of the cross-claim to be made in Amaca's favour.

Relying upon analogous High Court authority, Daines argued that the interim determination of contribution by operation of legislation such as the Regulation is not a final determination by way of judgment sufficient to found a costs order in favour of a cross-claimant.

Thereafter, although the Civil Procedure Act provided the presumption that on dismissal of a cross-claim a cross-claimant is liable to pay the cross-defendant's costs, Daines submitted that the appropriate order was not a costs order in favour of the cross-defendant but rather, no order as to costs. That is to say, bearing in mind the purpose of the Regulation is to promote the early joinder of interested parties and early settlement, in accordance with an interim apportionment scheme, it was appropriate for a judge to exercise his discretion to make no order as to costs.

Decision

President O'Meally accepted Daines' submissions as correct and, in doing so, expressly stated that his earlier decision in Olsen was not correct.

His Honour dismissed Amaca's cross-claim and made no order as to the costs of the cross-claim.

Conclusion

The decision is, in the writer's view, clearly correct. The overriding purpose of the Regulation is to efficiently and inexpensively determine all aspects of asbestos cases. The intention is to minimise costs and it is evident that pursuing a cross-claim and obtaining a contribution via a Determination is substantially less expensive and achieves a result substantially faster than litigating a contribution claim to completion.

The decision also implicitly recognises the usual practice in personal injury litigation, where defendants and cross-defendants participate in an overall settlement of the plaintiff's claim, not to purse costs of crossclaims.

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