CSR Limited & v Thompson; Thompson v CSR Limited & Anor (No 2) [2004] NSWCA 11 (17 February 2004)

Last Updated: 19 February 2004

NEW SOUTH WALES COURT OF APPEAL

CITATION: CSR Limited & Anor v Thompson; Thompson v CSR Limited & Anor (No 2) [2004] NSWCA 11

FILE NUMBER(S):

40354/03; 40445/03

HEARING DATE(S): On written submissions

JUDGMENT DATE: 17/02/2004

PARTIES:

(CA 40354/03)

CSR Limited (Appellant)

Midalco Pty Limited (Formerly known as Australian Blue Asbestos Pty Limited) (Second Appellant)

John Leonard Thompson (Respondent)

(CA 40445/03)

John Leonard Thompson (Claimant/Cross Appellant)

CSR Limited (First Opponent/First Cross Respondent)

Midalco Pty Limited (Formerly known as Australian Blue Asbestos Pty Limited) (Second Opponent/Second Cross Respondent)

JUDGMENT OF: Handley JA Sheller JA Ipp JA

LOWER COURT JURISDICTION: Dust Diseases Tribunal

LOWER COURT FILE NUMBER(S): DDT 399/02

LOWER COURT JUDICIAL OFFICER: O'Meally P

COUNSEL:

(CA 40354/03)

D F Jackson QC/C A Goodman (Appellants)

M Joseph SC/ J Catsanos (Respondent)

(CA 40445/03)

M Joseph SC/J Catsanos (Claimant/Cross Appellant)

D F Jackson QC/C A Goodman (First & Second Opponents/First & Second Cross Respondents)

SOLICITORS:

(CA 40354/03)

Windeyer Dibbs (Appellants)

Alex Stuart & Associates (Respondent)

(CA 40445/03)

Alex Stuart & Associates (Claimant/Cross Appellant)

Windeyer Dibbs (First & Second Opponents/First & Second Cross Respondents)

CATCHWORDS:

PRACTICE AND PROCEDURE - Costs of appeal - Indemnity costs - Rejection of pre-trial offer - Supreme Court Rules Pt 22 - whether offer was a true compromise - costs of appeal where action futile. ND

LEGISLATION CITED:

Supreme Court Rules, Pts 22, 52A

DECISION:

(1) The appellants pay the respondent the costs of the appeal on the basis that, as from 3 June 2003, those costs are to be assessed on an indemnity basis (2) The responent to pay the appellants' costs of the application for leave to cross-appeal.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40354/03

CA 40445/03

DDT 399/02

HANDLEY JA

SHELLER JA

IPP JA

Tuesday 17 February 2004

CSR LIMITED & ANOR v JOHN LEONARD THOMPSON

JOHN LEONARD THOMPSON v CSR LIMITED & ANOR (NO 2)

(ON COSTS)

Judgment

1 HANDLEY JA: I agree with Ipp JA.

2 SHELLER JA: I agree with Ipp JA.

3 IPP JA: The respondent was employed by the second appellant and in the course of his employment was exposed to and inhaled asbestos dust and fibre. While the respondent was so employed, the first appellant supplied asbestos to the second appellant. In August 2002 the respondent was diagnosed as suffering from malignant mesothelioma. He died on 20 November 2003 as a consequence of this disease.

4 Prior to his death, the respondent brought proceedings against the appellants in the Dust Diseases Tribunal, claiming damages for negligence. O'Meally P held that the respondent was entitled to damages in the amount of $465,899.49. Included in this sum was an amount of $165,480, being the respondent's loss of capacity to care for his disabled wife. His Honour rejected a claim made by the respondent for damages of $10,000 for fear of suffering from mesothelioma (a fear experienced by the respondent before he contracted the disease).

5 The appellants appealed against the decision of O'Meally P on grounds based on the proposition that a claim for the loss of capacity identified was not open in law. The respondent applied for leave to cross appeal against O'Meally P's dismissal of his claim for damages for fear of suffering mesothelioma. As appears from the judgment of this Court delivered on 26 November 2003 the appeal and the application for leave to cross-appeal were dismissed.

6 By the consent of the parties, the submissions as to the costs orders that should be made (in the light of the result of the appeal and application for leave to appeal) were made in writing. The appellants and the representative of the respondent's estate have filed their written submissions and I set out my reasons for judgment in regard to the issues so raised.

7 On 15 May 2003 the respondent informed the appellants by letter that the appeal process was causing him significant anxiety and aggravation to his illness and, for that reason, the respondent would seek costs on an indemnity basis should the appeal be unsuccessful. It was submitted on behalf of the respondent's estate that, in continuing the litigation beyond 15 May 2003, the appellants were acting unreasonably and on this ground they should be ordered to pay indemnity costs as from that date.

8 I do not consider that the appellants acted unreasonably in pursuing the appeal. The fact that litigation caused anxiety to the respondent does not, alone justify an award of indemnity costs. I would not uphold this submission.

9 The next argument raised on behalf of the respondent's estate was based on a formal offer of compromise that the respondent filed on 3 June 2003 pursuant to Pt 22 of the Supreme Court Rules. By that offer of compromise the respondent offered to settle the entire matter for the sum of $415,889.49. It follows that by the offer of compromise the respondent offered to accept $115,470 in settlement of the disputed aspects of the judgment (including the issues raised by the application for leave to cross-appeal).

10 On 17 June 2003 the appellants rejected the respondent's offer of compromise and instead made a counter-offer of $25,000 "in addition to the judgment money already paid". By this counter-offer the appellants offered $25,000 in satisfaction of the respondent's claim for damages for loss of capacity to care for his wife and his claim for $10,000 damages in respect of his claim arising out of his fear of contracting mesothelioma. The respondent rejected this offer.

11 It was submitted on behalf of the respondent's estate that an order of indemnity costs as from 3 June 2003 (the date of the offer of compromise) should be made in respect of the appeal. It was argued that the offer of compromise was more favourable to the appellants than the eventual judgment of the Court. For this reason, it was submitted, Pt 52A r 22(4) of the Supreme Court Rules applies.

12 Had the appellants accepted the respondent's offer, the claim for the respondent's loss of capacity to care for his disabled wife and the his claim for fear of contracting mesothelioma would have been resolved in the amount of $115,470. Instead, by the judgment of this Court, they are required to pay $165,480 in respect of the claim for loss of capacity.

13 The purpose of the Pt 52A r 22(4) is "to encourage parties ... very strongly [to] consider compromise and to avoid further litigation if they are able to do so": Diamond v Simpson (No 2) [2003] NSWCA 78 at [12] per Stein JA. In this case there is nothing to preclude the usual operation of the rule. The appellants failed, to a significant extent, to do better than the offer of 3 June 2003. Accordingly, in my view, they should pay the respondent's costs of the appeal on the basis that, as from 3 June 2003, those costs are to be assessed on an indemnity basis.

14 The appellants contended that, by persisting in the application for leave to cross-appeal, the respondent maintained a futile cause of action. On this basis, the appellants submitted, the respondent should be ordered to pay the costs of the application for leave to cross-appeal on an indemnity basis. In my view the respondent's claim was not so far-fetched as to attract an order for indemnity costs. I would merely order that the respondent pay the appellants' costs of the application for leave to cross-appeal.

15 In summary, I propose the following orders:

(a) The appellants pay the respondent the costs of the appeal on the basis that, as from 3 June 2003, those costs are to be assessed on an indemnity basis.

(b) The respondent is to pay the appellants' costs of the application for leave to cross-appeal.

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LAST UPDATED: 18/02/2004