Dust Diseases Tribunal of New South Wales CITATION : (re Floro) Bluescope Steel (AIS) Pty Limited v Amaca Pty Limited & Ors [2007] NSWDDT 7 Bluescope Steel (AIS) Pty Limited PARTIES : Amaca Pty Limited Wallaby Grip Limited Wallaby Grip (BAE) Pty Limited (In Liquidation) MATTER NUMBER(S) : 166/2005/1 of JUDGMENT OF: Kearns J Dust Diseases Tribunal :- offer of compromise CATCHWORDS: offer for a figure plus costs "costs and interest as agreed or assessed" did not validate offer LEGISLATION CITED: Civil Procedure Act 2005 DATES OF HEARING: 07/05/2007 EX TEMPORE JUDGMENT DATE : 7 May 2007 Mr T Rowles, instructed by Sparke Helmore, appeared for the cross-claimant LEGAL REPRESENTATIVES: Mr J Sheller, instructed by Phillips Fox, appeared for the first cross-defendant Mr T Morahan, instructed by Middletons, appeared for the second and third cross-defendants JUDGMENT: 4 Dust Diseases Tribunal of New South Wales Matter Number DDT166 of 2005/1 (Re: Tommaso Floro) (Settled 14/11/2005) C.C: Bluescope Steel (AIS) Pty Limited v C.D: Amaca Pty Limited C.D: Wallaby Grip Limited C.D: Wallaby Grip (BAE) Pty Limited (In Liquidation) 7 May 2007 RULING KEARNS J 1. On 17 October 2006 the second and third cross-defendants offered to compromise the cross-claim by serving on the cross-claimant an offer of compromise. The offer of compromise was in the following substantive terms: 1. The second and third cross-defendants to pay the cross-claimant $106,250 plus interest plus costs. 2. Costs and interest as agreed or assessed. 3. This offer remains open for a period of 28 days after the date of this offer. 2. The affidavit of Stewart James Newell of 4 May 2007 sets out a history of some correspondence after that date although it was all one way until the cross-claimant's solicitors sent a fax to the second and third cross-defendants' solicitors on 12 April 2007, sending a Calderbank offer which in substance was in the following terms: 1. $106,250 (representing 25 per cent of the total damages paid by the cross-claimant to the plaintiff). 2. Interest upon that sum at the relevant rate as prescribed under sch 5 Uniform Civil Procedure Rules from 22 March 2006. (The date of service of the cross-claims). 3. Payment of the cross-claimant's costs of the cross-claim as agreed or assessed. 3. Further correspondence ensued including another letter from the cross-claimant's solicitors of 26 April 2007 to the second and third cross-defendants' solicitors, again making the same Calderbank offer as to the principal sum and as to the rest of it adding: 1. Interest upon $106,250 at the relevant rate as prescribed on sch 5 Uniform Civil Procedure Rules from 22 March 2006 to date of acceptance of all of the terms of our offer contained in our letter of 12 April 2006. 2. Payment of our costs as agreed or assessed up to date of acceptance of all the terms of our offer contained in our letter of 12 April 2006. 4. There was some further correspondence. The end result is that the parties have agreed as to settlement of the substantive part of the claim, namely, that the cross-defendants will pay to the cross-claimant the principal sum of $106,250. Argument has remained as to interest and presumably the costs will sort themselves out after the order I will need to make in these reasons. 5. The outcome of this dispute will depend on how I view the second and third cross-defendants' offer of compromise of 17 October 2006. It is argued by Mr Rowles in effect that the offer of compromise is not a valid of compromise for a number of reasons: (1) it does not provide for a sum certain in relation to the interest; (2) it provides for interest to be assessed if not agreed, and there is no such thing as an interest assessor as there is a costs assessor; (3) on the same date the offer of compromise was made a Calderbank offer was made by the cross-defendants to the cross-claimant. The Calderbank offer was an offer to pay the sum of $111,627 inclusive of interest and costs. 6. As to the first point, namely that the offer of compromise did not provide for a sum certain as to interest, contract law envisages situations where an offer may be made without the sum being specified and certain when it is made. An offer to settle a case for a figure plus costs would be an example of that. It is not critical for an offer to be a valid offer that all figures that need to be determined before the contract can be formed need to be certain. An offer could be made where by the utilisation of some formula, could be determined that would make the figure known and determined. Acceptance of such an offer could be made before that process was undertaken and that would give rise to a valid contract. Similarly, in my view, an offer may be made where, if a figure is not certain, it may be left to be determined by some person. That is clearly the case with costs. In a sense costs may be in a special category because the rules provide for that, but I see no difficulty with an offer being made where the offeror leaves it that a component of the offer will be determined by some third person. If the offeree wishes to accept the offer on that basis he may do so and create a binding contract. Accordingly, the fact that the interest was not stated as a given figure, or a certain process in terms of some formula put forward for determining it was given, I do not see as fatal to the offer of compromise being a valid offer. The fact that interest was left to be determined by a judge is not an impediment, in my view, to the offer of compromise being a valid offer. There may be any number of reasons underlying an offer where interest is left undetermined. Interest is discretionary and there may be disputes between the parties that make interest difficult for the parties to agree on, yet they may be capable of agreeing that the substantive proceedings should be resolved and interest be determined later. That an offer allows for interest to be determined later, in my view, is perfectly in order. 7. The next point then argued by Mr Rowles is that the offer of compromise provided that interest was to be agreed or assessed and, in the absence of agreement, there is no such thing as an interest assessor and therefore there is no mechanism for the interest to be calculated. In a literal sense Mr Rowles's argument is correct because there is no interest assessor in the sense of a costs assessor. However, the Tribunal may be seen as an interest assessor. More to the point the Tribunal should try to give some business efficacy to the offer of compromise and it is plainly clear in my view what the second and third cross-defendants were seeking to do and that was to settle the substantive proceedings and leave the matters of interest and costs to be determined later. Now that is something that the cross-claimant could accept or reject. The offer for interest to be assessed should be read, in my view, as an offer for interest to be assessed in the appropriate way, that is by the Tribunal if the parties could not agree on the interest. 8. The third matter which Mr Rowles raised was that on the same day that the offer of compromise was made the Calderbank offer was made. The offer of compromise and the Calderbank offer were in fact made on the same day but sent to the cross-claimant's solicitors in two separate envelopes. It seems to me plain that they were alternatives. The cross-claimant had an option of accepting the offer of compromise or accepting the Calderbank offer. The Calderbank offer may not have been effective as a proper Calderbank offer because of its inclusion of costs in the figure but it was plain that it was an offer for a figure larger than the figure in the offer of compromise because it included what the second and third cross-defendants' solicitors saw as a figure for interest and costs. Being in the alternative I think the Calderbank offer may be put to one side and all we need to do is look at the offer of compromise in this case and determine whether or not it was a valid offer of compromise. In my view it was. It was to remain open for a period of twenty-eight days after its date, which was 17 October 2006. It was not accepted within that time period and accordingly the consequences of Pt 42 r 15 will apply. I should add that Mr Morahan referred me to s 100 of the Civil Procedure Act in relation to the Court's power to award interest and Mr Rowles argued that it only applied in cases where the Court was giving judgment, I take it as in a contested matter. I do not read that limitation into s 100. In any event a contest as to the giving of interest if it resulted in an award for interest would be a matter in respect of which judgment was given in a contested matter. 9. For these reasons I think the consequences in Pt 42 apply and accordingly the cross-claimant is entitled to its costs up until 17 October 2006, and the cross-defendants are entitled to their costs on an indemnity basis from 11am on 18 October 2006. 10. The orders I make are as follows: The second and third cross-defendants to pay interest to the cross-claimant in the sum of $5,632.71. Second and third cross-defendants to pay costs of the cross-claim up to 17 October 2006. Cross-claimant to pay the second and third cross-defendants' costs of the cross-claim on an indemnity basis from 11am on 18 October 2006. Liberty to apply. ********** Mr T Rowles instructed by Sparke Helmore appeared for the Cross-Claimant Mr J Sheller instructed by Phillips Fox appeared for the First Cross-Defendant Mr T Morahan instructed by Middletons appeared for the Second and Third Cross-Defendants 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.