Dust Diseases Tribunal of New South Wales CITATION : Ernesto Tucci v Austral Rock Milling Pty Ltd (in Liquidation) and Anor [2007] NSWDDT 10 Ernesto Tucci PARTIES : Austral Rock Milling Pty Ltd (in Liquidation) Unimin Australia Ltd (Formerly Normandy Industrial Minerals) MATTER NUMBER(S) : 10 of 2001 JUDGMENT OF: Curtis J at 1 CATCHWORDS: Dust Diseases Tribunal :- Offer of Compromise Dust Diseases Tribunal Act 1989 LEGISLATION CITED: Dust Diseases Tribunal Regulation 2007 Uniform Civil Procedure Rules 2005 Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528 ; Young v Combe (BC9301813) ; Scanruby Pty Ltd v Caltex Petroleum Pty Ltd (BC 200102605); CASES CITED: Gordon v Berowra Holdings Pty Ltd (2005) 62 NSWLR 427 ; Mohamed v Farah (BC200403298); Cropper v Smith 26 Ch.D., 700 ; Whitehouse Properties Pty Ltd v Bond Brewing (NSW) Ltd (1992) 28 NSWLR 17 DATES OF HEARING: 11 July 2007 EX TEMPORE JUDGMENT DATE : 11 July 2007 Mr J Sharpe instructed by Turner Freeman appeared for the plaintiff LEGAL REPRESENTATIVES: Mr D Graham instructed by Piper Alderman appeared for the defendant JUDGMENT: Dust Diseases Tribunal of New South Wales Matter Number DDT10 of 2001 Ernesto Tucci v Austral Rock Milling Pty Ltd (In Liquidation) and Unimin Australia Ltd (Formerly Normandy Industrial Minerals) 11 July 2007 JUDGMENT CURTIS J Introduction 1. By amended statement of claim of 7 February 2001 Ernesto Tucci, pursuant to s11A of the Dust Diseases Tribunal Act 1989, claimed provisional damages against Austral Rock Milling Pty Ltd (In Liquidation) and Unimin Australia Ltd in respect of his diseases of silicosis and pneumoconiosis. He also sought an order pursuant to r5(4) of the Dust Diseases Tribunal Rules that lung cancer, progressive massive fibrosis and tuberculosis were dust related conditions in respect of which an award of further damages may be made. 2. The plaintiff's solicitors, Turner Freeman, by letter of 1 March 2007 put an offer to the defendants of $334,452.70 inclusive of costs on a provisional damages basis only. 3. At an issues and listing conference on 27 March 2007 the defendants made a joint offer of $65,000 inclusive of costs on a full and final basis. 4. On 26 June 2007 Piper Alderman, solicitors for the second defendant, served upon Turner Freeman an offer of compromise in these terms: The second defendant offers to compromise this claim on the following terms: (emphasis added) 1. Verdict and judgment in favour of the plaintiff against the first and second defendants in the sum of $150,000 plus costs as agreed or assessed. 2. This offer of compromise is open for acceptance for a period of twenty-eight days from the date of this offer. 3. This offer of compromise is made in accordance with r20.26 of the Uniform Civil Procedure Rules 2005. (emphasis added) 5. On 28 June 2007 Turner Freeman wrote to Piper Alderman accepting this offer, and on 3 July, Piper Alderman wrote to Turner Freeman asking that they prepare documents to effect the compromise. 6. On 5 July 2007 Piper Alderman received a draft judgment order prepared by Turner Freeman. It was as follows: 1. Verdict and judgment for the plaintiff as against the defendants in the sum of $150,000 plus costs as agreed or assessed to settle the plaintiffs claim on a provisional basis under section 11A of the Dust Diseases Tribunal Act and as particularised in paragraph 10 and 11 of the plaintiff's statement of claim. 2. The dust related conditions in respect of which an award of further damages may be made are: (a) Silica induced carcinoma of the lung; (b) tuberculosis. 7. Mr Scott Hay, the partner of Piper Alderman having carriage of the matter, did not have instructions to settle on a provisional basis. He had been instructed by the first and second defendants to make a joint Offer of Compromise to the plaintiff in the sum of $150,000 plus costs on a full and final basis. That is, the same basis upon which $65,000 had been offered at the issues and listing conference. 8. On 6 July 2007 Piper Alderman replied to Turner Freeman, enclosing a copy of the offer of compromise dated 26 June 2007, and stating that: The terms specified in the draft agreement as to judgment, and draft order as to judgment, do not reflect the terms of the settlement. The offer was not on a provisional basis and not capable of being accepted on a provisional basis. 9. Turner Freeman do not accept this contention. Mr Antonio Mancia, the employed solicitor having the carriage of the matter for the plaintiff, says that at no time prior to acceptance, was any indication given by Piper Alderman that the Offer of Compromise referred to anything other than settlement of the plaintiff's claim as contained within the Amended Statement of Claim filed 7 February 2001. That was a claim for provisional damages. The Claims for Relief 10. In consequence of these events the plaintiff has filed a notice of motion seeking an order pursuant to r20.27(3) of the Uniform Civil Procedure Rules 2005 that judgment be entered in accordance with the judgment order prepared by Turner Freeman. 11. The second defendant by motion seeks an order that leave be granted for the defendants to withdraw the offer of compromise served by Piper Alderman on the plaintiff on 26 June 2007. Is this a valid offer of compromise? 12. The offer of compromise complies with the Uniform Civil Procedure Rules 2005, particularly r20.26(3)(a) which prescribes that the notice of offer "must bear a statement to the effect that the offer is made in accordance with these rules". (emphasis added) 13. Part 6 of the Dust Diseases Tribunal Regulations 2007 however regulates offers of compromise within the Tribunal. Relevant provisions are as follows: 84 Part displaces rules This Part displaces any provision of rules of court with respect to the acceptance or rejection of an offer of compromise. 86 Making of offer (1) In any proceedings, any party may, by notice in writing, make an offer to any other party to compromise any claim in the proceedings, either in whole or in part, on specified terms. … (3) A notice of offer: (a) must bear a statement to the effect that the offer is made in accordance with this clause, (emphasis added) … (6) Unless the notice of offer otherwise provides, an offer providing for the payment of money, or the doing of any other act, is taken to provide for the payment of that money, or the doing of that act, within 28 days after acceptance of the offer. …. … (9) Unless the Tribunal orders otherwise, an offer may not be withdrawn during the period of acceptance for the offer. 90 Acceptance of offer (3) If an offer is accepted in accordance with this clause , any party to the compromise may apply for judgment to be entered accordingly . 14. The defendant's offer of compromise did not bear a statement that it was made in accordance with cl 86. Mr Sharpe for the plaintiff submits that this circumstance is irrelevant. He argues that cl 84 operates to displace the Uniform Civil Procedure Rules only so far as they relate to the "acceptance or rejection" of offers of compromise, and that Part 6 does not purport to regulate the making of such offers. He suggests that a party to proceedings in the Tribunal may make an offer of compromise either in accordance with r20.26 of the Uniform Civil Procedure Rules 2005 or in accordance with cl 86. I do not accept this submission. The offers of compromise countenanced by cl 84 are offers of compromise which comply with cl 86. The offer must bear a statement to the effect that the offer is made in accordance with cl 86. 15. Because the present offer of compromise does not comply with this requirement, it has no effect under the regulation. Had the plaintiff rejected the offer, and secured a less favourable result from the Tribunal, he would not have been penalised in costs in accordance with cl 88 of the regulations. Conversely, because the offer does not trigger the operation of cl 90, the plaintiff, although he has accepted the offer, is not entitled to apply for judgment. If the offer were validly made, should leave be granted for its withdrawal? Authority 16. Cl 86(9) specifically confers upon the Tribunal a power to permit a party to withdraw an offer of compromise. The Tribunal is not compelled by cl 90(3) to enter judgment in accordance with an accepted offer of compromise. The power to enter judgment is permissive. The Tribunal may control its own procedures according to the justice of the case. In Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528 at 537 Finlay J, refusing to enter judgment in the terms of an accepted offer of compromise which contained a typographical error, said: The defendant's offer of the acceptance of compromise is, in my view, an agreement to a compromise of litigation which is subject to the procedures of the Court, such procedures included the possibility that the Court may consider it unjust to enforce the settlement or that it is in the interests of justice that the matter proceed to trial. This decision has been referred to with approval by Hodgson J. in Young v Combe (unreported, NSWSC, 29 July 1993) and Palmer J in Scanruby Pty Ltd v Caltex Petroleum Pty Ltd (BC 200102605). 17. In the New South Wales Court of Appeal, Mason P, in Gordon v Berowra Holdings Pty Ltd (2005) 62 NSWLR 427 at 437 said that: "Leave to withdraw an offer under the rules (even after acceptance) [may] be granted for good reason, including mistake or other circumstance making it just that the offer be allowed to be withdrawn. 18. A court may permit offers to be withdrawn after acceptance even if the mistake is entirely unilateral. The facts in Mohamed v Farah (BC200403298) are illuminating. 19. The plaintiff issued proceedings claiming $163,838 being the balance of his claim to 30 per cent of a deceased estate. He had already received $12,334 pursuant to an initial distribution, the executors withholding from his share of that distribution an amount of $107,666, alleged to be beneficial payments received by the plaintiff from the deceased during her lifetime. The plaintiff disputed the character of those payments, however even if he lost that dispute, his claim entitled him to $100,804 in a final distribution. 20. The plaintiff's solicitor, in the confused and mistaken belief that the sum of $107,666 was the whole of the amount in dispute in the proceedings, made an Offer of Compromise in the sum of $90,000 plus costs. The defendant's solicitors, before accepting this offer of compromise, wrote to the plaintiff's solicitor, pointing out that the summons claimed $163,838, and asking that she confirm that the offer to accept $90,000 was in full satisfaction of that claim. The plaintiff's solicitor, still labouring under her misapprehension, confirmed that the plaintiff's offer was in full satisfaction of the claim. 21. Thereafter the plaintiff's solicitor, realising her mistake, wrote to the defendant's solicitor advising that the offer was intended to be in settlement of the dispute which concerned the characterisation of the sum of $107,666. On the same day that this letter was written, but before it was received, the defendant solicitors wrote to the plaintiff's solicitor accepting the offer of compromise. 22. The plaintiff moved the court for leave to withdraw the offer of compromise. 23. Barrett J rejected the defendant's submission that the matter should be governed by the common law rules of contract, or equitable principles relating to unilateral mistake. He cited with approval the decision of Finlay J in Lewis v Combell Constructions Pty Ltd and said: I am… satisfied that this is a case in which the court cannot allow the compromise to stand. The plaintiff has invoked the jurisdiction of the court in an attempt to vindicate a right he considers himself to have against the defendant. The defendant, for her part, has entered an appearance and the parties, through their legal representatives, have embarked upon the ordinary steps directed towards obtaining adjudication by the court. The offer of compromise was made and accepted in the course of those events but is affected by unilateral mistake. Had the plaintiff and his solicitors realised that the offer to accept in full settlement a sum of $90,000 plus costs related to a claim of $163,838 rather than a claim of $107,666, the offer would not have been made. Enforcement of that compromise in this case would not represent a just result of the kind the court is bound to impose in determining every dispute it is called upon to adjudicate. As the New Zealand Court of Appeal said in Waitemata City Council v McKenzie, procedures designed to further the ends of justice cannot be allowed to become instruments of injustice or oppression. I am of the opinion that it would be unjust to enforce the apparent compromise rather than allowing the controversy to proceed towards trial as if the offer had not been made and accepted. 24. I add to these authorities the often cited passage of Bowen L.J. in Cropper v Smith 26 Ch.D., 700 at 710 where he said: Now, I think it is a well established principle that the object of courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of the cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy… The plaintiff's submissions 25. The plaintiff, having accepted an offer of compromise, prima facie has a right to judgment, and the defendant carries the onus of showing cause why leave to withdraw the offer should be granted. 26. First, Mr Sharpe submits that upon the facts proved before me there has been no mistake, that the defendants always intended to pay $150,000 to settle on a provisional basis. That submission is inconsistent with the evidence of Mr Hay, which I accept. Mr Sharpe did not require Mr Hay for cross-examination and I do not think this submission is open to him. 27. Secondly, Mr Sharpe submits that the Court may not receive evidence of the offerors' intention in any circumstance where the documents disclose no ambiguity. He cites no authority for this proposition and it is inconsistent with the decision in Mohamed v Farah. 28. In any event the reference in the offer to compromise "this claim" may in the circumstances be ambiguous. The offer of compromise makes no reference to provisional damages, and its terms are inconsistent with an award of provisional damages. The plaintiff's solicitor will not accept the form of judgment drafted by the defendant in the offer, believing that a judgment in that form will extinguish the claim for future damages. 29. If the offer is not ambiguous, I rather tend to think that it is to be read as an offer to settle the plaintiff's claim on a full and final basis, although this was not argued before me. The words "this claim" in the document do no more than describe the claim which is a subject of the offer. The terms of the offer are to the effect that this limited claim should be resolved by the entry of an unqualified judgment for the plaintiff in the sum of $150,000. This reading explains the reluctance of the plaintiff's solicitor to accept judgment in the terms offered. 30. Thirdly, Mr Sharpe submits that a claim for provisional damages is not amenable to any compromise on a full and final basis because such a claim is not pleaded. I do not agree. 31. The ambit of a claim does not dictate the terms upon which all or part of it may be compromised. In Whitehouse Properties Pty Ltd v Bond Brewing (NSW) Ltd (1992) 28 NSWLR 17, the Court of Appeal confirmed that an offer of compromise may be made pursuant to the rules, although it did not relate to all claims for relief made in the proceedings. 32. Cl 86(1) provides that any claim in the proceedings may be compromised either in whole or in part "on specified terms". Those terms may be as wide as human ingenuity can devise. Cl 86(6) envisages that a claim for damages may be compromised by the payment of money "or the doing of any other act" within 28 days after acceptance of the offer. A partial claim may be compromised by a payment which, by agreement, will extinguish all claims that could possibly be included in the proceedings. A defendant may make such an offer, requiring that the plaintiff file an amended statement of claim, including all such claims for relief, prior to the entry of judgment. 33. I am satisfied that, if the defendants' offer of compromise were to have complied with the governing rule or regulation, and if it is capable of being read as an offer to settle on a provisional basis, the defendant should have leave to withdraw that offer. Orders 34. I dismiss the plaintiff's motion that judgment be entered pursuant to the offer of compromise. I make no order upon the defendants motion to withdraw the offer of compromise. If such an order is necessary, the defendants have leave to withdraw the offer of compromise. Costs 35. Mr Sharpe submits that pursuant to r42.7 of the Uniform Civil Procedure Rules 2005 the costs of this interlocutory application should be costs in the proceedings. He submits that the plaintiff's solicitors are innocent, and that the proceedings have been brought about solely by the mistake of the defendant's solicitors. I am not so persuaded. 36. The ambiguity of the offer of compromise was demonstrated by the fact that the plaintiff's solicitor would not accept judgment in its terms. The courtesy of a simple phone call would have revealed that the parties were not ad idem. 37. Within a day of receiving the plaintiff's draft judgment, the solicitors for the defendants asserted that there had been a misunderstanding. An affidavit by Mr Hay spelling out the circumstances in which the offer of compromise was made has been proffered, and he was not required for cross-examination. The applicable law was always clear. Professional comity would militate towards the plaintiff's solicitor accommodating a mistake that may have been made by a colleague. No prejudice would have been occasioned to his client had the solicitor for the plaintiff not attempted to compel the defendants to adhere to his understanding of the offer of compromise. The parties would have been back to square one, each deciding whether he/they might further negotiate, or whether any one of them may choose to proceed to trial. 38. It is ironic that it was Turner Freeman in Lewis v Combell Constructions Pty Ltd who sought relief for their client in consequence of a mistake by one of their employed solicitors. Those same solicitors have now attempted to hold these defendants to a bargain which they never intended to make. The attempt has failed. 39. I think it is appropriate that costs should follow the event. The plaintiff is to pay the defendant's costs in the motion for the entry of judgment. That order is stayed pending the final resolution of the matter. Mr J Sharpe instructed by Turner Freeman appeared for the plaintiff Mr D Graham instructed by Piper Alderman appeared for the defendant 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.