Sarkem Pty Limited v CSR Limited [2008] NSWDDT 39

Dust Diseases Tribunal of New South Wales

CITATION : Sarkem Pty Limited v CSR Limited [2008] NSWDDT 39

PARTIES : Sarkem Pty Ltd (Cross Claimant) Respondent to the Motion CSR Ltd (Cross Defendant) Applicant on the Motion

MATTER NUMBER(S) : 8109 of 2008

JUDGMENT OF: Curtis J at 1

CATCHWORDS: :- Powers of the Tribunal - cross claim - equitable jurisdiction

Dust Diseases Tribunal Regulation 2007 LEGISLATION CITED: Dust Disease Tribunal Act 1989 Supreme Court Act 1970 Uniform Civil Procedure Rules 2005

Mangion v James Hardy and Coy Pty Ltd (1990) 20 NSWLR 100 (Ex parte Currie: Re Dempsey (1969) 70 SR (NSW) 443 CSR Ltd v Amaca Pty Ltd [2007] NSWCA 107 CASES CITED: Philip Morris Inc v Adam P Brown Male Fashion Proprietry Ltd (1981) 148 CLR 457 Fencott v Muller (1983) 152 CLR 570 Re Wakim: Ex parte McNally (1999) 198 CLR 511 Commonwealth of Australia v Cockatoo Dockyard Pty Ltd [2003] NSWCA 192

DATES OF HEARING: 18 September 2008

DATE OF JUDGMENT: 17 December 2008

Mr D M Jay instructed by Colin Biggers & Paisley appeared for CSR Limited

LEGAL REPRESENTATIVES:

Mr J C Sheller instructed by DLA Phillips Fox appeared for Sarkem Pty Ltd

JUDGMENT:

Dust Diseases Tribunal of New South Wales Matter No DDT8109 of 2008/1 (Re: Graham Richard Weismantel) Sarkem Pty Ltd (Cross Claimant) v CSR Limited (Cross Defendant) 17 December 2008 JUDGMENT CURTIS J The question for determination 1. A cross defendant, CSR Limited, moves to strike out a cross-claim upon the grounds that: (a) The relief sought by the cross claimant is equitable in nature and beyond the jurisdiction of the Tribunal. (b) If the Tribunal does possess equitable jurisdiction, then the cross-claim does not fall within that jurisdiction because it is not ancillary or related to Mr Weismantel's claim for damages. (c) If the cross-claim is within jurisdiction, the Tribunal should decline to exercise that jurisdiction in the circumstances of the case. The facts 2. The plaintiff, Mr Weismantel, claimed damages from Sarkem Pty Ltd, formerly CSR Chemicals Pty Ltd (CSR Chemicals), alleging that he contracted mesothelioma as a result of contact with the contaminated clothes of his father, who worked with asbestos when employed by that company between 1959 and 1982. 3. CSR Chemicals was, at the relevant time, a subsidiary of CSR Ltd (CSR) and was insured, as was CSR and other companies within the CSR group, by NZI Insurance Ltd (NZI). 4. On 3 March 1995, after some litigation, CSR and NZI entered a deed pursuant to which CSR released NZI from claims to indemnity from any of the companies within the "The CSR Group" in exchange for the payment of a large lump sum of money to CSR. 5. The deed provided that "The CSR Group" means CSR, Midalco and any and all related bodies corporate of CSR and any body corporate which was at any time prior to the date of this deed a related body corporate of CSR or was a body corporate over whom CSR exercised control within the meaning of the Corporations Law and includes (without limiting or being limited by the above definition) those companies and entities in Attachment A". 6. Although CSR Chemicals was not listed in "Attachment A", Sarkem cross claims against CSR, asserting that CSR Chemicals was nevertheless a company within the meaning of "The CSR Group", that CSR holds the moneys which it received from NZI on trust for Sarkem, and is accordingly liable to indemnify Sarkem in respect of any damages or costs payable to the plaintiff, and costs incurred in defence of that claim. 7. In response, CSR filed a notice of motion on 5 September 2008, to strike out the cross-claim upon the grounds stated above. 8. The motion was heard on 18 September 2008. At that time the plaintiff's claim was subject to the Claims Resolution Process and Clause 19(1)(c) of the Dust Diseases Tribunal Regulation 2007 prevented the Tribunal from making any order in the proceedings. 9. On 1 December 2008, the claim of Mr Weismantel against Sarkem was settled, and judgment was entered by consent against Sarkem in the sum of $201,960 inclusive of costs. The bar constituted by Clause 19(1)(c) no longer operates. Does the Tribunal have jurisdiction to grant equitable relief? Statutory Provisions 10. The Dust Diseases Tribunal Act 1989 provides as follows: s 10 Jurisdiction and functions of the Tribunal (1) The Tribunal has, except as provided by sections 29 and 32, exclusive jurisdiction to hear and determine proceedings referred to in sections 11 and 12. … (4) In any proceedings brought under section 11 or transferred under section 12, the Tribunal has the same power to make decisions as the Supreme Court would, but for this section, have had in relation to similar proceedings brought in the Supreme Court. (Emphasis added) s11 Claims for damages for dust diseases etc to be brought under this Act (1) If: (a) a person is suffering, or has suffered, from a dust-related condition or a person who has died was, immediately before death, suffering from a dust-related condition, and (b) it is alleged that the dust-related condition was attributable or partly attributable to a breach of a duty owed to the person by another person, and (c) the person who is or was suffering from the dust-related condition or a person claiming through that person would, but for this Act, have been entitled to bring an action for the recovery of damages in respect of that dust-related condition or death, proceedings for damages in respect of that dust-related condition or death may be brought before the Tribunal and may not be brought or entertained before any other court or tribunal. (1A) Proceedings by any tort-feasor liable in respect of damages referred to in subsection (1) to recover contribution from any other tort-feasor liable in respect of that damage may be brought before the Tribunal. … (4) Any matter that is ancillary or related to a matter that is the subject of proceedings to be brought under subsection (1) or (1A) may also be included in those proceedings. (Emphasis added) … s12 Transfer of proceedings from the Supreme Court or District Court to the Tribunal (1) If: (a) on the commencement of this section, proceedings of the kind referred to in section 11 (1) are pending in the Supreme Court and the hearing of those proceedings has not begun, or (b) after that commencement, proceedings of that kind are brought or are pending in the Supreme Court, the registrar of the division of that Court in which the proceedings are pending or are brought must transfer the proceedings to the Tribunal, together with any ancillary or related matters. (2) If: (a) on the commencement of this section, proceedings of the kind referred to in section 11 (1) are pending in the District Court and the hearing of those proceedings has not begun, or (b) after that commencement, proceedings of that kind are brought or are pending in the District Court, … s3 Definitions (1) In this Act: "ancillary or related matter", in relation to any proceedings, includes any claim relating to the subject-matter of the proceedings that a defendant in the proceedings has against another person, whether that other person is a party to the proceedings or not. 11. s57 of the Supreme Court Act 1970 provides that: The Court shall administer concurrently all rules of law including rules of equity. Authority 12. In Mangion v James Hardie and Coy Pty Ltd (1990) 20 NSWLR 100, Mahoney JA at 108 observed that: The objective sought to be achieved by the Dust Diseases Tribunal Act was, or included, that where a person is liable for damage because of its liability for a dust related condition, all aspects of his liability should be determined by one Tribunal… the experience of multiple litigation in motor vehicle and industrial accident cases was, I think, seen by the legislature as a mischief to be avoided in dust related conditions… In addition the legislature no doubt saw as a mischief to be avoided the possibility of inconsistent decisions in different courts or tribunals in respect of claims based upon a dust related condition. 13. If, in the present case before the Tribunal, Sarkem claimed indemnity from NZI, that claim might be defeated upon the basis that the deed effectively released it from liability. If Sarkem then sought equitable relief against CSR in the Supreme Court, that Court may conclude that the deed did not have that effect, leaving Sarkem without a remedy. 14. It may be accepted that any jurisdiction for an inferior court must be "expressly shown" by statute (Ex parte Currie: Re Dempsey (1969) 70 SR (NSW) 443, 447) and that the Dust Diseases Tribunal Act 1989 does not confer equitable jurisdiction in terms expressly similar to s134 of the District Court Act 1973. 15. I am conscious of the observations of Young CJ in Eq (with whom Hodgson JA. agreed) in CSR Ltd v Amaca Pty Ltd [2007] NSWCA 107 where he said: 18 It is important to bear in mind the jurisdiction of the Dust Diseases Tribunal. Section 10(1) confers jurisdiction to hear and determine proceedings referred to in ss 11 and 12. Section 11 deals with actions for damages because of a dust-related condition. Section 11(1A) is as follows: "Proceedings by any tort-feasor liable in respect of damages referred to in subsection (1) to recover contribution from any other tort-feasor liable in respect of that damage may be brought before the Tribunal. Note. This subsection does not prevent those proceedings being brought in another court." Subsection (4) confers jurisdiction in "any matter that is ancillary or related to a matter that is the subject of proceedings to be brought under subsection (1) or (1A) may also be included in those proceedings." 19 Accordingly, it is clear that the Tribunal has jurisdiction to deal with claims for contribution under s 5(1)(c) of the 1946 Act. It is probable that the Tribunal has jurisdiction under subsection (4) in common law claims made on a restitutionary basis or on an indebitatus count for contribution. Some of these matters are discussed in Amaca Pty Ltd v CSR Ltd (2001) 51 NSWLR 476 and Wallaby Grip (BAE) Pty Ltd v Eraring Energy (2004) 60 NSWLR 701. 20 In my view, it must be very doubtful as to whether the Tribunal can deal with equitable claims for contribution. However, with that comment, I can pass on. 16. The opinions of Mahoney JA and Young CJ do appear to be inconsistent. 17. To my mind the legislature clearly envisaged in the enactment of s12 of the Dust Diseases Tribunal Act that, in relation to matters transferred from the Supreme Court, the Tribunal would, in the exercise of its ancillary jurisdiction, exercise all of those powers available to the Supreme Court to resolve the issues between the parties, administering concurrently all rules of law including rules of equity. It would be anomalous if the jurisdiction were more limited in relation to those matters which commenced in the Tribunal pursuant to s11. 18. I hold that the Tribunal may administer the rules of equity in the disposition of matters otherwise within its jurisdiction. Is the equitable claim of Sarkem against CSR ancillary or related to the claim for damages made by the plaintiff? 19. In order that a claim be ancillary or related to a principal claim, there must be a substratum of facts that arise for determination. (Philip Morris Inc v Adam P Brown Male Fashion Proprietry Ltd (1981) 148 CLR 457 at 512, Fencott v Muller (1983) 152 CLR 570 at 607, Re Wakim: Ex parte McNally (1999) 198 CLR 511 at 587). 20. I reject the submission of CSR that there was no common substratum of facts connecting the claim made by Sarkem against CSR and the proceedings brought by Mr Weismantel. 21. In order to succeed against CSR, Sarkem must prove that the policies of insurance held by Sarkem, and surrendered by CSR, responded to the risk in the event that Sarkem was liable for Mr Weismantel's damages. CSR fairly criticises the present cross claim because that allegation, while implied, is not spelled out. That defect can be remedied by amendment. 22. The determination of whether a policy of insurance responds to a liability to pay damages for a disease of gradual onset depends upon findings of fact related not only to the source of the plaintiff's exposure to injurious dust, but also to the nature, extent, and timing of that exposure. Those facts would have been the subject of evidence and findings in the disposition of the primary claim of Mr Weismantel had that matter proceeded to trial. 23. The further criticism by CSR that the cross-claim does not allege denial of indemnity by the insurers is unwarranted. In paragraphs 41 to 44 of the cross-claim Sarkem has undertaken to prove that it is not entitled to claim indemnity. Should the Tribunal decline to exercise equitable jurisdiction in the circumstances of this case? 24. Pt 12 r 11(1)(h) of the Uniform Civil Procedure Rules 2005 provides that: (1) In any proceedings, the court may make any of the following orders on the application of a defendant: (h) an order declining to exercise jurisdiction in the proceedings, if the court is a clearly inappropriate forum. 25. In Commonwealth of Australia v Cockatoo Dockyard Pty Ltd [2003] NSWCA 192 Hodgson JA said at [32]: Certainly, it is desirable that proceedings that overlap substantially be heard altogether by one tribunal. However, it is also desirable that, where a tribunal is given exclusive jurisdiction in respect of certain tort claims, that tribunal should also dispose of claims for contribution between tortfeasers in respect of those torts. On the other hand, the Dust Diseases Tribunal is not an ideal tribunal for resolving complex contractual disputes between parties like Codock and the Commonwealth, while the Commercial Division of this Court is ideally suited to resolving that kind of dispute. Thus, there are competing considerations at play here, some pointing towards resolution of all issues by one tribunal, and others pointing towards the resolution of them by the tribunals most suited to resolution of particular issues. 26. It is entirely appropriate that, in the ordinary case, disputed claims for equitable relief should be brought before the equity division of the Supreme Court. In some cases however, the factual dispute underlying the equitable claim may be insignificant in comparison to the factual dispute common to both the principal claim and the cross-claim in the Tribunal. In that circumstance convenience, the saving of costs, and the advantage of avoiding potentially inconsistent decisions may justify the Tribunal's exercising equitable jurisdiction. 27. The Dust Diseases Tribunal was created to provide expert and expeditious disposition of claims by plaintiffs who suffer dust diseases. In the present case the plaintiff has secured his relief by settlement, and the dispute between Sarkem and CSR does not relate to apportionment of liability to the plaintiff. In these circumstances I find that the Tribunal is a clearly inappropriate forum to hear and dispose of the commercial dispute between Sarkem and CSR in accordance with equitable principles. Orders: 28. I order that the cross-claim by Sarkem Pty Ltd against CSR Limited be struck out. The motion was heard on 18 September 2008. On that day Sarkem, in resisting the orders sought by CSR, properly raised a defence that the claim was subject to the Claims Resolution Process and Clause 19(1)(c) of the Dust Diseases Tribunal Regulation 2007 prevented the Tribunal from making the orders sought. Had this ruling been delivered on that day, the motion would have been peremptorily struck out with an order that CSR pay the costs of Sarkem. Since that time circumstances have changed, because Sarkem has settled with the plaintiff. The appropriate order is that each party pay its own costs Mr J C Sheller instructed by DLA Phillips Fox appeared for Sarkem Pty Ltd Mr D M Jay instructed by Colin Biggers & Paisley appeared for CSR Limited