Dust Diseases Tribunal of New South Wales CITATION : (Re Cheong) SRA of NSW v Amaca Pty Ltd and Ors [2006] NSWDDT 29 State Rail Authority of New South Wales (Cross-Claimant) PARTIES : Amaca Pty Ltd (First Cross-Defendant) Wallaby Grip Ltd and Wallaby Grip (BAE) Pty Ltd (In Liquidation) (Second Cross-Defendant) Bradford Insulation Industries Pty Ltd (Third Cross-Defendant) MATTER NUMBER(S) : 192/2003/1 JUDGMENT OF: Duck J CATCHWORDS: Dust Diseases Tribunal :- Cross-claim - Offer of compromise - Interest and costs DATES OF HEARING: 08/08/2006 DATE OF JUDGMENT: 08/08/2006 EX TEMPORE JUDGMENT DATE : 08/08/2006 Mr J A Gracie instructed by Edwards Michael Moroney Lawyers appeared for the Cross-Claimant LEGAL REPRESENTATIVES: Mr D J Russell SC instructed by Phillips Fox Lawyers appeared for the First Cross-Defendant JUDGMENT: RULING DUCK J 1 In this matter I gave judgment on 25 July pursuant to the terms of which the first cross-defendant was ordered to pay to the cross-claimant as its contribution to the plaintiff's damages the sum of $50,000. At the request of the parties I refrained from making orders about interests and costs. The request was made in the expectation that the parties would be able to come to some agreement about those matters. 2 Insofar as the fourth cross-defendant is concerned agreement was reached and orders have been made by consent and no further consideration needs now to be given to that party. 3 Insofar as the first cross-defendant, Amaca Pty Ltd (Amaca), is concerned, the parties have not been able to agree about interest and costs. The difficulties arise from offers and counter offers which have been made one to the other as the matter developed. The first cross-defendant has filed and relied upon the affidavit of Ms C L Hartley, sworn 4 August 2006, which sets out in convenient form the course of dealings between the parties insofar as these matters are concerned. Relevantly the following material appears. On 17 September 2004 the cross-claimant served its cross-claim on Amaca by delivering it to Amaca's solicitors, Phillips Fox. On 29 September 2004 there was a directions hearing before the President O'Meally, short minutes were handed up and orders were made in conformity with them for the further conduct of the matter. There was a further directions hearing on 20 June 2005 and further short minutes were handed up and orders made. The content of those short minutes suggests, as has been submitted by Mr Russell SC, learned counsel for Amaca, that not much had happened between the dates of the directions hearings. On 5 August 2005 Amaca's solicitors wrote to State Rail's solicitors offering to settle the cross-claim. The letter or a copy of it is annexure D to Ms Hartley's affidavit. The substance of the offer appearing in that letter is as follows: We are instructed to make an offer of settlement to resolve the cross-claim against Amaca in the sum of $55,400 inclusive of the cross-claimant's costs. 4 The offer was expressed to be open for acceptance until 2 September 2005. The time for acceptance was extended by agreement, firstly, until 1 October 2005 and later until 20 January 2006. In the meantime there was a further directions hearing on 13 December 2005 when the matter was stood over until 20 February 2006. On that date an issues and listings conference was appointed for 31 March 2006. Evidence and witness statements were ordered to be served by the parties by 23 March 2006 and the matter was listed for further directions on 10 April 2006. On 10 March 2006 SRA served an offer of compromise, the substance of which was as follows: It proposed that the first cross-defendant should pay to the cross-claimant $60,000 plus interest of $8,500 plus costs assessed at $3,500. 5 The issues and listings conference took place as appointed. Following the conference the matter was listed for directions on 10 April 2006 so that a hearing date could be fixed. On 19 May 2006 the solicitors for Amaca served an offer of compromise. The substance of that offer is as follows: the first cross-defendant offered to compromise the action on terms that (1) the first cross-defendant pay to the cross-claimant the sum of $50,000 plus interest of $6,000. (2) The first cross-defendant was to pay its portion of the cross-claimant's costs assessed in the sum of $2,500. The offer was expressed to be open until 19 June 2006. There was then a little confusion because apparently the letter forwarding the offer of compromise had been received but the offer itself had gone astray. I do not think in the ultimate anything turns on that. 6 In due course the matter did not settle and proceeded to hearing over three days and in the outcome Amaca was ordered to pay by way of contribution to State Rail the sum of $50,000. As I mentioned earlier the judgment did not attempt to grapple with questions of interest and costs. 7 It is submitted on behalf of Amaca that it was not reasonable for the cross-claimant to have failed to accept its offer of 5 August 2005. That was the offer by Amaca to settle at that stage for $55,400 inclusive of interest and costs. Each party has calculated the figure for interest up to that date and each comes to the same figure of $4,586.30. That would mean that the offer represented a contribution towards the cross-claims costs of $814. It is not clear to me that the cross-claimant was unreasonable in not accepting that offer. One might look for example at the first letter sent to Amaca's solicitors and the material enclosed with it. There was a large volume of material served with the cross-claim, and I am not satisfied that $814 represents a reasonable amount of costs as at 5 August 2005. 8 Coming then to the offer of compromise of 19 May 2006. It is submitted, firstly, by counsel for State Rail that by then the value of interest calculated pursuant to the Court rules was $8,124.65. On its face the offer was over $2,000 short of that figure insofar as interest is concerned. It was also submitted that the offer for costs was insufficient, but I do not know how that matter can be resolved other than by a costs assessment being formally undertaken. But the offer was not submitted, as Mr Gracie submitted today, in any severable form. The components of the offer were identified, one of them was interest and it was for too little, or so it seems to me. That being so I do not accept that it was unreasonable for the cross-claimant to fail to accept that offer. In the circumstances I do not think that it is appropriate to make orders that the cross-claimant should be paying the cross-defendant's costs following one or other of those offers. If the Court had been satisfied that the cross-claimant was not reasonable in failing to accept one or other of the offers then such a consequence would have followed. But I do not think that is the position. 9 I think the only orders that are required are those set out in the draft submitted by the cross-claimant, and I will make them formally in a moment. I just wish to add this observation. In a sense it is shame that the cross-defendant was able accurately to identify a reasonable outcome of the cross-claim proceedings insofar as they affected their client, but for the reasons I have given I do not think the cross-claimant was unreasonable to failing to accept the offers as and when they were made. Hence I make the following orders: Firstly, I order the first cross-defendant Amaca Pty Ltd to pay the cross-claimant, State Rail Authority of New South Wales, as its contribution to the plaintiff's damages the sum of $50,000. Secondly, I order the first cross-defendant to pay to the cross-claimant interest on its cross-claim as between 29 July 2004 to the date of judgment 25 July 2006 in the sum of $8,963.01. There will be judgment for the cross-claimant against the first cross-defendant in the sum of $58,963.01. 10 Order first cross-defendant to pay cross-claimant's costs. Mr J A Gracie instructed by Edwards Michael Moroney Lawyers appeared for the Cross-Claimant Mr D J Russell SC instructed by Phillips Fox Lawyers appeared for the First Cross-Defendant I certify that the previous 10 paragraphs Are the reasons for Judgment of His Honour Judge Duck Associate 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.