Dust Diseases Tribunal New South Wales Medium Neutral Citation: Rafaraci v ACN 000 761 973 Pty Ltd & Ors [2020] NSWDDT 3 Hearing dates: 29 April 2020 Date of orders: 06 May 2020 Decision date: 06 May 2020 Before: Russell SC DCJ Decision: (1) Order that the plaintiff is to have no costs against the fifth and sixth defendants in relation to: (a) The proceedings against the first defendant; (b) The plaintiff's Notice of Motion filed on 24 February 2020 and his Amended Notice of Motion filed on 16 March 2020;and (c) The fifth and sixth defendants' Notice of Motion filed on 26 February 2020 and their Amended Notice of Motion filed on 29 April 2020. Catchwords: COSTS – discretionary order that plaintiff is not to have certain costs Legislation Cited: Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) Dust Diseases Tribunal Regulation 2019 (NSW), cl 27 Workers Compensation Act 1987 (NSW), s 151AB Category: Costs Parties: Felice Rafaraci (Plaintiff) Employers Mutual Limited (Fifth Defendant) Workers Compensation Nominal Insurer (Sixth Defendant) Representation: Counsel: Mr S Tzouganatos (plaintiff) Mr S Taylor-Jones (Solicitor) (Fifth and Sixth Defendants) Solicitors: Turner Freeman (Plaintiff) Moray & Agnew (Fifth and Sixth Defendants) File Number(s): DDT 165/2019 Judgment 1. This judgment concerns the appropriate orders to be made in relation to par 4 of an Amended Notice of Motion filed in court on 29 April 2020 by the sixth defendant Workers Compensation Nominal Insurer (WCNI). 2. The long and winding road in these proceedings is summarised below. Background 1. The plaintiff Mr Felice Rafaraci was employed as a labourer and stonemason. In his employment he was exposed to both asbestos dust and silica. He alleges that he has suffered the following injuries: 1. Left-sided adenocarcinoma of the lung; 2. Pleural plaques; 3. Diffuse pleural thickening; 4. Asbestos-related pleural disease; 5. Pulmonary fibrosis; 6. Silicosis. Statement of Claim 1. A Statement of Claim was filed on 10 May 2019 against two defendants. The first defendant was ACN 000 761 973 Pty Ltd, formerly known as Natural Stone Pty Limited. I will continue to refer to the first defendant as "Natural Stone". The pleading alleged that Natural Stone was the employer of Mr Rafaraci between 1978 and 1987. The second defendant was Amaca Pty Limited (Amaca) which was said to be the manufacturer and supplier of the asbestos cement building products to which Mr Rafaraci was exposed. Deregistration of Natural Stone 1. Natural Stone was deregistered on 12 May 2019. While the original Statement of Claim against the first defendant was filed on 10 May 2019, it was not served straight away. Service was not attempted until September 2019, by which time Natural Stone had ceased to exist in law. 2. The solicitor for the plaintiff had obtained an ASIC search in relation to the company on 3 October 2018, which showed that Natural Stone was still a registered company. An up to date search was not obtained closer to the filing of the Statement of Claim five months later. Had an ASIC search been obtained at any time after 7 March 2019 it would have stated: "Status: Strike-Off Action in Progress". In other words, when the Statement of Claim was filed on 10 May 2019, an ASIC search would have disclosed that Natural Stone was, in effect, heading towards deregistration. Amended Statement of Claim 1. An Amended Statement of Claim was filed on 10 September 2019 against four defendants. The pleading against Natural Stone remained an allegation that it employed him between 1978 and September 1987 and exposed him during the course of employment to both asbestos and silica. The pleading against Amaca remained unaltered. 2. This amended pleading alleged that: 1. between October 1987 and October 1988 the plaintiff was employed by International Marble & Granite Pty Ltd (International) as a stonemason; 2. between October 1988 and June 1996 the plaintiff was employed by Deemah Marble & Granite Pty Ltd (Deemah) as a stonemason; 3. between 1999 and late 2001 the plaintiff was employed by the (new) third defendant Ace Ceramics Pty Ltd (Ace) as a stonemason; 4. between 2002 and 2009 the plaintiff was employed by Iberian Artisans Pty Ltd (Iberian) as a stonemason; 5. the plaintiff was exposed to silica by each of these employers. 1. The Amended Statement of Claim added WCNI as a fourth defendant. It pleaded that WCNI was obliged to assume the liabilities of CGU Workers Compensation (NSW) Ltd and was liable to indemnify International, Deemah and Iberian (which were all deregistered companies) in respect of the plaintiff's claim for damages. Attempted service on Natural Stone 1. On 20 September 2019 a clerk from the office of the plaintiff's solicitor attempted to serve the Amended Statement of Claim on the first defendant at an address in Caringbah. No person was in attendance at those premises. 2. The plaintiff's solicitor directed one of his staff to prepare a letter of service so that the documentation could be served by registered post. A letter purporting to serve the pleading by registered post was sent on 23 September 2019. 3. Of course, at the time of attempted personal service and at the time of attempted service by registered post, the first defendant was no longer in existence, as it had been deregistered back in May 2019. Service could never have been effected and there was no entity in existence capable of being sued, after the date of deregistration. Statement of Particulars filed 1. On 20 September 2019 the plaintiff's solicitors filed a Statement of Particulars, which was required because part of the plaintiff's claim related to an asbestos-related disease and thus the Claims Resolution Process (CRP) mandated by the Dust Diseases Tribunal Regulation 2019 (Regulation) applied to it. Proposed Timetable filed 1. Also on 20 September 2019 the plaintiff's solicitor filed a Proposed Timetable. This stated in par 1 that the date of service on the last of the original defendants was 20 September 2019. I infer that the solicitor simply assumed that since he had sent a clerk out to the office of Natural Stone, service would be effected that day. The statement in the Proposed Timetable that the date of service on the last of the original defendants was 20 September 2019 was incorrect. The significance of specifying this date was that it started time running for the purposes of the Regulation. 2. The Proposed Timetable had the effect that the parties to the litigation were then bound under the Regulation to comply with the Timetable, which included filing Replies to enable a Contributions Assessment Determination to be made, and holding a compulsory mediation. WCNI becomes involved as Fourth Defendant 1. The Amended Statement of Claim was served upon Mr Cooper as solicitor for WCNI. As previously recited WCNI was sued as a fourth defendant, being the insurer of International, Deemah and Iberian. However, WCNI was not sued at that stage as the insurer of Natural Stone, as the solicitor for the plaintiff remained unaware that that company had been deregistered and that the only remedy the plaintiff would have would be to bring a claim against its workers compensation insurer. 2. When Mr Cooper was served with the Amended Statement of Claim, he commenced to act for WCNI in its interest as the insurer of International, Deemah and Iberian. However, he later declined to accept a retainer in relation to WCNI as the insurer of Natural Stone, as he would have had a conflict of interest. WCNI becomes involved in relation to Natural Stone 1. Mr Taylor-Jones, solicitor of Moray & Agnew, was retained by WCNI on 30 September 2019, to act in its interests as the insurer of Natural Stone. He was instructed that Employers Mutual Ltd (EML) was the employer's indemnity insurer of Natural Stone from a date preceding 1978 until 4.00pm on 30 June 1987 and that WCNI was the employer's indemnity insurer of Natural Stone from 4.00pm on 30 June 1987 onwards. 2. On 2 October 2019 Mr Taylor-Jones wrote to the plaintiff's solicitor raising a number of issues, including the fact that while the asbestos-related disease was subject to the CRP, the claim in respect of exposure to silica was not so governed. He suggested that the parties should agree to withdraw the proceedings from the CRP and progress them in the usual way before the Tribunal. 3. On 11 October 2019 Mr Taylor-Jones wrote to the plaintiff's solicitor advising that the first defendant had been deregistered on 12 May 2019, which was two days after the filing of the original Statement of Claim. He pointed out that the Statement of Claim had not been served prior to deregistration. He advised that the proceedings had only come to the attention of WCNI because of its involvement as the fourth defendant in the proceedings. Mr Taylor-Jones suggested that the Timetable filed on 20 September 2019 should be withdrawn, as it contained an incorrect statement to the effect that Natural Stone had been served. 4. By letter dated 17 October 2019 Mr Taylor-Jones wrote to the solicitors for the plaintiff referring to the operation of s 151AB of the Workers Compensation Act 1987 (NSW). He pointed out that there were two insurance policies relevant because of that section, the first being the policy on risk before 30 June 1987 and the second being the policy on risk after 30 June 1987. 5. There was some further discussion by correspondence concerning s 151AB. By letter dated 25 October 2019 Mr Taylor-Jones invited the plaintiff's solicitors to make an application to join WCNI, as the insurer of Natural Stone, to the proceedings. The CRP continues 1. By letter dated 25 October 2019 Mr Taylor-Jones wrote to the Registrar of the Tribunal raising all of the problems set out above and asking the Tribunal to reject the Timetable as it was clearly wrong in a fundamental way. 2. The Registrar, quite correctly in my view, said that he had no power to reject the Timetable and that, even knowing the problems caused by the error in the Timetable, the CRP had started and the matter was to be referred to a Contributions Assessor. In due course that occurred. Of course, Natural Stone was not represented at that stage and no Reply by Natural Stone was put before the Assessor to assist him in determining the appropriate contribution. 3. The Assessor, quite correctly in my view, said that he could not take into account that Natural Stone had been deregistered, as he was bound by the Regulation to carry out the very limited exercise of determining contribution on the basis of the allegations in the Statement of Claim, the Statement of Particulars and the Replies. 4. On 26 November 2019 a Contributions Assessment Determination was filed in the Tribunal. Further involvement of WCNI in relation to Natural Stone 1. On 29 January 2020 Mr Taylor-Jones wrote to the solicitors for the plaintiff advising that he now held instructions to act for EML, in its interests as the employer's indemnity insurer of Natural Stone prior to 30 June 1987 and WCNI as the employer's indemnity insurer of Natural Stone after 30 June 1987. Thus the circle was complete and Mr Taylor-Jones then had instructions from EML and WCNI as the insurers for Natural Stone to cover the whole period of employment of Mr Rafaraci by Natural Stone. 2. However there were still several steps to be taken to get the pleadings in order. Plaintiff's Notice of Motion filed on 24 February 2020 1. On 24 February 2020 the plaintiff filed a Notice of Motion seeking leave to amend the Amended Statement of Claim and leave to discontinue the proceedings against the first defendant. The proposed Statement of Claim joined EML as the fifth defendant, pleading that it was the worker's indemnity insurer of the first defendant between 1978 and about September 1987. Of course, this proposed amendment did not meet the point, correctly raised by Mr Taylor-Jones, that EML was not the appropriate insurer after 30 June 1987. In the end the plaintiff did not press the amendment in that form. WCNI and EML Notice of Motion filed 26 February 2020 1. On 26 February 2020 Mr Taylor-Jones filed a Notice of Motion by WCNI and EML. It sought leave for WCNI to have separate legal representation in respect of the insurance of: 1. Marble & Granite Pty Ltd, Deemah Marble & Granite Pty Ltd and Iberian Artisans Pty Ltd; as distinct from 2. ACN 000 761 373 Pty Ltd. 1. It also sought an order pursuant to cl 27(5) of the Regulation that the determination as to apportionment made under Div 5 of the 2019 Regulation and filed on 26 September 2019 be set aside. Hearing on 16 March 2020 1. The parties appeared before me on 16 March 2020. The plaintiff filed an Amended Notice of Motion in Court. On the plaintiff's Amended Notice of Motion I granted leave to the plaintiff to amend his pleading by filing a Further Amended Statement of Claim. This new iteration of the pleading satisfactorily met the concerns raised in correspondence by Mr Taylor-Jones. I also granted leave to discontinue against Natural Stone. 2. On the Notice of Motion filed on 26 February 2020 by WCNI and EML, I granted leave to WCNI to have separate legal representation firstly in relation to its insurance of International, Deemah and Iberian, and secondly in relation to its insurance of Natural Stone. I also set aside the Contribution Assessment Determination. 3. All questions of costs were stood over before me on 29 April 2020. I directed the parties to file and serve written submissions on costs by 27 April 2020. Second Further Amended Statement of Claim 1. On 25 March 2020 the plaintiff filed a Second Further Amended Statement of Claim. The only amendments were to reflect the discontinuance against Natural Stone. WCNI and EML Amended Notice of Motion filed on 29 April 2020. 1. At the hearing on 29 April 2020 I granted leave to the fifth and sixth defendants to file an Amended Notice of Motion in court. That Amended Notice of Motion left only a costs issue to be determined, expressed in par 4 as follows: "That the plaintiff have no costs of: (a) the proceedings against Natural Stone; (b) the Notice of Motion filed 24 February 2020 and Amended Notice of Motion filed 16 March 2020; and (c) the Notice of Motion filed on 26 February 2020 and amended by this pleading." Leave granted to sue insurers 1. While the plaintiff had now sued WCNI (as both the fourth and the sixth defendant) and EML, he had not obtained the requisite leave to do so pursuant to the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW). 2. On 29 April 2020 I made an order granting such leave nunc pro tunc to commence and continue the proceedings against EML as the fifth defendant. 3. On 1 May 2020 I made a consent order in chambers granting such leave nunc pro tunc to commence and continue proceedings against WCNI as both the fourth and the sixth defendant. Consideration of orders sought by WCNI and EML 1. Firstly I note that the only parties to appear on 29 April 2020 and make submissions were the plaintiff and the fifth and sixth defendants. When par 4 of the Amended Notice of Motion filed on 29 April 2020 seeks an order that the plaintiff have no costs in relation to certain events, I find that any such order would have to be confined to an order that the plaintiff have no costs against the fifth and sixth defendants in relation to those events. While the other defendants had notice of the hearing on 29 April 2020, Mr Taylor-Jones was only arguing for a costs restriction on behalf of his two clients. He was not putting arguments for any other defendant. 2. Secondly I note that WCNI and EML do not seek costs orders in their favour in relation to the nominated events. Nor do they seek costs of their Notice of Motion and Amended Motion. 3. The plaintiff opposed the orders sought by WCNI and EML. In the alternative, he sought orders that the costs of the plaintiff's Notice of Motion filed on 24 February 2020 and his Amended Notice of Motion filed on 16 March 2020 be costs in the cause. 4. I will deal separately with the three costs restrictions sought by WCNI and EML. Costs of the proceedings against Natural Stone 1. Counsel for the plaintiff correctly accepted that from the date of deregistration of Natural Stone, all steps taken against it in the proceedings were a nullity (MFI 2, par 6). That means that the only costs of the proceedings against Natural Stone which might be recoverable would be the costs of drafting and filing the Statement of Claim. But recoverable against whom? I cannot see any basis upon which such costs could be recoverable against the fifth and sixth defendants, and none was advanced on behalf of the plaintiff in submissions. 2. I will make the first costs restriction order sought. Costs of the plaintiff's Notice of Motion and Amended Notice of Motion 1. I find that the plaintiff should not have costs of the Notice of Motion filed on 24 February 2020. That Motion put forward a proposed amended pleading which was flawed. This was recognised by the plaintiff's solicitor, who eventually filed a pleading which adequately dealt with the issues raised by Mr Taylor-Jones for some months in correspondence. 2. The Amended Notice of Motion resulted in the plaintiff obtaining leave to amend his pleading in proper form, some 22 months after the original Statement of Claim was filed. While the amendment eventually allowed was necessary both as a result of the deregistration of Natural Stone and the existence of two insurers on risk for one employer, these too were matters that Mr Taylor-Jones had been agitating for months in correspondence. In the exercise of my discretion, I take these matters into account and will make a costs restriction order as sought by WCNI and EML. Costs of the WCNI and EML Notice of Motion and Amended Notice of Motion 1. The necessity for the order sought for separate legal representation arose through no fault of either party. WCNI sought the order and the plaintiff sensibly consented to it. However I can see no reason why the plaintiff should ultimately have any costs in its favour on that part of the WCNI and EML Notice of Motion. 2. The necessity for the order setting aside the Contribution Assessment Determination arose because a Proposed Timetable which contained an incorrect statement as to valid service upon Natural Stone was filed by the plaintiff's solicitor. The plaintiff should not have any costs in its favour on that issue either. Orders 1. My orders are: 1. Order that the plaintiff is to have no costs against the fifth and sixth defendants in relation to: 1. The proceedings against the first defendant; 2. The plaintiff's Notice of Motion filed on 24 February 2020 and his Amended Notice of Motion filed on 16 March 2020;and 3. The fifth and sixth defendants' Notice of Motion filed on 26 February 2020 and their Amended Notice of Motion filed on 29 April 2020. ********** 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. Decision last updated: 06 May 2020