(Re Olsen) Eraring Energy v Babcock Australia P/L

NEW SOUTH WALES DUST DISEASES TRIBUNAL

CITATION: (Re Olsen) Eraring Energy v Babcock Australia Pty Ltd [2006] NSWDDT 8

PARTIES:
Eraring Energy (Cross Claiment)
Babcock Australia Pty Ltd (Second Cross Defendant)

CASE NUMBER: 2/05/2 of

CATCH WORDS: Claims Resolution Process

LEGISLATION CITED:
Dust Diseases Tribunal Regulation

CORAM: O'Meally P

DATES OF HEARING: 5 April 2006

EX TEMPORE DATE: 05/04/2006

LEGAL REPRESENTATIVES

Goldrick Farrell Mullan (Cross Claiment)
Moray & Agnew (Second Cross Defendant)

JUDGMENT:

RULING
O'MEALLY P

A dispute has arisen concerning the liability of Babcock Australia Pty Ltd (Babcock) to pay costs claimed by Eraring Energy (Eraring) in a cross-claim by Eraring against Babcock and others.

On 6 January 2005 one Oscar Olson (the plaintiff) issued a Statement Of Claim seeking damages from Eraring, Cockatoo Dockyard Pty Ltd and Sarkam Pty Ltd in respect of an asbestos disease.

On 14 November 2005 Eraring issued a cross-claim seeking from Babcock International Ltd, Babcock, Amaca Pty Ltd and Wallaby Grip Ltd contribution to the damages it might be found liable to pay to the plaintiff. The cross-claim against Babcock International Ltd was discontinued.

The plaintiff’s claim against the three defendants was settled and agreement was reached between the defendants and cross-defendants on the contribution each should make to the plaintiff's damages.

The agreement pursuant to Cl 44 of the Dust Diseases Tribunal Regulation (the Regulation) was filed on 6 February 2006 and relevantly provided that the first defendant, Eraring, should contribute 31.85 per cent of the amount agreed to be accepted by the plaintiff in full satisfaction of his claim, which sum, I am told, was to include costs. The second defendant, Cockatoo Dockyard Pty Ltd, agreed to contribute 5 per cent. The third defendant, Sarkam Pty Ltd agreed to contribute 25 per cent. There was a cross-claim other than that with which I am presently concerned, that being the first cross-claim in which the Commonwealth of Australia was the cross-defendant, but in the cross-claim with which I am presently concerned, namely, the second cross-claim, Babcock agreed to contribute 4.875 per cent of the sum to be awarded to the plaintiff, Amaca agreed to contribute 17.875 per cent and Wallaby Grip Ltd 10.4 per cent.

Eraring seeks that Babcock pay in addition to the 4.875 per cent it has paid to the plaintiff, Erarings’ costs of the cross-claim. Babcock disputes it has any liability or obligation to pay any amount other than 4.875 per cent of the judgment sum.

Cl 44 of the Dust Diseases Tribunal Regulation relevantly provides as follows:
(1) An agreement or determination as to apportionment among defendants for the purposes of this Division is conclusively binding on the defendants for the purposes of the settlement, or determination by the Tribunal, of the plaintiff's claim and payment of the plaintiff's damages.
(2)The agreement or determination is not binding for the purposes of the subsequent taking, or determination by the Tribunal, of a dispute between defendants as to apportionment.
(3)If a defendant disputes the contribution that the defendant is liable to make to damages recovered by the plaintiff and the judgment of the Tribunal in the dispute does not result in the defendant materially improving the defendant's position, the defendant is liable to pay the cost of each other party to the dispute occasioned by the dispute, assessed on an indemnity basis.
(4)...
(5)For the purposes of this clause, the defendant is considered to materially improve the defendant's position only if the Tribunal's determination of the dispute results in a reduction of the defendant's contribution of at least 10% of the amount of the defendant's agreed or determined contribution or $20,000, whichever is the greater.
Mr Scotting, for Babcock, submits that in the circumstances the Regulation imposes a liability on Babcock to pay only 4.875 per cent of the judgment sum, which, as noted earlier, includes the plaintiff's costs.

With all respect to the argument of Mr Scotting I am unable to agree. Clause 44 (3) imposes a liability to pay costs at an increased level in the event that a cross-defendant does not improve its position. Here it should be observed that for the purposes of cl 44 “defendant” includes “cross-defendant.” The object of the claims resolution process introduced by the Dust Diseases Tribunal Regulation was to save costs. Whether it has succeeded in that objective, is of course, another question, but it is the situation that had Eraring not taken proceedings in such a way as to involve Babcock in the plaintiff's proceedings it could have pursued a cross-claim at a later stage, and in the circumstances presumably would have succeeded. Had it done so it would have been entitled to its costs against Babcock.

The desirability of involving not only defendants, but cross-defendants in the process to resolve a plaintiff's claim are obvious. Altruism on the part of a defendant can not be its only reward. The fact that cl 44(3) provides for costs on an indemnity basis in certain events does not mean that a defendant is entitled to no costs at all if those events do not occur. In my view Eraring should have the costs of its cross-claim against Babcock as agreed or assessed.

Mr P Squires of Goldrick Farrell Mullan appeared by leave for the Cross-Claimant

Mr A C Scotting instructed by Moray & Agnew appeared for the Second Cross-Defendant

I certify that the previous 10 paragraphs
Are the reasons for Judgment of His Honour
Judge O’Meally

Associate

The case before the Dust Diseases Tribunal was between Eraring Energy, the plaintiff, and Babcock Australia P/L, the defendant, in relation to a dispute involving a claims resolution process. Eraring Energy initiated a claim against Babcock Australia P/L, and subsequently, a cross-claim was made by Babcock Australia P/L against Eraring Energy. Both the plaintiff's action and the cross-claim were settled. The tribunal was required to determine the issue of costs associated with the settlement of the cross-claim.

The primary legal issue the tribunal had to decide was whether Babcock Australia P/L, as the cross-defendant, was liable to pay costs to Eraring Energy, the cross-claimant, in accordance with the Dust Diseases Tribunal Regulation Cl 44. This regulation outlines the circumstances under which costs may be awarded in relation to settled claims and cross-claims within the tribunal. The tribunal needed to interpret and apply the relevant regulation to determine if Babcock Australia P/L's liability for costs was established.

In its decision, the tribunal carefully considered the terms of the settlement and the application of Dust Diseases Tribunal Regulation Cl 44. It found that Babcock Australia P/L was indeed liable to pay costs to Eraring Energy, as the cross-claimant, in accordance with the regulation. The tribunal concluded that the regulation was clear in its provisions and that the circumstances of the settlement met the criteria for awarding costs. The tribunal thus ruled in favour of Eraring Energy, ordering Babcock Australia P/L to pay the costs associated with the cross-claim.

As a result of the tribunal's decision, Babcock Australia P/L was ordered to pay the costs of the cross-claim to Eraring Energy. This outcome was based on the tribunal's interpretation of Dust Diseases Tribunal Regulation Cl 44 and its application to the specific circumstances of the settled claims and cross-claims. The tribunal's ruling provided clarity on the liability for costs in such cases and reinforced the importance of adhering to the tribunal's regulations in the resolution of disputes.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established