Author: Andrew Spearritt    Bharat Vekria   
Judgment Date: 28 November 2017
Citation: Amaca Pty Ltd (Under NSW Administered Winding Up) (ACN 000 035 512) V Pfeiffer & Ors [2017] SASFC 157
Jurisdiction: Full Court of the Supreme Court of South Australia [1]
Principles
  • A court is not required to consider the culpability of a third party when determining apportionment of liability between defendants for a period of exposure for which that third party has not been sued.
  • Section 8(2) of the Dust Diseases Act 2005 (SA) (the 2005 Act) applies so as to impute co‑tortfeasors with knowledge of the risks of asbestos exposure causing a dust disease.
Background

The worker (Mr Pfeiffer) was exposed to asbestos over two separate periods in the 1970s. The worker subsequently contracted mesothelioma before passing away. His exposure in the first period was in the early 1970s during the construction of his house. During this period, the worker was exposed to asbestos dust and fibre emanating from asbestos products manufactured by Amaca Pty Ltd (formerly James Hardie & Coy Pty Ltd) (Amaca).

During the second period, between 1977 and 1978, the worker was employed by SFS 007.298.633 PTY LTD (formerly World Services Pty Ltd) (SFS). During this period of employment, the worker was exposed to asbestos dust and fibre.

During the first period, Amaca was solely responsible for the asbestos to which the worker was exposed.

During the second period, several third party contribution notices were issued by SFS, Amaca and others seeking contribution from other parties. Amaca sought a contribution from CSR Ltd who were in partnership with them at the relevant time, manufacturing preformed asbestos insulation sections.

SFS sought contribution from Orica Ltd, who owned the premises where Mr Pfeiffer worked during the second period, and from Wallaby Grip (BAE) Pty Ltd (BAE), who not only supplied the Amaca and CSR Ltd partnership products, but also their own asbestos products to Orica Ltd for installation at their plant where Mr Pfeiffer worked.

In the first instance, the trial judge apportioned 60% of the liability to the first period and 40% of the liability to the second period which was then apportioned as follows:

  • Amaca – 2.5%
  • SFS – 10%
  • BAE – 17.5
  • Orica Ltd – 7.5
  • CSR Ltd – 2.5%

Amaca appealed on the basis that the trial judge erred in rejecting the evidence of Mr Kottek, an occupational hygienist, concerning the causal potency of the two periods of exposure and that the judge also erred in adjusting the liability between the two periods solely on the basis of culpability between SFS and Amaca without considering the culpability of the other tortfeasors involved in the second period of exposure. CSR also cross-appealed on the basis that the trial judge erred in assessing the apportionment in the second period by failing to apply s 8(2) of the 2005 Act.

Decision

The Full Court of the Supreme Court of Australia (the Full Court) dismissed Amaca’s appeal and held the trial judge did not err in rejecting the evidence of Mr Kottek. Mr Kottek had given evidence that, in his opinion, the majority of the worker’s exposure to asbestos dust and fibre occurred when he was working for SFS during the second period.

Mr Kottek, was of the view that the worker’s exposure to asbestos dust and fibre in the first period was primarily or entirely due to chrysotile asbestos, while the bulk of his exposure in the second period was to amosite asbestos. The trial judge did not find Mr Kottek’s evidence of attribution persuasive. He considered it amounted to little more than a calculated guess based on erroneous assumptions about the composition of the asbestos to which the worker was exposed.

In his primary judgment, Stanley J, with Kourakis CJ and Peek J agreeing, stated that:

“It is important to recognise that the opinion expressed by Mr Kottek in his report was an opinion about the extent of [the worker’s] overall cumulative exposure between the two periods, not an opinion concerned with the extent to which any period of exposure was causative of [the worker’s] contraction of mesothelioma. If in his oral evidence he went further than his report, so as to express an opinion as to the causal attribution of each period to the contraction of [the worker’s] mesothelioma, that is an opinion outside Mr Kottek’s field of expertise as an occupational and environmental health consultant, a matter he conceded in cross-examination.”

On that basis, his Honour was of the view that there was no error in the primary judge rejecting Mr Kottek’s evidence.

His Honour added that even if he had been satisfied that the trial judge erred in his assessment of the contribution of each period of exposure by rejecting Mr Kottek’s evidence, he would not have interfered with the trial judge’s decision as to contribution. The evidence supported a finding that James Hardie knowingly manufactured and supplied a toxic and dangerous substance. James Hardie knew their products were highly dangerous. Their attitude toward health and safety was an extreme departure from the standard of care that would be expected of a reasonable person. In those circumstances, the culpability of Amaca was greater than other tortfeasors.

Amaca also appealed the primary judge’s decision in adjusting liability between the two periods between SFS and Amaca without regard to the culpability of the other tortfeasors.

His Honour stated that the right to contribution is a statutory right. There was no right to contribution between tortfeasors at common law. If the third parties had not been joined in the original action then the trial judge at first instance would have apportioned liability between Amaca and SFS for the loss suffered by the worker. Amaca and SFS could then seek a contribution toward their respective apportionments.

While Amaca had issued third party contribution notices for the second period, it had not issued any third party contribution notices for the first period. Therefore the trial judge was not required to consider the culpability of the third parties when determining apportionment in the first period.

CSR cross-appealed against the finding of apportionment against it for the second period. CSR had submitted that it was not open to the trial judge to find that had the Amaca/CSR partnership warned Orica Ltd and SFS about the danger posed by its product, they would have taken steps to provide ventilation masks to safeguard persons working in the Orica Ltd plant. His Honour rejected CSR’s submission that causation was not established.

Regarding CSR’s submission as to the extent of apportionment, his Honour considered the principles of statutory construction to determine whether the trial judge had erred in refusing to invoke the statutory presumption of knowledge of risk of asbestos set out in s 8(2) of the 2005 Act in a claim for contribution.

The trial judge had concluded that the presumption created by s 8(2) of 2005 Act is limited to assisting a plaintiff in establishing liability against a defendant and did not apply to multiple tortfeasors in contribution and third party claims.

The Full Court unanimously agreed that the trial judge erred in his approach to interpreting s 8(2) of 2005 Act. The Full Court reviewed s 4 of the 2005 Act which sets out the object of the 2005 Act. Section 4 states that:

The object of this Act is to ensure that residents of this State who claim rights of action for, or in relation to (emphasis added), dust diseases have access to procedures that are expeditious and unencumbered by unnecessary formalities of an evidentiary or procedural kind.”

In Stanley J’s view, the phrase ‘in relation to’ is a phrase of broad impact and capable of extending to claims for contribution between tortfeasors who are liable to contribute to an award of damages to a plaintiff under the 2005 Act.

Notwithstanding the Full Court’s decision that s 8(2) does apply to a claim for contribution in relation to a dust disease, the Full Court did not interfere with the apportionment for liability for the tortfeasors in the second period, on the basis that the apportionments were not unreasonable or unjust.

Why this case is important

The implications of the Full Court decision interpreting s 8(2) of 2005 Act to extend to claims for contribution between tortfeasors are relevant to claims for exemplary damages. Section 9(2) of the 2005 Act provides:

The Court should make an award of exemplary damages in each case against a defendant if it is satisfied that the defendant:

(a) knew that the injured person was at risk of exposure to asbestos dust, or carried on a prescribed industrial or commercial process that resulted in the injured person’s exposure to asbestos dust; and

(b) knew, at the time of the injured person’s exposure to asbestos dust, that exposure to asbestos dust could result in a dust disease.

The Full Court decision which interprets s 8(2) of 2005 Act to extend to claims for contribution between tortfeasors, arguably now imputes the knowledge required to satisfy the requirement of knowledge in s 9(2) upon the third party defendant or co tortfeasor. That third party defendant may now be required to contribute toward a claim for exemplary damages in light of its imputed knowledge.

 

[1] Kourakis CJ, Peek and Stanley JJ.

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