(Re Jones-Mashman) Amaca Pty Ltd v CSR Ltd

Partnership Act 1892 LEGISLATION CITED: Law Reform (Miscellaneous Provisions) Act 1946 Dust Diseases Tribunal Act 1989

(Re Doughan) CSR Limited v Amaca Pty Ltd [2007] NSWCA 107 (Re Linquist) QBE Insurance (Australia) Ltd v Wallaby Grip Ltd & Ors [2007] NSWCA 43 CASES CITED: Sarkem Pty Ltd v CSR Ltd [2008] NSWDDT 39 Macquarie Pathology Services Pty Ltd v Sullivan (NSWCA 40313/94 28 March 1995, unreported) Ho v Powell (2001) 51 NSWLR 572

DATES OF HEARING: 7 October 2009, 8 October 2009

J C Sheller instructed by DLA Phillips Fox appeared for the Cross-Claimant LEGAL REPRESENTATIVES: D L Williams SC with B C A Bradley instructed by Leigh Virtue & Associates appeared for the Cross Defendant

On 3 December 2008, the Court of Appeal remitted to the Tribunal two questions not considered on 8 August 2007 in the reasons for judgment then delivered on the cross-claim between Amaca Pty Ltd (Amaca) and CSR Limited (CSR). In its decision of 3 December 2008, the Court of Appeal determined that by virtue of a Deed of Dissolution of Partnership, CSR had no liability to contribute to damages paid by Amaca to Pacific Power and Delta Electricity in cross-claims brought by them against Amaca and a number of other corporations.

On 24 September 1964 a Deed of Partnership was entered into between Amaca's and CSR's predecessors. That partnership was terminated by the Deed of Dissolution on 26 June 1974. The Court of Appeal concluded that the Deed of Dissolution operated to release CSR from liability to indemnify Amaca. The partnership manufactured asbestos products between 1964 and 1974.

The two questions left unresolved were, first, whether it was open to Amaca to seek contribution from CSR under the Partnership Act 1892 (the Partnership Act), and secondly, whether CSR was liable to contribute by reason of s 5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 (the Law Reform Act).

To assist in the understanding of the present proceedings independently of reasons given earlier in the present dispute, I think it appropriate to record that a plaintiff, Graham Jones-Mashman, contracted mesothelioma as a result of inhaling asbestos dust and fibre, carried to his home on his father's work clothes and deposited in the family car in which each travelled. The plaintiff was the adopted son of Mr and Mrs Mashman. He changed his name by Deed Poll to Jones-Mashman after he met his biological mother.

Some of his exposure to asbestos also occurred when the plaintiff's adoptive mother and the plaintiff shook out Mr Mashman's work clothes before they were laundered. In this process, asbestos dust was released into the atmosphere and inhaled by the plaintiff. It was not disputed that the inhalation of the asbestos carried home by his adoptive father caused the plaintiff's mesothelioma. Some of the asbestos came from a product manufactured by the partnership.

In the present proceedings, it has been submitted by senior counsel for CSR that I would not be satisfied that any exposure for which it might be liable, made a material contribution to the plaintiff's mesothelioma. I reject that submission. As noted in my reasons of 8 August 2007, it is plain beyond controversy, that all asbestos exposure in an acceptable latency period, makes a material contribution to the disease of mesothelioma.

That conclusion has been reached in many cases decided in the Tribunal. If it be necessary to do so, then pursuant to r 9(2) of the rules made under s 33 of the Dust Diseases Tribunal Act 1989 (the Act), I determine as an issue to which s 25B applies, that all asbestos exposure within an acceptable latency period, makes a material contribution to the disease. It is well known and has been determined on many occasions, that the latency period for mesothelioma varies between 10 and 60 years.

The plaintiff's father was employed by International Combustions Australia Limited (ICAL) for a period of 15 years. During those 15 years, he was employed to work on the construction of power houses owned by the Electricity Commission of New South Wales for the negligent acts and omissions of which Pacific Power and Delta Electricity are now responsible. In the construction of the power houses, a variety of asbestos insulation material was used and the plaintiff's father experienced direct and indirect exposure. Mr Mashman's exposure to asbestos from Amaca's products occurred before the Partnership Deed was entered into. He was exposed to asbestos from partnership product after the partnership came into existence and until his employment by ICAL ceased.

Amaca submits that I should find that the plaintiff was exposed to asbestos from partnership product from the time of the inception of the partnership until his father ceased employment by ICAL. Mr Mashman's employment by ICAL began in 1965, though he had worked at Wangi Power Station and at the Vales Point Power Station before he commenced employment by ICAL. In those earlier employments, he was exposed to asbestos and, as described in the plaintiff's affidavit, so was the plaintiff.

The plaintiff did not give oral evidence in the principal proceedings. He swore an affidavit which is evidence in these proceedings. The cross-defendant has extracted from the affidavit, material which is helpful and useful now to recite.

In his childhood, the plaintiff would, as a matter of course, hug his father most evenings when his father returned from work. His father's work clothes were covered in dust and the plaintiff inhaled some of that dust. Between 1962 and 1965 when the plaintiff was aged between 13 and 16, his father was employed to work at the Vales Point Power Station. In that period, the plaintiff's father brought home asbestos lagging material to use as insulation in the family home.

It is submitted by CSR that there is no evidence to justify the conclusion that any of this asbestos material was brought home before April 1967. In evidence are copies of a large number of invoices issued by the partnership for the supply of K-Lite material to the Munmorah Power Station. The first of these bears date 14 April 1967. There is no invoice which relates to supply of asbestos insulation material to Wangi Power Station nor to Vales Point Power Station, but I am asked by counsel for Amaca, to infer from the plaintiff's affidavit, that partnership asbestos product was supplied to both Vales Point and to Munmorah.

The basis of that submission is par 12 of the plaintiff's affidavit and is as follows: … My adoptive father told me that he came in regular contact with asbestos insulation at the Power Stations and that in particular he recalled working with K-Lite insulation which he believed contained asbestos. 14. In my view, that is evidence only of what his father told him. It does not prove that the plaintiff's father came into contact with asbestos from K-Lite insulation, a partnership product, at Vales Point. I am satisfied that the plaintiff's father and therefore the plaintiff were exposed to and inhaled asbestos from K-Lite during the period the plaintiff's father was employed to work at Munmorah between April 1967 and 1970, but I am not satisfied there was exposure to asbestos from partnership product when the plaintiff's father was employed at Vales Point. Does the Tribunal have jurisdiction under the Partnership Act 15. There is no claim for equitable contribution, but the question I am now invited to consider whether the Tribunal has jurisdiction to entertain a claim based upon the Partnership Act. CSR says it does not. Amaca says it does. In the light of the conclusions to which I have come, but have not yet expressed, I think it unnecessary to determine that question. I have, however, been asked by senior counsel for CSR to express a view upon the question, so that if this decision is to be considered elsewhere, the jurisdiction of the Tribunal to decide questions under the Partnership Act may also be considered. This is important because, as I am informed, there is a large number of claims in both New South Wales and in Victoria, which are unresolved and which are potentially affected by the Partnership Act.

16. The argument of CSR proceeds in this way. Section 10(1) of the Act gives exclusive jurisdiction to the Tribunal to hear proceedings of the type referred to in ss 11 and 12 of the Act. It has concurrent jurisdiction with the Supreme Court under s 11(1A) of the Act. Proceedings under s 11(1A) are proceedings between tortfeasors to recover contribution.

17. CSR argues that this provision does not vest the Tribunal with jurisdiction to entertain contribution proceedings by one partner against another, as opposed to proceedings by one tortfeasor against another. It is submitted that s 11(1A) is designed to invest the Tribunal only with jurisdiction in relation to tortfeasor claims and that jurisdiction is not enlarged by s 10(4) of the Act. Neither, it is submitted, do s 11(3) or s 11(4) operate to give the Tribunal contribution jurisdiction other than pursuant to the Law Reform Act. In particular, it is said, they do not vest the Tribunal with equitable jurisdiction, and a claim arising from a partnership business is dealt with in a suit for taking accounts which is a claim for equitable contribution.

18. For s 11(3) purposes, the cause of action which gives rise to proceedings under s 11(1A) is a tortfeasor claim. Such a claim does not "also give rise to" a partnership claim that is a claim in respect of some other matter. It is said that any claim pursuant to the Partnership Act is entirely discrete and equitable in nature.

19. The question of the Tribunal's equitable jurisdiction has been adverted to in the Court of Appeal in (Re Doughan) CSR Limited v Amaca Pty Ltd [2007] NSWCA 107. After considering the effect of s 10 and 11, Young CJ in Eq, said: [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.
20. It may be thought that in (Re Linquist) QBE Insurance (Australia) Ltd v Wallaby Grip Ltd & Ors [2007] NSWCA 43, Handley AJA's words suggested that the Tribunal might have equitable jurisdiction, but he did not say so in express terms.

The decision in each case was a considered one, but there is a later opinion of my colleague, Curtis J in Sarkem Pty Ltd v CSR Ltd [2008] NSWDDT 39, in which his Honour expressed the view at [17] that the ancillary jurisdiction of the Tribunal granted to it by s 12, conferred jurisdiction to do anything which could be done in the Supreme Court and exercise all that Court's powers "…to resolve the issues between the parties, administrating concurrently all rules of law including rules of equity." CSR submits s 12 relates only to cases of the type referred to in s 11 which, relevantly, relate to proceedings between tortfeasors (s 11(1A)) or in a case where a plaintiff has a claim in respect of some other matter which is related or ancillary to a claim under s 11(1).

Because the Tribunal is a court of limited statutory jurisdiction, CSR submits it is unlikely that the Parliament would have intended that it would be invested with equitable jurisdiction without its having clearly said so.

Without having given to it the consideration which this question really deserves, and to comply with the request of senior counsel for CSR, guided by the opinion of Young CJ in Eq, I express the view that the Tribunal does not have equitable jurisdiction. With all respect to the view of Curtis J noted in par 21 above, I believe the submission of CSR referred to in the same paragraph to be correct. If I be wrong in that, I think it appropriate nevertheless, to consider whether the Partnership Act confers a remedy upon Amaca.

The Court of Appeal determined that the Deed of Dissolution released the partners from liability. It appears to me that once the partnership was dissolved and the partners released from liability, all rights that they might otherwise have had under the Partnership Act terminated. That is to say, if there were no liability under the partnership deed, there would be no liability under the Partnership Act.

Clause 8 of the Deed of Dissolution released the partners "from all such actions or claims which any of them might have had against the others". Because the language is wide and because of the absence of evidence of the circumstances surrounding entry of the deed, CSR submits the meaning of these words cannot be read down. Further, it is submitted, the release does not expressly reserve any claims for indemnity under the Partnership Deed or claims under the Partnership Act, and, as a consequence, the release operates according to its terms. It is significant that the release extends to all claims "which any of them has had or but for this Deed might have had against the others or either of the others". Thus, this clause operates to release the partners from all future claims which they might have had against each other as a result of the partnership.

CSR has persuaded me that the rights and obligations under the Partnership Deed ceased when the Deed of Dissolution came into effect. Those rights and obligations included future claims including claims under the Partnership Act. Tortfeasor claim 27. That now leaves the question of the Law Reform Act claim. It will be apparent from what I have earlier said, that CSR is a person who, if sued by the plaintiff, would have been liable to him. The plaintiff's exposure took place when both CSR and Amaca knew or ought to have known that the inhalation of asbestos constituted a foreseeable risk of injury in respect of which means were available to obviate or minimise it.

The approach to be taken in a case such as this was expressed by Clark JA in Macquarie Pathology Services Pty Ltd v Sullivan (NSWCA 40313/94 28 March 1995, unreported). I am required to consider the causal potency and the relative culpability of each party's conduct.

It is accepted for the purposes of this cross-claim, that the relative culpability of Amaca and CSR is equal. What therefore I must consider is causal potency. There is no direct evidence to assist in the application of the Peto formula, which considers time-weighted exposure, but both parties have approached the question as one involving a consideration of the duration of exposure of the plaintiff to partnership product.

I have earlier said that I am not satisfied that the plaintiff was exposed to partnership product asbestos other than during part of the period his father was employed at Munmorah.

CSR submits that I should find that the plaintiff was exposed to partnership product asbestos for three of 15 years. Amaca submits that I should conclude that the plaintiff was exposed to partnership product asbestos for three of 12 years. It is necessary to emphasise that the invoices satisfy me that exposure to partnership product asbestos began in April 1967. It is possible, though I am unable to find it probable, that there was exposure to partnership product asbestos before 1967. Thus, I would conclude that the exposure to partnership product asbestos was for three of 15 years rather than for the period submitted by counsel for Amaca.

Amaca settled the cross-claim brought against it by Pacific Power and Delta Electricity for $270,000. It is not disputed that the settlement was reasonable both as to the decision to pay and as to amount.

An approach to be adopted in reaching a decision was referred to by Hodgson JA in Ho v Powell (2001) 51 NSWLR 572 at 576, where his Honour said: [14] There is a long-standing controversy whether the civil standard of proof requires a numerical probability in excess of 50 per cent (see Davies v Taylor [1974] AC 207 at 219), or belief amounting to a reasonable satisfaction (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362). My own opinion is that the resolution of the controversy involves recognition that, in deciding facts according to the civil standard of proof, the court is dealing with two questions: not just what are the probabilities on the limited material which the court has, but also whether that limited material is an appropriate basis on which to reach a reasonable decision. … 34. In the light of what his Honour has said, I think it reasonable in this case to adopt the approach submitted by CSR. It is responsible for the consequences of half of three of 15 years exposure. Thus, I determine that CSR is liable to pay 10 per cent of the $270,000 paid by Amaca to Pacific Power and Delta Electricity. There will therefore be a verdict for the cross-claimant and judgment in the sum of $27,000. CSR should also pay interest as agreed.

35. The cross-defendant will pay the costs of the proceedings which resulted in my decision of 8 August 2007 and of these proceedings. The costs if not agreed will be assessed.

36. I direct the parties to bring in short minutes to give effect to the findings I have made.

J C Sheller instructed by DLA Phillips Fox appeared for the Cross-Claimant D L Williams SC with B C A Bradley instructed by Leigh Virtue & Associates appeared for the Cross-Defendant

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