Amaca v Wallaby Grip

Court of Appeal (NSW)|2000-07-01|Before: Walker J

CITATION : Amaca v Wallaby Grip [2005] NSWDDT 41

Amaca Pty Ltd PARTIES : Wallaby Grip ( BAE) Pty Ltd

:- Meaning "unfairly prejudicial"in s 135(a) Evidence Act (NSW) 1995

CATCHWORDS: actual knowledge is relevant in apportioning liability between joint tort feasors factors to be considered in apportioning liability between joint tort feasors whether meaning of supply in toxic tort is confined to cases of direct supply

Sections 6 and 7 Queensland Law Reform Act (1995) S 135(a) Evidence Act (NSW) 1995 LEGISLATION CITED: S 5(2) NSW Law Reform (Miscellaneous Provisions Act (1946) Section 10 and 12 Partnership Act 1892

Rolls Royce Industrial Power v James Hardie & Co (No 4) (1999) 18 NSWCCR 652 ; CSR Ltd v Wren (1997) 15 NSWCCR 650; Guide Dog Owner & Friends Association Inc. v Guide Association of NSW & ACT (1998) 154 ALR 54 at 532; Papakosmas v The Queen (1999) 196 CLR 297 at [93]; Ordukaga v Hicks [2000] NSWCA 180 at [35]-[40]; (Re Hunt) Ex Parte Sean Investments Pty Ltd(1979) 180 CLR 322 at 329; Podrebersek v Australian Iron & Steel Pty Ltd(1985) 59 ALJR 492; Wynbergen v Hoyts Corporation Pty (1997) 72ALJR 65 at 66 Macquarie Pathology Services Pty Ltd v Sullivan NSWCA No 40313/94 28.3.95; CASES CITED: James Hardie v Roberts (1999) 18 NSWCCR 500; Macleay Hastings Area Health service v Wallby Grip (BAE) Ltd (1997) 15 NSWCCR 93; Raif v SG Sayer Pty Ltd & Ors (1995) 13 NSWCCR 393; Katidis v Meggitt Overseas Ltd & Anor (1995)SWCCR 147 Bathis v Walaby Grip (BAE) Pty Ltd (2004) NSW DDT 13 Peirce v FR Coyle Pty Ltd (1999) DDR 21; E.M.Baldwin & Son Pty Ltd v Plane (1999)17 NSWCCR 434; Bendix Mintex Pty Ltd v Barnes (1997) 14 NSWCLR 661; SRA (NSW) v Wallaby Grip (Re Rayner) 2001 21 NSWCCR 650 ; March v Stramere (1991) 171 CLR 506; Mahony v Kruschich (Demolitions) Pty Ltd(1985) 156 CLR 522 Bennett v Minister Community Welfare1992-3) 176 CLR 408 Bitumen Oil Refineries (Australia) Ltd v Commissioner for Government Transport(1954-5) 92 CLR 200 Babcock Australia Ltd v Eraring Energy(?02) 2001 22 NSWCLR 141

Cross Claimant: Mr G Parker LEGAL REPRESENTATIVES: Thrid Cross Defendant: Mr D Russell with Mr A Scotting.

Robert Leslie McKee by statement of claim issued 25 January 2001 sued Evans Deakin & Co Pty Ltd (in liquidation); Wallaby Grip (BAE) Pty Limited ( in Liquidation) and James Hardie & Co Pty Limited ( now Amaca Pty Limited) for damages for negligence alleging that as a consequence of inhaling asbestos dust and fibre he contracted asbestos related pleural disease, pleural plaques and asbestos.
The basis of claim against Evans Deakin was that it employed the plaintiff as a boiler maker in its ship construction business at Kangaroo Point Queensland failing to provide a safe system of work by exposing him to dust from asbestos lagging work.

The basis of the claim against Wallaby Grip (BAE) was that it manufactured and supplied asbestos products to which he was exposed was negligent in its conduct and had breached statutory counts pursuant to the Queensland Factories and Shop Act .

The basis of the claim against Amaca Pty Limited was that it too manufactured asbestos products to which the plaintiff was exposed and was also negligent in that it breached its duty of care by failing to warn the plaintiff of the risks associated with exposure to it products and as a consequence he suffered damage.

On the 2 September 2002 consent judgment was entered against both Amaca Pty Ltd and Wallaby Grip Pty Ltd in the amounts of $135,000 and $67,500 respectively.

By the 2 September 2002 Amaca Pty Limited had issued cross claims against CSR Limited and Wallaby Grip (BAE) Pty limited claiming the Plaintiff's injury was caused by or contributed to by their negligence and breach of duty. The first count in the cross claim relies upon a deed of agreement dated 24 September 1964 whereby Amaca and CSR entered into a partnership known as the Hardie BI Company to manufacture and distribute within Australia asbestos products. The cross claimant alleged that ss 10 and 12 of the Partnership Act 1892 (NSW) rendered the partners jointly liable for wrongful acts or omissions. Secondly the cross claimant alleges that the plaintiffs injury and damage was caused by the negligence of CSR who was a tortfeasor in respect of any damage suffered by the plaintiff referrable to partnership products and for which Amaca was liable and accordingly entitled to contribution or indemnity pursuant to s 5 (1) (c) of the Law Reform (Miscellaneous Provisions) Act 1946. The parties assure the Tribunal that the claim against CSR has been severed.

The claim against Wallaby Grip was based on the allegation that 30-40% of the products to which the plaintiff was exposed which were causative of his disease were supplied by Wallaby Grip. The Defence.
Russell SC appeared with Mr Scotting of counsel on behalf of Wallaby Grip (BAE) Pty Limited (In Liquidation) the third cross defendant.
The third cross defendants defences as pleaded were:

(a)Wallaby Grip (BAE) denied the cross claimants allegation of negligence but tendered no evidence and made no submissions on that defence. The cross claim asserted that Wallaby Grip (BAE) was negligent in that knowing the danger and intended end use it breached its duty of care as a supplier of asbestos products ( manufactured by the cross claimant) to all end users resulting in damage to the plaintiff and cross claimant. That duty of care is well settled law ( see Rolls Royce Industrial Power v James Hardie & Co (NO 4) (1999) 18 NSWCCR 652; CSR Limited v Wren (1997) 15 NSWCCR650).

(b) The third cross defendant raised no estoppel and did not deny that if the cross claimant could establish that Mr McKee's damage caused by exposure to James Hardie products also included exposure to James Hardie products supplied to the constructors of the "Esso Gippsland by Wallaby Grip BAE then a case could be mounted for contribution under S 5 & 6 of the Queensland Law Reform Act 1995. The essence of the cross defendants defence is that the apportionment of liabilities reflected in the consent judgment should stand because:

(i) There is no admissible evidence before the court to substantiate the claim that the plaintiff had been exposed to James Hardie products supplied by Wallaby Grip BAE. (ii) Alternatively, if the court is satisfied there is evidence of such supply and exposure then either:

The evidence is of insufficient weight to convince the court that the cross defendant is responsible for the plaintiffs damage or;
If the court takes a contrary view then in making a comparison of relative culpability and the acts of the parties causing damage then the cross defendant must be seen to be less blameworthy in its role as "middle man" as compared to the cross claimant as manufacturer.

The causal potency of any Amaca product supplied by the cross defendant is small by comparison to that of the cross claimant. Preliminary Issues. 10. Prior to addressing the substantive questions of the probative value of the evidence and, if necessary, contribution pursuant to Ss 6 & 7 of the Law Reform Act 1995 (QLD) I should first determine a series of preliminary issues raised by the parties. 1. Appropriate Contribution Legislation . 11. As initially pleaded the cross claimant sought contribution or indemnity from both CSR and Wallaby Grip (BAE) pursuant to the provisions of S 5(1) (c) of the Law Reform (Miscellaneous Provisions) Act 1946. Russell SC submitted that because the facts of the Plaintiffs case alleged an entirely Queensland tort the applicable legislation is s 6 and 7 of the Queensland Law Reform Act 1995. Russell SC conceded however that the difference was academic because the New South Wales and Queensland apportionment provisions for all relevant intents and purposes applied the same test. 12. In those circumstances Mr Parker, by consent, amended the cross claim to plead the Queensland legislation. It is therefore not necessary for me to determine the issue of the applicable law.

Of crucial importance in the determination of the facts of this case that go to the relative importance of the acts of the parties in causing damage to the plaintiff is the evidence of Norman Uhr firstly given in proceeding DDT 7 of 1998 and contained in an affidavit dated 13 May 2002 and secondly given in these proceedings by way of an affidavit and statement both dated 8 August 2002.
Mr Uhr died on the 6 January 2004. There is no dispute between the parties that the appropriate notice having been given under s 63 and s 67 of the Evidence Act 1995 statements by the deceased are prima facie admissible. However Russell SC puts in issue the application of s 135 (a) of the Evidence Act which gives the Court a discretion to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to his client. Having heard lengthy argument on the law and facts, to facilitate the determination of the case I elected to admit Mr Uhrs affidavit on a provisional basis only and to determine the issue of its admissibility in this judgment.

The crux of Russell SC's submission is the proposition that although Mr Uhr gave oral evidence in his suit for negligent exposure to asbestos dust against Cockatoo Dockyard Pty Ltd, the Commonwealth of Australia, Amaca and Wallaby Grip (BAE) he was never cross examined on that part of his evidence that goes to the issues in this case notably the evidence that:

a. Between 1968 and 1976 he was self employed as the Manager of Queensland Marine Insulation Pty Ltd. b. That Company performed asbestos lagging work on ships at the Evans Deakin Dockyard Brisbane including work on the "Esso Gippsland" between February 1970 and February 1972.

c. The vast bulk of the asbestos insulation materials used on the ship were manufactured by Bells Asbestos and James Hardie.

d. The James Hardies products he purchased were K-Lite blocks, pipe sections and caposite blocks. The Bells products used included asbestos rope and cloth. There was also sprayed asbestos ("limpet") purchased from Roberts Fire Spray.

e. He did not purchase direct from James Hardies. Rather he purchased Bells products from the Bells Asbestos factory in South Brisbane and Hardies products from Bradford Insulations Queensland with whom James Hardie had a close association. He also purchased a lesser amount of Bells and Hardies products from a Company called Ashley Moore Pty Ltd.

f. Queensland Marine Insulation was the principal contractor to the Dockyards for insulation work on the Esso Gippsland and undertook 100% of the insulation work on the ship.

g. Mr Uhr estimated at [31] of his affidavit of 8 August 2002 "that about 70% of the products used on the "Esso Gippsland" were manufactured by James Hardie and 30% by Bells Asbestos". 16. Russell SC emphasises the point that Mr Uhrs evidence about the percentages of Bells and Amaca products on the "Esso Gippsland" was not in issue in the Uhr case because his asbestos exposure had been over many years and what had happened on that particular ship over only 2 years was of little relevance. However he submits that by virtue of his client's present inability to cross-examine Mr Uhr the probative value of the evidence is substantially outweighed by the danger that it is unfairly prejudicial to his client. 17. Russell SC argued that Amaca had 15 months after filing its cross claim to do something about having Mr Uhrs evidence tested by cross examination but failed to avail itself of that option. He relies on the decision of Justice Sackville in Guide Dog Owner & Friends Association Inc, v Guide Dog Association of NSW ACT (1998) 154 ALR 527 at 532 as authority for that proposition.

Ultimately Justice Sackville decided the Guide Dog case by applying the law applicable to the reception of lay opinion evidence. However, he did so on the basis of a consideration of what was required to exclude evidence on the ground that its probative value was outweighed by its prejudicial effect taking the view that if the evidence was only of slight probative value then the exclusionary power in S 135 (a) should be exercised.

At page 532.5 Justice Sackville said: " S 135 (a) requires the probative value of the preferred (sic) evidence to be substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party. In my opinion, the probative value of the preferred evidence is substantially outweighed by the danger referred to in S 135 (a). A statement couched in the form of the last sentence of para 19 is intended to go to the heart of the issues to be decided in this case, yet provides no basis for the witness' characterisation of the effect of the conversations. I accept, of course that Mr Finucane cannot be expected to recall in detail each of the many conversation to which he refers. But he should be able to provide sufficient examples of the conversations to give content to his opinion and to afford the applicant a full and fair opportunity to test that opinion in cross-examination"

The critical issue here is Mr Uhrs assessments that go to causal potency. It is not suggested that Mr Uhrs evidence has no probative value. Rather the suggestion is that given the effluxion of time and lack of cross-examination the value of his evidence is only slight. Mr Uhr was a man whose affidavit reveals had spent his working lifetime of some 50 years involved with asbestos products mostly lagging boilers in ships. He began his life as a marine fitter, and became a marine engineer. At the relevant time he was the manager of Queensland Marine Insulation Pty Ltd, work which involved the asbestos lagging of ships at the Evans Deakin Dockyard Brisbane. In particular he was responsible for the application of the asbestos insulations materials used on the "Esso Gippsland" the ship upon which Mr McKee was exposed to asbestos dust and fibre.
There is no doubt that para [31] of Mr Uhrs affidavit of 8 August 2002, which was filed in these proceedings, goes to the heart of the issues in this case. Notwithstanding the fact that the cross claimant and Wallaby Grip (BAE) Pty Limited were parties in Uhrs Case no attempt was made to cross examine Mr Uhr about the source of the asbestos products he used on the Esso Gippsland despite the fact that [34] of his affidavit of 13 May 2002 in Uhrs Case indicates that the vast bulk of the asbestos insulation materials he used on that ships came from Bells Asbestos and James Hardie.

Russell SC, not unreasonably, submits that because Mr Uhr's exposure to asbestos was extensive over many years it was unnecessary to go into the extent of exposure on one ship between 1970 and 1972. However Mr McKee's Statement of Claim was filed on 25 January 2001 and Mr Uhrs affidavit was available well before Uhrs Case was heard. It was open for both cross defendants to cross-examine Mr Uhr on his first affidavit. Moreover having become aware of the contents of Mr Uhrs affidavit in McKee's Case about a month before the case was settled on 2 September 2002 it was also open for both cross defendants to take the course commonly exploited in this Tribunal of requiring Mr Uhr to be cross examined prior to terms being filed.

Once the cross claim was issued and served on 17 October 2002 the cross defendants still had a further 3 months to attempt to have Mr Uhr examined on the issue but made no attempt to do so. I take it that Russell SC rests his submission that the cross claimant should have ensured Mr Uhrs evidence was fully tested on the basis of the Tribunals discretion to exclude evidence to ensure fairness of procedure or prevent abuse of process. I see no grounds to exercise my discretion here given the third cross defendant missed its forensically obvious opportunity to test the evidence. If the third cross defendant is to exclude Mr Uhrs evidence on basis of the Guide Dog Case then it will have to be on the basis that the probative value of Mr Uhrs evidence is so slight that the exclusionary power in S 135 (a) should be exercised.

It is true as Russell SC was at pains to emphasise, that Mr Uhr swore his affidavit in August 2002, some 30 years after he made the purchases of asbestos products to insulate the "Esso Gippsland". However in asbestos diseases cases where the onset of disease usually occurs between 20 and 40 years after exposure this Tribunal frequently has to deal with witnesses who are straining their recollection over long periods of time. Moreover because mesothelioma is such an aggressive tumour it is not unknown for the Tribunal to be considering evidence untested by cross- examination.

Russell SC notes that Mr Uhrs estimates made 30 years after the event are made without reference to any business records. He rhetorically asks the Court to think back to 1971 and ask itself if it has confidence in the mathematical accuracy of estimates it would make about time spent or quantities used in that year. The answer to such rhetorical questions usually depends on the importance of the events in the life of the witness and the expertise of the witness.

The circumstances of Mr Uhrs knowledge, as revealed by his affidavits, is that he was the manager of a Marine Insulation Company in Brisbane whose work was to insulate ships being constructed at the Evans Deakin Dockyards. The work was carried out on 6 ships and an oil rig between 1968 and 1976. The work was carried out one ship at a time.

In [33] of his affidavit of 13 May 2002 Mr Uhr states clearly that the insulation work on the "Esso Gippsland" was carried out between February 1970 and February 1972. Mr McKee's evidence in his affidavit of 9 August 2002 is that he was employed at the Evans Deakin Dockyards between October 1971 and February 1972 working on the Esso Gippsland. His evidence is consistent with Mr Uhrs not only in terms of the time frame but his recollection that asbestos lagging of the ships steam pipes, boilers and other structures was occurring at that time.

Accordingly, notwithstanding the cross defendants doubts about Mr Uhrs recollection in 1971, I take the view that given Mr Uhrs lifetime experience in the purchase supply and application of asbestos, the narrow focus of the work he was performing and the corroboration from Mr McKee that it is safe for the Tribunal to accept his evidence about events he recalls in 1971. Moreover Mr Uhr explains in his affidavit on 8 August 2002 [20] that he recalls the Esso Gippsland very clearly having undertaken "virtually 100% of the insulation on the ship". At [26] he recalls the use of K Lite pipe and block sections manufactured by James Hardie, caposite block sections manufactured by James Hardie and asbestos rope and cloth manufactured by Bells Asbestos. He also recalls sprayed asbestos called "Limpet" obtained from Roberts Fire Spray and Bells Asbestos. Mr Uhrs recollection is that he made no direct purchases from James Hardie. Rather he purchased the James Hardie products through Bradford Insulation. That evidence is also consistent with the agreed facts.

In his statement dated 8 August 2002 he also indicated that he purchased "a very small percentage of " Hardies and Bells products from a supplier called Ashley Moore when they were in short supply.

Reading Mr Uhrs affividavit's and statements I am impressed by the clarity of his recollection. I am not surprised by the detail of his recollection given his lifetime of experience in the industry and the fact that at the relevant time he was only working on one ship at a time.

I note that Stephen Odgers in the 6th Edition of his text on Uniform Evidence Law has cast doubts as to whether the term "unfair prejudice" should be interpreted as narrowly as Justice Sackville opines. He refers in particular to the judgment of Justice McHugh in Papakosmas v The Queen (1999) 196 CLR 297 at [93] where he suggested that Courts should give sufficient weight to the changes the 1995 Evidence Act has brought about from common law attitudes as to the traditional meaning of "prejudice" I also note the judgments of Sheller and Meagher JJA in Ordukaya v Hick [2000] NSWCA 180 at [35]- [40] which held that inability to cross examine on material sought to be introduced is not of itself unfairly prejudicial, at least in civil proceedings even though that inability may well be a very relevant consideration in the courts decision as to the weight it should ultimately afford to the evidence.

Taking all the evidence into consideration I reject the view that the probative value of Mr Uhrs untested evidence must be regarded as so slight that the exclusionary power in S 135 (a) should be exercised and I propose to admit it. I propose to leave my determination of the contentious question of the relative percentage of asbestos product of Hardies and Bells used on the Esso Gippsland while Mr McKee was present and the weight that should be given to Mr Uhrs evidence on that more specific point until later in this judgment.

It is not in dispute that James Hardie and CSR were in partnership in supplying the Hardies BI asbestos insulation material that went into the Esso Gippsland.
Russell SC submits that because as a matter of law the knowledge of one partner is the knowledge of another then the partners had the combined knowledge of the dangers of asbestos of both James Hardie and CSR. He asserts that it follows that the relative blameworthiness for supplying the Hardie BI product "descends upon Hardies in this case because only Hardies are seeking contribution." Moreover he further asserts that in assessing relative blameworthiness because of the partnership this is not a case such as "Roberts" where James Hardie and Wallaby Grip BAE can be seen to be equally blameworthy because someone merely on-selling a product does no have the same relative degree of blameworthiness as a manufacturer or end user. His ultimate submission is that the Tribunal should ascribe relative blameworthiness 75 per cent to Hardies and 25 per cent to Wallaby grip (BAE).

Mr Parkers submission on the effect of the partnership is firstly that the Tribunal cannot take into account a party that is not present (i.e. CSR Insulation Industries Pty Ltd) and secondly that he concedes that as managing partner James Hardie bears full liability. He notes that as a matter of partnership law his client may well be able to pass some of that liability on to CSR Limited but submits that legal relationship has nothing to do with the question of apportionment of liability for the judgment currently before the court.

This submission squarely raises the legal basis of apportionment between joint tortfeasors as governed by S 6 and 7 of the Queensland Law Reform Act 1995 and this is an appropriate point to firstly review the legal principles asserted by the case law and secondly note the factual considerations that have been held to be relevant in applying that law. (a) (Re : Hunt; Ex Parte Sean Investments Pty Ltd (1979) 180 CLR 322 at 329) held S 5 (2) of the NSW Law Reform (Miscellaneous Provisions) provides that in any proceedings for contribution the amount of contribution recoverable from any person shall be such as may be found by the court to be just and equitable "having regard to the extent of that persons responsibility for the damage". The direction to "have regard to" requires the tortfeasors responsibility for the damage to be taken into account and given weight to "as a fundamental element" in making the finding by the Court of what is just and equitable. (b) (Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALJR 492). The making of an apportionment between parties of their respective shares and the responsibility for the damage involves a comparison both of culpability, ie: of the degree of departure from the standard of care of the reasonable man and of the relative importance of the acts of the parties in causing the damage.

(c) (Wynbergen v Hoyts Corporation Pty Ltd (1997) 72 ALJR 65 at 66). It is the whole conduct of each negligent party in relation to the circumstance of the accident which must be subject to comparative examination.

(d) In Macquarie Pathology Service Pty ltd v Sullivan NSWCA NO. 40313/94 28 March 1995 the court of Appeal held that "The making of an apportionment involves a comparison of culpability and of the acts of the parties causing damage. To put it another way, the court is concerned with considering the relative blameworthiness and the relevant causal potency of the negligence of each party''.

In James Hardie v Roberts (1999) 18 NSWCCR 500 the court of Appeal considered a S 5 (1) (c ) apportionment between Seltsam and Hardies by Judge Curtis who had found that both tortfeasors had actual knowledge of the dangers of exposure to their asbestos products. So far as their relative blameworthiness was concerned given the evidence that they both were large industrial corporations actively competing for market share and manufacturing and distributing asbestos products, who despite many years of actual knowledge of the serious risks to workers health from exposure to their products had continued to manufacture and supply those products without warnings or advice to suppliers employers or workers as to the dangers or measures that could be taken to reduce that risk, Judge Curtis found them to be equally blameworthy. He then considered the nature of Mr Roberts disease (mesothelioma) its indivisibility, the length of exposure to asbestos manufactured and supplied by each joint tortfeasor and the relative potency of the type of asbestos each had manufactured. Taking into consideration the evidence the greater causal potency of the Hardies products and the greater length of exposure to the Hardies products Judge Curtis apportioned liability in the ratio 75:25. The court of appeal upheld that apportionment emphasing:

(a) There is no legal principle that, in circumstances where successive tortfeasors have exposed a worker to the risk of injury from asbestos over different periods with, perhaps different intensities of exposure and different degrees of toxicity apportionment between them should be equal. (b) The conventional regard to culpability and causation should not obscure the need to examine the whole conduct of each party, an examination which in circumstances of inability to quantify comparative causal potency could itself lead to differential responsibility by regard to the degrees of exposure. (c) Such apportionment is not a mathematical exercise and where the responsibilities were not to be distinguished in one respect but were to be distinguished in another respect there is no reason why the distinguishing respect should not be given full effect. 38. The case law has also taken into consideration in making apportionment between tortfeasors in asbestos cases various other distinguishing factors such as: (a) The lag time between exposure and diagnoses of the disease. (b) The year and decade in which exposure occurred. (c) The varying legal relationships between the tortfeasors eg employers; employee, supplier\and user; occupier \ bystander; builder\bystander; subcontracting applier\bystander (d) The number of tortfeasors (e) The relative state of knowledge of the tortfeasors as to the dangers of asbestos and the steps that might be taken to minimise harm to workers.

Significance of Partnership 39. Having summarised the relevant law on apportionment I should return to the question of the significance of the partnership agreement concerning the relative blameworthiness of the parties and causal potency noting that questions of actual knowledge of the dangers and supply are critically important in determining apportionment of liability.

The claim against CSR Limited has been severed and the Court cannot assess its relative blameworthiness. However Russell SC properly points out that relevant to the assessment of Hardies blameworthiness is its knowledge of the risks of exposure to asbestos. Further, because it is a partner of CSR then partnership law would attribute the knowledge of one partner to be the knowledge of the other. Russell SC submits that the combined knowledge of CSR and Hardies should be therefore determined to be greater that that of his client and that is a factor that should cause the Tribunal to take relative the view that where the Tribunal is comparing the blameworthiness of two long established manufacturers and suppliers of asbestos products when it comes to knowledge of the risks of exposure to asbestos dust and fibre they should be equally blameworthy.

A difficulty with this submission is that neither party has sought to put before this Tribunal the usual voluminous evidence that goes to the history of the Hardies and Bells involvement in asbestos manufacturing and the state of their knowledge since the 1930's to assist comparisons of the whole of the conduct of the negligent parties. Nor is there any evidence about the entry of CSR Limited into the industry and the state of its knowledge. Counsel no doubt expected the Tribunal to rely on its expertise and corporate knowledge to assess those matters.

However the cross claimant did give notice under S 25B (1) and Rule 9 of the Dust Diseases Tribunal Act 1989 about the knowledge of Wallaby Grip BAE viz: - The decision in Macleay Hasting Area Health Service v Wallaby Grip (BAE) Pty Limited (1997) 15 NSWCCR 93 , which held that from its incorporation in September 1966 Wallaby Grip BAE was aware that prolonged exposure to heavy concentrations of asbestos dust could cause respiratory problems.
The decision in Raif v SG Sayer Pty Ltd & Ors (1995) 13 NSWCCR 393 which held: (a) From 1949 there was reasonably practicable alternatives for suppressing dust relating to asbestos lagging work. (b) By 1953 asbestos dust was generally perceived in industry, as being dangerous per se and in concentrations over 5 million particles per cubic foot of air it was probably very dangerous. (c) By 1953 it was known that exposure to asbestos dust could cause asbestosis and there was a probable relationship between asbestos exposure and lung cancer.
In Katidis v Meggitt Overseas Limited & Anor (1995) 11 NSWCCR 147 it was held that distributors of asbestos products such as Wallaby Grip BAE had a duty to acquaint themselves with the scientific literature on asbestos and to take steps to prevent injury to people exposure to their products.
In Bathis v Wallaby Grip (BAE) Pty Ltd (2004) NSW DDT 13 the Tribunal found that despite being aware since at least 1962 (and probably well before that date) that the inhalation of asbestos dust and fibre caused asbestos related disease including carcinomas it had failed to take any measures to protect persons from unsafe concentrations of asbestos dust and fibre in factory environments.

In Peirce v FR Coyle Pty Ltd (1999) DDT 21 the Tribunal found that between 1952 and 1975 Wallaby Grip (BAE) Pty Ltd ( in liquidation) was possessed of such knowledge to inform itself of the dangers to which persons were exposed by being required to work with insulation material containing asbestosis.
In E.M Baldwin & Son Pty Ltd v Plane (1999) 17 NSWCCR 434 the Court of Appeal held that it was futile for an employer which exposed an employee with an asbestos related disease since the early 1960's to litigate foreseeability in this Tribunal in other than exceptional circumstances.

So far as the manufacturers and suppliers of asbestos products are concerned knowledge of the risk of asbestosis from the exposure of workers to asbestos dust and fibre has been known to the industry since the 1930's ( see judgment Beazley JA in Bendix Mintex Pty Ltd & Ors v Barnes (1997) 14 NSWCCR 661 at pages 690 to 699)
I have already noted the findings in Roberts Case of Judge Curtis that both Hardies and Seltsam had for many years had actual knowledge of the risks of asbestos.
Having considered the authorities I do not agree with is Russell SC's submission that because the combined knowledge of CSR and Hardies on the subject of the health risks of asbestos can be inferred to be greater than that of Wallaby Grip then somehow the relative weight of learning on the subject can be transposed to relative blameworthiness. Judge Curtis in Roberts found Hardies and Seltsam's equally culpable because they both were large corporations with actual knowledge of the risks. Once a state of actual knowledge has been attained the relative depth of that knowledge, to my mind, becomes superfluous.

I also beg to differ with Mr Parkers characterisation of his clients role as a mere middleman and accordingly less culpable then Seltsam who was a direct supplier to Mr Uhrs company. The fact is that Hardies were involved at all stages of the chain of supply firstly as the manufacturers of the product, secondly as the partner of CSR in Hardies BI the wholesale distributor, thirdly as a partner in Hardies BI in suppling the asbestos to its Brisbane retailer Bradford Insulations.

To my mind Hardies far more extensive involvement in the distribution chain is a further factor the Tribunal is entitled to take in account in comparing culpability and that a just and equitable apportionment should see Hardies in the circumstances of this case assuming a greater share of the liability under an apportionment. Definition of Supply

Mr Parker took this argument further by submitting that because Hardies, unlike Seltams, had not directly supplied asbestos for use on the "Esso Gippsland" then the law on supply did not apply.

I take it that Mr Parker is attempting to develop in the context of intervening suppliers the doctrine in the minority judgment of Powell JA in CSR v Wren (1997) 15 NSW CCR 650 at page 655 which suggests that a manufacturer owes no duty of care at all to end asserts of it products in circumstances where an intervening employer knows of the relevant dangers. This submission has been unsuccessfully made in other cases notably SRA (NSW) v Wallaby Grip Ltd; (Re- Rayner) and Rolls Royce v James Hardie & Co Pty Ltd (No 4) ( Re-Hay)(1999) 18 NSWCCR 653.

In CSR Ltd v Wren, the majority (Beasley and Stein JJA) made it clear that the supplier of goods known to be dangerous owed a duty of care to intervening employers and their employers whether or not the intervening employers had actual knowledge of the danger. 4
In Rayners case Judge Curtis summarised the relevant principles up at [25] where he said; " The negligence of others is consistently with both commonsense and principle ( March v Stramere 1991 171 CLR 506; Mahony v Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 Bennett v Minister Community Welfare ( 1992-93) 176 CLR 408 ) reasonably foreseeable in the contemplation of causal sequence. Hardies admit they knew the purpose for which their products were supplied. They must have known that use would create dust by saving shaping and mixing. They knew that workers exposed to asbestos dust even intermittently should wear respirators. They should have foreseen that an employer to whom they supplied asbestos products may neither provide respirators nor warn its employer of the dangers to which they were exposed. This is particularly so when those dangers were insidious and not immediately apparent".

By logical extension the intervention of intervening suppliers of asbestos products such as Hardies BI or Bradford Insulations Queensland does not constitute a break in the chain of causation so as to relieve Hardies of their duty of care. On the other hand it constitutes proof of greater involvement in the chain of supply, a factor which in my opinion goes to relative blameworthiness. 5.Abestosis is a Divisible Disease
In Ross v Meggitt Overseas Ltd (1999) 18 NSWCCR 324, His Honour Judge Johns found a clear distinction between the aetiology of asbestosis and other asbestos-related diseases.
Based on Medical evidence he concluded that asbestosis was the culmination of a progression the individual stages of which are brought about by separate but cumulative exposures to asbestos, involving an incremental evolution of the disease process. In other words the disease is the cumulative effect of myriad episodes of lung tissue damage caused by inhaled asbestos over a prolonged period, the pathological response in each episode to the asbestos being inflammation, repair and scarring of the lungs. He concluded that, unlike mesothelioma which involves the accumulation of mutational events in a single cell, asbestosis does not result in damage which is one and indivisible. Even though the different damage caused by each tortfeasor had combined to cause the sum of then plaintiff's present disabilities the physical injury or harm was not the same.

Mr Mckee suffered from asbestos related pleural disease, asbestos related pleural plaques and asbestosis. It is Mr Parkers submissions on behalf of the cross claimant on this issue that:-

(a) The expression "any tort feasor liable in respect of that damage" in S 5 (1) (c) of the Law Reform ( Miscellaneous Provisions) Act 1946 refers to a tort feasor whose liability has been ascertained and the word "liable" ( first occurring includes ascertainment by judgment. (see Bitumen & Oil Refineries ( Australia) Ltd v Commissioner for Government Transport [1954-1955] 92 CLR 200. (b) It is important to concentrate on the damage which is under consideration namely the divisible damage because this is an asbestosis case and we are dealing with the liability of suppliers of two different products. The liability of the cross claimant is separate from the liability of the 3rd Cross defendant.

What the Tribunal is considering in these proceedings is a claim for contribution in respect of the damage to the plaintiff attributable to Amaca Pty Ltds products K-Lite. The Tribunal is not concerned with the Plaintiffs exposure to other products or judgements in relation to those other products.
Once one party has a judgment establishing a defendant liable to the plaintiff the parties are conclusively bound as to that amount.

The Judgement of this Tribunal in the case of McKee was given on 2 September 2002 and provided:

(a) The employer, Evans Deakin & Co Pty Ltd pay the plaintiff damages of $225,000 inclusive of costs. (b) Wallaby Grip (BAE Pty Ltd pay the plaintiff damages of $67,500 inclusive of costs. (c) Amaca Pty Limited pay the plaintiff damages of $135,000 inclusive of costs.

The judgement was given after settlement. Because the damage alleged by the plaintiff was of such a nature as to be divisible it follows, as Mr Parker submits, that the $135,000 awarded against his client was for the damage brought about to Mr Mckee lungs by the cumulative exposure to the K-Lite asbestos involved in the cross claimants tort.
The statement of claim alleges that Amaca Pty Ltd manufactured asbestos products in both NSW and Queensland and also supplied them to the Evans Deakin Shipyard. The Cross Claimant pleads a deed of agreement dated 24 September 1964 between Amaca and CSR entering into partnership called the Hardie BI Company which manufactured and distributed specialist asbestos insulation products including: (a) 85% Magnesia section blocks and plastic (b) High temperature Magnesia sections blocks and plastic (c) Super High temperature magnesia sections blocks and plastic (d) K-Lite Calcium silicate section and blocks (e) Fibrefil (f) Caposite

The pleading admits that the partners were jointly and severally liable in respect of any damages to the plaintiff from exposure to partnership products.
Amaca's case, simply put, is that given its liability for all damages suffered by Mr McKee as a result of exposure to its products then it settled on that basis for $135,000. However it pleads in its cross claim that not all of Mr McKee's exposure to Amaca products was attributable to its tort because Wallaby Grip also supplied about 1/3 of the total Amaca asbestos product to the "Esso Gippsland" and is also liable in tort as a supplier. The cross claimant submits that entitles Amaca to an apportionment between it and Wallaby Grip pursuant to Ss 5 & 6 of the Queensland Act.

That submission raises two preliminary questions concerning the state of the evidence viz;

(a) Did Wallaby Grip supply Amaca asbestos product to the "Esso Gippsland"? (b) If so did the Amaca products supplied by Wallaby Grip constitute 30-40 per cent of the total Amaca product to which Mr McKee was exposed? 69. The evidence as to both the source and quantity of asbestos products supplied to the "Esso Gippsland" comes from Robert Uhr who testifies that through his company Queensland Marine Insulation Pty Ltd he undertook "virtually 100 % of the insulation work on that ship (see [20] affidavit 9/8/02.) Mr Uhr's evidence is that the work on the ship was carried out between February 1970 and February 1972 ( [33] affidavit 13/5/02.) 70. Mr Uhrs evidence is that the job was hurried ( [25] 8/8/02) and local asbestos supplies were short ( [26] 8/8/02.) About 70% of the products used on the "Esso Gippsland" were manufactured by James Hardie and 30% by Bells Asbestos although none of the products were directly supplied by Hardies ( [31] 8/8/02.)

In [2] of his statement of 8 August 2002 Mr Uhr asserts that the suppliers from whom he purchased James Hardie products were Bradford Insulations, Bells Asbestos and a company called Ashley Moore. At [4] of the statement he states that he also purchased "limpet" spray insulation from Roberts Fire Spray. He breaks his company's purchases of James Hardie products down as follow: (a) 60% to 70% from Bradford Insulations (b) 30% to 40% from Bells Asbestos (i.e. Wallaby Grip) (c) "a small percentage" from Ashley Moore.

The third defendant vigorously attacks the probative value of Mr Uhrs evidence. Russell SC in submissions, asks the court to consider the following matters in relation to the state of the evidence before the court concerning the James Hardie asbestos products that may have been used on the "Esso Grippsland" at the time Mr McKee was working on the construction of that ship:-

(a) There is no evidence that the cross defendant supplied or delivered asbestos products to the dockyard for use on the "Esso Gippsland." (b) Mr Uhrs evidence, if admissible, goes no further than an allegation that he purchased James Hardie products for use on the insulation of the ship from "Bradford Insulations Queensland" and another supplier named " Ashley Moore". Searches from the ASIC tendered in evidence reveal no registered corporation names Bradford Insulations (Queensland) Pty Ltd.

(c) There is no evidence of a chain of the alleged supply of Hardies asbestos products from Hardies BI partnership to the suppliers named by Mr Uhr.

(d) Even if Mr Uhrs evidence is accepted then the state of it does not allow the Court to apportion the damages with any precision because:

Mr McKee only worked on the "Esso Gippsland" over a period of 4 months whereas the estimates arrived at by Mr Uhr involve lagging work carried out over 24 months between February 1970 and February 1972.

Briefly stated Mr Parkers response is that Mr Uhrs evidence clearly asserts the amount of Hardies asbestos product used by his company to lag the "Esso Gippsland" between 1970 and 1972 and the source of that product. He asks the court to infer on the balance of probabilities that the proportions of Hardies asbestos product being used on the lagging of the ship during Mr McKees 4 month employment would have been the same as the estimated purchases over the full 2 year period.
Mr Parker asks the court to infer from the evidence the existence of all links in the chain of supply including the third cross defendant its partner and regional distributors.

There is no dispute in this case that Wallaby Grip, in its role as a supplier of K-Lite asbestos products, is liable in tort to the plaintiff. That being the case the cross claimant is entitled to put its case that an apportionment is available under the Queensland legislation between it and Wallaby Grip as a tortfeasor responsible for the same damage. The difficult question for the Court lies with the quality of the evidence and the cross defendant's submission that the settlement was just and equitable. Apportionment under S's 6 & 7 of Queensland Law Reform Act.
The judgment in McKee involved settlement of the parties liability in the following proportions: (a) Employer (Evans Deakin ) 52.6 per cent (b) James Hardie 31.6 per cent (c) Wallaby Grip 15.8.per cent
In other words the effect of the judgment as between Hardies and Wallaby Grip was to share liability for exposure to the K-Lite 2/3:1/3.

The cross claim was issued immediately prior to the settlement and the cross claimant points out that the settlement did not take into account of the fact that 30 to 40 per cent of the James Hardie product had been supplied by Wallaby Grip. Mr Uhr's evidence is the source of that figure. Counsel suggest the Court should be guided by Judge Curtis approach to apportionment in Roberts Case.
In Robert's case 75 per cent of the asbestos to which Mr Roberts was exposed were supplied directly by Hardies. The other 25 per cent were supplied by Wunderlich but manufactured by Seltsams. Judge Curtis took the view that because both Hardies and Seltsams were large industrial corporations actively competing for market share producing and distributing product which they ought to have known was associated with the risk of injury that they were equally blameworthy.

That approach favourably impressed the majority of the Court of Appeal but Russell SC submits I should not take the same approach to that aspect of the differentiation because when it comes to relative blameworthiness we are not in this instance comparing two manufacturers and wholesalers but rather comparing the manufacturer and wholesaler Hardies with Wallaby Grip (BAE) Pty Ltd. which was not the manufacturer but merely an on seller. Russell SC then suggests that when it comes to blameworthiness then the appropriate apportionment should be 75:25 not 50:50.
This Tribunal, in the past, has found that in assessing the extent of a parties responsibility for the damage that factors such as its size, corporate power research capacity and position in the chain of supply from manufacture to end user is relevant. For example in Babcock Australia Ltd v Eraring Energy (No.2) 2001 22 NSW CCR 141. Judge Curtis made the distinction between actual and constructive knowledge of the dangers of asbestos when it came to blameworthiness and despite the fact of the higher standard of care imposed by the law of tort on the employer\constructor Babcock Australia Ltd found only a 15 per cent liability as opposed to 75 per cent to the manufacturer designer supply Babcock International Limited. BIL's liability was seen in a very different light because of its actual knowledge of the dangers of asbestos since 1931 and its wilful failure to institute a system pursuant to which its designers and erecting engineers would inform workers of those dangers and pursuant to which conditions in the workplace could be immediately and permanently ameliorated.

Having noted that law I have already indicated that I cannot accept that this is another case of a relative corporate minnow ignorant of the scientific literature on the risks of asbestos caught up as a middleman or a user of the products of a asbestos manufacturer. On the contrary as the case law I have previously cited demonstrates Wallaby Grip BAE had actual knowledge of the health dangers of human exposure to the asbestos products it manufactured supplied and applied years before Mr McKee commenced work on the Esso Gippsland.

Despite that knowledge with total and reckless disregard for the health and lives of those workers it well knew were likely to develop asbestosis and fatal tumours after coming in contact with its toxic products, and motivated by the maximisation of corporate profits it failed to communicate to Mr McKee, Evans Deakin or Mr Uhr not only that knowledge but also the extensive knowledge it possessed of the appropriate measures available to reduce the risk of contracting asbestosis. When it comes to relative blameworthiness Wallaby Grip BAE cannot hide behind its role as a supplier of Hardies products because it well knew the deadly nature of the asbestos dust and fibre that would be released by those products.

I have also indicated that because the law on apportionment requires the whole of the conduct of each negligent party in relation to circumstances of the accident to be comparatively examined I tend to the view that because Hardies involvement in the distribution chain as a manufacturer, wholesaler through the Hardies BI partnership and distributor to the ultimate retailer Bradford Insulations (QLD) was greater then Wallaby Grip then its relative blameworthiness was also greater. Considering all the evidence about moral blameworthiness I see no reason why I should on that basis alter the apportionment of liability between the parties determined in the consent judgement. If that proportion is to be adjusted then because we are dealing with the same product Hardies will need to establish that the exposure to K-Lite purchased from Wallaby Grip was much greater than the purchased from Bradford Insulations Qld.

Mr Parker relies upon the evidence of Mr Uhr who estimates that 30 to 40 per cent of the K Lite product to which Mr McKee was exposed was actually supplied by Wallaby Grip to justify reapportionment.

Russell SC submits that it would be unsafe for the tribunal to rely upon that evidence because:

(a) Mr McKee's evidence at [10] of his affidavit of 9 August 2002 is that he only worked for 4 months on the construction of the Esso Gippsland (i.e. between October 1971 and February 1972.) That ship was built over 2 years (February 1970 to February 1972.) This raises the question of just how much if any of the K Lite supplied by Wallaby Grip was supplied during those 4 months because Mr Uhrs affidavit states the lagging occurred over the full 2 years. In other words because Mr Mckee worked on the ship only 17 per cent of time the lagging was taking place and because there is no evidence as to the precise dates of purchase by Mr Uhr conceivably No. K-Lite could have been purchased or use Mr Uhr from Wallaby Grip during Mr Mckee's employment. (b) Mr Uhr was not tested by cross examination on his estimates and full weight should not be given to his evidence.

(c) There are discrepancies in Mr Uhr's evidence. For example in his affidavit of 13/5/02 he says he brought James Hardie products from both Bradfords and Bells. In his affidavit of 8/8/02 he says he also purchased James Hardie products from Ashley and Moore. In his affidavit of 8/8/02 his evidence is that 70% of asbestos products on the Esso Gippsland were Hardies and 30 per cent Wallaby Grip (subject to a small amount of limpet asbestos spray supplied by Roberts Spray Fibre.) However in his statement of 8/8/02 he qualifies those figures reducing hardies to 60 to 70 per cent and Wallaby Grip to 30 to 40 per cent.

Mr Parkers response is that his client is comfortable with Mr Uhrs evidence and the Tribunal, just as it did in Roberts Case should apportion liability on the basis of the mathematics of relative exposures. Accuracy of Mr Uhrs estimates
As Russell SC was at pains to emphasise, Mr Uhr swore his affidavit some 30 years after the event and even the best of memories become dimmed after such a time. Mr Uhr raised doubts about his memory when he changed his statement by varying the estimate of the Hardies product supplied by Wallaby to 30 to 40 per cent. Mr Uhr had great experience with asbestos and between February 1970 and February 1972 was concentrating solely on lagging the Esso Grippsland. I have formed the view from reading his affidavits and statements that his memory of the time was still clear but he could only fix the range not the precise amount of Hardies Product sold to him by Wallaby Grip. That being the case I propose to take a conservative approach and on the balance of probabilities I find that between February 1970 and February 1972 Mr Uhr purchased 30 per cent of the K-Lite he used on the ship through Wallaby Grip.
That determination begs the question: how much "K-Lite" from both sources were used during the 4 months Mr McKee was employed on the ship? There is little evidence to assist the court answer that question. Mr Uhrs recollection was that asbestos insulation was in short supply at the time and he was forced to purchase it from 3 sources ( Bells, Bradfords and Ashley Moore) to make up the required amount ( See affidavit 8.8.02 [14]).

There was heavy pressure upon him from both Evans Deakin and the Commonwealth Department of shipping to get the work completed and do extra lagging work ( see [25] and [29]). There was also about 5% to 10% sprayed asbestos insulation supplied by Roberts Fire Spray. ( See [4] Statement 8.8.02).

The Commonwealth Department of Shipping specified the type of asbestos to be used in the construction of the ship ( see [39] affidavit 13.5.02).
All Mr Uhr can tell us is that from time to time "K-Lite" was in short supply in Brisbane and he tended to purchase it where he could get it. At times he was forced to go to the supplier Ashley Moore for the product but did not obtain a significant amount from that source.

The psychological processes by which facts are found , in life as well as in court are often intuitive rather than the result of a conscious rational process. However in the total absence of evidence as to whether Mr Uhr purchased any Hardies product from Wallaby Grip in the 4 month Mr McKee spent on the "Esso Gippsland" there is certainly no way that this judge can conclude within the bounds of acceptable inference that 30 per cent or indeed any percentage of the asbestos to which Mr McKee was exposed was supplied by Wallaby Grip.

It was not put to me by counsel that I should ignore the Court of Appeals counsel against taking a mathematic approach to apportionment and consider the possibility of apportioning the 30 per cent across the 24 months the lagging was being carried out and arriving at 17 per cent of 30 per cent or 5 per cent as a possible percentage. However for the following reasons such an exercise is pure speculation:-

This expert Tribunal is aware from experience and Mr Uhr and Mr McKee's evidence agrees that the dust release from asbestos lagging work usually occurs as it is being installed or removed for replacement. The is no evidence to suggest Mr McKee, who was a boiler maker fixing metal work such as handrails kick rails and ducting, was liberating asbestos dust from previously installed lagging. There is no evidence about laggers removing existing asbestos insulation on what was a new ship under construction. There is no evidence that any Hardies product supplied by Wallaby Grip was being installed while Mr McKee worked on the "Esso Gippsland".

For all these reasons I have reached the conclusion on the balance of probabilities that Russell SC is correct when he says that Mr Uhrs evidence cannot be given sufficient weight to support the cross claimants contention that at the relevant time 30 to 40 % of Mr McKees exposure to asbestos dust and fibre was released from K Lite supplied by Wallaby Grip.

It follows therefore that because the cross claimant has failed to prove its case that at the relevant time that 30 per cent of the asbestos to which Mr McKee was exposed by supplied by Wallaby Grip then justice and equity does not permit an apportionment pursuant to S 6 & 7 of the Queensland Act.

I therefore do not propose to disturb the apportionment represented in the consent Judgment.

I make the following orders: (a) Verdict and judgment in favour of the cross defendant. (b) The cross claimant pay the cross defendants costs.

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.

(1999) 18 NSWCCR 652

(1997) 15 NSWCCR 650

(1999) 18 NSWCCR 500

(1995) 13 NSWCCR 393

(1995) 11 NSWCCR 147

(1999) 17 NSWCCR 434

(1997) 14 NSWCCR 661

(1997) 15 NSW CCR 650

(1999) 18 NSWCCR 653

(1999) 18 NSWCCR 324

At a glance

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Judgment (96 paragraphs)

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Legislation Cited (1)

Cases Cited (19)