BHP Billiton Limited v Schultz & ors

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

1 SULLY J: By a summons filed on 16 August 2002 BHP Billiton Limited, ("the plaintiff"), seeks an order, pursuant to section 8 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) that certain proceedings pending in the Dust Diseases Tribunal of New South Wales, ("the Tribunal"), be removed into the Common Law Division of this Court; and, should such an order be made, then a further order pursuant to section 5(2)(b)(iii) of the same Act transferring those proceedings to the Supreme Court of South Australia. The summons, in its original form, cites four named defendants. At the hearing on 16 October, the plaintiff filed in Court by leave an amended summons adding a fifth defendant. There is no other change made by the amended summons to the summons in its original form. 2 The first named defendant is Mr. Trevor John Schultz. Mr. Schultz is the plaintiff in the proceedings now current in the Tribunal. The second, third and fourth named defendants are three related companies named, respectively, Wallaby Grip Limited, Wallaby Grip (BAE) Pty Ltd (In Liquidation), and Wallaby Grip (NSW) Pty Ltd (In Liquidation). The recently added fifth defendant is Amaca Pty Limited (formerly James Hardie & Co Pty Limited). 3 On 2 October 2002 the second, third and fourth defendants filed submitting appearances. On 14 October 2002 the fifth defendant notified by facsimile transmission an appearance submitting "to the making of all orders sought and giving of entry of judgment in respect of all claims made in these proceedings, save as to costs". I take this to be intended as a submitting appearance.

Factual Background 4 There are pending in the Tribunal proceedings which were commenced by the filing on 9 August 2002 of a statement of claim. The plaintiff is Mr. Schultz. There are four named defendants. The first of them is BHP Billiton Limited; and the three related Wallaby companies to which I have earlier herein referred are, respectively, the second, third and fourth such defendants. On 23 August 2002 this statement of claim was amended so as to add Amaca Pty Limited (formerly James Hardie & Co Pty Limited) as a fifth defendant. 5 Mr. Schultz pleads that between 1957 and 1964, and again between 1968 and 1977, he was employed by BHP Billiton Limited as an apprentice welder/boilermaker, and later as a welder/boilermaker, at that company's premises in Whyalla in South Australia. Mr. Schultz pleads that the nature of his employment required him to work with materials containing asbestos; and required him, as well, to work in the vicinity of related activities involving the use of materials containing various forms of asbestos. Mr. Schultz claims that the result of such exposure to asbestos caused him to inhale over time asbestos dust and fibre. 6 Mr. Schultz sues his former employer, BHP Billiton Limited, in tort for negligence; for breach of contract; and for breach of statutory duties. He sues the remaining defendants for negligence. Put very simply, Mr. Schultz's claim against the four defendants other than his immediate employer rests upon allegations of negligence by each of those four defendants in the manufacture and supply of various of the materials, the use of which exposed him to asbestos, and caused him resulting asbestos-related personal injury. 7 Mr. Schultz claims damages for the conditions of asbestosis and asbestos-related pleural disease. He seeks as well from the Tribunal an order preserving his right to make a future and additional claim for damages should he develop any of the conditions of asbestos-induced lung cancer; asbestos-induced carcinoma of any other organ; pleural mesothelioma; and peritoneal mesothelioma. 8 The capacity to frame in that fashion a claim for both present and prospective loss and damage is, so far as is now relevant, peculiar to the powers and procedures of the Tribunal. Section 11A of the Dust Diseases Tribunal Act 1989 (NSW), ("the Tribunal Act"), provides: "11A(1) This section applies to proceedings of the kind referred to in section 11(1) that are brought after the commencement of this section and in which there is proved or admitted to be a chance that at some definite or indefinite time in the future the person who is suffering from the dust-related condition in respect of which the proceedings are brought ("the injured person") will, as a result or partly as a result of the breach of duty giving rise to cause of action, develop another dust-related condition. (2) The Tribunal may, in accordance with the rules: (a) Award damages assessed on the assumption that the injured person will not develop another dust-related condition, and (b) Award further damages at a future date if the injured person does develop another dust-related condition." 9 Various interlocutory steps have been taken, and various interlocutory orders have been made, in connection with the progress to date of the proceedings in the Tribunal. At the hearing of the present summons it was indicated by learned senior counsel for BHP Billiton Limited that the following issues are the only disputed issues in the current proceedings in the Tribunal: "(a) Was Mr. Schultz exposed to asbestos dust and fibres from Wallaby Grip's and Amaca's products during the course of his employment with BHP? (b) Has Mr. Schultz developed asbestosis or asbestos-related pleural disease? (c) To what award of damages is Mr. Schultz entitled? (d) Is Mr. Schultz's claim barred by the Limitations Act 1936 (SA) ?" 10 Paragraph 10 of the written submissions made to this Court on behalf of BHP Billiton Limited says: "In summary, the case against the defendants is very simple. Subject to proof of exposure and diagnosis, liability will not be in issue. If Mr. Schulz proves exposure to asbestos from Wallaby Grip's and Amaca's products and the development of the alleged injuries, then each defendant will admit liability and the hearing will become an assessment of damages." 11 The factual background in the present case is strikingly similar to the factual background in a case which I decided in July last year: Broken Hill Pty Co Ltd v Zunic (2001) 22 NSWCCR 92. The legal issues posed by the present summons are identical with the legal issues that were posed in Zunic. My decision in Zunic was not taken on appeal; and I am not aware of, and counsel in the present matter were not able to refer me to, any decision subsequent to my decision in Zunic, in which my essential reasoning in that earlier case has been either approved or disapproved. I see no present reason to depart, in point of principle, from anything that I said in Zunic; and I propose, therefore, to approach the present matter in a way that is consistent with the approach that I took in Zunic. 12 In paragraphs 8, 9 and 10 of the report of Zunic, I summarise the relevant legislation. What I said on that earlier occasion is equally applicable to the present particular case. I need not repeat that material. 13 At paragraphs 11 and 12 of the report of Zunic are set out an analysis of the basic principles concerning the notion of "the interests of justice". Once again, I will not repeat what I said on the earlier occasion; observing only that it is equally applicable in the present particular case. 14 In Zunic I adverted to nine particular factors which I saw then, and see now, as bearing upon the striking of a correct particular balance, keeping in mind the correct ultimate question, namely: which is the more appropriate forum, upon a fair balancing of all the factors defining the relevant "interests of justice". I propose to take those same nine enumerated factors as a practical template for considering the present particular cross-vesting application.

The Personal Circumstances of Mr. Schultz 15 The following matters are based upon the contents of a report prepared by Professor J. Alpers at the request of Mr. Szhultz's solicitors. 16 Mr. Schultz was born on 13 October 1941. He is, therefore, now aged 61 years. He is a smoker, and is said by Professor Alpers to have "accumulated 60 pack years". I am not sure quite what that entails, but I infer that it entails, at least, that Mr. Schultz is a life-long heavy smoker. He has shortness of breath on exertion; a cough with white sputum; some central lower chest pains and some occasional wheezing. His general health is good. He drinks regularly; and has been in the past a heavy drinker. He receives a repatriation pension for duodenal ulcer and reflux and has had a past finger injury. He has no know allergies. He has current medications which do not seem to have, as I read Professor Alpers' report, anything particularly remarkable about them. 17 Clinical examination by Professor Alpers showed mild calcification of the pleural plaques; marked emphysema, particularly in the upper lobes; bilateral basal subpleural fibrosis; some bronchial dilatation and changes of a non-progressive kind. 18 Professor Alpers diagnoses:

[3] Moderately severe air flow obstruction, and an emphysema pattern secondary to cigarette smoking 19 Professor Alpers gives, due allowance made for the difficulty of making the assessment, an estimate that Mr. Schultz's lung function related to his asbestos conditions has a deficit of 30 percent. 20 As to prognosis, Professor Alpers says: "It is likely this man's disability will increase in the future. He does have clinical and radiological features of asbestosis and this is likely to increase over time and only further follows-up will determine the level of his future disability, but I would estimate it to be 50%. Prognosis in this man is uncertain. He is a current smoker. He carries a significant risk for more serious complications of asbestos exposure such as mesothelioma and lung cancer and he is likely to suffer from respiratory failure in relation to his abnormal gas transfer and pulmonary fibrosis some time in the future. He also has some bronchial dilatation on his CT scan and would be prone therefore to respiratory infections in the future." 21 The diagnosis and the prognosis made by Professor Alpers do not disclose, in the case of Mr. Schultz, personal circumstances nearly as dramatic in their immediacy as the personal circumstances of Mr. Zunic. Mr. Schultz's condition is, nevertheless, serious. There is not the same extreme and immediate pressure for a quick adjudication as there was in the case of Mr. Zunic. It is, nevertheless, important to ensure that any just claim of Mr. Schultz is dealt with as simply, as speedily and as efficiently as circumstances will permit.

The Jurisdiction of the Tribunal has been regularly invoked by Mr. Schultz 22 In this connection I take in the present case, mutatis mutandis, the stance that I took in Mr. Zunic's case.

The Dilatoriness, if any, of the Present Applicant in seeking Removal and Cross-Vesting Orders 23 It is sufficient to say that in the present case, unlike in the case of Mr. Zunic, it could not reasonably be found, in my opinion, that there has been anything dilatory about the bringing of the present application for removal and cross-vesting orders.

The Tribunal has a particular experience and facility in dealing with dust disease claims 24 I repeat, but will not reproduce in detail, what I said in this connection in Mr. Zunic's case.

The place of the torts pleaded respectively against the defendants in the Tribunal proceedings 25 I can see no difference whatsoever between Mr. Schultz's situation and that of Mr. Zunic in the earlier matter. I think that on the available evidence the conclusion is irresistible that the relevant torts arose in substance in South Australia. 26 That conclusion gives rise to the question of weight of which I speak in paragraph 28 of the judgment in Zunic. I adhere now to what I said on that earlier occasion.

Comparative availability of an appropriately expedited hearing 27 The progress to date of the proceedings in the Tribunal does not suggest that Mr. Schultz's situation is seen as justifying in any particular way an expedited hearing. In that respect at least, Mr. Schultz's case is very different from the situation of Mr. Zunic. 28 What needs to be kept in mind in Mr. Schultz's case, as I understand Professor Alper's prognosis, is that there might well be a deterioration in the present health of Mr. Schultz. If that deterioration were to reach the point where Mr. Schultz was in fact diagnosed as having mesothelioma or some comparably catastrophic condition, a prospect which is at least on the cards in a real sense, then I think that the Tribunal would be in a position to move with degree of expedition that could not fairly be expected of the Supreme Court of South Australia. That is so, as I conclude from the available evidence, not because the Supreme Court of South Australia does not have in place tried and tested procedures for expedition; but because those procedures do not have, and as I respectfully think could not reasonably be expected to have, the marked and practised experience of the Tribunal in, as it were, changing procedural gears so as to accommodate sudden health emergencies in dust-disease cases.

Comparative Cost Considerations 29 In the present matter, as in the earlier matter of Zunic, a very large amount of documentary material has been placed before the Court in connection with comparative cost considerations. This Court is, in my opinion, not at all well placed to resolve arguments of this character. An illustration of the practical difficulties can be taken from some of the contents of an affidavit sworn on 22 August 2002 by Mr. Nigel Wallwork, a South Australian solicitor who has the shared conduct of BHP Billiton Limited's case in the Tribunal proceedings. 30 In paragraph 34 of his affidavit, Mr. Wallwork sets out a schedule showing each substantially completed matter in the Tribunal where the issues for trial concern the management of the Whyalla Ship Yard in which Mr. Schultz was relevantly employed. The schedule shows the legal costs incurred by BHP Billiton Limited to date. Mr. Wallwork schedules seven completed matters; and a further three matters which have been completed save for the resolution of certain cross-claims. The total legal fees incurred across all ten of the scheduled files average, in round figures, $36,553. The lowest individual costing is, in round figures, $7,690. The highest is, in round figures, $102,255. It is impossible to get, from the available material, a reliable understanding of the reason for such a disparity between the lowest and the highest individual items in the ten scheduled items. The highest of the ten scheduled items happens to be the matter of Zunic. I am not certain, but I think it to be a reasonable inference, that the scheduled figure includes an allowance for the costs of the unsuccessful cross-vesting application which I decided in July last year. If that be so, it is impossible, as matters stand, to get any reliable idea of what proportion of the scheduled figure is thus to be attributed. 31 I should make it clear that I do not have the slightest doubt of the reliability of the figures as Mr. Wallwork quotes them in his affidavit. My difficulty is that as I understand the material which has been placed before me in connection with the present application, that material lacks, for all its volume, analysis of such a kind as would make it possible to say with a proper confidence that it has been established on the probabilities that there is so grossly disproportionate a relevant cost difference as would give significant, and perhaps even decisive, weight to the present application to remove and cross-vest.

Comparative Evidentiary Advantages 32 I adhere, mutatus mutandis, to what I said in the earlier matter of Zunic. 33 I add that in Mr. Schultz's particular case it seems to me to be important, given the prognosis offered by Professor Alpers, to keep open to Mr. Schultz the very unusual advantages that are conferred by section 11A of the Tribunal Act. 34 I have not overlooked the contents of the affidavit sworn by Mr. Wallwork on 26 September 2002. In that affidavit Mr. Wallwork deposes, relevantly, to the wish of BHP Billiton Limited to take, or at least to explore its prospects of taking successfully, proceedings by way of cross-claim based upon various contractual indemnities. Mr. Schultz himself is, of course, in no way a prospective cross-defendant in any such proceedings. That being so, it does not seem to me to be just that the legitimate interests of Mr. Schultz in the current proceedings in the Tribunal should be affected at all, and certainly not adversely, by the prospect of such cross-claims.

The Matter of Forum Shopping 35 Yet again, I need say no more than that I adhere to what I said in the earlier matter of Zunic.

Conclusions and Orders 36 It was submitted, and I accept, that there are obvious and important distinctions of fact to be drawn between the respective cases of Mr. Zunic and of Mr. Schultz. The basic question remains, however, constant; and the just answer to that question depends, as I said in the earlier judgment, "upon a fair balancing of all of the factors defining the relevant 'interests of justice' ". 37 I have come to the conclusion that a fair balancing of all of the individual matters to which I have referred does not establish on the probabilities that the interests of justice require the making of orders for the removal and cross-vesting of the proceedings in the Tribunal. 38 The summons is dismissed with costs. The exhibits may be returned. **********

Last Modified: 10/24/2002 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.