145 The Court of Appeal, however, has considered s 151AB on a number of occasions in which it has drawn heavily on the jurisprudence concerning the nature of employment test in the context of claims made by workers.
146 In Alcan the Court considered whether the phrase "employment to the nature of which the disease was due" in s 151AB attached liability to the last insurer of the employer in whose employment the worker contracted a disease as O'Meally J had held at first instance or, rather, required determining the kind of work being done by the employee at various times as Rolfe J held in Wellcome Australia Ltd v Australian Eagle Insurance Co Ltd (1993) 34 NSWLR 269. Gleeson CJ (with whom Mahoney and Meagher JJA agreed) held that Rolfe J's decision in Wellcome Australia Ltd v Australian Eagle Insurance Co Ltd was correct.
147 Echoing the opinions expressed in Blatchford concerning the "rough and ready" operation of the nature of employment test, Gleeson CJ (at 173) described s 151AB as "a fairly arbitrary legislative mechanism for identifying the relevant insurer in what would otherwise be an impossibly complex situation". He pointed out, referring to Blatchford, that "[f]rom the earliest days of workers' compensation legislation, both in England and in Australia, industrial diseases of gradual onset have been recognised as a cause of difficulties requiring special legislative treatment."
148 His Honour observed (at 174) that "the concluding words in the present s 151AB of the Workers Compensation Act 1987 of New South Wales [in the employment to the nature of which the disease was due] are the same words as were used in the English [Workmen's Compensation] Act of 1906". Having referred to the fact that the meaning of those words had been authoritatively established in Blatchford, Gleeson CJ held that the concluding words in s 151AB should have the same meaning as was given to the like expression in Blatchford, Smith v Mann and Tame v Commonwealth Collieries Pty Ltd. His Honour said (at 176):
"… [T]here is every reason to conclude that they have the same meaning. The context is the same. The problem being addressed is that of a disease contracted by a gradual process. The idea of a disease being due to employment of a certain nature directs attention, not to the contract of employment, but to the work being performed and the exposure to risk involved in that work. The reasoning in Blatchford and the cases that have followed, applies with equal force to s 151AB."
149 It is useful to look closely at the facts in CIC. The late Mr Nikola Crnkovic had been employed by Alcan from October 1961 until November 1987. In April 1993 he manifested symptoms of mesothelioma from which he subsequently died. Shortly before he died, he obtained an award of damages in the Dust Diseases Tribunal against Alcan. Alcan had had a number of insurers over the period of his employment. From September 1982 until October 1985 the insurer was American Home Assurance Co Limited. From October 1985 until October 1987 the insurer was Norwich Winterthur Insurance (Aust) Limited and from October 1987 until Mr Crnkovic left Alcan's employ, the insurer was CIC Workers Compensation (NSW) Limited. Judge O'Meally found that after 4 October 1985, apparently as a result of the treatment or removal of asbestos at Alcan's premises, Mr Crnkovic was no longer exposed to asbestos.
150 Judge O'Meally had held CIC to be the insurer liable pursuant to s 151AB because, in his Honour's view (see 172FG), "once it has been determined that a worker has contracted a disease in the course of employment for which the employer is liable in damages, the last insurer must indemnify the employer against that liability, for the employment was employment to the nature of which the disease as due and the liability is deemed to have arisen when the worker was employed". His Honour did not regard the concluding words of s 151AB(1) as making any material difference to liability.
151 Gleeson CJ gave what he described as a "simple example" of the way s 151AB would operate as construed by Judge O'Meally (at 172-173):
"Suppose that a worker was employed by a company for twenty years, and spent the first fifteen of those years engaged in an activity which brought him into daily contact with asbestos fibre, and the last five of those years working as a gardener. On the approach just described, the insurer made liable by s 151AB would be the insurer on risk at the time of the retirement of the worker, even though that insurer might only have come on risk after the worker had taken up his duties as a gardener."
152 His Honour then looked at the situation if the view of s 151AB expressed by Rolfe J in Wellcome Australia Ltd v Australian Eagle Insurance Co Ltd was accepted. Gleeson CJ explained that accepting Rolfe J's test meant (at 173):
"… [I]n the present context, exposure to substances capable of causing an occupational disease is a material factor in identifying the nature of the relevant employment. In the example just given, there was a material change in the nature of the worker's employment at the time he commenced to work as a gardener. The insurer liable under s 151AB would be the insurer on risk when the worker was last employed by the employer to do work which exposed the worker to asbestos."
153 Returning to his earlier example, Gleeson CJ said the construction supported by authority "appears to make good sense". As his Honour said (at 176):
"To revert to the example given earlier of the worker exposed to asbestos who later turned to gardening, why should the legislature have intended to render liable under s 151AB an insurer who came on risk whilst the nature of the relevant employment was gardening? Or, to address the other possibility advanced, why should the legislature have intended to render liable under s 151AB an insurer who came on risk only after a programme of asbestos removal had been undertaken (and, perhaps, had negotiated a premium accordingly)?"
154 Gleeson CJ concluded his analysis by saying (at 177):
"In its application to the facts of the present case, the construction correctly preferred by Rolfe J produces the result that Mr Crnkovic's exposure to asbestos must be regarded as a material factor in identifying the employment to the nature of which his disease was due. The employment referred to is not a contractual relationship with Alcan, but the engagement in a form of activity which exposed him to a risk of a disease of such a nature as to be contracted by a gradual process ." (Emphasis supplied)
155 Although in the passage underlined Gleeson CJ appears to refer to the relevant employment as exposing the worker to a risk of contracting a disease of a general nature, it is apparent in my view, that his Honour was not saying that the employment could be identified without reference to the actual occupational disease from which the employee was suffering. First, in the sentence immediately preceding the underlined passage, his Honour had referred to exposure to asbestos as being a material factor in identifying the employment "to the nature of which [Mr Crnkovic's] disease was due". Secondly, his Honour had held that the line of authority commencing with Blatchford and in Australia with Smith v Mann and Tame should be applied in determining the meaning of s 151AB. Those authorities, as I have earlier explained, required application of the nature of employment test by reference to the particular disease from which the worker was suffering.
156 In CIC Workers' Compensation (NSW) Ltd v Kellogg (Australia) Pty Ltd (1996) 40 NSWLR 422 ("Kellogg") Priestley JA (with whom Meagher and Beazley JJA agreed) held that for the purpose of the nature of employment test, employment embraced not only the work tasks performed by the worker, but also the worker's movements through the employer's premises in the course of employment which exposed the worker to the risk of contracting an occupational disease.
157 In Kellogg the worker had contracted mesothelioma. His case was that he had been directly exposed to the risk of contracting that disease by being brought into physical contact with machinery, equipment, piping and the like, which were protected or covered by asbestos which released dust or were otherwise associated with asbestos in a friable state. According to Priestley JA (at 424) the worker's evidence of his direct contact of this kind until about 1984 was "strong and sufficient to found his case".
158 The evidence at the worker's trial was that from 1984 onwards the worker was not required to work upon asbestos lined machinery or piping. Nevertheless an investigation by an industrial hygienist disclosed major locations within Kellogg's premises in which asbestos materials were still observed at the time of that report in May 1991. CIC had insured Kellogg from 1 July 1988 to 30 June 1992.
159 Johns J in the Dust Diseases Tribunal held, applying the nature of employment test, that CIC was liable to indemnify in relation to its liability to the worker. The Court of Appeal upheld that conclusion. It did so on the basis that, even though the worker was not required to work on asbestos lined machinery after 1984, the evidence supported the proposition that the worker would still be exposed to asbestos particles in the atmosphere in various parts of Kellogg's factory.
160 Priestley JA held (at 427):
"…an employee [is] within the requirements of [s 151AB(1)] if in the course of carrying out the employment the employee was in fact exposed to risk because of the employment , employment for this purpose embracing not only the actual work tasks performed by the employee, but also those of the employee's movements through the employer's premises in the course of employment which exposed the employee to risk of inhalation of asbestos particles." (Emphasis supplied)
161 In applying that test, Priestley JA (at 427F, 428G) accepted John J's finding (set out at 426C) that:
"The character, nature and incidence (sic) of the plaintiff's employment make it clear to me that his employment to the present time is of such a kind as to involve a risk of contracting the disease or is capable of causing it . … It is unnecessary to show that it was the cause of injury, but rather was apt to produce it. ..." (Emphasis supplied)
162 That passage makes it clear that the inquiry with which the nature of employment test was concerned was directed to identifying the nature of the worker's employment by reference to the actual occupational disease from which he or she suffered.
163 The same approach was taken in Manufacturers' Mutual Insurance Ltd v Goodyear Australia Ltd (1997) 15 NSWCCR 538 in which the nature of employment test was considered in the circumstances of an employee who successfully recovered damages for mesothelioma from Goodyear. Johns J found that he was not exposed to any asbestos dust during the final five months of his employment (July - November 1987) with the result that the appellant was held to be the insurer liable to indemnify Goodyear. The Court of Appeal overturned that conclusion, finding that MMI Workers' Compensation was the insurer liable to indemnify Goodyear.
164 It is important to bear in mind in considering the Court's reversal of Johns J's finding of fact, that in December 1997, when Manufacturers' Mutual Insurance Ltd v Goodyear Australia Ltd was determined, s 32 of the Dust Diseases Tribunal Act provided for an appeal to this Court which amounted to a complete rehearing: see Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262 per Spigelman CJ at 266 [15]; Stein JA at 291 [190]; Davies AJA at 305 [265]. As I have earlier noted, the current s 32 (which was inserted into the Dust Diseases Tribunal Act 1989 by the Courts Legislation Amendment Act 1998) which commenced on 4 December 1998, limits the ambit of an appeal from a decision of the Dust Diseases Tribunal. Significantly, it does not enable this Court to conduct a review of the facts and reach a conclusion on the facts which differs from that of the Dust Diseases Tribunal, unless that different view arises as the product of an error of law or because of the wrongful admission or rejection of evidence.
165 In Manufacturers' Mutual Insurance Ltd v Goodyear Australia Ltd, Johns J expressed the issue he was required to determine to resolve the nature of employment test as being to identify employment which was "of such a kind as to involve a risk of the employee contracting 'the gradual process disease' which was disabling him." Sheppard AJA (with whom Sheller and Powell JJA relevantly agreed) said (at 545) that his Honour's statement of principle was in accordance with the authorities.
166 Judge Johns had held that the worker was not exposed to the relevant risk after June 1987 because, during that period, there was a protocol in force pursuant to which any asbestos identified as hazardous was clearly marked by barricades, warning signs and warning tape. The worker gave evidence that he saw no such signs between July and November 1987 - from which Johns J inferred that he was not, therefore, exposed to any asbestos dust. However, both Sheller JA and Sheppard AJA (with whose judgment Powell JA entirely agreed) concluded that evidence given by the plant manager in charge of the site, Mr Love, demonstrated that the continued presence of asbestos which continued to break down in Goodyear's factory presented a problem until its closure in the 1990's.
167 Mr Love acknowledged that the sources of asbestos contamination continued at the factory after the worker's employment had ceased, although from the mid 1970s steps were taken both to remove those sources and to minimise the danger they posed. Despite those measures he conceded that there might have been free asbestos emanating from an undiscovered source into the 1990's.
168 Sheller JA said (15 NSWCCR at 541):
"However, as Sheppard AJA has pointed out, Mr Love's evidence shows that the continued presence of asbestos in the Goodyear factory presented a problem right up to the time that the factory closed in the 1990s. I agree that the preponderance of the evidence establishes that the risk continued through the entirety of Mr Jeal's employment and thereafter. In Tame v Commonwealth Collieries Pty Ltd (1947) 47 SR (NSW) 269 at 272 Jordan CJ said that "employment to the nature of which the disease was due" means an employment of such a kind as to involve a risk to the employee contracting the gradual process disease which is disabling him. Such was the risk to which Mr Jeal was exposed and I do not think it could be said that his work during the second half of 1987 was carried on under conditions which made inhalation of asbestos dust impossible. Despite Goodyear's best efforts, the problem continued because of continual breakdown of the asbestos in the building and in the machinery in it." (Emphasis supplied)
169 Sheppard AJA said (at 542 - 543):
"The purpose of s 151AB of the Act is to reduce the complexity and cost of resolving disputes among insurers which at various times have provided an employer with insurance cover … s 151AB may appear to have a somewhat arbitrary operation but the approach of the legislature was that, although that might sometimes be the case, the application of the section over time to a variety of situations, employers and insurers would probably not lead to very much overall unfairness in the long term."
170 Sheppard AJA concluded (at 556) that:
"The evidence given by Mr Love establishes that, despite his best efforts, the problem continued into the 1990s simply because of continual breakdown of the asbestos in the building and in the machinery in it. In my opinion, the preponderance of the evidence establishes that the risk continued throughout the entirety of the period of the plaintiff's employment and thereafter. At times it may have been less than it was at others. But it did not go away. The plaintiff may have genuinely thought that it had, but Mr Love's evidence makes it clear that it had not. In my opinion, the evidence demonstrates that the plaintiff remained at risk during the latter months of his employment when MMI was the insurer."
171 Sheppard AJA considered a secondary submission made by counsel for MMI Workers' Compensation that on the basis of the medical evidence it was unlikely that asbestos particles generated after 1 July 1987 were "the cause of the plaintiff's mesothelioma". As the subsequent cases to which I refer below make clear, it is not necessary for the purposes of s 151AB to prove causation in fact but, merely, exposure to a risk which may be causative of the occupational disease. Nevertheless it is useful to note that in considering this argument, Sheppard AJA adopted the position (similar to Gleeson CJ's gardener example in CIC) that as long as, "on the face of the medical evidence, it is possible, in a real and not a fanciful sense, for the plaintiff to have been exposed after 1 July 1987 to asbestos fibres from which he may have contracted the disease, that is enough to bring MMI within the section." While he acknowledged (at 557) that the result might be thought to be artificial, he said, echoing Lord Blanesburgh in Blatchford, that that was so "because of the arbitrary operation of the section."
172 CIC Workers' Compensation (NSW) Ltd v Alcan Australia Ltd confirmed that the nature of employment test in the employer-insurer context requires determining whether the worker's occupational disease is incidental to the employment in which the worker was engaged. CIC Workers Compensation (NSW) Ltd v Kellogg (Australia) Pty Ltd held that the nature of employment test was not confined to the specific duties the employee undertook but required determining whether the course of the worker's employment exposed the worker to the risk of inhaling asbestos particles.
173 Subsequent cases have addressed the issues of causation and the nature of the risk to which the worker was exposed in the course of employment.
174 In GIO General Ltd v ABB Installation & Service Pty Ltd [2000] NSWCA 118; (2000) 19 NSWCCR 720 the Court (Mason P, Beazley and Heydon JJA) held (at [19]), applying Jordan CJ's statement in Tame v Commonwealth Collieries Pty Ltd that "it is not necessary that the presence, or some aggravation, of the disease should be in some degree due to service with the last employer," that that statement made it "plain that s 151AB(1)(a) is not concerned with causation in fact … [but] with exposure to a risk which may be causative of the disease."