Smith v Amaca Pty Ltd & Anor [2009] VSC 318

Supreme Court of Victoria|2009-08-05|Before: FORREST J

PLEADINGS - Amendment to statement of claim to allege joint liability on the part of manufacturers of asbestos products - No agreement alleged but common course of conduct and knowledge said to found joint liability - Application to amend refused.

1 The plaintiff, Kenneth Smith, suffers from malignant mesothelioma. The trial of his action against Amaca Pty Ltd (formerly James Hardie & Co Pty Ltd) and Seltsam Pty Ltd (formerly Wunderlich Ltd)[1] was due to commence on 4 August 2009.

2 Shortly prior to the commencement of the trial, the plaintiff filed a summons seeking to amend the statement of claim. The primary amendment sought was to allege that the two manufacturers of asbestos products, James Hardie and Wunderlich, are "jointly liable" for the plaintiff's exposure to asbestos dust and fibres, which is said to arise from the use of one or other, or both, of the defendants' products. It is unfortunate that I have had to deal with this issue at such short notice, given that the proposition is novel and has not been determined, as far as I am aware, by any other Court in this country. Mr Gordon of counsel who appeared with Mr Rattray for the plaintiff could not identify any instance of this argument being raised or determined previously.

3 For reasons which I shall shortly set out, I refuse that part of the plaintiff's proposed amendment to the statement of claim alleging joint liability on the part of the two defendants.

4 The plaintiff is 53 years of age and suffers from malignant mesothelioma. His life expectancy is limited and it is imperative that the trial proceed as soon as possible.

5 The plaintiff sues James Hardie and Wunderlich on the basis that they manufactured and supplied building materials which on various occasions, when used, exposed him to asbestos dust and fibres. He asserts that the exposures led to the development of his terminal condition.

6 The statement of claim alleges a number of separate exposures to asbestos dust and fibres, between 1959 and 1964, in 1969 and in 1981. The exposure in 1981 is asserted to arise out of the plaintiff working upon ceramic tiles which, it is said, had asbestos backing manufactured by James Hardie. This exposure can be put to one side for the purpose of this application.

7 The plaintiff 's statement of claim alleges that he was exposed to asbestos dust and fibres while assisting his father between 1959 and 1964 in carrying out renovations on the family home in Nunawading and also in 1969 when his father renovated the laundry at the family home. The relevant parts of the pleadings as they existed prior to the proposed amendment are set out below:

"3. At all material times the First Defendant manufactured and sold or supplied for sale, building materials containing asbestos ('Hardie asbestos materials').

PARTICULARS

The First Defendant manufactured flat and corrugated asbestos cement sheets, Fibrolite asbestos sheets, Tilux asbestos sheets, fully compressed asbestos cement sheets and Super Six asbestos sheets.

4. At all material times prior to July 1977, the Second Defendant manufactured and sold or supplied for sale building materials containing asbestos including asbestos sheets ('Wunderlich asbestos materials').

PARTICULARS

The Second Defendant manufactured asbestos cement flat sheets corrugated asbestos sheets; Deep Six asbestos sheets; Durabestos asbestos sheets; Villaboard; Versalux asbestos sheets; Durawall asbestos sheets; Wunderlich Fibro asbestos sheets, New Deep Six corrugated asbestos sheet.

6. The old asbestos cement sheets demolished and removed during the home renovation, and the new asbestos cement sheets used in the home renovation, were Hardie asbestos materials and/or Wunderlich asbestos materials.

7. In the course of the home renovation, the Plaintiff was exposed to and inhaled asbestos from the Hardie asbestos materials and/or from the Wunderlich asbestos materials ('the Plaintiff's renovation exposure').

PARTICULARS OF THE PLAINTIFF'S RENOVATION EXPOSURE

(a) During the demolition of the old asbestos cement sheets, the Plaintiff was in the vicinity of his father, watching his father or playing. He assisted in loading up the demolished sheets onto the trailer and taking them to the tip;

(b) During the cutting, drilling, fixing and sanding of the asbestos cement sheets, the Plaintiff was in the vicinity of his father, watching his father or playing. Further, he held asbestos cement sheets whilst his father cut them and was taught by his father how to use the tools to cut the asbestos cement sheets;

(c) The Plaintiff assisted with sweeping up dust and debris from the cutting, drilling, fixing and sanding of the asbestos cement sheets;

(d) For many years after, the Plaintiff continued to find pieces of the asbestos cement sheet from the home renovation, in the lawn and garden around the home.

8. In or about 1969, the Plaintiff's father, assisted by the Plaintiff, carried out renovations in the laundry at the family home ('the laundry renovation').

PARTICULARS OF THE LAUNDRY RENOVATION

(a) The Plaintiff assisted the Plaintiff's father to remove an old hot water service and other fixtures that were fixed to the asbestos cement walls, which necessitated breaking, demolition and removal of the asbestos cement sheets;

(b) The Plaintiff assisted the Plaintiff's father to cut, drill and fix new asbestos cement sheets as walls for the laundry;

(c) The use by the Plaintiff and his father of clout-head nails to fix the sheets, cracked the new asbestos cement sheets which necessitated the Plaintiff and his father filling the cracks and sanding them back before painting them;

(d) The dust and debris from the breaking, demolition, removal, cutting, drilling, fixing and sanding of the asbestos cement sheets was swept up by the Plaintiff;

(e) The demolition, removal, cutting, drilling, fixing, sanding and sweeping of the asbestos cement sheets gave rise to considerable amounts of airborne asbestos dust and fibre.

9. The old asbestos cement sheets demolished and removed during the laundry renovation, and the new asbestos cement sheets used in the laundry renovation, were Hardie asbestos materials and/or Wunderlich asbestos materials.

10. In the course of the laundry renovation, the Plaintiff was exposed to and inhaled asbestos from the Hardie asbestos materials and/or from the Wunderlich asbestos materials ('the Plaintiff's laundry exposure')."

8 The pleadings then spell out matters relevant to duty and breach of duty, and conclude by asserting that each of the defendants are liable for his injury, loss and damage. Implicitly, and, I think, contrary to Mr Gordon's submission, their liability was, in this version of the claim, solely alleged to be several.[2]

9 It was common ground, for the purpose of this argument, that the relevant products (whether James Hardie or Wunderlich) were purchased from a suburban retail outlet known as "Ringwood Timber". It was also accepted by the parties that the two companies were competitors in the building products market at the relevant times.

10 The amendments which the plaintiff now seeks to make, relevant to the claim of joint liability, are contained in paras 12A, 18A, 18B and 19 of the proposed amended statement of claim. I set out those paragraphs:

"12A. At all material times during the Plaintiff's renovation exposure and the Plaintiff's laundry exposure, the First Defendant and the Second Defendant:

(a) each knew or should have known that the two companies supplied all or nearly all of the asbestos cement building products for sale in Melbourne.

(b) each knew or should have known that each company or both companies supplied Ringwood Timber with asbestos cement building products;

(c) each knew or should have known that purchasers of asbestos cement building products for home renovations, such as the Plaintiff's father, did not distinguish between the two companies' asbestos cement building products and/or did not select such products by reason of the manufacturer thereof, and were likely to purchase whichever company's product was available or supplied;

(d) each knew or should have known that persons likely to be exposed to asbestos from asbestos cement building products which had been purchased and used for home renovations, such as the Plaintiff's father and the Plaintiff, would be unlikely to know which of the First and/or Second Defendant's product had been purchased or used;

(e) each knew or should have known that as asbestos-related diseases were diseases of long latency between exposure and onset, persons likely to be exposed to asbestos from asbestos cement building products which had been purchased and used for home renovations, such as the Plaintiff's father and the Plaintiff, would be unlikely, when the disease manifested, to know which of the First and/or Second Defendant's product had been purchased or used or had given rise to exposure;

(f) each knew or should have known that each Defendant had not given or published any warning of the risks and dangers of asbestos exposure or the means to minimising or avoid such risks or dangers; which was likely to come to the attention of purchasers or users of asbestos cement building products which had been purchased and used for home renovations, such as the Plaintiff's father, or those exposed to asbestos as a consequence, such as the Plaintiff;

(g) from time to time shared information regarding the risks and dangers of asbestos exposure and the means of minimising or avoiding such risks;

(h) effectively constituted the asbestos cement industry in Victoria, and were effectively a duopoly in the asbestos cement building materials market in that state;

(i) knew or ought to have known that a warning by either Defendant of the risks and dangers of asbestos exposure or the means to minimise or avoid such risks or dangers, which was likely to come to the attention of potential purchasers or users of asbestos cement building products for home renovations, was likely to cause the purchaser or user to minimise or avoid the said risks or dangers no matter which Defendant's products were used;

(j) knew or ought to have known that if neither Defendant gave a warning of the risks and dangers of asbestos exposure or the means to minimise or avoid such risks or dangers, which was likely to come to the attention of purchasers or users of asbestos cement building products for home renovations, the purchaser or user would be unlikely to minimise or avoid the said risks or dangers no matter which Defendant's products were used.

18A. The breach of duty jointly by the First Defendant and the Second Defendant and by each of them severally, caused or contributed to the renovation exposure and the laundry exposure, and the breach of duty by the First Defendant caused or contributed to the tile exposure.

18B. The said breaches of duty by the First Defendant and the Second Defendant made it difficult for the Plaintiff to know which of the two (or both) was the manufacturer of the asbestos cement building products, the use of which, gave rise to the renovation exposure and the laundry exposure.

19. As a consequence of;

(a) the Plaintiff's renovation exposure caused by the negligence of the First Defendant, and/or the negligence of the Second Defendant; and/or,

(b) the Plaintiff's laundry exposure caused by the negligence of the First Defendant and/or the negligence of the Second Defendant; and/or,

(c) the tile exposure caused by the negligence of the First Defendant;

the Plaintiff has suffered indivisible injury, loss and damage for which the Defendants are jointly and severally liable.

PARTICULARS OF INJURY

(i) Malignant mesothelioma;

(ii) Impaired respiratory function;

(iii) Severe pain and suffering;

(iv) Shock and nervous anxiety;

PARTICULARS OF LOSS AND DAMAGE

(v) The Plaintiff has incurred, and will incur substantial medical, hospital, nursing and travelling expenses as a consequence of his injuries;

(vi) The Plaintiff will require the voluntary care and assistance of his family, partner and friends during the course of his illness occasioned by the injuries;

(vii) The Plaintiff will require to hire people to do household maintenance and repairs which he, but for his injuries, would have done;

(viii) The Plaintiff was born on 24 December 1955 and was, prior to suffering the injuries, employed as a Managing director for Excell based in China, on a package of salary and benefits worth approximately $160,000 net per annum plus superannuation. The Plaintiff intended to remain in such work for about a further 10 years. The Plaintiff claims for loss of economic capacity.

Full and further particulars of the Plaintiff's injury, loss and damage will be provided prior to the trial herein."

11 It can be seen that the thrust of the proposed amendments is to assert that both manufacturers are jointly liable for any exposure of the plaintiff to asbestos during the home renovations and the laundry renovations, irrespective of whether the product responsible for the exposure was that of James Hardie or Wunderlich, or a combination of both.

12 I make one other observation at the present time about the proposed amendments. Essentially, the allegation of joint liability particularised in paragraphs (a) to (f) and (i) to (j) turns upon the knowledge (actual or constructive) that each of the companies had as to the industry, the supply of products, the market, the nature of warnings given on the products (or not given) and the long latency period between exposure and onset of symptoms. Only paragraphs (g) and (h) make allegations of fact, and only (g) asserts any association between the two defendants.

13 Both Mr Curtain QC, who appeared with Dr Keeling for Wunderlich and, somewhat belatedly, Mr Blanden SC, who appeared with Mr Wallis for James Hardie, opposed the proposed amendments.

14 Mr Gordon argued that the allegations in the proposed paragraph 12A underpinned the proposition that there was a common course of conduct between James Hardie and Wunderlich sufficient to give rise to joint liability. He said that it was not necessary to establish an agreement (implied or expressed) between James Hardie and Wunderlich for their liability to be joint. Rather, he argued that their conduct in supplying similar, if not identical, products to a small hardware store where differentiation between the products would be difficult constituted sufficient common conduct to give rise to joint liability. Further, he stated that the presence of a sufficient level of mutual knowledge of the two manufacturers of aspects of the market (it being a duopoly), such as the nature of the products, their common features, the difficulty in distinguishing between their respective products and the lack of any warning as to the risks posed by the products were sufficient for joint liability to be established. This, it was said, was particularly important in circumstances where the products were supplied, without identification, to the same store at the same time in circumstances where each of the manufacturers knew it would be difficult to differentiate between the products. Moreover, it was said, knowledge as to which product was actually used when the exposures occurred was necessarily diminished by the passage of time, given the latency period of asbestos-related diseases. In these circumstances, he contended, there was an arguable case of joint liability on the part of the manufacturers and that the amendments should be allowed.

15 Mr Curtain argued that, on the facts alleged in the proposed amended statement of claim, there was no basis in law upon which joint liability could be attached to Wunderlich. A coincidence of separate acts is insufficient, he said - there must be "concerted action to a common end" for joint liability to be established. He argued that knowledge, per se, of another manufacturer's business (be it of its products, supply to a particular store or safety information - no matter how detailed) and similar conduct in respect of manufacturing and sales could not give rise to joint liability. He said it was essential for the plaintiff to plead (and at trial establish) that there was an agreement or understanding (be it express or implicit) to engage in such conduct that would give rise to joint liability.

17 In an application such as this I am required to accept the factual allegations made by the plaintiff and thus determine the question of law on those facts.[3] I should only refuse the amendment if "it is clear that there is no real question to be tried"[4] or, to put it another way, that the proposed amendment would be futile. Accordingly, the question is whether the facts alleged in the proposed paragraph 12A support joint liability on the part of James Hardie and Wunderlich for the plaintiff's exposure to asbestos products sold or distributed from Ringwood Timber.

18 The plaintiff's case, until the proposed amendment, was that James Hardie and Wunderlich were concurrent separate tortfeasors, i.e., their independent tortious acts were the cause of the same damage. Those acts were said to be the manufacture and supply of building products containing asbestos which as a result of their use caused injury. Each could be found liable for the whole of the plaintiff's damage assuming breach of duty and causation was established.

19 The principles relating to joint liability of concurrent tortfeasors were set out in The Koursk,[5] in which Scrutton LJ said:

"Certain classes of persons seem clearly to be 'joint tort feasors': The agent who commits a tort within the scope of his employment for his principal, and the principal; the servant who commits a tort in the course of his employment, and his master; two persons who agree on common action, in the course of, and to further which, one of them commits a tort. These seem clearly joint tort feasors; there is one tort committed by one of them on behalf of, or in concert with another."[6]

Bankes LJ, Scrutton LJ and Sargant LJ[7] accepted the following proposition taken from Clerk and Lindsel on Torts[8]:

"Persons are said to be joint tortfeasors when their respective shares in the commission of the tort are done in furtherance of a common design ... but mere similarity of design on the part of independent actors, causing independent damage, is not enough; there must be a concerted action to a common end."

20 These principles still represent the law in this country. In Thompson v Australian Capital Television Pty Ltd[9] Brennan CJ, Dawson J and Toohey J said:

"Principal and agent may be joint tortfeasors where the agent commits a tort on behalf of the principal, as master and servant may be where the servant commits a tort in the course of employment. Persons who breach a joint duty may also be joint tortfeasors. Otherwise to constitute joint tortfeasors two or more persons must act in concert in committing the tort. Torts of all kinds may be joint and defamation is no exception.[10] (Emphasis added).

Gummow J (with whom Gaudron J agreed) also referred with approval to the The Koursk principles.[11]

21 Consistent with these principles, McPherson J in Adsteam Building Industries Pty Ltd v Queensland Cement and Lime Company Ltd (No 4) said[12]:

"Much the same conclusion is true of the allegation of 'acting in concert' in the same paragraph of the pleading and particulars. As at present advised I cannot see that it is possible for persons to 'act in concert' towards an end or object, or even simply to act in concert, unless there is at least an understanding between them as to their common purpose or object. The expression in question evokes the notion of joint actors, or perhaps even joint tortfeasors, as to which it is settled that there must be 'concerted action to a common end': see The Koursk [1924] p 140, 156. A mere coincidence of separate acts is insufficient: see Fleming, The Law of Torts, 6th ed, at pp 227-228". (Emphasis added.)

22 The common thread in an allegation asserting joint liability is the existence, either express or implied, of an agreement, or, perhaps understanding, to attain a common end or purpose.

23 Only two of the pleaded allegations of fact in the proposed amended statement of claim relate to the conduct of James Hardie and Wunderlich, as opposed to knowledge (constructive or actual). That conduct is said to be that from time to time they shared information regarding the risks and dangers of asbestos exposure and the means of minimising or avoiding such risks and, secondly, in effect, maintained a duopoly in Victoria in the asbestos cement building materials market. Neither, I think, could give rise to an inference that the two companies were acting pursuant to a common understanding or agreement. Indeed, as I have noted, the proposed amendments do not allege an agreement or understanding (be it express or implicit) between the two manufacturers. Rather it is said that there is such a commonality of conduct that joint liability arises.

24 I am bound to apply the law as stated by the High Court in Thompson. I am not persuaded that a level of knowledge, as postulated by plaintiff's counsel, of a competitor's products and, for that matter, the latency period of the disease and difficulty in identifying the particular products, can as the law currently stands give rise to joint liability. Nor does the existence of a duopoly and shared information as to the risk posed by asbestos products.

25 Each of the manufacturers were responsible for producing different products which arguably caused damage to the plaintiff. They were competitors in the same market supplying products to retailers throughout Victoria. The mere fact of supply of similar products (even accepting that there was no apparent distinction) and the knowledge of the competitor's products in the same shape or form does not amount to conduct giving rise to joint liability. The manufacturers were not engaged in a common enterprise; they were not acting collusively; they each sold materials containing asbestos under different names.[13] Whilst it may be accepted that each had a real familiarity with the other's practices in the marketing and supply and knew the potential injurious consequences associated with the use of the products, this does not amount to conduct which would create a joint liability. This may, if proved, amount to a "coincidence of acts", but not conduct which could arguably constitute an understanding or agreement.

26 Out of deference to Mr Gordon's submissions, I should say something about the authorities he cited in argument. I do not think Arneil v Patterson[14] aids the plaintiff's contention. In that case, brought under the Dogs Act 1906 in relation to two dogs which attacked "a flock of black faced sheep on a farm in Scotland", the House of Lords held that owners of both dogs were liable for the whole of the damage to the sheep. Viscount Halsham said:

"I think that each of the dogs did in law occasion the whole of the damage which was suffered by the sheep as a result of the actions of the two dogs acting together. If that be so, then each of the owners of the two dogs is responsible for the whole of the damage which has been done, and judgment can be obtained against either of them."[15]

However, it was conceded in that case, as Mr Curtain pointed out, that the two dogs acted together. [16] Indeed, it was pivotal to the decision.

27 Arneil v Patterson is cited in Laws of Australia, relied upon by Mr Gordon, as authority for the following example:

"The principal of joint liability assists the plaintiff who cannot prove who actually caused the damage. Three persons may have been throwing rocks at the plaintiff, but the plaintiff may not be able to prove which person threw the rock that hit him or her. If the three persons are proved to have been taken concerted action to a common end, they cannot take advantage of the plaintiff's inability to prove who caused the actual contact or if there is more than one injury, who caused which."[17]

28 Counsel also relied upon this proposition contained in Laws of Australia:

"Where two or more persons agree expressly or tacitly to take 'concerted actions to a common end' and in the course of furthering that common end one of the persons commits a tort, all parties to the agreement are jointly liable."[18]

29 Underpinning both the proposition and the factual illustration is that those involved were "taking concerted action to a common end" pursuant to an agreement or an understanding. None of the allegations contained in paragraph 12A support this contention.

30 Nor do I think that the decision in Brooke v Bool[19] assists the plaintiff's assertion. In that case the landlord and tenant set out to look for a gas leak. In the course of the search the tenant lit a match. It was held that the landlord was liable for the consequent explosion as a joint tortfeasor even though it was the tenant's lit match that caused the explosion. The two had a common purpose, an understanding and a common design.[20]

31 Finally, that part of the speech of Lord Hoffman in Barker v Corus UK Ltd[21] relied upon by Mr Gordon clearly, as I think he conceded, related to joint and several liability for the resulting damage, not for the tortious conduct itself.

32 Mr Gordon could not direct me to any authority that directly supported the proposition in this country that where two parties engage in similar or identical conduct with mutual knowledge of each other's conduct then that alone can give rise to joint liability on the part of the two parties engaged in such conduct.

33 In summary, I think it is necessary for the alleged facts to demonstrate that there was some form of understanding, arrangement or agreement between the parties with a common end or purpose. Mere commonality of conduct in terms of the distribution and sale of products to a particular retailer of similar, or perhaps identical products does not, as I understand the law, give rise to joint liability. Nor does a detailed knowledge of a competitor's manufacturer process, marketing and supply of products into the same market.

34 There is no "real question to be tried" on the question of joint liability of Wunderlich and James Hardie. The application to amend the statement of claim by adding paragraphs 12A and 18A and by amending paragraph 19 is refused.[22]

[1] To avoid confusion, given the dates of manufacture and supply, I will refer to the first defendant, Amaca, as James Hardie, and the second defendant, Seltsam, as Wunderlich.

[2] Nowhere in the statement of claim is joint liability on the part of the two manufacturers alleged as such.

[3] Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598, 602.

[4] Fancourt & Anor v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99. Although this was a case concerning summary judgment, the principles are applicable to any amendment to the pleadings.

[10] See also CBS Songs Ltd v Armstrad Consumer Electronic PLC [1988] UKHL 15; [1988] AC 1013, Credit Lyonnais Bank Nederland NV(now Generale Bank Nederland NV) v Export Credit Guarantee Department [1998] 1 Lloyds Rep 19, 35.

[12] [1985] 1 Qd R 127, 132; see also Louis Vuitton v Toea Pty Ltd [2006] FCA 1443; (2006) 237 ALR 118, [148] - [164].

[13] See paragraphs 3 and 4 of the statement of claim.

[17] Thomson Law Book Co Torts: The Laws of Australia 2nd ed), 834.

[18] Thomson Law Book Co Torts: The Laws of Australia 2nd ed), 830..

[22] Paragraph 18B of the proposed Amended Statement of Claim may also be relied upon to support the proposition advanced in paragraph 18C and therefore it may be included in the amended pleading.

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