His Honour added:
"Their evidence is sadly consistent with evidence frequently before this tribunal. It may be accepted that compliance with industry standards is no defence to a case brought in negligence. I believe however that, on another plane, industry practice reflects the general standards of civilised behaviour accepted in both the community at large and within any given industrial community. Observance by a tortfeasor of work practices general in an industry is, to my mind, prima-facie evidence that the tortfeasor has not deliberately courted a risk."
75 His Honour's comment that compliance with industry standards was not a defence to a case brought in negligence is correct. However, the issue with which his Honour was dealing in this paragraph was not whether the respondent was negligent. He had already determined that question in the terms I have discussed above. The issue he was dealing with was whether the respondent had deliberately courted the danger of exposure to asbestos. Nonetheless, his Honour's reference to negligence was not an unreasonable observation to make at that point. He was doing no more than drawing a distinction between what was relevant in relation to a finding of negligence and what was relevant in relation to the question he had under consideration, namely whether the respondent had deliberately courted the danger of exposing its employees to asbestos, and more particularly, the related question whether it had taken reasonable precautions to prevent bodily injury as required by Condition 4 of the policy.
76 I make a more particular reference to the second of these points, because, on the way I have understood his Honour's judgment, having determined that the basis of the respondent's negligence was that it had cause to know that persons exposed to asbestos were at risk of injury, rather than because it had actual knowledge, the question whether the respondent had deliberately courted the danger had, in effect, been determined. However, that still leaves the question as to what the appellant needed to prove so as to satisfy its onus under Condition 4. Before dealing directly with that question, it is convenient first to turn to the appellant's contentions presently under consideration.
77 As is apparent from the last sentence of [30], his Honour, having found that the respondent complied with standard industry practice, considered that that constituted prima-facie evidence that a tortfeasor had not deliberately courted a risk. In the circumstances, that finding was open to his Honour. If an employer followed the standard industry practice relating to the use of or exposure to a particular product or process, or had acted in the same way as other employers in similar circumstances, there is an available inference that that employer had not deliberately courted the risk involved in exposing employees to that product or process. That inference would only be available, however, provided the employer did not have actual knowledge of the dangers associated with the use of the particular product or process.
78 In this case, there was no finding by his Honour that the respondent had actual knowledge. It is apparent from his Honour's finding that compliance with industry practice was prima facie evidence that a tortfeasor had not deliberately courted the risk, it is likely that he appreciated that if there was a finding of actual knowledge, the requirement would not be made out.
79 The balance of the comments in paragraph [30], should, in my opinion, be read as surplusage. The first, that the evidence of the witnesses was "sadly consistent with evidence frequently before this tribunal" may well have accurately reflected his Honour's judicial experience, although it was irrelevant to the factual and legal issues that his Honour was required to determine. His Honour's further observation, that "industry practice reflects general standards of civilised behaviour", appears, when regard is had to the words "on another plane", to be in the nature of a philosophical musing, but was also irrelevant to the issues that he was required to determine. Being mere surplusage to his Honour's reasoning, neither observation bespeaks error.
80 The appellant contended, however, that there was no evidence that the respondent complied with standard industry practice. That submission requires an examination of the evidence of Mr Barlow, Mr Davis and Mr Gorsuch to which his Honour referred.
81 Mr Barlow was the injured employee. He gave evidence of the conditions in which he worked at the Vales Point and Munmorah power stations. In summary, his evidence was that there was a significant exposure to asbestos, sometimes to the point of its being "just like walking through a dust storm". He said that the floors were swept, but that only had the effect of causing more dust to circulate in the area where he was working. He said at night-time after the dust had accumulated, he and the other employees were given a fire hose to hose the place down. He said that whilst working at Vales Point, he was not given any protective clothing or respiratory protective equipment, nor was he given a warning about the dangers of asbestos. The conditions were largely the same at Munmorah, although Mr Barlow said the conditions there were better because it was a new power station.
82 In about 1969, his employer was taken over by Pozzolanic Pty Limited, who provided "a nurses gauze type mask". He understood that this was to protect against the fly ash and nothing was said about protection against asbestos. He said, however, that the mask became clogged and it was difficult to work whilst wearing it.
83 Mr Davis was a trades assistant who had worked at the Vales Point and Munmorah power stations between 1953 and 1998. During that time he worked for three different employers. Between 1953 and 1957, he was employed at Vales Point power station by Bailey Meters & Controls Pty Ltd. Between 1957 and 1967, he was employed by International Combustion Australia Ltd as a boilermaker's assistant at Munmorah power station and from then until his retirement with the Electricity Commission of New South Wales at both Vales Point and Munmorah power stations, for the most part as a trades assistant. Mr Davis' description of the work conditions was similar to that given by Mr Barlow. He also said that no safety masks, breathing equipment, or other protective clothing, was provided by any of his employers and he was not warned of the dangers of asbestos.
84 Mr Gorsuch's evidence was contained in an affidavit in proceedings that he had brought against Babcock Australia, the respondent, Pacific Power and Delta. He gave evidence of exposure to asbestos at a number of power stations including Vales Point and Munmorah with different employers from 1955 until 1979. He said that he was not provided with any protective clothing or warned of any dangers.
85 There was other evidence to the same effect, adduced pursuant to the provisions of s 25(3) of the Dust Diseases Tribunal Act. Mr Naughton, who also had been employed by the respondent and who brought proceedings against it, gave evidence that he was exposed to asbestos between 1951 until his retirement in 1983. He said that he had worked at a number of power stations, including Vales Point and Munmorah, as well as at other premises where he was exposed to asbestos during that period. He said that whilst working at the various power stations the respondent was not the only contractor working on the premises. He said that he was not provided with any protective clothing or equipment until 1976, when, whilst working at Vales Point, he was provided with a mask when working in the area where asbestos removal was taking place. However, when he was not working in that area, masks were not supplied, notwithstanding that he was still working in the proximity of the asbestos removal operations and was still exposed to asbestos dust.
86 The evidence of Graham Jones-Mashman was to similar effect. His exposure to asbestos arose because his father had worked at various power stations for a number of employers including the respondent, and who came home wearing his work clothes covered in asbestos dust. Mr Jones-Mashman gave evidence that his father had described work conditions such as have been described above and that he was not provided with protective clothing or equipment or warned of the dangers of exposure to asbestos.
87 There was also evidence given by Boris Osman, consulting engineer, in proceedings McRae v Bestobell Overseas Ltd & Ors. Mr Osman gave evidence that the asbestos exposure of the plaintiff in that case occurred whilst working for a number of different employers between 1966 and 1986. Again, the evidence was that no steps were taken by the employers to protect against the effects of exposure. Evidence from proceedings Marks v Australian Asbestos Installations Pty Ltd & Ors was also in evidence and was to the same effect.
88 The evidence above indicated that at different power stations, as well as in other places of employment where asbestos was used, employers, during the period of Mr Barlow's exposure, did not provide protective clothing or respiratory equipment to safeguard against exposure to asbestos. It is in this sense that it appears his Honour considered that the respondent "complied with" standard industry practices followed by the various employers engaged in the construction and maintenance of coal-fired generators for Elcom. In other words, the respondent's practices were the same as those of other employers in the relevant section of industry. Understood in that way, there was evidence to support his Honour's conclusion. It is in this sense, as I have understood it, that his Honour considered that the fact that this was the general practice in the industry constituted prima-facie evidence that "the tortfeasor" (who in this case was the respondent) did not deliberately court a danger.
89 It must be said, however, that the use of the word "complied" is not particularly apt in the circumstances, given that the evidence was that nothing, or little, was done to protect employees from the dangers associated with exposure to asbestos. "Compliance" usually denotes the doing of something.
90 His Honour, at [31] then drew a number of inferences, leading to a conclusion that the work practices were not the result of any deliberate decision to court known dangers. The inferences that he drew were that it was improbable that the engineers employed by the respondent were uniformly unconcerned with the health of the respondent's employees. Rather, he considered that "because they acted in common in the development and acceptance of what proved to be unsafe work practices", those work practices were not the result of a deliberate decision to court a known danger, namely the dangers arising from exposure to asbestos.
91 As I understand his Honour's reasoning, he was doing no more than concluding that work conditions in industry where asbestos was used were, overall, the same. In the main, precautions were not taken to protect employees and others working in the vicinity of asbestos from the dangers of exposure. His Honour inferred from the fact that this was common that there had not been a deliberate decision to court the danger by relevant personnel. However, as I have said, that determination flowed, in any event, from the nature of the findings that he made in respect of negligence for the reasons I discussed. It might be said however that the reasoning does confirm that in finding that the respondent was negligent his Honour had not made a finding of actual knowledge.
92 The appellant next complained that his Honour utilised findings of fact from his decision in Babcock Australia Ltd v Eraring Energy (No 2) in circumstances where the parties had not been given an opportunity to consider and respond to that material.
93 At [33] his Honour stated that at the time of Mr Barlow's exposure to asbestos, it was not thought that the substance was inherently dangerous and the scientific community had not yet concluded that there was no safe level of exposure. He commented that expert guidance was necessary to assess the gravity of the risk in each case. It was at that point that his Honour made reference to his judgment in Babcock Australia Ltd v Eraring Energy (No 2). His Honour then commented at [34] that "seen in this light", the failure of the respondent "was an organisational failure".
94 Contrary to the appellant's submission, I am not satisfied that his Honour used his decision in Babcock Australia Ltd v Eraring Energy (No 2) as evidence of the matters that he had found and to which I have referred above. Rather, it appears that he was using his decision in Babcock Australia Ltd v Eraring Energy (No 2) by way of reiteration of what he had found in this case. Indeed, it appears that the 'findings' were in fact inferences and conclusions of the same type that were made and reached in [31].
95 However, assuming that his Honour did use his judgment in Babcock Australia Ltd v Eraring Energy (No 2) for the purposes of fact finding, there was ample evidence in this case that supported that fact finding. For example, there was a report of Michael Kottek, occupational and environmental health consultant in the case of Bowman.
96 Kottek undertook a review of the literature relating to asbestos exposure from 1900. He found records of over 340 articles published between 1900 and 1952, being the commencement of Mrs Bowman's exposure to asbestos, and 1000 articles between 1900 and 1970 when her exposure ceased. He referred to a number of these articles, many of which were papers that had been given at scientific or medical conferences.
97 Kottek stated that from 1960 onwards, it became recognised that exposure to asbestos was associated with mesothelioma. This observation was based upon the fact that an article appeared in 1960 in the British Journal of Industrial Medicine (Wagner et al) where it was reported that of 33 mesothelioma cases, 32 had involved an exposure to asbestos.
98 Importantly, the first Australian case of mesothelioma was reported in 1962 in the Medical Journal of Australia.
99 In 1964, there was an international conference held by the New York Academy of Sciences at which a paper was presented in respect of a study of 45 cases of mesothelioma, which found that the majority had a history of intermittent or casual exposure to asbestos. There was an associated meeting of the Working Group on Asbestos and Cancer convened under the auspices of the International Union Against Cancer. That committee noted that asbestos exposure was associated with lung cancer and diffuse mesothelioma of the pleura and peritoneum.
100 In 1965, an article by Elmes et al published in the Postgraduate Medical Journal considered that transient exposure to asbestos could be an important factor in the cause of mesothelioma.
101 Regulations had been introduced over the years, commencing in 1933 in the United Kingdom, dealing for the most part with the saturation levels of dust in the work environment or with work practices such as ventilation and the use of wet methods for dry asbestos. Not all of these regulations covered asbestos affected environments. Further, the regulatory regimes tended to be limited in their effect and operation either to concentrations of dust in the atmosphere, or to particular industries. In 1969, the Asbestos Regulations 1969 (UK) were introduced, although in 1967, in anticipation of these Regulations, the Asbestosis Research Council published a recommended code of practice for asbestos cement. This was supplemented, in 1970 (revised in 1973), with a code of practice for the stripping and fitting of insulation. It was not until 1975 that the Scaffolding and Lifts Act 1912 (NSW) was amended to ban asbestos insulation by means of spraying.
102 There was also the evidence of KS Basden, Retired Senior Lecturer, Department of Mineral Processing & Extractive Metallurgy, University of New South Wales, that reviewed much of the same material.
103 The appellant further submitted that his Honour's finding at [33] appears to be designed to excuse the respondent's failure to take any reasonable precautions and was inconsistent with the appellant's s 25B case. The import of this submission was that it was not open as a matter of law for his Honour to make a different determination to those that had been made in the decisions relied upon in the s 25B notice.
104 In its s 25B Notice the appellant relied, inter alia, upon the determinations in Bendix Mintex Pty Ltd v Barnes (1997) 43 NSWLR 307; EM Baldwin & Son Pty Ltd v Plane (1989) Aust Tort Reports 81-499 at 65, 645; CSR v Wren (1997) 44 NSWLR 463; and Raif v SG Sayer Pty Ltd (1996) 13 NSWCCR 393. In summary, those cases determined that there was a body of knowledge in the scientific, medical and industrial communities including knowledge of the precautions available to reduce the dangers of exposure to asbestos.
105 The effect of the determinations in those cases was that it was established that, as at 1968, when Mr Barlow was first exposed to asbestos, asbestos posed a foreseeable risk of injury and that industry should have known of those risks and taken available precautions to reduce the risk. However, as the evidence in this case established, those precautions were not being taken by a significant body of operators in the industry. The authorities relied upon in the s 25B Notice did not establish to the contrary.
106 It is in this sense, as I understand it, that his Honour considered that there was a dichotomy between professional and expert knowledge on the one hand, and practices in industry on the other. Indeed, the fact that effective governmental regulation of this danger came at a fairly late stage, and in New South Wales not until 1975, demonstrates that although there was evidence of the dangers of exposure to asbestos for a significantly long period, there was little or no industry response or relevant regulation until the mid-1970's.
107 As I have said, the existence and availability of the material to which Kottek and Basden referred would be sufficient, and as the caselaw in this area demonstrates, has frequently led to findings against employers and others that they ought to have known of the dangers. However, those authorities did not constitute determinations of the question with which his Honour was concerned, namely, whether the respondent had discharged its onus of establishing that it had taken reasonable precautions to prevent bodily injury for the purposes of satisfying the precondition to indemnity in Condition 4.
108 For these reasons, I am of the opinion that the appellant's claim that it was denied procedural fairness and its claim that the trial judge failed to take into account uncontested evidence and determinations to the contrary of his findings therefore, fail. It follows that as there was no failure to take these matters into account, the additional complaint that his Honour failed to give reasons for not doing so, also fails.
109 That brings me back to a consideration of the question of what was required for the respondent to prove compliance with Condition 4. That issue has to be examined having regard to the nature of the appeal. Curtis J at [34] made a finding of fact that:
"… no one person who constituted the guiding mind of [the respondent] at any relevant time made a deliberate decision to court that danger to which Mr Barlow was exposed."