Amaca Pty Limited (ACN 000 035 512 under NSW Administered winding up) v CSR Limited

[2017] NSWDDT 2

Dust Diseases Tribunal

New South Wales

Medium Neutral Citation:

Amaca Pty Limited (ACN 000 035 512 under NSW Administered winding up) v CSR Limited [2017] NSWDDT 2

Hearing dates:

10 March 2017

Date of orders:

29 March 2017

Decision date:

29 March 2017

Before:

Judge AC Scotting

Decision:

1 I am satisfied on the balance of probabilities that the answers to the questions posed in [6] should be answered in the affirmative.
2 Amaca is entitled to a verdict on the cross-claim.
3 I direct that the parties bring in short minutes of order to finalise the cross-claim in accordance with their agreement.

Catchwords:

DUST DISEASES – mesothelioma – illness – asbestos – exposure – extent of exposure – causal connection – diagnosis
PROCEDURAL – contribution between defendants – cross-claim
OTHER – partnership agreement – partnership product – partnership deed
EVIDENCE – circumstantial evidence – civil onus

Cases Cited:

Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262
Belhaven and Stenton Peerage (1875) 1 App Cas 278
Luxton v Vines (1952) 85 CLR 352
Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 142

Category:

Principal judgment

Parties:

Amaca Pty Limited (ACN 000 035 512 under NSW Administered winding up) (Plaintiff)
CSR Limited (Defendant)

Representation:

Counsel:

 

JC Sheller (Plaintiff)
B Ilkovski (Defendant)

 

Solicitors:

  Mills Oakley (Plaintiff)
Colin Biggers Paisley (Defendant)

File Number(s):

370/15

Judgment

1. Amaca Pty Limited (Amaca) seeks contribution from CSR Ltd (CSR) to damages it paid to the estate of the late Bernard James Newman.

2. Mr Newman worked that the Munmorah Power Station (the Power Station) for 12 months in about 1966. Mr Newman contracted mesothelioma shortly before he died in June 2014

3. From September 1964, James Hardie & Coy Pty Ltd (now Amaca) and The Colonial Sugar Refining Company Ltd (now CSR) entered into a partnership to supply asbestos containing insulation products marketed under the brands 85% Magnesia, High Temperature Magnesia, Super High Temperature Magnesia, Caposite and K-lite Calcium Silicate (K-Lite) as well as asbestos millboard (partnership products).

4. Bradford Insulation Industries Pty Ltd (BI Industries) was appointed by the partnership as the sole supplier of the partnership products.

5. BI Industries supplied some partnership products to the Power Station in the period that Mr Newman worked there.

6. The issues to be determined are:

1. Was Mr Newman exposed to asbestos from partnership products at the Power Station?

2. If so, was that exposure causative of his mesothelioma?

7. In the event that both of those issues are determined in the affirmative, the parties agree that Amaca is entitled to a verdict on its cross-claim and the parties have agreed on the orders to be made.

The relevant law

8. Amaca must satisfy me of the issues to be determined on the balance of probabilities.

9. A court can be satisfied of an issue on the balance of probabilities based on circumstantial evidence: Seltsam Pty Ltd v McGuiness at (2000) 49 NSWLR 262 at [90].

10. This requires considering the weight that can be given to the united force of all of the circumstances put together: Belhaven and Stenton Peerage (1875) 1 App Cas 278 at 279.

11. Facts can be inferred on the basis of the primary facts, if it is reasonable to draw the inference: Luxton v Vines (1952) 85 CLR 352 at 358.

12. Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. Some facts can be inferred with as much practical certainty as if they had been actually observed. In other cases the inference does not go beyond reasonable probability: Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 142 at 169-170.

The exposure issue

13. Amaca tendered a Statement of Particulars (the Particulars) filed by the estate in the proceedings brought by it that were commenced by Statement of Claim filed on 16 November 2015. Michael Newman, the executor of the estate, executed a Statutory Declaration contained in the form of the Particulars on 1 December 2014, declaring that the answer to each and every question in the form was true. The question in the Particulars were responded to as if Mr Newman had answered them, i.e. in the first person.

14. CSR did not object to the tender of the Particulars, indicating that it would make submissions about the use to which the material contained in the document could be put.

15. The content of the Particulars was hearsay and even perhaps second hand hearsay, but admissible and available to prove the truth of the matters asserted in the document, because it was not objected to: Perish v R [2016] NSWCCA 89 at [261]-[271]. I am satisfied that the decision not to object to the document was a rational forensic decision made by CSR’s counsel because I was taken to assertions within the document and asked to weigh them against representations made by Mr Newman in documents tendered in CSR’s case to determine if I could be satisfied to the civil standard.

16. The following matters were taken from the Particulars.

17. Mr Newman worked at the Munmorah Power Station (the Power Station) for about 12 months between about August or September 1965 until about August or September 1966. He worked 5 days per week at the Power Station as well as doing some overtime on weekdays and weekends. Mr Newman was employed by McNamee Industries Pty Ltd (McNamee Industries) and was transferred to the Power Station to assemble and install the induced draught and forced draught fans.

18. The induced draught fans that drew hot air away from the precipitators and into the smoke stack. Mr Newman fed asbestos tape into the casing of fan. The task involved Mr Newman using a large amount of asbestos tape. The asbestos tape gave off dust that got onto his hands and clothes and into the air around him.

19. The forced draught fans were installed very close to the base of the boilers. There were 2 forced draught fans per boiler. When Mr Newman worked on the forced draught fans he did so in proximity to the laggers who were lagging pipe work that was 4 inches to 6 inches in diameter.

20. Mr Newman observed the laggers to apply wet asbestos lagging on the ends of pipes and then put a metal cover over the lagging. Mr Newman was interested in the way they completed the metal covering in the shape of a cone at the end of where a steam pipe had been lagged. Mr Newman described the area were the laggers worked as “very dusty”. There were about 4 or 5 laggers working in a crew.

21. Mr Newman described his exposure at the Power Station as the heaviest asbestos exposure that he encountered in the course of his work. Mr Newman could see asbestos dust in the air around him when he worked at the Power Station.

22. With the exception of K-lite and asbestos millboard the partnership products were sold as sections, blocks and plastic. K-lite came in sections and blocks only. A section was designed to fit around pipes, coming in various diameters and thicknesses with a standard length of 3 feet. A K-lite section is depicted in on page 133 of Exhibit 3. A block was a rectangular shape available in various sizes and thicknesses. Plastic was an insulating cement that was mixed with water and applied to joints in pipe and block insulation.

23. Amaca tendered a number of orders on BI Industries for supply of partnership products for use at the Power Station (Exhibit 5). In the period of Mr Newman’s work at Power Station those orders demonstrated the supply of K-lite blocks and asbestos millboard. In about July 1966 the inner layer of the furnace on boilers 1-4 of the Power Station were being insulated with 2 inch thick K-lite, [1] which I infer was a reference to the use of K-lite blocks.

    1. p 204

24. I infer that pages 191-195 of Exhibit 5 are a specification for the application of thermal insulation at the Power Station issued to Australian Asbestos (Contracting) Pty Ltd (the specification). Reference is made to order number 253/146 on page 194 (page 4 of the document). That order number is referred to in a letter from International Combustion Australia Ltd (ICAL) to the Electricity Commission of New South Wales dated 28 January 1966. [2] The letter relates to the lagging of boilers 1-4 at the Power Station. ICAL was the company that issued the orders to BI Industries for the supply of partnership products to the Power Station. The specification appears to be complete on my reading of it, except that it may be missing a line from the bottom of page 191 (page 1 of the document) because the last sentence on page 191 does not finish and the first line on 192 does not follow. However, that does not matter for the purpose for which it can be relied on. The specification on page 191 refers to the use of K-lite sections and pages 193 and 194 refer to the use of sections generally. The insulation work for boiler 1 was programmed to take place between February and October 1966. [3]

    2. p 202

    3. p 195

25. Amaca tendered a bundle of photographs of the Power Station that were certified to have been taken on various dates in 1966 (Exhibit 4). Only one of the photographs was taken outside the period of Mr Newman’s work at the Power Station; that photograph was taken on 6 December 1966.

26. The photographs depict a number of cardboard boxes labelled “Manufactured by Hardie-B.I.Company for Bradford Insulation Sydney – Melbourne – Adelaide” (the boxes). The boxes had a logo of a flag divided on the diagonal with the top half containing the word “Hardie” and the bottom half containing the letters “B.I.”. The boxes were also labelled with the words “Don’t Drop Fragile Handle with Care”. I infer that the content of the boxes was partnership products.

27. The photograph at page 160 depicts 2 boxes in the foreground of the photograph. Behind the boxes is a large pipe that is partly covered in a white material. The box on the right of the photograph appears to have off-cuts of white material in it. I infer that the white material covering the pipe and appearing in this and the balance of the photographs was asbestos containing insulation. The off-cuts appear to be blocks but could also be sections as some of the pieces appear have a rounded edge. The floor depicted at the front of the photograph is covered in a white dust. The dust appears to be of a depth of about 20mm on the right hand side of the photograph between the piece of timber running parallel to the pipe and underneath the valve handle. The dust also appears on the metal surface of the uncovered part of the pipe and on the box on the left hand side of the photograph. I infer that the white dust was created during the application of the insulation material to the pipe when it was cut to size and in the process of its application.

28. The smooth appearance of the insulation work in this and the other photographs was most likely achieved by the application of plastic. The description of the “wet asbestos” given by Mr Newman is consistent with the application of plastic to those areas. The specification documents in Exhibit 5 provide that joints in block or section layers of insulation were to be “completely filled with plastic made from the same material as the layer itself”. [4] It is probable that the plastic contained asbestos because if it did not the insulation could not have kept the heat resistance that it was intended to have.

    4. p 193

29. The photograph at page 157 depicts a partially insulated pipe with a flange in the middle of it. The white dust of similar appearance is on the surface of the surrounding pipework. At page 163 the photograph shows the white dust of a similar appearance as footprints on the floor near boxes that have been used to contain refuse. It is probable that some of the white dust depicted in the photographs came to be deposited in the form of wet plastic that subsequently dried and reverted to a powder form. This is best depicted in the photograph at page 157 that shows white lines consistent with the spillage of wet plastic on the pipe immediately under the insulated pipe.

30. The bundle of orders tendered in Exhibit 5 are not complete and all refer to the insulation of the boilers. They probably represent only a small amount of the insulation materials used at the Power Station. There is no record in Exhibit 5 of the supply by BI Industries of plastic and I note that K-lite was not supplied in that form.

31. The photograph at page 151 depicts that some parts of the Power Station were open to the elements, in particular on one side of the building.

32. The photographs corroborate Mr Newman’s representation in the Particulars that the area where the laggers were applying the lagging was dusty to the extent that it could be seen in the air. I infer that the lagging work created large amounts of dust that settled on the floors and the surfaces adjacent to where the work was being performed and that dust remained there for some time, probably a period of a couple of days. I also infer that the movement of the workers, cleaning processes and the natural airflow in the building would have stirred up that dust after it had settled, exposing the workers in the vicinity to further amounts of airborne dust.

33. In the vicinity of the boilers where Mr Newman worked on the forced draught fans I infer that the dust to which Mr Newman was exposed contained asbestos dust from K-lite blocks and asbestos millboard used by the laggers to insulate the boilers. In the vicinity of the pipework, I infer that the dust to which Mr Newman was exposed contained asbestos dust from K-lite sections and /or blocks used by the laggers to insulate the pipes.

34. CSR tendered the records of the Dust Diseases Authority, previously known as the Dust Diseases Board (DDB) obtained on subpoena. Those records reveal the following.

35. On 6 February 2014 Mr Newman signed and Application for benefits that was submitted to the DDB on 13 February 2014 (the Application). In the Application Mr Newman stated that he had been exposed to asbestos dust in the course of his work with McNamee Industries at the Power Station.

36. On 12 March 2014 Mr Newman was interviewed over the telephone by Sandra Callan, an Industrial History Officer employed by the DDB. Mr Newman told Ms Callan that “he had various direct and indirect exposure to asbestos materials and dust at Munmorah Power Station over a period of about 12 months when employed by McNamee Industries…as a fitter and turner for a period of 3 years between 1966 and 1969”.

37. On 28 March 2014 Ms Callan signed an “Industrial History Officer Report” dated that day (the report). The report described Mr Newman’s work with the asbestos tape when installing the fan casings, saying, “He spent days handling this material”. Ms Callan reported that Mr Newman could not recall how frequently he worked in the general vicinity of the laggers.

38. Drawing together all of the objective facts and the inferred facts I am satisfied on the balance of probabilities that Mr Newman:

1. was present when the laggers insulated various installations within the Power Station with partnership products, in particular K-lite block and asbestos millboard used to insulate the boilers and K-lite sections used to insulate the pipes, and at those times he breathed in the asbestos dust that was created by the process;

2. breathed in the asbestos dust that was left behind by the activities of the laggers and became airborne by reason of movement of workers, cleaning processes or by the airflow throughout the Power Station.

The causation issue

39. The parties agreed that all exposures to asbestos above background community exposure are causative of mesothelioma in that they make a material contribution to the disease. Background community exposure is the amount of exposure to asbestos experienced by a person of a stated age who has lived in the community for that period and does not include occupational exposure.

40. In this case, Mr Newman had a number of occupational exposures to asbestos. These were set out in the evidence as follows.

41. Between 1951 and 1959 Mr Newman worked for Lane Cove Engineering. In that work he used asbestos gauntlets for about 10 days per month for about 4 years at the end of his period of employment, which was after he was a qualified tradesman. Mr Newman did not remember being exposed to dust from the gauntlets.

42. Between 1960 and 1963 Mr Newman worked for Kenway and Clarke as a general fitter on all types of machinery. In that work he did the occasional brake job. He described his exposure to asbestos in that work as “very, very minimal”.

43. Between 1966 and 1969 Mr Newman worked for McNamee Industries. Apart from the exposure I have already set out there was no other significant exposure in this period, although I note that Mr Newman attended the Vales Power Station in this period of employment. Mr Newman did not recall handling asbestos at the Vales Power Station or seeing laggers at work.

44. Between 1969 and 1972 Mr Newman worked at JB Engineering. In that work he attended CSR’s factory at Camellia for a few weeks installing a vacuum conveyor for asbestos and was exposed to asbestos dust in the air.

45. The only issue that I have to determine is whether the exposure to asbestos dust from the activities of the laggers at the Power Station, and in particular to the partnership products was an exposure above background community exposure.

46. The exposure to the asbestos tape at the Power Station was substantial. It involved handling the material and it liberated dust that got on his hands, clothes and into the air around him.

47. I would also consider the exposure to the asbestos gauntlets and at CSR to be occupational exposure and above background community exposure. The CSR exposure involved being exposed to airborne asbestos that could be seen in the atmosphere.

48. The exposure to the dust generated by the laggers was also significant. It involved being exposed to airborne dust that was visible in the atmosphere at the time that the work was being performed and afterwards when the dust was re-agitated from the floor and surfaces it had settled on. I am satisfied that a substantial part of that exposure was to dust from K-lite blocks and sections and asbestos millboard. This was an occupational exposure and above background community exposure. This exposure was heavier than the exposure to the asbestos gauntlets or at CSR.

Conclusion

49. I am satisfied on the balance of probabilities that the answers to the questions posed in [6] should be answered in the affirmative.

50. Amaca is entitled to a verdict on the cross-claim.

51. I direct that the parties bring in short minutes of order to finalise the cross-claim in accordance with their agreement.

**********

Endnotes

Decision last updated: 29 March 2017