Amaca Pty Ltd v CSR Ltd & Anor

[2015] VSC 582

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

S CI 2003 05689

AMACA PTY LTD (ACN 000 035 512) (Under NSW Administered Winding Up)	Plaintiff
v
CSR LTD (ACN 000 001 276)	First Defendant
and
BRADFORD INSULATION INDUSTRIES PTY LTD (ACN 000 078 357)	Second Defendant

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JUDGE:	MACAULAY J
WHERE HELD:	Melbourne
DATE OF HEARING:	4-7, 13-14, 18-21, 25-28 August 2014
DATE OF JUDGMENT:	21 October 2015
CASE MAY BE CITED AS:	Amaca Pty Ltd v CSR Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2015] VSC 582

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TORT – 204 claims for contribution between tortfeasors – Eight claims tried separately pursuant to r.47.04 Supreme Court (General Civil Procedure) Rules 2005 (Vic) – Where tortfeasors were manufacturers and suppliers of asbestos thermal insulation – Where torts committed between 1964 and 1979 – Section 24(1)(c) and s 24(2) Wrongs Act 1958 (Vic) as applying before amendments in 1985 – Whether plaintiff proved exposure of injured persons to asbestos manufactured or supplied by defendants.

TORT – Contribution claims between tortfeasors – Divisible and indivisible injuries – Whether there should be different approaches to the determination of contribution depending upon the nature of the victim’s injury – Sienkiewicz v Grief (UK) Limited [2011] 2 AC 229.

EQUITY – Recovery of contribution upon the discharge of a coordinate liability – Coordinate liability of partners due to the liability of one partner – Sections 10 and 12 Partnership Act 1892 (NSW) – Whether action for contribution available notwithstanding rule in Merryweather v Nixan (1799) 8 TR 186; 109 ER 1377 – Whether action for equitable contribution available notwithstanding enactment of statutory remedy for contribution between tortfeasors – Albion Insurance Company Limited v Government Insurance Office (New South Wales) (1969) 121 CLR 342; Burke v LFOT Pty Ltd (2002) 209 CLR 282; Belan v Casey (2003) 57 NSWLR 670; Dall v Blue Wren Taxi Co Pty Ltd (1926) VLR 365.

LIMITATION OF ACTIONS – Statutory construction of s 24(4) Wrongs Act 1958 (Vic) as it applied before 31 December 1971 – Whether contribution claims barred or maintainable where writ in the original action was not served on the claimant for contribution – Meaning of ‘writ served in the original action’ – Whether s 24(4) Wrongs Act 1958 (Vic) is the exclusive limitation provision for contribution claims under s 24(1) – Allman v Daly [1959] VR 175.

LIMITATION OF ACTIONS – Statutory construction of s 24(4) Wrongs Act 1958 (Vic) as amended by Wrongs Act 1972 (Vic) – Interaction between s 24(4)(a)(i) Wrongs Act 1958 (Vic) and s 5(1A) Limitation of Actions Act 1958 (Vic) – Whether defendant raising limitation defence must exclude the possibility the injured party could have obtained an extension under s 23A Limitation of Actions Act 1958 (Vic) – State Electricity Commission of Victoria v Fooks [1994] 1 VR 259; Cavenett v Commonwealth [2007] VSCA 88.

LIMITATION OF ACTIONS – Application of statutory limitation provisions to equitable actions for contribution by the doctrine of analogy – Section 5(8) Limitation of Actions Act 1958 (Vic) – Whether s 5(1)(c) Limitation of Actions Act 1958 (Vic) which governs actions brought in simple contract including contract implied in law applies by analogy to the action for equitable contribution – Whether the true analogy is to the action for statutory contribution under s 24 of the Wrongs Act 1958 (Vic) such that the limitation in s 24(4) applies.

EQUITY – Equitable action for contribution – Defences of laches, acquiescence and waiver – Whether defences are available notwithstanding action is within time prescribed by an applicable statutory limit – Where delay claimed to result in an unfair adverse change to defendant – Whether loss of evidence constitutes relevant adverse change – Gerace v Auzhair Supplies (2014) 87 NSWLR 435; P&O Nedlloyd BV v Arab Metals Co (No 2) [2007] 1 WLR 2288.

EVIDENCE – Whether statements made to doctors by unavailable witnesses were admissible to prove a person’s exposure to asbestos – Hearsay – Exceptions to hearsay – Section 63(2)(a) Evidence Act 2008 (Vic) – Section 32(3) Evidence Act 2008 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T G R Parker SC with Mr D Wallis	DLA Piper Australia
For the Defendants	Mr B F Quinn SC with Mr B Barr	Moray & Agnew

TABLE OF CONTENTS

Introduction.................................................................................................................................... 1

Background......................................................................................................................................... 5

Circumstantial nature of James Hardie’s evidence.................................................................. 5

SECV power stations.................................................................................................................... 7

Asbestos thermal insulation products....................................................................................... 9

James Hardie company background........................................................................................ 12

Hardie-BI partnership................................................................................................................ 13

Asbestos and illness:.................................................................................................................. 14

Asbestos fibre types.......................................................................................................... 14

Types of disease................................................................................................................ 15

Did Hardie-BI products contain amphibole asbestos?................................................ 18

The SECV’s removal of asbestos products from the late 1970s........................................... 23

Early negotiations between James Hardie and CSR.............................................................. 25

The General Settlement Agreements........................................................................................ 28

Primary contribution clause............................................................................................ 28

The formula........................................................................................................................ 30

Treatment of contributions obtained from other wrongdoers.................................... 32

Information to be obtained and exchanged between the GSA parties...................... 34

Approval required............................................................................................................ 35

Factors affecting liability and quantum................................................................................... 36

a......... trade......................................................................................................................... 36

b......... direct or indirect exposure................................................................................... 37

c......... period...................................................................................................................... 38

d......... type of asbestos insulation product................................................................... 38

e......... exposure to asbestos fibre from other manufacturers..................................... 39

f.......... nature of illness...................................................................................................... 39

g......... interval between exposure and onset of illness................................................ 40

Commencement of James Hardie’s contribution proceeding.............................................. 40

All claims............................................................................................................................ 40

The eight sub-group claimants........................................................................................ 40

Evidence for proof of exposure................................................................................................ 41

Occupational Exposure Assessments............................................................................ 41

Answers to interrogatories............................................................................................... 43

Doctors’ reports containing claimants’ history of exposure....................................... 44

Provisional ruling on admissibility made during trial.................................. 45

Professor Fox’s evidence..................................................................................... 46

Final ruling on admissibility.............................................................................. 53

Professor Henderson’s evidence.............................................................................................. 54

Quantum Assessment spreadsheet: information categories................................................ 57

Pleading issues:........................................................................................................................... 58

Co-ordinate liability to whom?....................................................................................... 58

The decision to proceed only with the eight sub-group claimants........................... 60

Issues in more detail........................................................................................................................ 63

Common questions....................................................................................................................... 65

Correct approach to determining amount of contribution....................................................... 66

James Hardie’s arguments......................................................................................................... 70

CSR and Bradford’s arguments................................................................................................. 74

Approach in respect of divisible injuries................................................................................ 76

Approach in respect of indivisible damage............................................................................ 77

Criteria for determining contribution...................................................................................... 82

Contribution to defence costs.................................................................................................... 82

Limitation defences to the actions for contribution................................................................... 84

General historical and statutory context.................................................................................. 85

Framing the issues...................................................................................................................... 90

What is the proper construction of the pre-1972 Wrongs Act limitation?.......................... 93

CSR’s argument.................................................................................................................. 93

James Hardie’s argument................................................................................................. 96

Analysis and conclusion on the pre-1972 provisions.................................................. 99

What is the proper construction of the post-1972 Wrongs Act provision?...................... 105

What limitation (if any) applies in respect of the claim based on coordinate liability? 111

(a) ...... Does James Hardie have an equitable action for contribution?................... 119

(b)...... What  statutory time limitation, if any, governs that equitable action?...... 132

(c)....... Does CSR have a defence of laches, acquiescence or waiver?...................... 138

Summary of conclusions on the limitation and laches defences....................................... 143

Evidence in respect of each sub-group claimant............................................................. 144

generic evidence for exposure................................................................................................ 148

Presence of Hardie-BI product at SECV sites........................................................................... 150

SECV contracts for the supply of ATI during the partnership period.............................. 152

Supply contracts for ATI between: 1 December 1963 to 30 May 1974..................... 153

Maintenance Contracts.................................................................................................... 156

Construction Contracts for Hazelwood and Yallourn W Power Stations............... 158

Hazelwood Power station................................................................................. 158

Yallourn W Power Station................................................................................ 161

Summary of supply, maintenance and construction contracts and contractors.... 161

Other evidence of construction contracts and orders from sub-contractors........... 165

Hardie-BI records of supply to SECV facilities during the partnership period............. 169

Minutes of Hardie-BI Partnership Committee meetings........................................... 169

Reports of Partnership Board meetings/Bradford Sales Data................................. 172

Partnership delivery vouchers/invoices..................................................................... 174

Miscellaneous.................................................................................................................. 175

Extent of Hardie-BI’s Australian market share in ATI industry........................................ 176

Evidence from Ron Hinton:........................................................................................... 176

Evidence of Leslie Cook................................................................................................. 179

Evidence from Merv Wilson (transcript from arbitration)........................................ 179

Evidence from Bruce Hilton.......................................................................................... 180

Presence of non Hardie-BI product at SECV sites............................................................... 180

Roles of workers at SECV sites in the partnership period..................................................... 182

Lagger................................................................................................................................ 182

Rigger................................................................................................................................ 183

Fitter.. 184

Cleaner.............................................................................................................................. 184

Instrument maker............................................................................................................ 184

Other trades...................................................................................................................... 185

General conclusions about risk of exposure to Hardie-BI ATI............................................. 185

Specific evidence for and resolution of each claim....................................................... 188

A. David Alexander....................................................................................................................... 189

General details........................................................................................................................... 189

Facts in issue.............................................................................................................................. 191

Generic evidence....................................................................................................................... 193

Specific evidence....................................................................................................................... 194

Conclusions on exposure to Hardie-BI asbestos.................................................................. 196

Limitation and laches defences............................................................................................... 196

Wrongs Act claim............................................................................................................ 196

Equitable contribution claim......................................................................................... 197

Contribution payable............................................................................................................... 201

B.. Hendrick (Hank) De Vries...................................................................................................... 201

General details........................................................................................................................... 201

Facts in issue.............................................................................................................................. 203

Generic evidence....................................................................................................................... 204

Specific evidence....................................................................................................................... 205

Conclusions on exposure......................................................................................................... 206

Limitation and laches defences............................................................................................... 206

Contribution payable............................................................................................................... 206

C.. Stephen Benjamin................................................................................................................... 206

General details........................................................................................................................... 206

Facts in issue.............................................................................................................................. 208

Generic evidence....................................................................................................................... 209

Specific evidence....................................................................................................................... 210

Conclusions on exposure......................................................................................................... 211

Limitation and laches defences............................................................................................... 212

Wrongs Act claim............................................................................................................ 212

Equitable contribution claim......................................................................................... 214

Amount payable........................................................................................................................ 214

D.. Walter Reid................................................................................................................................ 217

General details........................................................................................................................... 217

Facts in issue.............................................................................................................................. 218

Generic evidence....................................................................................................................... 219

Specific evidence....................................................................................................................... 220

Conclusions on exposure......................................................................................................... 221

Limitation and laches defences............................................................................................... 222

Wrongs Act claim............................................................................................................ 222

Equitable contribution claim......................................................................................... 223

Amount payable........................................................................................................................ 227

E. . Bruce Johnstone........................................................................................................................ 227

General details........................................................................................................................... 227

Facts in issue.............................................................................................................................. 229

Generic evidence....................................................................................................................... 230

Specific evidence....................................................................................................................... 230

Causal role of cigarette smoking and asbestos inhalation?................................................ 232

Conclusion on exposure.......................................................................................................... 232

Limitation and laches defences............................................................................................... 238

Wrongs Act claim............................................................................................................ 238

Equitable contribution claim......................................................................................... 239

Amount payable........................................................................................................................ 240

F... Jan Kracht................................................................................................................................... 241

General details........................................................................................................................... 241

Facts in issue.............................................................................................................................. 243

Generic evidence....................................................................................................................... 244

Specific evidence....................................................................................................................... 244

Conclusions on exposure to Hardie-BI asbestos.................................................................. 246

Limitation and laches defences............................................................................................... 247

Wrongs Act claim............................................................................................................ 247

Equitable contribution claim......................................................................................... 247

Amount payable........................................................................................................................ 248

G.. Brian McGuire.......................................................................................................................... 249

General details........................................................................................................................... 249

Facts in issue.............................................................................................................................. 250

Generic evidence....................................................................................................................... 251

Specific evidence....................................................................................................................... 252

Conclusions on exposure......................................................................................................... 253

Limitation and laches defences............................................................................................... 254

Wrongs Act claim............................................................................................................ 254

Equitable contribution claim......................................................................................... 255

Amount payable........................................................................................................................ 258

H.. Keith Preston............................................................................................................................. 259

General details........................................................................................................................... 259

Facts in issue.............................................................................................................................. 261

Generic evidence....................................................................................................................... 261

Specific evidence....................................................................................................................... 262

Conclusion on exposure.......................................................................................................... 264

Limitation and laches defences............................................................................................... 264

Wrongs Act claim............................................................................................................ 265

Equitable contribution claim......................................................................................... 265

Amount payable........................................................................................................................ 269

conclusions in respect of each contribution claim....................................................... 269

HIS HONOUR:

Introduction

1. Amaca Pty Ltd, the plaintiff, formerly known as James Hardie & Co Pty Ltd (‘James Hardie’) seeks contribution from the defendants, CSR and Bradford, towards 204 payments James Hardie made in connection with the settlement of 204 separate actions for damages.  Those actions were brought by employees of the State Electricity Commission of Victoria (‘SECV’) or its contractors and other persons associated with those employees.  These reasons explain my decisions in respect of eight of the contribution claims.  It is hoped that, applying the principles used and findings made in respect of those decisions, the parties may be able to resolve all or some of the remaining claims.

1. From at least the 1920s onwards, the SECV owned and operated numerous power stations in Victoria. For much of that time, until the late 1970s, the SECV used asbestos thermal insulation as a means of insulating hot pipes, boilers and furnaces at its power stations.  Many of the SECV’s employees developed illnesses from exposure to asbestos fibres released from the insulation while working at the power stations. So too did some of those workers’ family members after being exposed to asbestos fibres brought home on work clothing. From the late 1980s onwards, the SECV settled many hundreds of claims made by such employees, family members and their dependents, for damages suffered as a result of exposure to asbestos fibres at SECV power stations.

1. James Hardie manufactured asbestos insulation products in Australia for a number of decades before the 1960s. Until 1964 it supplied asbestos insulation products in its own right to customers, including the SECV. Between 1964 and 1974, however, James Hardie only made and distributed asbestos insulation products in partnership with CSR and Bradford.  James Hardie and CSR were the partners in the business of manufacturing the insulation products. Bradford was only a party to the partnership deed because, under the deed, it was appointed sole selling and distribution agent.  The partnership was known as the Hardie-B.I. Company (‘Hardie-BI’).  It supplied asbestos insulation products to the SECV during the partnership period. As a result, various SECV power stations contained certain quantities of asbestos insulation products manufactured by James Hardie, in its own right, and by Hardie-BI.

1. Although James Hardie and, later, Hardie-BI, were significant suppliers of asbestos insulation products in Australia, they were not the only suppliers.  At relevant times to this proceeding, various SECV power stations also contained asbestos insulation products supplied by manufacturers other than James Hardie or the Hardie-BI partnership.

1. James Hardie entered a series of agreements with the SECV (or its successors) in 1993, 2004 and 2007 respectively under which it made contributions towards the settlements the SECV reached with its workers and other claimants.  At trial, the three agreements were called the General Settlement Agreements (‘GSAs’).  By the terms of the GSAs James Hardie agreed to contribute to the SECV’s settlements for claims arising from asbestos exposure at seven specific SECV sites.  The seven sites were those to which James Hardie acknowledged having supplied its asbestos insulation products; that is, either products it supplied in its own right or which Hardie-BI supplied.

1. James Hardie’s contribution toward each settlement was made in accordance with a formula set out in the GSAs.  The use of that formula did not purport to identify or apply to only those claims stemming from an illness necessarily caused by fibres emanating from James Hardie or Hardie-BI product, as opposed to any other manufacturer’s product.  Rather, it required James Hardie to make a contribution so long as the relevant claimant suffered damage from likely exposure to asbestos fibres (of whatever provenance), at one of the seven SECV facilities, within a certain time-frame.  For the commercial purposes of the parties to the GSAs, that formula was evidently considered to be a sufficiently reliable criterion to identify instances of asbestos-related illness to which some James Hardie or Hardie-BI product had probably made a causal contribution.

1. Under the GSAs, the contribution amount paid by James Hardie to the SECV settlements was, broadly speaking, around 25% of the SECV payment per claim. James Hardie made its contributions to settlements under the GSAs beginning in 1993, through to 2012. Although it contributed to more than the 204 settlements the subject of this proceeding, James Hardie has chosen only to pursue CSR and Bradford for that number.

1. Neither CSR nor Bradford were parties to the GSAs; they made no contributions to the settlements, nor were they asked to do so.  In fact, they were unaware of the existence of the GSAs or of James Hardie’s contributions to the SECV settlements until they received the writ in this proceeding in 2003 (which, at that time, only listed some 40 settlements towards which contribution was sought).  Unlike James Hardie, CSR and Bradford can only be liable to a claimant, and thus potentially liable to make contribution to James Hardie, if the claimant’s damage was caused by exposure to Hardie-BI asbestos fibre.  They can have no liability in respect of damage caused by exposure to James Hardie asbestos fibre, still less any other manufacturer’s fibre.

1. James Hardie relies upon two legal bases for each of its contribution claims. One, as against CSR only, is an equitable right to contribution premised upon an alleged co-ordinate liability that, as former partners, it and CSR owed toward those who were injured from exposure to Hardie-BI product. The other, as against both CSR and Bradford, is an alleged statutory entitlement to contribution under s 24 of the Wrongs Act1958 (Vic) (‘Wrongs Act’)[1].

   [1]For reasons explained below [301], the only relevant versions of the Wrongs Act for the purpose of these cases are those that applied in the periods 1958-1972 and 1972-1985.

1. I will explain in greater detail later in these reasons the numerous issues that arise to be decided.  For now, it is enough to say that, first, in respect of every claim, there is a live factual issue whether the relevant claimant was actually exposed to asbestos fibres emanating from Hardie-BI thermal insulation product at one or more of the defined SECV sites.  Secondly, even if the relevant claimant was so exposed, there is a question of precisely how the contribution between James Hardie and CSR and Bradford is to be proven and apportioned, especially having regard to the possible causal responsibility of other wrongdoers for the claimant’s damage.  Thirdly, there is a significant issue in almost every case whether James Hardie’s claim for contribution against CSR and Bradford is barred by an applicable limitation statute or, if not, otherwise met by defences of laches, acquiescence or waiver.  

1. In circumstances to be explained in further detail below, the parties have cooperated to select the eight contribution claims to be tried in the first instance, separately from the rest.  The eight persons whose claims were settled by the SECV (in these reasons called the ‘sub-group claimants’) suffered an asbestos related illness of one kind or another: mesothelioma, asbestosis or lung cancer.  Seven were workers at one or other of the seven SECV sites; the other was a member of a SECV worker’s household who is believed to have contracted his illness through exposure to asbestos fibre brought home on the worker’s clothing.

1. For the purpose of the eight contribution claims, particular admissions and concessions have been made by CSR and Bradford that have not necessarily been made in respect of the wider class of claims.  Upon those admissions and concessions, the essential issues to be decided in respect of the eight claims are as follows:

(a)   Whether the sub-group claimant was exposed to any Hardie-BI asbestos fibre from a SECV site to which the GSAs applied;

(b)   If so, the proportion of the sum James Hardie paid toward the settlement for that sub-group claimant that can be attributed to exposure to Hardie-BI asbestos fibre as opposed to James Hardie fibre or fibre from any other source; and

(c)    Whether James Hardie’s claim for contribution in each case is no longer maintainable because of an applicable time bar on the bringing of the contribution claim or because of laches, waiver or acquiescence.

1. Within those issues to be decided for each of the eight contribution claims lie a number of questions of principle common amongst them and, potentially, amongst the wider class.  Before coming to each individual contribution claim, it is convenient that I give greater contextual background to all of the claims, then break down in more detail the matters to be decided and, finally, deal with some major common issues of principle.

Background

Circumstantial nature of James Hardie’s evidence

1. An understanding of the factual context of these claims is particularly important.  The reason for that lies in the nature of the challenge that faces James Hardie in proving its entitlement to contribution in the peculiar circumstances of this case.  In particular, James Hardie faces the challenge of proving that each individual sub-group claimant was exposed to Hardie-BI product. Additionally, if it is necessary to do so, it faces the challenge to prove the degree to which the sub-group claimant’s damages were attributable to such exposure.

1. Only few workers are now alive.  Certainly none were called to give evidence at trial regarding the nature of their work or their exposure to asbestos insulation material (known as ‘lagging’) at their respective work sites.  Their proceedings for damages were never run to trial but were settled after issue.  So there is no material admitted into evidence in any court proceeding that is available. Not only is the evidence of the actual work of any individual sub-group claimant relatively scant, but the critical evidence concerning the presence and location of asbestos lagging, its type and provenance, is also fragmented. 

1. To attempt to meet the difficulty of the lack of direct evidence from any primary source concerning actual episodes of exposure to Hardie-BI product, James Hardie’s case rests upon persuading the court to infer from circumstantial evidence that a particular sub-group claimant was probably exposed to Hardie-BI asbestos fibre at one of the seven SECV sites.  In the same way, it asks the court to infer that the sub-group claimant was exposed to a sufficient level of that fibre for it to have been causative (and, if necessary, the extent to which it was causative) of his particular strain of asbestos-related illness.

1. James Hardie’s method of attempting to prove the relevant exposure, in each case, was to marry together a range of contemporaneous business records, some contemporaneous documents produced for the relevant court proceeding, and some other witness evidence, from which to invite the necessary inferences to be drawn.  That method can be represented by the following equations: 

(1)SECV power station construction and maintenance schedules + SECV (and contractor) purchase orders + Hardie-BI supply records = probability of presence of Hardie-BI product at power station.

(2)Presence of Hardie-BI product at power station + period of worker’s employment at power station + nature of worker’s trade + typical duties of that trade = probability of some exposure to Hardie-BI product.

1. In seeking to prove that the inferred exposure to Hardie-BI product was causative of the relevant sub-group claimants’ illness (ie to support the existence of a liability by the Hardie-BI partners), the further evidence equation ran like this: 

(3)Probability of some exposure to Hardie-BI product + nature and timing of particular illness + expert pathology opinion as to probable causal connection = probability that exposure caused illness.

1. As will appear, there is a live debate between the parties as to whether, in respect of one category of asbestos-related illness (termed ‘indivisible’:  see further below), James Hardie needs to establish any measured degree to which the illness is attributable to Hardie-BI exposure.  The question is whether proof of that degree of exposure, relative to other exposures, is relevant or necessary for the assessment of the contribution amount as between James Hardie and the defendants (if that question ever arises).  

SECV power stations

1. The SECV built numerous power stations in the Latrobe Valley in Victoria (relevantly, at Morwell, Yallourn, Yallourn West and Hazelwood).  It also had power stations within the suburban area of Melbourne at Richmond and Newport. Different power stations, and different working units of power stations, were constructed at different points in time.[2]  For example, Yallourn A was commissioned between 1924 and 1928; Yallourn B, 1931-38; Morwell Power Station, 1958-62; and different units of Hazelwood Power Station were constructed between 1961 and 1970.

   [2]Details set out in ‘SECV Site Schedule’ exhibit Q (see [493] below).

1. Over the course of time, technology changed.  Changes occurred in the design, and thus the materials requirements, of power stations.  Changes also occurred in the composition and form of insulation materials.  Thermal insulation was installed at the construction stage of power stations, maintained over the life of the insulating materials, and then replaced as and when necessary.  Maintenance and alterations of other components within a particular power station potentially called for the removal and replacement of the surrounding insulation material even if the material itself was otherwise still functional.  At each stage, the potential existed for asbestos fibre to be released into the atmosphere through cutting, sanding and other installation or removal activities.

1. In very broad terms, the power stations were compromised of two essential components:  first, a boiler plant for the generation of steam and, secondly, a turbo-generator plant where the steam produced by the boiler drove a generator to produce electricity.  The boiler plant, generally, consisted of a large vertical vessel, several stories high, with a furnace at the bottom.  It contained a series of pipes within the boiler vessel carrying water around the furnace to be heated so as to produce steam. 

1. The furnaces, of course, had to be insulated inside and out with different types of insulation and heat resistant material such as fire bricks, solid, trowelled and air-blown insulating material, and outer-skin cladding.  The pipe work taking the hot water and steam around the different parts of the boiler, and from the boiler to the turbo generator plant, had to be insulated.  The pipes bringing steam to individual turbines within the generator plant also had to be insulated.  The insulation increased efficiency. But, also, all these components had to be insulated because, whilst they were operating under huge temperatures, workers worked in and around them at all times.

1. Those initially installing insulation material — or replacing it when necessary — were generally called ‘laggers’. But numerous other tradespersons were also required to handle asbestos-based thermal insulation.  For example, electricians and instrument makers were required to remove and refit wiring and instruments located on pipes beneath or within the insulating material; bricklayers and boilermakers were required to install insulating material within the furnaces; riggers were required to erect and take down scaffolding within the vicinity of piping and duct work where insulating materials were fixed and where debris in the form of asbestos fibre and dust had fallen or gathered in the process; trade assistants accompanied the various trades already mentioned in the performance of their tasks; and cleaners were required to clean up the debris released from the fitting or removal of insulating material.  And, work on insulation carried out on pipes on the upper levels of the boiler vessel could liberate dust that drifted down to lower levels where workers performing quite unrelated tasks might inhale the asbestos fibres.

1. Many workers who worked in and around the SECV power stations were SECV employees. Others — particularly at the time of initial construction — were employees of third party contractors engaged by the SECV for the particular construction phase.  For maintenance purposes, different power stations may have had a mixture of permanent maintenance staff and outside contractors to perform the maintenance activities.

1. There is a large range of trades and occupations that are represented amongst the 204 workers and family members whose settlements are the subject of this contribution proceeding.  The eight sub-group claimants the subject of this particular decision include: contractor and employee laggers, electrician instrument makers, a fitter, rigger and cleaner. One of the sub-group claimants, Mr Hendrick (Hank) De Vries, was a member of the household of two contractor-laggers — his father and his grandfather.  Mr De Vries contracted mesothelioma as a result of being exposed to asbestos dust brought home on his father’s and grandfather’s work clothing and is therefore an example of a claimant with secondary exposure to asbestos fibre.

Asbestos thermal insulation products

1. Asbestos thermal insulation was produced in a variety of ways, both in terms of its material composition and in terms of its shape, form and intended application.  The material composition, shape and form changed over time as production technology changed and as the thermal insulation requirements of industry also changed. 

1. Being a fibre with high heat resistant and insulating properties, asbestos was capable of being woven into cloth; it could be formed into a rope or thick bandage-like tape to be wound onto round surfaces; it could be mixed with cement and applied wet with a trowel; it could be mixed with liquids and air-blown into or onto irregular shaped cavities or surfaces; or it could be mixed with other chemical ingredients, chiefly as a binding agent, so that the resulting compound could be moulded into different shapes (pipe sections, blocks and sheets) for particular insulation uses. 

1. The parties tendered product catalogues published around the time of or during the Hardie-BI partnership period. Those catalogues illustrated the range of asbestos-based products then available on the market.  Most relevant of course are those products that were suitable for insulating pipes and other features of industrial boilers and furnaces.  One catalogue was titled ‘Hardie-BI insulating materials’, clearly a partnership period document.  The other was a catalogue from Bells Asbestos and Engineering (Australia) Limited which used the trade name ‘Bells’ and ‘Bestobell’.  According to the Bells’ brochure, that company, English by origin, had been trading in Australia for about 60 years. 

1. Relevantly, the Hardie-BI product catalogue featured the following products:[3]

   [3]Hardie BI Catalogue in Court Book (‘CB’) doc 215 pp 13,103–114. The description given is supplemented by information derived from the witness statement of Mr Ron Hinton (‘Hinton statement’) (CB doc 11 pp 536-40 [12]-[16]), an industrial chemist who was the manager of the Hardie-BI plant between 1964 and 1972.

(a)   85 percent magnesia: a compound of magnesia carbonate (itself having insulating properties) and asbestos fibre (used as a binder) capable of being applied as a cement or moulded into pipe insulation (tube-shaped sections) or blocks (like planks);

(b)   High Temperature (HT) insulation: a variant of the 85% magnesia product designed to withstand high temperatures, available both in block and pipe section form;

(c)    Super HT block insulation: a further variant of the 85% magnesia product designed to withstand even higher temperatures than HT, available in block and pipe sections, and panel form;

(d)  K-Lite:  a compound of calcium silicate (also having insulating properties) and asbestos fibre (as a binder) which could also be moulded into pipe sections, blocks or panels — by the 1960s, the use of K-Lite increasingly overtook the use of 85 % magnesia;

(e)   Caposite:  moulded thermal blocks made from amosite asbestos used for boiler casings, flues and ducts where vibration or shock might occur;

(f)     Asbestos millboard: a flexible insulating sheet where thin sheeting was required; and

(g)   K-Lite and Super HT insulating cement (also called ‘plastic’):  a cement made of the same materials as the equivalent pipe and block insulation products but in powder form, to be mixed with water and applied by trowel in a series of coats. 

1. Relevantly, the Bells brochure featured the following types of asbestos insulation products:

(a)   Asbestos webbing tape for lagging pipes;

(b)   Asbestos millboard;

(c)    Asbestos sealing, packing and jointing compounds — that is, for filling spaces between other insulating material;

(d)  Asbestos rope lagging; and

(e)   Asbestos fibre, to be mixed with standard cement products for troweling applications.

1. Interestingly, Bells appear to have stocked and supplied ‘Hardie’s K-Lite’ and ‘Hardie’s 85 % magnesia’ for pipe insulation in pipe and block sections.  There is no reference in the Bells brochure to ‘Hardie-BI’ so it is assumed that the brochure predates the partnership period.  Although Bells may have also sold stock sourced from overseas, it may be that it purchased locally made products, as a wholesaler, for on-sale in the Australian market.

1. The significance of listing these products emerges when it becomes necessary to examine the purchase and supply documents for the construction and maintenance phases of each of the seven SECV sites at which particular workers were employed.  To support the probability that relevant workers were exposed to Hardie-BI products, James Hardie points to the evidence that specific Hardie-BI products (eg K-Lite, Super HT insulation etc) were ordered and supplied for the relevant SECV power stations within the partnership period.  For their part, CSR and Bradford point to similar types of supply documents in an endeavour to show the prevalence of other suppliers’ insulation products at the same locations.  Their various arguments based upon that kind of evidence will be identified and analysed below. 

1. As well as showing that its products existed in the market place, and that the SECV was supplied with some of its products, James Hardie sought to bolster its case on the exposure issue, as a matter of inferential probability, by leading evidence about James Hardie’s market share in the asbestos insulation industry at the time.  That evidence was given, primarily, by Mr Ron Hinton who first joined James Hardie in 1945 as a cadet chemist. Thereafter he held numerous positions, including manager of the Hardie-BI plant in Sydney between 1964 and 1972, and did not retire from James Hardie until after his last posting which commenced in 1984. 

1. CSR and Bradford objected to aspects of Mr Hinton’s evidence about market share as being inadmissible opinion evidence, or mere speculation.  A supplementary witness statement was filed as a means of overcoming those objections.  Ultimately, the supplementary statement was not objected to, CSR and Bradford taking the view that it rather confined the impact of Mr Hinton’s evidence as to market share.  I will revisit this evidence in greater detail below when I come to deal with the generic evidence for exposure. 

James Hardie company background

1. So far as the evidence revealed, or it was common ground between the parties, James Hardie had manufactured asbestos-insulation products for decades before 1964.  Indeed, it is likely it had done so since the early 1930s.[4]  In 1945 the company was known as James Hardie Asbestos and immediately prior to the commencement of the Hardie-BI partnership, James Hardie was manufacturing asbestos-insulation products through its ‘Insulation Division’.

   [4]CB doc 212 p 13,093;  doc 156 p 3290 (interview with Leslie Cook).

1. Immediately before the commencement of the partnership, James Hardie’s Insulation Division was making asbestos-insulation products including 85% magnesia sections, blocks and plastic; HT sections, blocks and plastic; Super HT sections, blocks and plastics; K-Lite sections and blocks; and asbestos millboard and Caposite. The company had a manufacturing plant for making its asbestos-insulation products on about three acres of land at Camellia, New South Wales.   

Hardie-BI partnership

1. The Hardie-BI partnership was formed by deed dated 24 September 1964.[5]  Although there were three parties to the deed, only James Hardie and CSR were referred to as the ‘partners’.  Under its terms, James Hardie sold its land, plant, machinery and equipment at Camellia to the partnership.  The deed provided that the business of the partnership was to manufacture in Australia, and distribute and sell in Australia and elsewhere, those thermal insulating materials that were, as at that time, being manufactured or marketed by the Insulation Division of James Hardie (namely, the products mentioned above).  The partners agreed not to engage in any other business for the manufacture or sale of thermal-insulation during the period of the partnership.

   [5]CB doc 7 pp 468-94.

1. The deed established a partnership committee to govern the partnership. But, the partners otherwise appointed James Hardie to manage the partnership business on a day to day basis.  At one stage in this proceeding there appeared to be an issue regarding the parties’ relative levels of control in the management of the partnership business. That issue was relevant to an argument about the appropriate allocation of responsibility for any damage suffered by claimants, when assessing contribution toward that damage as between James Hardie and CSR and Bradford.  But that issue has now disappeared upon CSR and Bradford accepting, at least in respect of these sub-group claimants, that any contribution should simply be 50% if ever that stage is reached.[6]

   [6]Transcript pp 1004, 1013.

1. The partnership was formally dissolved by deed made in 1974.[7]  That deed recited that James Hardie and CSR had agreed to cease the manufacture of their thermal-insulation products on or before 30 June 1974.  Once again, the terms of that dissolution deed, including various indemnities, were once of some relevance in this proceeding but have ceased to be relevant upon various changes to the pleadings, concessions and admissions. 

   [7]Deed at CB doc 8 p 495 — the precise date is illegible.

1. It is common ground that the partnership ceased manufacturing Hardie-BI asbestos based insulation products by 30 June 1974. James Hardie argued that Hardie-BI insulation would likely have remained in situ at the relevant SECV power stations through to the end of 1979.

1. For convenience, hereafter I will only refer to CSR when referring to the two defendants unless the context requires me to mention Bradford specifically or to differentiate between the two.  In connection with the contribution claims brought under the Wrongs Act (where both defendants are sued) a reference to CSR will refer also to Bradford.  In connection with the contribution claims brought in equity for coordinate liability (where only CSR is sued) a reference to CSR is to it alone.

Asbestos and illness:

Asbestos fibre types

1. There are several different kinds of asbestos fibre that have been used in insulation products over the years.  Some are known to have significantly greater potency than others in the causation of malignant forms of asbestos-related disorder.  Three different kinds of fibre were described in this case: 

·Crocidilite (referred to as blue asbestos);

·Amosite (referred to as brown asbestos); and

·Chrysotile (referred to as white asbestos).

1. Crocidilite and amosite both belong to a variety of asbestos known as amphibole, a category characterised by the straight, needle-like profile of the fibre observed microscopically, compared to chrysotile, which has a curly shape.[8]  It was not in dispute that amphibole fibres are the most potent of the fibres for causation of malignant disorders; and of the two amphibole fibres mentioned, crocidilite is twice as potent as amosite.  It was not suggested that any Hardie-BI product was made from crocidilite fibre.  But James Hardie did contend — although it was disputed — that its evidence at trial established that several of the more common insulation products made and supplied by Hardie-BI were made from the amosite fibre.  Amosite has a causal potency for disease around fifteen times greater than chrysotile. 

   [8]Transcript p 755.

1. As will appear, one of the assumptions made by the pathologist called by James Hardie, Professor Henderson, was that the relevant SECV workers had been exposed to an amphibole form of asbestos fibre.  I will return shortly to the question whether that assumption was made good.

Types of disease

1. For the purposes of this proceeding, there was evidence that asbestos fibres are implicated in the causation of a number of different types of disorder.  The diseases were divided into two categories.  The first category was malignant disease:  malignant mesothelioma, carcinoma of the lung and other malignant neoplasms.  The second category was a group of benign disorders:  asbestosis, pleural plaques, and some other pleural conditions. 

1. In his two reports tendered in evidence,[9] Professor Douglas W Henderson, a world renowned and undisputed expert in the pathology of asbestos-related disorders, explained the causal mechanism by which exposure to asbestos fibre was thought to contribute to the onset of the various diseases.  His explanation featured the use of the terms ‘indivisible’ and ‘divisible’ to differentiate the two categories of disorders.  Mesothelioma and lung cancer were each said to be examples of indivisible disorders whereas asbestosis and pleural plaques were said to be examples of divisible disorders. 

   [9]Report 8 July 2014, CB doc 13 pp 545-911 and Supplementary and Amended Report dated 3 August 2014, CB doc 223 pp 13,130-451.  The Supplementary Report contains the same (and additional) information to that which is contained in the first report, except that the first report also contains Appendix A.  Unless it is necessary to refer to pages in Appendix A, references hereafter to Professor Henderson’s report will be to the Supplementary Report.

1. For present purposes, the importance of the distinction between the two categories lies in the attribution of any particular episode of exposure to asbestos (above mere background exposure)[10] as a cause of the particular disorder.  In respect of the first category of disorders (ie indivisible), all exposures to asbestos fibre are thought to contribute to the causation of the mesothelioma or lung cancer, as the case may be.

   [10]Background exposure is the level of exposure which all members of the community might expect to encounter in day to day life.  Hereafter, reference to ‘exposure’ is taken to mean above background exposure.

1. By contrast, in respect of the second category of disorders (ie divisible), each exposure to asbestos fibre that causes a tissue reaction (eg inflammation or scarring) results in an additional injury which cumulates with others and contributes to or exacerbates the severity of the whole injury or illness.[11]  Professor Henderson contrasted pleural plaques (a divisible disorder) with mesothelioma and lung cancer, saying that pleural plaques were

qualitatively different from singular ‘all or none’ neoplastic asbestos-related disorders such as malignant mesothelioma and lung cancer where — once the cancer has come into being as such — continued exposure to the causative factors … does not significantly aggravate the cancer.

[11]See distinction explained by Professor Henderson at CB doc 223 p 13,334 (4^th bullet point).

1. Focusing on the indivisible disorders, and in relation to mesothelioma in particular, Professor Henderson said it was well known that there exists a dose-response causal relationship between asbestos exposure and mesothelioma.[12]  He said further

when there are multiple episodes of exposure, each increment of exposure within an acceptable latency interval produces a corresponding increment in ‘risk’ and makes a proportional incremental causal contribution to the actual occurrence of the mesothelioma, dependent upon the time of the exposure, its magnitude and the type of asbestos fibre involved.

[12]Appendix A, CB doc 10 p 857. 

1. Referring to his opinion that ‘all exposures contribute’, Professor Henderson further explained:[13]

for each episode of exposure, some fibres will be inhaled and then exhaled, a fraction of the inhaled fibres will actually be deposited in airways and lung tissue (proportionally more amphibole fibres are deposited and retained than chrysotile fibres); many of those will remain localised within airway tissues and lung parenchyma, and some will be cleared from the lung tissue.  However, a proportion/fraction of those fibres will translocate to the pleura and a smaller fraction of those reaching the pleura will translocate to the peritoneum (by direct penetration of the diaphragm or via lymphatic channels in contact with stomata in the lower zones of the parietal pleura).  In this way, a fraction of each exposure will reach the target tissue for mesothelioma development (pleura; peritoneum); more for the pleura than the peritoneum. 

Multiple exposures result in additional deposition of fractions of the inhaled/deposited fibres within airways and lung, with further migration of fractions/sub fractions reaching the pleura and peritoneum — thereby adding to the pool of previously translocated fibres in the target tissues.  Other factors being roughly equal (eg. asbestos fibre types), the fractions of deposited fibres reaching the pleura and (in lesser numbers) the peritoneum, will be proportional to the numbers of fibres inhaled and deposited for each episode of exposure (especially for amphibole fibre exposures), by way of multiple fibres interacting with multiple mesothelial cells over multiple generations of those cells, to bring about the development of a mesothelioma. 

[13]Ibid p 859.

1. For those reasons, Professor Henderson said that one cannot point to any exposure and exculpate it, and blame all of the others.  That is because where there are multiple exposures within an appropriate latency interval, each one of those exposures makes a causal contribution towards mesothelioma induction, incremental upon ‘background’ exposure and any preceding above-background exposures from identified (and any non-identified) point sources of exposure.[14]

   [14]Ibid.

1. Professor Henderson explained that lung cancer, like mesothelioma, was also an indivisible kind of illness (also referred to as ‘singular and irreversible’[15]), saying[16]

It is important to emphasise that lung cancer — like mesothelioma — is a singular, ‘all or none’ injury:  according to current theory, the actual cancer comes into existence as such at a particular (although unknown) point in time:  the various genetic and epigenetic steps leading up to its development do not per se constitute the cancer injury, but merely a series of necessarily preliminary and obligatory steps on the pathway to the cancer (I often liken these preliminary steps as the initial steps on, say, leaving one’s house to travel by air to London:  those preliminary steps are necessary for the rest of the journey to take place but they are not the same as the arrival in London).  Conceptually, this type of singular injury is different from asbestosis, whereby the disorder asbestosis is thought to result from an accumulation of multiple tiny injuries that coalesce over time to produce the injury that we call asbestosis. 

[15]CB doc 215 p 13,136.

[16]CB doc 215 p 13,253.

1. As will be explained more fully below, James Hardie contends that, in respect of any sub-group claimant suffering an indivisible disorder, it is unnecessary for it to show more than that the relevant claimant was exposed to Hardie-BI fibre of at least a sufficient amount to have made a necessary, incremental contribution to the development of the illness.  According to James Hardie’s primary argument, so long as it can prove such exposure on the balance of probabilities, it will follow that CSR must contribute 50% to the amount paid to the sub-group claimant.  In other words, on its argument, it is irrelevant to the amount each partner must bear as a matter of contribution between them whether the Hardie-BI product was a major or minor contributing factor to the cancer, as ‘all exposure is causative’.  CSR disputes that contention.

1. The position is different in respect of divisible disorders.  Both sides agree that it is necessary for the court to decide the proportionate role that the Hardie-BI product played in the cause of the relevant condition.

Did Hardie-BI products contain amphibole asbestos?

1. As is apparent from Professor Henderson’s statement at [50] above, the type of asbestos fibre involved in an individual worker’s exposure history affects the proportional, incremental causal contribution to the actual occurrence of mesothelioma (and, I infer, to other malignant conditions). In his reports, Professor Henderson stated that he had assumed that the Hardie-BI products to which workers may have been exposed contained commercial amphibole asbestos.

1. Under the heading ‘Assumptions made for the preparation of this report’,[17] Professor Henderson stated:

In relation to causation, I have assumed that there is a high probability that the asbestos insulation materials used in power stations and other industries (and including asbestos-cement products) manufactured and used (or ‘in place’) during the period 1964-1974 included commercial amphibole asbestos such as crocidolite and/or amosite.  Crocidolite — the most potent form of asbestos for mesothelioma induction on a fibre-by-fibre basis — was widely used in asbestos insulation materials and asbestos-cement (AC) building products in Australia until about 1966 when its use was terminated with the closure of the Wittenoom blue asbestos industry.  The use of the other commercial amphibole amosite — which ranks about second among asbestos fibre types in its potency for mesothelioma induction — was widely used in the same materials until about 1983/1984 when its use was also terminated. The use of the least potent form of asbestos for carcinogenesis – chrysotile (white asbestos) — was used until about 1987/1989 when its use was also terminated… I note the references to asbestos thermal insulation (ATI) materials in Mr Drewett’s statement but I have not been able to find any specific mention of amosite or crocidolite asbestos.

[17]CB doc 215 p 13,138.

1. Professor Henderson’s report was admitted into evidence without objection.  His reference in the final sentence to not having found any mention in the statement of Mr Drewett to amphibole fibres is a reference to the statement of a long-standing SECV employee (described in more detail below) whose evidence supplied some of the relevant factual material for James Hardie’s case. 

1. As well as stating the assumptions made for his report (to which I will return), when giving oral testimony Professor Henderson made a further statement, that was objected to, about the asbestos fibre composition of Hardie-BI products.  He was being questioned about the causal connection between the development of mesothelioma in a particular sub-group claimant (Mr McGuire) and that man’s exposure to Hardie-BI partnership product, on the assumption that the worker had also been exposed to a non-Hardie-BI asbestos product, namely asbestos rope.  In expressing his view that the Hardie-BI product nonetheless made a ‘significant causal contribution’ to Mr McGuire’s mesothelioma, Professor Henderson said:[18]

In the first place, that [sic] those materials, which you referred to as partnership products, would almost certainly have contained amphibole asbestos, such as amosite, during that period.  And on the other hand, the second consideration is that any rope or gasket material would almost certainly have comprised commercial chrysotile, that is white asbestos only.

[18]Transcript p 753.

1. That evidence was objected to on the basis that Professor Henderson had no relevant expertise in the asbestos-fibre composition of particular insulation materials.  I invited Mr Parker (for James Hardie) to address the question of whether Professor Henderson had the relevant expertise.  But the matter was not pressed.  Later, in submissions, Mr Parker pointed to two sources of evidence that he contended established, as a fact, that amphibole fibre was used in the production of Hardie-BI insulation products (for example, K-Lite, HT Insulation blocks and sections, super HT insulation blocks and sections, etc). 

1. The first source of evidence was said to be the statement appearing in the middle of the passage from Professor Henderson’s report extracted at [57] above, commencing with the words, ‘The use of the other commercial amphibole amosite …‘. I will return to discuss this first source of evidence below.

1. The second source of evidence for Mr Parker’s proposition was to be found in the transcript of an interview on 18 June 1993 with Leslie George Cook, a former James Hardie employee.[19]  Mr Cook had had extensive experience in the insulation industry, including with James Hardie from 1950 to 1964, with Hardie-BI partnership from 1964 to 1974, and again with James Hardie until 1982.  During the period of the Hardie-BI partnership, Mr Cook was variously described as ‘Sales Engineer’, ‘Industrial Sales Manager’ and ‘Sales Manager Hardie-BI’.[20]  One of Mr Cook’s tasks was to prepare all the technical data for the contractors who were tendering for jobs intending to use Hardie-BI products.  Undoubtedly, he would have acquired a good working knowledge of the composition of Hardie-BI products. 

   [19]It is understood Mr Cook is deceased. No objection was taken to reliance upon the transcript given that the maker of the representations contained in the document was not available to give evidence: s 63(2) Evidence Act 2008 (Vic) (‘Evidence Act’).

   [20]CB doc 156 p 3283.

1. As appears from the transcript of the interview, Mr Cook described the gradual trend from the late 1950s onwards of James Hardie, and later Hardie-BI, moving away from water-based cement products (‘plastic’), which were applied by trowel onto pipes and other surfaces, to a greater use of the pre-formed insulation products (eg the moulded pipe sections and blocks) that were placed around pipes and vessels in solid form.  The change to solid-form insulation occurred as labour costs, greater in the application of cement-based insulation, increased as a proportion of overall cost. That change began, he said, around the end of 1957, a time-frame that also coincided with the period when he said James Hardie was beginning to use K-Lite (the calcium silicate product) in preference to the 85% magnesia product.[21] 

   [21]CB doc 156 pp 3285, 3289.

1. In that context, Mr Cook digressed to discussing the composition of the ‘Hardie’s’ products and compared the pre-formed product, which he said had about 10-12%  asbestos content, to ‘caposite’,  saying:

Well, the only real asbestos product that Hardie’s made was caposite and that was virtually pure asbestos just bonded with sodium silicate.[22]

[22]CB doc 156 p 3285.

In the very next question, the interviewer, Duncan Graham (a solicitor), continued:

Graham:        Again, a mixture of amosite and chrysotile or …?

Cook:Well, I thought it was nearly all amosite, but they did mix a bit of chrysotile with it, but I think that was when they were a bit short of amosite.

Graham:        Well, amosite has a better heat resistance.

Cook:Exactly.  But they used to use it up to about one thousand Fahrenheit.

Graham:And chrysotile is hopeless for heat, is that right?  It was never used.  Although it was used for sprays.

Cook:            Yes, but that was for cold, it wasn’t for hot.[23]

[23]CB doc 156 p 3286 (underlining added).

1. In final addresses, Mr Parker argued that even though he had not pressed Professor Henderson to elicit evidence of the amosite content in Hardie-BI products, the other two portions of evidence I had just described sufficiently established the amosite content in the Hardie-BI products as a matter of probability.

1. Both sources of evidence have their limitations and problems. 

1. In my view, at first glance the Cook evidence is ambiguous in relation to which particular Hardie-BI products contained amosite.  He may only have been referring to caposite when responding to Mr Graham’s question underlined above; alternatively, the word ‘again’ may have implied a return to addressing the broader category of pre-formed products which the two men had been discussing in the immediately preceding passage.  Read in context, I think the latter interpretation is the preferable one. Mr Cook’s answer appears to establish the probable use of amosite in the high temperature products, which would likely include the pre-formed 85% magnesia, HT, Super HT and K-Lite products used to insulate boilers and pipes around boilers.[24] 

   [24]One other consistent piece of evidence is a statement appearing in a memorandum of a conference between officers of CSR and officers of James Hardie on 25 July 1986 (CB doc 218 p 13,119).  Mr Lionel Denmead, Legal Services Manager, is recorded as having made a statement to the CSR officials as follows:  ‘Hardie-BI was a high user of amosite and Hardie-BI material was responsible for a high percentage of mesotheliomas in NSW’.

1. Returning then to the first source of evidence Mr Parker pointed to, I am less convinced that the relevant passage in Professor Henderson’s report reliably establishes the fact that James Hardie sought to prove.  First, the extract appears in a section dealing explicitly with assumptions.  Secondly, at best, the passage purports only to contain a statement of broad industry usage of amphibole fibre in generically described ‘asbestos insulation products and asbestos-cement’.  The tenor of Professor Henderson’s statement in the report does not purport to express any particular familiarity with, or application to Hardie-BI products still less different types of Hardie-BI product.

1. On balance, however, I consider it is safe to conclude that at least the pre-formed Hardie-BI products I have referred to were made using the amosite asbestos fibre as the binding material with the other insulating chemical compounds.

1. It is clear that it was of importance to Professor Henderson that the type of fibre inhaled was an amphibole variety when expressing his views on the causal contribution which an exposure made to the onset of mesothelioma.  That is, in stating his conclusion that such exposure made a ‘significant causal contribution’ to the disease, his express assumption was that the Hardie-BI asbestos fibres to which workers were exposed was of the amphibole variety.

1. It seems to follow that it is also of importance to understand the fibre composition of non-Hardie-BI product where it is also probable that a given worker was exposed to other product in causally-significant quantities.  Perhaps more accurately, it would seem to be relevant in respect of any analysis of the amount of contribution CSR should pay for a divisible illness.[25]  But it may or may not be relevant in respect of a claimant with an indivisible illness depending on the outcome of one of the common issues I address below.[26]

   [25]Little if any attention was paid in arguments to the relevance or otherwise of different fibre types to the cause or degree of non-malignant disorders, such as asbestosis But, in Professor Henderson’s supplementary report (see [198] below) he said that the nature of the fibre type was also relevant to the development and severity of benign asbestos-related disorders such as asbestosis: CB doc 223 p 13,134.

   [26]See generally below [228]-[241].

1. Assuming, in the case of a worker with mesothelioma who had been exposed to both Hardie-BI product and non-Hardie-BI product, that the Hardie-BI product contained amphibole asbestos but the non-Hardie-BI product did not, Professor Henderson said that it remained his opinion that the Hardie-BI product made a ‘significant causal contribution’ to the development of mesothelioma.  That is hardly surprising. However, if he assumed that the non-Hardie-BI product also contained amosite (an amphibole), Professor Henderson said:

It would still not affect my conclusion causing causation, it would simply slightly … vary a proportional causal contribution from one material versus another.[27]

[27]Transcript p 754 (underlining added).

1. I will come later to deal with the significance of that view — that is, that the composition of other products to which a worker was exposed may affect the proportional causal contribution of the Hardie-BI product to the development of mesothelioma — when I deal with the rival arguments concerning what James Hardie must prove to establish the amount of contribution CSR should pay in any particular case that involves an ‘indivisible’ condition.

The SECV’s removal of asbestos products from the late 1970s

1. The evidence establishes that, at least from 1971, the SECV began to respond to developing knowledge of health risks associated with the use of asbestos thermal insulation.  In 1975, the SECV decided, where practicable, not to use such insulation on any new construction.  But a considerable amount of asbestos insulation remained in situ at its power stations throughout the mid to late 1970s.

1. Mr John Drewett had been an employee of the SECV since 1961, employed in a range of capacities commencing as a junior commercial administrative officer, and progressing through to Personnel Manager for Latrobe Valley (1971) and Personnel Manager for the SECV generally (1979). Later, he became Director, Corporate Services for Generation Victoria (which took on the SECV’s power generation activities in 1993). Since 1999 he has been a consultant to Victorian Managed Insurance Agency (‘VMIA’) which is responsible for managing the statutory and common law personal injury compensation liabilities of the SECV and Generation Victoria.

1. In 1979, Mr Drewett was also appointed convenor of the Asbestos Task Force, established by the SECV to inspect operations sites, assess the extent that asbestos thermal insulation remained at those sites, and recommend a programme for removal, containment and substitution. The Task Force reports demonstrate that the report authors, including Mr Drewett, acquired a detailed knowledge of the precise location of asbestos thermal insulation at the sites from the need to record the removal of it with great specificity.

1. From his long experience with SECV personnel in the Latrobe Valley, the asbestos-clean-up operations, and in responding to claims made against the SECV, Mr Drewett was able to give a significant body of evidence on topics such as:

(a)   the role performed by various trades at SECV power stations in the 1960s and 1970s;

(b)   information contained in SECV records of individual workers employed at SECV power stations;

(c)    records kept by the SECV of construction and maintenance of SECV power stations; and

(d)  typical locations at power stations where asbestos thermal insulation was present.

He also conducted the view for the Court at Morwell power station on 14 August 2014. 

Early negotiations between James Hardie and CSR

1. Although the first of the 204 matters the subject of this proceeding appears to have been issued in 1989 (ie Ronald Wilson), claims in relation to asbestos-fibre illnesses were being made against asbestos insulation manufacturers from the early to mid-1980s onwards.  Correspondence and memoranda of meetings between James Hardie and CSR in that early period presaged the very arguments that have landed in this Court 30 years on. 

1. In 1983, a corporate lawyer for CSR, Mr I M Mutton, replied to a letter from Mr Lionel Denmead, a legal officer with James Hardie.[28]  The letter was headed ‘Hardie-BI partnership’ and its subject was two legal proceedings that had been brought against James Hardie for damages for asbestos-related disease.  The plaintiffs were employees of businesses that had purchased asbestos products said to have been made by James Hardie, possibly by the Hardie-BI partnership.  CSR was, evidently, responding to a request that it contribute towards the settlement of the claims; presumably on the basis of shared partnership responsibility. 

   [28]CB doc 204 p 3884, letter dated 4 August 1983.

1. Mr Mutton stated CSR’s position.  He made it clear that there was the possibility that if workers were exposed to Hardie-BI product, the workers were also exposed to asbestos fibre from product made by either or both James Hardie or CSR in their own right and/or by other manufacturers.  He continued:

the almost limitless possibilities in this regard renders it to my mind almost impossible to settle upon a formula that will determine the quantum of the contribution that should be made by each of the partners towards the satisfaction of any judgment that might ultimately be obtained.  For this reason I suggest that it is appropriate for each matter to be considered individually on the basis of the available evidence.

If the evidence establishes that the plaintiff was only exposed to products manufactured by the partnership then it would be appropriate for each of the partners to contribute equally towards the satisfaction of any judgment that might ultimately be entered.[29]

[29]Ibid.

1. It can be inferred from CSR’s reply (the first letter was not produced) that James Hardie was suggesting that the parties should settle on a formula for agreeing their respective contributions towards settlements.  That became more evident in later communications.

1. In 1984, a Mr R W Bagnall of CSR had a conversation with Mr Denmead.  In it, Mr Bagnall informed Mr Denmead that CSR’s position remained as before, that is that it would contribute 50:50 with James Hardie

on whatever liability was properly attributable to Hardie-BI products … but the problem would of course be in working out relative liabilities of Hardie-BI product and non-Hardie-BI product.[30]

[30]CB doc 217 p 13,118.

1. In June 1986, the Executive Director of CSR, Mr W A Bennett, wrote to the Deputy Managing Director of James Hardie, Mr F D Loneragan,[31] about a tension that had arisen between the two companies concerning the management of their respective interests in asbestos litigation.  In substance, the tension was between the James Hardie ‘formula’ approach and the CSR ‘case-by-case’ approach.  The letter also contained CSR’s protest against any approach whereby one party left the running of cases to the other while being expected to automatically ‘accept whatever the other might feel is the best solution to any particular matter’.  A meeting between the parties was suggested. 

   [31]CB doc 204 p 3886.

1. In July 1986 a conference was held at CSR for the purposes of trying to resolve the difference of opinion between the former partners over their approaches to claims.  Attending for James Hardie were Mr Loneragan, Mr Denmead, and another legal officer.  For CSR there was Mr Bennett and Mr Bagnall. 

1. During the meeting, the CSR position, put by Mr Bennett, was generally as follows:  CSR was prepared to pay equally ‘on liability properly attributable to the partnership’; the use of a formula appeared ‘deceptively simple’ but ‘there are so many variables that it is not realistic’; CSR wanted to deal with each case on the facts as they emerged, trying to ‘agree shares of liability on the facts’; there was a need in each case to ‘get the facts out into the open’ as to period of employment or exposure, what type of product the worker was exposed to, who was the manufacturer and the employer, etc; CSR required evidence in each case that reasonable steps had been taken to contest the claim; and CSR thought there was still considerable value in making each worker establish negligence against the partnership.

1. For its part, James Hardie was against any approach which put them into court.  Because James Hardie was the more visible of the two companies, it, rather than CSR, tended to be sued or joined as a third party.  James Hardie also thought that the process of discovery and the giving of evidence in court would be detrimental to the long term interests of the companies as there was damaging material that the plaintiffs had not yet unearthed.  James Hardie’s view was that if it looked like it could not win a case then it would settle, and the only issue was how to split up the settlement between itself and CSR.  Mr Denmead thought CSR ought to leave the detailed calculations of CSR’s contributions to James Hardie and not insist on being provided with the level of detail it had thus far been demanding. 

1. Each party was also concerned, as far as possible, to appease and comply with the wishes of their respective insurers.

1. The meeting concluded with CSR reiterating its concern that it was being asked to sign a blank cheque and stressing its desire that James Hardie press, as hard as possible, to obtain the best settlement in each case.  CSR also wanted more input in the way cases were run.  James Hardie appeared to accept this requirement and referred to the need to set aside ‘antagonisms’ between the lawyers for both sides.  It emphasised the need for information to flow ‘both ways’.  Ultimately, the parties appeared to recognise that there might be a philosophical divide between them that could not be solved. 

1. Several years after the meeting between CSR and James Hardie, and without there being evidence of any further negotiations, James Hardie forwarded to CSR a ‘bundle of papers’ that had been served upon James Hardie by the SECV.  The SECV was claiming contribution and indemnity from James Hardie for liability stemming from insulation products ‘installed at various power stations in Victoria between 1959 and 1987’.  In turn, James Hardie sought CSR’s views because ‘the claim quite clearly covers the Hardie-BI period’. 

1. The letter from James Hardie to CSR is dated 27 October 1988, so it appears to relate to a worker’s claim (or workers’ claims) that preceded the claim of Ronald Wilson, the earliest claim involved in this proceeding.  In any event, there is no evidence of what became of that claim or those claims.  Thereafter, there is no other evidence of communications between James Hardie and CSR concerning claims involving SECV power station workers. 

1. The next step in the story was the making of the GSAs between James Hardie and the SECV enabling the settlement of the claims that are the subject of this proceeding. As mentioned previously, CSR appeared not to even know that James Hardie had made an agreement with the SECV, still less was it asked to contribute towards the settlements made under it.  The history of negotiations which I have just recounted may explain why that was so.

1. Aside from being an interesting historical backdrop to this set of claims, as I have already foreshadowed, CSR relies on a defence of laches, waiver and acquiescence to James Hardie’s claims for contribution.  This narrative forms part of the evidentiary material to be considered on that defence. 

The General Settlement Agreements

1. The general purport of the GSAs has been introduced already (see [5]-[8]).

Primary contribution clause

1. The first of the three agreements is dated 13 August 1993 (‘1993 GSA’).  The parties were the SECV and James Hardie.  The primary clause, paragraph 1, is worth setting out in full:

1James Hardie and the SECV agree to contribute towards the damages and legal costs payable by either party to any claimant who has suffered injury or loss or who has suffered a loss of dependency of which exposure to airborne asbestos fibres arising from thermal insulation products manufactured, sold and/or supplied by any person, firm or corporation (here and after called ‘thermal insulation products’) and used at the following locations was a cause:

Yallourn W Power Station Stage 1 boilers and turbo generators

Yallourn C Power Station boilers and turbo generators

Yallourn B Power Station boilers

Yallourn E Power Station boilers and turbo generators

Morwell Power Station boilers and turbo generators

Hazelwood Power Station boilers and turbo generators.[32]

[32]CB doc 4 p 353.

1. A number of things are to be noted:

(a)   Each party agreed to contribute towards damages and legal costs payable by the other to any claimant.

(b)   Although the damages to which a contribution was required had to be referrable to exposure to asbestos fibre in thermal insulation product, it did not matter who was the manufacturer of that product.

(c)    Such exposure was limited to exposure at one of six specified SECV power stations.

(d)  Ultimately, the list of sites was refined by a process of variation over the second and third agreements to arrive at the final seven sites. The final seven sites were: (1) Yallourn W Power Station; (2) Yallourn C, D and E Power Stations; (3) Morwell Power Station; (4) Hazelwood Power Station; (5) Newport Power Station; (6) Richmond Power Station;  and (7) Morwell Lurgi Gasification Plant.

The formula

1. The 1993 GSA then dealt with the alternative scenarios in which either a claim was made against the SECV and it sought contribution from James Hardie, or vice versa.  In practice, almost all of the claims were made against the SECV.

1. James Hardie’s contribution was to be 25% and the SECV’s was to be 75%.  However, those percentages were not simply applied to the totality of the damages ordered or agreed to be paid by the party sued.  Rather, the amount of the damages to be apportioned according to those percentages was a time-dependent fraction of that whole.  That is, it was —

that proportion of the damages (but excluding exemplary damages) and legal costs payable by [the SECV or James Hardie, as the case may be] which represents the period during which —

•        the claimant, or

•        the person upon whom a claimant was dependent,

was exposed to airborne asbestos fibres arising from thermal insulation products used at the locations referred to in paragraph 1 calculated as a percentage of the total period of exposure to airborne asbestos fibres …[33]

[33]CB doc 4 p 354.

1. This time-dependant fraction required the parties to ascertain (1) each claimant’s total period of exposure to asbestos fibre over his or her working life at any location, and (2) the period that claimant was exposed to asbestos fibre at one of the nominated SECV locations, and then to divide the second figure into the first.  By application of that fraction to the totality of damage paid, one gets to the core measure of damages to be allocated between the parties according to their agreed percentage responsibility (ie the 25% or the 75%).  So, for example, the SECV may pay a worker $100,000 in damages but that worker may have only ever worked 50% of his time at one of the SECV power stations (in an ATI-exposed environment) and the rest of his time at, for example, oil refineries which also exposed that worker to asbestos insulation products. James Hardie would only be required to contribute 25% of $50,000 (ie $12,500).

1. It can be seen that such a formula was, of necessity, a ‘rough and ready’ approximation of the parties’ true degree of legal responsibility.  The formula did not take into account the precise nature of a given worker’s employment at any particular facility.  For example, at one location the worker may have been installing lagging, cutting and sanding insulation products, thereby being exposed daily to high volumes of airborne asbestos fibre.  At another, the worker’s role may have been more confined to supervision or inspection work which did not involve exposure to such high volumes of asbestos.  However, the mere duration of time in each location may have been equal and would be equally weighted in arriving at the ‘core damage’ to be allocated between James Hardie and the SECV. 

1. The formula also took no account of the specific thermal insulation product that the worker may have encountered, or the particular manufacturer of the product.  Although James Hardie could only be lawfully liable to workers who were exposed to fibre from its own product — manufactured either on its own behalf or by the Hardie-BI partnership — any given worker may only have worked on those parts of an SECV site that contained (or predominantly contained) thermal insulation made  by other manufacturers.  So, conceivably, the formulae may pick up cases where, upon detailed examination of the facts, James Hardie had no liability at all.  James Hardie would argue that such a scenario was most improbable.  Another possibility, however, may be that, although using the time-dependent fraction, James Hardie was only required to contribute, say, 25% of 50% of the SECV’s payment, a more detailed analysis of the facts might have led to the conclusion that the worker’s illness was entirely attributable to products made by James Hardie.

1. But by means of the formula, James Hardie and the SECV sought to create a workable proxy for a more detailed, case-by-case analysis of the precise amount of a worker’s exposure to James Hardie product and its causal role in the development of that worker’s illness.  That proxy employed the variables of:

·place;

·fractional exposure duration; and

·a fixed percentage, ie 25%.

1. Presumably, James Hardie and the SECV considered that, overall, the formula would serve them well.  It would save them the cost of fighting claimants and one another.  It would minimise publicity damage.  And, what they each might lose on the roundabouts they would win on the swings so that a fair balance would be achieved in the long run. 

1. All this may well have made good commercial sense and have been entirely reasonable as between the SECV and James Hardie.  But the critical question for James Hardie’s  contribution claim against CSR is whether the amount paid by James Hardie to the SECV under that formula can in any legitimate way represent the end point (or even the starting point) for the:

·identification of a mutual liability to each claimant; and/or

·measure of the liability that needs to be apportioned between them.

1. And that question is all the more complicated by the fact that the formula does not purport to differentiate James Hardie’s liability in its own right from James Hardie’s liability as a Hardie-BI partner. It its submission, CSR employed a memorable aphorism to capture its argument: ‘period plus place is no proxy for product’.

1. There are some other clauses of the 1993 GSA (also carried into the later agreements) that need to be noticed. 

Treatment of contributions obtained from other wrongdoers

1. First — and assuming for the purpose of this explanation that the SECV was the party sued by the claimant — if the SECV obtained a contribution to a settlement or award of damages from another wrongdoer, that contribution was first to be deducted from the sum payable by the SECV to the claimant before any of the calculations stipulated above were to be applied. 

1. A ‘contribution’ from another person might be obtained in one of two ways.  One way was that, although not sued and not a party to the settlement with the worker, another potentially liable person might have agreed with the SECV to contribute towards the amount that the SECV agreed to pay the claimant.   A second way was that the other person was joined in the action and agreed (or was ordered) to pay a proportion of the claimant’s damages.  Strictly speaking, a payment made by another party to the claimant’s proceeding directly to the claimant under a multiparty settlement agreement to which the SECV was also a party, would not be a ‘contribution’ to the SECV. 

1. But, in either case, the amount paid by that other party was deducted before any apportionment calculation vis-à-vis the SECV and James Hardie was applied (see clauses 4(c)(ii) and 4(c)(iii)).  Modifying the example in [98] above, assuming another party had contributed $20,000 to the $100,000 to be paid to the claimant, so that the SECV’s payment (or net payment) was only $80,000, the sum to be contributed by James Hardie was 25% of $40,000 (ie $10,000).

1. These provisions were reinforced by another clause which, if enforced, addressed the risk that other would-be contributors did not bear their fair share.  The SECV (when it had been sued) was obliged to take reasonable steps to obtain contribution to a claimant’s damages from any party (other than James Hardie) which would if sued have a liability to contribute.  If the SECV did not do so, James Hardie could have an arbitrator to decide what amount that other party should have contributed and then to reduce its own contribution by that sum: clause 5(l).

1. In concept at least, these provisions meant that the responsibility of other persons towards the claimant’s damage had already been accounted for before the SECV and James Hardie turned to allocate the remaining liability between themselves.  Of course, the quantum of the ‘responsibility’ apportioned to that other person may have been somewhat arbitrary.  It first depended upon whether that other potentially liable person was ever joined to the litigation or the SECV sought contribution from them as it was obliged to do.  Secondly, the amount of responsibility that they bore was, except in cases determined by a court, presumably the outcome of settlement negotiations on a basis that is not disclosed. 

1. The occasions when another party bore some proportion of a claimant’s damages are ascertainable — or, at least one category of them is.  They are ascertainable from the record of the amount a claimant received under a settlement, and the amount paid by the SECV to the claimant.  Those amounts are shown on a large spreadsheet produced by James Hardie, labelled ‘JHC: Quantum Assessments’ (‘QA spreadsheet’). On the QA spreadsheet, wherever the figure labelled ‘settlement amount’ for a given claimant was larger than the figure shown as ‘SECV’s contribution’, that was an instance of some other person making a contribution. 

1. Unfortunately, none of the settlement agreements between the SECV and the claimants were in evidence.  Therefore, it is unclear whether those examples are only instances of cases where at least two parties (including the SECV) agreed severally to make direct payments to a claimant under a settlement agreement but only the SECV’s payment is recorded. Alternatively, they may also be instances where the SECV’s payment to the claimant was higher than the amount shown but it obtained a contribution from a non-party to the settlement so that the amount recorded is the ‘net’ sum paid by the SECV.

1. For example, in the case of Jan Kracht (one of the eight sub-group claimants), the QA spreadsheet shows that the settlement amount paid to Mr Kracht was $500,000.  The amount shown as ‘SECV’s contribution’ was only $450,000.  So either another party to the settlement agreement separately agreed to pay $50,000, or (perhaps) the SECV was liable for the full amount but independently obtained a contribution of $50,000 from a non-party.  In the majority of the cases it appears that the SECV paid the full amount of the settlement paid to the claimant without any contribution.

1. I will return later, in connection with individual claims, to the significance to be attached to the fact that contributions from other parties have been taken into account, at least to some degree, before James Hardie seeks a contribution from CSR. 

Information to be obtained and exchanged between the GSA parties

1. Another set of clauses to be noted are those that oblige the party seeking the contribution under the GSA to supply information to the contributing party (clauses 5 and 6).  For example, where the SECV was seeking contribution, it had to give James Hardie notice of the claim and copies of all documents relating to the claimant, together with the SECV’s assessment of:

the level of exposure to airborne asbestos fibres in respect of which it is alleged the subject of the claim was exposed at each location and the evidence to support that assessment.[34]

[34]Clause 5(a)(v).

1. Whether or not they were provided to James Hardie pursuant to that obligation, assessments for each claimant-worker were prepared by Mr Drewett in the form of ‘Occupational Exposure Assessments’ (‘OEAs’).  I understood that they were primarily prepared for the process of settling the claims made by the workers against the SECV. To prepare them, Mr Drewett would draw upon a claim file for each claimant comprising court documents, including the writ and statement of claim and any answers to interrogatories, SECV employment records and other supporting material such as medical reports and expert reports.[35] 

   [35]Witness statement of John Bradley Drewett dated 20 December 2013 [7] (‘Drewett statement’).

1. Mr Drewett described the manner in which he prepared the OEAs:

In each case, I would undertake the task of identifying the most probable cause of a worker’s exposure to the ATI [asbestos thermal insulation].  This analysis was documented in the OEA, which would also seek to link the information provided by the claimants with the relevant records of SECV regarding the alleged exposure, such as when ATI was used at various SECV sites. This would be supplemented by my own first-hand knowledge and experience of where and when ATI was used at the various SECV sites.[36]

[36]Ibid [12].

1. When I come to the material placed in evidence in respect of each sub-group claimant, I will describe the content of the OEAs in more detail.

Approval required

1. The SECV could not settle any claim without James Hardie’s written approval, and James Hardie could require further information to be obtained if it chose (clauses 5(d) and (e)).  If the SECV did settle a claim made against it without first obtaining the approval of James Hardie, James Hardie was not liable to contribute to the settlement (clause 9).

1. These two conclusions mean that any claim by James Hardie under the Wrongs Act in respect of the payment made to Mr McGuire is statute barred.

Equitable contribution claim 

1. James Hardie paid its settlement sum under the GSA in respect of Mr McGuire on 21 July 2005 and, as already noted, joined its equitable claim for contribution against CSR on 24 April 2008.  It follows that, because its claim was brought within six years of the accrual of its cause of action, the claim was brought within the time limit imposed by s 5(1)(a) of the Limitation of Actions Act.  The claim is therefore maintainable unless upon the principles of laches, waiver or acquiescence it would be unjust to allow the remedy.

1. After the date when the cause of action accrued to James Hardie, a period of 2 ¾ years elapsed before it joined its claim for contribution to the proceeding.  In my view the following matters are relevant to my consideration of any inequity in permitting James Hardie to recover a remedy for contribution in the circumstances that now pertain:

·Mr McGuire first sued the SECV and his employer (Bells Thermalag) in December 2004.

·His condition was mesothelioma, an indivisible injury.

·He was seen by doctors for the SECV in January and February 2005.

·The SECV settlement was made in March 2005 and the JHC payment was made in July 2005.

·James Hardie’s contribution claim against CSR was added to the proceeding in April 2008.

·The documents that were gathered by the SECV and provided to James Hardie (in so far as they have been discovered to the defendants) consisted of the writ and statement of claim by Mr McGuire, a notice of contribution between Bells Thermalag (known then as Wallaby Grip (NSW) Pty Ltd) and the State of Victoria, and the two medical reports of Professor Fox and Dr Woodruff described above, and Mr Drewett’s OEA.

·Although James Hardie had a right to require other medical reports or expert assessments, it does not appear that it exercised that right.

·A significant proportion (60%) of the settlement amount accepted by Mr McGuire was contributed by a party other than the SECV, probably Bells Thermalag, although it is not known whether any other person may have contributed without being sued.

·Without the evidence of what Mr McGuire said to his doctors concerning his employment and the nature of his work duties, James Hardie had insufficient evidence of his actual employment and his probable exposure to Hardie-BI product to succeed. 

·Mr McGuire was not available to be called to give evidence either because he is now deceased (which was not revealed by the evidence) or because he was too ill.

·The omnibus nature of the proceeding, periodic additions of claims to the proceeding as more were settled and sheer number of claims, has contributed to the result that the claim for contribution in respect of the McGuire  settlement came to trial in August 2014.

1. James Hardie’s choice to ‘go it alone’ in making agreements with the SECV to settle claims for contribution towards claimants’ claims could readily be justified, for its own pragmatic commercial purposes.  CSR’s insistence upon a stricter approach to the assessment of liability towards claims than James Hardie thought was necessary or desirable could equally be justified from the perspective of its legal entitlement.  I would not be prepared to criticise either company for adopting the position it took from a consideration of their own particular interests.  Each reflected a value judgment which was perfectly reasonable; but they each applied different values. 

1. Nonetheless, the more important issue here is not the explanation that might appear sound from the internal perspective of James Hardie, but whether the delay in bringing the proceeding in the context of all of the circumstances was both unreasonable and produced some adverse effect for CSR or conferred some advantage for James Hardie that was unfair or unjust in a practical way.

1. Having made the choice that it made, any delay in informing CSR of the existence of the McGuire claim, the proposal to settle it and the fact of settling it, and then joining it to the proceeding was apt to prejudice CSR’s ability to undertake its own investigations of the circumstances of the injury. 

1. A number of circumstances could combine to give rise to that prejudice if there should be further, unreasonable delay, namely: the long latency period between exposure and illness created a situation of urgency for the preservation of whatever relevant factual material might still exist; the nature of the condition meant that the time frame within which to obtain relevant medical and other information directly from the claimant was limited; the ‘control’ over such other information that could be obtained was, in substance, exercised by James Hardie under its GSA entitlements; and the choice James Hardie made as to the omnibus form of the litigation extended the delay between issue and  trial.

1. As noted, the doctors’ evidence has been pivotal to my finding of Mr McGuire’s exposure to some Hardie-BI asbestos.  The cumulative delays probably contributed to the inability of the doctors to whom relevant information was given to recall any aspect of their conversations with claimants.  The same delay may have constrained CSR’s ability to investigate and establish the  potential causal role of ‘fourth party’ contributors. 

1. I recognise there is an air of artificiality in James Hardie’s insistence that CSR should identify with greater specificity the evidence that was lost, or the precise way in which it was prejudiced, or the actual period of ‘excessive’ delay.  These requirements call for CSR to identify the very things it could not know by reason of the position in which it was placed by the choices James Hardie made and the delay in bringing the claim for nearly three years after settlement.

1. But for one unusual fact in this case I may have been persuaded that the cumulative delays, potentially impacting the practical ability of the defendants to test or challenge the evidence of the doctors about exposure,  was both unreasonable and produced an unfair, adverse limitation to CSR in defending the claim and a corresponding unfair advantage to James Hardie in prosecuting it.  That fact is that other parties contributed 90% of the settlement funds and James Hardie contributed only 10%.  So the amount ultimately sought from CSR is only 5%.  In realistic terms, the marginal difference between that outcome and what might conceivably have been achieved by CSR having earlier opportunities to investigate and pursue other evidence is likely to be negligible, if any.

1. For that reason I am not persuaded there is any practical injustice flowing from the delay in the circumstances of the McGuire claim and the laches defence fails.    

Amount payable

1. The amount claimed by James Hardie is $36,304.03 being half of the amount contributed to the settlement under the GSA plus half of the JHC costs.

1. Applying the principles I determined earlier in these reasons[494] in respect of a claim for contribution toward an indivisible injury, it is not open to me to consider the possible causal role of wrongdoers who are not before the court.  Nonetheless, in my view the degree of any unfairness to CSR or Bradford produced by that principle, in the context of this particular claim, is likely to be negligible. That is because  sufficient reduction has already been made for the likely responsibility of exposure to product of other manufacturers through the contributions made by the SECV and Bells Thermalag. Although themselves not manufacturers, the responsibility of other manufacturers has likely been undertaken by them.

   [494]See [273(c)] above.

1. No reduction is to be made in this case for the probability of exposure to product made by James Hardie alone because Mr McGuire’s exposure was singularly at Yallourn West where it is improbable if not impossible that product produced by James Hardie before September 1964 was used.

1. In the result, I will order that CSR contribute the sum of $36,304.03 (with interest yet to be determined).

H.       Keith Preston

General details

1. The general details applicable to Mr Preston are as follows:

Date of birth	5 January 1940
Disease and exposure type	Mesothelioma — directly exposed
Trade	Cleaner, trimmer, trades assistant and rigger
Places of work	Yallourn Power Station, Yallourn Based Workshops and Hazelwood Power Station
Period of alleged exposure	During the Hardie-BI period
Pre or post December 1971	Both before and after December 1971
Total Settlement Amount	$545,000 plus $17,973 costs, total $562,973
SECV payment (percentage of whole settlement)	SECV contributed $562,973 (100%)
Total SECV expenditure (incl. its costs)	$562,973 costs $12,356 total $575,329
JHC contribution (percentage of SECV total)	JHC contributed $88,912.62[495] to the SECV settlement (15.44%)
JHC defence costs	JHC incurred $5601.50 defence costs
Total JHC expenditure	$88,912.62 + $5601.50 = $94,514.12
Amount claimed by James Hardie	$94,514.12 ÷ 2 = $47,257.06
Date of JHC payment	24 February 1998
Date claim joined to proceeding	6 May 2003

[495]This figure differs from the QA Spreadsheet and the Claimant Schedule at CB doc 1 p 212, which showed a figure of $90,579.90 being paid by James Hardie.  But the figure of $88,912.62 was used in both parties’ final submissions.

1. It was common ground that, in the potential Hardie-BI exposure period, Mr Preston worked during these dates, at these SECV facilities and in the trade specified:[496]

   [496]Defence for Preston para 6(iia)(A).

Period	Location	Trade
21 July 1969 to 27 July 1969	Yallourn Power Station	Cleaner
28 July 1969 to 26 October 1969	Yallourn Power Station	Trimmer
27 October 1969 to 30 October 1969	Yallourn Power Station	Cleaner
14 November 1969 to January 1970	Yallourn Power Station	Boiler house cleaner
12 January 1970 to 25 October 1970	Yallourn Power Station	Trimmer
26 November 1970 to 29 October 1970	Yallourn Based Workshops	Trades assistant
30 November 1970 to 6 December 1971	Yallourn Based Workshops	Rigger
7 December 1971 to 27 May 1973	Hazelwood Power Station	Rigger
28 May 1973 to 13 June 1974	Yallourn Power Station	Rigger
14 June 1974 to 27 March 1975	Yallourn Based Workshops	Rigger

Facts in issue

1. The defendants do not identify any specific employment, times or locations where Mr Preston may have been exposed to non-Hardie-BI asbestos but otherwise, the defendants made the same allegations that they made in relation to each of the other sub-group claimants generally, as noted at [480] above. That is, they admit that he may have been exposed to Hardie-BI fibre but say that the circumstances of any such exposure is essentially unknown. Ultimately, the defendants submitted that the evidence available was insufficient for the court to draw an inference that Mr Preston was exposed to partnership products or, if so, to what extent either in absolute terms or relative to other asbestos exposure. They submitted that the court required a much stronger factual foundation for it to properly draw any inferences about those matters.

Generic evidence

1. As is apparent from the table above, Mr Preston undertook a variety of trades during his period of work at SECV facilities.  He was a cleaner at Yallourn for approximately three months, a trimmer for approximately 13 months and a rigger for approximately four years and three months.  He was a trade assistant for a negligible period of time.  Other than a 17 month period at Hazelwood Power Station (as a rigger) in 1972 and 1973, he was at Yallourn Power Station or workshops.  His role as a rigger was one likely to have brought heavy exposure to ATI in general.  Not much generic evidence is available in relation to likely exposure as a trimmer.  Depending upon the location of cleaning work, that may also have brought him into substantial contact with asbestos dust. 

1. Because his relevant employment at Yallourn was in the late 1960s and through to the mid-1970s, the prospect of exposure to Hardie-BI ATI during maintenance work was reasonably prominent for anyone who was in a trade with typically high exposure to ATI (as was a rigger) particularly if that person stayed in that role for several years.  By the time Mr Preston worked at Hazelwood Power Station the plant had been fully constructed.  So, he was not subjected to the particularly intense period of potential asbestos exposure as new lagging was being fitted.  Nevertheless, such ATI as was then present would have included a substantial quantity of Hardie-BI material, particularly in the form of pre-formed pipe lagging used in both boiler and turbine units.  Riggers erecting and dismantling scaffolding to permit laggers, fitters and instrument makers to access pipes, and to remove and refit ATI, would typically be in an environment containing airborne asbestos dust. 

1. On the generic evidence it is probable that Mr Preston was exposed to substantial amounts of Hardie-BI asbestos fibre. 

Specific evidence

1. There were several sources of exposure evidence specific to Mr Preston.  They are Mr Drewett’s OEA, reports of Dr James Milne (2 June 1992) and Dr Roger Woodruff (28 May 1992) and, significantly, answers to interrogatories sworn by Mr Preston in response to interrogatories delivered by the SECV. 

1. In his answers to interrogatories Mr Preston explained that whilst working as a cleaner he was required to clean up after maintenance work at Yallourn; as a coal trimmer he was also required to clean coal chutes and perform general cleaning at Yallourn; and as a rigger and scaffolder he erected scaffolding for fitters and boilermakers around steam pipes and inside boilers throughout the Hazelwood Power Station.[497]

   [497]Answer to interrogatory 2, CB doc 210_146 p 9292.

1. In answering questions concerning his handling of asbestos or working in the vicinity where asbestos dust was present, he said that during the course of his employment at Yallourn and at Hazelwood Power Stations he came into contact at various times with asbestos dust which he inhaled.  Sometimes he was exposed to dust all day for months and at other times to a lesser extent.  He also said asbestos fibre was released into the air from laggers working around and above him, steam pipes which were lagged with asbestos, boilers which were lined with asbestos and remnants of asbestos which had fallen to the ground and for which he was responsible for sweeping up.[498]

   [498]Answers to interrogatories 13 and 14, CB doc 210_146 p 9294.

1. As recorded by Dr Milne[499] he said that as a cleaner at Yallourn he was required to clean up general refuse that had dropped to the floor from those working above.  The refuse consisted of asbestos and other objects and substances removed by workers higher up which they dropped to the ground.  He and other workers cleaned it up with shovels and hoses and would get it into front end loader buckets, a job which was very dusty.  He also explained that his work as a trimmer involved cleaning up the coal chutes and around the boilers which resulted in exposure very similar to that of a cleaner.  He described how lagging was stripped and applied in the power house which contributed to the dust in the air.  In the turbine rooms laggers would pull off and re-apply lagging around the turbines as would other members of the maintenance crew.  Lagging would be thrown on the ground and on the scaffoldings.  He and other workers would do a lot of the cleaning up. 

   [499]Ibid CB doc 210_146 p 9294.

1. As a rigger-scaffolder he was required to put up and pull down scaffolding for boilermakers, fitters and others inside and outside the boilers.  Those trades would pull the installation off as they needed for the modifications and drop it on the scaffolding.  Although to some extent it was cleaned up there was always some lying around. 

1. The account given to Dr Woodruff did not advance the matter much further.  No objection was taken to the evidence of either doctor.

1. Mr Drewett’s OEA contained more general details than those revealed in the answers to interrogatories and medical reports I have referred to.  Mr Drewett did say that whilst Mr Preston was working at the Hazelwood Power Station there was significant major modification work being undertaken on boilers and turbines.  He said during that time ATI was being handled in a traditional manner and a frequent task for riggers was to erect scaffolding to enable asbestos removal to take place, to modify the scaffolding during the job and to dismantle it at the finish. 

Conclusion on exposure

1. The specific evidence in relation to Mr Preston confirmed that he encountered significant asbestos exposure over a period of years working around maintenance crews at Yallourn and Hazelwood Power Stations.  I am satisfied that such ATI was likely to include a significant amount of Hardie-BI insulation — more so at Hazelwood than at Yallourn since, being constructed in the Hardie-BI partnership period, Hazelwood would have contained significantly more pre-existing partnership product than Yallourn.  Nevertheless, the replacement ATI at Yallourn would likely have included a reasonable proportion of Hardie-BI product. 

1. Being a worker of some duration at both Yallourn and Hazelwood Power Stations, Mr Preston would more likely than not have encountered Hardie-BI product at both locations, in significant quantities.

1. During his working period at the power stations he would also have been exposed to non-Hardie-BI ATI, most significantly at the Yallourn Power Station but also at Hazelwood.  The non Hardie-BI material at Yallourn would likely have included a significant amount of product supplied by James Hardie alone, either for original construction purposes (depending on the particular plant) or for subsequent maintenance purposes.

1. The majority of his exposure to ATI, including to Hardie-BI product, is likely to have occurred after December 1971 simply because he worked in his role for a greater time after that date than beforehand.  Further, his work after December 1971 included his time at Hazelwood. 

Limitation and laches defences

1. I will now apply the conclusions reached above[500] in respect of the application of the statutory limitation and the laches defences to the various claims for contribution toward the payment made to Mr Preston.

   [500]See above [479].

Wrongs Act claim

1. In so far as Mr Preston was exposed to partnership product supplied to the SECV and used at Yallourn and Hazelwood power stations before 31 December 1971, the claim for contribution under the Wrongs Act is governed by s 2(4) of the Wrongs Tortfeasors Act 1949. No action is maintainable unless James Hardie was served by Mr Preston with the writ in the original action in which he claimed the damages towards which the settlement payment was made.  James Hardie was not served with the writ by Mr Preston.  Accordingly, no action is maintainable against CSR by James Hardie in respect of any part of the payment it made under the GSA that is attributable to any tort committed by the supply of Hardie-BI product before 31 December 1971.

1. In so far as Mr Preston was exposed to partnership product supplied to the SECV and used at the Yallourn and Hazelwood power stations after 31 December 1971, the claim for contribution under the Wrongs Act is governed by s 24(4) as introduced by the 1972 Act.  Mr Preston’s writ against the SECV was issued on 26 April 1992,[501] meaning that James Hardie had six years from that date to commence its proceeding for contribution relying upon the statutory cause of action for any tort committed after 31 December 1971.   It joined its claim for contribution to the proceeding, in respect of its payment for Mr Preston, on 6 May 2003, more than six years from 26 April 1992.  It follows no action is maintainable against CSR by James Hardie in respect of any part of the payment it made under the GSA that is attributable to any tort committed by the supply of Hardie-BI product from 1 January 1972 onwards.

   [501]CB doc 250.

1. These two conclusions mean that any claim by James Hardie under the Wrongs Act in respect of the payment made to Mr Preston is statute barred.

Equitable contribution claim

1. James Hardie paid its settlement sum under the GSA in respect of Mr Preston on 24 February 1998 and, as already noted, joined its equitable claim for contribution against CSR on 6 May 2003.  It follows that, because its claim was brought within six years of the accrual of its cause of action, the claim was brought within the time limit imposed by s 5(1)(a) of the Limitation of Actions Act.  The claim is therefore maintainable unless upon the principles of laches, waiver or acquiescence it would be unjust to allow the remedy.

1. After the date when the cause of action first accrued to James Hardie, a period of nearly 5 ¼  years elapsed before it joined its claim for contribution to the proceeding. In my view the following matters are relevant to my consideration of any inequity in permitting James Hardie to recover a remedy for contribution in the circumstances that now pertain:

·Mr Preston first sued the SECV in April 1992.

·His condition was mesothelioma, an indivisible disease.

·Under the GSA, the SECV was obliged to inform James Hardie as soon as reasonably practicable of any intention to make a contribution claim in relation a worker’s action arising from exposure at location included in the GSA. Unless James Hardie was not requiring the SECV to adhere to the agreements, I infer James Hardie was informed of the likely claim in mid-1992.

·The SECV settlement was made in July 1992 but the JHC payment was not made until February 1998.

·James Hardie’s contribution claim against CSR was added to the proceeding in May 2003.

·The documents that were gathered by the SECV and provided to James Hardie (in so far as they were revealed in the court book) consisted of the writ and statement of claim of Mr Preston,  his answers to the SECV’s interrogatories, Mr Drewett’s OEA and two medical reports (Dr Woodruff 28 May 1992 and Dr Milne 2 June 1992).

·Although James Hardie had the right to require other medical reports or expert assessments, it does not appear that it exercised that right.

·No other party, other than the SECV, contributed to the settlement amount accepted by Mr Preston.

·Mr Preston was not available to be called to give evidence either because he is now deceased (which was not revealed by the evidence) or because he was too ill.

·The omnibus nature of the proceeding, periodic additions of claims to the proceeding as more were settled and sheer number of claims, has contributed to the result that the claim for contribution in respect of the Preston settlement came to trial in August 2014.

1. James Hardie’s choice to ‘go it alone’ in making agreements with the SECV to settle claims for contribution towards claimants’ claims could readily be justified, for its own pragmatic commercial purposes.  CSR’s insistence upon a stricter approach to the assessment of liability towards claims than James Hardie thought was necessary or desirable could equally be justified from the perspective of its legal entitlement.  I would not be prepared to criticise either company for adopting the position it took from a consideration of their own particular interests.  Each reflected a value judgment which was perfectly reasonable; but they each applied different values. 

1. Nonetheless, the more important issue here is not the explanation that might appear sound from the internal perspective of James Hardie, but whether the delay in bringing the proceeding in the context of all of the circumstances was both unreasonable and produced some adverse effect for CSR or conferred some advantage for James Hardie that was unfair or unjust in a practical way.

1. Having made the choice that it made, any delay in informing CSR of the existence of the Preston claim, the proposal to settle it and the fact of settling it, and then joining it to the proceeding was apt to prejudice CSR’s ability to undertake its own investigations of the circumstances of the injury. 

1. A number of circumstances could combine to give rise to that prejudice if there should be further, unreasonable delay, namely: the long latency period between exposure and illness created a situation of urgency for the preservation of whatever relevant factual material might still exist; the nature of the condition meant that the time frame within which to obtain relevant medical and other information directly from the claimant was limited; the ‘control’ over such other information that could be obtained was, in substance, exercised by James Hardie under its GSA entitlements; and the choice James Hardie made as to the omnibus form of the litigation extended the delay between issue and  trial.

1. Once a claim was settled by the SECV attracting the operation of the GSAs, James Hardie ought to have acted swiftly to investigate and make its payment and join the claim to the proceeding. In this particular case the cumulative delays of nearly eleven years between the SECV settlement and then the JHC payment and the JHC payment to the commencement of this proceeding has added an unacceptable and unreasonable additional period of time before this matter has come to trial.  All of the relevant time frames in this case are longer than those relating to Mr Alexander, including those over which I presume James Hardie had a degree of control. The lengths of the delays of themselves called for some explanation. But, without explanation, over 5 ½ years elapsed from settlement and nearly 5 ¼ years elapsed from contribution before the claim was brought. During that time it may reasonably be inferred that some evidence which might have been gathered to assist CSR in defending the claim would have either been lost or made less readily accessible.

1. There is an air of artificiality in James Hardie’s insistence that CSR should identify with greater specificity the evidence that was lost, or the precise way in which it was prejudiced, or the actual period of ‘excessive’ delay.  These requirements call for CSR to identify the very things it could not know by reason of the position in which it was placed by the long latency period of the disease and the choices James Hardie made in the arrangement under which it settled claims.

1. In the circumstances of this particular case, I consider that the additional delay to trial caused by the time taken to join the claim to the proceeding has likely caused some unfair disadvantage to CSR and corresponding advantage to James Hardie. In my view it is inequitable that James Hardie should be permitted to recover its remedy in respect of the contribution made to the settlement of Mr Preston’s claim.

Amount payable

1. Upon that conclusion, no sum is payable by CSR in respect of this claim. However, in case I am found to be wrong to deny James Hardie a remedy for this claim, I will state what amount I would have awarded had I not upheld the laches defence.

1. The amount claimed by James Hardie is $47,257.06 being half the amount contributed to the settlement under the GSA plus half the JHC costs.

1. Applying the principles I determined earlier in these reasons[502] in respect of a claim for contribution toward an indivisible injury, it is not open to me to consider the possible causal role of wrongdoers who are not before the court.  Nonetheless, in my view the degree of any unfairness to CSR produced by that principle, in the context of this particular claim, is likely to be negligible.  That is because the payment by the SECV of a net 84.56% of the claim (after James Hardie’s contribution) would most likely have accounted for the proportionate contribution to the damages attributable to product of manufacturers other than James Hardie and the Hardie-BI partnership.

   [502]See [273(c)] above.

1. Upon my findings, CSR is bound to contribute one half of the portion of the JHC payment that reflects the incremental proportionate contribution that exposure to Hardie-BI asbestos made to the development of Mr Preston’s mesothelioma, excluding the role of James Hardie ATI.  Doing the best I can, and allowing for a modest causal role to have also been played by asbestos released from James Hardie product, I would quantify the contribution that would have been payable by CSR at $33,000 (with interest yet to be determined).

conclusions in respect of each contribution claim

1. It is now possible to state my conclusions in relation to each claim for contribution.  The table below sets out the results.  Where I have proceeded to state a conclusion in case I am wrong about my substantive decision, I have noted that conclusion in italics and square brackets.  The bold figures in the final column below containing an asterisk are amounts to be ordered against CSR alone and the others are to be ordered against both CSR and Bradford.

Claimant & illness	Hardie-BI exposure proven?	Wrongs Act claim		Equitable claim		Amount (exclusive of interest)
		Pre-31 Dec 1971	Post 31 Dec 1971	Limitation by analogy	Laches defence
Alexander Asbestosis	Yes	Barred	Barred	Not barred	No	$35,000*
De Vries Mesothelioma	No	-	-	-	-	Nil
Benjamin Mesothelioma	Yes	Barred	Not barred	NA [Not barred]	NA [No]	$90,268.09
Reid Mesothelioma	Yes	Barred	Barred	Not barred	Yes	Nil [$77,000]
Johnstone Lung cancer	Yes	NA	Not barred	NA [Not barred]	NA [No]	$90,000
Kracht Mesothelioma	Yes	Barred	NA	Not barred	No	$15,000*
McGuire Mesothelioma	Yes	Barred	Barred	Not barred	No	$36,304.03*
Preston Mesothelioma	Yes	Barred	Barred	Not barred	Yes	Nil [$33,000]

1. I will ask the parties to bring in minutes of orders to give effect to these reasons.