Bernard George Frost v Amaca Pty Ltd

[2005] NSWDDT 36

Dust Diseases Tribunal

of New South Wales

CITATION:	Bernard George Frost v Amaca Pty Ltd [2005] NSWDDT 36
PARTIES:	Bernard George Frost Amaca Pty Ltd
MATTER NUMBER(S):	407 of 2002
JUDGMENT OF:	Curtis J
CATCHWORDS:	:- Negligent Manufacture Place of tort
LEGISLATION CITED:	Accident Insurance Act 1998 (NZ), ss 39, 94, 394, 396 & 398 Accident Rehabilitation and Compensation Insurance Act 1992 (NZ), s17
CASES CITED:	Jackson v Spittall (1870) LR 5 CP 542 ; Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 ; Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575; Donoghue v Stevenson [1932] AC 562; Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1; James Hardie and Co Pty Ltd & Anor v Hall (as administrator of the Estate of Putt) (1998) 43 NSWLR 554; James Hardie and Co Pty Ltd & Anor v Grigor (1998) 16 NSWCCR 435; James Hardie and Coy Pty Ltd v Carley [1999] NSWCA 80 ; Jacobs v Australian Abrasives Pty Ltd [1971] Tas SR 92; Bryant v Attorney General (unreported, High Court, Wellington, CP 44/00 7 August 2000)
DATES OF HEARING:	22 and 23 April 2004, 25 July 2005
DATE OF JUDGMENT:	08/17/2005
LEGAL REPRESENTATIVES:	FOR PLAINTIFF: Mr GF Little SC with Mr D Morgan instructed by Turner Freeman FOR DEFENDANT: Mr DE Graham instructed by Allens Arthur Robinson

JUDGMENT:

Dust Diseases Tribunal of New South Wales

Matter Number DDT 407 of 2002

Bernard George Frost

v

Amaca Pty Ltd

17 August 2005

JUDGMENT

CURTIS J

1. The plaintiff Mr Frost, a native of New Zealand, has been resident in Queensland since 1996. He suffers from asbestos-related diseases which became clinically apparent in 2000. These diseases were caused by his inhalation of asbestos fibre released from insulation products, manufactured in New South Wales by James Hardie and Coy Pty Ltd, when Mr Frost worked with these products in New Zealand in the course of his employment with an insulation contractor between January 1963 and July 1966.

2. He sues Amaca Pty Ltd, (Amaca), heir to the liabilities of James Hardie and Coy Pty Ltd, for damages, which are agreed in the sum of $320,000. His action is resisted by Amaca upon the grounds that:

(1) the place of the tort is New Zealand,
(2) choice of law rules mandate that New Zealand law is to apply,

(3) S39 of the Accident Insurance Act 1998 (NZ) entitles the plaintiff to insurance cover under that Act. (He is in receipt of those benefits.)

(4) S394 of the Accident Insurance Act 1998 (NZ) provides that:

(1) No person may bring proceedings independently of this Act, whether under any rule or an enactment, in any court in New Zealand, for damages arising directly or indirectly out of-

(a) Personal injury covered by this Act; or

(b) Personal injury covered by the former Acts.

3. Choice of law rules are engaged if a cause of action involves a foreign component. They require that the place of the tort be ascertained. In this case the plaintiff suffered injury because he inhaled asbestos fibres in New Zealand. He asserts that because the defendant’s breach of duty which caused his injury occurred in New South Wales, that is the place of the tort. Amaca contends that because the breach of duty had its effect in New Zealand, that is the place of the tort.

Agreed Facts

4. The parties have drafted and agreed upon the following statement of facts in which the names James Hardie, Hardie and Amaca are used interchangeably:

(1) The plaintiff was born on 17 August 1944 in New Zealand. He is 59 years old.

(2) The plaintiff lives in Brisbane, Queensland. He has been a resident of Queensland since 23 December 1996, when he emigrated to Australia from New Zealand.

(3) The plaintiff suffers from bilateral pleural plaques, diffuse pleural thickening and asbestosis (the Asbestos Diseases).

(4) Between January 1963 and July 1966, the plaintiff was exposed to, and inhaled, asbestos when he worked as a lagger in New Zealand for Van Doorne Bros of Cambridge. During this period of employment in New Zealand, the plaintiff was exposed to, and inhaled, asbestos dust and fibres when he worked with Amaca Pty Ltd (Amaca)’s asbestos-containing insulation products (the Hardie Products). The Asbestos Diseases were caused by the plaintiff’s inhalation of asbestos dust and fibres from the Hardie Products.

(5) With each inhalation of asbestos dust and fibres from the Hardie Products, the plaintiff suffered injury to his lungs at a microscopic level. This microscopic injury occurred in New Zealand. The asbestos diseases are the culmination of these multiple tiny episodes of injury. The Asbestos Diseases did not become clinically apparent and were not diagnosed until 12 April 2000 when the plaintiff was resident in Queensland. The Asbestos Diseases were diagnosed in Queensland. The Abestos Diseases were first diagnosed in New Zealand on 11 July 2001.

(6) Amaca Pty Ltd was incorporated in New South Wales.

(7) Between 1 January 1963 and 1 July 1966 the defendant maintained no premises, employees or other presence in New Zealand.

(8) The Hardie Products:

(a) Were manufactured by Amaca in New South Wales;
(b) Were distributed by Amaca throughout Australia and New Zealand between 1963 and 1966;
(c) Were supplied by Amaca from New South Wales directly or indirectly to Van Doorne Bros of Cambridge in New Zealand;
(d) Were packaged in New South Wales into cartons, bags and frames for supply and immediate use without further modification;
(e) Contained the amphibole asbestos fibre, amosite;
(f) Did not carry labels indicating that they contained amphibole asbestos;
(g) Did not carry any warning about the risks to health to purchasers or users of the products from being exposed to, and inhaling, amphibole asbestos from the products.
(9) Amaca owed the plaintiff a duty of care and breached that duty. Amaca breached its duty of care to the plaintiff by:
(a) Failing to warn the plaintiff, his employer or users of the Hardie Products of the risks associated with their use when it knew that they would be cut, drilled, worked and handled thereby releasing asbestos dust and fibres into the atmosphere;
(b) Manufacturing the Hardie Products in New South Wales and supplying them from New South Wales when it knew or ought to have known that persons such as the plaintiff were at risk of inhaling asbestos dust and fibres from the products and thereby suffering the Asbestos Diseases;
(c) Failing to withdraw the Hardie Products in New South Wales when it knew or ought to have known that persons such as the plaintiff were at risk of inhaling asbestos dust and fibres from the products and thereby suffering the Asbestos Diseases;
(d) Manufacturing the Hardie Products in New South Wales and supplying them from New South Wales when it knew or ought to have known that workers in New Zealand and Australia, such as the plaintiff, would cut, drill, work with and handled the products, thereby releasing asbestos dust and fibres into the atmosphere and being at risk of inhaling asbestos dust and fibres from the products and suffering the Asbestos Diseases;
(e) Continuing to use asbestos in the Hardie Products when it knew or ought to have known that persons such as the plaintiff were at risk of inhaling asbestos dust and fibres from the products and thereby suffering the Asbestos Diseases;
(f) Failing to make inquiries of appropriate authorities, such as the New South Wales Departments of Health and Labour and Industry, as to the risks associated with working with the Hardie Products;
(g) Failing properly to investigate at its New South Wales research centre the substitution in the Hardie Products of asbestos with a non-asbestos material;
(h) Failing properly to investigate at its New South Wales manufacturing centre the risks associated with working with the Hardie Products;
(i) Failing properly to investigate at its New South Wales research centre the risks associated with working with the Hardie Products;
(j) Failing to attach warning labels at, and to distribute directions from, its New South Wales manufacturing centre as to the risks associated with working with the Hardie Products;
(k) Failing to substitute the asbestos in the Hardie Products at its New South Wales manufacturing centre with a non-asbestos material;
(l) Deciding at its New South Wales manufacturing centre not to warn users of the Hardie Products of the risks associated with their use;
(m) Failing to warn users of the Hardie Products of the results of atmospheric testing at its New South Wales manufacturing centre in relation to the use of the Hardie Products, which had demonstrated grossly elevated levels of asbestos dust above the then known scientific standards;
(n) Failing to devise, organise, administer and implement at their New South Wales headquarters a scheme for warning purchasers and users of the Hardie Products of the risks to health from inhaling asbestos dust and fibres.

5. In Jackson v Spittall (1870) LR 5 CP 542 the Court of Common Pleas considered s18 of the Common Law Procedure Act 1852 which conferred jurisdiction on a court in respect of “a cause of action which arose within the jurisdiction” and held that the phrase “cause of action” did not there mean the whole of the cause of action but “the act on the part of the defendant which gives the plaintiff his cause of complaint”. (at 552).

6. This test was adopted by the Privy Council in Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458 where their Lordships said that the rule laid down in Jackson v Spittall “…is inherently reasonable as the defendant is called upon to answer for his wrong in the courts of the country where he did the wrong” (at 468). Their Lordships then proceeded to apply the rule in these terms:

The right approach is, when the tort is complete, to look back over the series of events constituting it and ask the question where in substance did this cause of action arise? [at 468]

7. In Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 the appellant tortfeasor argued that the cause of action pleaded against him arose in the foreign jurisdiction because the acts and omissions complained of occurred outside New South Wales. Upholding this submission the High Court by majority (Mason CJ, Deane, Dawson and Gaudron JJ) held at 567 that:

The approach formulated in Distillers does no more than lay down an approach by which there is to be ascertained, in a commonsense way, that which is required by Jackson v Spittall , namely, the place of "the act on the part of the defendant which gives the plaintiff his cause of complaint". That approach has particular point if, as was the case in Distillers , it is necessary to ascribe a place to an omission for the purpose of determining where, if at all, a tort was committed.

One thing that is clear from Jackson v Spittall and from Distillers is that it is some act of the defendant, and not its consequences, that must be the focus of attention. Thus, in Distillers the act of ingestion of the drug Distaval by the plaintiff's mother was ignored, the place of that act being treated like the place of the happening of damage, as one that might have been "quite fortuitous". (emphasis added)

8. In Dow Jones & Company Inc v Gutnick (2002) 210 CLR 575 at 606 the High Court (Gleeson CJ, McHugh, Gummow, and Hayne JJ) said:

Reference to decisions such as Jackson v Spittall , Distillers Co (Biochemicals) Ltd v Thompson and Voth v Manildra Flour Mills Pty Ltd show that locating the place of commission of a tort is not always easy. Attempts to apply a single rule of location (such as a rule that intentional torts are committed where the tortfeasor acts, or the torts are committed in the place where the last event necessary to make the actor liable has taken place) have proved unsatisfactory if only because the rules paid insufficient regard to the different kinds of tortious claims that may be made. Especially is that so in cases of omission. In the end the question is "where in substance did this cause of action arise". In cases, like trespass or negligence, where some quality of the defendant's conduct is critical, it will usually be very important to look to where the defendant acted, not to where the consequences of the conduct were felt.

9. In cases of positive tortious actions which are complete in themselves it is usually not difficult to ascertain the place of that act which gave to the plaintiff his cause of complaint. Cases of negligent omission may be otherwise. As the majority in the High Court in Voth said at 567:

It makes no sense to speak of the place of an omission. However, it is possible to speak of the place of the act or acts of the defendant in the context of which the omission assumes significance and to identify that place as the place of the “cause of complaint”.
That is, because a tortious omission takes place nowhere, the place of the tort, is in such a case , to be identified as the place where the omission assumes significance.

10. In the case of a failure to warn, the omission assumes significance at the place where, if received, the warning would have been acted upon. In Distillers that was the place of the sale, because the mother would not have purchased the drug had she then been warned.

11. In cases of negligent manufacture the breach of duty may be couched equally in positive or negative terms. Thus the breach of duty in Donoghue v Stevenson [1932] AC 562 may be seen as the act of filling the tainted bottle with soft drink or as the omission of failing to keep the snail out. If the failure is seen as an omission, the place of the tort is the place where the want of care assumed significance. Commonsense dictates that this occurred at the time of, and in the place where, the bottle was filled and the drink became polluted. Applying the test formulated in Johnson v Spittall, applied in Distillers Co (Biochemicals) Ltd v Thompson and Voth v Manildra Flour Mills and confirmed in Dow Jones & Company Inc v Gutnick, I would hold that the place of the breach of duty, and the tort, in cases of negligent manufacture is the place of manufacture whether the breach is an act or an omission because it is the defective manufacturing process which gives the plaintiff his cause of complaint.

12. Such a conclusion is consistent with the observations of Callinan J in Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 at 76 where he said at [180]:

First, Pfeiffer holds that the law to be applied in cases of tort is the law of the place of the commission of the tort. What is not completely settled in cases of torts of product liability is how the place of the commission of the tort is to be determined, whether by reference to the place of design, manufacture, assembly, supply, consumption, or even of advertisement. True it is in a case of tort that damage is said to be the gist of the action, but equally, there will be no damage but for the defective design, manufacture, assembly or supply, as the case may be, wherever that occurred. Arguments can be persuasively advanced to locate the tort in any of the suggested places. This Court on balance appears to have adopted a test which is tantamount to asking the question, "where, in substance, did the act take place?"

Four Justices, although they did not refer in terms to the "substance" of the cause of action, an expression used by the Privy Council in Distillers Co (Biochemicals) Ltd v Thompson, in looking to "the act on the part of the defendant which gives the plaintiff his cause of complaint", were effectively adopting the same or a very similar approach to their Lordships in that case. The proposition that the best place for a trial will usually be the place where the defendant misconducted itself or omitted to do something (except in cases to which longstanding different rules based on different considerations apply, such as defamation and injurious falsehood cases), rather than where seven people are able to congregate to start an action, is I think, the preferable one.

13. Authority more directly applicable to the present facts is said by Amaca to be found in the decisions of the New South Wales Court of Appeal in James Hardie and Co Pty Ltd & Anor v Hall (as administrator of the Estate of Putt) (1998) 43 NSWLR 554 (Putt), James Hardie and Co Pty Ltd & Anor v Grigor (1998) 16 NSWCCR 435, and James Hardie and Coy Pty Ltd v Carley [1999] NSWCA 80 and in a decision of the Chief Justice of Tasmania, Jacobs v Australian Abrasives Pty Ltd [1971] Tas SR 92.

14. In Putt the defendant James Hardie and Co Pty Ltd exported raw asbestos fibre from Australia to a subsidiary company James Hardie and Co (NZ). That company used this asbestos fibre in the manufacture of asbestos cement product at a factory in Penrose in Auckland. The plaintiff was there employed between 1947 and 1951 and, as a result of his exposure to asbestos in this employment he contracted mesothelioma in 1977.

15. He sued James Hardie for damages asserting that because James Hardie the parent company exercised control and influence over its subsidiary it owed a duty to exercise reasonable care to protect the employees of the subsidiary from foreseeable harm.

16. The plaintiff alleged that this duty was breached by:

(1) arranging the supply and export of asbestos from Australia to New Zealand;

(2) failing to warn him of the dangers of asbestos; and,

(3) failing to ensure that a safe system of work was adopted by the subsidiary at the Penrose factory.

The trial judge accepted those submissions both as to duty and breach of duty, and awarded damages.

17. On appeal, the court (Sheller JA, Beazley and Stein JJA agreeing) held that the defendant owed no duty of care towards employees of its subsidiary. It further held that in any event such conduct as involved the supply and export of asbestos from Australia could not constitute a breach of duty in the light of the trial judge's finding that asbestos was not inherently dangerous and that "its danger depends upon the manner of its use".

18. In relation to the other two breaches upon which the plaintiff relied, failure to warn and failure to provide a safe system of work, the court held that if the defendant did owe to the plaintiff a duty then the place of the tort was New Zealand because:

In one case the place of the tort was the place where the warning should have operated to protect the plaintiff, in the other, the place where the system of work should have been safe. Both places were in New Zealand and I have no doubt that it was there that the tort complained of, properly analysed, occurred. (at577)

19. Implicit in the reasoning of Sheller JA in Putt is the proposition that there can be no breach of duty in simply supplying (or manufacturing) a product which is without defect and which can be used safely, albeit in compliance with appropriate warnings. The case is silent upon the liability of a manufacturer of defective articles in New South Wales for supply to consumers of those products in a foreign jurisdiction. Upon the findings of the trial judge in Putt, asbestos fibre per se was not a dangerous or defective product.

20. The effect of Putt was considered in James Hardie and Co Pty Ltd and Anor v Grigor (1998) 16 NSWCCR 435. The plaintiff, a resident of New Zealand, contracted mesothelioma as a result of inhaling asbestos fibres liberated from an asbestos-cement building product called Fibrolite. He alleged that the Fibrolite to which he was exposed was manufactured in part by James Hardie and Co in New South Wales for export to New Zealand and also in part by the subsidiary James Hardie and Co (NZ) at Penrose. The particulars of negligence upon which he relied included the failure by James Hardie and Co to control the operations of its subsidiary at Penrose, the duty rejected in Putt.

21. The particulars also included allegations that the defendant:

(e) knowing the risk of injury from the inhalation of asbestos dust and fibre in a respirable form, continuing to manufacture “Fibrolite” products for sale and use in New Zealand.
and
(j) Knowing the risk of injury from inhaling asbestos dust and fibres, continuing to permit manufacture of products containing asbestos . . .

22. In answer to a further request for particulars the plaintiff replied:

"In relation to material emanating from New South Wales
(a) The asbestos cement building materials which have caused the plaintiff's condition were manufactured by James Hardie and Co in circumstances giving rise to a tortious liability… and this manufacture took place in New South Wales. The manufacture involved the use of asbestos when the defendants knew or ought to have known that in the normal application of the products a preventable danger would be created and it is this preventable danger which has harmed the plaintiff.
and
(d) The defendants should, by 1947, have withdrawn asbestos cement building products from the market. By 1947 [the] defendant had sufficient knowledge of the dangers of asbestos and the availability of safe alternatives to asbestos to have discontinued the manufacture of a product which, in its reasonably expected use, presented an unnecessary risk to those using it. These decisions should have been made by the defendants in the course of their management and operations in New South Wales.”

23. Before the decision of the Court of Appeal in Putt was handed down the matter came before the Dust Diseases Tribunal on the defendant's motion to stay or dismiss the proceedings because New South Wales was a clearly inappropriate forum. The trial judge dismissed this motion, expressing his opinion consistently with the approach of the trial judge in Putt that the negligent acts and omissions occurred in New South Wales, in part by negligent manufacture in New South Wales, in part by failure to attach warnings to the products manufactured in New South Wales, and in part by the failure of management in New South Wales to control the operations of the New Zealand subsidiary in relation to the products there manufactured to the same effect.

24. The Court of Appeal upheld the defendant's appeal upon the ground that the trial judge's discretion had miscarried because of his erroneous view that the place of the tort was almost entirely in New South Wales.

25. Spigelman CJ was of the opinion that Putt had dealt with the place of the tort "in a manner which was not distinguishable from the present case" and referred to the judgment in Putt at page 576 where Sheller JA said "… if the defendants owed the plaintiff a duty of care it was breached when and at the place where the plaintiff was exposed to dust from the asbestos without adequate warning".

26. Mason P, with whom Beazley JA agreed, also found that the trial judge's discretion had miscarried. Reviewing the discretionary factors relevant to a plea of forum non conveniens His Honour said at 465 [96]:

In favour of a stay are the considerations that the action has a substantial connection with New Zealand, indeed nearly all of the particulars allege negligence occurring in New Zealand….
His Honour however did go on to add that a consideration to be placed in the opposite balance was:
. . . that one of the plaintiff’s allegations against the first defendant (particular of negligence (j)) pleads a case of manufacture [in New South Wales]. There is authority supporting the proposition that such a tort occurs in the place of negligent manufacture and not where the harm is suffered, for the purpose of the test approved in Voth at 566-7: see Dicey and Morris, The Conflict of Laws 12th ed (1993) at 1501-1511. I do not see this as carrying much weight in the present calculus, but such as it does is in favour of the plaintiff. (p 466)

27. Again Grigor is not authority for the proposition that where a foreign plaintiff suffers harm in consequence of defective or incorrectly manufactured articles the place of the tort is a place where the article was used or caused that harm.

28. James Hardie and Coy Pty Ltd v Carley was decided at first instance on the 12th of December 1996. The appeal was heard on 23 March 1999, after the decisions of the Court of Appeal in Putt and Grigor were delivered. The plaintiff, a resident of New Zealand, contracted mesothelioma as a result of exposure to asbestos containing insulation products used in the Whakatane Board Mill between 1964 and 1974. The products were manufactured in New South Wales and despatched to New Zealand without affixation of warnings. He succeeded at first instance but died before the defendant's appeal was heard. His estate was not represented in the Court of Appeal where the matter proceeded ex parte. The short judgment of the Court was delivered ex tempore by Sheller JA, Beazley JA and Stein JA agreeing. His Honour said:

. . . Armitage DCJ in finding negligence, relied on holding that Mr Carley’s cause of action arose in New South Wales upon James Hardie's failure to include warnings on the packaging of its products. Essentially the same claim was made on behalf of Mr Putt and rejected by this court .

Further, Armitage DCJ upheld Mr Carley’s claim on the basis that James Hardie had been negligent in continuing to export asbestos based products to New Zealand after the dangers of these products had been known. In this court [in Putt] it was said that the export of asbestos-containing products was not of itself tortuous.

29. With the greatest respect, what was said in Putt was that the export of raw asbestos fibre to New Zealand was not in breach of duty in circumstances where the trial judge found as a fact that asbestos was not inherently dangerous. The court did not there consider the manufacture of an asbestos-containing product in New South Wales in admitted breach of duty, i.e. tortiously.

30. What His Honour actually said in Putt at page 575 was this:

The reasons for judgment [of the trial judge] placed the tort in New South Wales solely by reference to arrangements for the export of asbestos and the shipping of it from Australia to New Zealand. I repeat a sentence which I have already quoted from His Honour's reasons for judgment: "in doing so the first defendant committed a breach of duty in New South Wales." His Honour did not describe the breach unless it be the very act of export. Earlier His Honour had found that asbestos was not inherently dangerous. Its danger depends upon the manner of its use."

With respect I think the inconsistency to which I have referred and the absence of a complete and thorough analysis have tended to conceal what were in truth the breaches, if the defendants owed a duty of care. These were a failure when supplying asbestos to a consumer to warn of the dangers of its use without appropriate safeguards or if indeed the defendants had the capacity to give instructions which James Hardie and Co (NZ) was bound to accept, the failure to ensure a safe system of work for James Hardie and Co (NZ)’s employees.

31. Because the court in Carley did not distinguish the factual situation there before them as in significant degree different to Putt, the precedential value of the judgment is to be seen as no more than confirming that the analysis found in Putt as to the place of a tort founded on negligent omissions is correct.

32. Significantly, upon the facts and reasoning in Putt, if there were a duty, there was no breach of that duty before the asbestos material arrived in New Zealand. If there were a failure to warn, or to ensure a safe system of work, that failure occurred at the place where the omission assumed significance, that is, the place where the defendant’s want of care caused the plaintiff to be exposed injuriously to asbestos, there being no prior breach of duty.

33. Putt, Grigor and Carley are authority for the proposition that in cases constituted by failure to warn against dangers or provide a safe system of work, the place of the tort is that place where "the omission assumes significance". They do not stand as authority for the proposition that where a defendant in breach of duty manufactures a product containing a toxin, which product cannot be used safely, the place of the tort is that place where the plaintiff is fortuitously exposed to the toxin.

34. Jacobs v Australian Abrasives Pty Ltd (1971) Tas SR 92 concerned a plaintiff injured in Tasmania by the failure of a grinding wheel manufactured in New South Wales. He sued the New South Wales manufacturer and sought leave to serve the process out of the jurisdiction. The rules of the court permitted that step if "the action is founded on a tort committed in this state".

35. The statement of claim alleged the following particulars of negligence:

Supplying for sale an abrasive wheel without displaying thereon, or supplying therewith, adequate simple and specific warnings as to its inherent dangers and instructions as to the safe method of using the same.

36. In granting leave Burberry CJ said at 96:

The alleged tort is that of negligence. To establish negligence the plaintiff must show a breach of duty to him . The breach of duty complained of is a breach of duty by the manufacturer of the goods to an ultimate consumer or user. The alleged breach would seem to be either in failing to take reasonable care in manufacturing the article so that it was dangerous in use or in a failure to attach or supply with the article adequate instructions or warnings as to its use so as to avoid or minimise the risk. The foundation of the action is that the plaintiff, although in another State, was one of an anonymous class of users of the wheel within the contemplation of the defendant. The breach of duty (if it be such) is not complete until the dangerous article or the article without adequate instructions or warnings reaches the consumer or user. He has no cause of action unless or until he suffers damage as a result of that breach of duty, but to my mind the tort of negligence is committed when and where the breach of duty is complete and that is in Tasmania.

37. His Honour concluded (at 97):

To my mind the plaintiff in the present case is in the same position as the plaintiff in Thompson v Distillers Co (Biochemicals) Ltd (supra). The plaintiff is an ultimate consumer of the article, or user of the article, within the contemplation of the defendant, and is thus someone to whom the defendant owed the duty to which the breach is complained. That duty was breached when the abrasive wheel came into the hands of the plaintiff as an article exposing him to risk of injury in the absence of taking precautions in accordance with adequate instructions and warnings supplied with the article.

38. Although in his reasons Burberry CJ passingly refers to a breach of duty by negligent manufacture, that breach was not pleaded, was not the subject of his conclusion, and was not the breach considered by the Privy Council in Distillers where the only breach of duty alleged was failure to warn against a discrete and peculiar risk to pregnant women. The product Distaval there considered was without manufacturing defect and the addition of the ingredient thalidomide was not suggested as constituting any breach of duty. Sheller JA in Putt adverted to the decision in Jacobs, regarding it as authority relevant to a failure to warn.

39. In so far as Burberry CJ expresses an opinion that the breach of a manufacturer's duty to ensure that his product is without latent defect (against which any warning other than “do not use this product” is useless) is incomplete until the article reaches the consumer, I believe him to be wrong.

40. A breach of duty is constituted by that act which is forbidden by the duty, or the omission of that act mandated by the duty. In a case of defective manufacture by wrongful addition of a toxic ingredient, the act forbidden by the duty occurs at the time of, and at the place of manufacture and that is the place of the tort. The place where the breach has its effect and the place where the damage occurs are in such a case “quite fortuitous”. As the High Court said in Voth “It is the act of the defendant, and not its consequences that must be the focus of attention”.

Relevant Present Facts

41. Mr Graham for Amaca has conceded that I may consider each particular of negligence upon which the plaintiff relies disjunctively and independently of the others. I think he is right to do so and propose to examine the liability of Amaca exclusively in the light of the admissions by Amaca that it breached its duty of care to the plaintiff by “(e) Continuing to use asbestos in the Hardie Products when it knew or ought to have known that persons such as the plaintiff were at risk of inhaling asbestos dust and fibres from the products and thereby suffering the Asbestos Diseases; and (k) failing to substitute the asbestos in the Hardie products at its New South Wales manufacturing centre with non-asbestos material" and that these breaches caused the plaintiff's injuries.

42. Although (k) is framed as an omission, the substance of this allegation is that the defendant tortiously used asbestos fibre in manufacturing its insulation products.

43. These admissions of breach of duty constitute concessions of mixed law and fact; the defendant implicitly conceding that the scope of its duty to the plaintiff extended to removal of all asbestos materials from its insulation products.

44. To the specialist knowledge of this Tribunal, the dangers of contracting mesothelioma from relatively trivial exposure to asbestos fibres were recorded in medical journals before 1963. The defendant's admission that it breached its duty to the plaintiff by continuing between 1963 and 1966 to use asbestos in its insulation products, (independently of breaches constituted by failure to warn), constitutes an admission that it then knew or ought to have known that products containing asbestos were inherently dangerous; that is, as is now generally known, the products constituted such danger to an end user as could not be reasonably obviated by a simple warning and compliance with instructions as to use. The toxic quality was inherent in the defective product and did not depend upon "the manner of its use".

45. I must here record that I have not been asked to decide exactly when it was that the growing body of medical evidence compelled the conclusion that all asbestos products should be withdrawn from the market. No evidence has been led on that subject, and the present admissions foreclose inquiry. The facts of this case do not generate a determination on an issue of a general nature.

46. I hold that the place of the admitted tort by which Mr Frost suffered damage is New South Wales.

Plaintiff's Alternative Contentions

47. If I am wrong in my conclusion that the place of the tort is New South Wales, then New Zealand law is to govern the plaintiff’s entitlement to damages. The plaintiff asserts that s394 does not operate to bar the his claim because he does not have cover under the Accidents Insurance Act 1998 (NZ), and further, that even if he does have cover, s394 does not operate to bar recovery when a defendant is sued in a court which is not a New Zealand court.

Does the Plaintiff have cover under section 39 of the Accidents Insurance Act 1998 (NZ)?

48. Relevant sections of the act are as follows:

39 Cover for personal injury suffered in New Zealand (except mental injury caused by certain criminal acts)

(1) An insured has cover for a personal injury if

(a) He or she suffers the personal injury in New Zealand on or after 1 July 1999; and

. . .

(c) The personal injury is described in any of the paragraphs in subsection (2)

(2) Subsection (1)(c) applies to-

. . .

(d) Personal injury caused by a work related gradual process, disease, or infection suffered by the insured; or

. . .

41. Cover for personal injury suffered outside New Zealand (except mental injury caused by certain criminal acts)

(1) An insured has cover for a personal injury if-

(a) He or she suffers the personal injury outside New Zealand on or after 1 July 1999; and

(b) [The personal injury is caused by a work related gradual process]

(c) The insured is ordinarily resident in New Zealand when he or she suffers the personal injury; and

(d) The personal injury is one for which the insured would have cover if he or she had suffered it in New Zealand,-

45. Date on which insured suffers personal injury caused by a work-related gradual process, disease, or infection-

(1) The date on which the insured suffers personal injury caused by a work related gradual process, disease, or infection is the earlier of the following dates:

(a) the date on which the insured first receives treatment from a registered medical practitioner for that personal injury as that personal injury:

(b). . .

49. It is the plaintiff’s contention that because he was neither in New Zealand nor ordinarily resident in New Zealand at the time he suffered his injury, deemed by s45 to be in 2000, he was not entitled to cover under either s39 or s41.

50. Such an argument was raised before Heron J in the High Court in New Zealand in Bryant v Attorney General (unreported, High Court, Wellington, CP 44/00 7 August 2000). Mr Bryant, a New Zealand-born engineer then resident in Australia, contracted mesothelioma as a result of New Zealand exposure to asbestos and first received medical treatment in August 1999. In holding that he was entitled to cover pursuant to s39 Heron J said:

. . . in the end it seems to me a purposive construction of the Act so far as section 45 is concerned is required. In my view it fixes the time of personal injury by accident but does not exclude cover in the circumstances of this personal injury by accident which was a result of a process suffered or undertaken in New Zealand.

51. In circumstances where His Honour’s interpretation of the law is tenable, binding upon those who administer the Accident Insurance Act 1998, and the plaintiff has been granted cover under the Act, it would be entirely inappropriate for me to consider an alternative view of the law.

52. I hold that the plaintiff does have cover under the Act.

If the Plaintiff does have cover, can s394 of the Accident Insurance Act 1998 (NZ) operate to bar recovery of damages in a New South Wales court?

53. In Putt, Sheller JA considered s17 of the Accident Rehabilitation and Compensation Insurance Act 1992 (NZ) which was in similar terms to s394, viz:

S17 No proceedings for damages arising directly or indirectly out of personal injury that is caused by gradual process, disease, or infection from exposure of any person before the 1st day of April 1974 arising out of and in the course of employment within the meaning of this Act that ceased before that date shall be commenced in any court in New Zealand independently of this Act on or after the 1st day of April 1993, whether by that person or any other person, and whether under any rule of law or any enactment.
And concluded at 579;
In my opinion…s17 must be read as extinguishing any cause of action for damages arising directly or indirectly out of personal injury caused and arising in the manner therein described. While the language of the section in form bars an action to enforce a right to damages, its substantial effect, read in the context of the act as a whole, is to substitute cover under the act for the right to recover common law damages. It is a substantive law…the section extinguished the plaintiff’s common law right to recover damages for his injury.

54. Notwithstanding the force of this authority, Mr Little SC for the plaintiff argues that Putt is distinguishable on this issue because Mr Putt was not a resident of Australia with unfettered right of access to the courts of Australia. I am not persuaded by this particular submission.

55. Mr Little further argues that the provisions of the Accident Insurance Act 1998 (NZ) taken as a whole do not disclose a legislative intention that the common law right to recover damages for personal injury be entirely extinguished in New Zealand law. He submits that the statute and the common law of New Zealand countenance that foreign courts applying New Zealand law may award compensatory damages for personal injury against a negligent foreign defendant.

56. He makes two points. First, s396 of the Act preserves the right of an injured plaintiff to bring proceedings for exemplary damages before New Zealand courts in respect of personal injuries and secondly s398 of the Act contemplates that persons entitled to cover under the Act have the right to bring proceedings for damages in courts other than New Zealand courts.

57. Section 398 is in the following relevant terms:

398. Powers of insurer when claimant has right to bring proceedings-

(1) Subsection (2) applies when-

(a) Any entitlement is required to be provided under this Act for personal injury to an insured; and

(b) The Insured has the right to bring proceedings for damages in New Zealand or elsewhere for the personal injury.

(2) When this subsection applies, the insurer may require an insured to do one of the following things, at the insured’s option and at the insurer’s expense:

(a) To take all reasonable steps to enforce the right;…

58. To my mind this reasoning is unsound. First, there is no inconsistency in extinguishing the right to claim compensatory damages in circumstances where the Act provides insurance cover for the losses occasioned by the tort, while yet preserving that public policy pursuant to which exemplary damages are awarded by the courts.

59. Secondly, s398 does not direct that New Zealand law is to apply in those actions to which it refers. If the substantive law of New Zealand is to apply, the foreign jurisdiction cannot award damages because the insured has no right to bring proceedings for damages in New Zealand or elsewhere and s398 has no application. If the foreign law is to apply the New Zealand statute does not operate to bar damages. S398 obviously contemplates actions brought before foreign courts, or before New Zealand courts applying foreign law, in respect of injuries suffered outside New Zealand by persons ordinarily resident in New Zealand. Such persons are entitled to cover pursuant to s41 of the Act.

60. I hold that because the plaintiff has cover, s394 of the Act bars his right to recover damages in a New South Wales court applying the law of New Zealand.

61. Verdict and Judgment for the plaintiff in the sum of $320,000. The defendant is to pay the plaintiff’s costs.

Mr GF Little SC instructed by Turner Freeman appeared for the plaintiff

Mr DE Graham instructed by Allens Arthur Robinson appeared for the defendant