BHP Billiton Ltd v Nilsen (SA) Pty Ltd - [2012] SADC 34

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Interlocutory Application)
BHP BILLITON LTD v NILSEN (SA) PTY LTD
[2012] SADC 34
Judgment of His Honour Judge Gilchrist
22 March 2012
PROCEDURE
Further particularity of a statement of claim on the cross action sought - operation and scope of r98(2) - inappropriate to merely make reference to paragraph numbers - pleading of a long latency - extent of particulars required for exposure to asbestos - application allowed in a limited respect.

BHP BILLITON LTD v NILSEN (SA) PTY LTD
[2012] SADC 34

This is an interlocutory application by the third party, BHP Billiton Limited, that seeks an order that the statement of claim on the cross action (the third party claim) filed by the first defendant, Nilsen (SA) Pty Ltd, be struck out or in the alternative that Nilsen be directed to file further and better particulars.
In considering this application regard must be had to the guiding principles regarding the general rules of pleadings contained in Rule 98(2):
A pleading-
(a) must be as brief as the nature of the case allows;
(b) must state only material facts relied up and not the evidence or arguments by which the facts are to be proved; ...
Nilsen’s third party claim relies upon the settlement of the plaintiff’s claim in the main action by several of the defendants in that action.
Amongst others, one of the major complaints of BHP, is that the third party claim makes reference to various paragraph numbers in the plaintiff’s statement of claim rather than specifying in pleading form the specific allegations that Nilsen makes as against BHP.
I think this complaint is well founded. The plaintiff’s action is at an end. BHP is entitled to assume that Nilsen has given appropriate consideration as to those of the plaintiff’s allegations that it considers can and must be proved for it to succeed in prosecuting a third party action against it.
This will be best achieved by requiring Nilsen to specify what it contends those allegations are, rather than merely citing various paragraph numbers from the plaintiff’s statement of claim.
As for the pleadings generally, I think that what emerges from the cases is that the guiding test must be whether or not the reader of the pleadings will understand the case that must be met.
The third party claim reveals that Nilsen accepts that it was the plaintiff’s employer and that the plaintiff suffered injury loss and damage as a result if its negligence as his employer. It, along with other defendants, accepted that the plaintiff was entitled to damages in the amount of $260,000 and costs of $50,000. It accepted that it was liable to pay 50% of these amounts.
It claims to be entitled to recover money from BHP on two bases. First in contract. Second in tort.
It contends that during the period from November 1964 through to January 1979 the plaintiff worked for it at BHP’s premises at Whyalla. It contends that whilst he undertook that work he was exposed to asbestos.
The claim in contract is based upon the assertion that the plaintiff was undertaking this work as a result of contracts that it had with BHP.
Nilsen claims to be unable to provide full particulars of these contracts but asserts that even so there were a number of express contractual obligations that BHP had. It asserts the following. BHP was responsible for specifying the materials to be used by Nilsen and its employees at BHP’s premises. It supplied all of the material that was used by the plaintiff and the other employees of Nilsen in the course of their work at BHP’s premises. It directed when and where the work was to be carried out by Nilsen’s employees, including the plaintiff and it coordinated the different trades that were working in the same area at BHP’s premises. In particular it decided when Nilsen employees, including the plaintiff, would perform work in the area or in the vicinity of work being carried out by other persons including work involving the use of asbestos or asbestos products.
In addition to these Nilsen asserts that the contracts contained a number of relevant implied terms. It contends that these terms obliged BHP to specify only products which did not give rise to a risk of injury to Nielsen’s employees. They obliged BHP to supply only products which did not give rise to a risk of injury to Nielsen’s employees. They obliged BHP to coordinate the work of workers at BHP’s premises (including employees of Nilsen) in such a way as to not give rise to the risk of injury to Nilsen’s employees, including the plaintiff. They obliged BHP to comply with all relevant statutory provisions and in particular to comply with the provisions of the Health Act 1935 (SA) and the Industrial Safety Health and Welfare Act 1972 (SA) and the Regulations made under those Acts. They obliged BHP to otherwise take reasonable care for the safety of Nilsen’s employees including the plaintiff.
It contends that these terms were to be implied because they were necessary to give these contracts business efficacy.
Next it claims that BHP breached these terms. The third party claim asserts through paragraph 13 that these contractual obligations were breached by reference to various pleadings contained in the plaintiff’s statement of claims. As was said earlier, I do not regard this as sufficient. This will need to be corrected if this action is to go further.
Nilsen then contends that had BHP not been in breach of these contractual terms the plaintiff would have not suffered the injury that he suffered in the course his employment with Nilsen and that therefore Nilsen would have not suffered the damage that it had suffered by reason of its obligation to pay damages and costs to the plaintiff and in defending and in negotiating the settlement of the plaintiff’s claim.
Nilsen contends that as a result it is entitled to damages in contract, as against BHP, to recoup those losses.
The claim in tort is based upon the assertion that when the plaintiff was undertaking work at BHP’s premises BHP owed him a duty of care, that it knew or should have known of the risk of injury associated with the inhalation of asbestos dust and that it breached its duty of care to the plaintiff in a number of ways.
It contends that as a result of these breaches it is entitled to recover contribution or indemnity from BHP pursuant to the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA).
The allegations of negligence are contained in paragraph 19 of the third party claim.
It contends that BHP was negligent in a variety of ways. Without repeating them, because many overlap, the principal complaints are that BHP was negligent because: it supplied and required the plaintiff to use products that contained asbestos; it permitted the plaintiff to work in and around asbestos dust and fibre; it failed to take effective steps to protect that plaintiff from the consequences of that exposure such as providing him with respiratory protection, maintaining an adequate exhaust draft, providing him with coveralls or some other form of full body protective clothing; and that as a consequence of these and other matters it breached various statutory and regulatory obligations that it owed to the plaintiff to keep him safe.
Nilsen asserts that to the extent that it is necessary to seek an extension of time to prosecute this action it relies upon the provisions of s 48 of the Limitation of Actions Act 1936. It contends that it should be granted an extension of time because facts material to its case against BHP, namely that the plaintiff was intending to claim against it were not ascertained by it until it first became aware of the plaintiff’s claim against it in on about December 2010. Next it says that this action was instituted within 12 months of the ascertainment of these facts and that in all the circumstances of the case it is just to grant the extension of time.
BHP makes a general complaint that pleadings do not identify: the types of asbestos insulation materials that were allegedly used; the composition of those materials; specific work places were the plaintiff was exposed to asbestos; the manner and extent of the exposure of what BHP knew or ought to have known of the risk of asbestos of when and how it had or ought to have obtained that knowledge. It says that without this level of particularity it will be prejudiced in defending this action.
I accept that ideally particulars of this type ought to have been provided. However, as Judge Parsons noted in Morris v Resi Corporation and Babcock Australia Pty Ltd:
Any issue concerning the sufficiency of the pleadings in a claim for damages for a dust disease must be determined bearing in mind the generally accepted position that such diseases remain latent for many years after the asserted exposure. By the time that the injury first comes to the attention of the plaintiff and proceedings are issued, many years will have passed and the passage of time may influence the precision with which a plaintiff may plead material facts. As a result, the material facts supporting a conclusion that the plaintiff was exposed to asbestos may be based upon the best recollection that the plaintiff has about where and when an alleged exposure occurred, what duties were undertaken at that time and the duration and circumstances of the alleged exposure.
Added to that, the very nature of an asbestos related disease makes it impossible to isolate any particular exposure amongst many, as the cause of the condition. Material facts as to exposure will necessarily be global rather than precise.
…whether the pleadings define the issues for the Court and give fair notice to an opposing party necessarily involve the context which includes the nature of the cause of action and the relevant circumstances. ([2011] SADC 70 at paras 16, 17 and 21)
In my view these remarks are apposite here. The alleged exposure to asbestos in this case that relates to BHP occurred in the period between November 1964 and January 1979. It is scarcely surprising that Nilsen is unable to provide the level of particularity sought on these issues. Presumably much of Nilsen’s case will be based upon the drawing of inferences rather than direct evidence. If the claim fails because of the lack of cogent evidence, then so be it. If evidence emerges, that would have enabled particulars to be given, and this causes BHP some embarrassment, that issue can be dealt with at that time. In the circumstances of this case I would not regard the particulars given in respect of these issues as inadequate.
BHP complains that Nilsen refers to contracts but provides no particulars of the contracts.
I think this is essentially a matter of evidence, not pleadings. Subject to the amendments that I have suggested in my opinion the third party claim provides sufficient particularity for BHP to know the case that it needs to meet in contract.
If Nilsen is unable to adduce evidence sufficient to establish as a fact that contracts between it and BHP existed at the relevant time in terms consistent with what it has pleaded, its case in contract will fail.
BHP contends that it is incongruous that Nilsen can identify implied terms but it cannot particularise express terms.
In the circumstances of this case I see no such incongruity. Presumably Nilsen cannot provide further particulars of the express terms because it does not have in its possession and does not otherwise know precisely what the terms of the contracts are. The terms that it identifies as implied terms are the terms it is hoping the Court will recognise as being necessary to give contracts business efficacy and otherwise will satisfy the legal requirements necessary for the terms to be implied.
BHP contends that all that paragraph 19 does is make allegations without identifying material facts about the circumstances of the failures or information that BHP should have done and known that did not do so.
It seems to me, that this is really complaining about a lack of evidence, which of course, is outside of the purview of pleadings.
BHP complains that Nilsen has failed to provide particulars relating to the plaintiff’s exposure to asbestos outside of the period when the plaintiff was working at BHP’s premises in Whyalla. It contends that it needs these particulars to determine and any proportion or contribution that Nilsen is claiming.
The pleadings demonstrate that Nilsen has assumed 50% responsibility for the damages and costs payable to the plaintiff. It will need to adduce some evidence at trial to support that contention and also to support the damages that it has paid. It seems to me that these are matters of evidence.
BHP complains that Nilsen has not provided any particulars of the costs that it has incurred. It seems to me that this is a matter of evidence.
BHP complains that Nilsen has not identified any material facts or particulars about the plaintiff’s injury, loss and damage. It has not, but extracting from the plaintiff’s statement of claim those matters that Nilsen contends can and need to be proved in its action against BHP can cure this.
I have listened to, read and re-read the submissions advanced on behalf of BHP. Apart from its legitimate complaint that it is entitled to more than a reference to paragraph numbers in the plaintiff’s statement of claim in my opinion the third party claim gives BHP fair notice of the nature of the claim against it.
Accordingly I propose to adjourn this application and invite Nilsen to consider applying to make the amendments to the third party claim in that manner that I have suggested.