BI (Contracting) Pty Ltd v David Jones Ltd - [2019] SASCFC 138

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
BI (CONTRACTING) PTY LTD v DAVID JONES LTD
[2019] SASCFC 138
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Kelly and The Honourable Justice Hinton)
8 November 2019
TORTS - THE LAW OF TORTS GENERALLY - JOINT OR SEVERAL TORTFEASORS - CONTRIBUTION - GENERALLY - RELEVANT PRINCIPLES
TORTS - NEGLIGENCE - APPORTIONMENT OF RESPONSIBILITY AND DAMAGES - PRINCIPLES AND MODE OF APPORTIONMENT
WORKERS' COMPENSATION - WORKERS' COMPENSATION LEGISLATION FOR PARTICULAR INDUSTRIES AND DISEASES - DUST DISEASES - DAMAGES
The appellant was the defendant in an action for contribution brought by the respondent pursuant to s 6 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA), following the settlement of a claim for damages for personal injury brought against the respondent by Mr Murphy, a former employee of the respondent’s. Mr Murphy had alleged that in the course of his employment he was negligently exposed to asbestos and, as a result, contracted mesothelioma.
The trial Judge found that the respondent had proved that Mr Murphy was exposed to asbestos sprayed by the appellant and determined that a fair apportionment of liability between the appellant and the respondent was 75/25, being that the respondent was entitled to recover 75 per cent of its reasonable liability to Mr Murphy from the appellant. The trial Judge found that settlement sum was reasonable and that the respondent had therefore proved the quantum of its claim against the appellant.
The appellant complains on appeal that the respondent failed to establish that Mr Murphy was exposed to asbestos sprayed by the appellant and that the trial Judge applied the incorrect legal test in finding that the respondent had proved the quantum of its alleged loss and erred in finding that the settlement was reasonable.
Held, per Kelly J (Kourakis CJ and Hinton J agreeing), dismissing the appeal:
1. It was open to the Judge to conclude that during the course of his employment with the respondent, Mr Murphy had, on the balance of probabilities, been exposed to asbestos in the display area of David Jones’ premises.
2. The Judge applied the correct legal test with respect to quantum.
3. On the basis of the material available, the Judge was entitled to conclude that the figure for which the respondent settled the primary claim was reasonable. Having regard to the appellant’s greater culpability in respect of the joint exposure, an amount equivalent to 75 per cent of that sum was fair and equitable.
Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) s 6; Dust Diseases Act 2005 (SA) s 8(1)(b), referred to.
Saccardo Constructions Pty Ltd v Gammon (No 2) (1994) 63 SASR 333; Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603; Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574; Fox v Percy (2003) 214 CLR 118, applied.
Deloitte Touche Tohmatsu v Cridlands Pty Ltd & Ors (2003) 204 ALR 281; 134 FCR 474, discussed.
David Jones Ltd v BI (Contracting) P/L [2017] SADC 79; Bakker v Joppich & Bitumax Pty Ltd (1980) 25 SASR 468; Bitumen & Oil Refineries (Australia) Ltd v Commissioner for Government Transport (1955) 92 CLR 200; BHP Billiton Ltd v Hamilton (2013) 117 SASR 329, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"contribution", "quantum", "reasonableness of the settlement"

BI (CONTRACTING) PTY LTD v DAVID JONES LTD
[2019] SASCFC 138
Full Court: Kourakis CJ, Kelly and Hinton JJ

KOURAKIS CJ: I would dismiss the appeal for the reasons given by Kelly J.
KELLY J.
Introduction
This is an appeal from a decision made in the District Court of South Australia on 28 July 2017.[1]
[1] David Jones Ltd v BI (Contracting) P/L [2017] SADC 79.
The appellant, BI (Contracting) Pty Ltd (‘BI’), was the defendant in an action for contribution brought by the respondent, David Jones Ltd (‘David Jones’), pursuant to s 6 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) (‘the Law Reform Act’), following the settlement of a claim for damages for personal injury.
The relevant portions of s 6 of the Law Reform Act are set out:
6—Right to contribution
(1)A person who is liable in damages for harm suffered by another may recover contribution from a third person who is also liable in damages for the same harm.
…
(5)The contribution is to be an amount that is fair and equitable having regard to the extent of each contributory’s responsibility for the harm.
Prior to institution of the contribution action, David Jones had settled the primary action brought by its former employee, Mr Phillip Murphy (now deceased), who had sued David Jones in the Dust Diseases Tribunal of New South Wales in April 2007 for damages for personal injury, alleging that in the course of his employment he was negligently exposed to asbestos and, as a result, developed mesothelioma.
David Jones settled the primary action by consent in the sum of $435,000 all-inclusive and subsequently brought the action for contribution from BI.
In the contribution proceedings, David Jones alleged that, in 1960, BI had applied sprayed asbestos at the David Jones premises in Rundle Street, Adelaide, and that this asbestos was the asbestos to which Mr Murphy was exposed in the course of his employment.
The Judge found that David Jones had proved that Mr Murphy was exposed to asbestos sprayed by BI and determined that a fair apportionment of liability as between BI and David Jones was 75/25, that is, David Jones was entitled to recover 75 per cent of its reasonable liability to Mr Murphy. In reaching that conclusion, the Judge found that, although David Jones was exclusively responsible for all of Mr Murphy’s exposure to asbestos, the majority of the exposure was joint, and that BI had a much greater culpability for that joint exposure than David Jones. The Judge also found that, viewed objectively, the settlement of $435,000 was well within the limits of reasonable tolerance and that David Jones had therefore proved the quantum of its claim against BI.
BI appeals that decision on two main grounds. The first ground of appeal alleges that David Jones failed to establish that Mr Murphy was exposed to asbestos sprayed by BI. The second ground of appeal alleges that the Judge applied the incorrect legal test in finding that David Jones had proved the quantum of its alleged loss. BI also seeks an extension of time for commencement of the appeal.
Background facts
Before turning to the grounds of appeal it is necessary to set out the history to the proceedings and the relevant factual background.
Between 24 May 1965 and 29 December 1978, David Jones employed Mr Murphy as a display artist at its Rundle Street store. Mr Murphy principally worked in an area described as “the roof space”, known as the display department (sometimes referred to as “the seventh floor” or the “plant room”) in the David Jones store, preparing props and window dressings for store promotions. The display department incorporated an open workshop, some partitioned offices and an air‑conditioning plant room with associated duct work.
In 1960, BI sprayed 22,106 square yards with asbestos throughout the store. The sprayed asbestos was applied to all structural steelwork.
In April 2007, Mr Murphy instituted proceedings against David Jones seeking damages for personal injury, claiming that David Jones had negligently exposed him to asbestos in the course of employment as a result of which he contracted a dust disease, namely mesothelioma.
In October 2007, those proceedings were settled and judgment was entered by consent for Mr Murphy in the amount of $435,000 inclusive of costs. Mr Murphy died in January 2008 from mesothelioma.
In October 2010, David Jones commenced proceedings against BI seeking indemnity or contribution in relation to its liability to Mr Murphy.
BI admitted that it carried out sprayed asbestos operations at David Jones’ Rundle Street store but otherwise denied that David Jones was entitled to indemnity or contribution from it.
David Jones’ primary case at trial was that Mr Murphy had been exposed to sprayed asbestos during his work in the display department. David Jones relied on a body of documentary evidence and oral evidence called from eye‑witnesses who saw Mr Murphy in that area during his employment at the David Jones’ Rundle Street store.
BI’s defence was that David Jones had not proved exposure and, furthermore, had not established that the settlement of the primary proceedings in the sum of $435,000 inclusive of costs was reasonable.
The Judge’s findings
The Judge made the following findings in relation to the exposure of Mr Murphy to asbestos in the store:[2]
[2] David Jones Ltd v BI (Contracting) P/L [2017] SADC 79, 12 [78]-[81], 13 [83], 13 [85].
1.BI sprayed 22,106 square yards of asbestos at David Jones’ Rundle Street store in 1960. The asbestos was sprayed on the building’s structural steelwork.
2.The asbestos sprayed by BI contained blue asbestos, i.e. crocidolite, which is a very toxic form of asbestos.
3.Mr Murphy worked in the display department of the Rundle Street store between 24 May 1965 and 29 December 1978, a period of 13 years.
4.The evidence did not permit of a finding that the ceiling or the air‑conditioning ducts in the display department were sprayed with asbestos.
5.It was apparent from the Asbestos Register that there was asbestos in many areas of the David Jones store, including the roof area on the boilers, the plant room soffit beams, the original electric cable trays, and asbestos rope at the concrete roof slab interface. There were also traces of asbestos in a variety of other locations throughout the building.
6.Mr Murphy was exposed to asbestos dust in circumstances in which that exposure might have caused or contributed to his mesothelioma.
7.Based on the evidence given and findings made in The Public Trustee of South Australia v Clifton Financial Services Pty Ltd (No. 3),[3] BI knew, when it sprayed asbestos at the Rundle Street store in 1960, that it was hazardous and took no steps to warn David Jones or any of its employees of the danger.
8.The failure to warn of the dangers established negligence on the part of BI.
9.It was likely that Mr Murphy was exposed to some asbestos at the store that was not supplied by BI and that such other asbestos may have caused or contributed to his mesothelioma.
[3] [2004] NSWDDT 40.
The trial Judge found that the presumption created in s 8(1)(b) of the Dust Diseases Act 2005 (SA) (‘Dust Diseases Act’) was engaged. That section relevantly states:
8—Evidentiary presumptions and special rules of evidence and procedure
(1)If it is established in a dust disease action that a person (the injured person)—
(a) suffers or suffered from a dust disease; and
(b) was exposed to asbestos dust in circumstances in which the exposure might have caused or contributed to the disease,
it will be presumed, in the absence of proof to the contrary, that the exposure to asbestos dust caused or contributed to the injured person’s dust disease.
It was sufficient for David Jones to prove that the deceased was exposed to asbestos sprayed by BI which might have caused mesothelioma. The Judge found that it was therefore incumbent on BI to prove that Mr Murphy’s exposure to the asbestos which BI sprayed in 1960 did not cause or contribute to Mr Murphy’s mesothelioma.
BI did not adduce any evidence to negate the statutory presumption.
In assessing the contribution that asbestos other than the asbestos sprayed by BI might have made to Mr Murphy’s contraction of mesothelioma, the trial Judge concluded that it was likely that the 22,106 square yards of asbestos sprayed by BI was, by volume, much greater than any other asbestos within the David Jones Rundle Street store and, having regard to that fact, a fair and equitable apportionment of liability as between BI and David Jones was 75/25 per cent.
Ground 1 – Proof of Exposure
BI’s complaint in support of ground 1 is based on comments and observations made by the trial Judge in the following paragraphs:
[78]Whilst I thought that Ms Cavanaugh and Ms Simmons were credible witnesses and I generally accept their evidence, it does not permit a finding that the ceiling in the so called roof area was sprayed with asbestos, nor does it permit a finding that the air conditioning ducts in that area were sprayed with asbestos. Ms Simmons’ evidence of her understanding in respect of asbestos is clearly hearsay and inadmissible.
[79]The evidence does, however, establish that in 1960 BI sprayed 22,106 square yards of asbestos at the [David Jones] Store. It establishes that it sprayed asbestos on the building’s structural steelwork. Based on the air sampling report attached to the Department of Public Health letter of 14 November 1977 and the evidence given and findings made in The Public Trustee of South Australia v Clifton and Ors, I think it likely that the asbestos that BI had sprayed at the [David Jones] Store contained blue asbestos, i.e. crocidolite, and I so find. I am permitted to know that crocidolite is a very toxic form of asbestos and that it is much more toxic than other forms of asbestos. Mr Murphy worked at that store between 24 May 1965 and 29 December 1978 in its Display Department. In my view these facts are sufficient to enable me to find that he was exposed to asbestos dust in circumstances in which that exposure might have caused or contributed to his mesothelioma. As such, the evidentiary presumption created by s 8(1)(b) of the Dust Diseases Act created an evidentiary burden on BI to establish that this exposure did not cause or contribute to Mr Murphy’s mesothelioma. It has not adduced any evidence to discharge that burden. I therefore find Mr Murphy’s exposure to the asbestos dust that BI sprayed at the [David Jones] Store caused or contributed to his mesothelioma.
[Citations omitted]
BI contended that, by inference, the Judge must have found in these paragraphs that Mr Murphy was exposed to sprayed asbestos elsewhere in the building than in the display department. BI contended that the evidence did not permit a finding that Mr Murphy had been exposed to any sprayed asbestos outside of the display department. There was simply no evidence that Mr Murphy was exposed or that he even worked for periods of time in other locations within the building. It was contended that the Judge’s conclusion effectively amounted to an erroneous finding that the mere possibility of Mr Murphy’s presence within the building elsewhere proved, on the balance of probabilities, that he had been exposed to it. Given the finding that the evidence did not permit a finding that Mr Murphy had been exposed to sprayed asbestos within the display department, BI complained that the burden of proof on David Jones had not been discharged.
In my view, BI’s argument is based on a misunderstanding as to the true effect of the trial Judge’s conclusions when read in their proper context.
The trial Judge correctly summarised David Jones’ case based on the documentary evidence:
[9]First, I must determine whether or not liability has been established as against BI. If it has, which will be contingent upon proof of exposure to asbestos, I must reflect upon whether all of the exposure at David Jones was attributable to BI, or only part of it. If it is only part of it, I must reflect upon the difference. I then must consider the relative degrees of departure from the standard of care of the reasonable person by David Jones and BI. Finally I must consider the reasonableness of the settlement.
David Jones’ case
[10]David Jones’ case comprised of admissions made by BI, various documents, oral evidence from Ms Raymonda Cavanaugh and Ms Pamela Simmons, and evidence given in and findings made in other cases.
The admissions
[11]BI admits that it carried out sprayed asbestos operations at the [David Jones] Store in Rundle Street. It admits that Mr Murphy died of mesothelioma. It admits the authenticity of a death certificate issued in Hong Kong that certifies that Mr Murphy was born in July 1947, that he died of mesothelioma on 24 January 2008, that his recorded occupation was ‘Artist’, that he left a widow and that she registered his death. It admits the authenticity of a document that records sprayed asbestos contracts carried out by it that includes an entry that records that it sprayed 22,106 square yards of asbestos at the [David Jones] Store in 1960. It admits the authenticity of a document that records that Mr Murphy worked for David Jones as a window dresser between 24 May 1965 and 29 December 1978 in its Display Department. And, it admits that the payment of the judgment sum to Mr Murphy [sic].
The documents
[12]The documents included a building specification for the [David Jones] Store dated September 1960. Item 84 of that document refers to “Sprayed Asbestos Beam & Column Encasings” and contains the following note:
The extent of the asbestos beam casings is increased to include all beams on the perimeter stock areas south of the passenger lifts on all floors.
[13]They included a letter from the Department of Public Health dated 14 November 1977 addressed to David Jones’ maintenance manager that had, as an enclosure, a report on air sampling in the Rundle Street Store. The report stated:
The presence of crocidolite in your building will mean that specific precautions will be necessary whenever the material is encountered, and Mr Hamilton has outlined some of these. In addition, as the building ages, the condition of the asbestos coating can be expected to deteriorate, and so further action may be necessary if the deterioration does occur. That eventuality, however, may be years or even decades off.
[14]The report included the following:
Air sampling was carried out because the building’s structural steelwork was coated with blue asbestos (crocidolite) during construction. A sample of the coating was taken from the mezzanine floor (where it was exposed) on 25^th August, 1977, and analysed by the Australian Mineral Development Laboratories. The analysis showed that the material consisted almost entirely of crocidolite.
[15]The report recorded that sampling had taken place at five locations including the mezzanine office floor area which it noted had no suspended ceiling and had exposed asbestos steelwork. It noted that areas with exposed asbestos coating were extremely hazardous.
[16]The documents included the minutes of a discussion between David Jones’ management on 16 December 1977 in connection the report. It records that it was resolved that in terms of dealing with the asbestos the immediate focus was on exposed beams; that the roof area would be done first, followed by the ladies store reserve and the mezzanine; and that what was to be done was that a mix of aquadhere and water would be sprayed on the exposed asbestos.
[17]They included a letter dated 22 November 1978 from David Jones to the South Australian Health Commission wherein it reported that over several months it had obtained appropriate equipment, that vacuuming of surfaces had been completed, masking and breathing equipment were being used by those working in affected areas, and exposed beams had been cleaned and sprayed as advised.
[18]The documents included an Asbestos Risk assessment undertaken in April 1998 that revealed that there was residual asbestos in the roof area on the boilers, the plantroom soffit beams and the original electrical cable trays. It also reported residual asbestos in the form of asbestos rope at the concrete roof slab interface.
[19]It recorded that:
Sprayed blue (crocidolite) asbestos has been applied to steel beams on various floors for fire rating purposes. The affected floors are 6, 5, 4, 3, 2, 1 and ground floor Gawler Place awning. Residual sprayed blue asbestos insulation is also present on designated areas of mezzanine floor, ground floor ceiling spaces, and rooftop plant room soffits.
[20]It noted that sprayed limpet asbestos is friable and subject to damage and deterioration if disturbed.
[Citations omitted]

When [78] and [79] are read in the context of the Judge’s earlier findings, it is apparent that the Judge’s observation in [78] was a response to the evidence of Ms Cavanaugh and Ms Simmons, who had given evidence of their observations of airborne dust and the working conditions in the display department in the 1970s. In my view, it is plain from the trial Judge’s assessment of the documentary evidence referred to in [12] to [20], that his findings in [78] in relation to the evidence of Ms Cavanaugh and Ms Simmons was confined only to the ceiling and the air conditioning ducts.
To establish an appellable error, BI must demonstrate that the factual findings made by the trial Judge in this respect were wrong, having regard to incontrovertible facts or uncontested testimony, or demonstrate that the Judge’s conclusion was glaringly improbable or contrary to compelling inferences.[4]
[4] Fox v Percy (2003) 214 CLR 118, 128 [28]-[29] (Gleeson CJ, Gummow and Kirby JJ).
Based on the documentary evidence alone, I consider it was open to the trial Judge to find that:
·Mr Murphy spent 13 years working for David Jones in a building throughout which BI had sprayed 22,106 square yards of asbestos to all structural steelwork.
·The Asbestos Register, standing alone, revealed that there was sprayed limpet asbestos on the plant room soffit beams in the area described as the display department.
·There was no suspended ceiling in the display department.
·Other employees who had worked in or observed the display department area during the course of Mr Murphy’s employment, noted the regular presence of dust.
·Mr Murphy contracted and died of mesothelioma.
In addition to those findings, it was also open to the Judge, on the totality of the evidence, to have concluded that David Jones had proved on the balance of probabilities that Mr Murphy was exposed to asbestos sprayed by BI elsewhere in the building. As an aside, I note that when David Jones’ counsel endeavoured to lead direct evidence about that issue from Ms Cavanaugh, counsel for BI objected:[5]
[5] Transcript of Proceedings, David Jones (Australia) Pty Ltd v BI (Contracting) Pty Ltd (South Australian Dust Diseases Tribunal, 858/11, His Honour Judge Gilchrist, 3 April 2017) 14.
MR FLOREANI: A moment ago in your evidence you described to his Honour dust on your drawing paper. In the photograph do we see anything of the type that you were talking about in terms of drawing paper?---Yeah. You know, that’s a print, and a fairly dark print in the foreground, but it was always sort of white, white paper and white tracing paper.
To your observation was Mr Murphy working on the seventh floor the whole time?---That was – the display offices were up there, yeah, so in and out during the day.
When you say in and out, were there other places where he was required to work?
MR TRIM:I object to that question. Nothing said by this witness would permit her to answer that question.
MR FLOREANI: I’ll withdraw the question.
The objection taken to the question appears to have been based on the format of the question. However, it would have been open to that witness to say whether she ever saw Mr Murphy leave the seventh floor during working hours and for how long and how often. Nevertheless, the answer which the witness did give, “Yeah, so in and out during the day”, makes it clear that Mr Murphy did from time to time go elsewhere in the building.
I add that, as a matter of plain common sense, it was open to the Judge to find from the very nature of Mr Murphy’s job description that he would have been required from time to time, to move elsewhere in the building in the course of his duties.
The documentary evidence referred to by the trial Judge in [12] to [20] also revealed that, as early as 1977, the Department of Public Health was concerned about the results of air samples obtained from the store in September 1977, particularly in areas where there were no suspended ceilings. The Department of Public Health provided a report to David Jones’ maintenance manager on 14 November 1997 which noted that “the presence of crocidolite in your building will mean that special precautions will be necessary whenever the material is encountered” and that the asbestos coating was likely to deteriorate with the effluxion of time. That report also noted that the building’s structural steelwork had been coated with crocidolite during construction. A sample of the coating taken from an exposed area on the mezzanine floor was analysed and found to consist almost entirely of crocidolite. Areas which had exposed asbestos coating were hazardous. In the shoe reserve on the second floor and on the mezzanine floor office area there were no suspended ceilings and accordingly the asbestos covered steelwork was exposed.
A recommendation was made that exposed asbestos on beams be enclosed and that other precautionary steps be taken to minimise the extent of work done in ceiling space and other work, such as the movement of lights for fashion parades, that created a risk of the asbestos becoming airborne.
The significance of the Department of Public Health’s air sampling report lies in its confirmation that the building’s entire structural steelwork had been sprayed with crocidolite and that in areas in which that coating was exposed, for example, in areas where there was no suspended ceiling, that material posed a substantial risk to health and safety.
In my view, that was sufficient circumstantial evidence to conclude that there was sprayed asbestos in areas other than the ceiling and the air‑conditioning ducts in the display department.
Following on from the provision of that report on 14 November 1977, the documentary evidence indicates that there was a meeting held in David Jones’ offices on 16 December 1977. Notes of that meeting record discussion about the report of 14 November 1977 and it was noted that the “roof area could be done during working hours and this should be done first”. During the meeting, Mr Jessup commented that there were a lot of loose fibres hanging in the mezzanine.
Subsequent correspondence concerning remedial measures that the Health Commission recommended be undertaken revealed the Health Commission’s concern in February 1979 about a proposal made by David Jones to spray over asbestos with a mix of water and glue. In a letter dated 27 February 1979, the Health Commission said:
Overspraying of limpet asbestos is effective for only a relatively short period (1-3 years), after which further work may be required. Previous experience has shown that the limpet asbestos on steelwork is likely to degrade with time, and that further, perhaps major, remedial work is required from time to time. The asbestos in your store will be a potential hazard for as long as it remains there.
Later, in the same year, a memorandum authored by the then managing director of David Jones’ Adelaide store, acknowledged that:
When the Adelaide store was rebuilt in 1960/62, the fire insulation for the majority of the steel beams was provided by spraying on asbestos. The exception was the area north of the customers’ lifts (staff and goods lifts, toilets, locker rooms etc.) where beams are encased in concrete.
In April 1998, an Asbestos Risk Assessment Review, undertaken by contractors for David Jones, recorded that crocidolite had been applied to steel beams on floors one to six and on the ground floor Gawler Place awning. Further, the presence of crocidolite was also noted in designated areas of the mezzanine, ground floor ceiling spaces and, significantly, the rooftop plant room soffits. The report concluded:
Sprayed limpet asbestos insulation presents a number of health and safety considerations with regard to the physical characteristics of the materials as well as the risk associated with asbestos fibres. The limpet asbestos is friable and subject to damage/deterioration if disturbed and therefore access into affected ceiling spaces is to be prohibited unless safe systems of work are in place.
In the same report was an appendix identifying a number of locations on the rooftop level which was among many other areas of the building where asbestos was said to remain.
On the basis of that evidence, I consider that it was open to the Judge to conclude that during the course of his employment with David Jones, Mr Murphy had, on the balance of probabilities, been exposed to asbestos sprayed by BI in the display department of the David Jones’ store.
The Judge’s conclusion that the evidence of Ms Cavanaugh and Ms Simmons did not prove that the ceiling or air conditioning ducts were sprayed with asbestos did not undermine his ultimate conclusion that, during the course of his employment in the display department or elsewhere throughout the building, Mr Murphy had been exposed to asbestos sprayed by BI.
Arising out of the presumption in s 8(1)(b) of the Dust Diseases Act, the possibility that Mr Murphy contracted mesothelioma as a consequence of the negligence of BI was established in the absence of proof to the contrary from BI.
For these reasons, I would dismiss the first ground of appeal.
Ground 2 – Proof of Quantum
The second ground of appeal is a complaint that David Jones did not discharge its onus to prove the quantum of its loss.
The first issue arising in respect of this ground of appeal is whether the trial Judge applied the correct principles of law as enunciated by both the Supreme Court of South Australia[6] and the High Court of Australia[7] in assessing whether David Jones had proved the quantum of its loss.
[6] Bakker v Joppich & Bitumax Pty Ltd (1980) 25 SASR 468; Saccardo Constructions Pty Ltd v Gammon(No 2) (1994) 63 SASR 333, 335-336 (King CJ).
[7] Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603.
BI argued that it was necessary for David Jones to prove the quantum of its loss in the ordinary way and then, and only then, to prove that the quantum of the settlement was reasonable. That is, whether the settlement amount was within the limits of reasonable tolerance viewed objectively and based upon material available to David Jones and its legal advisers at the relevant time.
BI alleged that the Judge fell into error by ignoring the first stage of proof and instead simply focussing on the second stage, which was to consider whether or not the settlement was reasonable.
Particular complaint was made of the Judge’s findings as follows:
[99]Reference also needs to be made to the decision of the High Court in Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd. That case is important because it reflects the flaw in BI’s submission. In Unity Insurance, Kirby J said as follows:
As I approach this appeal, it presents a clash between principle and pragmatism. Principle requires that, if damage is contested, a party claiming damages for negligence and breach of contract must prove its loss by calling evidence. Ordinarily, it must establish exactly what that loss is. The burden of doing so is upon it. If it fails to do so, to the extent of the default, it cannot expect to recover. Pragmatism supports the sensible settlement of legal claims, particularly where settlement is achieved following the advice of experienced legal practitioners. Pragmatism recoils from the prospect of ignoring a settlement between A and B, considered reasonable when made, so as to require A, in a related claim against C, to prove objectively that the factors leading to the settlement were correctly judged. Such factors can rarely, if ever, be estimated with absolute certainty. Yet C asks why its liability in damages to A should be defined by settlement negotiations between A and B in which C played no part and over which C had no control.
It is surprising that the issue raised in this appeal, from the Full Court of the Supreme Court of Western Australia, has not previously arisen for decision by this Court. Now that the question is presented to this Court, it is necessary to choose. I prefer principle. Inconvenient though it may be, where damages are in contest, a plaintiff must prove its loss. It cannot rely on a settlement which it has reached with someone else, however reasonable that settlement may have seemed to be to the parties to it. (Underlining mine)
[100]The passages underlined illustrate the approach that Kirby J stated should apply in a case such as this. This is effectively the very approach that BI asks me to adopt here. Its complaint about a want of proof assumes that strict proof in a case such as this is necessary. But the difficulty for BI, is that Kirby J was in dissent. The majority, Brennan CJ, McHugh and Hayne JJ, plainly rejected the notion that strict proof of loss is required. They held that the party seeking recovery was entitled to rely on the settlement in establishing damages. They held that all that was necessary to prove that the settlement was reasonable. Their approach is broadly consistent with that taken by King CJ in Saccardo (No. 2). It is the approach that I adopt here.
[Footnotes omitted]
BI contended that, had the Judge applied the correct approach, he would have concluded that David Jones failed to prove the quantum of its alleged loss as there was a deficiency of evidence in respect of the damages claim. All that was tendered by David Jones in the contribution action was proof of employment, proof of a dust diseases claim by Mr Murphy, proof of death, proof of certain legal advice provided to the insurer, QBE, and proof of a consent judgment for the sum of $435,000 inclusive of costs.
BI contended that David Jones did not prove by admissible evidence the underlying facts giving rise to the various heads of damages notionally considered by the Judge when he considered the reasonableness of the settlement.
Discussion
In support of its submission that the Judge applied the incorrect principles, BI referred to a number of authorities including Saccardo Constructions Pty Ltd v Gammon (No 2),[8] Bitumen & Oil Refineries (Australia) Ltd v Commissioner for Government Transport,[9] Thompson v Australian Capital Television Pty Ltd,[10] Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd,[11] and Deloitte Touche Tohmatsu v Cridlands Pty Ltd & Ors.[12]
[8] (1994) 63 SASR 333.
[9] (1955) 92 CLR 200.
[10] (1996) 186 CLR 574.
[11] (1998) 192 CLR 603.
[12] (2003) 204 ALR 281; 134 FCR 474.
In Saccardo (No 2), King CJ stated four uncontroversial propositions as to the applicable law where a defendant seeks to recover contribution towards its liability on a consent judgment to which a third party did not consent:[13]
1.The test as to whether the defendant can recover on the basis of the full amount of the consent judgment is the reasonableness of the settlement.
2.There is no presumption of law that the settlement was reasonable and the onus is on the defendant seeking contribution to prove in the proceedings against the third party, the reasonableness of the settlement.
3.The fact of the settlement is some evidence of its reasonableness and the defendant is not in all circumstances required to call witnesses to establish that the amount paid was reasonable.
4.The circumstances in which the settlement was arrived at and any proper inferences therefrom may be evidence of the reasonableness of the same.
[13] Saccardo Constructions Pty Ltd v Gammon (No 2) (1994) 63 SASR 333, 336.
In Unity Insurance, there was a disagreement between the majority and the minority judgments on the issue as to what was required to be proved on the issue of quantum. The majority emphasised that to prove that a settlement was reasonable, it is appropriate to have regard not only to the amount that was the subject of the claim but any evidence that was offered, including the evidence of legal advisors. Hayne J, with whom Brennan CJ generally agreed, emphasised:[14]
[14] Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603, 651 [124]-[125], 652 [128]-[131] (Hayne J).
[124]Next, and most importantly, to require the insured to prove, as part of its case against the broker, the case which the insurer would have mounted against it is to encourage the prolonging of litigation and to discourage settlement. If the insured must prove the insurer’s case, that is a significant reason not to settle its claim against the insurer but to conduct alternative claims against the insurer and the broker. If, without working injustice to the broker, the settlement of disputes can be encouraged, the desirability (some may say the necessity) of doing so is obvious.
[125]In addition, such decided cases as there are on the matter tend in favour of a rule which would require a person in the position of the insured (who has settled a dispute with a third party under a contract procured by the broker) to prove in support of its claim against the broker for breach of retainer no more than that the settlement which it had reached with the insurer was reasonable.
…
[128]In my view, however, the several considerations which I have mentioned, especially the need to encourage settlement of disputes, suggest that a settlement of the dispute between insured and insurer should be given more significance as between insured and broker than simply identifying an amount which may limit the amount of damages recoverable by the insured from the broker for the broker’s breach of duty. They are considerations that suggest that the damages recoverable by the insured should be fixed as the difference between what the insured recovered under the settlement (if it was reasonable) and what would have been recovered under the policy which the broker ought to have arranged (together, no doubt, in an appropriate case, with any other costs or expenses incurred by the insured as a result of the broker’s breach and taking account of any extra premium that would have been payable). Whether such a rule would, or may, work injustice to the broker is much affected by what is meant by a “reasonable” settlement of the dispute between insured and insurer and it is to that subject that I now turn.
[129]Whether the compromise of a claim was reasonable must be judged objectively, not subjectively. Thus whether a party to litigation has received advice to settle may be important in deciding whether that person’s conduct in settling the case was reasonable but, standing alone, the fact that a litigant was advised to settle at a particular figure reveals little or nothing about whether the settlement reached was reasonable. This is not to say that evidence may not be led that such advice was given and adopted; it may. But evidence of that kind does not conclude the issue. What will usually be much more important is the reasoning that supported the advice that was given for that will ordinarily reveal why it was thought reasonable to compromise the claim as it was.
[130]Next, the question whether the settlement was reasonable must be judged by reference to the material the parties had available to them at the time the compromise was reached. It is not to be judged according to whether material which was obtained later shows that the opposite party could or could not have prosecuted or defended the claim successfully but according to the assessment which could properly be made at the time of settlement of the chances of success or failure.
[131]Often that will require consideration of whether the party that later seeks to say that the settlement was reasonable had made sufficient enquiries and had sufficient information available to it to warrant reaching a compromise. In turn that may invite attention to whether the cost of seeking further information would outweigh the benefit that it was reasonable to expect may be obtained from doing so, but it does not assume knowledge of the opposite party’s brief to counsel.
[Footnotes omitted]

Hayne J concluded the discussion as to the reasonableness with the following comments:[15]
[133]No doubt this may be contrasted with the case which is fought to judgment. Then the liability of the party in the position of the insurer in this case would be fixed by the judgment. The broker’s argument in this case (and the argument which found favour with Devlin J at first instance in Biggin & Co Ltd) is that its liability should be fixed by reference to that sum and no other and that if the liability of the insurer has not been fixed by judgment in an action brought against it, it should be fixed in the action between insured and broker.
[134]I do not agree. First, as I have indicated, acceptance of this argument would discourage settlement of the claim between insured and insurer. Secondly, to subject the broker to liability based upon a settlement that is found to be reasonable is not unjust. And it is not unjust even though there may well have been a range of figures within which settlement could reasonably occur and even though the decisions whether to settle and at what figure to settle are decisions over which the broker has no control. It is always necessary to recall that the broker was in breach of duty. There is no injustice in leaving the wrongdoer to bear the consequences of the decisions made in response to that wrongdoing by the party harmed - so long as those decisions are reasonable. Reasonableness informs much of the law of contract and, in particular, the assessment of damages for breach. This means, for example, that if the party wronged has acted reasonably, the wrongdoer may be liable for all the loss that the plaintiff has suffered, even if the plaintiff’s conduct has increased the loss. Conversely, the party wronged is not bound to take all possible steps to mitigate its loss, only those steps which are reasonable.
[Footnotes omitted]
[15] Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603, 654 [133]-[134].
In submissions on this issue, BI also relied on what fell from Selway J in Deloitte Touche Tohmatsu v Cridlands Pty Ltd & Ors[16] and Gummow J in Thompson v Australian Capital Television Pty Ltd.[17]
[16] (2003) 204 ALR 281; 134 FCR 474.
[17] (1996) 186 CLR 574, 616-617.
In Deloitte, Selway J made some observations, in obiter, with respect to sections 12(4) and 13 of the Law Reform (Miscellaneous Provisions) Act 1956 (NT), which are the equivalent legislative provisions to subsections 6(1) and 6(5) of the Law Reform Act (SA):[18]
[121]In fact the test for liability under the Law Reform (Miscellaneous Provisions) Act would seem to be a different one. Gummow J in Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574; 141 ALR 1 described the applicable test as follows (at CLR 616; ALR 32-3):
Authority indicates that the phrase in s 11(4) “any other tort-feasor … liable” includes a party whose liability has been ascertained upon a settlement whether or not reflected in a consent judgment, and that this is so whether or not in reaching the settlement the party now seeking contribution admitted liability. Nevertheless, the party seeking contribution after such a settlement must be prepared in that proceeding to establish that, if the claim had been fought out, that party would have been held responsible in law and liable to pay in whole or in part for the damage referred to in s 11(4). The decision of the English Court of Appeal in Stott v West Yorkshire Road Car Co [1971] 2 QB 651, which established these propositions with respect to the UK Act, has been followed in respect of Australian legislation deriving from it: Baker v Joppich (1980) 25 SASR 468 at 472-3; John Holland v Jordin (1985) 36 NTR 1 at 11-12; Ballina Shire Council v Volk (1989) 18 NSWLR 1 at 10. In New Zealand, the decision of the English Court of Appeal was anticipated by McGregor J in Baylis v Waugh [1962] NZLR 44; cf Re Securitibank Ltd [1986] 2 NZLR 280 at 288.
[122]On this approach it is not sufficient merely to show objectively that Deloittes had acted reasonably in settling the claim against it by the Campbells for $3.5 million; Deloittes must go further and establish that if the claim by the Campbells against Deloittes had been fought out, Deloittes would have been held liable in tort to the Campbells for at least $3.5 million.
[18] Deloitte Touche Tohmatsu v Cridlands Pty Ltd (2003) 204 ALR 281; 134 FCR 474, [121]-[122].
In placing reliance on what fell from Gummow J in Thompson, BI has overlooked the context in which Gummow J made the remarks. It is plain from the whole of the passages relied upon that Gummow J’s remarks were directed to the issue of liability and not to the issue of quantum.
Gummow J observed with respect to equivalent provisions in the Law Reform (Miscellaneous Provisions) Act 1955 (ACT), sections 11(4) and 12:[19]
[19] Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574, 616.
“11.(4) A tort‑feasor liable in respect of the damage may recover contribution from any other tort‑feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort‑feasor or otherwise, but no person is entitled to recover contribution under this section from a person entitled to be indemnified by him or her in respect of the liability in respect of which the contribution is sought.”
“12. In proceedings for contribution under section 11 the amount of the contribution recoverable from a person is such as is found by the court to be just and equitable, having regard to the extent of that person’s responsibility for the damage, and the court has power to exempt a person from liability to make contribution, or to direct that the contribution to be recovered from a person shall amount to a complete indemnity.”
Authority indicates that the phrase in s 11(4) “any other tort‑feasor …liable” includes a party whose liability has been ascertained upon a settlement whether or not reflected in a consent judgment, and that this is so whether or not in reaching the settlement the party now seeking contribution admitted liability. Nevertheless, the party seeking contribution after such a settlement must be prepared in that proceeding to establish that, if the claim had been fought out, that party would have been held responsible in law and liable to pay in whole or in part for the damage referred to in s 11(4). The decision of the English Court of Appeal in Stott v West Yorkshire Car Co, which established these propositions with respect to the UK Act, has been followed in respect of Australian legislation deriving from it. In New Zealand, the decision of the English Court of Appeal was anticipated by McGregor J in Baylis v Waugh.
Section 12 deals with the amount of contribution recoverable in the proceedings under s 11. It specifies this as that amount found by the court to be “just and equitable”, having regard to the extent of the responsibility for the damage of the party against whom contribution is sought. The court is given a power to exempt a person from any liability to contribution and a power to direct that contribution in a particular case shall amount to a complete indemnity. Of the corresponding provision in the NSW Act. It was said in the joint judgment of this Court in Bitumen & Oil Refineries (Australia) Ltd v Commissioner for Government Transport:
“The Court, however, is required to find what is just and equitable as an amount of contribution having regard to the extent of the responsibility for the damage of the tortfeasor against whom the claim is made. There does not seem to be any valid reason why that tortfeasor may not say to the tortfeasor making the claim, if he has improvidently agreed to pay too large an amount or by unreasonable or negligent conduct in litigation has incurred or submitted to an excessive verdict, that the excess is due to his fault and not to that of the tortfeasor resisting the claim. It would be a matter for the Court to consider under the heading of ‘just and equitable’.” (Emphasis added)
Accordingly, upon its proper construction, the Law Reform Act establishes a regime creating and regulating a right of contribution between joint tortfeasors where contribution is sought consequent upon a release of the claimant for contribution.
[Citations omitted]
It is evident, from the whole of that passage in context, that Selway J conflated the comments made by Gummow J as to proof of liability, which is the first limb of the test, with the amount of the quantum which is the second limb.
The authorities therefore clearly show that the second limb, which requires that the contribution is to be an amount that is fair and equitable having regard to the extent of each contributory’s responsibility for the harm, is to be determined by reference to whether a judgment or settlement entered into was or was not reasonable.
It is for these reasons that I do not accept that there has been any error in the approach of the trial Judge to the principles articulated in Unity Insurance and what fell from King CJ in Saccardo (No 2). The Judge therefore applied the correct legal test with respect to quantum.
I turn now to consider the second complaint made with respect to this ground of appeal, which is whether David Jones has proven the quantum of its alleged loss.
The evidence at trial
At the trial, David Jones tendered evidence of Mr Murphy’s formulated claim, together with legal advice provided to David Jones’ insurer and medical records relating to Mr Murphy.
The additional evidence consisted of Mr Murphy’s formulated claim in the primary proceedings and, importantly, a number of hospital and medical reports relating to Mr Murphy, a schedule of out-of-pocket expenses, supporting invoices of various dates and bank records of Mr Murphy in the primary proceedings, which informed the advice given to David Jones by its legal advisors.
The evidence tendered established that:
·Mr Murphy was born in 1947 and worked for David Jones from the age of 18 until 31, between 1965 and 1978.
·Mr Murphy was living with his wife and had been working as an artist with sporadic income when he diagnosed, as a 59-year-old man, with mesothelioma in Hong Kong in February 2007.
·Thereafter, he incurred predictable out‑of‑pocket expenditures on account of his ill‑health.
·A medical report dated 29 September 2007 estimated the likely death of Mr Murphy to occur between the next six and 12 months.
The Judge concluded that the course of Mr Murphy’s deterioration in health was predictable and that David Jones was entitled to assume as much. That finding was justified on the basis of the medical reports alone. That finding also had obvious implications in respect of assessment of damages for non‑economic loss and loss of expectation of life.
Based on those documents alone, I consider that the Judge’s findings at [107] were plainly justified:
[107]On these bare facts, even without medical evidence, one can surmise that a judgment from the Dust Diseases Tribunal of New South Wales in 2007 would result in a generous award of general damages for pain and suffering and loss of enjoyment of life. Based on a letter of advice that it received from its solicitors, David Jones appears to have allowed a sum of the order of $170,000. In Kenneth Wallace v Amaca Pty Limited the Dust Diseases Tribunal awarded a man in his mid-seventies who was dying of mesothelioma $170,000 for general damages. In Gifford v Cockatoo Dockyard Pty Limited it awarded a 62 year old man dying of mesothelioma $250,000 for general damages. With these cases in mind, in approaching settlement in this case, David Jones could have reasonably allowed up to $250,000 for this head of loss.
[Citations omitted]
The Judge’s suggestion that, if anything, the award in respect of general damages for pain, suffering and loss of enjoyment of life was low was plainly justified.[20]
[20] cf BHP Billiton Ltd v Hamilton (2013) 117 SASR 329 (Blue and Stanley JJ, Kourakis CJ agreeing) where an award of non-economic loss was raised to $190,000.
The evidence before the trial Judge demonstrated that David Jones had faced a genuine and reasonably formulated claim and David Jones took comprehensive and careful advice before settling the matter. They were matters that could properly be taken into account when assessing the objective reasonableness of the settlement.
On the basis of the material available at trial, the Judge was entitled to conclude that the figure for which David Jones settled the primary claim was reasonable. Having regard to BI’s greater culpability in respect of the joint exposure, an amount equivalent to 75 per cent of that sum was fair and equitable.
Conclusion
For these reasons, I would grant BI an extension of time in which to commence the appeal but would dismiss the appeal.
HINTON J: I agree with Kelly J for the reasons her Honour gives that this appeal should be dismissed.