CSR Ltd v Amaca Pty Ltd - [2009] NSWCA 338

No judgment structure available for this case.

New South Wales

Court of Appeal

CITATION: CSR LTD v AMACA PTY LTD [2009] NSWCA 338

HEARING DATE(S): 7 September 2009

JUDGMENT DATE:
19 October 2009

JUDGMENT OF: Allsop P at 1; Hodgson JA at 51; Basten JA at 82

DECISION:
(1) Allow the appeal and set aside the judgment of the Dust Diseases Tribunal of 25 June 2008 and the orders made on 8 July 2008.
(2) In lieu of the orders made by the Tribunal,
(a) dismiss the cross-claimant’s claim for contribution against the cross-defendants;
(b) order that the cross-claimant pay the cross-defendant’s costs of the proceedings in the Dust Diseases Tribunal on the cross-claim.
(3) Order the respondent to pay the appellants the sum of $375,000 (being the amount paid by them to the respondent as a condition of the stay granted in the Tribunal) together with interest at the rate prescribed by Schedule 5 to the Uniform Civil Procedure Rules 2005 (NSW) calculated from the date of payment to the date on which the amount is repaid by the respondent.
(4) Order the respondent to pay the appellants’ costs of the appeal.

CATCHWORDS: APPEAL – when appeal lies – scope limited to appeal from decision of Tribunal in point of law – challenge to finding of duty of care – whether evidence to support finding – nature of error – significance of "illogicality" in reasoning or "perversity" in fact-finding - TORTS – negligence – duty of care – pleural mesothelioma contracted after exposure to crocidolite asbestos as young child – two periods of exposure of between three and seven days each – exposure due to destruction of cement sheets containing asbestos mined no earlier than September 1965 – possibility of link between "transitory" or "minimal" exposure documented in 1962 – miner of asbestos aware of medical knowledge – whether knowledge of miner of risks posed by asbestos gave rise to duty of care - WORDS AND PHRASES – "blue asbestos" – "transitory exposure"

LEGISLATION CITED: Dust Diseases Tribunal Act 1989 (NSW), s 32
Uniform Civil Procedure Rules 2005 (NSW), r 51.53

CATEGORY: Principal judgment

CASES CITED: Amaca Pty Ltd v Hannell [2007] WASCA 158; 34 WAR 109
Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321
Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26; 78 CLR 353
Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
Bale v Seltsam Pty Limited [1996] QCA 288
Caltex Refineries (Qld) Pty Limited v Stavar [2009] NSWCA 258
Chapman v Hearse [1961] HCA 46; 106 CLR 112
CSR Limited v Young (1998) 16 NSWCCR 56
E v Secretary of State for the Home Department [2004] QB 1044
House v The King [1936] HCA 40; 55 CLR 499
Julia Farr Services Inc v Hayes [2003] NSWCA 37; 25 NSWCCR 138
Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323
Mount Isa Mines Ltd v Pusey [1970] HCA 60; 125 CLR 383
Nielsen v Seltsam Pty Ltd (DDT No 280 of 2003)
Seltsam Pty Limited v McNeill [2006] NSWCA 158; (2007) 4 DDCR 1
Shirt v Wyong Shire Council [1978] 1 NSWLR 631
Tame v State of New South Wales [2002] HCA 35; 211 CLR 317
Western Districts Developments Pty Limited and Turnpike Lane Pty Limited v Baulkham Hills Shire Council [2009] NSWCA 283
Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1971] 2 QB 23
Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741
Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40

TEXTS CITED: F Trindade, P Cane and M Lunney The Law of Torts in Australia (4th Ed) at 468

PARTIES: CSR Limited – First Appellant
Midalco Pty Limited – Second Appellant
Amaca Pty Limited - Respondent

FILE NUMBER(S): CA 40315/08

COUNSEL: B Walker SC/Ms JS Gleeson – First and Second Appellants
G M Watson SC/J C Sheller - Respondent

SOLICITORS: Colin Biggers & Paisley – First and Second Appellants
DLA Phillips Fox - Respondent

LOWER COURT JURISDICTION: Dust Diseases Tribunal

LOWER COURT FILE NUMBER(S): DDT 238/2001/1

LOWER COURT JUDICIAL OFFICER: Curtis J

LOWER COURT DATE OF DECISION: 25 June 2008

LOWER COURT MEDIUM NEUTRAL CITATION: Amaca Pty Ltd v CSR Limited [2008] NSWDDT 18

CA 40315/08
DDT 238/2001/1

ALLSOP P
HODGSON JA
BASTEN JA
19 October 2009

CSR LTD v AMACA PTY LTD

Headnote

In 1998 Mrs Belinda Dunn ("the plaintiff") contracted pleural mesothelioma from exposure to crocidolite asbestos fibres during two separate brief periods in 1970 and 1971, when she was aged three and four respectively. The fibres were released from broken up asbestos cement sheets that were removed, in 1970, from the ceiling of the den of the house in which the plaintiff was living, and in 1971, from the roof of the carport. In each case, following removal, the plaintiff was exposed to asbestos dust for between three and seven days, as she assisted with clearing away broken sheets, and whilst she played games on the resulting mound of asbestos sheeting.

The plaintiff brought proceedings in the Dust Diseases Tribunal against Amaca Pty Ltd, being the manufacturer of the cement sheets. These proceedings having settled, Amaca brought a cross-claim against the appellants, CSR Ltd and its wholly owned subsidiary, Midalco Pty Ltd. Midalco operated a crocidolite asbestos mine at Wittenoom in Western Australia, and in conjunction with CSR, mined, milled and supplied the asbestos to Amaca. In 1962 Dr James McNulty, who was in indirect communication with CSR, documented the possibility of "transitory" or "minimal" exposure to crocidolite asbestos giving rise to pleural mesothelioma.

Curtis DCJ held that the appellants were liable for 50% of the plaintiff's damages on the basis that in September 1965, found to be the earliest date at which the asbestos contained within the sheets could have been mined, the state of knowledge of the appellants as to the dangers associated with crocidolite asbestos gave rise to a duty of care to persons in the position of the plaintiff. The appellants appealed to this Court from his Honour's decision.

The issues for determination on appeal were:

(i) whether the knowledge of the appellants as to the risk posed by transitory or minimal exposure to crocidolite exposure gave rise to a duty of care owed to the plaintiff, and

(ii) whether the Tribunal erred by relying upon a medical journal article not in evidence before the Tribunal.

The Court held, allowing the appeal:

In relation to (i)

(per Allsop P and Basten JA):

1 The imposition of a duty of care depended on what CSR ought reasonably to have anticipated or foreseen as to the risk of injury, drawing upon the contemporary base of knowledge in 1965. The evidence of the appellants' state of knowledge did not support a finding that the appellants should have understood Dr McNulty to have foreseen in 1962 that such exposure as experienced by the plaintiff would give rise to pleural mesothelioma: [25], [39], [49] – [50], [85], [152].

Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40, applied.

CSR Limited v Young (1998) 16 NSWCCR 56; Seltsam Pty Limited v McNeill [2006] NSWCA 158; (2007) 4 DDCR 1, applied but distinguished.

Chapman v Hearse [1961] HCA 46; 106 CLR 112, considered.
Mount Isa Mines Ltd v Pusey [1970] HCA 60; 125 CLR 383; Tame v State of New South Wales [2002] HCA 35; 211 CLR 317; Bale v Seltsam Pty Limited [1996] QCA 288; Amaca Pty Ltd v Hannell [2007] WASCA 158; 34 WAR 109, referred to.

(per Hodgson JA, dissenting):

2 The evidence was capable of supporting a finding that the appellant were aware that the material they were putting into the world was very dangerous in ways not understood, through exposure substantially less than had been previously believed, and that there was no understanding of how much or how little exposure was required in order that the material have lethal effects. In such circumstances the appellants owed the plaintiff a duty to exercise reasonable skills and care to protect her from risk of injury: [72] – [75].

CSR Limited v Young (1998) 16 NSWCCR 56, applied.

In relation to (ii)

(per Hodgson and Basten JJA, Allsop P not deciding):

3. The Tribunal erred by referring to and relying upon the medical journal article not in evidence: [80], [137] – [138].

Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323, cited.

(per Hodgson JA, Basten JA not deciding):

4 The error did not occasion a substantial miscarriage of justice under the Uniform Civil Procedure Rules 2005 (NSW), r 51.33: [80].

CA 40315/08
DDT 238/2001/1

ALLSOP P
HODGSON JA
BASTEN JA
19 October 2009

CSR LTD v AMACA PTY LTD

Judgment

1 ALLSOP P: I have had the advantage of reading in draft the reasons of Hodgson JA and Basten JA. I agree with the orders proposed by Basten JA. Given that their Honours have fully canvassed the relevant reasons of the Tribunal and the facts I am able to express myself assuming a familiarity with that background.

2 It was common ground at the appeal that the Court should approach the matter without reference to the 1965 Newhouse article on the basis that there was no evidence to support the conclusion of the Tribunal that the article was available to CSR and Midalco (to which I will compendiously refer as CSR) on or before September 1965. There was no debate to the contrary of the proposition that this was an error of law entitling this Court to interfere under the Dust Diseases Tribunal Act 1989 (NSW), s 32 if the error was operative: see the reasons of Basten JA at [86] below; and Caltex Refineries (Qld) Pty Limited v Stavar [2009] NSWCA 258 at [11], [130] and [143]-[146]. Amaca supported the decision of the Tribunal on the remaining evidence, submitting that the conceded error was not operative.

3 The attack by CSR was upon the conclusion by the Tribunal of the existence of a duty of care. That conclusion was one of law: Caltex at [16] and see generally Western Districts Developments Pty Limited and Turnpike Lane Pty Limited v Baulkham Hills Shire Council [2009] NSWCA 283 at [3] and [57] and the cases there cited. Nevertheless, that final legal conclusion may depend (as it does here) on factual questions: see, in particular, the discussion by Bryson JA (with whom Handley JA and Tobias JA agreed) in Seltsam Pty Limited v McNeill [2006] NSWCA 158; (2007) 4 DDCR 1 at 15-17 [33]-[35].

4 Here, the central question debated on appeal was the legitimacy of the Tribunal’s conclusion of the reasonable foreseeability of the risk of injury to a person in the position of the three year old Miss Birks (now Mrs Dunn) when helping her mother sweep up broken asbestos sheeting put on the ground by her father and playing on a pile of broken pieces for a short time over a brief period of days. This was a question of fact: see the discussion in Seltsam v McNeill at 15-17 [33]-[35].

5 It is unnecessary to discuss the application of the multifactorial approach to the imputation of a duty of care: Caltex at [101]-[107]. The only substantive complaint about the Tribunal’s conclusion of the existence in or about September 1965 of a duty of care of CSR to persons such as (the as yet unborn) Miss Birks was that there was no evidence capable of supporting the finding, at the appropriate degree of abstraction (see Caltex at [66]-[70] and Seltsam v McNeill at 14-17 [30]-[38]), that it was reasonably foreseeable that the selling of blue asbestos (crocidolite) to Amaca for use in the manufacture of fibre cement (fibro) involved a risk of injury to persons (or children) in the position of Miss Birks.

6 It was common ground that compliance with the duty required the cessation of selling blue asbestos and the closure of the mine. A duty to warn case was abandoned at the trial in the Tribunal. The duty was pleaded in paragraph 10 of the Third Amended Statement of Cross-Claim as follows:

“By reason of the matters pleaded in paragraphs 5 to 9 above, [CSR] owed a common law duty of care to [Miss Birks], requiring [CSR] to take reasonable steps to protect [Miss Birks] from the risk of injury caused by inhaling asbestos.”

7 There was no debate as to whether the obligation to cease selling the product and close the mine was properly viewed as an aspect of breach, or as part of the delineation of the content of the duty. No aspect of the argument was affected by such a question.

8 Thus, it was common ground on the appeal that if the Tribunal’s conclusion as to reasonable foreseeability, leaving out of consideration the article by Newhouse, was legally capable of being supported by the evidence the appeal must fail. Likewise, if the conclusion of reasonable foreseeability was so lacking in evidential foundation to make it legally flawed, the appeal must succeed.

9 Before turning to the evidence before the Tribunal and the arguments, two bodies of principle must be identified: one concerning reasonable foreseeability and duty of care; and the other concerning the proper approach to the identification of legal error in fact finding.

10 As to the first issue, there was no substantive argument about the operative principle as to reasonable foreseeability. In Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40 at 44-48 Mason J (with the “full” and “complete” agreement of Stephen J and Aickin J, respectively) discussed, along with breach, the question of reasonable foreseeability and duty of care. These statements are binding on this Court: Julia Farr Services Inc v Hayes [2003] NSWCA 37; 25 NSWCCR 138 at 142 [2]-[3]; Seltsam v McNeill at 14 [30]; and Caltex at [65]. In Wyong v Shirt, Mason J said at 47:

“In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant’s position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff.”

11 Mason J recognised (at 47) that the concept of foreseeability in connection with the existence of duty involved a more generalised enquiry than in connection with breach. See also Glass JA in Shirt v Wyong Shire Council [1978] 1 NSWLR 631 at 639 referring to the question “at the higher level of abstraction”. This enquiry is as to the foreseeable risk of harm from the impugned conduct before it occurred: see also Seltsam v McNeill at 17-18 [38]. In Seltsam v McNeill, Bryson JA at 17 [36] made the point that foreseeability is reasonable foreseeability, being a test which “exists in reality and operates within the limits of the reasonable”; it is not to be equated with “the limits of the imagination”. In this respect, see also Amaca Pty Ltd v Hannell [2007] WASCA 158; 34 WAR 109 at 185 [349].

12 Reasonable foreseeability is of the risk of injury; not of the likelihood of injury: Wyong v Shirt, per Mason J at 47 (though principally in discussing breach).

13 In Bale v Seltsam Pty Limited (QCA 23 August 1996) and CSR Limited v Young (1998) 16 NSWCCR 56 the question of the object of the reasonable foreseeability (that is: what is to be reasonably foreseeable) was critical to the differences of opinion in each of the two appellate courts. For present purposes, it is sufficient to recognise that in CSR Limited v Young Giles AJA (as his Honour then was) with whom Cohen AJA agreed, preferred the views of the dissentient in Bale v Seltsam (Fitzgerald P) to those of the majority. The extent of that agreement by Giles AJA with Fitzgerald P can be seen in CSR v Young at [118] 92:

Bale v Seltsam Pty Ltd

‘the known toxicity’

the known uncertainty’

‘could not be dismissed as ‘remote’, ‘slight’, ‘far-fetched’, or ‘fanciful’’

Bale v Seltsam

14 In Seltsam v McNeill, Bryson JA made the point at 17-18 [38] that in evaluating the reasonable foreseeability of the risk of injury to the plaintiff at the required level of abstraction:

“… It would be an error, a legal error, to bring to bear considerations relating to the foreseeability of risk of injury to classes of people with higher degrees of exposure, either in intensity of involvement in working on the product, or in number of occasions and length of time for which the product was worked on, or otherwise with greater intensity.”

“[38] … it would be a legal error to treat all end-users of a manufactured product uniformly for the purpose of considering the existence of the duty of care to them unless in reasonable foreseeability of risk of injury their circumstances placed them in the same class.

…

[40] When addressing foreseeability and the existence of a duty of care it is in my opinion an error, and an error of law, to treat the respondent as a member of any class more highly exposed to risk than a class described at a high level of abstraction as home handymen and other low-intensity casual end users who worked on asbestos cement products as handymen, not in an industrial or other controlled situation, not in the course of employment or any like relationship and not for extended periods.”

15 Neither party submitted that either CSR v Young or Seltsam v McNeill was wrong. CSR did submit that if there was any conflict, Seltsam v McNeill, as the later Court of Appeal decision, should prevail. I do not see any necessary conflict between the two decisions, properly understood in their context and recognising the facts in each case.

16 As to the second issue referred to at [9] above, there was no debate about Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139. It was accepted by CSR that it faced the hurdles stated within that case at 155-156:

The finding of foreseeability and the lack of evidential foundation

17 The finding of the Tribunal was that it was reasonably foreseeable to CSR, as at September 1965, that a child such as Miss Birks might contract mesothelioma from childhood exposure to crocidolite fibre released in the course of domestic building renovation.

18 The case before the Tribunal and the appeal in this Court were conducted on the basis of what CSR was told by Dr McNulty and of what it otherwise knew. From that foundation the conclusions of what was reasonably foreseeable to it at the relevant time were to be drawn.

19 The evaluation of what was reasonably foreseeable is to be informed by what was known at the relevant time (without hindsight) as to the risks posed by asbestos, here it was accepted, blue asbestos or crocidolite. As Bryson JA said in Seltsam v McNeill at 17 [36], this involves an assessment of what is or might be a risk by an evaluation that is “real, reasonable or just”. As the learned authors F Trindade, P Cane and M Lunney The Law of Torts in Australia (4^th Ed) at 468 put it:

“’Reasonable’ is a word used to express fact-specific value judgments about the extent to which people ought to be expected to anticipate the likely effects of their conduct on others.”

20 The Tribunal found, as was clear from the evidence, that it was not until after 1967 that the uniquely carcinogenic property of crocidolite fibre and the significance of brief or intermittent exposure in the aetiology of mesothelioma were generally recognised: the Tribunal’s reasons at [80]. The Tribunal used the word “generally” in part to distinguish what it found was Dr McNulty’s “prescience” and to distinguish the conclusion it made as to the medical plausibility of the risk of injury through exposure to “an extremely small quantity” of crocidolite, saying at [80]:

“… Dr McNulty, without the benefit of evidence, but armed with sufficient imagination and intelligence, foresaw this development five years earlier. Although not in 1962 proven in the case of crocidolite, the contraction of cancer by susceptible persons through exposure to an extremely small quantity of a carcinogen was then medically plausible.”

21 The Tribunal also found at [78], as was clear from the evidence, that before 1966:

“... no published study reported the occurrence of mesothelioma in circumstances where the exposure was other than environmental, and then in a period measured by years.”

22 The evidential foundation for the conclusion of reasonable foreseeability of the risk of harm to a person in the position of Miss Birks must be found (as the arguments accepted) in the seminal 1960 Wagner article, in the 1962 McNulty article, in the correspondence between Dr McNulty and Dr Rennie and in the answers by CSR to interrogatories.

23 There was no debate about Dr Rennie’s knowledge being that of CSR or that Dr Rennie examined all available and relevant medical literature.

24 The case about what a reasonable person in CSR’s position should be taken reasonably to anticipate or foresee was based on what it knew and what it ought reasonably to have anticipated or foreseen as to the risk of injury from that contemporary base of knowledge. Mr Walker SC (who, with Ms Gleeson, appeared for CSR) submitted that the parties did not fight the case below on any basis other than the above. In particular, he submitted that Amaca never put a case based on a principle of the need for environmental precaution with this substance. Mr Watson SC (who, with Mr Sheller, appeared for Amaca) did not demur from that proposition. The battle lines of the case in the Tribunal and on appeal marked out an issue as to whether there was any evidence before the Tribunal to support the factual conclusion as to reasonable foreseeability, in the evaluative sense and at the level of abstraction, to which I have referred.

25 In my view, CSR is correct in its submission that there was no such evidence.

26 The making good of this conclusion requires an examination of the findings and the evidence. Because of the full reasons of Hodgson JA and Basten JA I can do this tolerably briefly. I accept, at once, the caution which this analysis must exhibit. The analysis of the factual conclusions of the Tribunal to assess whether they are sustained by evidence carries the danger of treading beyond the boundaries set in Azzopardi. That danger is present here particularly because the overall conclusion is an evaluative one drawn from a number of other found facts. It is necessary therefore to identify which factual findings were evidentially baseless and which were not. As to the latter, even if the finding (to use the words of Glass JA in Azzopardi) is “perverse” or “contrary to the overwhelming weight of the evidence” it is beyond review in this Court.

27 The argument on appeal proceeded on the basis that if the 1960 Wagner and 1962 McNulty articles and the McNulty letters were not capable of being read as referring to slight exposure of the kind experienced by Miss Birks and her father and mother, then there was an absence of evidence for the crucial factual findings supporting the conclusion of reasonable foreseeability and thus legal error in the findings. No submission was put that even if all CSR’s submissions about the meaning of the articles and letters and what could be understood from them were correct the individual findings as to those matters were questions of fact: cf Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1971] 2 QB 23 at 58-59, 63 and 64-65 (Court of Appeal); and [1972] AC 741 at 755, 759, 761, 766 and 770 (House of Lords).

28 The findings of fact of the Tribunal challenged as evidentially baseless were:

(a) the findings that the references in the 1960 Wagner article to “slight exposure”, in the 1962 McNulty article to “transitory exposure” and in Dr McNulty’s letters to “minimal exposure” could be understood (and could reasonably have been understood by Dr Rennie and CSR) as referring to exposure undergone by persons working with fibro cement sheeting containing crocidolite in home renovations or persons nearby that activity;

(b) the finding that there was information in the medical literature or Dr McNulty’s letters reasonably identifying or anticipating any risk from exposure of the kind in (a) above;

(c) the conclusions drawn about Dr McNulty’s evidence in the Rentz matter (see the Tribunal’s reasons at [70]-[75]);

(d) the finding that children were susceptible or at special risk of contracting mesothelioma from transitory childhood exposure to crocidolite (see the Tribunal’s reasons at [76]);

(e) the finding that Dr McNulty was prescient in that he was aware of the dangers of transitory exposure of the kind in (a) above (see the Tribunal’s reasons at [78] and [80]);

(f) the finding that in 1962 (and before September 1965) there was a medically plausible view that cancer could be contracted by susceptible persons through an exposure to an extremely small quantity of crocidolite (see the Tribunal’s reasons at [80]);

(g) the finding that from the 1960 Wagner article and the 1962 McNulty article and Dr McNulty’s correspondence it can be concluded that they (Wagner and McNulty) foresaw that children exposed to “low doses” (in the sense described in (a) above) might suffer “damage of the relevant kind” (see the Tribunal’s reasons at [83]);

29 As to (a), (b), (e), (f), (g) and (h) of [28] the relevant studies (Wagner and McNulty) and all the letters of Dr McNulty were only capable of being read and understood as discussing risks of exposure at or near mines of an order of magnitude and character utterly different from that which might be produced by working with fibre cement containing asbestos in a home handyman environment. The references to “slight”, “transitory” and “minimal” could only be understood in their context of being juxtaposed to heavy exposure for many years. I do not read the articles or the letters as ambiguous in any way in this respect, or reflecting any view then held by Dr Wagner or Dr McNulty (and being communicated to Dr Rennie) that any exposure (however small) to crocidolite fibre in any circumstances (including the casual or occasional breaking up of fibre cement sheeting) could be dangerous. To draw the conclusion that it did, the Tribunal was not making a perverse finding on available evidence. The articles and letters simply did not speak about exposure in any context other than that of mining or industrial or other closely related environmental contact.

30 That this is so and that Dr McNulty did not believe to the contrary can be seen from a letter he wrote on 7 August 1963 about the apparently slight exposure of waterside workers to blue asbestos on the Fremantle waterfront. I set the letter out in full below. If Dr McNulty had the belief attributed to him, he could not have written the letter. It stated:

^th

The Kangaroo was unloading 120 tons of blue asbestos from Port Sampson. The asbestos was pretty well bagged, although a few bags had burst open, liberating some of their contents. There was no visible dust in the atmosphere but there were small scattered tufts of blue fibre lying about the dock and hold.

and since contact with the fibre is very occasional and intermittent,

The spilt fibre should be cleaned up.

31 The recognised importance of the Newhouse article after 1965 also makes the point. This was described by Professor Ferguson in evidence that was before the Tribunal as follows:

[the] Annals of the New York Academy of Sciences

British Journal of Industrial Medicine

32 It is not this Court’s place to make factual findings. I refer to these pieces of evidence to identify the clarity of the proposition that there was no evidential basis in the 1960 Wagner and 1962 McNulty articles or Dr McNulty’s letters to conclude that the references to “transitory”, “minimal” or “slight” exposures could have been understood at the time as other than in the context of a comparison with heavy mining and industrial exposure understood before 1960 to be a danger.

33 There was no evidence to conclude that Dr McNulty believed, or that CSR was told, anything to the effect that minimal exposure of the kind referred to in [28(a)] above was any risk.

34 As to [28(c)] (Dr McNulty’s evidence in the Rentz case), I read Dr McNulty’s evidence entirely differently to how it was read by the Tribunal, as discussed at [70]-[75]. To the three paragraphs of Dr McNulty’s evidence in Rentz quoted by the Tribunal at [71] of its reasons (being paras 20-22 of Dr McNulty’s statement) the next paragraph should be added. I set out all four paragraphs:

“20. In relation to the handling of and working with asbestos cement products there was a general belief that the asbestos fibres were locked up in the cement matrix of the product and that the asbestos did not represent any real health risk to persons working with the product.

21. For people putting up asbestos fences, for example, on the weekends using hand tools it wasn’t thought that they were exposed to any real risk of an asbestos related disease.

22. It wasn’t believed that working with asbestos sheeting presented a significant health hazard.

23. However, I became concerned in the early 1970s of a potential for a risk to people working regularly with asbestos cement products, particularly with power tools.”

35 This was evidence under the heading “Asbestos Cement Products”. It was not predicated on any particular type of such products, with or without crocidolite. It is true that later in his statement Dr McNulty referred to a doubt about Seltsam’s use of crocidolite in its product (see the Tribunal’s reasons at [73]). That was hardly emphatic and was divorced in context (at paragraph 51 of the statement) from his earlier comments. It is worth setting out paragraphs 51 and 52 of Dr McNulty’s statement in full:

“51. Prior to and as at 1974 I would not have considered Mr Nielsen to be at risk of an asbestos caused disease from the limited exposure to asbestos which might have occurred during the work described above. I would have expected any asbestos exposure from this activity to have been well below the then applicable threshold limit value for asbestos exposure of 4 fibres per cc averaged over an 8 hour working day. Although James Hardie in Perth did use some crocidolite during the period from about 1963 to 1966. I doubt that Seltsam Pty Limited would have used it.

In my view it would not in 1974/1975 have been reasonably foreseeable that Mr Nielsen could contract an asbestos related disease, including mesothelioma, from the sort of isolated and limited exposure to asbestos which he is likely to have had repairing his garage. That is, such exposure would not then have been seen by medical experts as carrying a risk of causing an asbestos related disease.”

36 The reasoning of the Tribunal at [70]-[75] was described by Mr Walker as “specious”. I would prefer to deal with it recognising that the Tribunal’s conclusion about Dr McNulty’s belief referred to above was without evidential foundation. In that context, the reasoning is easier to understand. The Tribunal had reached a view about Dr McNulty’s belief in the 1960s (a view which was legally flawed as being without evidential foundation once the clear meaning of the letters is appreciated). In that context, one can understand the Tribunal’s need to reconcile Dr McNulty’s evidence and his earlier (incorrectly found) belief.

37 The legal error of the Tribunal remains its findings of Dr McNulty’s belief in the 1960s and what CSR was told by the articles and letters as to the risk of exposure of the kind referred to at [28(a)] above, not the reasoning process in [70]-[76] of the Tribunal’s reasons. Once one appreciates that all Dr McNulty’s writings (his 1962 article and his letters) were directed to exposures and circumstances quite different to those of Miss Birks, his evidence in the Rentz case is clear in its effect. Like the letter about the Fremantle waterside workers, it is eloquent testament to the state of his belief in the 1960s and to the only construction available to the 1960 Wagner article, the 1962 McNulty article and the McNulty letters. Again, this is not a finding of fact; it is reinforcement of the entire absence of evidence to support the findings drawn by the Tribunal as to Dr McNulty’s beliefs, the intended and proper construction of the articles and Dr McNulty’s letters and what Dr Rennie should be taken to have been told.

38 As to [28(d)], there was evidence in the letters of Dr McNulty of his view (which can be inferred to be a medical view) of the susceptibility of children to relevant exposure: see his letter of 8 March 1963. This finding was open.

39 Given the above legal errors in the factual findings, in my view the reasoning of the Tribunal cannot support the conclusion of reasonable foreseeability and thus of a duty of care.

40 First, at [79] of the reasons the Tribunal impermissibly commenced its reasoning from the position that any event which happens is foreseeable. This came from a comment by Dixon CJ in argument in Chapman v Hearse [1961] HCA 46; 106 CLR 112 at 115. His Honour’s views are better understood in the judgment of the Court at 120.

41 Secondly, at [80] of the reasons, the Tribunal concluded that Dr McNulty foresaw in the 1960s the significant of brief or intermittent exposure (of the kind undergone by Miss Birks in 1975) and that there was in the 1960s a medically plausible view to that effect. There was no evidential foundations for these conclusions.

42 Thirdly, there was an implicit finding at [81] of the reasons that Dr McNulty’s 1962 article spoke of the risk of injury from exposure of the kind undergone by Miss Birks. It did not. There was no evidence to conclude that there was knowledge or information available to CSR to that effect.

43 Fourthly, the Tribunal concluded at [81] of the reasons that the 1965 Newhouse article was available to CSR by September 1965. There was no evidence that it was.

44 Fifthly, the Tribunal concluded (see the Tribunal’s reasons at [83]) that both Dr Wagner and Dr McNulty knew or foresaw that people such as Miss Birks might suffer damage in circumstances of “low doses” (implicitly of the kind undergone in fact by her). There was no evidence that either knew or foresaw that.

45 Sixthly, it is true (as stated in [84] of the Tribunal’s reasons) that by June 1965 CSR knew that crocidolite caused mesothelioma, and that that disease caused death. This belief, however, on the admissions in the interrogatories was “in circumstances involving the inhalation of significant amounts of asbestos fibre over a prolonged period of time”. This was a proper answer in that it plainly reflected the state of knowledge in the Wagner and McNulty articles and the McNulty letters. The evidence before the Tribunal took the matter no further. The reasoning in [84] of the reasons is thus legally flawed insofar as it sought to build on “low doses” and CSR’s asserted knowledge in that respect.

46 It is necessary also to deal with [86]-[91] of the reasons, Bale v Seltsam and CSR v Young. It can be readily accepted that if, by September 1965, the available medical knowledge or CSR’s knowledge through Dr McNulty was such that there was appreciated to be a risk (that was not far-fetched or fanciful) that any exposure, however slight, including by inhalation of asbestos fibre in the domestic circumstances of Miss Birks’ exposure, might cause injury by serious disease such injury would be reasonably foreseeable. There was no evidence to support such a view of the contemporary state of knowledge in September 1965.

47 Likewise, if in September 1965, the available medical knowledge or CSR’s knowledge through Dr McNulty was that the risk of injury had been established for certain classes of people with a certain degree of exposure, but the risk was recognised as possibly existing for any exposure, which wider risk could not be eliminated on current knowledge, the reasoning of Fitzgerald P in Bale, approved by Giles AJA in CSR v Young could be seen as applicable. That was not the evidence of the contemporary state of knowledge in September 1965. There was no evidence that there was any appreciation, at all, of any risk to persons (child or adult) from dealing with asbestos sheeting in the circumstances of the kind undergone by Miss Birks or her father and mother and referred to at [28(a)] above.

48 Of course, with the benefit of later acquired medical knowledge the risk can be appreciated. Also, even without the later medical knowledge, one might now say, as a matter of rational exposition, that since some exposure of crocidolite causes mesothelioma, any exposure whatsoever might conceivably cause it, and one should therefore proceed on the basis that this should be seen as a risk until it is eliminated. That was not the contemporary view in 1965. (Though the link as to “any exposure” can also be seen to require medical knowledge, which did not exist in September 1965, on the evidence.) It is not reasonable to impute that standard of foreseeability to CSR in the absence of evidential foundation as to reasonable and informed views at the time.

49 Nor, in my view, is it an answer to say that CSR was producing the substance. It was. The substance had its appreciated risks. However, those appreciated risks did not extend (because of the state of medical knowledge) to circumstances of the kind undergone by Miss Birks and referred to at [28(a)] above. That is not a conclusion based on evidence of medical certainty, but of contemporary evidence and views concerning the risk of injury of the kind referred to by Mason J in Shirt.

50 For the above reasons, I agree with the orders proposed by Basten JA.

51 HODGSON JA: By its third amended statement of cross-claim in these proceedings, the respondent, Amaca, claimed against the appellants, CSR and Midalco, that CSR and Midalco owed a common law duty of care to the plaintiff requiring it to take reasonable steps to protect the plaintiff from the risk of injury caused by inhaling asbestos.

52 In its decision given on 25 June 2008, the Dust Diseases Tribunal, constituted by Curtis DCJ, found that the appellants owed a duty of care to the plaintiff, and found that they had breached that duty. The appellants appeal from that decision.

53 The appeal to this Court is limited to an appeal from a decision of the Tribunal in point of law: Dust Diseases Tribunal Act 1989 (NSW) s 32(1). The sole issue raised by this appeal is whether the Tribunal was in error in finding that the appellants owed a duty of care to the plaintiff.

54 Midalco mined asbestos in the vicinity of Wittenoom in Western Australia between 1944 and December 1966, when mining operations ceased because of continuing losses. It is clear that during that period very substantial quantities of crocidolite (blue) asbestos were mined and sold for use in the building industry. The particular asbestos which caused the plaintiff’s mesothelioma was sold by the appellants in or after September 1965; and it is common ground that the decision of the primary judge was to the effect that the appellants had a duty of care to the plaintiff in and after September 1965.

55 In my opinion, it is appropriate to set out the whole of the reasoning of the Tribunal on the question of the duty of care:

Foreseeability

State of Medical Science

56. Before the publication of the article Diffuse Pleural Mesothelioma and Asbestos Exposure in the North Western Cape Province by Wagner et al in the British Journal of Industrial Medicine in 1960, there was no reason to suppose that any cancer, other than lung cancer, may be induced by exposure to asbestos fibre. In the case of lung cancer, the relationship was associated with the presence of asbestosis, a disease contracted after prolonged industrial exposure.

57. Mesothelioma is a very rare form of cancer, the aetiology of which was for a long time unknown. Wagner and his associates studied 33 cases that occurred in South Africa and concluded that their findings were highly suggestive of a relationship between mesothelioma and crocidolite asbestos.

Case 4-K. H., a white female, 56 years of age (born 1898), was a social worker, who could only have had a short exposure to asbestos as a child and probably a further slight exposure as a young woman. She may have paid several short visits to the mines with her husband at a later period.

She was born in Griquatown where she lived until she was five years of age. Her family then moved to Kimberley where from 1916 to 1922 she worked as a clerk in an asbestos warehouse. Her husband owned an asbestos mine from 1933 to 1940.

Case 15-S.S.V., a white female, 42 years of age (born 1916), is a housewife, who lived on a mine near Johannesburg ... She spent most of her youth in the asbestos belt.

Case 24-D.G., a white male. 32 years of age (born 1922), by profession an accountant, was born in England but came to South Africa as an infant. He spent his early childhood in Kuruman [a town in the asbestos belt] and left at the age of 7. He later qualified as a chartered accountant in Kimberley. His only subsequent contact with asbestos was the auditing of the books of an amosite mine in the Transvaal.

59. In February 1965 a paper by Newhouse & Thomson, published in the British Journal of Industrial Medicine, drew attention to the incidence of mesothelioma in people living in the vicinity of a London asbestos factory where crocidolite was used.

60. It was then apparent to persons informed by such publications, that, in comparison to those levels required to produce asbestosis and asbestos related lung cancer, lower levels of asbestos in inspired air may cause mesothelioma.

61. The vice of crocidolite, identified by the Wagner and Newhouse articles, was that it was not only an agent of slow change in lung tissue, but also that it may act as a primary carcinogen at very low doses.

Dr McNulty

62. Dr James McNulty was, between 1957 and 1963, a chest physician employed by the Western Australian Department of Public Health as a Mines Medical Officer. During this time he visited Wittenoom and alerted Australian Blue Asbestos to the health hazards presented by blue asbestos.

Malignant Pleural Mesothelioma in an Asbestos Worker

There appears to be a relationship between exposure to blue asbestos and the development of the pleural mesothelioma in this case. Pleural mesothelioma is a very rare tumour and the details are known of only three cases in Western Australia. Asbestosis has, regrettably, become less rare, but there are less than 49 cases in the state. The relatively short period of exposure to blue asbestos dust confirms an impression received from Wagner et al (1960, 1961) that these tumours may arise after transitory exposure to crocidolite in susceptible persons .

Experience in Western Australia certainly confirms that blue asbestos is a very harmful and a lethal fibre. The dust is one that

urgently requires further experimental study

... The interval between exposure and the development of the tumour is much shorter than has been previously reported...

64. Dr H Maynard Rennie was a specialist physician, who upon the evidence, acted as a consultant to CSR. It is apparent from correspondence that he was in close contact with the management of CSR and the Australian Blue Asbestos Co concerning conditions at Wittenoom, and advised the company on matters of industrial hygiene.

The known hazard is real enough but reading papers on pleural mesothelioma (notably J. C. Wagner, C.A Sleggs & P. Marchand, British Journal Indust Medicine 1960, 17, 260) one is left with a suspicion that a combination of individual idiosyncrasy and minimal asbestos exposure, such as from road surfacing, may be dangerous.

I am seriously concerned that these cancers of the pleura which are being reported in large numbers from South Africa, are due to an

individual susceptibility and minimal exposure

to blue asbestos (crocidolite). (Emphasis added)

I am still a little concerned about

the carcinogenic effect of crocidolite

and wish that the Company would not use its tailings for roads and paths. Tailings were used as fillers at the golf course so that the poor devils inhale asbestos at recreation as well.

68. In a letter of 8 March 1963, Dr McNulty forwarded to Dr Rennie a copy of a letter from Dr Wagner. That copy is not in evidence. However in the text of his own letter to Dr Rennie, Dr McNulty said: “ The reference [presumably by Wagner] to the possible slightness of exposure especially in childhood is one that has always worried me and why I have always decried the practice of using mill tailings for laying paths etc in the township ”. (Emphasis added)

69. Dr McNulty gave evidence in a matter of CSR Limited v Young (1998) 16 NSWCCR 56. In the course of cross-examination he rejected the proposition that the phrase " transitory exposure ", which he used in his article in the Australian Medical Journal, was intended to describe the relatively brief exposure of the person the subject of his article. That man worked for two years in an asbestos mill. Further, exposure of Mrs Olson was not transitory in any sense of the word. She lived in a township the atmosphere of which was heavily contaminated with crocidolite fibre.

70. Dr McNulty also prepared a witness statement in the matter of Rentz v Seltsam Pty Ltd (supra). That case concerned a home handyman who contracted mesothelioma. He had, in or about 1975, cut with a handsaw, and fixed to his garage, several sheets of asbestos cement cladding.

20. In relation to the handling of and working with asbestos cement products there was a general belief that the asbestos fibres were locked up in the cement matrix of the products and that the asbestos did not represent any real health risk to persons working with the product.

21. For people putting up asbestos fences, for example, on the weekends using hand tools it wasn't thought they were exposed to any real risk of asbestos related disease.

22. It wasn't a belief that working with asbestos sheeting presented a significant health hazard.

Much criticism and publicity has been given to the health hazards of asbestos but these are largely due to early heavy exposure to asbestos dust and particularly to crocidolite (blue) asbestos. Crocidolite is now no longer mined in Australia and is very little used in this country...

73. It is also to be read in the light of observations by Dr McNulty that the sheets of asbestos cement upon which Mr Nielsen worked in the construction of his garage were manufactured by Seltsam Pty Ltd and " Although James Hardie in Perth did use some crocidolite during the period from about 1963 to 1966 I doubt that Seltsam Pty Ltd would have used it ."

74. In giving his evidence Dr McNulty was clearly aware of the significance of small amounts of crocidolite, were that fibre to have been included in the asbestos cement sheets upon which Mr Nielsen worked. Given Dr McNulty's concerns as to susceptibility during childhood, it is also relevant that Mr Nielsen was exposed as an adult.

75. Further, the commonsense assumption that breaking up weathered fibro sheets, and sweeping up the broken pieces and dust would expose a person to a higher respirable concentration of liberated asbestos fibre, (particularly if that fibre were crocidolite) than installing new sheets with hand tools, is borne out by the expert evidence of Dr Francis.

76. While Dr McNulty in communication to Dr Rennie referred to what he saw as an actual danger posed by the use of crocidolite tailings upon paths at Wittenoom, he nevertheless used the term "transitory exposure" in the more general warning contained in his article in the Australian Medical Journal. The duty of Midalco and CSR to Mrs Dunn is postulated upon appreciation of those words in the context of the references by Wagner and Dr McNulty to the especial risks posed to children by slight exposure. In the Shorter Oxford English dictionary the word "transitory" bears the meaning "fleeting".

77. In a letter to Dr McNulty of 29 September 1961 Dr Rennie said: " At the moment I am reading all the articles I can get hold of ”. It is improbable in the extreme that he did not read Dr McNulty's article published in the Medical Journal of Australia in December 1962 in which Dr McNulty said that " These tumours may arise after transitory exposure to crocidolite in susceptible persons ". He would have read the letter from Wagner to Dr McNulty forwarded to Dr Rennie in March 1963 in which Wagner referred to possible slightness of exposure especially in childhood . It is improbable that he did not read the paper by Newhouse and Thomson published in the British Journal of Industrial Medicine in February 1965.

Discussion

78. Before 1966 no published study reported the occurrence of mesothelioma in circumstances where the exposure was other than environmental, and then in a period measured by years. Dr McNulty was prescient in his use of the words " transitory exposure " to describe the risks of crocidolite. Both he and Wagner appreciated the particular risks of transitory exposure in children.

Chapman v Hearse

Foreseeability does not include any idea of likelihood at all. I cannot understand why any event which does happen is not foreseeable by a person of sufficient imagination and intelligence

80. It was not until after 1967 that the uniquely carcinogenic property of crocidolite fibre, and the significance of brief or intermittent exposure in the aetiology of mesothelioma, were generally recognised. Dr McNulty, without the benefit of evidence, but armed with sufficient imagination and intelligence, foresaw this development five years earlier. Although not in 1962 proven in the case of crocidolite, the contraction of cancer by susceptible persons through exposure to an extremely small quantity of a carcinogen was then medically plausible.

81. If Midalco and CSR did not know of the content of Dr McNulty's 1962 article in the Australian Medical Journal then they should have. The subject of the article was one of Midalco’s former employees. If they did not know of the Newhouse and Thomson article published in February 1965 then, the business of ABA being exclusively the production of crocidolite, they should have. If they did not seek to inform themselves by inquiring of their consultant physician, Dr Rennie, as to the content of opinions passing between him and Dr McNulty, an officer of the Western Australian Department of Health who visited Wittenoom in the course of his office, then they should have. In any event they should have informed themselves by speaking directly to Dr McNulty on those occasions when he visited the mine.

Identification of the particular foreseeable risk

82. In addressing foreseeability for the purpose of imposing a duty of care, it is necessary to conceive, at an appropriate level of abstraction, of the class of persons to whom the risk was foreseeable.

83. Relevant to a finding of foreseeability in this case is the circumstance that, at the relevant time, two experts in the field, J C Wagner and Dr McNulty, foresaw that persons who may predictably belong to the class in question, children exposed to low doses, might suffer damage of the relevant kind, and that this belief was communicated to Dr Rennie, a consultant to ABA and CSR. As I have said, if those companies did not seek to inform themselves from Dr Rennie's store of expertise, they should have.

84. By June 1965 CSR and Midalco knew that crocidolite caused mesothelioma. They knew that mesothelioma caused death. They knew or ought to have known that children were susceptible and at risk of contracting this disease from transitory exposure to crocidolite. They knew that certainty of the risks associated with low doses may not emerge for many years, during which time a large number of persons may unknowingly contract the disease. Midalco has admitted that it knew that crocidolite fibre sold by it was used by Hardies to manufacture building products, and that if those products were broken crocidolite dust would be released.

85. Mrs Dunn was a member of a class which may be described as children, susceptible because of early childhood development, who suffer transitory exposure specifically to the crocidolite fibre in the course of home renovation. A remote risk to such a class of persons may nevertheless be foreseeable ( Bolton v Stone [1951] UKHL 2; [1951] AC 850).

86. In 1965 the risks faced by such a class were beyond certain scientific knowledge. However, in my opinion, the test of foreseeability does not depend upon sure knowledge of a risk. It is satisfied if the risk is a reasonable (in the sense of rational) possibility, bearing in mind medical plausibility and the gravity of the consequence of the risk coming home.

87. The resolution of the foreseeability issue in this case depends upon an answer to the question whether foreseeability in disease cases requires a consensus of expert opinion that harm could occur, or whether the test is satisfied by an informed and reasonable conception that, given the uncertain state of knowledge, harm might occur.

88. The former view was adopted by Handley JA in CSR Limited v Young (1998) 16 NSWCCR 56 who held that reasonable foresight of dangerous properties in articles of commerce did not extend beyond the limits of current scientific knowledge [64].

Bale v Seltsam Pty Ltd

The critical question in my opinion, is whether the trial judge was correct in her view that the respondent was not under a duty of care until "the link between exposure to low levels of asbestos dust and malignant mesothelioma had been made", i.e, until the respondent had positive knowledge (actual or constructive) of actual risk, or whether, in the circumstances, the uncertainty which existed concerning the toxic effects of asbestos dust and the level of exposure which could induce illness in susceptible persons, and the risk inherent in that uncertainty, was sufficient to create a duty of care i.e., a duty to implement inexpensive and convenient systems to eliminate the possible risk to, and/or warn, those like the appellant who might be affected.

link... with malignant mesothelioma had been made out

90. Although the notion of reasonable foreseeability of risk does not incorporate concepts of likelihood, the imagination required in contemplation of possible risk should be informed by the magnitude of the possible consequences should the risk come home.

Tame v State of New South Wales

Wyong Shire Council v Shirt

Reference was there made to the rather tendentious description of the requirement of foreseeability as "undemanding"; a description that may be more or less accurate depending upon the context. It is important that "reasonable foreseeability" should be understood and applied with due regard to the consideration that, in the context of an issue as to duty of care, it is bound up with the question whether it is reasonable to require a person to have in contemplation

the risk of injury that has eventuated

Conclusion

92. I find that the risk that Mrs Dunn may contract mesothelioma from childhood exposure to crocidolite fibre released in the course of building renovations was foreseeable.

Proximity

93. CSR and Midalco argue that two circumstances militate against the imposition of a duty of care in this case. First, they submit that they had no control over Mrs Dunn (or her parents) of any kind, let alone that which might have enlivened duty of care. Secondly they submit that the class to whom the suggested duty was owed was so large and indeterminate that it was unreasonable to impose a duty to protect all members of that class from the foreseeable harm.

Control

Sutherland Shire Council v Heyman

The requirement of proximity is directed to the relationship between the parties in so far as it is relevant to the allegedly negligent act or omission of the defendant, and the loss or injury sustained by the plaintiff. It involves the notion of nearness or closeness and embraces physical

proximity

(in the sense of space and time)

between the person

or property

of the plaintiff and the

person or

property of the defendant,... and

what may (perhaps loosely) be referred to as causal proximity in the sense of the closeness or

directness of the causal connection

or relationship

between the particular act

or course of conduct

and the loss or injury sustained

Sutherland Shire Council v Heyman

Thus a duty to act to prevent foreseeable injury to another may arise when a transaction... has been undertaken by the alleged wrongdoer and that transaction... has created... the risk of that injury occurring. Such a case falls literally within Lord Atkin's principal in Donoghue v Stevenson

Indeterminate liability

96. I have above delineated the class to whom CSR and Midalco owed a duty. It is no more indeterminate than the class to whom the manufacturers were said to owe a duty in Donoghue v Stevenson . In that case it was every person who consumed a beverage manufactured by the defendant. In this case it is each child who, during formative years, was exposed to crocidolite fibre sold by ABA after June 1965, when, as I will later explain, the Wittenoom mine should have been closed

Other factors

97. Other circumstances in this case militate towards the imposition of a duty of care. Mrs Dunn as a child was uniquely vulnerable and without means to protect herself. CSR and Midalco had access to special expertise and knowledge which was not at the relevant time available to the wider community, which included Mr and Mrs Birks. Further, the conduct required in discharge of the duty was conduct required to discharge a concurrent duty owed by CSR and Midalco to the workers employed at the mine.

Conclusion

56 It will be seen that the Tribunal identified the class to which the duty of care that it found was owed was constituted by children susceptible because of early childhood development, who suffer transitory exposure to crocidolite fibre in the course of home renovations.

57 The appellant relies on the following grounds of appeal:

1. The Tribunal erred in finding that the Appellants owed a duty of care to Belinda Dunn, the Plaintiff in Dust Diseases Tribunal proceedings 238 of 2001/1.

2. There was no evidence to support a finding that, at the relevant time, the Appellants ought to have foreseen a risk of contracting mesothelioma from transitory childhood exposure to crocidolite, as a result of occupying a house constructed from products containing crocidolite.

58 A fourth ground was abandoned: see appeal transcript p 3.

59 As regards ground 3, it was accepted by the respondent that there was no evidence before the primary judge that the 1965 Newhouse and Thompson article had been published by September 1965, and thus that it was an error of law for the Tribunal to have regard to it; and that accordingly, in relation to this ground, the question was whether the Tribunal’s decision was affected by that error of law.

60 In oral submissions, Mr Walker SC for the appellants made it clear that grounds 1 and 2 were advanced on the basis that there was an error of law constituted by the finding of a duty of care, when the evidence was not capable of supporting a finding of reasonable foreseeability which was necessary to found the imputation of a duty of care; and although criticisms were made of the reasoning of the Tribunal, these were to establish that error of law rather than being relied on to show an error of law constituted by erroneous reasoning.

61 I will address the following issues:

(2) Was the Tribunal’s decision affected by its regard to the 1965 article?

Evidence of reasonable foreseeability

62 Mr Walker’s submission was to the effect that, although the evidence referred to in par [56]-[77] of the Tribunal’s judgment could support a conclusion that it was foreseeable in September 1965 that persons living near asbestos mines for periods of years were at some risk of injury from crocidolite asbestos, it could not support a conclusion that it was reasonably foreseeable that persons (whether adults or children) merely exposed transitorily in the course of home renovation were at risk of injury.

63 Mr Walker submitted that the references in the 1960 Wagner paper to “short exposure” and “slight exposure” had to be understood in their context, which concerned a person who worked for six years in an asbestos warehouse and may have paid several short visits to an asbestos mine owned by her husband. Similarly, he submitted, the reference in Dr McNulty’s 1962 article to transitory exposure had to be understood in its context, which related to a man who had worked for two years as a mill-worker at Wittenoom.

64 Mr Walker submitted that references such as those in Dr McNulty’s letter of 25 October 1961 to individual susceptibility and minimal exposure had to be understood in their context, in that case being Dr McNulty’s wish that asbestos tailings not be used for roads and paths near asbestos mines. He submitted that Dr McNulty’s statement in the 2004 case of Rentz made it clear that, even as late as 1975, it was not a belief that working with asbestos sheeting presented a significant health hazard; thereby confirming that his earlier references to transitory or minimal exposure did not extend to exposure from working with asbestos sheeting.

65 Mr Walker submitted that accordingly the evidence did not support the Tribunal’s conclusion at par [80] that Dr McNulty had in 1962 foreseen the later recognition of the carcinogenic property of crocidolite fibre through brief or intermittent exposure, and did not support the similar assertion made in par [83]. He also submitted that the evidence did not support the identification of a class of children as particularly susceptible to these risks.

66 Mr Walker relied particularly on the decision of this Court in Seltsam Pty Limited v McNeill [2006] NSWCA 158, especially at [39] and [101].

67 I accept that it is necessary (but not sufficient) for a finding of a duty of care not previously established that the Court be satisfied that a reasonable person in the position of the defendant would have foreseen that his or her conduct involved a risk of injury to a class of persons including the plaintiff: cf McNeill at [30]-[36].

68 I accept also the following statement of Bryson JA in McNeill at [39]:

… The question of foreseeability of risk of harm to persons such as the respondent should not, on a just or reasonable basis, be decided upon information known or available to the appellant about risks to persons in industrial situations.

69 In that case, which concerned the exposure to asbestos in 1961 of a person who worked with asbestos sheeting in home renovation for a total of twelve hours over several days, Bryson JA (with whom Handley JA and Tobias JA agreed) reached the following conclusion:

101 The reasons which the Trial Judge gave at paras [98] and [99] and the course of the judgment generally show that the Trial Judge conflated all persons exposed to risks of injury associated with inhalation of asbestos dust and fibres, and used the results of this consideration to reach a conclusion about the reasonable foreseeability of a risk of injury to the respondent. In my opinion this was an error in point of law, because the material which the Trial Judge considered in reaching this conclusion does not provide a basis for concluding that a risk of injury was reasonably foreseeable in relation to a person whose exposure to asbestos was of the extremely low intensity of the respondent's exposure. Almost all the references to exposure relate to occupational exposure and to continuing situations of exposure, and while they vary greatly in periods of time and intensity, they were all of a completely different and much greater order of intensity than the exposure of the respondent. It is only in the last of the publications reviewed by the Trial Judge, those of J. C. Wagner and others in 1959 and 1960, that there was any reference to sufferers from asbestosis or carcinoma other than persons occupationally exposed to asbestos. The conclusion that risk of injury to the respondent, or to a person in the respondent's position, was reasonably foreseeable is not a conclusion which could be reached by reasonable persons finding the facts, on the material which the Trial Judge considered. The concessions attributed to Mr Pickford do not add anything of substance: most of them have little connection with foreseeability in relation to the class of which the respondent is a member. Indeed, unless the case of the respondent and persons in his circumstances is conflated with cases of altogether different intensity of exposure, there is not in my opinion any material upon which, avoiding hindsight and judging matters from the point of view of the information of which the appellant ought to have been aware in 1961, the Trial Judge could find that there was any exposure to risk at all.

70 There are of course differences between that case and the present case. In particular, the question of duty in that case was being considered as at 1961 and not 1965; and it was not shown that the asbestos involved in that case was crocidolite or blue asbestos, which was the subject of particular concern in Wagner’s 1960 article and also Dr McNulty’s 1962 article. However, it is also true that the years between 1961 and 1965 did not disclose any recognition of a risk to persons who merely used asbestos sheeting in home renovations, or who were exposed to dust created by such use by others.

71 In my opinion, the correct approach to the question of foreseeability in a case such as this is that supported by the dissenting judgment of Fitzgerald P in Bale v Seltsam Pty Limited [1996] QCA 288, and by the majority of the Court of Appeal (Giles AJA and Cohen AJA) in CSR v Young (1998) 16 NSWCCR 56, as set out in pars [87] to [89] of the Tribunal’s judgment.

72 In my opinion, the evidence in this case could support a finding of a duty of care on that approach, for these reasons:

(2) Prior to about 1960, it was known that substantial exposure to this substance over a substantial period of years could cause very serious injury, but there was not any evidence that the substance had properties that could cause serious injury through significantly less exposure than this.

(3) From about 1960, a reasonable person in the position of the appellants would over the ensuing few years have come to appreciate that there was persuasive evidence that crocidolite was capable of causing very serious injury through significantly less exposure than had previously been considered necessary, but that there was no understanding whatsoever of the mechanism of this causation or of the extent of exposure which was required to cause this injury.

(4) By 1965 it would have been appreciated by reasonable persons in the position of the appellants that they were putting into the world a substance which was known to be a “harmful and lethal fibre” under some circumstances, and which was reasonably suspected of being harmful and lethal under other unknown circumstances.

(5) Accordingly, a reasonable person in the position of the appellants would have foreseen that this conduct (in putting into the world large quantities of this lethal substance) involved some risk of injury to persons having exposure to it to any extent not shown to be reasonably safe: the degree of risk could be considered small (in terms of its probability, though not of course in terms of its seriousness if it eventuated), but unless and until there was some understanding of the method of causation of injury and/or the extent of exposure sufficient to cause injury, the risk could not be considered far-fetched or fanciful.

(6) Having regard to common sense considerations, as well as to what Dr McNulty wrote to Dr Rennie in his 8 March 1963 letter, this would be particularly so in relation to children who could be exposed to crocidolite dust in the course of home renovations.

73 It is true, as Mr Walker submitted, that Dr McNulty did not express concern about exposure to crocidolite of persons working with asbestos sheeting or of children exposed to asbestos dust in the course of such work; but it is to be kept in mind that Dr McNulty was not putting this material into the world in large quantities, and did not on that account have the responsibility as a reasonable person to give careful consideration to whether or not such conduct involved an unreasonable risk of injury, as did the appellants.

74 It is also true, as submitted by Mr Walker, that the references in the 1960 Wagner article to “slight exposure”, in the 1962 McNulty article to “transitory exposure”, and in Dr McNulty’s letters to “minimal exposure”, should not be understood as extending to exposure of the kind undergone by persons working with asbestos sheeting in home renovation or persons in the position of the plaintiff. However, the significance of these references is that they should have brought home to a reasonable person in the position of the appellants that the material they were putting into the world was very dangerous in ways not understood, through exposure substantially less than had been previously believed, and that there was no understanding of how much or how little exposure was required in order that the material have lethal effects.

75 For those reasons, in my opinion the evidence was capable of supporting a finding of reasonable foreseeability; and in my opinion grounds 1 and 2 fail. There being no challenge as regards other factors relevant to the existence of a duty of care, I would conclude that the evidence was capable of supporting a finding that the appellants owed the plaintiff a duty to exercise reasonable skill and care in and about their operations at Wittenoom to protect her from the risk of injury from the blue asbestos extracted and distributed from there.

76 It might be suggested that the risk that I have held to be foreseeable has such a low probability of realisation as to provide too slender a basis for a duty of care, compliance with which required cessation of selling blue asbestos and closure of the mine. In my opinion, such a suggestion would impermissibly run together the question of the existence of a duty to exercise reasonable skill and care, and the question of what that duty required. My finding is strictly limited to a finding that the evidence is capable of supporting the existence of a duty to a class of persons including the plaintiff, because of indications of the possibility of most serious injury and ignorance of the circumstances in which that injury can be caused; and it says nothing about what the exercise of reasonable skill and care would require.

77 I would add however that a factual finding that in a case such as the present the duty of care required cessation of selling blue asbestos and closure of the mine would not be unreasonable. Had there been an otherwise profitable and safe business, providing employment and performing a useful function in society, one might well think that a duty of care based on a risk of that nature would at most elicit from a reasonable person further investigation and possibly warnings. However, in this case the business was not profitable, and it was subjecting its employees and others to clearly established and severe risks of dreadful injuries; and accordingly, the response of a reasonable person to a duty based on the “low probability” risk to persons in the position of the plaintiff could well be to close the mine, this being a course supported also by other very strong considerations.

1965 Article

78 The Tribunal referred to the 1965 article in par [59]-[61], [77] and [81]. The Tribunal did not refer to the content of this article, beyond the brief description in par [59], which did not suggest any significant contribution beyond that already provided by the 1960 Wagner article.

79 In my opinion, the references to this article by the Tribunal did not affect the Tribunal’s decision. As shown by the passages quoted above from that decision, all elements relied on by the Tribunal in support of its finding of a duty of care were provided by other material, and at most the 1965 article was treated as merely confirmatory.

80 Thus, although it was an error of law by the Tribunal to refer to this article, I am not satisfied, in terms of UCPR 51.53, that this error of law occasioned any substantial miscarriage of justice.

Conclusion

81 For those reasons, I would dismiss the appeal with costs.

82 BASTEN JA: In 1998 Mrs Belinda Dunn (“the plaintiff”) contracted mesothelioma from exposure to crocidolite asbestos fibres during short periods in 1970 and 1971. She was then aged three and four respectively. She sued James Hardie & Coy Pty Ltd (now known as Amaca Pty Ltd and hereafter “Amaca”) which was the manufacturer of the asbestos cement roofing sheets which were the source of the crocidolite asbestos fibres which caused her injury. The plaintiff settled her claim against Amaca.

The four industrial cases are significant. Two of the patients were lagging locomotive boilers and one was lagging steam pipes. A man, who was an upholsterer by trade, was employed in making fire-proof clothing from 1939-1945. As far as can be ascertained these people were never in the Griqualand district.”

115 In December 1962 Dr McNulty published a paper in the Medical Journal of Australia entitled “Malignant Pleural Mesothelioma in an Asbestos Worker”. The case concerned a labourer who had worked in the mill at Wittenoom from 1948 to 1950. The case was described by Dr McNulty as believed to be “the first case of pleural mesothelioma reported in an asbestos worker outside South Africa”. Dr McNulty referred to the Wagner paper in the following passage:

et alii

116 Dr McNulty’s discussion of the case may be set out in full:

et alii

Experience in Western Australia certainly confirms that blue asbestos is a very harmful and lethal fibre. The dust is one that urgently requires further experimental study (Barnes, 1961). The interval between exposure and the development of the tumour is much shorter than has been previously reported. This also applies to the interval between exposure to blue asbestos and the development of asbestosis in this State, which in one instance was less than four years.”

117 The question raised by this paper was whether Dr McNulty’s reference to “transitory exposure” was a reference to the patient discussed, who worked for a period of two years in the mill. Some internal support for that view may be derived from his final comparison with silicosis amongst gold miners which is said to be rare, in the case of a gold miner “with only 10 years’ surface mining experience”.

118 The Tribunal’s discussion with respect to duty of care commenced with the foreseeability of the risk which materialised in the present case, by reference to the state of medical science in and before 1965. His Honour commenced with reference to the paper by Wagner et al. In particular he noted at [58]:

“The subjects of the study did not all work in the asbestos industry. The histories of exposure included persons who lived for a time near asbestos mines.”

119 His Honour referred to what was described as a paper published in February 1965 in the British Journal of Industrial Medicine, by M Newhouse and H Thompson. This paper, it was said, “drew attention to the incidence of mesothelioma in people living in the vicinity of a London asbestos factory where crocidolite was used”: at [59]. His Honour continued:

“60 It was then apparent to persons informed by such publications, that, in comparison to those levels required to produce asbestosis and asbestos related lung cancer, lower levels of asbestos in inspired air may cause mesothelioma.

61 The vice of crocidolite, identified by the Wagner and Newhouse articles, was that it was not only an agent of slow change in lung tissue, but also that it may act as a primary carcinogen at very low doses.”

120 His Honour then considered the role played by Dr McNulty in alerting the company, both directly and through Dr Rennie, of the state of medical science in the early 1960s. He emphasised the passage in the Medical Journal of Australia article that “these tumours may arise after transitory exposure to crocidolite in susceptible persons”. He quoted the concern that “individual idiosyncrasy and minimal asbestos exposure” could be dangerous, as appeared in the letter to Dr Rennie of 18 September 1961 and repeated in the letter of 25 October 1961. He also identified Dr McNulty’s reference in his letter to Dr Rennie of 8 March 1963 to the unavailable letter from Dr Wagner, suggesting “the possible slightness of exposure especially in childhood” as a matter which had worried him.

121 His Honour further noted that in the course of cross-examination in another matter, the transcript of which had been tendered in the present proceedings, Dr McNulty had denied that his reference in the Medical Journal of Australia article to “transitory exposure” was intended to refer to the affected worker’s two years in the mill, or that such a period would be regarded as transitory exposure: Tcpt, DDT 72/94. p 194C.

122 His Honour also made reference to a statement prepared by Dr McNulty for a case of Nielsen v Seltsam Pty Ltd (DDT No 280 of 2003) which concerned the state of knowledge in relation to the risks associated with asbestos cement sheets prior to and as at 1974. Mr Nielsen had been exposed to asbestos dust whilst cutting sheets with a hand saw in order to replace panels on the wall of his garage. The statement is not entirely clear, but suggested that in Dr McNulty’s view the sheets would not have contained crocidolite in 1974. Accordingly, his view that it would not have been reasonably foreseeable that Mr Nielsen would contract mesothelioma from such an isolated and limited exposure to asbestos was of limited relevance. The primary judge also noted evidence that the breaking up of weathered fibro sheets and sweeping the broken pieces and dust would expose a person to a higher level of asbestos fibre than the use of a hand saw: at [43] and [75].

123 The discussion with respect to reasonable foreseeability involved a mixture of fact-finding and application of legal principle. It is convenient to deal first with the statements of principle. His Honour commenced by setting out a comment by Dixon CJ in the course of argument in Chapman v Hearse [1961] HCA 46; 106 CLR 112 at 115 to the following effect:

“[F]oreseeability does not include any idea of likelihood at all. I cannot understand why any event which does happen is not foreseeable by a person of sufficient imagination and intelligence.”

124 There are two problems with reliance upon this statement. First, reading the whole of the intervention in context, it is clear that the Chief Justice was directing attention to the proposition that the words “reasonably foreseeable” would not be satisfied unless the events were “within the scope of likelihood”. The inference, if drawn, that virtually any event which occurred fell within the test of reasonable foreseeability, was clearly not intended.

125 Further, as counsel for the appellants correctly pointed out, the judgment of the Court in Chapman identified the real issue as whether that which had to be reasonably foreseeable, to invoke a duty of care, was “the precise sequence of events which led to his death”: at 120. As the judgment noted, that proposition had been rightly rejected by the Full Court. The judgment continued:

“It is, we think, sufficient in the circumstances of this case to ask whether a consequence of the same general character as that which followed was reasonably foreseeable as one not unlikely to follow a collision between two vehicles on a dark wet night upon a busy highway.”

126 Invoking a highway accident in the present case was unlikely to be of assistance. However, what the primary judge appears to have derived from this passage was the view that Dr McNulty, “without the benefit of evidence, but armed with sufficient imagination and intelligence, foresaw” the significance of brief or intermittent exposure to blue asbestos: at [80].

127 In fact, the significance of this last passage appears to be more clearly stated later in the judgment where his Honour posed the question in the following terms at [87]:

“The resolution of the foreseeability issue in this case depends upon an answer to the question whether foreseeability in disease cases requires a consensus of expert opinion that harm could occur, or whether the test is satisfied by an informed and reasonable conception that, given the uncertain state of knowledge, harm might occur.”

128 His Honour had earlier concluded that Dr McNulty’s reference to “transitory exposure” being sufficient to create a risk from inhalation of blue asbestos was “prescient”: at [78]. In other words, there was no consensus of expert opinion as to the risks in such circumstances in 1965. Accordingly, for there to be liability on the part of the appellants, the test to be satisfied must have been no less demanding than the second limb proposed by his Honour.

129 His Honour noted that there had been a difference of view in this Court in CSR Ltd v Young (1998) 16 NSWCCR 56, in the course of which Handley JA (in dissent) had adopted the former test whereas the majority (Giles AJA and Cohen AJA) had preferred the latter test. In particular, Giles AJA had adopted the statement of principle as explained by Fitzgerald P in Bale v Seltsam Pty Ltd [1996] QCA 288. Towards the end of his judgment, Fitzgerald P, under the heading “Proximity” expressed the following opinion:

“More importantly, in my opinion, the respondent ought to have known, at the latest by the end of 1962, that there was a risk that amongst the unidentified and unknown possible toxic effects of asbestos dust was injury or illness to those, such as wives, who were exposed to it by its introduction into their homes and lives by their husbands bringing it with them from the place of employment. Further, because of the known toxicity of asbestos dust, the known uncertainty with respect to its effects, and the knowledge that injury or illness might not emerge for many years, that risk could not be dismissed as ‘remote’, ‘slight’, ‘far-fetched’, or ‘fanciful’ or otherwise ignored so as to absolve the respondent of any duty of care towards the wives of its employees. Contrary to the opinion of the trial judge, I do not consider that it was open to the respondent to assume that the ‘low-level’ exposure to asbestos dust experienced by persons such as the appellant was safe until a ‘link … with malignant mesothelioma had been made’. The ‘alarm bells’ should have rung for the respondent, as they did for Dr Ferguson, prior to the end of 1962, whereupon, even if it considered risk of injury or illness improbable, I think that it became incumbent upon the respondent to respond by introducing the inexpensive and convenient system which would have protected its workers’ wives and warned those women to avoid exposure to asbestos dust even in small quantities.”

130 It was this passage which was adopted by Giles AJA in CSR Ltd v Young at [114].

131 The passage from the judgment of Fitzgerald P set out by the primary judge was in similar terms to that to which Giles AJA appears to have been referring. In the course of his reasons, just prior to the passage to which the primary judge referred, Fitzgerald P identified as the key issue in the judgment below in that case (White J) that her Honour “considered it necessary for the appellant to establish constructive knowledge of actual risk to the wives of asbestos workers from exposure to asbestos dust such as that experienced by the appellant”. Fitzgerald P also noted the acceptance by White J of evidence that “it was not until the publication of the paper by Newhouse and Thompson in 1965 that research and academic workers in the field became strongly conscious of the risk of mesothelioma from exposure to relatively small doses of asbestos”. His Honour then continued:

“It knew, or must be taken to have known, that there was scientific and medical uncertainty concerning the toxic effects of asbestos dust; the assumption that exposure to asbestos dust at the level experienced by the appellant was safe was not established at the material time, any more than it had been demonstrated that such exposure would cause illness to at least those individuals who were susceptible to the asbestos dust's toxic effects. The position was uncertain, as the article by Wagner, Slegg and Marchand had shown and the subsequent papers and letters published before the end of 1962 had confirmed. Further, the respondent knew, or ought to have known, that the effects of exposure to asbestos dust on persons such as the appellant might not emerge for years and that any illness might be serious or even fatal. The critical question, in my opinion, is whether the trial judge was correct in her view that the respondent was not under a duty of care until ‘the link between exposure to low levels of asbestos dust and malignant mesothelioma had been made’, ie, until the respondent had positive knowledge (actual or constructive) of actual risk, or whether, in the circumstances, the uncertainty which existed concerning the toxic effects of asbestos dust and the level of exposure which could produce illness in susceptible persons, and the risk inherent in that uncertainty, were sufficient to create a duty of care; ie, a duty to implement inexpensive and convenient systems to eliminate the possible risk to, and/or warn, those like the appellant who might be affected.”

132 On this appeal, no challenge was made to the adoption in CSR Ltd v Young of the approach of Fitzgerald P in Bale.

133 Finally, albeit at the end of this section of his reasons in relation to reasonable foreseeability, the trial judge made reference to the statement of Gleeson CJ in Tame v State of New South Wales [2002] HCA 35; 211 CLR 317 at [12] that “‘reasonable foreseeability’ should be understood and applied with due regard to the consideration that, in the context of an issue as to duty of care, it is bound up with the question whether it is reasonable to require a person to have in contemplation the risk of injury that has eventuated”: at [91].

134 His Honour accepted that it was not until “after 1967 that the uniquely carcinogenic property of crocidolite fibre, and the significance of brief or intermittent exposure in the aetiology of mesothelioma, were generally recognised”: at [80]. Nevertheless, his Honour found that, in 1962, the contraction of cancer by susceptible persons “through exposure to an extremely small quantity of a carcinogen was then medically plausible”. His Honour also found that Dr McNulty “foresaw” the development which occurred five years later.

135 His Honour concluded that the appellants should have known of the various articles discussed above. With the exception of the Newhouse and Thompson article, no objection is taken to that finding. The critical issue was whether Dr McNulty foresaw, or should have been understood by the appellants to have foreseen, that which was established some years later, as described above.

Disposition of appeal

136 It is convenient to commence with the complaint about reliance upon the article by Newhouse and Thompson. Although not discussed in these terms in the judgment of the primary judge, the Newhouse and Thompson article was treated as of considerable significance in Bale, as demonstrating the link between exposure to low-levels of asbestos dust and diseases like mesothelioma. Bale, like the recent decision of this Court in Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258, was concerned with injury to the spouse of a worker bringing home asbestos fibres on his clothing from his employment in a factory where asbestos was being used. In Bale, the critical date at which the knowledge of the defendant needed to be addressed was December 1962; in Stavar, later dates were relevant.

137 Given the changes in medical science and understanding which were occurring during the 1960s, the latest date at which the relevant conduct of a defendant took place is a matter of prime importance. As noted above, in the present case it was the end of September 1965. The date of publication of the Newhouse and Thompson paper was not established by the evidence in the present case. It followed that his Honour’s conclusion that it was published in February 1965 was not open. Although it cannot properly be relied upon as evidence, it may be observed that Helman J in Bale said the paper was received for publication by the British Journal of Industrial Medicine on 11 February 1965 and published in the middle of 1965. Taking that as a theoretical possibility only, it is sufficient to demonstrate the difficulties with reliance upon that paper in the present case. If the earlier material were not sufficient to require action on the part of the appellants, that paper was too late to assist the plaintiff. The case was not based on any proposed warning, but on the obligation of the appellants to shut down their mine and cease selling blue asbestos to manufacturers such as Amaca. If that duty had not arisen until mid-1965, there would have been a very real issue as to whether it was a duty which, in all reasonableness, required that mining and sales cease by the end of September of the same year (a period of perhaps three months). Accordingly, it was inappropriate for his Honour to have taken that publication into account as a basis for finding the relevant duty of care.

138 Implicit in his Honour’s reliance upon the paper was a factual assumption that the paper was in evidence before him and was relied upon by Amaca. That factual assumption was erroneous. A failure to identify correctly and in a significant respect the material upon which a case is to be decided can amount to an erroneous exercise of jurisdiction and therefore an error of law: see Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323. The manner in which his Honour relied upon the article demonstrated an implicit decision that it was before him: the error is therefore one to be identified in a decision of the Tribunal in point of law.

139 There remains a question as to whether the error was material, but it is a question which need not be answered in the present case, in isolation from the primary complaint made by the appellants.

140 That primary complaint was directed to findings made by his Honour as to the lessons drawn by Dr McNulty from the Wagner paper and the appropriate reading of the Wagner paper itself. The appellants contended that none of the documents prepared by Dr McNulty, nor the Wagner paper itself, provided any evidential basis for a finding that, in September 1965, the appellants ought to have known that the risks associated with blue asbestos required them not to provide the material for use in domestic roofing, in circumstances where children playing at home might be exposed to asbestos dust resulting from the destruction of the roofing in the course of renovations.

141 It may be that such a description involves an undue level of precision. However, the primary judge referred to the plaintiff as a member of a class of “children susceptible because of early childhood development, who suffer transitory exposure specifically to the crocidolite fibre in the course of home renovation”: at [85]. In any event, the critical finding of fact was that the appellants “knew or ought to have known that children were susceptible and at risk of contracting this disease from transitory exposure to crocidolite”: at [84].

142 The language of “transitory exposure” was to be found in Dr McNulty’s material, referred to above.

143 The appellants’ contention is that Dr McNulty was not addressing the kind of case raised by the injury to the plaintiff and gave no particular consideration to such circumstances. Rather, he was concerned to draw attention to evidence which undermined the current thinking that asbestos related diseases (and particularly the common asbestosis) required both an extensive and intensive exposure to asbestos dust. While ongoing research was concerned with the identification of “safe” levels of exposure, Dr McNulty’s concern, particularly on reading the paper by Wagner et al, was that qualitatively different (and lower) levels of exposure might be sufficient to cause disease in susceptible persons. It is also reasonable to infer that he was concerned that children whose lungs were not yet mature might more readily fall within the class of those susceptible to the disease. In particular, he sought to draw attention to what may have been described as “environmental” exposure, namely that occurring outside the industrial setting, due to the use of tailings to make roads and sports facilities. In such circumstances people living near the mill at Wittenoom would be exposed to dust on a frequent, if intermittent, basis, even if they never went inside the mill. Such circumstances were far removed from the plaintiff’s case; they covered the circumstances of the plaintiff in CSR Ltd v Young, which involved a woman exposed to asbestos dust during the first 27 months of her life, simply by living in Wittenoom, playing on the veranda and playing in tailings in the backyard and elsewhere in the town, and through inhaling asbestos fibres from her father’s clothes: 16 NSWCCR 35 at [92].

144 Counsel for the appellants submitted that the primary judge had applied an “unarticulated variant of the precautionary principle” in identifying what was reasonably foreseeable: NSWCA Tcpt, 7/09/09, pp 5(43) and 14(8). This, it was argued, took the approach of Fitzgerald P in Bale beyond that which had been expressed by his Honour, or accepted by this Court in CSR Ltd v Young. Thus, a degree of care must be taken when transposing statements of principle from one case to another. For example, in Mount Isa Mines Ltd v Pusey [1970] HCA 60; 125 CLR 383 Windeyer J stated at 402:

“Foreseeability does not mean foresight of the particular course of events causing the harm. Nor does it suppose foresight of the particular harm which occurred, but only of some harm of a like kind.”

145 These are clear words with an accepted meaning; however, taken out of context they may be stretched inappropriately. For example, foresight of harm to residents of Wittenoom does not necessarily give rise to a duty of care to persons who were users of a manufactured product, even though the particular harm which they suffered may be the same, or of the same kind.

146 Nor does the realisation that mesothelioma may result from a “low” level of exposure involve a reasonable foresight that it may be caused by any exposure. It is easy to make such a leap at a later point in time when the mechanism of causation is better understood, but that would be to apply impermissible hindsight to the exercise.

147 It is also possible to overstate the degree of uncertainty which may be tolerated in accordance with the statement of Fitzgerald P in Bale. What his Honour rejected was a requirement that the respondent have “positive knowledge (actual or constructive) of actual risk”. His Honour appears to have preferred a test where “the uncertainty which existed concerning the toxic effects of asbestos dust and the level of exposure which could produce illness in susceptible persons, and the risk inherent in that uncertainty, were sufficient to create a duty of care”. As with other statements of principle, reference to a risk inherent in “known uncertainty” permits an expansion of the concept of foresight beyond that which might otherwise be thought appropriate, constrained by the term “reasonable”. There was no statement in evidence from any source in 1965, whether knowledgeable, responsible, authoritative or otherwise, to the effect that building products manufactured with a significant quantity of crocidolite involved a risk of harm in circumstances where they were broken, or disintegrated, causing dust and the release of loose fibres. In particular, such a conclusion would need to take into account the manner and effectiveness in which the fibres were bound together in the manufacturing process and the likelihood of fibres being released in foreseeable circumstances, such as breakage, sawing or deterioration.

148 Amaca sought to answer this concern by reliance upon two matters. First, it said that it was wrong to focus upon the specific statements of Dr McNulty, who was concerned about other issues, and in particular the health of workers at the mine, the mill and in their town environment. The fact that Dr McNulty did not expressly advert to other circumstances involving risk did not mean that such circumstances were not reasonably foreseeable, based upon the concerns he had raised. In particular it was noted that any such extrapolation was one which should be considered as being within the knowledge of medical practitioners, including Dr Rennie, with whom Dr McNulty was corresponding.

149 Secondly, Amaca sought to rely upon the answers given by the appellants to interrogatories. Those interrogatories included affirmative answers to questions establishing that the appellants knew that the blue asbestos they sold to Amaca was used in the manufacture of asbestos cement building products, and that handling such products, including cutting, drilling and breaking could produce dust which included crocidolite. The appellants also accepted that they were aware that inhaling crocidolite could cause mesothelioma, a fatal condition. Critically, the following question and answer were relied upon:

“When were you first aware that inhaling crocidolite can cause mesothelioma?

Midalco [and CSR] has made inquiries of former officers, servants and agents, and having receiving such records as remain in its possession, custody or power, believes that it was aware in 1960 that the inhalation of asbestos could cause mesothelioma, but only circumstances involving the inhalation of significant amounts of asbestos fibre over a prolonged period of time.”

150 This material was of assistance so far it went: no specific interrogatory sought to identify the time at which CSR became aware that there was a risk of mesothelioma resulting from the inhalation of dust when building products were used or broken up. No doubt for that reason, the case accepted by the primary judge did not depend upon actual knowledge, but on that which the appellants ought reasonably to have known. Further, the answer in relation to knowledge as to the effects of inhalation did not seek to distinguish between inhalation of loose fibre at a mill, or released by loose tailings, as opposed to fibre which had been bound in a manufactured product. In these circumstances, the answers to interrogatories took the matter no further.

151 Statements that the test of what is reasonably foreseeable may be “undemanding” were described by Gleeson CJ in Tame as “tendentious”: at [12]. Further, even if the comment of Dixon CJ in Chapman in argument, that any event which has happened is foreseeable by a person of sufficient imagination and intelligence, accorded with the principle explained in the judgment, it must be read in its context or it loses its meaning. That context supplies a number of qualifications not expressly recognised by the primary judge. First, the legal principle requires foreseeability on the part of the defendant who is said to owe the duty of care. Secondly, the question of foreseeability, although it must be addressed in a prospective sense, involves an essential causal link between the proposed conduct of the defendant and the risk of harm to the plaintiff. In this context, imagination and intelligence are not enough, or, rather, they presuppose the existence of a form of causal connection. Thirdly, it is erroneous not merely to reason backward from the materialisation of harm to its foreseeability, but also to reason that if the plaintiff’s harm followed the defendant’s conduct, that conduct caused the harm. That is not merely to employ the improper use of hindsight, but to assume that a causal connection flows from a temporal connection.

152 On the basis of the material before the Tribunal, the risk to persons in the circumstances of the plaintiff would, in September 1965, have been dismissed as remote, slight or far-fetched. The known uncertainty may have precluded the use of the adjective “fanciful”, but the risk relied on was of a kind which, in a practical sense, either required widespread public education, or the removal of blue asbestos from all building products. There was, as counsel for the appellants put it, no basis in the evidence for identifying, in 1965, a degree of foresight capable of satisfying the test necessary for the duty of care. The error of the trial judge was his understanding (or decision) as to the flexibility allowed by the adoption in CSR Ltd v Young of the approach of Fitzgerald P in Bale. While it was unnecessary (and not contended for in the present case) to find in 1965 scientific evidence of a connection between exposure of the kind which arose in the present case and mesothelioma, there had to be more than the mere fact that the level of uncertainty was inconsistent with the affirmative rejection of such a causal link. Similarly, ‘known toxicity’ did not by itself create a duty to this plaintiff. There are many toxic materials produced in an industrial context which need to be disposed of or handled with care. The mere fact of toxicity does not mean that they cannot be used or disposed of safely. What needed to be established was some level of appreciation in September 1965 that use of blue asbestos in building products of the kind manufactured by Amaca (and in earlier years by the appellants) carried real risks for householders.

153 Taken in combination, the remarks made in argument in Chapman and the language of Fitzgerald P in Bale led the primary judge to adopt a test of foreseeability which omitted the element just noted. The adoption of that test was a decision of the Tribunal in point of law and was erroneous.

Conclusion

154 Having established that the reasoning of the primary judge was based on an erroneous identification of legal principle, the judgment must be set aside.

155 There remains a question as to whether the matter should be remitted for further hearing or, as the appellants contended, Amaca’s application for contribution should be dismissed. The error on the part of the primary judge was to substitute for a test of reasonable foresight a requirement that the defendant speculate as to possible risks which had not yet been identified by the medical or scientific community. It was only on that basis that the material before the Tribunal could sustain the claim for contribution. There may have been other material available which was not called, but it is not appropriate to provide an opportunity for rehearing on the basis that Amaca may be able to improve its case evidentially. Because, on the available material, the findings of the Tribunal were not reasonably open, the appellants should have the order they sought.

Costs

156 There remains a question of the appropriate order as to the costs before the Tribunal. In their amended notice of appeal, the appellants sought to have the proceedings remitted to the Tribunal for further hearing on the question of costs in respect of the hearing before the Tribunal. Nothing was said in support of that order in the written submissions of the appellants, nor in the course of oral argument. If there is some basis for making an order other than that proposed below with respect to the costs before the Tribunal, the parties have leave to seek a variation of that order, in accordance with the order proposed in the amended notice of appeal, by consent. If there is any dispute as to the appropriate order as to the costs before the Tribunal, a party seeking to vary the order proposed below will need to file a notice of motion with evidence or submissions in support thereof within 14 days of the date of this judgment. The opposing party has leave to file any evidence or submissions in reply within a further period of 14 days.

157 The appropriate orders are as follows:

(1) Allow the appeal and set aside the judgment of the Dust Diseases Tribunal of 25 June 2008 and the orders made on 8 July 2008.

(a) dismiss the cross-claimant’s claim for contribution against the cross-defendants;

(b) order that the cross-claimant pay the cross-defendant’s costs of the proceedings in the Dust Diseases Tribunal on the cross-claim.

(3) Order the respondent to pay the appellants the sum of $375,000 (being the amount paid by them to the respondent as a condition of the stay granted in the Tribunal) together with interest at the rate prescribed by Schedule 5 to the Uniform Civil Procedure Rules 2005 (NSW) calculated from the date of payment to the date on which the amount is repaid by the respondent.

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Citations

CSR Ltd v Amaca Pty Ltd [2009] NSWCA 338

Most Recent Citation

Amaca Pty Ltd v King [2011] VSCA 447

Cases Citing This Decision

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Amaca Pty Ltd v Phillips [2014] NSWCA 249

BHP Billiton Ltd v Dunning [2013] NSWCA 421

Cases Cited

17

Statutory Material Cited

2

Seltsam Pty Ltd v Mcneill [2006] NSWCA 158

Chapman v Hearse [1961] HCA 46

Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258

CITATION:	CSR LTD v AMACA PTY LTD [2009] NSWCA 338
HEARING DATE(S):	7 September 2009
JUDGMENT DATE:	19 October 2009
JUDGMENT OF:	Allsop P at 1; Hodgson JA at 51; Basten JA at 82
DECISION:	(1) Allow the appeal and set aside the judgment of the Dust Diseases Tribunal of 25 June 2008 and the orders made on 8 July 2008. (2) In lieu of the orders made by the Tribunal, (a) dismiss the cross-claimant’s claim for contribution against the cross-defendants; (b) order that the cross-claimant pay the cross-defendant’s costs of the proceedings in the Dust Diseases Tribunal on the cross-claim. (3) Order the respondent to pay the appellants the sum of $375,000 (being the amount paid by them to the respondent as a condition of the stay granted in the Tribunal) together with interest at the rate prescribed by Schedule 5 to the Uniform Civil Procedure Rules 2005 (NSW) calculated from the date of payment to the date on which the amount is repaid by the respondent. (4) Order the respondent to pay the appellants’ costs of the appeal.

CATCHWORDS:	APPEAL – when appeal lies – scope limited to appeal from decision of Tribunal in point of law – challenge to finding of duty of care – whether evidence to support finding – nature of error – significance of "illogicality" in reasoning or "perversity" in fact-finding - TORTS – negligence – duty of care – pleural mesothelioma contracted after exposure to crocidolite asbestos as young child – two periods of exposure of between three and seven days each – exposure due to destruction of cement sheets containing asbestos mined no earlier than September 1965 – possibility of link between "transitory" or "minimal" exposure documented in 1962 – miner of asbestos aware of medical knowledge – whether knowledge of miner of risks posed by asbestos gave rise to duty of care - WORDS AND PHRASES – "blue asbestos" – "transitory exposure"
LEGISLATION CITED:	Dust Diseases Tribunal Act 1989 (NSW), s 32 Uniform Civil Procedure Rules 2005 (NSW), r 51.53
CATEGORY:	Principal judgment
CASES CITED:	Amaca Pty Ltd v Hannell [2007] WASCA 158; 34 WAR 109 Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26; 78 CLR 353 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Bale v Seltsam Pty Limited [1996] QCA 288 Caltex Refineries (Qld) Pty Limited v Stavar [2009] NSWCA 258 Chapman v Hearse [1961] HCA 46; 106 CLR 112 CSR Limited v Young (1998) 16 NSWCCR 56 E v Secretary of State for the Home Department [2004] QB 1044 House v The King [1936] HCA 40; 55 CLR 499 Julia Farr Services Inc v Hayes [2003] NSWCA 37; 25 NSWCCR 138 Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 Mount Isa Mines Ltd v Pusey [1970] HCA 60; 125 CLR 383 Nielsen v Seltsam Pty Ltd (DDT No 280 of 2003) Seltsam Pty Limited v McNeill [2006] NSWCA 158; (2007) 4 DDCR 1 Shirt v Wyong Shire Council [1978] 1 NSWLR 631 Tame v State of New South Wales [2002] HCA 35; 211 CLR 317 Western Districts Developments Pty Limited and Turnpike Lane Pty Limited v Baulkham Hills Shire Council [2009] NSWCA 283 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1971] 2 QB 23 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741 Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40
TEXTS CITED:	F Trindade, P Cane and M Lunney The Law of Torts in Australia (4th Ed) at 468
PARTIES:	CSR Limited – First Appellant Midalco Pty Limited – Second Appellant Amaca Pty Limited - Respondent
FILE NUMBER(S):	CA 40315/08
COUNSEL:	B Walker SC/Ms JS Gleeson – First and Second Appellants G M Watson SC/J C Sheller - Respondent
SOLICITORS:	Colin Biggers & Paisley – First and Second Appellants DLA Phillips Fox - Respondent

LOWER COURT JURISDICTION:	Dust Diseases Tribunal
LOWER COURT FILE NUMBER(S):	DDT 238/2001/1
LOWER COURT JUDICIAL OFFICER:	Curtis J
LOWER COURT DATE OF DECISION:	25 June 2008
LOWER COURT MEDIUM NEUTRAL CITATION:	Amaca Pty Ltd v CSR Limited [2008] NSWDDT 18