David Jones Ltd v BI (Contracting) P/L
[2017] SADC 79
•28 July 2017
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
DAVID JONES LTD v BI (CONTRACTING) P/L
[2017] SADC 79
Judgment of His Honour Judge Gilchrist
28 July 2017
TORTS - NEGLIGENCE
ASBESTOS - DUTY OF CARE
CONTRIBUTION BETWEEN JOINT TORTFEASORS
A former employee of the plaintiff when aged 60 prosecuted a claim for damages in the Dust Diseases Tribunal of New South Wales alleging that he was suffering from mesothelioma as a result of the plaintiff’s negligence. The plaintiff settled the claim for $435,000 all inclusive. In these proceedings the plaintiff alleges that the employee was exposed to asbestos that was negligently supplied and installed by the defendant.
Whether the within action is a dust disease action for the purposes of the Dust Diseases Act 2005. Held: That it is. Whether the plaintiff has established that the defendant was liable in tort to the former employee. Held: That it has.
Apportionment is based on a comparison of the respective culpability and of the relative importance of the tortious acts in causing the employee’s damage.
Held: That whilst the plaintiff is responsible for all the exposure; the majority of the exposure was joint and in respect of the joint exposure, the defendant bears much greater culpability than the plaintiff. Held: That the plaintiff is entitled to 75% contribution.
Held: That the settlement sum was within a reasonable range.
Further consideration of final orders, costs and interest adjourned.
Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 ss 6(5) and (6); Dust Diseases Act 2005 ss 3, 4, 8 and 10, referred to.
Oliver v ACN 007 870 484 Pty Ltd & Ors [2017] SADC 52; Podrebersek v Australian Iron and Steel Pty Limited [1985] HCA 34; 59 ALJR 492; The Public Trustee of South Australia v Clifton Financial Services Pty Limited and Ors (No. 3) [2004] NSWDDT 40; BI (Contracting) Pty Ltd v The Public Trustee of South Australia & Anor [2005] NSWCA 306; BI (Contracting) Pty Ltd v The Myer Emporium Ltd [2005] NSWCA 305; Amaca Pty Ltd v Booth (2011) 246 CLR 36; Mutch v BHP Billiton Ltd & Ors [2015] VSC 253; Russo v Aiello (2003) 215 CLR 643; Hendrika Misiani (As Executor of the Will of Alfredo Antonio Misiani (Dec)) v Welshpool Engineering Pty Ltd 008 669 421 (In Liq) & Anor 2003] WASC 263; Saccardo Constructions Pty Ltd v Gammon (No.1) (1991) 56 SASR 552; Saccardo Constructions Pty Ltd v Gammon (No.2) (1994) 63 SASR 333; Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 192 CLR 603; Kenneth Wallace v Amaca Pty Limited [2007] NSWDDT 4; Gifford v Cockatoo Dockyard Pty Limited [2007] NSWDDT 22, considered.
DAVID JONES LTD v BI (CONTRACTING) P/L
[2017] SADC 79
This is an action for contribution following the settlement of a claim for damages for personal injury.
The plaintiff in these proceedings, David Jones Ltd, was sued in the Dust Diseases Tribunal of New South Wales in 2007, by Mr Phillip Murphy, for damages for personal injury. Mr Murphy alleged that David Jones was his employer between 24 May 1965 and 29 December 1978; that over the course of that employment it negligently exposed him to asbestos; that as a result of that exposure he developed mesothelioma; and that as a consequence he had suffered injury, loss and damage.
On 8 October 2007, by consent, judgment was entered in those proceedings in favour of Mr Murphy in the sum of $435,000 all inclusive.
David Jones seeks to recover that sum plus its costs of defending those proceedings from the defendant to these proceedings, BI (Contracting) Pty Ltd (BI). David Jones alleges that BI carried out the application of sprayed asbestos at its Charles Birks Store, later known as David Jones, in Rundle Street, Adelaide, and that this was the asbestos that Mr Murphy was exposed to in the course of his employment with it. It pleaded that it was entitled to full indemnity on the amount it paid to Mr Murphy or in the alternative that it was entitled to contribution.
As the case unfolded before me it became apparent that David Jones was seeking contribution rather than full indemnity.
Claims for indemnity and contribution in circumstances such as these are governed by ss 6(5) and (6) of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001. The contribution is to be an amount that is fair and equitable having regard to the extent of each tortfeasors’ responsibility for the harm.
In Oliver v ACN 007 870 484 Pty Ltd & Ors[1] I made some observations about how this task has to be undertaken. Having made reference to the decision of the High Court in Podrebersek v Australian Iron and Steel Pty Limited[2] I spoke of the need to compare the relative causative importance of the parties’ respective torts and the degree of their respective departures from the standard of care of the reasonable person.
[1] [2017] SADC 52 at para 46.
[2] [1985] HCA 34; 59 ALJR 492.
This is the approach that I apply here.
First, I must determine whether or not liability has been established as against BI. If it has, which will be contingent upon proof of exposure to asbestos, I must reflect upon whether all of the exposure at David Jones was attributable to BI, or only part of it. If it is only part of it, I must reflect upon the difference. I then must consider the relative degrees of departure from the standard of care of the reasonable person by David Jones and BI. Finally I must consider the reasonableness of the settlement.
David Jones’ case
David Jones’ case comprised of admissions made by BI, various documents, oral evidence from Ms Raymonda Cavanaugh and Ms Pamela Simmons, and evidence given in and findings made in other cases.
The admissions
BI admits that it carried out sprayed asbestos operations at the Charles Birks Store in Rundle Street. It admits that Mr Murphy died of mesothelioma. It admits the authenticity of a death certificate issued in Hong Kong that certifies that Mr Murphy was born in July 1947, that he died of mesothelioma on 24 January 2008, that his recorded occupation was ‘Artist’, that he left a widow and that she registered his death. It admits the authenticity of a document that records sprayed asbestos contracts carried out by it that includes an entry that records that it sprayed 22,106 square yards of asbestos at the Charles Birk Store in 1960. It admits the authenticity of a document that records that Mr Murphy worked for David Jones as a window dresser between 24 May 1965 and 29 December 1978 in its Display Department. And, it admits that the payment of the judgment sum to Mr Murphy.
The documents
The documents included a building specification for the Charles Birk Store dated September 1960.[3] Item 84 of that document refers to “Sprayed Asbestos Beam & Column Encasings” and contains the following note:
The extent of the asbestos beam casings is increased to include all beams on the perimeter stock areas south of the passenger lifts on all floors.
[3] Ex P4 tab 12.
They included a letter from the Department of Public Health dated 14 November 1977 addressed to David Jones’ maintenance manager that had, as an enclosure, a report on air sampling in the Rundle Street Store.[4] The report stated:
The presence of crocidolite in your building will mean that specific precautions will be necessary whenever the material is encountered, and Mr Hamilton has outlined some of these. In addition, as the building ages, the condition of the asbestos coating can be expected to deteriorate, and so further action may be necessary if the deterioration does occur. That eventuality, however, may be years or even decades off.
[4] Ex P4 tab 13.
The report included the following:
Air sampling was carried out because the building’s structural steelwork was coated with blue asbestos (crocidolite) during construction. A sample of the coating was taken from the mezzanine floor (where it was exposed) on 25th August, 1977, and analysed by the Australian Mineral Development Laboratories. The analysis showed that the material consisted almost entirely of crocidolite.
The report recorded that sampling had taken place at five locations including the mezzanine office floor area which it noted had no suspended ceiling and had exposed asbestos steelwork. It noted that areas with exposed asbestos coating were extremely hazardous.
The documents included the minutes of a discussion between David Jones’ management on 16 December 1977 in connection the report.[5] It records that it was resolved that in terms of dealing with the asbestos the immediate focus was on exposed beams; that the roof area would be done first, followed by the ladies store reserve and the mezzanine; and that what was to be done was that a mix of aquadhere and water would be sprayed on the exposed asbestos.
[5] Ex P4 tab 14.
They included a letter dated 22 November 1978 from David Jones to the South Australian Health Commission[6] wherein it reported that over several months it had obtained appropriate equipment, that vacuuming of surfaces had been completed, masking and breathing equipment were being used by those working in affected areas, and exposed beams had been cleaned and sprayed as advised.
[6] Ex P4 tab 16.
The documents included an Asbestos Risk assessment undertaken in April 1998[7] that revealed that there was residual asbestos in the roof area on the boilers, the plantroom soffit beams and the original electrical cable trays. It also reported residual asbestos in the form of asbestos rope at the concrete roof slab interface.
[7] Ex P5.
It recorded that:
Sprayed blue (crocidolite) asbestos has been applied to steel beams on various floors for fire rating purposes. The affected floors are 6, 5, 4, 3, 2, 1 and ground floor Gawler Place awning. Residual sprayed blue asbestos insulation is also present on designated areas of mezzanine floor, ground floor ceiling spaces, and rooftop plant room soffits.
It noted that sprayed limpet asbestos is friable and subject to damage and deterioration if disturbed.
It identified asbestos in the insulation in the centre of the basement fire door comprising of white asbestos, i.e. chrysotile and brown asbestos, i.e. amosite; a small amount of crocidolite dust in the bulkhead above the escalators on the second floor; some chrysotile sheeting around a chilled water circulation pump and hot water pipe gasket on level seven; some chrysotile sheeting in the water cooling tower grille on the roof; some chrysotile millboard in the escalator limit switch on the fourth floor; some chrysotile sheeting in the brake lining of the ground floor escalator; some crocidolite rope insulating some generator wire in the lift motor room; and some chrysotile and crocidolite sheeting in the brake lining in the lift motor room.
The documents included a letter from Sparke Helmore lawyers to David Jones’ insurer. It contained a provisional assessment range between $432,500 and $559,500 all inclusive.
They included a formulated claim from Mr Murphy’s solicitors of $547,771 plus $35,000 for costs and an offer to settle for $550,000 all inclusive.
They included a schedule of medical and like expenses of $20,505.22 with supporting vouchers. It included details of Mr Murphy’s bank records.
Finally, they included an advice of 11 May 2017 from counsel with alleged expertise in assessing mesothelioma cases, which attested to the reasonableness of the compromise reached between David Jones and Mr Murphy.
The oral evidence
Ms Cavanaugh’s evidence was as follows.
She is an interior designer. She was formerly employed by David Jones at its Rundle Street Store, having commenced there in 1971. She said that at that time the building comprised of a basement, a ground floor, first, second, third, fourth and fifth floor, all of which for part of the “shopping area”. She said that the sixth floor, that mainly comprised of offices and that above that, there was an area that she described as “the roof” that comprised of another story with a concrete floor and a sprayed ceiling.
She said that she had an office on the “roof area” that was partially partitioned. She described grey particles floating down from the ceiling. She knew Mr Murphy and worked with him at the David Jones Store in Rundle Street. She said that she saw him at work nearly every day over many years.
Ms Simmons’ evidence was as follows.
Her father worked for David Jones at its Rundle Street Store. He worked there from 1937 until 1986, save for a period during World War Two. She met Ms Cavanaugh through that association. She did some casual work at that store in the mid-1970s. Her father worked in the “roof area”. She frequently visited him there.
She described air conditioning ducts in the “roof area” and that they were covered in a grey substance. She understood that it comprised of asbestos. She described the area as dusty.
Findings and evidence in other cases
David Jones relies on the decision of the Dust Disease Tribunal of New South Wales in The Public Trustee of South Australia v Clifton Financial Services Pty Limited and Ors (No. 3)[8] the defendants in that action included BI. Mr Richardson worked as a painter in the John Martins store in Adelaide. The liability that attached to the store vested in Clifton Financial Services Pty Ltd. In 1974 Mr Richardson was required as part of his employment duties with John Martins to remove and clean ceiling panels which formed a false ceiling beneath a concrete slab that formed the first floor of the store. The trial judge found that John Martins had contracted with BI to spray asbestos as a form of fire retardant on the store’s steel framework. He found that Mr Richardson was exposed to and inhaled asbestos fibres that came from that spray whilst he was undertaking the cleaning work in 1974; that this exposure caused him to suffer from mesothelioma; and that his exposure occurred as a result of the negligence of John Martins, BI and another entity, CSR Ltd. In his reasons he referred to evidence given by Mr Snelling in a previous action concerning Gloria Williams, BI Contracting Pty Ltd and CSR. That evidence indicated that the spraying of asbestos was an inexact business and that 25% of the spray did not find its target. It indicated that the sprayed asbestos comprised of blue asbestos and that BI knew it was dangerous because it had instructed its employees to wear masks. The trial judge found that BI knew that the sprayed asbestos would become friable. He found that BI knew that the asbestos was in an area of the store where tradespersons working at the store would be in its vicinity and that it did nothing to warn the store or the maintenance supervisor that the inhalation of asbestos was dangerous. He found that its failure to warn and its failure to take steps to seal off the fire retardant material, so that it could not be inhaled, showed a want of care on its part.
[8] [2004] NSWDDT 40.
The trial judge, having found that John Martins, BI and CSR were all liable in tort to Mr Richardson, then went on to apportion liability as between them. He found that BI and CSR knew relevantly of the risks and that their customer, John Martins did not. He concluded that BI and CSR should jointly bear 75% of the responsibility and that John Martins should bear 25%.
David Jones relies on the decision of the Court of Appeal of New South Wales in BI (Contracting) Pty Ltd v the Public Trustee of South Australia & Anor[9] being the appeal decision from the case just mentioned.
[9] [2005] NSWCA 306.
The decision of the Court was delivered by Mason P. After referring to the evidence of Mr Snelling, just discussed, Mason P noted that the trial judge:
Had found that BI knew that the material it was spraying was injurious to health; it knew that its own workers should have been protected; and it knew that the material was not capable of being sprayed accurately in that 25% of it, or thereabouts, went anywhere.
He then went on to find that the trial judge had amply disclosed his reasoning process and that his findings against BI as to duty, breach and causation were supported in the evidence and correct in law. He did not disturb the trial judge’s findings on apportionment.
David Jones relies on the decision of the Court of Appeal of New South Wales in BI (Contracting) Pty Ltd v The Myer Emporium Ltd.[10] This was an appeal from the Dust Diseases Tribunal that challenged the apportionment of liability as between the plaintiff’s employer, Myer, and BI.
[10] [2005] NSWCA 305.
The plaintiff, Mr Jantzen, had contracted mesothelioma as a result of his exposure to asbestos dust when employed as an apprentice carpenter between January 1960 and May 1965 by Myer at its store in Rundle Street, Adelaide. He was present while asbestos insulation was sprayed by BI onto steel structured beams that formed part of the store.
There was a finding that BI took no steps to warn or protect Myer’s employees including the plaintiff who were working in the vicinity of its activities.
There was a finding that the plaintiff was exposed to other asbestos whilst working for Myer.
Myer was found liable on the basis that it ought to have known between 1963 and 1966 that the spraying of asbestos insulation in close proximity to workers was likely to be injurious to their health and included the possibility that they would contract mesothelioma and that its failure to warn or protect constituted a breach of its non-delegable duty of care as an employer, to its apprentice.
BI had admitted both duty of care and breach. It had admitted that it was aware prior to 1965 that there was medical opinion that the inhalation of asbestos fibre in respirable form in sufficient quantities in “predisposed people” could cause mesothelioma.
In assessing BI’s culpability the trial judge described it “as a specialist firm spraying asbestos for commercial gain who at all relevant times knew that asbestos inhalation could cause mesothelioma but did nothing to inform either the first defendant or the plaintiff and nothing to protect the plaintiff.”
The trial judge noted that “as an employer, Myer bears an onerous duty of care” and that it “did nothing to discharge its duty to protect workers such as Mr Janzten from asbestos exposure”. He noted that Myer was a huge employer in Adelaide and that it was an entity that “had the resources to research concerns and take precautions to protect workers but took no interest in the matter.”
However, he viewed Myer as a “Department Store only peripherally concerned with the building industry as a consumer of its services and a retailer of hardware products” and apportioned liability between Myer and BI Contracting at 10% to Myer and 90% to BI.
On appeal Mason P, who again wrote the decision of the Court, upheld the findings made and did not enter into the issue on apportionment on the basis that it involved discretionary conclusions that did not fall within this Court’s limited appellate jurisdiction in such a case.
The parties’ submissions
David Jones submitted that it can rely upon the evidentiary presumptions created by the Dust Diseases Act 2005, in proving its case against BI.
The presumptions are contained in s 8 of the Act which provides as follows:
(1) If it is established in a dust disease action that a person (the injured person)—
(a) suffers or suffered from a dust disease; and
(b) was exposed to asbestos dust in circumstances in which the exposure might have caused or contributed to the disease,
it will be presumed, in the absence of proof to the contrary, that the exposure to asbestos dust caused or contributed to the injured person's dust disease.
(2)A person who, at a particular time, carried on a prescribed industrial or commercial process that could have resulted in the exposure of another to asbestos dust will be presumed, in the absence of proof to the contrary, to have known at the relevant time that exposure to asbestos dust could result in a dust disease.
(3) The following rules apply in a dust disease action:
(a) the Court may admit evidence admitted in an earlier dust disease action against the same defendant (including in a dust disease action brought in a court of the Commonwealth or another State or Territory);
(b) the Court may dispense with proof of any matter that appears to the Court to be not seriously in dispute;
(c) the Court may invite a party to admit facts of a formal nature, or facts that are peripheral to the major issues in dispute, and may, if the party declines to do so, award the costs of proving those facts against the party.
(4) If—
(a) a finding of fact has been made in a dust disease action by a court of this State, the Commonwealth or another State or Territory; and
(b) the finding is, in the Court’s opinion, of relevance to a dust disease action before the court,
the Court may admit the finding into evidence and indicate to the parties that it proposes to make a corresponding finding in the case presently before the Court unless the party who would be adversely affected satisfies the Court that such a finding is inappropriate to the circumstances of the present case.
David Jones contended that the evidence of Ms Cavanaugh and Ms Simmons established that Mr Murphy worked in the “roof area” and that that area had no suspended ceiling. It submitted that I could rely upon their evidence to find that the roof and air conditioning ducts in the roof area were sprayed with asbestos. It said that I should find that Mr Murphy was exposed to the asbestos that BI sprayed at its store.
Next, it said that that exposure might have caused or contributed to Mr Murphy’s mesothelioma and as such in the absence of proof to the contrary, and it said that there was none, in accordance with s 8(1)(b) of the Dust Diseases Act, I should find that that exposure caused or contributed to Mr Murphy’s disease.
It then contended that I should find that the asbestos that BI sprayed contained blue asbestos and that it knew when it sprayed asbestos at the Charles Birk Store in 1960 that it was hazardous and that it took no steps to warn David Jones or any of its employees of the danger that it posed.
It submitted that the balance of responsibility was heavily against BI and that like the judge in BI (Contracting) Pty Ltd v The Myer Emporium Ltd I ought to apportion liability 90/10 that is that I should hold BI 90% responsible.
BI contended that the oral evidence was irrelevant. It said Ms Cavanaugh started at David Jones in 1971 and that Ms Simmons was 15 when she started to attend at her father’s workplace in 1973 or 74. It said that in both cases this was over a decade after BI had completed its work at the store. It said that whilst they undoubtedly observed dust in the roof area, it was a long bow to find that this dust comprised asbestos applied by BI many years earlier.
It contended that all that the evidence establishes is that BI sprayed asbestos to steel beams in 1960. It said that there was no direct evidence that it sprayed the roof area or the air-conditioning ducts in that area. It submitted that the evidence of sampling did not establish David Jones’ case. It said that the document does not permit an inference to be drawn that BI sprayed asbestos in the roof area.
It submitted that David Jones could not rely upon the Dust Diseases Act to assist it in proving its case against it, because these proceedings are not a dust disease action for the purposes of that Act. It submitted that without those evidentiary aids David Jones was unable to prove that BI was liable.
Finally, it submitted that David Jones had not proved the quantum of Mr Murphy’s claim, because there was no evidence from Mr Murphy and hence no evidence from which I could make findings to satisfy myself as to the reasonableness of the settlement that David Jones reached with him.
Consideration
A Dust Disease action?
I commence with the issue as to whether the Dust Diseases Act applies to the within proceedings.
In Amaca Pty Ltd v Booth[11] Heydon J spoke of the evidentiary difficulties confronting a plaintiff in prosecuting a claim for damages in connection with mesothelioma. He made the point that because the disease is often not diagnosed until many years after exposure to asbestos, it can be difficult for a plaintiff to establish that the conduct of a given defendant caused the disease.
[11] (2011) 246 CLR 36 at 69.
In some jurisdictions legislative assistance is provided to plaintiffs to help overcome these obstacles.
In New South Wales assistance has been provided by the creation of a specialist court called the Dust Diseases Tribunal. The enacting legislation vests the Tribunal with special powers, including evidentiary powers that do not apply to courts generally.
In South Australia, the assistance is provided by a different means. The Dust Diseases Act has not created a specialist court. Instead, it has vested special rules to apply to a dust disease action, as defined. Because the special rules created by the Dust Diseases Act are attached to the action, not the forum in which the action is prosecuted, it follows that the special rules contained with the Act will apply to such an action irrespective of where the proceedings are prosecuted. Thus, if pursuant to cross-vesting legislation an action between residents of South Australia in connection with a dust disease was prosecuted in another State, the Dust Diseases Act would apply.[12]
[12] See, for example: Mutch v BHP Billiton Ltd & Ors [2015] VSC 253.
The object of the Dust Diseases Act is contained in s 4, which provides that the purpose of the Act is:
to ensure that residents of this State who claim rights of action for, or in relation to, dust diseases have access to procedures that are expeditious and unencumbered by unnecessary formalities of an evidentiary or procedural kind.
A “dust disease” is defined in s 3 of the Act as one or more of the following:
(a) asbestosis;
(b) asbestos induced carcinoma;
(c) asbestos related pleural disease;
(d) mesothelioma;
(e) any other disease or pathological condition resulting from exposure to asbestos dust;
A “dust disease action” is defined in s 3 of the Act as follows:
“dust disease action” means a civil action in which the plaintiff—
(a) claims damages for or in relation to a dust disease or the death of a person as a result of a dust disease; and
(b) asserts that the dust disease was wholly or partly attributable to a breach of duty owed to the person who suffered the disease by another person;
Mr Murphy claimed damages from David Jones on account of mesothelioma. He therefore claimed for a dust disease as defined.
Mr Murphy and David Jones were at the time of the alleged tort, residents of the State. It therefore was a dust disease action.
Accordingly, although the action as between Mr Murphy and David Jones was issued in the Dust Diseases Tribunal of New South Wales, it was nonetheless a dust disease action for the purposes of the Dust Diseases Act.
That then begs the question as to whether a claim for indemnity and contribution arising out of a dust disease action is of itself a dust disease action, for the purposes of the Dust Diseases Act.
It can be seen that s 8 gives a plaintiff considerable assistance in prosecuting a claim in relation to a dust disease. If the plaintiff proves that he or she has a dust disease and proves exposure to asbestos that might have caused or contributed to the disease, the plaintiff will invariably have also proved that that exposure caused his or her dust disease, because it will be almost impossible for a defendant to prove otherwise. Absent that evidentiary aid, such proof might otherwise be difficult to establish.
It is common in dust disease actions for there to be multiple defendants. It would be a very odd outcome if the special evidentiary aids that apply to a dust disease action as between a plaintiff and the tortfeasors only applied in that action and did not apply to contribution and indemnity claims between the tortfeasors in the same action. The difficulties that Heydon J alluded to in Amaca Pty Ltd v Booth are just as profound in actions between tortfeasors in cases concerning mesothelioma as they are as between the plaintiff and the tortfeasors.
It is permissible to look to the stated object of an Act to assist in its construction.[13] It is instructive that the objects clause speaks of “residents of this State who claim rights of action”. It does not speak of “actions for damages”. It is also notable that in connection with its reach, it speaks not just of “for a dust disease” but also, “in relation to a dust disease”.
[13] See, for example, the judgment of Gleeson CJ in Russo v Aiello (2003) 215 CLR 643.
With this in mind I conclude that where s 8 of the Dust Diseases Act speaks of the rules that apply in a dust disease action it means that those rules apply not just to the action as between the plaintiff and the tortfeasors but also to contribution and indemnity claims as between the tortfeasors in the same action.
What then of actions between tortfeasors that are separated from the action involving the plaintiff?
Section 10 of the Dust Diseases Act contemplates that this might frequently happen. It provides:
The Court will determine questions of liability and quantum of liability to the plaintiff before dealing with questions of contribution between defendants or insurers unless, in the opinion of the Court, any delay resulting from dealing with the questions together is inconsequential in the circumstances.
It would seem an odd result that different evidentiary rules would apply in actions between tortfeasors depending upon whether or not they were separated from the primary action.
This leads me to conclude that an action between tortfeasors concerning a dust disease action does not have to be concurrent with the primary action involving the plaintiff for the Dust Diseases Act to apply to it. If the primary action is a dust disease action for the purposes of the Act, contribution actions arising out of that action are also dust disease actions for the purposes of the Act.
The within proceeding is a contribution action arising out of a dust disease action. Accordingly, it too is a dust disease action.
Liability
I now turn to determine whether or not liability has been established as against BI.
Whilst I thought that Ms Cavanaugh and Ms Simmons were credible witnesses and I generally accept their evidence, it does not permit a finding that the ceiling in the so called roof area was sprayed with asbestos, nor does it permit a finding that the air conditioning ducts in that area were sprayed with asbestos. Ms Simmons’ evidence of her understanding in respect of asbestos is clearly hearsay and inadmissible.
The evidence does, however, establish that in 1960 BI sprayed 22,106 square yards of asbestos at the Charles Birk Store. It establishes that it sprayed asbestos on the building’s structural steelwork. Based on the air sampling report attached to the Department of Public Health letter of 14 November 1977 and the evidence given and findings made in The Public Trustee of South Australia v Clifton and Ors, I think it likely that the asbestos that BI had sprayed at the Charles Birk Store contained blue asbestos, i.e. crocidolite, and I so find. I am permitted to know that crocidolite is a very toxic form of asbestos and that it is much more toxic than other forms of asbestos.[14] Mr Murphy worked at that store between 24 May 1965 and 29 December 1978 in its Display Department. In my view these facts are sufficient to enable me to find that he was exposed to asbestos dust in circumstances in which that exposure might have caused or contributed to his mesothelioma. As such, the evidentiary presumption created by s 8(1)(b) of the Dust Diseases Act created an evidentiary burden on BI to establish that this exposure did not cause or contribute to Mr Murphy’s mesothelioma. It has not adduced any evidence to discharge that burden. I therefore find Mr Murphy’s exposure to the asbestos dust that BI sprayed at the Charles Birk Store caused or contributed to his mesothelioma.
[14] See, for example Hendrika Misiani (As Executor of the Will of Alfredo Antonio Misiani (Dec)) v Welshpool Engineering Pty Ltd 008 669 421 (In Liq) & Anor [2003] WASC 263 at para 144.
Based on the the evidence given and findings made in The Public Trustee of South Australia v Clifton and Ors, I find that BI knew when it sprayed asbestos at the Charles Birk Store in 1960, that it was hazardous and that it took no steps to warn David Jones or any of its employees of the danger that it posed.
I find that BI’s failure to warn of the dangers that the asbestos that it sprayed at that store showed a want of care on its part.
In my view David Jones has established that BI was liable in tort for Mr Murphy’s loss.
It is apparent from the Asbestos Register that there was asbestos in many areas of the David Jones store. This included the roof area on the boilers, the plantroom soffit beams, the original electrical cable trays, asbestos rope at the concrete roof slab interface and traces of asbestos in a variety of places such as the basement fire door, the bulkhead above the escalators on the second floor, the chilled water circulation pump and a hot water pipe gasket on level seven, in the water cooling tower grille on the roof, in the escalator limit switch on the fourth floor, in the brake lining of the ground floor escalator, around some generator wire in the lift motor room, and in the brake lining in the lift motor room.
There is no evidence that BI supplied any asbestos besides the sprayed asbestos that I have just referred to.
I think it is likely that Mr Murphy was exposed to some asbestos at the David Jones store that was not supplied by BI. I think it is likely that that other asbestos might have caused or contributed to his mesothelioma. As such, the evidentiary presumption created by s 8(1)(b) of the Dust Diseases Act created an evidentiary burden on David Jones to establish that this exposure did not cause or contribute to Mr Murphy’s mesothelioma. It has not adduced any evidence to discharge that burden.
It follows that BI was not responsible for all of the asbestos that Mr Murphy was exposed to in the course of his employment with David Jones.
I must now reflect upon the difference.
I am permitted to know that 22,106 square yards of sprayed asbestos is a lot of asbestos. I think it is likely that by volume it was much greater than the other asbestos within the Charles Birk store. Much of the other asbestos that Mr Murphy was exposed to was not crocidolite.
In terms of causative weighting there needs to be some adjustment to reflect the fact that BI was not responsible for all of the asbestos that Mr Murphy was exposed to. But not by a great amount.
I now must consider the relative degrees of departure from the standard of care of the reasonable person by David Jones and BI.
In making that comparison, on the one hand, I have an entity that had duty of care as an employer to provide Mr Murphy with a safe working environment. Whilst there is no evidence that establishes that David Jones knew about the dangers of exposure to asbestos, given the state of knowledge in the 1970s about those dangers, it could have and should have made enquiries about the risks that working with asbestos entailed. I am permitted to know that over the period of Mr Murphy’s employment with David Jones that it was a sophisticated, well-resourced entity. As such, its lack of knowledge about the danger of asbestos was inexcusable. It should have taken appropriate protective measures to minimise the harm to which its employees were exposed. Its departure from the standard of care that would be expected of the reasonable person acting in its position over the period of Mr Murphy’s employment was significant and became increasingly so as the years passed.
As for BI, it was the source of the most of the relevant asbestos product. It installed that product. It knew before it supplied and installed it at the Charles Birk store that it was hazardous and that it could harm those who were exposed to it. It could have and should have provided warnings and information about the hazards that it presented. It took no steps after it had installed the asbestos to warn David Jones of the danger that it presented. Its indifference to the health and safety of those who it knew would be exposed to the product that it supplied and which it knew was dangerous, was an extreme departure from the standard of care that would be expected of the reasonable person.
In summary, although David Jones is exclusively responsible for all of Mr Murphy’s exposure to asbestos, that the majority of the exposure was joint. In respect of the joint exposure, BI bears much greater culpability than David Jones, having weighed these matters I have come to the conclusion that the appropriate apportionment as between David Jones and BI is 75/25, that is, David Jones is entitled to recover 75% of its reasonable liability to Mr Murphy.
Quantum
I now turn to consider whether David Jones has proved its loss.
At issue is what a party must prove in connection with a claim for contribution or indemnity, having settled the primary action.
Following the decision of the Full Court in Saccardo Constructions Pty Ltd v Gammon[15] more is required that simply asserting that the agreed settlement was reasonable and leaving it up to the other party to prove otherwise. In that case the Full Court, by a majority, held that the party seeking contribution or indemnity had to prove the reasonableness of the settlement. It agreed with the judgment of Wells J in Bakker v Joppich[16] and held that in evaluating the reasonableness of the settlement, the Court is not required to itself assess damages on the evidence as would be required in a personal injury action. It held that it is sufficient to prove that the settlement was within the limits of reasonable tolerance, looked at as a settlement. As the trial Judge in this case had presumed that the settlement was reasonable, the judgment was set aside and the matter was remitted for re-hearing.
[15] [1991] SASC 3102; (1991) 56 SASR 552.
[16] (1980) 25 SASR 468.
That re-hearing resulted in a further appeal. In Saccardo Constructions Pty Ltd v Gammon (No. 2),[17] King CJ identified from the authorities the following propositions as to the law applicable where a defendant seeks to recover contribution or indemnity towards its liability on a consent judgment that the party against whom contribution is sought did not consent to. They being:
1The test as to whether the defendant can recover on the basis of the full amount of the consent judgment is the reasonableness of the settlement.
2There is no presumption of law that the settlement was reasonable and the onus is on the defendant seeking contribution to prove in the proceedings against the third party, the reasonableness of the settlement.
3The settlement is some evidence of its reasonableness and the defendant is not in all the circumstances required to call witnesses to establish that the amount paid was reasonable.
4The circumstances in which the settlement was arrived at and any proper inferences therefrom may be evidence of the reasonableness of the same.
[17] (1994) 63 SASR 333 at 335.
King CJ then stated that in assessing whether the settlement was reasonable it is not appropriate to have regard to material that became known after settlement and that the reasonableness of the settlement must be assessed in light of the facts which were known or ought to have been known by the defendant and his legal representatives at the time the settlement was reached.
Reference also needs to be made to the decision of the High Court in Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd.[18] That case is important because it reflects the flaw in BI’s submission. In Unity Insurance, Kirby J said as follows:
As I approach this appeal, it presents a clash between principle and pragmatism. Principle requires that, if damage is contested, a party claiming damages for negligence and breach of contract must prove its loss by calling evidence. Ordinarily, it must establish exactly what that loss is. The burden of doing so is upon it. If it fails to do so, to the extent of the default, it cannot expect to recover. Pragmatism supports the sensible settlement of legal claims, particularly where settlement is achieved following the advice of experienced legal practitioners. Pragmatism recoils from the prospect of ignoring a settlement between A and B, considered reasonable when made, so as to require A, in a related claim against C, to prove objectively that the factors leading to the settlement were correctly judged. Such factors can rarely, if ever, be estimated with absolute certainty. Yet C asks why its liability in damages to A should be defined by settlement negotiations between A and B in which C played no part and over which C had no control.
It is surprising that the issue raised in this appeal, from the Full Court of the Supreme Court of Western Australia, has not previously arisen for decision by this Court. Now that the question is presented to this Court, it is necessary to choose. I prefer principle. Inconvenient though it may be, where damages are in contest, a plaintiff must prove its loss. It cannot rely on a settlement which it has reached with someone else, however reasonable that settlement may have seemed to be to the parties to it.[19] (Underlining mine)
[18] [1998] HCA 38; (1998) 192 CLR 603.
[19] [1998] HCA 38 at para 72; (1998) 192 CLR 603 at 628.
The passages underlined illustrate the approach that Kirby J stated should apply in a case such as this. This is effectively the very approach that BI asks me to adopt here. Its complaint about a want of proof assumes that strict proof in a case such as this is necessary. But the difficulty for BI, is that Kirby J was in dissent. The majority, Brennan CJ, McHugh and Hayne JJ, plainly rejected the notion that strict proof of loss is required. They held that the party seeking recovery was entitled to rely on the settlement in establishing damages. They held that all that was necessary to prove that the settlement was reasonable. Their approach is broadly consistent with that taken by King CJ in Saccardo (No. 2). It is the approach that I adopt here.
Because the death certificate came into existence after the settlement was reached, in conformity with Saccardo (No 2) I must ignore it.
But it does not follow that David Jones cannot prove its case.
It has proved that Mr Murphy was employed for a considerable time at David Jones. It has proved that he was suffering from mesothelioma and that he was 60 years old when it settled the case.
In some cases the mere description of the injury tells very little about the extent of pain and suffering and loss of enjoyment of life and the need for treatment and care.
Cases involving mesothelioma do not fall within this category. Whilst the impact of the disease will vary from person to person, there is a predictable path that the victims of this disease will take. It is a debilitating and painful progressive disease that can be assumed will lead to death. As that journey proceeds the person suffering from the disease can be assumed to need narcotic analgesia to control severe and unremitting pain, to need oxygen to assist with breathing and to become increasingly disabled to the point where he or she will eventually be totally dependent on others for assistance with even the most basic aspects of daily living.
It was reasonable for David Jones in approaching potential settlement of this case to assume that this was the journey that Mr Murphy was taking.
On these bare facts, even without medical evidence, one can surmise that a judgment from the Dust Diseases Tribunal of New South Wales in 2007 would result in a generous award of general damages for pain and suffering and loss of enjoyment of life. Based on a letter of advice that it received from its solicitors, David Jones appears to have allowed a sum of the order of $170,000. In Kenneth Wallace v Amaca Pty Limited[20] the Dust Diseases Tribunal awarded a man in his mid-seventies who was dying of mesothelioma $170,000 for general damages. In Gifford v Cockatoo Dockyard Pty Limited[21] it awarded a 62 year old man dying of mesothelioma $250,000 for general damages. With these cases in mind, in approaching settlement in this case, David Jones could have reasonably allowed up to $250,000 for this head of loss.
[20] [2007] NSWDDT 4.
[21] [2007] NSWDDT 22.
David Jones appears to have allowed about $12,500 for loss of expectation of life. In Gifford v Cockatoo Dockyard Pty Limited the Dust Diseases Tribunal awarded $20,000 for loss of expectation of life. Accordingly, given that Mr Murphy was younger than the plaintiff in Gifford, I think David Jones could have allowed up to $25,000 for this head of loss.
Mr Murphy sought $45,000 for past and future out of pocket expenses. David Jones appears to have allowed about $15,000. Given the fact of a schedule of expenses and the typical costs associated with the treatment of mesothelioma, David Jones’ presumed allowance seems modest.
Mr Murphy sought $60,000 for past and future gratuitous care. David Jones appears to have allowed about $20,000. In Gifford v Cockatoo Dockyard Pty Limited the Dust Diseases Tribunal awarded $60,000 for this head of loss. As such, $20,000 appears modest.
Mr Murphy’s lawyers sought $35,000 for costs. David Jones appears to have allowed $27,500. I am permitted to know that preparing a mesothelioma case involves intense preparation. In my view David Jones could have allowed the amount claimed without criticism.
A contentious aspect of Mr Murphy’s claim was his claim for economic loss. No taxation returns were supplied. Instead, his lawyers asserted that he earned a living as an artist and his bank statements purportedly proved that by recording not infrequent deposits of modest sums.
Even without evidence, given Mr Murphy’s age and employment history, David Jones cannot be said to have acted unreasonably in thinking that he was likely to establish a claim for future economic loss. It appears to have allowed $175,000 based on assumed earnings for ten years, less a 15% discount for vicissitudes. That equates to assumed earnings of less than $20,000 a year. That appears modest. Whilst a case could be made for arguing that without evidence to assume ten years lost earnings was generous, even without supporting evidence, no quarrel could be had by allowing $20,000 a year for five years.
One then must take into account that had David Jones put Mr Murphy to proof, costs would have escalated significantly and it would have been conceivable that the award could have been much greater than the agreed settlement sum, especially if Mr Murphy gave credible evidence in connection with his claim for future economic loss.
Viewed objectively, a settlement of $435,000 was well within the limits of reasonable tolerance. David Jones has therefore proved the quantum of its claim against BI.
Conclusion
It follows that David Jones is entitled to recover from BI 75% of the judgment sum paid by it to Mr Murphy. I would like to hear from the parties as to the precise terms of the orders that follow and as to questions of interest and costs.
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