Dionisatos v Acrow Formwork and Scaffolding Pty Ltd & Acrow Formwork and Scaffolding Pty Ltd v Gordian Runnoff Ltd and Anor
[2013] NSWDDT 8
•29 August 2013
Dust Diseases Tribunal
New South Wales
Medium Neutral Citation: Dionisatos v Acrow Formwork and Scaffolding Pty Ltd & Acrow Formwork and Scaffolding Pty Ltd v Gordian Runnoff Ltd and Anor [2013] NSWDDT 8 Hearing dates: 8-11/07/ 2013 Decision date: 29 August 2013 Before: Curtis, J Decision: Judgment for the plaintiff against Acrow Formwork and Scaffolding Pty Ltd in the sum of $420,142
Judgment for Acrow Formwork and Scaffolding Pty Ltd against the State of New South Wales in the sum of $245,071
Judgment for Acrow Formwork and Scaffolding Pty Ltd against Gordian Runnoff Ltd in the sum of $171,549.70
Catchwords: DUST DISEASES TRIBUNAL - estate claim - mesothelioma - extent of exposure to asbestos - whether the deceased plaintiff was exposed to asbestos - whether exposure was forseeable - whether defendant had knowledge of exposure - breech of common law duty - deductions of Dust Diseases Board payments
CROSS-CLAIMS - whether the employer as a contractor and the State of New South Wales owed the deceased a duty of care - whether the cross-defendant knew or ought to have known about the dangers of exposure to asbestos dust - policies of insurance - vicarious liability of the State of New South WalesLegislation Cited: Construction Safety Regulations 1950
Construction Safety Act 1912
Scaffolding and Lifts Act 1912
Law Reform (Miscellaneous Provisions) Act 1946
Compensation to Relatives Act 1897
Civil Liability Act 2002
Workers Compensation (Dust Diseases ) Act 1942
Dust Diseases Tribunal Act 1989
Workers Compensation Legislation Amendment (Dust Diseases and Other Matters) Act 1998
Corporations Act 2001 (Cth)Cases Cited: Thompson v Johnson & Johnson Pty Ltd [1991] 2 VR 449
McPherson's v Eaton (2005) 65 NSWLR 187
O'Connor v S.P.Bray Pty Ltd [1936-1937] 56 CLR 464
Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152
State of New South Wales v Perez [2013] NSWCA 149
Nguyen v Nguyen [1990] 169 CLR 24
Griffiths v Kerkemeyer [1977] HCA 45; [1977] 139 CLR 161
Van Gervan v Fenton [1992] 175 CLR 327
Fitch v Hyde Cates [1981-1982] 150 CLR 482
Davies v Powell Duffryn Associated Collieries Ltd [1942] AC 601
Haines v Bendall [1991] 172 CLR 60
Manser v Spry [1994] 181 CLR 428
Harris v Commercial Minerals Ltd [1990] 186 CLR 1
James Hardie and Coy Pty Ltd v Newton (1997) 42 NSWLR 729
Public Trustee v Zoanetti [1945] 70 CLR 266
De Sales v Ingrilli [2002] 212 CLR 338
BI (Contracting) Pty Ltd v Strikwerda (2005) 3 DDCR 149
Boncristiano v Lohmann [1998] VSC 228
Stevens v Brodrib Sawmilling Co Pty Ltd [1985-1986] 160 CLR 16
The Commonwealth of Australia v Verwayen [1990] 170 CLR 394
Colonial Mutual Life Assurance Society Ltd v Producers & Citizens Co-operative Assurance Company of Australia Ltd [1931] 46 CLR 41
Wynbergen v Hoyts Corporation Pty Ltd [1997] HCA 52; (1997) 149 ALR 25Category: Principal judgment Parties: Gerasimos Dionisatos (as legal personal representative of the estate of the late George Dionysatos) (Plaintiff)
Acrow Formwork and Scaffolding Pty Ltd (Defendant/Cross-Claimant)
Gordian Runnoff Ltd (First Cross-Defendant)
The State of New South Wales (Second Cross-Defendant)Representation: J T Rush, QC with S Tzouganatos appeared for the Plaintiff
G M Watson with J C Sheller appeared for the Defendant/Cross-Claimant
J L Sharpe appeared for the First Cross-Defendant
L P McFee appeared for the Second Cross-Defendant
Turner Freeman (Plaintiff)
Hunt & Hunt (Defendant/Cross-Defendant)
Thompson Cooper Lawyers (First Cross-Defendant)
Ellison Tillyard Callanan (Second Cross-Defendant)
File Number(s): 210/2012
INDEX
THE PLAINTIFF'S CLAIM
Evidence of Exposure to Asbestos Paragraph 4
Findings Paragraph 26
Defences Paragraph 30
The fact of exposure Paragraph 31
Knowledge of exposure Paragraph 41
Foreseeability Paragraph 42
Breach of Common Law Duty Paragraph 69
Breach of Statutory Duty Paragraph 75
Damages Paragraph 82
Claim for Care of Mrs Dionysatos
The Facts Paragraph 83
Does section 15B apply? Paragraph 91
Assessment Paragraph 107
Deduction of Dust Diseases Board Payments Paragraph 114
THE CROSS CLAIMS
Introduction Paragraph 140
The Liability of Hornibrook Paragraph 144
The Insurance Issue Paragraph 163
The Liability of the State Paragraph 184
Apportionment Paragraph 195
ORDERS Paragraph 200
JUDGMENT
Introduction
George Dionysatos contracted mesothelioma, and died on 13 July 2012. His son Gerasimos Dionisatos, as legal personal representative of his father's estate, claims damages from Acrow Formwork and Scaffolding Pty Ltd (Acrow) by whom George Dionysatos was employed between approximately 1963 and 1969 to assemble and disassemble scaffolding in the construction of the Sydney Opera House.
The plaintiff asserts that the late Mr Dionysatos contracted his mesothelioma as a result of exposure to asbestos dust and fibre released by the work of tradesmen installing asbestos-containing materials in the course of that construction, and that Acrow negligently failed to protect him from this exposure.
He claims in the alternative that the injury to Mr Dionysatos resulted from the defendant's failure to comply with Regulations 73(9) and (10) of the Construction Safety Regulations 1950.
The Extent of Exposure to Asbestos
The evidence of Mr Dionysatos is contained in an affidavit sworn on 12 July 2012, the day before he died.
Because the extent of exposure is in issue it is appropriate to reproduce the whole of the relevant paragraphs of this affidavit.
11 My job involved putting up scaffolding for use by various trades including plumbers, electricians, carpenters and laggers. The plumbers installed pipes and the electricians installed wires and switchboards. The carpenters put up the formwork, external and internal structures. The laggers put insulation on pipes, beams and concrete blocks. I worked very closely with all of these trades. I also took down scaffolding and removed formwork timber. I also did general cleaning work including picking up off cuts and sweeping.
12 I worked within metres of the various trades as they worked. I moved scaffolding around at the request of tradesmen. I was frequently directly underneath the work of these tradesmen. The dust they created flowed down on to me.
13 On a number of occasions, while I was erecting and moving scaffolding, spraying was going on near where I was working. The spray was put on concrete blocks and on steel beams. The spraying involved a few men who used a spray machine, which had a long rubber hose. A powder like substance was put in the back of the machine and the spray mixture came out of the hose. One man held the hose while another fed the powder into the machine. The men with the hose looked like a fireman. The spraying process was very dusty. I could see dust in the air for 20 to 30 m around where the spraying was carried out. The dust went onto the floor. As part of my job, I cleaned up the floor including picking up off cuts and sweeping. I swept up the dust from the spray. As the overspray dried and we walked around in it more dust was stirred up. I inhaled this dust on a regular basis.
14 Some of the spraying was done on scaffolds. I installed the scaffolds and helped to move them around, while the spraying was going on. The dust got all over the scaffolds. I cleaned up the scaffolds to get rid of the dust. I turned over the planks and the dust went into the air and onto the floor. I swept up the dust. I got dust on me and my clothes from the spraying work. I inhaled this dust.
15 Insulation was put around the pipes and on the floor for soundproofing. On the floor the insulation was in the form of a thick board or sheet, grey in colour and about 1 to 2 inches thick. On occasions, I worked nearby when the sheets were cut using a heavy duty power saw. A lot of dust went into the air around me and on my clothes from this process.
16 About once a fortnight when we finished working on a section and took down the scaffolding we cleaned up the area. I swept up dust and off cuts on the floor. I also cleaned the planks on the scaffold, as I moved them around, usually by turning over the planks. This was a very dusty job. I saw the dust in the air in this process. I inhaled this dust.
17 At the Opera House, I worked six days a week from 7 AM to 5 PM. I also did overtime. There was plenty of overtime. I often worked 16 hour days. There was a period of three months when I worked seven days a week.
18 I left the site before the building work was complete. This scaffolding work was coming to an end so I looked for work elsewhere.
19 I was not told to stay away from where the spraying was taking place. I was not given a mask to wear or told anything about asbestos. Had I been told to wear a mask, I would have. If I knew asbestos could kill me I would have left the job and found other work.
This evidence is substantially corroborated by the evidence of Mr Steve Tsoukalas who was employed by the principal contractor, Hornibrook in 1968. Towards the end of that year he was promoted to foreman of a gang charged with the work of moving the steel scaffolding pieces from place to place for assembly and disassembly by the employees of Acrow.
Mr Tsoukalas recalled the spraying of material that he believed was asbestos onto steel beams, that this work began in 1968, and that the work was frequent, being carried out maybe every day in the different areas. He gave this evidence:
Q When people were spraying did you make any observations of the air or the atmosphere around where they were spraying?
A They make it a lot of dust like a cloud everywhere and many of the people the only they can do is they get a piece of rag because had not-no masks at that time and we wait in the rack and we put them on in the- in the face.
Q When would you do that?
A Every time we go in the areas they had a lot of dust, because they use all the Opera House they had a system with compressor pipes and then they had a special keys and you connect the- airhose and you blow-they-they blow everywhere to clean up the scaffolding, to clean up the deck, to clean up the walls, been dust-it was everywhere.
Q Airhose was used, was it?
A Yes. For this, it was nearly every room they have to- use the airhose.
Q Was scaffolding used at all when the spray was being undertaken?
A Yes. You can't stand on the air, you have to use a scaffold to do the spray?
Q In relation to the spray that you have referred to and what was in the air, what would happen if anything to the scaffolding?
A Well, everybody have to breathe the dust. I have to breathe the dust to because I have to collect the pipes too.
Mr Tsoukalas also remembers the installation of sound-proofing board from 1968. Although he did not specifically identify the board as containing asbestos, this material was removed in an asbestos removal program conducted in 1990. I infer that it did contain asbestos.
The installation of sound-proofing board was Stage III work. Mr Tsoukalas rejected the suggestion that Stage III work did not commence until 1970, after Mr Dionysatos had left the project. He said that Stage III work commenced from 1968. The Construction Contract specifically provided that other contracts may proceed concurrently with Stage II work. The site minutes of a meeting of 26 September 1967 record a progress claim for Stage III work in the sum of $686,914.19.
Mr Barry Clee was employed as an asbestos sprayer by Australian Asbestos (NSW) Pty Ltd. His evidence is contained in an affidavit sworn on 22 August 1997. His affidavit records that he sprayed asbestos at the Sydney Opera House, and that the job on which he was employed took 2 to 3 weeks.
He described the work of asbestos spraying generally as follows:
The bags of spray mix were stacked near the machine. A bag was taken off the stack and would be placed near the hopper. The top was cut off the bag, and I would then start to feed the hopper until the bag was empty. When the bag was empty the bag was thrown away, and another bag was started until all the bags were used or the job was completed, whichever happens first. The process of manually feeding the machine using handfuls of asbestos fibre mix was a very dusty process. There was dust permanently in the air around me. It got into the machine. The overfill fell onto the floor. I worked all day every day in an atmosphere that was thick with asbestos dust and fibre. The dust and fibre got onto my clothes and my skin. I was covered in the material by the end of the day. The mix was prickly and sharp. It got into my mouth and nose and it felt terrible.
....
When the spraying work was taking place the man that held the gun was required to hold the gun approximately 18 inches from the surface being sprayed. The gun was held at an angle. As the mix poured out the end of the nozzle it blew onto the surface. There was not a perfect cohesion of the spray onto the surface. A lot of spray fell off the surface and fell back onto the sprayer on the scaffold. There was a lot of overspray. The overspray fell on to the sprayer, and in particular, onto his face and overalls. The sprayer worked permanently in an atmosphere where there was a dried asbestos dust and fibre all around him all day. We put up hessian screens. This concentrated the dust and it covered all three men in the team. It was a thick cloud over us all.
...
The whole area had to be swept up. We had to sweep up daily. Clouds of dust were generated when we did the sweeping up. The overspray and the spills were swept into piles and the piles were shovelled up into the paper bags which were then turfed out on the site or put onto the back of a truck and taken back to the factory.
It is quite apparent from archival documents in evidence that asbestos spraying was carried out extensively in the construction of the Opera House. On 28 January 1966 S A Butler Pty Ltd, a steel work subcontractor, tendered for "Coating of Stage Tower Steelwork" (Page 1198). This tender provided for application of limpet asbestos spray to 1330 square yards of columns and stanchions, 770 square yards of trusses, a total of 2100 square yards. The required thickness was 1 inch to give fire protection rating of two hours.
In addition the tender provided for the application of 280 square yards "hardened surface". We know from the minutes of 1 February 1966 that this material was Bulldog cement, and from the affidavit of Mr Clee that Bulldog cement was a product of Australian Asbestos and contained asbestos.
Minutes of a site meeting held on Tuesday 1 February 1966 disclose that Australian Asbestos, apparently the subcontractor to S A Butler Pty Ltd, brought their plant on site that day, and expected to start work the following day. The minutes record that It is expected that it will take 10 days to complete the application of the asbestos. A finishing coat of Bulldog cement is to be applied to protect the surface.
We know from Mr Clee's affidavit that Bulldog cement was a product of Australian Asbestos and comprised chrysotile asbestos mixed with white plaster powder.
Minutes of a meeting held on Tuesday 1 March 1966 record that "Truss 9 in the Minor Hall is now ready for asbestos application. Butler's will arrange for Australian Asbestos to return to the site". Minutes of a meeting of 4 May 1966 (Page 1336) indicate that the contract envisaged asbestos spraying on a total of 9 trusses.
Minutes of 9 February 1966 record that a contract had been signed by Nucrete Pty Ltd. Nucrete had contracted to perform certain works including spraying cement on steelwork, a process known as Guniting. There is no reference to the Guniting taking place in the minutes between that date and 1 March 1966.
Those minutes also record that in some areas on truss 6 the finishing coat was too thin and required further spraying.
It is reasonable to infer from this material that in the course of 10 consecutive days in February 1966 at least 8 trusses were sprayed with asbestos.
These trusses were not the only sites of asbestos spraying.
A specification for the supply and erection of Platforms, Stairways and Other Miscellaneous Steel Work Items Required in Conjunction with Mechanical Services required that limpet asbestos be sprayed on the underside of platforms and structural supports, to a density of between nine and 12 pounds per cubic foot.
In a letter of 4 May 1966, apparently to Hornibrook, Mr A.G. Kingsmill, the Under Secretary to the Department of Public Works wrote:
I am directed to inform you that the proposal to protect the main horizontal girders in Bents 1 and 2 in the stage Tower of the Major Hall and 1 and 9 in the Minor Hall with sprayed limpet asbestos with no application of fire insulation to the remainder of the steel tower is acceptable to this Department.
This letter confirms that truss 9 was sprayed with asbestos. There was certainly further spraying after the date of that letter.
I accept entirely the evidence of Mr Dionysatos, Mr Tsoukalas and Mr Clee. Mr Tsoukalas was cross-examined at length about other matters, but his evidence as to the atmospheric conditions obtaining during and after asbestos spraying was unchallenged.
I am conscious of the fact that during the period of Mr Dionysatos's employment until 1969 the site minutes record no asbestos spraying other than that which occurred in February 1966. Because those minutes do not record the spraying of the main horizontal girders in Bents 1 and 2, nor the spraying of Truss 9, I do not accept that they are exhaustive. I prefer the evidence of Mr Dionysatos and Mr Tsoukalas.
Findings
I find that the late Mr Dionysatos, in the course of his employment on the Opera House site, was occasionally exposed to visibly high concentrations of asbestos dust created by asbestos spraying and the cutting of asbestos-containing soundproofing board. This dust was stirred up by the work of cleaning and dismantling scaffolding and at times presented as a cloud. Workers in the vicinity sometimes placed cloths over their faces to assist in breathing. This exposure to asbestos dust, whilst intermittent, was intense.
I also find that over a period of approximately 10 days in February 1966 Mr Dionysatos was continuously exposed to this concentration of asbestos dust. During that time Australian Asbestos sprayed 8 trusses. It is reasonable to suppose that the formwork was assembled and disassembled on eight occasions, that is nearly every day during this period.
I reject the defendant's submission that Mr Dionysatos may have been exposed to Gunite spraying in this period rather than asbestos spraying.
The defendant concedes that, if I conclude that Mr Dionysatos was exposed to more than a de minimis concentration of asbestos dust and fibre I may find that his mesothelioma resulted from his exposure in the course of his employment with Acrow.
Defences
The defendant argues that:
(a) The evidence does not establish that Mr Dionysatos was exposed to any asbestos.
(b) It had no cause to know that any of its workers were exposed to asbestos.
(c) That, even if Mr Dionysatos were exposed to asbestos, it had no cause to foresee that he was exposed to concentrations that created a foreseeable risk to health, because, more probably than not, his exposure did not exceed the recommended maximum concentration of atmospheric contaminants recommended by the National Health and Medical Research Council.
The Fact of Exposure
The description by Mr Dionysatos of the spraying operations to which he was exposed is consistent with the descriptions by Mr Clee of the work he performed as an asbestos sprayer.
The defendant suggests that that description is also consistent with the application of a substance called Gunite to steel beams on the site.
Minutes of a site conference held on 6 November 1963 disclose that six firms were invited to tender for the supply, fabrication and delivery of structural steel work for Stage Towers.
Minutes of a meeting of 29 July 1964, disclose that Guniting of the Stage Tower steelwork should start on the Major Hall on 31 July 1965 and the Minor Hall on 18 September 1965.
The minutes of the site conference held on 29 September 1965 referred, in relation to the Stage Tower Steelwork, to a tender from Australian Asbestos for supplying and spraying the asbestos coating, and also to a Gunite subcontract for cladding of Stage Tower Steelwork.
Minutes of a site meeting of July 13 1966 indicate that a company called Nucrete Pty Ltd had contracted to Gunite the steel on Trusses 1 and 2.
The defendant tenders promotional material from the Sprayed Concrete Association published on the Internet. It appears that Gunite refers to the mixture of cement sand and water pressurised with compressed air and forced through a delivery nozzle.
I accept the evidence that Nucrete Pty Ltd sprayed Gunite onto steelwork at the Opera House. Because such records as are available indicate that asbestos was sprayed on Trusses 1-9, that at one time there was a problem with a hard coating applied after the asbestos spray was complete, and that Gunite was to be sprayed on Trusses 1-2, I infer that Gunite was sprayed on part of the asbestos coated steel, where protection against impact or wear was desirable.
There is no evidence as to the quantity of Gunite sprayed. There is no material from which I could conclude that Gunite was sprayed as extensively as asbestos in the works. There is no evidence that Gunite was sprayed in the first two weeks of February 1966.
The chances that Mr Dionysatos over the years 1963-1969 was exclusively exposed to Gunite are vanishingly small.
Knowledge of Exposure
This defence may be readily disposed of. Given the enormous amount of asbestos spraying that occurred during the first two weeks of February 1966 I cannot accept that the defendant's foremen or supervisors did not know that asbestos spraying was taking place. Even if the defendant did not know of subsequent exposures it should have known. No employer should remain ignorant of the conditions in which its employees laboured.
Foreseeability
The defendant relies upon the Schedule of Recommended Maximum Concentrations of Atmospheric Contaminants for Occupational Exposures published by the National Health and Medical Research Council in 1964.
In respect of chrysotile and amosite asbestos, the recommendation was as follows:
The long-term average fibre concentration of the air breathed by the worker should not significantly exceed four fibres per cubic centimetre of air, as measured by the membrane filter method for the British Occupational Hygiene Service or by any other method proven equivalent to this method.
Four fibres per cubic centimetre of air is equivalent to 5 million particles per cubic foot of air. This recommendation is to be seen in context.
The introductory notes to the guide relevantly state:
These values should be used as guides in the control of health hazards and should not be regarded as fine lines between safe and dangerous concentrations. They represent conditions under which it is believed that nearly all workers may be repeatedly exposed, day after day, without adverse effects. The values listed refer to time -weighted average concentrations for a normal work day. The amount by which these figures may be exceeded for short periods without injury to health depends upon a number of factors such as the nature of the contaminant, with very high concentrations even for short periods produced acute poisoning, whether the effects are cumulative, the frequency with which high concentrations occur, and the duration of such periods. All must be taken into consideration in arriving at a decision as to whether a hazardous situation exists.
...
These values are intended for use in the field of occupational health and should be interpreted and applied only by persons trained in this field.
The defendant calls no evidence to suggest that it knew of this recommendation, or attempted to comply with it. There is no evidence that it commissioned any measurement of the concentrations of asbestos in the air breathed by its workers at the Opera House.
The opinion of Dr David Kilpatrick, an occupational hygienist, is in evidence. Dr Kilpatrick is skilled and experienced in the measurement of airborne asbestos particles. He says:
If you can see the dust it is over five [particles per cubic foot of air] and if it's a haze in the air it could be between say, 10 and 25 million. But if you can see the dust clearly, or if I can see the dust clearly, then it is going to be over 50 million particles per cubic foot. And when it reaches dust cloud proportions, when visibility begins to drop to the person a few metres away then you're looking up around 500 million particles a cubic foot.
Accepting this evidence it is possible, though improbable, that the time weighted average concentration of asbestos fibres to which Mr Dionysatos was exposed over a twelve month period exceeded the recommendation of the National Health and Medical Research Council. He was exposed to many sources of asbestos dust. The asbestos survey of the upper house in October 1990, demonstrated widespread use of asbestos materials in the construction of the Opera House, some of which was cut with power saws, creating a lot of dust. Because no measurements were taken we cannot quantify the amount of asbestos to which the plaintiff was exposed. The plaintiff has not proved that Mr Dionysatos was exposed to concentrations in excess of the recommendations, and the defendant has not proved that he was not.
The failure of the plaintiff to prove that the exposure of Mr Dionysatos was in excess of the recommendations of the National Health and Research Council is not determinative of whether that exposure created a foreseeable risk of harm.
In Thompson v Johnson & Johnson Pty Limited [1991] 2 VR 449 at 494 the Appeal Division of the Supreme Court of Victoria noted:
Whether or not the NHMRC recommended that a warning be given was not determinative of the question of reasonable care, for to accept that proposition would permit the respondents to abrogate the duty of reasonable care owed by them. It is not the response of such a body which determines whether a person in the position of the respondents is or is not negligent. That is for the courts to decide.
The recommendations of the NHMRC were not accepted by all experts in the field of Occupational Health and Safety.
In an article published in The Lancet in July 1953, entitled The Prevention of Dust Diseases, Dr A McLaughlin, H.M. Medical Inspector of Factories wrote:
The intermittent exposure to high concentrations of dust may be more dangerous than exposure to low concentrations over a longer period.... Individuals too, vary greatly in their capacity to deal with dusts... this is one reason why I am not greatly impressed by the validity of what is known as the maximum allowable concentrations of dusts of which lists have been drawn up in various countries. The M.A.C.S. seem to be based on the assumption that man is a standardised machine, which clearly he is not. The reasons for the differences in individual reaction to dust are not accurately known.
The Victorian Harmful Gases, Vapours, Fumes, Mists, Smokes and Dusts Regulation 1945 imposed an absolute limit of 5 million particles per cubic foot of air, not a time weighted average.
In 1948, in his Report of the Director-General of Public Health in New South Wales, the Director General, Dr Smith confirmed the concern of some contemporary industrial physicians and hygienists in relation to exposures to small amounts of asbestos. In relation to the exposure of metal casters he wrote:
The exposure to asbestos was intermittent and of short duration, about five minutes each pouring, and, as at the time, asbestos was only being used two or three times a week, the dust hazard was considered to be small. However, in view of the dangers associated with asbestos dust it was advised that a substitute such as magnesia should be used.
By at least 1965, the possibility of contracting mesothelioma from relatively minor exposures to asbestos fibre was well known to professionals engaged in occupational and public health.
In 1960, Wagner, Sleggs and Marchand published the paper "Diffuse Pleural Mesothelioma and Asbestos Exposure in the North Western Cape Province" describing a correlation between mesothelioma and limited exposure to asbestos.
In 1965, Newhouse and Thomson published the paper "Mesothelioma of Pleura and Peritoneum Following Exposure to Asbestos in the London Area" in which they conclude: "There seems little doubt that the risk of mesothelioma may arise from both occupational and domestic exposures to asbestos".
Also in 1965 Dr Selikoff published Relationship between Exposure to Asbestos and Mesothelioma in the New England Journal of Medicine confirming the relationship between mesothelioma and low doses of asbestos.
In an article Asbestos Exposure and Pleural Mesotheliomas published in the Medical Journal of Australia in October 1968 the authors wrote "The association of pleural mesothelioma with asbestos exposure is now widely recognised."
It may be accepted that, without having cause to enquire, the defendant may have reasonably remained ignorant of this information.
The defendant was a manufacturer and provider of scaffolding to be used by other enterprises in the building industry. It cannot have been expected to be aware of every risk posed by every kind of dust, paint, solvent, glue or other building material used by its customers.
In MacPherson's Ltd v Eaton (2005) 65 NSWLR 187 Ipp JA said:
A finding that a defendant ought to know of the risk of particular harm may lead to the existence of duties to take reasonable care, to investigate, to do research or to warn. Such a finding, and the existence of such duties, are based to a significant degree, on reasonable foreseeability and depend largely on whether it is reasonably foreseeable that the risk that should be investigated, researched, warned against might materialise (at 203) (Emphasis added).
I accept that, without being put on notice to enquire, Acrow had no cause to believe that small exposures to asbestos fibre may cause mesothelioma. That circumstance was not public knowledge during the years 1963 to 1969. The discussions and published works in that period had not moved beyond professionals engaged in public health and occupational hygiene.
This claim however does not concern the foreseeability of contracting an asbestos-related disease from small quantities of asbestos fibre.
The circumstances of Mr Dionysatos's exposure would alert any reasonable layman to the possibility that the quantity of dust in the air, whatever its constitution, may be hazardous to his health, particularly to his lungs.
An editorial in the journal Manufacturing and Management published in Australia in July 1956, entitled Dust Hazard in Industry commented on an article "Dust Becoming Bigger Hazard in Industry; More Workers Affected" published in The Age newspaper on 13 January 1956. The introductory sentence to the journal's editorial stated that: Inhalation of large quantities of dust has long been recognised as a danger to health.
As far back as November 1931 an article published in the journal Safety Engineering stated that:
Scientific knowledge of the results of dust exposure has not progressed far enough to exactly predict the degree of danger in every kind of dust and fume. The only safe way for an employer is to regard all dust in industry as a hazard.
I believe the statements reflected community awareness at the time Mr Dionysatos was employed in 1963. The responsible officers of Acrow then either knew, or ought to have known of the generic dangers of inhaling large quantities of dust.
Breach of common law duty
Those officers or their subordinates knew or should have known of the conditions to which Mr Dionysatos was exposed and that the obvious generic risk should be eliminated or investigated.
It is beyond question that if the defendant had approached the New South Wales Department of Public Health it would have advised that steps be taken to reduce the exposure, even if it did not exceed the recommendations of the National Health and Research Council.
Advice from the Western Australian Public Health Department would have been to the same effect. In 1958 Dr James McNulty was employed by the Western Australian Public Health Department as an occupational hygienist. His evidence in the matter of Rowley v The University of Adelaide (DDT 73 of 2003) is before me. Dr McNulty said that a principle of occupational health established by the 1950s was that all exposure to harmful dusts should be avoided as far as possible. He gave this evidence:
Q, if you came across the circumstances in 1961, of men working in clouds of asbestos dust you would be concerned about the situation, would you not?
A. If I saw him working in clouds of asbestos dust, yes.
Q. If no precautions were being taken by anyone in that area that also would raise your concern?
A. Yes.
Q. You would go about immediately recommending the sort of principles that we have discussed this morning, would you not?
A. Yes.
Q. It is no excuse for those conditions, is it, to say, well, one person might only come in for 10 minutes.
A. That would suggest any exposure at all, but I mean, you wonder whether 10 minutes would be harmful
Q. No. I'm just saying those conditions are not-
A. We are talking now, excuse me, about clouds of asbestos dust?
Q. Yes.
A. Yes, I wouldn't like any exposure at all to clouds of asbestos dust.
The defendant was registered in Victoria. Advice from the Victorian Department of Health would have been again to the same effect, that is, reduce exposure as far as possible. The Victorian regulations imposed an absolute limit of 5 million particles per cubic foot of air, at which concentration the presence of the particles remains invisible.
The practical advice that would probably have been given by an occupational hygienist at the time was that the employees, including Mr Dionysatos, should have been provided with the respirators described in Regulation 73(10) of the regulations made under the Construction Safety Act 1912.
The plaintiff's injury was caused by the defendant's failure to make reasonably prudent enquiries in response to a foreseeable risk.
Breach of Statutory Duty
Regulation 73 of the Construction Safety Regulations 1950, promulgated pursuant to the provisions of the Scaffolding and Lifts Act 1912 provided that a person who carried out any building work must:
(9) Cause all working places and approaches thereto, to be adequately ventilated by the circulation of fresh air the ventilation to be such as to render harmless all fumes, dust or other impurities that may be injurious to health, generated or produced by any means in any such working place and approach,
(10) Where, in connection with any chipping, grinding, cleaning, spraying or manipulation of any material, there is given off any dust of such a character and to such extent as to be likely to be injurious to the health of persons employed, take all practicable measures, either by securing ventilation or by the provision and use of respirators or otherwise, to prevent inhalation of such dust or fibre. Only respirators of a type approved by the Chief Inspector shall be used for this purpose.
In O'Connor v S.P.Bray Ltd (1936-1937) 56 CLR 464 the High Court held that the Scaffolding and Lifts Act 1912 conferred a cause of action upon a person injured as a result of the non-observance of the statutory duty imposed by these regulations.
Lord Wright in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 178, described the action as: A common law action based on the purpose of the statute to protect the workman, and belonging to the category often described as that of cases of strict or absolute liability.
As Glass, McHugh and Douglas observe in The Liability of Employers 2nd Edn at 116, the statute does not require the exercise of care, but rather obedience to its terms.
If the conduct to be performed did not occur... it is wholly irrelevant that no risk of injury was foreseeable, that the statutory requirements were not reasonably practicable, or that to comply with them was in the circumstances entirely reasonable.
In the present case I find that the defendant was in breach of Regulation 73(9), that required, in circumstances where the dust may be injurious to health, ventilation sufficient to render harmless the asbestos dust.
I also find the defendant was in breach of Regulation 73(10). The word likely, where used in the provision does not refer to a probability, but to the existence of a real chance or possibility of injury. That question is to be determined objectively, and not in the light of the subjective capacity of the defendant to actually foresee the risk.
The defendant is liable pursuant to the Statutory Count.
Damages
The following heads of damage are agreed:
General damages, $290,000;
Interest on general damages, $7250;
Loss of expectation of life, $13,000;
Past out-of-pocket expenses, $13,913;
Interest on past out-of-pocket expenses, $626;
Griffiths v Kerkemeyer, including interest, $17500.
Total: $342,289.
Claim for the Care of Polixeni Dionysatos
Polixeni Dionysatos is the widow of the late Mr Dionysatos. Mrs Dionysatos was born on 31 March 1931. She was 80 years of age when her husband died and is now 82. At the time of her husband's death, she was physically frail and suffering from progressive vascular dementia. I accept the evidence that she should not be left alone for periods in excess of 30 minutes, against the possibility that she may fall or wander.
Before he fell ill Mr and Mrs Dionysatos lived in the rented ground floor home unit of their daughter Aspasia at Mortlake. Aspasia's daughter, Arielle, 21 years of age when Mr Dionysatos died, also lived in the home.
Mr Dionysatos's other child, Gerisamos, who is married with three children, now aged 20, 16 and 12, lived at Castle Hill.
Mr Dionysatos alone cared for his wife during those times during the week when Aspasia was at work, and Arielle attended university. On weekends Mr Dionysatos sometimes went fishing, and sometimes attended the football games of his grandsons.
When Mr Dionysatos was absent from the house Aspasia or Arielle attended to the needs of his wife.
Since the death of Mr Dionysatos, Arielle, who has graduated from university, but not yet found full-time employment, cares for her grandmother during weekdays. Arielle has part-time employment on Thursday nights and Sundays. When Arielle is absent Aspasia looks after her mother.
Occasionally on weekends Mrs Dionysatos stays with her son Gerisamos.
A claim is made for the commercial cost of care for 24 hours each day, seven days each week, or in the alternative for 13 hours per day, seven days each week.
Does Section 15B Apply?
The plaintiff's claim for damages in respect of the care for Mrs Dionysatos is brought by the executor, in the alternative, pursuant to the Law Reform (Miscellaneous Provisions) Act 1944 or the Compensation to Relatives Act 1897. The plaintiff contends that it is appropriate to measure these damages in the manner provided by s15B of the Civil Liability Act 2002, as explained by Basten JA in State of New South Wales v Perez [2013] NSWCA 149, and award those damages pursuant to s2 of the Law Reform (Miscellaneous Provisions) Act 1944.
The defendant contends that the damages are not preserved by s2 of the Law Reform (Miscellaneous Provisions) Act 1944 and should be assessed pursuant to the common law principles of Nguyen v Nguyen (1990) 169 CLR 24, Griffiths v Kerkemeyer (1977) 139 CLR 161 and Van Gervan v Fenton (1992) 175 CLR 327 and awarded pursuant to s3 of the Compensation to Relatives Act 1897.
Although there are subtle differences in the expression of the applicable standard to be applied in the calculation of the damages, I am not persuaded that, if a plaintiff satisfies the threshold of at least six hours per week for at least six consecutive months that the results will differ.
However resolution of the question raised has implications beyond the quantum of damages.
The Defendant's Argument
Section 2 of the Law Reform (Miscellaneous Provisions) Act 1944 provides relevantly that the cause of action vested in Mr Dionysatos survives his death for the benefit of his estate. Section 2(5) provides that the rights created by the Act shall be in addition to and not in derogation of any rights conferred on the dependents of the deceased by the Compensation to Relatives Act 1897.
Sections 3 and 4 of the Compensation to Relatives Act 1897 provide that a dependant of a deceased, whose death is caused by a wrongful act, may recover damages ... proportioned to the injury resulting from such death.
In each case the action is to be brought by the executor of the will or administrator of the deceased's estate. The action pursuant to Section 2 of the Law Reform (Miscellaneous Provisions) Act 1944 is stated to be for the benefit of the estate of the deceased person. The action pursuant to sections 3 and 4 of the Compensation to Relatives Act 1897 is stated to be for the benefit of the spouse or other dependant.
The defendant points out that where the dependants are not beneficiaries of the estate, the estate may recover damages pursuant to s15B in respect of gratuitous care to a dependant and pay those damages to the beneficiary of the will, for instance the RSPCA, and not to the dependants in need of care.
The submission is then made that the provisions of s2(5), to the effect that the rights conferred by the Act shall be in addition to and not in derogation of any rights conferred on the dependants of deceased persons by the Compensation to Relatives Act 1897, require that damages recoverable in the estate claim should exclude damages pursuant to s15B, so that the rights conferred on the dependants by the Compensation to Relatives Act 1897 are not compromised.
Consideration
The flaw in this submission is the assumption that recovery of damages by the estate pursuant to the survival of actions act is a bar to the recovery of damages by dependants pursuant to the Compensation to Relatives Act. There is no such bar. The dependants claim is a statutory cause of action, quite independent of any claim by the estate. The very point of providing that the rights conferred by the 1944 Act were not to be in derogation of the rights of the dependants under the Compensation to Relatives Act emphasises that the claims of the dependants are not to be adversely affected by any claim made by the executor pursuant to the survival of actions legislation.
The High Court in Fitch v Hyde Cates [1981-1982] 150 CLR 482 held that a victim's estate may recover damages pursuant to the Law Reform (Miscellaneous Provisions) Act 1944, for the loss of earning capacity in the "lost years" although those damages need not be applied by the executor in diminution of the tortfeasor's liability for damages in a subsequent claim brought by the victims dependants pursuant to the Compensation to Relatives Act 1897. Mason J said:
It leaves extant the possibility that in some cases, notably cases in which the deceased leaves his estate to persons other than his dependants, there will be a duplication of liability. Although this is a matter which may require legislative attention, it is not an argument of sufficient weight to induce me to depart from the interpretation of s. 2(2)(c) and (d) which I favour for reasons already given (at 499).
In response to this decision the legislature amended section 2 of the Act by providing that damages awarded under its provisions:
(a) Shall not include:
(ii) any damages for the loss of the capacity of the person or the loss of future probable earnings of the person during such time after the person's death is the person who would have survived, but for the act or omission which gives rise to the cause of action.
In his second reading speech the Attorney said:
There is no guarantee that damages awarded in a case such as this will go to the upkeep and support of dependants as the money will be distributed in accordance with the deceased's will, if he has made one. Further, if the beneficiaries of the estate and dependants were in fact different persons there is a possibility of double recovery. The dependants will continue to be able to recover damages under the Compensation to Relatives Act so that the person responsible for the death will have to pay twice.
It may be that s2(2)(a) of the Law Reform (Miscellaneous Provisions) Act 1944 should be amended to exclude damages for the loss of the capacity of the victim to provide gratuitous services to his dependants. That is a matter for the legislature.
In any event, in cases where the dependants are beneficiaries of the estate, damages pursuant to the Compensation to Relatives Act are reduced by what was recovered by the executor in the estate claim, so that those damages remaining are proportionate to the injury (Davies v Powell Duffryn Associated Collieries Ltd [1942] AC 601 at 623). If the claim by the executor for inclusion of s15B damages in the estate claim succeeds, then, assuming Mrs Dionysatos to be the beneficiary of her husband's estate, she has no further entitlement pursuant to the Compensation to Relatives Act. The possibility of double recovery does not arise.
I hold that the entitlement of the late Mr Dionysatos to claim damages in respect of the care of Mrs Dionystos pursuant to s15B of the Civil Liability Act 2002 is preserved by s2 of the Law Reform (Miscellaneous Provisions) Act 1944. Damages in respect of the care of Mrs Dionysatos are to be assessed in accordance with the provisions of s15B.
Assessment
State of New South Wales v Perez [2013] NSWCA 149 is authority for the proposition that the plaintiff (here the Estate), must establish:
(a) That the dependant (Mrs Dionysatos) had a need for the provision of alternative services after the plaintiff was deprived of his capacity to provide services, and
(b) The period of time necessary to satisfy that need.
Basten JA said at [19]
The critical reference to "need" in paragraph (d) focuses upon the specified temporal scope of the services provided. That scope, as identified in paragraph (c), is that the services be provided for at least six hours per week for at least six consecutive months. The phrase "reasonable in all the circumstances" qualifies not the word "need", but the phrase "that need". Read in context, the focus is not merely the need of the dependant, but the time which would have been taken to deliver services in satisfaction of that need. No doubt some service providers will be more efficient than others. There is an evaluative judgment involved which, the paragraph provides, shall be undertaken by reference to the standard of reasonableness and having regard to all relevant circumstances in the particular case. It is thus not merely an abstract quality of the need which is in issue.
The circumstances of the present case include the fact that Mrs Dionysatos is presently cared for by her daughter and son in discharge of the filial duties owed to an aged parent.
Those circumstances also include the fact that the late Mr Dionysatos did not attend to his wife full-time on weekends. He often went fishing, and he watched his grandsons play sport.
There is a reasonable need for the provision of services during those times when the son and daughter attend to their respective employment and business, or neither is available. I assess that need at 50 hours each week.
The plaintiff claims at the rate of $26.36 per hour, that is $1319 per week. I find that it is reasonable that Mrs Dionysatos be provided with care at commercial cost for 50 hours each week, and that the reasonable cost of this care is $1319 per week.
Calculation of the entitlement is as follows:
Past gratuitous care: 1 February 2012 to 30 August 2013 82.3 weeks x $1319 = $108,553.
Future care: 4.5 years (3% multiplier 219.75) x $1319 x 85% = $246,372
Total: $354,925.
Deduction of Dust Diseases Board Payments
The defendant contends that money paid to Mrs Dionysatos pursuant to the provisions of the Workers Compensation (Dust Diseases) Act 1942 in consequence of the death of her husband should be deducted from any amount awarded pursuant to s15B.
Mrs Dionysatos has received a lump sum payment of $160,072 from the Dust Diseases Board. She has also received fortnightly compensation payments in excess of $18,000 to date, and is entitled to receive those payments in the future. Taking into account the shortened lifespan and applying a standard discount of 15 per cent, the present net value of those payments exceeds $29,000. The total value of the entitlement is $207,072.
The Nature of the Payments
These payments were made to Mrs Dionysatos pursuant to s8 of the Workers Compensation (Dust Diseases) Act 1942 which provides that, subject to certain conditions, where a person died from a dust disease his dependants were entitled to receive compensation under the Act. Subsection 8(2B)(d) is in these terms:
(d) Where the dependent person ... was partially dependent on the worker for support the prescribed rate of compensation payable shall be such payments, not exceeding in any case the amount that would have been payable as compensation under the award had that person been wholly dependent on the worker for support, as may be determined by the board to be reasonable and proportionate to the injury to that person.
This provision mirrors the language of s4 of the Compensation to Relatives Act 1897 which permits a jury to award such damages as they may think proportioned to the injury.
The present claim is for that amount of damages which would have been awarded to Mr Dionysatos had he lived. Included in these damages, by force of s15B, is an amount to compensate him for the loss of his capacity to provide gratuitous services to his dependent wife.
At the time Mr Dionysatos fell ill he had retired. Mrs Dionysatos was not financially dependent upon him for support. As Stein JA noted in James Hardie and Co v Newton (1997) 42 NSWLR 736: The Workers Compensation (Dust Diseases) Act makes it clear that the weekly pension is also payable to people... who are no longer working and have not suffered any economic loss in the nature of past earnings or future earning capacity.
In that context, and given the use of the words, proportionate to the injury the phrase partially dependent on the worker for support in s8(2B)(d) must include not only financial support, but support by way of the provision of services.
The moneys paid to Mrs Dionysatos by the Dust Diseases Board would appear to be in recognition of, and as a direct consequence of, the loss of the capacity of Mr Dionysatos to provide those services.
The moneys cannot have been paid to Mrs Dionysatos as a gratuity because her statutory entitlement was conditional upon dependency.
General Principles
In Haines v Bendall (1991) 172 CLR 60 at 63, the Court said the fundamental rule governing the assessment of compensatory damages, is that:
The injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been...had the tort not been committed. compensation is the cardinal concept...Cognate with this concept is the rule... that a plaintiff cannot recover more than he or she has lost.
In Boncristiano v Lohman [1998] 4 VR 82 at 89 Winneke P said:
The law, which now embraces equity, will not permit a plaintiff, whatever procedural device is used, to recover more than the damages which have been suffered, no matter what the cause of action upon which he proceeds against the various defendants.
An exception to this rule against double recovery is to be found in the principle that a plaintiff is not required to bring into account a benefit accruing to him by legislation, contract or benevolence that would not have accrued to him/her but for the injury, and has the distinguishing characteristic that the person, institution, or legislature conferring the benefit intended that the benefit be enjoyed by the him/her independently of, and cumulatively upon the right to claim damages (Manser v Spry (1994) 181 CLR 428).
The decisions in Harris v Commercial Minerals Ltd (1990) 186 CLR 1 and James Hardie and Co v Newton (1997) 42 NSWLR are authority for the proposition that the benefits conferred by the Workers Compensation (Dust Diseases) Act 1942 are not intended to be enjoyed independently and cumulatively upon damages, and should be taken into account in the assessment of those damages.
The reasoning behind those decisions is spelt out in this passage in Harris v Commercial Minerals Ltd:
Here employers alone are the principal contributors to the [Compensation (Dust Diseases) Fund] that provides the benefits. It is difficult to conclude that Parliament intended that the employers should fund benefits paid for injuries suffered in the course of employment and at the same time have to make a payment by way of damages for those injuries. The financial source of the benefits therefore indicates that the benefits should be deductible from awards of damages in respect of injuries giving rise to the benefits.
Conclusion
This case is complicated by the fact that the direct recipient of the benefit is Mrs Dionysatos. In the application of the rules it is necessary to identify a benefit, otherwise compensable, that has accrued to the estate of Mr Dionysatos that would not have accrued but for his injuries.
The question is then whether a failure to deduct the value of that benefit from the s15B damages would offend the rule against double compensation.
Mrs Dionysatos, the beneficiary of Mr Dionysatos' capacity to provide services, has been supported after his loss of that capacity by payments of the Dust Diseases Board made in respect of that same loss. To that extent, the need of Mrs Dionysatos for services has been satisfied.
It is appropriate to deduct from the s15B damages payments made to Mrs Dionysatos by the Dust Diseases Board.
I am fortified in that conclusion by the circumstance that the executor is the plaintiff both in the Survival of Actions Claim and the Lord Campbell's Act claim. The payments by the Dust Diseases Board would certainly be deducted from an award of damages in favour of Mrs Dionysatos made pursuant to Lord Campbell's Act, because damages in such an action are calculated on the balance of pecuniary gains and losses consequent upon the death (Public Trustee v Zoanetti (1945) 70 CLR 266; Nguyen v Nguyen (1990) 169 CLR 245; DeSales v Ingrilli (2002) 212 CLR 338).
Further, in the Lord Campbell's Act claim the plaintiff bears the onus of proving the extent to which Mrs Dionysatos will benefit from her share of an estate swollen by the proceeds of the verdict in the estate claim (BI (Contracting) Pty Ltd v Strikwerda (2005) 3 DDCR 149).
In this circumstance, the statement by Winneke P in Boncristiano v Lohman is pertinent. The dependency of Mrs Dionysatos upon the capacity of her husband to provide services to her is the substance of each claim. The legislature in enacting s15B addressed the same mischief as that addressed by Lord Campbell's Act, that is, the deprivation of support to a family member in consequence of the actions of a tortfeasor. It cannot have intended that the measure of damages should depend upon the procedural device used by the executor in electing to pursue the claim pursuant to s2 of the Law Reform (Miscellaneous Provisions) Act 1944 rather than pursuant to s3 of the Compensation to Relatives Act 1897.
Section 12D of the Dust Diseases Tribunal Act 1989
The response of the legislature to the decision in James Hardie and Co v Newton depriving plaintiffs in receipt of Dust Diseases Board pensions of part or all of the damages for pain and suffering was to enact the Workers Compensation Legislation Amendment (Dust Diseases and Other Matters) Act 1998. This inserted s12D into the Dust Diseases Tribunal Act 1989 in the following terms:
12D Damages for non-economic loss not to be reduced by certain compensation payments
(1) This section applies to proceedings before the Tribunal (including proceedings on an appeal from the Tribunal) for damages in relation to dust-related conditions.
(2) In determining damages for non-economic loss in any such proceedings, no deduction is to be made for any amount of compensation already paid or payable, or payable in the future, under the Workers' Compensation (Dust Diseases) Act 1942 .
(3) In this section: "damages for non-economic loss" means damages or compensation for the following:
(a) pain and suffering,
(b) loss of amenities of life,
(c) loss of expectation of life,
(d) disfigurement,
(e) the need for services of a domestic nature or services relating to nursing and attendance which have been or are to be provided to a person by another person, and for which the first person has not paid and is not liable to pay any fee or charge.
Damages for the commercial cost of care are not included within "damages for non-economic loss". It follows that damages in respect of the provision of paid care are subject to deduction in respect of any amount of compensation already paid or payable, or payable in the future, under the Workers' Compensation (Dust Diseases) Act 1942.
Damages for the provision of gratuitous services are not subject to any deduction.
In the result the plaintiff is entitled to an award of $108,553 in respect of past gratuitous care, and an award of $246,372 minus $207,072 = $39,300 in respect of future commercial care, a total of $147,853.
Summary of Damages
General damages: $290,000;
Interest on general damages: $7250;
Loss of expectation of life: $13,000;
Past out-of-pocket expenses: $13,913;
Interest on past out-of-pocket expenses: $626;
Griffiths V Kerkemeyer, including interest: $17500.
Section 15B: $147,853.
TOTAL: $490,142.
Cross claims
Introduction
Acrow contends that both Hornibrook and New South Wales, if sued, would have been liable to the plaintiff for breach of duties owed by each to the late Mr Dionysatos pursuant to the common law and statute and claims indemnity or contribution pursuant to s5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946.
Mr Watson SC for Acrow submits that the relevant category of common law duty owed by the cross defendants to Mr Dionysatos is that recognised in Stevens v Brodribb Sawmilling Co Pty Ltd [1985-1986] 160 CLR 16.
The duty was described by Mason J. In these terms:
If an entrepreneur engages independent contractors to do work which might as readily be done by employees in circumstances where there is a risk to them of injury arising from the nature of the work and where there is a need for him to give directions as to when and where the work is to be done and to coordinate the various activities, he has an obligation to prescribe a safe system of work.
Liability is contingent upon the plaintiff establishing:
That the defendant has retained independent contractors to conduct an activity on his behalf that may otherwise be conducted by direct employees;
That the defendant failed to exercise reasonable care in the selection of the independent contractor whose negligence caused the plaintiff's injuries;
or;
That the interdependence of the activities of the independent contractors created a foreseeable risk of injury that could be avoided by the entrepreneur retaining and exercising a supervisory power to coordinate these activities by giving directions as to how, when, and where the work was to be carried out.
That the plaintiff's injuries were caused by the defendant's unreasonable failure to take these precautions.
The Liability of Hornibrook
The Contract
The Sydney Opera House was constructed in three stages. The first stage involved the construction of the foundations and podium. The second stage involved the construction of the walls, shell roofs, and internal arrangements for ceiling suspension. The third stage involved the fit-out of the interior.
On 18 October 1962 an agreement for the construction of the Opera House was executed between:
The Honourable Phillip Norman Ryan, the Minister for Public Works of the State New South Wales as Constructing Authority for and on behalf of Her Majesty the Queen (hereinafter called "The Principal") and M.R. Hornibrook (NSW) Proprietary Limited (hereinafter called "the contractor") of the other part.
The state of New South Wales agreed to pay to Hornibrook the actual cost of the works, together with the sum of £75,000.
Clause 32(12) provides that the actual cost of the works shall include the net cost of authorised Sub Contracts.
Clause 17 of the agreement provided that Hornibrook should supply, deliver and pay for all material, employees or labour required for the efficient performance of the agreement, but should not enter into any subcontract without the consent of the Engineer.
Clause 41 provided that the Contractor shall be responsible for the management and coordination of all sub-contractors employed on the works, and that a model form of sub-contract shall be submitted by the contractor to the Engineer for his approval.
A draft Standard Subcontract Document dated 5 July 1966 is in evidence (page 1418). That document provides that the agreement is Between M.R. Hornibrook (NSW) Proprietary Limited (hereinafter called the "Main Contractor" contracting in right of itself and not as agent) of the one part and "The Sub- Contractor" on the other part.
In a later document relating to the spraying of asbestos, a letter of 5 August 1970, Hall Todd and Littlemore Architects, wrote to the Department of Public Works advising that "we have instructed the Hornibrook Group to accept the tender and arranged a contract".
It is quite plain that pursuant to the agreement with the State, Hornibrook agreed to perform the works by its own employees or by subcontractors engaged by it.
I find that the asbestos spraying subcontractors who created the risk to Mr Dionysatos were engaged by Hornibrook in its own right and not as agent for the State of New South Wales.
Common Law Liability
Mr Tsoukalas gave this evidence:
Who organised these subcontractors, who organised where they would work and when they would start and what they would do. A.Well, Hornibrooks was the main contractor of the building, he was the builder, and he gave the orders to everyone.
The interdependence of the activities of the asbestos sprayers and the scaffolders created a foreseeable risk that the scaffolders may suffer injury because of the extremely dusty conditions in which they worked. In that circumstance, Hornibrook was subject to an obligation to prescribe a safe system of work.
The risk to the scaffolders, that I have held was obvious, could have been averted by Hornibrook directing that no asbestos spraying may take place in the presence of the scaffolders, that the asbestos sprayers clean the planks and the site floor before disassembly of the scaffolding, or that the asbestos spraying subcontractor provide respirators to the scaffolders.
Site minutes of 10 October 1967 record that Mr Faircloth of Hornibrook brought to the notice of the meeting the lack of insurance cover for common law risk arising out of silica dust. Mr Faircloth said that he had spoken to the Director of Occupational Health who offered to carry out tests on the site. The attendees at the meeting, including Mr Marshall of the Department of Public Works, apparently decided to do nothing.
The failure of Hornibrook to consult the Director of Occupational Health in relation to the far more obvious danger of asbestos dust is inexplicable.
I find that the injuries of Mr Dionysatos were caused by the failure of Hornibrook to adopt reasonably practicable protective measures to protect him from the inhalation of asbestos dust during the period 1963 to some date in 1969.
Statutory Liability
Regulation 73 of the Construction Safety Regulations 1950 provides that:
Any person who directly or by his servants or agents, carries out any building work shall take all measures that appear necessary or advisable to minimise accident risk and to prevent injury to the health of persons engaged in such building work, and for this purpose, without limiting the generality of the foregoing, he shall...[comply with regulations 73(9), and 73(10)]
I find that within the meaning of this provision Hornibrook carried out the building work upon which the asbestos sprayers, the installers of sound-proofing board and Mr Dionysatos were engaged. The injuries suffered by Mr Dionysatos were caused by the failure of Hornibrook to comply with regulations 73(9) and 73(10).
Hornibrook, if sued, would be liable to the plaintiff.
The Insurance Issue
The Missing Policies
The second cross defendant, Gordian Runoff Ltd, is successor to the liabilities of the Government Insurance Office of New South Wales (GIO). The cross claimant Acrow has proved that GIO issued policies of insurance covering the risk of Hornibrook and the Department of Public Works for the periods March 1963 to 25 June 1965 and 31 March 1967 to 31 March 1971. No policy for the period 26 June 1965 to 30 March 1967 can be located.
Nevertheless correspondence in evidence gives rise to a reasonable inference that the GIO covered at least the period 26 June 1965 until 30 September 1966. The last letter in that chain of correspondence is from the GIO to the Secretary of the Department of Public Works. The letter is headed: Contractors All Risks Insurance-Sydney Opera House- M.R. Hornibrook (NSW) Proprietary Limited. It reads in part:
Further to your letter under reference we advise that we have this day forwarded to M.R. Hornibrook (NSW) Pty Ltd our debit note for £34,100 representing premium payable in regard to increase in sum insured under Sections 1(a) and 2, to £4,000,000 and extension of the period of insurance under Sections 1(a),1(b) and 2 until 30 September 1966.
Section 3 of the Policy, which provides fire and specified extraneous perils cover on existing works of Stage 1, remains unaltered and will expire on 25 June 1965. In view of the proximity of expiry we would be pleased to receive your instructions regarding renewal of this Section to 30 September 1966.
It is apparent from the terms of this letter that Hornibrook had requested an extension of All Risks Insurance cover to 30 September 1966, and that GIO had agreed to this extension.
Most significantly the period of extension covered the first two weeks in February 1966 when the exposure of Mr Dionysatos to asbestos dust was at its highest.
In any event, because all periods of exposure to asbestos dust are inculpated in the causation of Mr Dionysatos' mesothelioma Gordian Runnoffis liable to indemnify Hornibrook in respect of its liability incurred when the proven policies were on foot.
Estoppel
If I were wrong in this conclusion I would find that Gordian Runoff is estopped from denying that GIO was the insurer of Hornibrook for the whole of the period the subject of the cross claim.
Before issuing the cross claim Hunt and Hunt Solicitors for Acrow on 29 May 2013 wrote to the Claims Manager GIO advising:
Hornibrook is deregistered and in order for us to proceed against that company we need to identify its public liability or all risks insurer.
We have located copies of Contractors All Risks policies issued by GIO policy number MC 42727 for the period 25 March 1963 to 25 June 1965 and MC 55530 for the period 31 March 1967 to 31 March 1971, copies of which we enclose.
We would be pleased if you would confirm GIO will indemnify Hornibrook in respect of proceedings brought by our client against it for contribution in its capacity as head construction manager in respect of the contract entered with our client at the direction of NSW Public Works for the provision of scaffolding services at the Opera House.
After this letter Gordian Runoff Ltd retained Thompson Cooper solicitors to act on its behalf.
On 4 June 2013, before the cross claim was filed, Hunt and Hunt wrote to Thompson Cooper enquiring as to the correct legal status of that entity; Is it as insurer pursuant to s601AG, or what is the position?
Thompson Cooper replied on the same day: I have received instructions that your client is not required to reinstate Hornibrook.
On 12 June 2013 Acrow filed the present cross claim pleading that Gordian Runoff Ltd is the insurer liable to indemnify Hornibrook in respect of any liabilities which it has in connection to this cross claim, and is sued pursuant to s601AG of the Corporations Act 2001.
Section 601AG provides:
Claims against insurers of deregistered company
A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if:
(a) the company had a liability to the person; and
(b) the insurance contract covered that liability immediately before deregistration.
The defence filed by Thompson Cooper on 21 June 2013 pleaded that the liability of Gordian Runoff Ltd was exempted by an exclusion clause, and also limited to the periods of the two policies identified by Hornibrook.
Further correspondence followed in which Thompson Cooper suggested that the liability of Gordian Runoff Ltd was excluded under the terms of the policies.
In a letter of 21 June 2000 Hunt and Hunt directed the attention of Thompson Cooper to clauses in the policy which negated such an exclusion, and continued:
We refer to earlier correspondence in which your client accepted that it would be appropriate for our client to sue Gordian Runoff directly - may we take it that your client stands by that position?
On 26 June 2013 the solicitor at Thompson Cooper with carriage of the matter replied:
I have received instructions to advise that my client does not dispute that Gordian is the correct defendant for Hornibrook.
My client no longer relies on the argument contained in my "Without Prejudice" letter to you dated 20 June 2013. Also, I will be amending my defence in due course to drop the paragraph pleading the Exclusion clause in the Policy of insurance.
No amended defence was filed. The paragraph pleading the exclusion clause was deleted in the course of the trial.
When Mr Sharpe, counsel for Gordian Runoff announced in the course of the trial that he would rely upon the defence that any liability of the insurer was restricted to the periods proved by the available policies, Mr Watson SC, counsel for Hornibrook, voiced his surprise. Mr Sharpe's position was, he said, inconsistent with the assurances contained in the correspondence. I think he is right. In the message of 4 June 2013 Thompson Cooper wrote your client is not required to reinstate Hornibrook. In the letter of 26 June 2013, after the defence had been filed, Cooper Thomson wrote: my client does not dispute that Gordian is the correct defendant for Hornibrook.
Crucially, the letter of 26 June 2013 was sent when Gordian Runoff knew that Acrow was unable to produce the policy for the interim period 26 June 1965 to 30 March 1971, and through its solicitors knew that the solicitors for Acrow were aware of the need to reinstate Hornibrook to the register if any arguable insurance point was taken.
When Mr Sharpe took the point for Gordian Runoff it was impracticable for Acrow to join Hornibrook as a defendant.
I hold that, because Acrow has acted to its detriment in reliance upon the representations of Gordian Runoff, Gordian Runoff is estopped from relying upon its pleaded defence (The Commonwealth v Verwayen (1990) 170 CLR 394.
Liability of the State
The Contract
Clause 8 of the agreement between the State and Hornibrook provided that: The whole of the works to be executed under this contract are to be carried out and completed to the complete and entire satisfaction of the Engineer.
The agreement provided that the expression "The Engineer" means Ove Arup and Partners and also include the Engineer or Engineers from time to time employed by the principal as hereinafter provided in connection with the works. (emphasis added)
Clause 6 provided that the Engineer may in his absolute discretion, issue written instructions in regard to the works generally, and the Contractor shall forthwith comply with the Engineer's instructions.
I hold that pursuant to this agreement The Engineer was the agent of the State. The knowledge of the Engineer was the knowledge of the State, and the powers of the Engineer were the powers of the State. In the words of Gavan Duffy CJ and Starke J in Colonial Mutual Life Assurance v Producers Assurance Co (1931) 46 CLR 41 at 47: He was authorised to speak, and in fact spoke, with the voice of the defendant.
Common Law Liability
The State is liable for the failure of the Engineer to impose a safe system of work upon the use of asbestos. This liability is a liability that is personal to the State. It is not vicarious.
Mr Tsoukalas said that inspectors from Public Works and Engineers from Ove Arup and Partners were constantly on the site overseeing the work. The minutes of every site meeting record the presence of the Engineer. Almost all record the presence of a representative of the Public Works Department.
The State had actual knowledge of the risks faced by Mr Dionysatos. It is convenient to again refer to the advice given in the Report of the Director-General of Public Health in New South Wales for the year 1948, where Dr Smith wrote that intermittent exposure to asbestos for five minutes 2 or 3 times a week created a foreseeable risk because of the dangers associated with asbestos dust.
Similar advice was given by Dr E.O. Longley the Acting Director of the Division of Occupational Health in a letter of 24 November 1967 to the secretary of the Boilermakers and Blacksmiths Society of Australia. Dr Longley wrote:
I would advise... that your members should use the utmost care when handling asbestos materials, particularly in confined spaces, to ensure that there is both adequate ventilation and adequate respiratory protection.... It would be advisable to seek advice from this Division before exposure to asbestos commences.
I find that the injuries of Mr Dionysatos were caused by the failure of the State of New South Wales to discharge its Stevens v Brodribb duty to him. It is unnecessary to repeat the reasonable precautions that the State could have imposed upon the activities of the asbestos spraying subcontractor by force of the Engineers power of control.
Statutory Liability
The statutory duty pursuant to regulation 73 is imposed upon any person, who directly or by his servants or agents, carries out any building work. I hold that the State retained and exercised sufficient powers of control over the work as to subject it to the duty imposed by the regulation.
The State, described in the Contract as the Constructing Authority, would, if sued, would be liable to the plaintiff pursuant to the statutory count.
Apportionment
The task of apportionment was described by Hayne J in Wynbergen v Hoyts Corporation Pty Ltd [1997] HCA 52; (1997) 149 ALR 25 at 29 in these terms:
No doubt the making of the apportionment which the legislation requires involves comparison of the culpability of both parties, i.e. the degree to which each has departed from the standard of what is reasonable, but that is not the only element to be considered. Regard must be had to the "relative importance of the act of the parties in causing the damage" and it is "the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination".
The State alone through the Department of Health had actual knowledge of the grave risks of Mr Dionysatos contracting mesothelioma. It had pursuant to the contract, by its agent the Engineer, the greatest power to avert the danger. The State had unique access to the assistance of the Department of Health and the Director of Occupational Health. As is apparent from the site minutes of 10 October 1967, the Director of Occupational Health was readily available to give advice and conduct dust tests on site.
Hornibrook was the principal contractor with day-to-day supervision of the site. Although there is no evidence that Hornibrook possessed actual knowledge of the peculiar dangers of asbestos in relation to mesothelioma, it should have been aware, and probably was aware, of the extremely dusty conditions pertaining during the spraying of asbestos and the cutting of sound proofing board. As a matter of prudent housekeeping on site Hornibrook should have intervened to prevent the obvious danger to health.
Acrow could not have been expected to be fully aware of the dangers of asbestos. It had limited control of the site. Nevertheless, it owed to the plaintiff the distinguishing duties of an employer and, because the general dangers of dust were so obvious during the first two weeks of February 1966, it should have been aware of the need to withdraw its workers or seek advice.
I apportion responsibility 50 per cent to the State, 35 per cent to Hornibrook, and 15 per cent to Acrow.
Orders
Judgement for the plaintiff against Acrow Formwork and Scaffolding Pty Ltd in the sum of $490,142.
Judgement for Acrow Formwork and Scaffolding Pty Ltd against the State of New South Wales in the sum of $245,071.
Judgement for Acrow Formwork and Scaffolding Pty Ltd against Gordian Runnoff Ltd in the sum of $171,549.7
I will hear the parties on costs.
Mr J T Rush QC with Mr S Tzouganatos instructed by Turner Freeman appeared for the plaintiff.
Mr G M Watson SC with Mr J C Sheller instructed by Hunt and Hunt appeared for the defendant.
Mr J L Sharpe instructed by Thompson Cooper Lawyers appeared for Gordian Runoff Pty Ltd.
Ms L P McFee instructed by Ellison Tillyard Callanan appeared for the State of New South Wales
Decision last updated: 05 September 2013
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