Erdevicki v Amaca Pty Limited (ACN 000 035 512)
[2021] VSC 118
•16 March 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
DUST DISEASES LIST
S CI 2015 05207
| MILORAD ERDEVICKI | Plaintiff |
| v | |
| AMACA PTY LIMITED (ACN 000 035 512) (FORMERLY JAMES HARDIE & COY PTY LTD) & ORS (according to the attached schedule) | Defendants |
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JUDGE: | Keogh J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 11, 12, 13 November 2020; 7, 8 December 2020 |
DATE OF JUDGMENT: | 16 March 2021 |
CASE MAY BE CITED AS: | Erdevicki v AMACA Pty Limited (ACN 000 035 512) & Ors |
MEDIUM NEUTRAL CITATION: | [2021] VSC 118 |
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NEGLIGENCE – Plaintiff’s claim for damages for lung cancer caused by inhalation of asbestos fibres – Plaintiff’s claim settled – Contribution claim – Dispute regarding whether plaintiff was exposed to second defendant’s product – Just and equitable amount of contribution to be paid by second defendant – Wrongs Act 1958 (Vic), ss 23B(1), 24(2).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | N Murdoch QC and A C Dimsey | Zaparas Lawyers |
| For the First Defendant | D C Oldfield | Mills Oakley |
| For the Second Defendant | A T Strahan QC and N Y Rattray | Colin Biggers & Paisley Lawyers |
| For the Third Defendant | No appearance | No appearance |
HIS HONOUR:
Introduction
During the 1970s, Mr Erdevicki worked as a subcontractor installing faux brick cladding on houses throughout Victoria and in parts of regional South Australia and New South Wales. He brought this proceeding alleging a lung cancer condition with which he was diagnosed in 2017 was caused by exposure to dust from asbestos cement sheets manufactured by the first and second defendants,[1] which were part of the brick cladding panels.
[1]A notice of appearance was not filed for the third defendant and it took no part in the trial.
Mr Erdevicki’s claim was settled on the second day of the trial. The contribution claim by the first defendant (‘James Hardie’) against the second defendant (‘Wunderlich’) remained to be determined.
Both defendants manufactured asbestos cement sheets in Victoria during the period Mr Erdevicki worked installing brick cladding. It was not in issue that Mr Erdevicki was exposed to inhalation of asbestos fibres when he cut and worked with the brick cladding panels, or that this was a cause of the cancer from which he suffered. Nor were duty, breach or the reasonableness of the damages paid to Mr Erdevicki pursuant to the settlement in issue.
The matters in dispute at trial related to exposure: whether James Hardie established that Mr Erdevicki was exposed to asbestos from product manufactured by Wunderlich,[2] and if so, what amount is just and equitable for James Hardie to recover as contribution from Wunderlich.[3] It was agreed Wunderlich’s contribution should correspond to the proportion of asbestos product Mr Erdevicki was exposed to that was manufactured by Wunderlich.
[2]Wrongs Act 1958 (Vic), s 23B(1).
[3]Ibid s 24(2).
Manufacture of asbestos sheets
Stephen Huckett, who in the 1970s worked as a sales cadet and later sales representative for Wunderlich, described the process used to manufacture faux brick cladding panels. He said asbestos cement sheets were attached to a template designed to replicate a section of brick veneer wall. Concrete slurry was trowelled into the template to form the faux bricks. The panel, which was comprised of the asbestos cement backing sheet and the faux brick outer surface, was then placed in racking to cure.
During installation, dust was created when the brick cladding panels were cut to size to fit around doors and windows, and at corners of the house. As a consequence, Mr Erdevicki was exposed to inhalation of asbestos fibres.
James Hardie manufactured HardiFlex asbestos cement sheets at a factory in Brooklyn, Victoria for the entire period Mr Erdevicki worked installing brick cladding.
Wunderlich manufactured Wunderflex asbestos cement sheets at a factory in McIntyre Road, Sunshine, Victoria in the period to 31 July 1977.
James Hardie purchased the McIntyre Road factory from Wunderlich on 1 August 1977, and operated it from that time.
Mr Erdevicki’s cladding work
Mr Erdevicki installed brick cladding as a subcontractor working for a business called Victoria Perma Brick Co Pty Ltd (‘Victoria Perma Brick’), which was located in Keilor Road, Niddrie.
Mr Erdevicki said he installed brick cladding on houses in Melbourne, in north-west Victoria, north-east South Australia, and Broken Hill and Albury in New South Wales. He said the brick cladding was transported to each worksite using a Victoria Perma Brick truck, although he would sometimes transport smaller amounts of cladding panels himself if there was a shortage, which he would pick up from Victoria Perma Brick’s premises in Niddrie.
One interrogatory tendered at trial enquired about the geographical location of Mr Erdevicki’s exposure to asbestos in the course of his work with Victoria Perma Brick:
11. What percentage of your overall alleged exposure occurred in:
a) Victoria?
80%
b) NSW?
10%
c) South Australia?
10%
d) Overseas?
0%
Wunderlich tendered evidence establishing that it did not operate in South Australia.
Wunderlich submitted that it should be inferred the 10% of Mr Erdevicki’s exposure which occurred in South Australia could not have been from product manufactured by it. It was submitted that if work was being done in South Australia, logically the product being used would be sourced in that state.
I reject Wunderlich’s submission. Mr Erdevicki only performed the cladding work for Victoria Perma Brick. He said the cladding panels were delivered to each worksite, including interstate worksites, by a Victoria Perma Brick truck. It was not put to Mr Erdevicki that cladding panels for South Australian jobs were supplied from a source in that state. The obvious inference is that all cladding panels supplied by Victoria Perma Brick for Mr Erdevicki’s work came from the Niddrie factory.
The period of Mr Erdevicki’s exposure
Mr Erdevicki commenced work with Victoria Perma Brick in the second half of 1974. In evidence in chief he said that although he could not remember exactly the date and the month that he started the cladding work, he thought it was ‘August/July or something like that’. In cross-examination by counsel for Wunderlich Mr Erdevicki said he attended an English language course from about the middle of 1974 for about 12 weeks, and it was after that that he commenced the cladding work. He was asked:
in the last quarter – do you know what I mean by quarter? After September of 1974?---Correct.
Mr Erdevicki said the cladding work was full-time, and that he worked most weekends.
Mr Erdevicki said that at the end of May 1979 he became a probationary tram conductor. He said he made the decision to find other work because the brick cladding work was slowing down in the city, and there were more jobs in the country which he could not do because he had a young family. He said he continued to do cladding work up to 1980.
When asked how often he was doing the brick cladding work after May 1979, Mr Erdevicki responded:
We did that taking smaller jobs and two, three days, maximum four days. We had a day – day off with the trams working next day for – say, of Thursday or Friday. Then I joined Friday, Saturday, Sunday, and Monday I ask to mate from work to swap for the next week, work for him different day to giving me three or four days together to complete that job brick cladding.
In cross-examination by counsel for James Hardie, Mr Erdevicki agreed that from May 1979 he worked two or three days a fortnight on the brick cladding work.
In examination in chief, Mr Erdevicki said that his work as a probationary tram conductor was not full-time. Confusingly, in cross-examination by counsel for James Hardie, he agreed he was working full-time as a probationary tram conductor from May 1979.
James Hardie submitted it should be concluded Mr Erdevicki worked on average six days a week from August 1974 to May 1979 installing brick cladding. From May to the end of December 1979 he worked two to four days a fortnight doing the cladding work, which is the equivalent of less than two months full-time work. On this basis, James Hardie submitted the period from August 1977 onwards, when it was the only relevant manufacturer of asbestos sheets, represented 40% or less of the total period of Mr Erdevicki’s exposure.
Wunderlich submitted the total period of exposure should commence in September 1974 and conclude in March 1980, which is approximately 66 months. James Hardie was the exclusive manufacturer and supplier from 1 August 1977 to March or April 1980, which is approximately 31 months. On that basis 47% of Mr Erdevicki’s total exposure occurred after it ceased manufacturing asbestos sheeting in Victoria.
Mr Erdevicki was a difficult witness to understand. Often his answers were not responsive to the question asked, and were difficult to follow. Even with the assistance of an interpreter Mr Erdevicki appeared to have difficulty comprehending some concepts and questions, and articulating a clear response. My impression was this reflected Mr Erdevicki’s background and general manner of communication, possibly combined with feeling overwhelmed to a degree by the trial process. The end result was that care needed to be taken understanding Mr Erdevicki’s evidence.
I conclude:
(a) Mr Erdevicki commenced work as a subcontractor installing faux brick cladding for Victoria Perma Brick in around September 1974.
(b) Until the end of May 1979 Mr Erdevicki worked an average of six days a week performing the cladding work.
(c) From around 1 June to around the end of 1979 Mr Erdevicki worked an average of between two and three days a week performing the cladding work.
On the basis of these findings the period to 31 July 1977 represents about 58% of Mr Erdevicki’s total exposure. The period from 1 August 1977, during which James Hardie was the sole manufacturer and supplier of asbestos cement sheets used in the manufacture of faux brick cladding, represents about 42% of Mr Erdevicki’s exposure.
Supply of HardiFlex and Wunderflex
Mr Huckett was employed by Wunderlich as a sales cadet from 1968, and as a sales representative from 1971, until the business was taken over by James Hardie in August 1977. His geographical sales region was the northern and western suburbs of Melbourne, which he said included the suburb of Niddrie.
Mr Huckett said his role predominantly involved calling on distributors, who were timber and hardware building supply merchants, to check their stocks of Wunderflex and take orders. He said there was a trading agreement between James Hardie and Wunderlich which meant the price and discount structures, and trading terms, for their products were the same, and the products were identical, and competition in the marketplace really came back to supply and service. He said distributors were exclusive customers of either Wunderlich or James Hardie.
Mr Huckett said he sold Wunderflex to faux brick cladding manufacturers via distributors. He recalled three manufacturers in his sales region, a small business in Collingwood, a major customer called Heywood Constructions located in West Footscray, and a business in Keilor Road, Niddrie. Mr Huckett said he visited the Niddrie business once or twice. He was asked whether he recalled the name of the Niddrie business, and said:
It’s still – a little – I’ll not 100 percent sure, but the major customer that I had around that area was – is – was Heywood Constructions and they originally were in West Footscray, and the more I think about it, the Keilor Road business was associated with Heywood Constructions.
Mr Huckett said there was only one brick cladding manufacturer in Niddrie.
Mr Huckett said as a sales representative he was interested in expanding the sales of Wunderflex. He regularly called on distributors supplied by James Hardie. He said he knew the clients that James Hardie’s product was supplied to. Mr Huckett was asked:
And in your region that you would look after in terms of sales, were you aware of any imitation brick cladding factories to which James Hardie was supplying product?---No, I wasn’t.
Did you observe in your time visiting any of the imitation brick factories that we’ve just talked about, Hardie, James Hardie product being supplied to those factories?---No, I didn’t, no.
Mr Huckett said that at the McIntyre Road factory Wunderlich produced sheets of Wunderflex which were cut to a non-standard size to fit a template which he saw used at the Niddrie brick cladding manufacturer and at Heywood Constructions in West Footscray. He said these sheets were different to the standard stock size. Mr Huckett said he did not see any asbestos sheet material being cut to size at the Niddrie factory, and there were no cutting facilities which were part of the process.
Mr Huckett said it was his practice to keep an eye on what products James Hardie were supplying to the market. In his time as a sales representative, he did not see HardiFlex cut to size to fit the cladding template. Mr Huckett never visited the James Hardie factory.
Mr Huckett agreed James Hardie had more sales representatives, and better resourced marketing so that purchasers were more aware of their brand. James Hardie had a bigger production capacity than Wunderlich.
Mr Erdevicki’s evidence as to product
Mr Erdevicki said that as well as the faux brick cladding panels he also fitted plain cement sheets to houses where customers wanted them for the gables or the basement of the house. He said they used the plain cement sheets much less than the brick cladding panels.
Mr Erdevicki was asked about collecting additional materials if there was a shortage at the worksite:
And did you go to Victorian Permabrick’s premises in Niddrie to do that?---First we went there, yeah, and if they had that, ah, we pick up from them. And then, ah, yeah, we back to complete the job.
Did you ever go to James Hardie’s factory at Brooklyn?---I did. I did because if, ah, is shortage or, ah, not ready or they didn’t have that, ah, they just send me, go to James Hardie and, ah, pick up that amount, ah, 10, 15 or whatever needed, and load it on, ah, roofers.
How many times did you do that?---Three to four times. I can’t remember exactly but I remember that three to – maybe more, you know, but three to four times, ah, I went there.
And what did you pick up there?---Just pick up, ah, that sheets. What was, ah, for me for that, ah, shortage to complete the job.
…
Mr Erdevicki, did you ever go to Wunderlich’s factory at McIntyre Road, Sunshine?---I did.
For what purpose?---For same, shortage for that material.
How often did you go?---I can’t remember exactly but wasn't that many times. So, like, (indistinct) maybe two, three times, so – because the other department maybe went there.
Materials collected by Mr Erdevicki direct from James Hardie or Wunderlich must have been asbestos cement sheets, not the brick cladding panels which were manufactured by Victoria Perma Brick.
It is not clear whether the occasions Mr Erdevicki collected cement sheets from either the Brooklyn or Sunshine factories were part of the usual supply arrangement to Victoria Perma Brick, or irregular purchases direct from a manufacturer to cover a shortage of material.
Mr Erdevicki was not involved in the production of the brick cladding panels, and he could not explain in clear terms how they were made.
Mr Erdevicki was cross-examined at length about his following answers to interrogatories:
3. Were you exposed to asbestos containing products during the work?
Yes. I believe that the sheet contained asbestos.
…
5. If yes to Interrogatory 3, where were the brand or trade names of the asbestos containing products during the work?
The asbestos sheets were manufactured by James Hardie.
6. For each product named in Interrogatory 5, and during the work:
a) Who was the manufacturer?
James Hardie.
b) How do you know it was manufactured by that entity?
I knew at the time that the asbestos sheet was James Hardie sheet and I frequently collected asbestos cement sheet from the James Hardie factory in Brooklyn.
c) Why do you believe that product contained asbestos?
I believe that the sheet contained asbestos.
d) What logo, lines or markings of identification were on the product and/or on its packaging?
I don’t recall.
e) How were the products purchased?
I believe that the products were purchased by Victorian Perma Brick.
f) From what entity were the products purchased?
I believe from James Hardie.
…
12. What percentage of your overall alleged exposure to asbestos containing products was manufactured by:
a) The First Defendant?
100%
b) The Second Defendant?
0%
c) The Third Defendant?
0%.
Mr Erdevicki said he understood the interrogatories were asking a series of questions. He said he told his solicitors everything, and he accepted that the recorded answers were his answers.
Mr Erdevicki was asked:
At the time you were applying the sheet, you knew that it was James Hardie sheet. That's what you've told – that's what your answer means?---James Hardie, it was a James Hardie because we had that from James Hardie and the company which whoever was supplying from them and that's it.
Well, you said in this answer that at the time I knew that the asbestos sheet was James Hardie sheet, and that was a true answer when you gave it?---Yes. James Hardie, sure, that was James Hardie sheets. James Hardie, that's how I been there – yes, had been informing about that and - - -
…
You knew that because you had been working with the product at the time and knew that it was a James Hardie product that you were working with; is that correct?---No, that was after that. We – we only – didn’t know when I pick it up, but before that I did nothing where that material is coming – I did not (indistinct words) but yes, they probably – they had all that material like asbestos sheets and things from James Hardie.
Mr Erdevicki was asked about what he knew when he was doing the cladding work:
And what that means is, ‘At the time’ – this is back in the 1970 – ‘when I was working with the product, doing the cladding, I knew it was James Hardie sheet’?
INTERPRETER: Well, it’s important to (indistinct words) this is how it goes – well, the gentlemen says, ‘I didn’t know that it was asbestos at the time. I did know it was coming from James Hardie, yes, but who would have ever thought that is was asbestos? Neither anybody even inquired what those – those sheets were made of’, so – yes.
Mr Erdevicki sought to explain further:
Well, you know how it is. This is what we call them now. We call them asbestos cement sheets. However, at the time that I was collecting those sheets, I didn’t even know that it was asbestos, neither I – I inquired what is it but, since we all know now what the product was, this is what we call them and this is what I said.
Mr Erdevicki was asked about his answer that he collected asbestos cement sheets from the James Hardie factory in Brooklyn:
And that’s what you told your solicitor?---Yes. I told my solicitors where I was sent to collect those cement sheets if there were any shortage of them, however, the rest of it would come by trucks sent by our company.
And what you told them was what you could remember?---Yes. I said to him what I could remember but I also said to him how we – what we know about those sheets and how we told them and considered them today.
Mr Erdevicki was asked about his answer to interrogatory 12:
Now, you see the document in front of you with a sentence that reads, ‘In answer to interrogatory 12’?---(Through interpreter) Yes. Yes, I can see that. Yes.
And in respect of the option A, you’ve said ‘100 per cent’?---Yes. Because they – they’ve proven that it’s asbestos. They can’t do nothing else.
Mr Erdevicki further explained:
INTERPRETER: Okay. So, the answer is at the time I didn’t – at the time I was working I didn’t know that, but at the time I was answering the question I know – I did give that answer because we knew after all the investigations that this was exactly the company that produced 100 per cent of asbestos that I was working with.
Mr Erdevicki was asked a further question about interrogatory 12:
At the time you gave this answer, Mr Erdevicki, the answer reflected your belief that 100 per cent of the products you were working with came from James Hardie, all the products.
INTERPRETER: Your Honour. Your Honour, I really need to do – interject here. What I interpreted Mr Erdevicki said 100 percent of asbestos containing product, not all the product, so if that is the question to seek the same answer, I already interpreted it, I believe.
Mr Erdevicki said that Victoria Perma Brick would always say the sheets were coming from James Hardie. Confusingly Mr Erdevicki was also insistent some of the sheets came from Wunderlich, and that he had collected product from Wunderlich in McIntyre Road, Sunshine. It was put to Mr Erdevicki that in amended answers to interrogatories sworn by him he said some of the cement sheets he used came from Wunderlich only because his solicitors told him that the results of tests conducted by Mr Kottek showed Wunderlich manufactured some of the cement sheets he installed. Mr Erdevicki said:
I didn’t change it because you say that my lawyer told me the results. What actually happened, that we all knew that James Hardie manufactured everything. At some stage they sold their manufacture, all remaining products to Wunderlich, so that’s – when it happened, I really don’t know, but this is basically what – what we were told at the time and that this is – this is the answer that I gave, yes.
Mr Erdevicki was asked some further questions about this topic, and added:
it has always been common knowledge that the product has been manufactured by James Hardie, however, it has been common knowledge as well that at some stage the company was purchased – meaning James Hardie company – was purchased by Wunderlich. So it’s the same product purchased – or same manufacturer purchased by another firm called Wunderlich.
The answers to interrogatories were sworn by Mr Erdevicki without the assistance of an interpreter.
Mr Kottek’s evidence on provenance of the product
Mr Kottek, an Occupational and Environmental Health Consultant engaged by the plaintiff as an expert witness, gave evidence at trial.
Mr Kottek described the features of HardiFlex and Wunderflex which enabled him to differentiate between the products:
When I have examined samples of asbestos cement of known provenance, Wunderlich manufactured asbestos cement contains hardwood fibre and in the 1970s may contain softwood fibre; the Wunderlich samples typically contain amosite. This is consistent with the Wunderlich product mix documents ... In contrast, samples known to be manufactured by James Hardie only contain softwood pulp and typically only contain chrysotile.
It is not in dispute that the constituents of HardiFlex and Wunderflex include wood fibres and asbestos fibres.
Mr Kottek took samples from three properties at which Mr Erdevicki installed faux brick cladding while working for Victoria Perma Brick in the 1970s. At the first property, where Mr Erdevicki installed cladding in around March 1977, Mr Kottek collected a sample of cladding from the front fence which he said matched the cladding on the house. Mr Kottek said he immersed a fragment of the sample in Selleger’s stain, which differentially stains hardwood and softwood fibres. He then examined the fragment using a standard microscope, and identified that it contained hardwood and softwood fibres, but did not detect the presence of amosite. He said more sensitive laboratory examination by a scanning electron microscope indicated asbestos fibres consistent with amosite were present in the sample.
Mr Erdevicki worked at the second property in about September 1976. Mr Kottek collected two samples from the property, one of cladding from the walls, and another from the baseboards of the house. He said hardwood was definitely identified in the cladding sample and, with less certainty, in the baseboard sample. Using a standard microscope amosite was detected in the baseboard sample, but not the cladding sample. Electron microscopy examination was not undertaken, and Mr Kottek said without doing so he would not conclude amosite was not present in the cladding sample.
Mr Erdevicki worked at the third property in about January 1977. Mr Kottek again collected samples of the wall cladding and baseboards. Hardwood and softwood fibres were detected in both samples. Amosite was not detected using a standard microscope.
Mr Kottek referred to seven other samples of Wunderlich product obtained from five properties, each of which he determined contained hardwood fibres, and all bar one of which contained amosite. The sample which did not contain amosite appeared to date from between 1964 and 1968. Six samples were from Victoria, and one from New South Wales. Mr Kottek accepted that his attempts to date a number of these samples depended on the memory of property owners going back many decades, and was not reliable. Two of the samples, collected from the same property, were of cladding produced by another manufacturer.
Mr Kottek tested four samples of HardiFlex, which he obtained from three properties. The HardiFlex samples all appeared to date from the late 1960s. Two samples came from a property in New South Wales. None of these samples contained evidence of hardwood fibres. A trace of amosite was found in one of the Victorian samples using an electron microscope. Amosite was not found in the remaining three samples.
Mr Kottek accepted that for a period in 1975, and probably for some other periods, amosite was included in the HardiFlex product mix used by James Hardie at the Brooklyn factory. He said that if amosite is detected in product that does not date from a period when James Hardie was including amosite in their product mix, its presence indicates the product tested is not from James Hardie.
In cross-examination Mr Kottek was asked about an affidavit tendered at trial made by Mr John Winters, a longstanding employee of James Hardie. Mr Kottek agreed with Mr Winters’ evidence that the duration of a particular product mix used by James Hardie depended on the availability of different types of asbestos within the factory, and the product mix could be varied to accommodate issues with the availability of raw materials. He agreed amosite was definitely used by James Hardie from time to time as part of the mix for some products, but added that he had gone through the HardiFlex product mix specifications for the Brooklyn factory, and there were only a handful that included amosite. He said if you cross-referenced the date of product against the product mix specification for HardiFlex from the Brooklyn factory for that period then you could be clear whether detection of amosite indicated the product was not manufactured by James Hardie. Mr Kottek could not say whether he had done that analysis.
Mr Kottek agreed that trace elements of amosite might remain in production machinery from an earlier product mix, and find its way into later product. He said whether the presence of amosite was explained in this fashion might depend on how readily it was detectable. Amosite detectable by a standard microscope would not be consistent with contamination of machinery. The possibility of contamination would also depend on how many production runs had been through the machinery since it was included in the product mix.
Product mix specification
James Hardie tendered 41 product mix specification sheets for HardiFlex produced at the Brooklyn factory between 1966 and 1981. The only sheet on which amosite was specified as part of the product mix was dated 15 September 1975. Most of the sheets did not specify the type of wood pulp used as a component of HardiFlex. Where detail was given softwood was specified.
A Wunderflex product mix specification sheet from March 1977 included amosite. A Wunderflex sheet from 1975 specifies use of hardwood in addition to softwood pulp.
Product sales
Wunderlich sales reports for the Sunshine factory were tendered for five months in the period 1973 to 1975. The reports show that for the months covered, sales of Wunderflex to brick pattern (faux brick cladding) manufacturers represented between 17% and 23% of total square metres delivered.
The sales reports also detail the experience of some loss of sales to James Hardie associated with the effects of product shortages and James Hardie’s superior marketing. In the January 1974 sales report it is stated:
Stock shortages of Wunderflex are having a serious effect on our sales. At present we are out of stock of eight sizes and the factory have advised that it will be some months before a complete stock range is available. Because of this position, distributors who have always purchased from Wunderlich, now have no alternative, and are getting their requirements from James Hardie. Another disturbing feature is that distributors who in recent years have been influenced to change over to Wunderlich are now once again buying from James Hardie. While this situation continues it will have an adverse effect on our sales and the longer it takes to rectify, will make it more difficult to recover lost sales.
In the June 1974 sales report it is stated:
We wish to point out however that large sales of all products were lost because of our inability to supply. Although this situation is not new and has occured [sic] on a number of occasions over the past few years it has now reached a stage where clients are losing their confidence in us. At one period during the month, out of seventeen stock sizes of Wunderflex, only two sizes were available …
A large number of our distributors who have never previously purchased from James Hardie have been forced because of this situation to place orders with them.
Mr Huckett did not recall the stock shortages.
Submissions
Wunderlich
There is real doubt as to whether Mr Erdevicki was exposed to Wunderlich product during his work installing faux brick cladding. If he was, that exposure was limited to the period from 1974 to 31 July 1977 and, on the evidence, is well below 50% in that period of exposure.
Mr Erdevicki’s evidence as to what occurred is, in a case of this nature, very important. He swore the answers to interrogatories identifying James Hardie as the manufacturer at his solicitor’s office, free from the sort of forensic pressures that attend giving evidence at trial. He said in evidence that he understood the swearing of answers to interrogatories was an important task, and he gave it his proper attention. The somewhat confusing evidence he gave when asked about his answers to the interrogatories may be explained by fear that it would compromise his claim if he knew at the time he was installing the cladding that he was handling asbestos, perhaps compounded by having to give evidence remotely with the assistance of an interpreter. What the Court should be confident of is that Mr Erdevicki had a genuine recollection that at the time he was doing the cladding work he was dealing with James Hardie products. When he answered the interrogatories he could not even recall Wunderlich products. In evidence, Mr Erdevicki said quite clearly that he knew at the time he was doing the cladding work that the cement sheets came from the James Hardie factory in Brooklyn. He said Victoria Perma Brick would always tell them where the sheets were coming from, and that he told his solicitor everything he remembered. Putting the pieces together, notwithstanding some appropriate concerns about his evidence, it is clear he remembered the cement sheets as coming from James Hardie in Brooklyn.
The evidence Mr Erdevicki gave in chief that he had visited the Wunderlich factory in McIntyre Road, Sunshine, should be treated with caution because it is inconsistent with his answers to interrogatories, and was given in response to a question which suggested the answer.
Mr Huckett’s evidence did not establish any link between Victoria Perma Brick and Wunderlich. Mr Huckett said he sold Wunderlich product to faux brick cladding manufacturers, including a manufacturer located in Keilor Road, Niddrie. He did not identify that company as Victoria Perma Brick, but said it was a business associated with Heywood Constructions. Mr Huckett could not remember Victoria Perma Brick. Wunderlich submitted:
So, at that point, we’ve got positive evidence that Mr Huckett can only recall one brick manufacturer, and it’s not Victoria Perma Brick; it’s Heywood Constructions. Now, that is important evidence, as I say, because it proves positively, if your Honour accepts it, that Wunderlich was not dealing with Victoria Perma Brick, leaving open the inference, which is consistent with Mr Erdevicki’s evidence, that they were dealing with James Hardie.
Mr Huckett said that customers tended to remain with the one supplier. Given Mr Erdevicki’s evidence, it cannot be doubted that at least a proportion of the cement sheet supplied to Victoria Perma Brick came from James Hardie. Taken together with Mr Huckett’s evidence this supports an inference that most, if not all, the cement sheet came from James Hardie.
The evidence suggests, in terms of overall product, James Hardie had 72% market share, and Wunderlich 26%. To the extent it is relevant, the market share evidence supports Wunderlich.
Mr Kottek’s evidence was unsatisfactory in a number of ways. First, despite receiving instructions which were consistent with Mr Erdevicki’s answers to interrogatories, he took it upon himself to investigate the possibility of Wunderlich’s involvement, without ever having been asked to do so. Second, some matters upon which Mr Kottek sought to rely were well outside his expertise, demonstrating his willingness to go further than was appropriate. Third, Mr Kottek’s assumption that James Hardie was not using amosite in HardiFlex, which is the foundation for his conclusion, is completely unsound. It was never proven as a fact that James Hardie was not using amosite. Fourth, analysis of samples from properties at which Mr Erdevicki did cladding work do not support the Kottek thesis that the cladding was composed of Wunderflex. The first sample was not taken from the house but from a fence on the property. There is no evidence Mr Erdevicki installed anything on the fence, and it cannot be inferred that whatever was on the fence was the same product, and came from the same supplier, as cladding installed by Mr Erdevicki on the house. Further, amosite was only detected in the sample on electron microscope examination, not by standard microscope. Amosite was only detected in one of the two samples from the second property, despite Mr Kottek’s evidence that you would expect to see amosite in both. Amosite was not detected in the third sample on examination using a standard microscope. Mr Kottek’s assertion that James Hardie did not use hardwood pulp is not supported by evidence establishing that fact. Fifth, a trace of amosite was found on analysis of one of the James Hardie samples, which undermines Mr Kottek’s thesis. Sixth, the James Hardie product mix specification for HardiFlex changed and at times included amosite. Application of Mr Kottek’s thesis required analysis of product mix specifications to determine when amosite was used. This was never done by Mr Kottek, which robs his evidence of any weight. Seventh, as Mr Kottek accepted, amosite might be present as a contaminant from a previous product mix. Eighth, the dating of samples on which Mr Kottek relied was inherently unreliable, adding a further complication to the lack of any product mix analysis over time. Ninth, the HardiFlex samples on which Mr Kottek based his analysis all date from 1968, and thus pre-date the period of Mr Erdevicki’s work and are irrelevant. Tenth, Mr Kottek only obtained samples from three of what must have been hundreds of houses on which Mr Erdevicki installed cladding. Mr Kottek agreed the samples were not representative in a statistical sense.
James Hardie
For the following reasons it should be concluded that in the period to 31 July 1977 Mr Erdevicki was exposed, if not entirely, almost entirely, to asbestos dust and fibres emanating from Wunderlich product.
First, Mr Erdevicki said that, on a few occasions, he was sent to the Wunderlich factory in McIntyre Road, Sunshine, to pick up asbestos cement sheets when there was a shortage of materials, and that he was also aware of others having done so.
Second, Mr Kottek used his knowledge of the product mix documents and specifications of both manufacturers, and results of testing of the samples that he has of known provenance, to conclude that samples taken from three properties where Mr Erdevicki performed cladding work were consistent with Wunderlich product. Wunderlich has adduced no evidence to contradict Mr Kottek, despite it having in its possession from late 2018 the samples taken by him, access to the baseline samples to which he referred, the reports which he used for the purposes of his analysis, and references made explicitly in that regard in his third report.
Third, the only conclusion available from Mr Huckett’s clear and unchallenged evidence is that the faux brick cladding manufacturer in Niddrie to whom he sold Wunderflex, was Victoria Perma Brick.
Fourth, the clear inference from Mr Huckett’s evidence, supported by asbestos cement product sales documents from the time, is that Wunderlich had a dominant position in the faux brick cladding marketplace in Victoria. This shows a rational explanation for Wunderlich’s willingness to provide the additional service of cutting its Wunderflex to fit the brick cladding template, which is itself consistent with Wunderflex being sought after by faux brick manufacturers and used for that purpose.
Fifth, Wunderlich has been unable in this case to adduce any evidence pointing to any James Hardie product being used in faux brick cladding manufacturing in Victoria prior to August 1977, let alone adduce evidence pointing to its use by Victoria Perma Brick. Mr Erdevicki’s evidence that he attended the James Hardie factory on a few occasions is not specific in terms of timing, that is, whether it was before or after August 1977.
The Court should treat Mr Erdevicki’s answers to interrogatories with caution: his evidence was confusing and very unclear when he was being asked about the nature of the product that he was using, contrasted with his evidence of how he completed his work. Mr Erdevicki’s evidence as to provenance of the product is of no weight when viewed in the light of the obvious difficulty he had in comprehending questions put to him in court; his apparent impression that Wunderlich and James Hardie were for all intents and purposes one and the same; and the fact that he has no actual insight into the composition of the product that he was using because he was working out in the field and this product was being delivered to the worksite as a manufactured brick cladding panel with no identification markers on it.
Analysis
Victoria Perma Brick was located in Keilor Road, Niddrie, during the period of Mr Erdevicki’s brick cladding work.
Mr Huckett was the Wunderlich sales representative in the northern and western suburbs of Melbourne from 1971 to July 1977 and was in a good position to know about cement sheet customers in that region during that period. He had a particular reason to be aware of the market for sale to brick cladding manufacturers given that the sector made up a significant proportion of the overall sales of product manufactured by Wunderlich at the Sunshine factory. He took an interest in distributors carrying James Hardie product, and in businesses using that product, because he was interested in expanding Wunderlich sales. Mr Huckett said that, through a distributor, Wunderlich sold Wunderflex to a faux brick cladding manufacturer in Keilor Road, Niddrie, and that he visited that factory once or twice and saw Wunderflex being used to produce the cladding panels. I accept Mr Huckett’s evidence that there was only one brick cladding manufacturer located in Niddrie at the time. I reject the second defendant’s construction of Mr Huckett’s evidence as to the identity of the Niddrie manufacturer. Mr Huckett said that business was associated with Heywood Constructions, not that it bore the same name. I conclude that the brick cladding manufacturer identified by Mr Huckett, located in Keilor Road, Niddrie, was Victoria Perma Brick.
Mr Huckett’s evidence supports the conclusion that in the period to 31 July 1977 a significant proportion of the asbestos cement sheet used by Victoria Perma Brick was Wunderflex supplied by Wunderlich.
Mr Erdevicki did not work in the Victoria Perma Brick factory. His evidence did not indicate that he was familiar with the process of manufacturing brick cladding panels.
For the following reasons, Mr Erdevicki’s evidence that he collected cement sheet on a few occasions from the James Hardie factory in Brooklyn and the Wunderlich factory in Sunshine was not instructive. First, I accept Mr Huckett’s evidence that cement sheets were supplied to brick cladding manufacturers, including the Niddrie business, by a distributor, rather than direct from either James Hardie or Wunderlich. Second, Mr Erdevicki’s evidence was that he occasionally collected cement sheets when there was a shortage at the worksite. My impression was that these additional sheets were used by Mr Erdevicki at the job site for areas of the house such as the gables or basement which required plain cement sheets rather than brick cladding panels. I did not understand Mr Erdevicki to be saying that he took the additional sheets to Victoria Perma Brick so that extra brick cladding panels could be manufactured. Third, it may be that the process of Mr Erdevicki and other workers collecting additional material from James Hardie in Brooklyn or Wunderlich in Sunshine to cover a shortage at a job site was completely separate from Victoria Perma Brick’s usual arrangements for supply from a distributor of cement sheets used to manufacture brick cladding panels. Finally, Mr Erdevicki did not say when he collected sheets from James Hardie in Brooklyn. It is possible that this occurred after 1 August 1977, when James Hardie was the exclusive manufacturer of cement sheets used by Victoria Perma Brick.
When it came to identifying the manufacturer of asbestos cement sheet used by Victoria Perma Brick to manufacture brick cladding panels, Mr Erdevicki’s evidence was particularly confused. He was mistaken when he said James Hardie was taken over by Wunderlich. His evidence appeared to indicate that he did not recognise James Hardie and Wunderlich as two distinct manufacturers operating at the same time. Mr Erdevicki was adamant that in the 1970s he did not know the cement sheets contained asbestos. I conclude Mr Erdevicki’s answers were infected by what he thought he had since learnt, which resulted in him associating asbestos cement sheet with the name James Hardie, and nominating that company as the source of all asbestos containing product that he worked with.
Mr Erdevicki swore the answers to interrogatories without the assistance of an interpreter. Even with an interpreter it was often not possible to be satisfied Mr Erdevicki clearly comprehended what he was being asked, or to understand the answers he gave. Mr Erdevicki’s confusion, and the assumptions he made, explain the answers to interrogatories and much of the evidence he gave in relation to the source of cement sheets used by Victoria Perma Brick. I do not entirely dismiss Mr Erdevicki’s evidence. I accept that he remembered cement sheets supplied to Victoria Perma Brick coming from James Hardie, and that this memory was not limited to the few occasions he attended the Brooklyn factory, or to the later period of cladding work. However, I reject Mr Erdevicki’s sworn answers to interrogatories, that 100% of the asbestos containing product to which he was exposed was manufactured by James Hardie.
The following matters limit the weight of Mr Kottek’s evidence. First, Mr Kottek analysed samples taken from only three of what must have been hundreds of houses on which Mr Erdevicki performed cladding work. Second, amosite was only detected in one of five samples taken from those three houses using a standard microscope, and in one further sample by an electron microscope. Third, a complete suite of product mix specifications from both defendants for the relevant period is not in evidence. Whilst I accept that Mr Kottek has a general knowledge of the type of asbestos used in cement sheets manufactured by James Hardie and Wunderlich, he agreed the constituents of those products may vary from time to time, and he did not say he had undertaken a comprehensive analysis of the constituents of cement sheet produced by James Hardie at Brooklyn and Wunderlich at Sunshine over the whole period from late 1974 to August 1977. Fourth, little documentation establishing the type of wood pulp used by James Hardie and Wunderlich is in evidence. Again I accept Mr Kottek has a level of general knowledge about these matters. Fifth, analysis of HardiFlex samples dating from the late 1960s, and Wunderflex samples of uncertain date, added little if any substance to Mr Kottek’s evidence.
The most that could be said is that Mr Kottek’s evidence was not inconsistent with a conclusion that in the period to 31 July 1977 Victoria Perma Brick used Wunderflex in the manufacture of brick cladding panels.
Wunderlich supplied Wunderflex sheets cut to size to fit the cladding template used by Victoria Perma Brick. While Mr Huckett said he was not aware of James Hardie supplying sheets of HardiFlex cut to fit the cladding, he did not state positively that this did not occur.
The sales reports are important for the following reasons. First, they record that Wunderlich experienced serious stock shortages over a period of years. For example, in June 1974 only two out of 17 stock sizes for Wunderflex were available. Second, the stock shortages resulted in some distributors which were customers transferring to or making purchases from James Hardie. It was surprising that Mr Huckett did not remember the stock shortages given the effect they had on supply and sales. Third, contrary to Mr Huckett’s evidence, it is clear at least some distributors were not exclusive customers of one manufacturer. The May 1973 report records efforts made to influence James Hardie distributors to share their business with Wunderlich, and the December 1975 report refers to a distributor which shared its business between Wunderlich and James Hardie. Fourth, James Hardie competed strongly for sales with some success being enjoyed because of superior marketing and a much larger sales team. Given the apparent importance of the brick cladding industry to sales it would be surprising if James Hardie were not competing for a share of that sector.
The time which has elapsed since the relevant events occurred has had an adverse impact on the memories of both Mr Huckett and Mr Erdevicki. Certainty and precision is no longer possible.
I conclude, largely on the basis of Mr Huckett’s evidence, that it is probable a significant proportion of asbestos cement sheets used by Victoria Perma Brick in the period to 31 July 1977 was Wunderflex supplied by Wunderlich. However, Mr Erdevicki’s evidence, considered in the context of the sales reports, leads me to conclude that Victoria Perma Brick and the distributor which supplied it were not exclusive customers of either defendant for the whole period from September 1974 to July 1977. It is just and equitable to conclude that in that period, approximately 50% of the asbestos cement sheet used by Victoria Perma Brick was Wunderflex, supplied by Wunderlich.
I have already concluded that the period to 31 July 1977 represents about 58% of Mr Erdevicki’s total exposure to asbestos. Therefore I conclude that it is just and equitable that James Hardie recover 29% contribution from Wunderlich of the damages paid to Mr Erdevicki.
I will hear from the parties as to costs, and the appropriate form of order.
SCHEDULE OF PARTIES
BETWEEN:
| MILORAD ERDEVICKI | Plaintiff |
| - and - | |
| AMACA PTY LIMITED (ACN 000 035 512) (FORMERLY JAMES HARDIE & COY PTY LTD) | First Defendant |
| - and - | |
| SELTSAM PTY LIMITED (ACN 000 003 734) (FORMERLY WUNDERLICH LTD) | Second Defendant |
| - and - | |
| VICTORIA VINYL CO. PTY LTD (ACN 004 964 836) (FORMERLY VICTORIA PERMA BRICK CO. PTY LTD) | Third Defendant |
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