GIO General Ltd v ABB Installation and Service Pty Ltd
[2000] NSWCA 118
•10 May 2000
Reported Decision: [2000] 19 NSWCCR 720
New South Wales
Court of Appeal
CITATION: GIO General Limited v ABB Installation & Service Pty Limited & Ors [2000] NSWCA 118 FILE NUMBER(S): CA 40253/98 HEARING DATE(S): 22/03/2000 JUDGMENT DATE:
10 May 2000PARTIES :
GIO General Limited
ABB Installation & Service Pty Limited
GIO Workers Compensation (NSW) Limited
MMI Workers Compensation (NSW) Limited
TGI Australia LimitedJUDGMENT OF: Mason P at 1; Beazley JA at 1; Heydon JA at 1
LOWER COURT JURISDICTION : Dust Diseases Tribunal LOWER COURT
FILE NUMBER(S) :47/96 LOWER COURT
JUDICIAL OFFICER :Curtis J
COUNSEL: Appellant: J McIntyre SC
First Respondent: B Ferrari
Second Respondent: G Little
Third Respondent: B Hughes
Fourth Respondent: J D Hislop QCSOLICITORS: Appellant: Hunt & Hunt
First Respondent: Gillis Delaney Brown
Second Respondent: GIO Australia Workers Compensation (NSW) Limited
Third Respondent: A O Ellison & Co
Fourth Respondent: Moray & AgnewCATCHWORDS: Workers Compensation - Dust Diseases - Employment to the nature of which the disease was due - s 151AB of the Workers Compensation Act 1987 (NSW) LEGISLATION CITED: Dust Diseases Tribunal Act 1989 (NSW)
Workers Compensation Act 1987 (NSW)CASES CITED: CIC Workers Compensation (NSW) Ltd v Alcan Australia Ltd 91994) 35 NSWLR 169
CIC Workers Compensation (NSW) Ltd v Kellogg (Australia) Pty Ltd (1996) 40 NSWLR 422
MMI Insurance Compensation (NSW) Ltd v Baker (1997) 41 NSWLR 289
FAI Traders Insurance Co Ltd v HIH Winterthur Workers Compensation (NSW) Pty Ltd (1998) 45 NSWLR 257
Tame v Commonwealth Collieries Pty Ltd (1947) 47 SR (NSW) 269
Smith v Mann (1932) 47 CLR 426
Blayney Shire Council v Lobley (1995) 12 NSWCCR 52
Commonwealth v Bourne (1960) 104 CLR 32
Bryer v Metropolitan Water Sewerage & Drainage Board (1939) 39 SR (NSW) 321
R v City of Westminster Assessment Committee [1941] 1 KB 53DECISION: Appeal dismissed with costs; Cross-appeal dismissed
1 THE COURT: This is an appeal from an order made by Curtis CCJ that the appellant (GIO General) was liable to indemnify the first respondent (ABB) in respect of its liability to the plaintiff for damages for injury - the disease of mesothelioma - caused by his exposure to asbestos during the course of his employment with ABB during the periods 1966 to 1969 and 1978 to 1993.
THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40253/98
CL 47/96MASON P
BEAZLEY JA
HEYDON JAWednesday, 10 May 2000
GIO GENERAL LIMITED v ABB INSTALLATION & SERVICE PTY LIMITED & ORS
FACTSThe first respondent (ABB) had cross-claimed against the insurers on risk during the period of a claim made by the plaintiff against the respondent for damages for injury (the disease of mesothelioma) suffered by him as a result of negligent exposure to asbestos whilst in ABB’s employ. The plaintiff’s claim was made in respect of the period 1969 to 1993. The trial judge found that the plaintiff had been negligently exposed during the period 1966 to 1969. The fourth respondent (TGI) was on risk at that time. The trial judge left open the question whether ABB was liable for any period after 1969.
On the hearing of the cross-appeal the trial judge held that the plaintiff was last in an employment of the nature of which his disease was due in December 1986. The appellant (GIO General) was the insurer on risk at this time and was held liable to indemnify ABB: s 151AB of the Workers Compensation Act 1987 (NSW).
On the appeal, GIO General contended that as TGI was the only insurer on risk between 1966 and 1969, the period of causative exposure as found by the trial judge, it was liable to indemnify ABB and so s 151AB had no application. Alternatively, it submitted that if s 151AB did apply, the trial judge erred in finding the plaintiff was last employed in December 1986 by ABB in an employment of the nature of which the disease was due.
Mesothelioma is a dust related condition under the Dust Diseases Tribunal Act 1989 (NSW) and is an occupational disease (defined as disease contracted by a gradual process) for the purposes of the common law remedies provided for by Pt 5 of the Workers Compensation Act : see s 151AB(6)(a).
TGI cross-appealed on costs.
HELD ON THE APPEAL
(i) Section 151AB of the Workers Compensation Act applied.
(ii) Section 151AB(1)(a) is not concerned with causation in fact, but with exposure to a risk which may be causative of the disease.
(iii) The statement of Jordan CJ in Tame v Commonwealth Collieries Pty Ltd (1947) SR (NSW) 269 approved by the Court in CIC Workers Compensation (NSW) Ltd v Alcan Australia Ltd (1994) 35 NSWLR 169 that “employment of the nature of which the disease was due” within the meaning of s 151AB(1)(a) “means an employment of such a kind as to involve a risk to the employee contracting the gradual process disease which is disabling him” applied.
(iv) The evidence was sufficient to support his Honour’s finding that the appellant was the insurer on risk for the purposes of s 151AB(1)(a).
HELD ON THE CROSS-APPEAL
(i) The decision of the trial judge on costs was discretionary and no error attracting appellate intervention against a discretionary decision was identified.
ORDERS
(i) Appeal dismissed
(ii) Appellant to pay the costs of the respondents
(iii) Cross-appeal dismissed
(iv) No order as to costs on the cross-appealTHE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40253/98
CL 47/96MASON P
BEAZLEY JA
HEYDON JAWednesday, 10 May 2000
JUDGMENT
GIO GENERAL LIMITED v ABB INSTALLATION & SERVICE PTY LIMITED & ORS
The Factual Background
2 ABB employed the plaintiff over three separate periods from 1965 onwards. For present purposes there were two relevant periods, the first from 1966 until 1969 and the second from 1986 until 1993. During the period July 1966 until July 1969 the plaintiff worked at the Torrens Island Power Station which was operated and occupied by the Electricity Trust of South Australia. In that work he suffered significant exposure to asbestos. Between 1985 and 1993, the plaintiff was appointed to supervise the electrical installation work at the Kelloggs factory at Botany. At that time Kelloggs was engaged in a ten year upgrading of its entire premises. There was asbestos on the premises, notably in the lagging on the old ducting and in the insulation on pipes and vessels, all of which were being removed and replaced. There were also fibro ceilings in the factory. Kelloggs kept an Asbestos Register and employed specialised methods for the removal of asbestos. The plaintiff left that employment in 1993. In 1995, he was diagnosed with mesothelioma. Mesothelioma is defined as a dust related condition under the Dust Diseases Tribunal Act 1989 (NSW) and is an occupational disease for the purposes of Pt 5 of the Workers Compensation Act 1987 (NSW) (the Act): see s 151AB(6)(a) of the Act (common law remedies). An occupational disease is defined as a disease of such a nature as to be contracted by a gradual process.
3 Curtis CCJ held that the plaintiff had been negligently exposed to asbestos at the Torrens Island Power Station (that is the period between 1966 and 1969) and that that exposure was causative of his mesothelioma. He entered a verdict against both defendants for damages. Recognising however, that there was the outstanding cross-claim, his Honour added:
“It is unnecessary in the present case to further address the liability of ABB Installation in relation to evidence of asbestos exposure after the plaintiff worked upon the Torrens Island Power Station, and unnecessary to make any findings in that regard.”
4 ABB had cross-claimed against the seven insurers with whom it had held insurance policies during the various periods of the plaintiff’s employment (the cross-claim proceedings). The cross-claim was heard separately from the plaintiff’s claim. It required a determination as to which of the insurers on risk during the period of the plaintiff’s claim was liable to indemnify ABB for the damages it had been ordered to pay the plaintiff. The resolution of that question involved the proper construction and application of s 151AB of the Act.
5 The trial judge held that the last exposure of the plaintiff to asbestos was in October and December 1986 and that the exposure “was of the nature to which mesothelioma may be due”. ABB was insured by the appellant in December 1986. The trial judge held that, upon its proper construction, s 151AB of the Act applied so as to make the appellant liable to indemnify ABB in respect of the damages and costs recovered by the plaintiff against ABB.
6 Although the various insurers for the respective periods of the plaintiff’s employment were joined in the proceedings the essential contest on the appeal was whether the appellant, as the insurer as at December 1986, was liable or whether the fourth respondent (TGI), as the insurer in the period 1966 to 1969, was liable to indemnify ABB. TGI cross-appealed. The cross-appeal was largely a protective one should GIO General be successful on any of its grounds of appeal. The balance of the cross-appeal related to a complaint about the trial judge’s costs order.
7 We have already referred to the plaintiff’s period of employment with ABB at the Torrens Island Power Station between 1966 and 1969. Whilst at the Power Station he was exposed to “a considerable amount of asbestos dust thrown up by the work of laggers”. The plaintiff described “asbestos dust [falling] like snow through the steel mesh floors onto the workers including myself”.
8 The working conditions at the Kelloggs factory were dirty and dusty. However, the plaintiff did not attribute this to the presence of asbestos. His evidence was that “[he] was not aware of any asbestos at Kelloggs whilst [he] was there, other than …” two specific incidents of exposure. The first specific occasion of exposure to asbestos which the plaintiff recalled occurred in October 1986. Asbestos was found in some ducting in the ceiling. The plaintiff, who was not in the vicinity at the time the asbestos was located, went to inspect the area. When he arrived the ducting had been removed from the ceiling and was on the floor. He said “there would [still] have been dust” around. As he said, “when you work in an enclosed building and you disturb dust it doesn’t blow away in five minutes it stays around for hours”.
9 The second exposure, in December 1986, occurred when some cladding was taken off pipes located in one area of the premises. The cladding was primarily asbestos fibre. The plaintiff described the cladding as being “pretty well knocked about, having been pulled off the pipe”.
10 His Honour observed that the plaintiff was occupied in employment which exposed him to the risk of inhalation of asbestos fibres between 1986 and 1993, “if adequate precautions were not taken”. However, he considered that there was insufficient evidence to establish “that, upon the probabilities, he was actually exposed to the inhalation of asbestos fibre during that period”. His Honour found that on the evidence:11 His Honour considered that s 151AB:
“the plaintiff … was last employed by ABB in an employment to the nature of which the disease mesothelioma was due in December 1986.”
12 GIO General challenged the trial judge’s determination on two bases. First, it contended that as TGI was the only insurer on risk during the period 1966 to 1969, being the period of causative exposure identified by the trial judge in the first hearing, it alone was liable to indemnify ABB and s 151AB had no application. Alternatively, it submitted that if s 151AB did apply, his Honour erred in finding that the plaintiff was last employed by ABB in an employment to the nature of which the disease of mesothelioma was due in December 1986.
“… requires that the claimant establish when upon the probabilities the worker last worked in an atmosphere where asbestos fibres were actually present. Because all exposure is relevant in the aetiology of the disease of mesothelioma, the quantity of fibre inhaled is irrelevant. It may be otherwise in diseases of silicosis or asbestosis.”
13 Section 151AB provides:
Section 151AB of the Workers Compensation Act 1987 (NSW)
Legislation and Case Law
14 The interpretation and proper application of four recent cases in this Court were at the heart of this appeal: CIC Workers Compensation (NSW) Ltd v Alcan Australia Ltd (1994) 35 NSWLR 169 (Alcan); CIC Workers Compensation (NSW) Ltd v Kellogg (Australia) Pty Ltd (1996) 40 NSWLR 422 (Kellogg); MMI Insurance Compensation (NSW) Ltd v Baker (1997) 41 NSWLR 289 (Baker); and FAI Traders Insurance Co Ltd v HIH Winterthur Workers Compensation (NSW) Pty Ltd (1998) 45 NSWLR 257 (HIH).
“(1) If an employer is liable independently of this Act for damages for an occupational disease contracted by a worker, the following provisions have effect for the purpose of identifying from among a number of insurers under policies of insurance obtained by the employer for different periods which insurer or insurers is liable to indemnify the employer for the full amount of the damages or which is liable to pay the full amount of damages to the worker (without any right to contribution from those other insurers):
(a) Any liability of that employer that arose before the relevant commencement is taken to have arisen when the worker was last employed before that commencement by that employer in an employment to the nature of which the disease was due.”
The relevant commencement date for the purposes of para (a) is 3pm on 30 June 1987.
15 In Alcan Gleeson CJ said at 176 that
CIC Workers Compensation (NSW) Ltd v Alcan Australia Ltd
16 In so construing s 151AB, the Chief Justice adopted the statement of principle in Tame v Commonwealth Collieries Pty Ltd (1947) 47 SR (NSW) 269 (Tame) where Jordan CJ said at 272:
“The problem being addressed [by s 151AB(1)(a)] is that of a disease contracted by a gradual process. The idea of a disease being due to employment of a certain nature directs attention, not to the contract of employment, but to the work being performed and the exposure to risk involved in that work .” (emphasis added)
His Honour reiterated the point at 177:
“The employment referred to is not a contractual relationship with [the employer], but the engagement in a form of activity which exposed him to a risk of a disease of such a nature as to be contracted by a gradual process.”
17 Gleeson CJ considered this construction made good sense, for, as he postulated at 176:
“I think that ‘employment to the nature of which the disease was due’ means an employment of such a kind as to involve a risk to the employee contracting the gradual process disease which is disabling him. In the present case, what is complained of is a disease contracted by a gradual process of the inhalation of silica dust. For the worker to succeed, it was necessary for him to satisfy the Commission that his employment with his last employer was of such a kind as to expose him to the risk of inhaling silica dust … I agree that if it had been established that, although his last employment was such as ordinarily involved a risk of inhaling silica dust, nevertheless work with his last employer was carried on under special conditions which made inhalation of silica dust impossible, the worker would have failed …” (emphasis added).
18 In the sentence immediately preceding the extract from Tame quoted by Gleeson CJ, Jordan CJ had said:
“[W]hy should the legislature have intended to render liable under s 151AB an insurer who came on risk only after [for example] a programme of asbestos removal had been undertaken (and, perhaps, had negotiated a premium accordingly)?”
19 That statement is important. It makes it plain that s 151AB(1)(a) is not concerned with causation in fact. Rather, it is concerned with exposure to a risk which may be causative of the disease. Dixon J had clearly said so in Smith v Mann (1932) 47 CLR 426 at 449:
“It is not necessary that the presence, or some aggravation, of the disease should be in some degree due to service with the last employer.”
20 See also Blayney Shire Council v Lobley (1995) 12 NSWCCR 52 where Cole JA, after referring to Tame, Smith v Mann and also Commonwealth v Bourne (1960) 104 CLR 32, stated at 64:
“The nature of a disease contracted by a gradual process is such as to make it difficult, and sometimes impossible, to say how far a particular period of employment contributed. The purpose of the sub-section is to pitch upon the latest employer for the purpose of immediate liability to the worker … the diseases dealt with are those which are contracted by a gradual process and are due to the nature of an employment. The expression in the first paragraph ‘in whose employment the worker is or who last employed the worker’ implies a reference to a point of time or event, and it is apparent that the occurrence of incapacity is the event or time intended. The employer at the time of, or last before, the incapacity is made primarily liable. It seems proper to understand the provision in the first paragraph as confined to employers who do employ or have employed the worker in an employment to the nature of which the disease is due, but any further restriction upon the class of employment or any further requirement as to causation seems unwarranted.”
“It follows from these authorities that in determining whether, at the time when notice of injury was given, Mr Lobley was ‘employed in an employment to the nature of which the injury was due’, attention must be directed not to whether the employment then engaged in actually caused the injury but whether the ‘tendencies, incidents or characteristics’ of that employment were of a type which could give rise to the injury in fact suffered .” (emphasis added)
CIC Workers Compensation (NSW) Ltd v Kellogg (Australia) Pty Ltd
21 Section 151AB was again considered by the Court in Kellogg. In that case, the plaintiff’s only employment which exposed him to asbestos was with Kellogg (Australia) between 1970 and the early 1990s. The plaintiff contracted mesothelioma and brought proceedings for damages.
22 There was ample evidence in that case of direct exposure to asbestos up until 1984. That was sufficient to found the plaintiff’s claim against Kelloggs. From about 1984, the plaintiff’s work tasks no longer brought him into direct contact with asbestos, although there was still asbestos remaining on the premises, which the plaintiff was required to walk through during the course of his employment. The asbestos was gradually being removed from the workplace as part of the upgrade of the Kelloggs factory.
23 Kelloggs had insurance with a number of different insurers over the period of the worker’s employment. Having regard to the findings of facts made by the trial judge, the argument on the appeal in that case was directed to the liability of two insurers: NEM, who was the insurer in the period up until 1985 and the appellant CIC, who was the insurer on risk from 1 July 1988 to 30 June 1992. CIC contended that s 151AB was directed to the actual circumstances of employment, that is the employment tasks performed by the worker, and not to the general conditions in the work place.
24 Priestley JA rejected that contention holding at 427 that:
“[A]n employee was within the requirements of [s151AB] if in the course of carrying out the employment the employee was in fact exposed to risk because of the employment, employment for this purpose embracing not only the actual work tasks performed by the employee, but also those of the employee’s movements through the employer’s premises in the course of employment which exposed the employee to risk of inhalation of asbestos particles .” (emphasis added)
25 His Honour considered that this construction was either required by Alcan or fitted more readily with the construction given to the section in that case.
26 The decision in Kellogg must, of course be read in the context of its own facts. CIC may have been able to make good its submission that it was not liable to indemnify Kelloggs had it been able to establish that, because of protective measures it had taken, the plaintiff’s movements around the workplace did not expose him to the risk of inhalation of asbestos. However, the trial judge’s findings of fact did not support that conclusion.
MMI Insurance Compensation (NSW) Ltd v Baker & Ors
27 Gleeson CJ next considered the application of s 151AB in Baker. In that case, the worker sued his employer for hearing loss caused by exposure to noise in the course of his employment. Although the worker remained in the same employment until 1990, he confined his claim to injury sustained prior to 30 June 1987, so as to preserve his common law rights to damages. Amendments to the Act in 1987 and 1989 had altered the rights of workers to claim both.
28 Gleeson CJ (Meagher and Powell JJA agreeing) described the purpose of s 151AB at 293 as being:29 As the plaintiff had confined his claim to the period prior to 30 June 1987, during which time there was only one insurer, s 151AB had no application. Baker therefore has little to say in relation to the case under appeal.
“[r]elated to a case where there are two or more policies of insurance under which an employer is contractually entitled to indemnity in respect of damages for which a plaintiff sues .” (emphasis added)
FAI Traders Insurance Co Ltd v HIH Winterthur Workers Compensation (NSW) Pty Ltd
30 The last case to which the Court was referred was HIH. That case also involved a deafness claim confined to the period prior to 30 June 1987, although the plaintiff had continued in a noisy employment with the same employer after that date. The appellant, who was the insurer on risk for the period 1 September 1986 to 30 June 1987, was held liable to indemnify the employer. On the appeal, the appellant sought to have the respondent, who was on risk for the period 30 June 1995 to the date of hearing, made liable to indemnify the employer.
31 Handley JA (Fitzgerald JA in a separate judgment and Sheppard AJA. agreeing) held that the case was governed directly by the decision of the Court in Baker. His Honour added at 261:32 The construction of s 151AB has, in our opinion, been decided by this Court in Alcan. Kellogg is relevant to this case as it defines employment so as to extend beyond merely the work tasks performed. However, to the extent that Baker and HIH deal with claims made in artificially confined periods, they do not apply to this case.
Conclusion on the Case Law
“If the plaintiff had persisted in his claim to recover damages for industrial deafness caused by his noise exposure after 30 June 1987, another insurer may have become liable for the whole of those damages. However in all probability the plaintiff would not have recovered any damages for his noise exposure after 30 June 1987 because of the restrictions in Div 3 of Pt 5 of the Act: see s 151U(1) and Div 3. If so the only damages awarded would have been for the period up to 30 June 1987 and the appellant would have been the insurer liable.”
33 The issues on the appeal can thus be stated as follows: (i) whether it was open to his Honour to make the findings he did on the evidence and if it was open to his Honour to make the findings; and (ii) how the principles stated in Alcan apply to the facts as found by the trial judge.
Issues on the Appeal
34 The trial judge held:
Findings of the trial judge
(i) that s 151AB required proof, upon the balance of probabilities, of when the worker last worked in an atmosphere where asbestos fibres were present;
(ii) the quantity of the asbestos inhaled was irrelevant because “all exposure [to asbestos] is relevant in the aetiology of the disease of mesothelioma” . (In making this finding his Honour was apparently drawing on his experience as a member of a specialist tribunal: see Bryer v Metropolitan Water Sewerage and Drainage Board (1939) 39 SR (NSW) 321 at 330; R v City of Westminster Assessment Committee [1941] 1 KB 53 at 69.);
(iii) the plaintiff’s work took him throughout the premises where he was in the presence of asbestos insulation and lagging;
(iv) the plaintiff was exposed to the inhalation of dust dislodged by the dismantling of pipe ducts and vessels;
(v) “these two circumstances [ in (iii) and (iv)] raised the possibility that he [the plaintiff] may have been exposed to inhalation of asbestos fibre in circumstances he does not recall” ;
(vi) however, there was insufficient evidence to support a finding that upon the balance of probabilities, the plaintiff was actually exposed to the inhalation of asbestos between December 1986 and 1993. His Honour commented:
“If [the plaintiff] had cause to believe that one of the sources was asbestos it is improbable that he would not have noted that fact. Further, there is no evidence that these pipes and vessels dismantled overhead were lagged at all let alone with asbestos.”
35 His Honour repeated his conclusion that there was no evidence of exposure after December 1986 and that any exposure after that date was “speculative” and found, on the evidence of Dr Zwi, that the “limited exposure at the Kelloggs factory in October and December 1986 was of the nature to which mesothelioma may be due”.
36 Dr Zwi’s evidence upon which his Honour relied was that:
“[The plaintiff] appears to have acknowledged that his exposure to asbestos at Kellogg’s was restricted to three incidents, the total duration of which was measured in hours rather than days. If this is correct, the risk of developing mesothelioma as a result of this exposure would be minimal, though it cannot be entirely excluded.
… Based on Australian records it has been calculated that only 1.8% of cases of mesothelioma have a latent period less than ten years, after the first exposure to asbestos and only 2.8% of cases of mesothelioma have a latent period … less than ten years after a second exposure. In other words, the likelihood that [the plaintiff’s] mesothelioma was due to exposure to asbestos at Kellogg’s was small if it is regarded as the only exposure and very slightly larger if it is regarded as additional to the exposure from 1966 to 1969 at Torrens Island Power Station.”
37 In his reasons for judgment, the trial judge approached the resolution of the issue before him, using the language of “actual exposure”. That is not the test required by s 151AB(1)(a). What is required is that the worker be exposed to a risk of contracting the disease: see Alcan. Notwithstanding that we consider that the language of the trial judge is not consistent with the proper test as postulated in Alcan, we do not consider that his Honour has erred in his approach. On the facts relating to the exposure at the Kelloggs factory, it would be impossible, or virtually impossible, to prove that a person was exposed to the inhalation of asbestos. Rather, and we think this is what his Honour meant in his finding, the plaintiff was exposed to the risk of inhalation of asbestos on the two occasions in 1986 of which he gave evidence, but there was insufficient evidence to support a finding that he was exposed to the risk of inhalation of asbestos on any other occasion.
38 In our opinion this evidence was sufficient to support his Honour’s finding that the appellant was the insurer on risk for the purposes of s 151AB. It was not necessary for the purposes of the section for it to be established that the exposure to asbestos in December 1986 was a cause of the plaintiff’s mesothelioma. All that had to be established was that his employment at this time was, to use the words of Gleeson CJ in Alcan at 177:39 Although the risk may have been very low, it was still a risk. Accordingly, we have concluded that the appeal should be dismissed with costs.
“…engagement in a form of activity which exposed him to a risk of a disease of such a nature as to be contracted by a gradual process.”
The Cross-Appeal
40 Our conclusion on the appeal makes it unnecessary to deal with the issues raised by TGI’s protective cross-claim. We should state however that his Honour’s findings of fact do not support a finding that any of the other insurers were liable under s 151AB.
41 There remains for determination TGI’s cross-appeal against the trial judge’s rejection of its claim for indemnity costs of the cross-claim proceedings. It will be recalled that TGI was the insurer on risk for the period 1966-1969, being the period upon which his Honour fixed to determine ABB’s liability to the plaintiff. The plaintiff’s claim encompassed the period up until 1993, although it became apparent from his evidence at trial that the last occasion of exposure was December 1986.
42 TGI’s claim for indemnity costs was based upon approaches it had made to ABB prior to the cross-claim proceedings that it be let out of those proceedings at an early stage on the basis that it would meet its own costs to that point. The approaches were contained in letters dated 12 and 14 August 1996. In its first letter it said:43 It repeated its claim in the second letter:
“It seems to us that the Plaintiff’s allegation will be that his exposure occurred until the date on which he discontinued employment with your client in 1993. As such, we consider that Section 151AB of the Workers Compensation Act 1987 (NSW) would operate to place responsibility to indemnify your client on the insurer then on risk, being MMI.”
44 The trial judge rejected the application for indemnity costs. After ordering the appellant to indemnify ABB in respect of damages and costs recovered by the plaintiff against ABB, and after ordering the appellant to pay “the costs of all parties upon the issue of insurance on a party-party basis”, he said:
“Please note that our client relies upon the provisions of Section 151AB … which, in our view, clearly imposes responsibility to indemnify your client upon the insurer last on risk as at the date of an exposure to asbestos dusk and fibre. The Plaintiff alleges that his exposure extended for many years subsequent to the end of our client’s relevant period of risk (that is in 1969). Indeed we understand that documents in your possession confirm exposure at least during a later period of employment during which GIO was on risk. As such, our client has formed the view that Section 151AB will operate as practically a total defence to your client’s claim against our client.
However, our client is prepared to meet its own costs incurred to date in the event that your client is prepared to consent to a Judgment being entered in favour of our client forthwith.”
“TGI Australia Limited, whose costs are to be borne pursuant to the above order by GIO General Limited, seeks indemnity costs pursuant to a Calderbank letter directed to the solicitors for ABB on 14 August 1996 in which the solicitors for the cross-claimant were invited to consent to a judgment for that insurer.
The plaintiff when he gave evidence did resile significantly from portions of his evidence and he succeeds in the present claim upon significantly limited exposure.
In the circumstances when all later insurers denied, and one would have thought on instructions and for good cause, liability to indemnify, I do not regard the actions of the solicitors for ABB, in declining to accept the Calderbank offer as unreasonable. I decline to make such an order.”
45 The point made on the cross-appeal was that as TGI had offered to compromise its claim at an early point on terms “more reasonable than were ultimately achieved” it was thus entitled to indemnity costs.
46 The decision of the trial judge on costs was a discretionary decision. No error of any of the kinds attracting appellate intervention against discretionary decisions was identified. Accordingly, this part of the cross-appeal should not be upheld.
47 As practically no additional time during the hearing of the appeal was spent on the cross-appeal, we consider there should be no order as to the costs of the cross-appeal.
48 The orders of the Court are:
(i) Appeal dismissed;(ii) Appellant to pay the costs of the respondents;
(iii) Cross-appeal dismissed;
(iv) No order as to costs on the cross-appeal.
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