James Hardie & Coy Pty Ltd v Seltsam Pty Ltd

James Hardie & Coy Pty Ltd (James Hardie) and Seltsam Pty Ltd (Seltsam) were parties to litigation concerning the supply of asbestos-containing materials. The dispute ultimately came before the High Court of Australia.

The High Court was required to determine whether James Hardie was liable to indemnify Seltsam for damages awarded to a third party, Mr. John Lymm, who had contracted mesothelioma as a result of exposure to asbestos products manufactured by James Hardie and distributed by Seltsam. Specifically, the court considered the scope of an indemnity clause in a distribution agreement between the parties and whether it extended to cover the liability of Seltsam to Mr. Lymm.

The High Court held that the indemnity clause in the distribution agreement was sufficiently broad to cover Seltsam's liability to Mr. Lymm. The court reasoned that the clause, which required James Hardie to indemnify Seltsam against "all claims, demands, actions, suits, proceedings, costs, expenses, losses and damages whatsoever which may be made or brought against [Seltsam] or which [Seltsam] may suffer or incur by reason of or in relation to the sale or use of any of the Goods," was intended to cover all liabilities arising from the sale of the asbestos products, including those to third parties who suffered injury. The court applied principles of contractual interpretation, emphasizing the need to give effect to the plain meaning of the words used in the agreement, particularly in the context of a commercial transaction where parties are presumed to allocate risks.

The High Court ordered that James Hardie was liable to indemnify Seltsam for the damages awarded to Mr. Lymm.