McNeil v Seltsam Pty Ltd

[2006] HCATrans 474

[2006] HCATrans 474

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S246 of 2006

B e t w e e n -

ROBERT ALBAN McNEILL

Applicant

and

SELTSAM PTY LIMITED

Respondent

Application for special leave to appeal

GLEESON CJ
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 1 SEPTEMBER 2006, AT 11.53 AM

Copyright in the High Court of Australia

MR S.J. GAGELER, SC:   If the Court pleases, I appear with MR A.L. McSPEDDEN for the applicant.  (instructed by Turner Freeman)

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR T.G.R. PARKER, SC, for the respondent.  (instructed by Makinson d’Apice)

GLEESON CJ:   Yes, Mr Gageler.

MR GAGELER:   We have at page 153 of the application book at line 20 extracted the statement of Justice McHugh in Graham Barclay Oysters.  What his Honour said was that:

“The duty of care owed by a manufacturer or producer to a consumer is a duty to take reasonable care to avoid injury to the consumer.

His Honour there referenced Donoghue v Stevenson.  That is of course the narrow ratio, the actual holding in Donoghue v Stevenson.  His Honour went on to say:

To formulate the duty in more specific terms invites error because it is likely to mix a question of law (whether a duty exists) with a question of fact (whether a breach has occurred).”

It is precisely that error that was made and then compounded by the Court of Appeal in the present case.  The error of the Court of Appeal was really this.  It was to take the class of consumers of the relevant product, that is, the class of users and intended users of asbestos cement sheets, and then to divide that class into two:  users in respect of whom there was a known risk, high intensity users, to use the language of the judgment, and users in respect of whom the risk was unknown, that is, not that the risk was thought to be non‑existent, but simply that the risk was not known – they are described in the judgment as low intensity users – and then to say in respect of that subclass of low intensity users, because the risk was unknown in that sense, it was not foreseeable and there was no duty of care.  Now, that structure of reasoning your Honours can see in the judgment of ‑ ‑ ‑

CALLINAN CJ:   Is that unknown or slight, unknown risk or slight risk?

MR GAGELER:   Unknown.

CALLINAN CJ:   Unknown.

MR GAGELER:   I will show your Honour the relevant finding in just a moment, but that basic structure of reasoning which, in our submission, is flawed, your Honours see beginning at page 98 at about line 30.  That is where one finds the erroneous division of the class of consumers or users into what is seen to be the relevant subclass into which this particular plaintiff falls.  That is the beginning of the error that is the slide to which Justice McHugh was referring in Graham Barclay Oysters.  Then one finds on the next page, page 99, this concept of known risks being introduced and then analysed over a number of pages, leading ultimately to the conclusion that one sees at page 126.  There is a bit of a slide in what appears at page 126, and it is too much to read, but at line 15:

The conclusion that risk of injury to the respondent, or to a person in the respondent’s position, was reasonably foreseeable is not a conclusion which could be reached by reasonable persons finding the facts, on the material which the Trial Judge considered.  The concessions attributed to Mr Pickford do not add anything of substance –

Now, the concessions attributed to Mr Pickford are those which were not disturbed by the Court of Appeal, but were recorded by the trial judge at pages 50 through to 52.  It is those concessions which were accepted by the trial judge as summarising the effect of the evidence generally and founding the duty of care which, in our submission, he correctly found to exist.

GLEESON CJ:   Well, I presume it is paragraph (i).

MR GAGELER:   It is paragraph (i):

No one knew the level of fibre that could cause asbestos diseases.

Combined, your Honour, in particular with paragraphs (l) and (m), that is, once the sheets left the factory one did not know precisely how they would be used, and that flows on to paragraph (m), but what is absolutely clear is that the use that was being made of this particular product by this particular plaintiff was within the scope of the intended uses of this particular product.  It was being sold in a kit form for use, amongst others, by home handymen. 

Now, your Honours, that is not an isolated finding at paragraph (i).  It is well enough supported by some of the other evidence.  In particular, if your Honours turn back to page 33 at the bottom of the page, one sees an extract from the British Medical Journal in 1960 – and I understand that this was actually part of the editorial in that journal – and look at line 30 on page 33:

asbestos dust is most toxic, and the amount needed to cause asbestosis is not known, so constant vigilance and new preventive methods are needed if this disease is to be abolished.

Now, in circumstances, your Honours, where one has an inherently dangerous product in the sense that it is known to be causative of disease at high levels and where it is simply not known whether or not it is causative of disease at low levels, to divide the class of intended users, the class of consumers, in a Donoghue v Stevenson parlance into high users and low users, in our submission, is artificial and, indeed, putting it another way, to disturb the finding of the duty made by the trial judge, as he did at the top of page 52 on the basis of those facts, is an error on the part of the Court of Appeal, in our submission.

GLEESON CJ:   Mr Gageler, it is difficult to believe that this is the first case about home handymen and asbestos fibres.

MR GAGELER:   It is.

GLEESON CJ:   Asbestos companies all around the world have been driven into liquidation by claims against them.

MR GAGELER:   Or into chapter whatever it is.

GLEESON CJ:   Yes, chapter whatever it is.

MR GAGELER:   Driven to make arrangements.  Your Honour, I think it is correct to say it is the first one in Australia to deal with home handymen in this period, in the early 1960s.  Apparently within this jurisdiction the chronology gets divided up.

HEYDON J:   There are later ones.

MR GAGELER:   But this is the first one to go back to the early 1960s, as I understand.

GLEESON CJ:   It is very surprising if Judge O’Meally had not had a home handyman somewhere along the line.

MR GAGELER:   Look, I cannot tell your Honours, but there is a case I wanted to mention.  It is mentioned in a footnote in our submissions.  It goes fairly close and it was a case of Julia Farr Services.  It is not actually a user of the products.  This was a nurse who during a later period was exposed to asbestos dust in the course of her duties as a nurse, not as an industrial user of fibro products.  There was an argument there that is similar to the argument that was put to and accepted by the Court of Appeal in the present case that because the risk to a person in her position was unknown, then the risk could not be foreseeable and therefore no duty of care to her.  That argument was rejected. 

Your Honours will see it was rejected by Chief Justice Spigelman at paragraph 2 of the Julia Farr judgment by reference to Wyong Shire Council v Shirt as frequently applied in New South Wales and particularly within this dust diseases jurisdiction.  He was agreeing with Justice Giles whose conclusion appears at page 181, paragraph 125.  Your Honours, part of our point is simply that to break up the class of consumers is itself erroneous.  Another part of our point is, having broken up the class of consumers, to say in respect of that subclass for which the risk was unknown there was no foreseeability in the Donoghue v Stevenson sense such as to give rise to a duty of care was itself erroneous.

GLEESON CJ:   It depends what you mean by “unknown”.  The word “unknown” might mean different things.

MR GAGELER:   That is why I tried to be fairly specific about it – unknown in the sense that it was not known whether or not exposure at that level would produce injury or could produce injury.  That is the sense.

GLEESON CJ:   But even among home handymen I presume there are various degrees of intensity of use.

MR GAGELER:   Of course, yes.  This was a case of a particularly low degree of intensity of use.  This man was a priest who over three Mondays, which were the days he obviously had off, helped his sister to build a garage.  So it was two or three hours over two or three days.  But in principle, in our submission, he fell within that class of end users who were intended to use the product and to whom the duty of care was owed and these questions about what labelling ought to have been placed on the product, if any, to deal with a person in his position are questions which go, if anything, to breach of the existence of the duty of care. 

So, your Honours, we say in respect of what I think I have described as the type of error identified by Justice McHugh in Graham Barclay Oysters, the Court of Appeal here has gone wrong and the approach is really just fundamentally inconsistent with Donoghue v Stevenson, Grant v Australian Knitting Mills and those other cases that have defined the duty of care in a product liability case in precisely the same terms as Justice McHugh defined it in that one sentence in Graham Barclay Oysters.

GLEESON CJ:   But the ultimate question is always the duty of care owed to the plaintiff, is it not?

MR GAGELER:   Well, it is always the duty of care owed to persons in the class within which the plaintiff falls.

GLEESON CJ:   Well, you ask that question for the purpose of deciding whether there was a duty of care owed to the plaintiff.

MR GAGELER:   I accept that, yes, and what I have put is by no means inconsistent.  So that is one fundamental error.  The other fundamental error is, even if one goes down that route, to take the case of an unknown risk within a continuum where at one end of the continuum the risk is known and to divide the continuum and say that in the case of that end of the continuum where the risk is unknown there was no duty of care is separately erroneous, in our submission.

GLEESON CJ:   Is it right to say that the decision of Justice Bryson turned ultimately upon the proposition that an examination of the evidence showed that it was not reasonably open to any fact finder to conclude that in the state of knowledge available in 1960 or 1961, whatever was the relevant time, it was not reasonably foreseeable that a person who had such a low level of exposure to this product as your client might be harmed by it?

MR GAGELER:   No.  That was the evidence of Professor Ferguson.  The evidence of Professor Ferguson was positively to the effect that during the early 1960s it could not be reasonably anticipated that the home handyman type low intensity user could develop a disease as a result of using asbestos products.  That approach of Professor Ferguson was specifically rejected by the trial judge and the Court of Appeal held that it was open to him to reject the evidence of Professor Ferguson.  So that positive position, no, was not the explanation of the reasoning of the Court of Appeal.  The reasoning of the Court of Appeal, as I have sought to show, was one that focused on known risks and said that in the absence of a known risk to the plaintiff ‑ ‑ ‑

GLEESON CJ:   That is the problem of ambiguity that I am having.  The reasoning really culminates in page 126, does it not?

MR GAGELER:   Yes, it does, and I did not read the entirety of that but, your Honour, look at the second sentence.  You see there is a slide.  So having said in the first sentence at the top of page 126 that there was no basis for concluding that there was a risk to low intensity persons, it is said:

Almost all the references to exposure relate to occupational exposure and to continuing situations of exposure –

and so on, and even those could vary significantly.  But having, in our submission, just wrongly divided the class of users to start with, where this goes wrong is then further to artificially draw a line between persons within what the evidence showed to be a continuum.  What the evidence showed and what the judge accepted was that there was mounting evidence at the end of the 1950s and in the early ‑ ‑ ‑

CALLINAN J:   I wanted to ask you about that.  Justice Bryson dealt extensively with the contemporary published material, did he not?

MR GAGELER:   Yes.

CALLINAN J:   Did he deal specifically with the material relied upon by the trial judge to which you drew our attention at the foot of page 33?  I will tell you why I ask that, Mr Gageler.  I have the impression by the reference to a factory that that paper may have been concerned with factory conditions.  Now, I note what you have said about it, the generalities of some of the statements, but I wonder whether it was directed in particular to a factory situation?

MR GAGELER:   I simply cannot tell your Honour that and I do not know if my learned friend can tell you whether it is actually referred to in Justice Bryson’s ‑ ‑ ‑

CALLINAN J:   Because he obviously made a close study of all the published material that was before the court.

MR GAGELER:   Yes, and, your Honours, what we have sought to say – and I am repeating myself – he did it for the wrong purpose.  He did it to look for these things called known risks.

CALLINAN J:   Well, that may or may not be right.  It might be first necessary to identify to whom the duty is owed and in respect of whom foreseeability should exist.  I do not know whether you can say it is irrelevant in considering those questions first to have identified possible classes.  I do not know that that is necessarily wrong.

MR GAGELER:   Well, I sought to show that it is just not the way product liability cases have traditionally been approached and this is ‑ ‑ ‑

CALLINAN J:   Well, they are just a species of tort, Mr Gageler, a product liability case.

MR GAGELER:   Of course, but an incredibly well‑established and well‑defined category of duty of care, your Honour.

CALLINAN J:   Yes, except sometimes when subcategories of tort cases are dealt with they develop their own lore sometimes and there is a departure from general principle.

MR GAGELER:   And, your Honour, if this is to develop its own lore and to depart from the general principle, this is the first case to do it and, as I have sought to show, it is really very different from the approach that was taken by the Court of Appeal ‑ ‑ ‑

CALLINAN J:   Well, I must say, I have seen a bit of lore emanating from the Dust and Diseases Tribunal in my time on this Court.

MR GAGELER:   Well, your Honour, we want to go back to law.  That is our submissions, your Honour.

GLEESON CJ:   Thank you, Mr Gageler.  Yes, Mr Walker.

MR WALKER:   May it please your Honours.  Your Honours, the culmination of the factual findings in an appeal by way of rehearing at page 126 of the application book does indeed include a finding which was predicated on the thorough, I think its completely comprehensive, review of every one of the documents preceding the time in 1961 which is relevant to the foreseeability question in relation to the liability held against my client at trial.  Your Honours will see that in Justice Bryson’s reasons in paragraph 101 on page 126 at about line 12 or so there is a reference to the last of the publications reviewed by the trial judge, those – there are two – of Dr Wagner and others, and that is then a:

reference to sufferers from asbestosis or carcinoma other than persons occupationally exposed to asbestos.

The record does not enable one to say negatively that those studies had nothing to do with people such as the unfortunate plaintiff in this case.  However, there is no suggestion that it did – none at all.  What one can go back to in order to understand the context is in page 33 of the application book when one sees the 1959 Wagner and others.  It is the South African studies.  Your Honours would probably know that in any event South Africa, like Canada and Australia, was a source of asbestos.  At the top of page 33, the conclusion in a paper which in paragraph 66 on page 32 the trial judge had described as including the study of mesothelioma sufferers who were not employed in mines, the conclusion of these researches in 1959 in relation to what might be called industrial health or hygiene concerns was as follows:

The problem requiring most urgent investigations is the high incidence of mesotheliomas on the Cape asbestos fields, where a very serious hazard may exist.

So it is mining of the raw material and persons who obviously come into contact with the detritus generated by that approach from which one would infer the 1959 paper derived its concerns.  The 1960 paper by Wagner and others, we know very little more than what one finds in paragraph – that is, we know no more in this application book than what is found at paragraph 67 on page 33 of the application book, which again is a reference to the North Western Cape Province which quite plainly refers to, one would have thought by inference, the same asbestos fields.  It is the same researchers.  Again, we do not have any description of who these people “who did not work in the asbestos industry” may have been, but there is no suggestion whatever, none tenable ever put forward, that they included people with exposures in the slightest degree comparable with that of a class to which the plaintiff might sensibly be described as belonging.

Now, it is in light of all of that, and quite specifically by reference to those papers, that Justice Bryson for the court reached the factual conclusion at page 126.  That, in our submission, one way or the other, would have to be confronted in this Court were special leave to be granted on the grounds and to raise the issues that my learned friend has referred to because, whether or not the would be appellant wants to argue that if you do not know of a risk you still must guard against it, we would be entitled to be heard for the proposition that this is evidence that shows there was a state of the art, it has been reviewed by the courts below, and it is a state of the art that did not show a risk available to be known for persons in that class of exposure.

GLEESON CJ:   It is very surprising, Mr Walker, that in 2006 there is still litigation about what was known concerning the danger of asbestos in 1960 or 1961.  People have been litigating about the risks of asbestos for decades now.

MR WALKER:   But it is obvious, your Honour, from the record of this trial and this appeal that your Honours have seen that there was not either a judicial finding available to be used or its material to be used by the extended powers of the Dust and Diseases Tribunal or otherwise which concluded this matter of fact.  This was a contested issue of fact which in the Court of Appeal we succeeded upon because the state of the art proceeds incrementally.

GLEESON CJ:   As I understand it, at some stage it came to be known that asbestos might be dangerous just to people who sleep in a bedroom that has asbestos in the ceiling.

MR WALKER:   Whether one talks about theories of no observable effect, thresholds being zero, or one talks about the single molecule theory, the single fibre theory, your Honour, those are latter day developments and they may be more a matter of courtroom than of laboratory, which would require examination in cases where it was still open as a genuine factual dispute.  In this case there was a genuine factual dispute about the state of the art.  That which may have come in after, say, 1965 was not relevant in this case.

Now, the ambiguity that the Chief Justice referred to in rasing some matters with my learned friend is one upon which there needs to be close attention.  The summary of so‑called concessions by the unfortunate Mr Pickford which is contained in paragraph 108 of the trial judge’s reasons at pages 50 to 52 of the application book does indeed clue the “no one knew” concession to which my learned friend drew attention at line 21 on page 52.

That no one knew does not anywhere in the evidence rise, for example, to the more precise description that it was not known but it was suspected that it was understood there was a body of knowledge, grossly imperfect, which indicated a risk.  That, after all, is a common sense jury style approach to a matter of risk.  It will never be an answer by a defendant to say, “Well, there wasn’t definitive…..therefore there was no risk”.  Risk will include matters where the science indicates the possibility too serious to be ignored or requiring urgent research but too serious to be treated as not existing, and that is a state of art factual question.

There is no finding to that effect here.  There was no material by which it could be said, though the science suggested at the time – it has all been reviewed in the reasons – the risk came from the heavy exposures of actually dealing with asbestos either in a mine or in a factory, the considerably lesser but nonetheless considerable and continuous exposure that came from working with product including asbestos in such a way as to free it, those were the classes – they may be more than two, but they are the two broad classes – about which the state of the art had spoken.

Now, in effect, our learned friends wish to put an argument that somehow as a combination legal and factual proposition that where the evidence is left in that state all other classes, whether it be one or more, which might be supposed of people who could be theorised as coming into contact with that substance are treated as classes which include individuals to which there will be a duty of care actionable many years later notwithstanding the state of art has moved on radically thereafter.

Now, in our submission, that defies the necessary connection between imposing a duty of care and considering the reasonableness of a response to that, a response which has to be in advance of injury, not simply by paying damages when injury has been suffered.  A response, therefore, requires sufficient knowledge of exactly the same kind which underlies the common law factually based essentially jury question about foreseeability.

Now, if something is not foreseeable for the reasons that the Court of Appeal has identified, namely, the state of the art did not indicate it as foreseeable, then it is, in our submission, a travesty to require after the event somebody to be held liable because they failed to take a reasonable response to something of which they were not aware.

Now, as your Honours have seen in any event, because of that essentially factual question, there are possibly two contention points which would need to be dealt with before the dispute between these parties could be settled were it to reach this Court in any event, including, of course, what was the content of a reasonable response, given this state of the art and particularly bearing in mind that the known risk to miners, industrial users and occupational exposure for people working with asbestos products was a risk which might be dealt with by any number of other possibilities and certainly no one would have regarded as adequately dealt with by a simple skull and crossbones warning on a manufactured product, which in effect is what the plaintiff here is complaining he did not receive.

So, for those reasons, there is a mingling, a confusion, of propositions about what principles of negligence require in terms of foreseeability, in terms of reasonable response, in terms of what is now called in this Court, we respectfully submit, the content or scope of a duty, what your Honours Justices Callinan and Heydon referred to as identifying what the generally stated duty of care included among its obligations imposed in order to comply with that duty in Vairy.  The commingling of all of that, in our submission, does not produce this as a suitable vehicle for the grant of special leave because it is at beginning and end a finding of fact.  What was the state of art?  What was reasonably foreseeable bearing in mind that state of art? 

The closest our learned friends offer for a prospect of factual success in this Court on that matter can be seen from how I started today as being a very tenuous possibility of a 1959/1960 paper which was not confined to the people who actually mined the stuff, without there being any finding in his favour that the people studied by Dr Wagner and colleagues bore any resemblance whatever – epidemiologically, socially or as a matter of common sense in a jury’s mind – to the position of the unfortunate plaintiff here.

For those reasons, in our submission, your Honours, this case does not present an opportunity to review anything that needs to be reviewed as a matter of doctrine, nor is there an individual injustice that requires to be attended to in any visitorial jurisdiction and, for those reasons, they should be refused.  May it please the Court.

GLEESON CJ:   Yes, Mr Gageler.

MR GAGELER:   Your Honours, this is not an appeal by way of rehearing.  It was an appeal on a question of law only from the Dust Diseases Tribunal.

GLEESON CJ:   Yes, but the question of law that was ultimately identified was the question whether there was any evidence on which a particular conclusion could be reached.

MR GAGELER:   Yes.  I mentioned the evidence of Professor Ferguson and I should have given greater emphasis to that.  At page 42 your Honours will see what Professor Ferguson was saying.  He was saying positively at about line 15 on page 42 that the only concern in the early 1960s was with industrial users.  That proposition, that is, the state of the art was that there was only a concern with industrial users, was that which was rejected by the judge at first instance at page 48, line 20 and the rejection of Professor Ferguson’s evidence by the judge at first instance was said by Justice Bryson in the appeal at page 125 at about line 18 to disclose no error of law.

So that positive state of the art evidence is entirely put to one side and was put to one side by his Honour when he went on to reach those critical conclusions at page 126 and he did so accepting the findings of fact that the trial judge had made back at page 51 on the basis of the concessions of Mr Pickford.  Now, critically, what are they?  One, that this product was known to cause disease; two, it was not known at what level of exposure to this product disease would be caused; and three, it was not known once the product left the factory just how much exposure any particular individual would have.  Those three facts, in our submission, are sufficient to give rise to the duty of care which the trial judge found.

GLEESON CJ:   You would have to have a fourth proposition, would you not?  It was known that there was a risk, unquantified, unquantifiable, of injury to someone who had any level of exposure.

MR GAGELER:   No, I do not need that.  That is the problem with the known risk analysis.  That is the heading in his Honour’s judgment and it is just, in our submission, flawed analysis to introduce that additional element of known risk.  A suspected risk or an inferred risk or a possible risk, to use the language of Shirt, is sufficient.

GLEESON CJ:   To put it more elaborately, risk of a kind which reasonableness says you should guard against.

MR GAGELER:   Exactly, but those three facts that I have stated and restated, your Honours, in our submission, is sufficient to give rise to a conclusion which is ultimately a conclusion of fact, albeit one that becomes a conclusion of law when applied to the duty of care, that the trial judge reached.

GLEESON CJ:   Was the breach found to consist in not putting a warning?

MR GAGELER:   Correct.

GLEESON CJ:   Is not the logic of your argument that if there was the risk of which you speak the product should simply have been taken off the market?

MR GAGELER:   Well, there are different ways – of course the product liability cases say there are different ways in which it can be dealt with.  One is by a warning and another is by withdrawal from sale.

GLEESON CJ:   But if the risk is unknown, if there is an unknown risk in the sense in which you use that term, what sort of a warning could you reasonably put?

MR GAGELER:   Well, what the trial judge found was at page 55.

GLEESON CJ:   And how would you know what to warn against?

MR GAGELER:   Breathing in the dust.  I mean, it is not too hard.

GLEESON CJ:   Well, you breathe in the dust if you sleep in the bedroom.

MR GAGELER:   We are talking about the users of the product, the persons who will be drilling it, sawing it, planing it.  It is not too much trouble, and his Honour found this at ‑ ‑ ‑

CALLINAN J:   Or anyone in the vicinity.

MR GAGELER:   Well, yes.  It is not a big deal to ‑ ‑ ‑

GLEESON CJ:   I perhaps should not alarm you by telling you what is in mind for this building over the next few years, Mr Gageler.

MR GAGELER:   I might stay away, your Honour.  But his Honour found, and it was accepted by the Court of Appeal that it was open to his Honour to find, that a simple label warning people against breathing in the dust could have occurred and, indeed, these products are, in any event, stamped with the manufacturer’s label.  On that label there should have been a

warning about breathing in the dust – as simple as that.  If the Court pleases, those are our submissions.

GLEESON CJ:   Thank you, Mr Gageler.  We will adjourn for a short time to consider the course that we will take in this matter.

AT 12.30 PM SHORT ADJOURNMENT

UPON RESUMING AT 12.33 PM:

GLEESON CJ:   The leading judgment in the Court of Appeal in this matter was that of Justice Bryson.  After a comprehensive review of the evidence about the state of knowledge concerning risk at the relevant time, Justice Bryson came to the following conclusion upon which his reasoning turned:

The conclusion that risk of injury to the respondent, or to a person in the respondent’s position, was reasonably foreseeable is not a conclusion which could be reached by reasonable persons finding the facts, on the material which the Trial Judge considered.

We think there are insufficient prospects of success of an appeal to warrant a grant of special leave and the application is dismissed with costs.

We will adjourn for a short time to reconstitute.

AT 12.34 PM THE MATTER WAS CONCLUDED