PHR P/L v Bradford Insulation (SA) P/L - [2017] SADC 80

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
PHR P/L v BRADFORD INSULATION (SA) P/L
[2017] SADC 80
Judgment of His Honour Judge Gilchrist
28 July 2017
CONTRACTS
BREACH OF IMPLIED TERM - TORTS - NEGLIGENCE - ASBESTOS - DUTY OF CARE
CONTRIBUTION BETWEEN JOINT TORTFEASORS
A former employee of the defendant PHR recovered damages by consent against it in the sum of $240,000 all inclusive. In these proceedings PHR alleges that the third party Bradford Insulation (SA) Pty Ltd supplied asbestos millboard to it and that the former employee was exposed to in the course of his employment with PHR and that this exposure caused his mesothelioma.
Whether PHR has established that Bradford Insulation (SA) supplied it with asbestos millboard. Held: That it has. Whether the asbestos millboard was of merchantable quality for the purposes of the Sale of Goods Act. Held that it was such that the action for breach of contract fails.
Whether PHR has established that Bradford Insulation (SA) was liable in tort to the former employee. Held: That it has.
Apportionment is based on a comparison of the respective culpability and of the relative importance of the tortious acts in causing the employee’s damage.
Held: That PHR and Bradford Insulation (SA) were equally responsible and their culpability was the same. Held: That PHR is entitled to 50% contribution.
Further consideration of final orders, costs and interest adjourned.
Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 ss 6(5) and (6); Dust Diseases Act 2005 ss 3, 4 and 8; Sale of Goods Act 1895 s 14; Limitation of Actions Act 1936 ss 35 and 48(2) , referred to.
Astley v Austrust Ltd (1999) 197 CLR 1; Pfeiffer v Amaca Ltd and Others [2016] SADC 101; Williams (As Legal Personal Representative of the Estate of the late Russell John Charles Williams) & Another v BI Contracting Pty Ltd & Ors [2004] NSWDDT 19; Strikwerda v BI (Contracting) Pty Ltd and PHR Pty Ltd [ [2005] NSWCA 304; Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd [1999] NSWDDT 5; Teheran-Europe Co Ltd v ST Belton (Tractors) Ltd [1968] 2 QB 545; BI (Contracting) Pty Limited v University of Adelaide [2008] NSWCA 210; Jones v Dunkel (1959) 101 CLR 298; Oliver v ACN 007 870 484 Pty Ltd & Ors [2017] SADC 52; Podrebersek v Australian Iron and Steel Pty Limited [1985] HCA 34; 59 ALJR 49, considered.

PHR P/L v BRADFORD INSULATION (SA) P/L
[2017] SADC 80

This is an action for contribution or indemnity following the settlement of a claim for damages for personal injury as between the plaintiff, Mr Vivian Edwards, and the defendants, BI (Contracting) Pty Ltd and PHR Pty Ltd.
Mr Edwards issued proceedings in this Court for damages for personal injury. He alleged that between 1967 and 1969 he was employed by BI (Contracting) and that between 1970 and the early 1980s he was employed by PHR. He alleged that in connection with both employments, BI (Contracting) and PHR negligently exposed him to asbestos; that as a result of that exposure he developed mesothelioma; and that as a consequence he had suffered injury, loss and damage.
On 18 June 2014 by consent, judgment was entered in those proceedings in favour of Mr Edwards in the sum of $60,000, all inclusive, as against BI (Contracting) and in the sum of $240,000, all inclusive, as against PHR.
PHR issued third party proceedings against Bradford Insulation (SA) Pty Ltd (BISA) and through this action seeks to recover from it the $240,000 it paid to Mr Edwards, plus the costs of defending that action or alternatively it seeks contribution.
It has based those claims on an alleged breach of contract and in tort.
Underpinning both claims is its contention that BISA supplied the asbestos that Mr Edwards was exposed to in the course of his employment with it.
In connection with its action based in contract, PHR contends that BISA supplied that asbestos pursuant to a contract and that the contract contained the implied terms provided for by s 14 of the Sale of Goods Act 1895, which provides as follows:
14—Implied conditions as to quality or fitness
Subject to the provisions of this Act, and of any Statute in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:
(a) where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply (whether he be the manufacturer or not), there is an implied condition that the goods shall be reasonably fit for such purpose: Provided that in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as to its fitness for any particular purpose;
(b)where goods are bought by description from a seller who deals in goods of that description (whether he be the manufacturer or not), there is an implied condition that the goods shall be of merchantable quality: Provided that if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed;
(c) an implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade;
(d) an express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith.
It contends that BISA breached its implied contractual obligation to provide goods that were fit for their purpose and were of merchantable quality.
The reason why PHR has pursued an action in contract is because if successful, despite its own admitted negligence and responsibility for Mr Edwards’ harm, no issue of apportionment will arise. This emerges from the judgment of the High Court in Astley v Austrust Ltd.[1] In that case the High Court held that on the proper construction of s 27A of the Wrongs Act 1936, being the predecessor to 6(5) and (6) of the Law Reform (Contributory Negligence and Apportionment of Liability) Act, it did not apply to contractual claims. The case concerned an action against solicitors founded in tort and contract, the essence of which was that the solicitors had breached their duty of care. There was a finding that the plaintiff was guilty of contributory negligence. The High Court held that although this could be relied upon to reduce the liability in connection with the action based in tort, it could not be relied upon in connection with the action based on the solicitors’ breach of their contractual obligation to exercise due care.
[1] [1999] HCA 6; (1999) 197 CLR 1.
In response to this decision, the Law Reform (Contributory Negligence and Apportionment of Liability) Act was amended. Section 4 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act extended the reach of the notion of apportionment to include a liability in damages for breach of a contractual duty of care. Whilst the amendment overcomes the immediate effect of Astley it did not extend the reach to apply an apportionment to any other actions based on contract. Accordingly, if PHR makes good its claim that BISA supplied it with the asbestos pursuant to a contract and in breach of the implied terms provided for by s 14 of the Sale of Goods Act 1895, no issue of apportionment will arise.
In connection with its action based on tort, PHR contends that Mr Edwards had a right of action against BISA in tort and that pursuant to ss 6(5) and (6) of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 it has a right to contribution of an amount that is fair and equitable having regard to the extent of its and BISA’s responsibility for the harm that Mr Edwards suffered.
PHR’s case
PHR’s case comprised of a tender book that included the affidavit and transcript of evidence of Mr Edwards, admissions made by BISA, oral evidence from Mr Bruce Harris, and evidence given in and findings made in other cases.
Mr Edwards
In his affidavit Mr Edwards described his work at PHR. He was employed there from 1 May 1969 to 20 March 1985. He said he was employed as a sheet metal worker and was involved in the manufacture of air conditioning and heating ducts. He worked mainly at PHR’s Kilburn factory. He said that most of the ducts for heating systems were insulated with thick rigid insulation sheets. He said that the panels near the heat banks, which were electric elements, were insulated with asbestos millboard. He said that he and his co-workers simply referred to the asbestos millboard as asbestos. He said that part of his job was to cut the millboard down to size. He said that he did this with a sharpened hacksaw blade. He said that he did this work for two or three days every two months. He said that each cut took a few minutes and released a lot of dust. He said that he was also present when other employees at PHR did this work. He cleaned the asbestos dust with a brush and scoop. He said that his overalls would become dusty as a result of this work. He described the millboard as “white-grey coloured rectangular sheets that each measured about eight foot by four foot. The millboard was about two inches thick.”[2] Mr Edwards tendered as part of his case a brochure of James Hardie insulation products which described millboard that was about half the size described by him in his affidavit. He also identified asbestos millboard sheets from Bells brochure.[3] He said that he did not know who supplied the asbestos. He said that he was made redundant in 1985.
[2] Ex PHR 3 at p 15.
[3] Bells was described in Pfeiffer v Amaca Ltd and Others [2016] SADC 101 at para 111, as a large commercial enterprise trading in asbestos.[3]
The admission
BISA admits that between 1970 and 1974 it supplied asbestos millboard to the market generally.
Mr Harris
Mr Harris is 77 years old. In about 1956 he commenced an apprenticeship with PHR as a plumber. He completed that apprenticeship and became a master plumber. At some point he became the contracts manager for PHR. He estimated this to have been in the early 1960s. Within a few years he rose to the position of manager of PHR. Over time he owned the company. He described PHR’s business as the designer, installer and commissioner of large industrial air conditioning units. He said that its range of work was extensive. He said: “It was a big outfit, and a very efficient outfit. We took it from rags to riches…”[4] He said that at one time it employed 250 or more people. He recalled Mr Edwards working for PHR. He confirmed that he worked as a sheet metal worker. He said that PHR used asbestos millboard during the time when Mr Edwards worked at PHR. He spoke of the wonderful association that PHR had with the Bradford Group. He said that representatives would visit PHR’s estimating department once every two weeks to help with PHR’s tendering for work. He said that Bradfords offered PHR with very generous credit terms. He said that PHR purchased all of the asbestos millboard that it used from Bradfords. He said that Bradfords supplied all products connected with insulation. He said that Bradfords at no stage provided PHR with any warnings about asbestos. He was adamant that had he known that asbestos was dangerous he would not have used it.
[4] Tr 8.
During his time at PHR Mr Harris was a member of the executive of the Air Conditioning and Mechanical Contractors’ Association of South Australia. It was put to him that as a result of this and in light of Industrial Awards that were in existence in mid 1970s that made safety provisions around asbestos, that he knew then of the risks of asbestos. He denied this.
Findings and evidence in other cases
In Williams (As Legal Personal Representative of the Estate of the late Russell John Charles Williams) & Another v BI Contracting Pty Ltd & Ors,[5] Mr Peter Snelling gave evidence. He identified himself as a civil engineer. He said that he commenced working for Bradford Insulating Contracting Pty Ltd in 1959. He said that he was its contracts manager. He said that he left that company in 1962 and became the manager of BI Spraying Pty Ltd and that he had the responsibility for spraying work. He said that he was responsible for the laggers and sheet metal work and the whole operation of BI Contracting. He said that when he first started working “there” (which I think means for Bradford Insulating Contracting Pty Ltd) he was given a book or pamphlet pointing out the dangers of asbestos and the need to wear masks.
[5] [2004] NSWDDT 19.
BISA’s case
BISA tendered a bundle of documents containing deeds and minutes relating to a partnership entered into between James Hardie & Coy Pty Ltd and Colonial Sugar Refining Company Ltd and Bradford Insulation Industries Pty Ltd.
The deed documents
The deed documents that BI tendered show that commencing on 24 September 1964, James Hardie, CSR and Bradford Insulation Industries agreed to form a partnership to be known as the Hardie BI Company to manufacture certain products in Australia and distribute them in Australia and elsewhere. Bradford Insulation Industries was appointed the “sole selling and distributing agent” of partnership products in Australia. The conduct, management and control of the partnership business was to be mutual. The deed provided that the general management and control of the partnership business would vest in a partnership committee which would “have full power and authority to do and authorise to be done all such acts, matters or things as might be done by the partners either jointly or severally in connection with the partnership business.” It was also agreed that James Hardie would have the day to day management of the partnership business, subject to the control and directions of the partners’ committee.
A subsequent deed shows that on 26 June 1974 the partnership was dissolved. The minutes of a meeting that took place on 8 July 1974 concerning the dissolution of that partnership establish that all outstanding stock was to be dumped.
The parties’ submissions
Mr Harms, counsel for PHR, contended that from BISA’s admission that between 1970 and 1974 it supplied asbestos millboard to the market generally, I could draw the inference that when Mr Harris spoke of being supplied with millboard by “Bradfords”, he was speaking of BISA. He submitted that I could rely upon BISA’s failure to call evidence that suggested otherwise, in drawing that inference.
He submitted that I should find that PHR purchased all of its asbestos millboard from BISA; that Mr Edwards was exposed to that millboard in the course of his employment; and that that exposure caused or contributed to his mesothelioma.
As to the claim based in contract, he submitted that in light of the toxic qualities of the asbestos millboard, I should find that it could not be used safely and that for that reason alone, it was not fit for its purpose nor was it of merchantable quality. He submitted that in the circumstances I should find that there was a breach of the implied term provided for the s 14 of the Sale of Goods Act.
Mr Harms conceded that for the purposes of an action based on breach of contract, the cause of action arises at the time of the breach, not the occurrence of the damage. Section 35 of the Limitation of Actions Act 1936 provides that save as otherwise provided by that Act, such actions must commence within six years next after the cause of action accrued and not after. Mr Harms accepted that PHR needs an extension of time to prosecute this claim. He submitted that it could rely upon s 48(2) of the Limitation of Actions Act to seek that extension of time, on the basis that facts material to the case against BISA did not become known to PHR until after the limitation period had expired, that being that Mr Edwards was suffering from mesothelioma. Next he said that in all the circumstances of the case, it is just to grant the extension of time.
In respect of the action based in tort, Mr Harms submitted that in apportioning liability, I should adopt the same approach that commended itself to the Dust Diseases Tribunal of New South Wales in Strikwerda v BI (Contracting) Pty Ltd and PHR Pty Ltd.[6] That case concerned a claim by a Mr Hans Strikwerda, who was employed by PHR between 1964 and 1968 as a pipe fitter welder. In that employment he was exposed to asbestos dust and fibre during the time when PHR was a sub-contractor engaged to do plumbing and air-conditioning work in connection with construction work being carried out at the Royal Adelaide Hospital. BI (Contracting) was also a sub-contractor at that site. It was engaged to spray asbestos material on beams and girders that were used in that construction work. Mr Strikwerda was exposed to the asbestos material that was sprayed by BI (Contracting) and as a consequence he contracted mesothelioma.
[6] [2005] NSWCA 304.
The trial judge, O’Meally P, found that BI (Contracting) had actual knowledge of the dangers of asbestos, whereas PHR did not know, but should have known, of those dangers. He said:
In determining the relative culpability of each of BI and PHR it is relevant to consider not only the fact that BI had actual knowledge of the dangers of asbestos and that PHR ought to have known of them, but also the size; and nature of the operations of each. BI’s business consisted in spraying asbestos mixed with cement and water in buildings during the course of their construction to act as a fire retardant in the event that a fire occurred. PHR began its operations as a “sewerage plumber”, but later it specialised in the installation of pipes which would carry hot water, steam and medical gases. During the course of the construction of the Royal Adelaide Hospital PHR had something in the order of 30 or more employees present at the site, though the number fluctuated depending upon the nature of the work being carried out at any particular time. It had a total of 70 employees. It was thus not a small enterprise and the evidence demonstrates that it professed some expertise in the tasks upon which it was engaged.
Considering that BI had actual knowledge and its sole enterprise, unlike that of PHR, was working with asbestos it is my view that BI ought to bear the large proportion of the liability to the plaintiff. Mr O’Dowd has suggested that its liability should be something in the order of 50 per cent and in that respect he has reminded me of the decision in BHP Billiton Ltd v Amaca Pty Ltd [2003] NSWDDT 18. In that case liability was apportioned between an employer and a supplier of asbestos products as to 50 per cent each. It is important however, to remark that the employer there was one of the largest, if not the largest corporation in Australia, and there was why its liability to contribute to the damages awarded to the plaintiff was assessed at 50 per cent.
Doing the best I can to do justice between the parties it is my view that BI should bear 80 percent of the liability to satisfy the plaintiff’s damages and PHR should bear 20 per cent.[7]
[7] [2005] NSWCA 304 at para 27.
This apportionment was upheld on appeal.[8]
[8] BI (Contracting) Pty Ltd v PHR Pty Ltd [2005] NSWCA 304.
Mr Harms submitted that in the action based in tort, I should find BISA is 80% liable.
Mr Lindsay, counsel for BISA, pointed to the deed documents and the minutes of a meeting that took place on 8 July 1974 and said that I ought to find that in light of them, by the mid-1970s, BISA stopped supplying asbestos products to the market. He said the evidence of Mr Edwards and Mr Harris indicated that PHR used asbestos millboard throughout Mr Edwards’ period of employment, which was to 1985. He said that in light of Mr Edwards’ evidence and his identification of products by reference to the James Hardie and Bell’s brochures, I should find that BISA was not at the relevant time, the only supplier of asbestos millboard. Next, he said, that Mr Harris’s evidence suffered from the passage of time and does not provide a sound basis to find that BISA supplied asbestos millboard for the period from 1969, when Mr Edwards commenced working for PHR to 1974, when he said BISA ceased suppling asbestos generally.

In short, he submitted that I cannot be satisfied to the requisite degree that BISA supplied any asbestos millboard to PHR, and if I can be so satisfied, I should find that BISA did not supply any asbestos millboard to PHR after about 1974, such that it would only be responsible for about a third of the relevant exposure.
Next, he said, that the claim in contract could not be made out. He relied upon the decision of the Dust Diseases Tribunal of New South Wales in Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd.[9] In that case an employee of John Thompson Australia Pty Ltd contracted mesothelioma as a result of exposure to asbestos during the course of that employment. John Thompson later became Rolls Royce Industrial Power (Pacific) Ltd. After settling with the employee, Rolls Royce pursued an action against James Hardie and Co Pty Ltd for contribution, on the basis that the asbestos products, to which the employee was exposed in his employment at John Thompson, were manufactured, sold and supplied by James Hardie to John Thompson without any warning as to the toxic potential of asbestos dust. In particular Rolls Royce alleged that James Hardie had supplied the asbestos products in breach of the implied contractual terms that the asbestos products would be suitable and safe for their contemplated use and that James Hardie would warn John Thompson of any dangers associated with the products and of any necessary precautions to be observed in using them. It further asserted that the products were not reasonably fit for sawing and shaping that was necessary to adapt their shape to the expressed purpose of insulating boilers and duct work, and that, being sold without any expressed warning or limitation on use, the products were in consequence not of merchantable quality.
[9] [1999] NSWDDT 5.
The trial judge accepted that John Thompson made known to James Hardie that the purpose for which it wanted the goods was the purpose of providing efficient insulation to boilers and ancillary works. However, he dismissed the claim in contract because he regarded it necessary for the claim to succeed for there to be proof that “the seller knows he is being relied upon”[10] and he determined that Rolls Royce had not established that to be so.
[10] Teheran-Europe Co Ltd v ST Belton (Tractors) Ltd [1968] 2 QB 545 at 554 per Lord Denning MR.
The trial judge rejected Rolls Royce’s submission that by reason of the toxic asbestos fibres contained within the insulating products sold by James Hardie those products could not, in the absence of warnings, be of merchantable quality on the basis that it misconceived the idea behind the term or description “merchantable quality”.
The trial judge said:
The description is intended to import into the contract of sale a common understanding of ‘condition and quality ... normal for goods of that description’: George Wills & Co v Davids Pty Ltd (1957) [1957] HCA 6; 98 CLR 77 at 89.
If the contract called for the supply of goods of generic description and the goods supplied are normal for that description the purchaser cannot be heard to complain that they have ‘the ordinary defects which articles of that type possess’: Taylor v Combined Buyers Ltd [1924] NZLR 627 per Salmond J at 631.
At 646 of his judgment Salmond J said:
The question is always whether the goods are merchantable under that description. This means as I understand the matter, are the goods of such a quality and in such a state and condition as to be saleable in the market, as being goods of that description, to buyers who are fully aware of their quality, state, and condition, and who are buying them for the ordinary purposes for which goods so described are bought in that market?
It is not the point that a disappointed buyer was unaware of an inherent defect in the goods if more knowledgeable buyers would accept the goods as normal for that class of commodity: see George Wills & Co v Davids Pty Ltd (supra).
In the present case, had James Hardie supplied magnesia carbonate insulating blocks without the necessary asbestos binding, the goods would not have been of merchantable quality. I reject the submission that the asbestos products sold were not of merchantable quality. [11]
[11] Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd [1999] NSWDDT 5 at paras 105-8.
By parity of reasoning, Mr Lindsay submitted that here, PHR contracted to buy goods of a generic description, being asbestos millboard; those goods were normal for that description; and to the extent that they contained defects, being the fact of asbestos, that did not make them abnormal. He submitted that the goods were of merchantable quality because their defects were no different than what was to be expected of any asbestos millboard.
As to liability in tort, he submitted that if I found that BISA supplied PHR with asbestos millboard, I must approach the apportionment from the premise that BISA only supplied asbestos millboard for one third of the time that Mr Edwards was employed by PHR, whereas, on this finding PHR was responsible for all of the exposure. He submitted that in light of Construction Safety Regulations that were published in 1976, PHR must have been aware of the dangers of asbestos from about that time. He submitted that in light of the fact that it took no action, despite that knowledge, I should infer that had BISA given PHR warnings about the danger of asbestos, it would have ignored those warnings such that the claim should be dismissed. He said if I was to find that BISA was liable, in comparing culpability, I should regard it as a mere supplier. He said that there was no evidence that it manufactured asbestos or that it installed the product at PHR. He said that PHR was a large, well-resourced, sophisticated entity that was in the business of designing, installing and commissioning large industrial air conditioning units. He made reference to the decision of the New South Wales Court of Appeal in BI (Contracting) Pty Limited v University of Adelaide.[12] In that case the trial judge held that the plaintiff’s employer, the University of Adelaide, was liable for 65% of the plaintiff’s loss and BI, being the relevant supplier of the asbestos that was at the crux of the plaintiff’s case, was liable for 35%. In that case the relevant exposure to asbestos occurred in 1961. The trial judge noted that at that time BI had full available knowledge of the dangers of asbestos and that it conducted the spraying of the asbestos. He noted the University did not conduct the spraying and did not have actual knowledge. On that issue the trial judge then added:
Why it did not mystifies me. What was it teaching its medical, engineering and architectural students in 1961? I would have thought a University with a medical school in 1961 would have been teaching its students about mesothelioma and about the Wagner paper. The University’s failing on this point is so far from acceptable standards in my view that it should not benefit from its ignorance.[13]
[12] [2008] NSWCA 210.
[13] [2008] NSWCA 210 at para 114.
Those findings were not disturbed on appeal.
He submitted that in this case, I should adopt a similar approach and indeed should find PHR even more culpable. Based on that, and the alleged limited period of supply, he contended that any contribution, if there is to be any, should be very modest.
Consideration
Factual findings
Mr Harris’s evidence that Bradfords supplied the asbestos millboard was very clear and I accept that evidence. Although he did not expressly identify that it was BISA who supplied the millboard, his identification of Bradfords and BISA’s admission between 1970 and 1974 goes a fair way to establishing that when Mr Harris spoke of Bradfords in connection with asbestos millboard, the supplying entity was in fact BISA.
In Jones v Dunkel, Taylor J said:
…where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.[14]
[14] (1959) CLR 298 at 312.
In conformity with this I think that due weight must be given to the fact that BISA called no evidence to refute the suggestion that it was BISA that supplied PHR with asbestos millboard and provided no explanation as to why it could not call that evidence. I think it is appropriate to rely upon these matters as part of the fact finding exercise that I must undertake. On balance, I find that BISA supplied asbestos millboard to PHR.
In light of the fact that BISA was not party to the deed, I am not prepared to rely upon the deed to find that it ceased to supply asbestos millboard in 1974. Indeed, in the absence of any evidence from BISA to the effect that it ceased to supply asbestos millboard, and in the absence of any explanation as to why it could not call that evidence, I think it is appropriate to rely upon these matters to assist me in drawing the inference that BISA supplied asbestos millboard to PHR throughout the time PHR used asbestos millboard over the course of Mr Edward’s employment.
Mr Harris gave pretty clear evidence that Bradfords were the only suppliers of asbestos millboard. Through skilful cross examination Mr Lindsay extracted a concession that others possibly supplied it, but it was not an especially persuasive concession. I do not regard Mr Edwards’ evidence in connection with the James Hardie and Bells’ brochures particularly persuasive. I am not prepared to find on the strength of this evidence that any entity other than BISA supplied asbestos to PHR over the relevant period.
The evidence does not enable me to find that Mr Edwards was exposed to any other asbestos whilst working at PHR, other than asbestos millboard.
I accept Mr Harris’s evidence that had he known that asbestos was dangerous he would not have used it. I find that had BISA warned PHR about the dangers of using asbestos, it would have acted on the warning.
Breach of contract?
I now turn to consider whether the supply of that asbestos millboard and Mr Edwards’ exposure to it was in breach of its contract with PHR.
I agree with the submissions advanced by Mr Lindsay on this issue and with the approach taken by the trial judge in Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Pty Ltd. Without repeating them, I adopt them in finding that the asbestos millboard supplied by BISA was fit for purpose and was of merchantable quality. In my view there was no breach of contract by reference to the Sale of Goods Act.
The claim in tort
I now turn to the claim in tort.
Having found that BISA provided no warnings about the danger of asbestos that it supplied to PHR, and that had it warned PHR about that danger, PHR would have acted on the warning, I find that BISA was responsible in tort, for the harm that Mr Edwards suffered. Prima facie, the claim for contribution has therefore been established.
I move to the issue of apportionment.
In Oliver v ACN 007 870 484 Pty Ltd & Ors[15] I made some observations about how this task has to be undertaken. Having made reference to the decision of the High Court in Podrebersek v Australian Iron and Steel Pty Limited[16] I spoke of the need to compare the relative causative importance of the parties’ respective torts and the degree of their respective departures from the standard of care of the reasonable person.
[15] [2017] SADC 52 at para 46.
[16] [1985] HCA 34; 59 ALJR 492.
In light of my conclusion that the only asbestos that Mr Edwards was exposed to whilst working at PHR was asbestos millboard and my finding that BISA supplied PHR will all of that millboard, I proceed on the issue of apportionment from the premise that the causal significance of the respective torts of PHR and BISA to Mr Edwards is the same.
I now turn to consider the relative degrees of departure from the standard of care of the reasonable person by PHR and BISA.
The situation here is quite different to the facts in Strikwerda v BI (Contracting) Pty Ltd and PHR Pty Ltd.
In that case the relevant period was between 1964 and 1968, which was a time when PHR was transitioning from being a sewerage plumber to a specialist in the installation of pipes which would carry hot water, steam and medical gases. At that time it had 70 employees overall and about 30 at the relevant site. It was not then a particularly sophisticated entity. During the relevant time the general state of knowledge about the dangers of asbestos was not especially well known. Although PHR’s lack of knowledge of that danger was in breach of its duty of care as an employer, at the time, and in all the circumstances, it was not an especially egregious breach.
BI (Contracting) Pty Ltd was the source of the asbestos in that case. It installed the product. It knew before it supplied and installed it that it was hazardous and that it could harm those who were exposed to it. It could have and should have provided warnings and information about the hazards that it presented. Even by reference to standards as they existed in the early 1960s, given all the circumstances, its departure from the standard of care that would be expected of the reasonable person acting in its position would be regarded as very significant. In those circumstances, with respect, I can understand why O’Meally P apportioned liability 80/20 against BI (Contracting) Pty Ltd.
In this case, the relevant period is between 1969 and the mid-1980s. PHR was by then a corporate entity of some substance that had considerable engineering prowess. Over that time its manager, Mr Harris, was to become a senior representative of the industry in which it worked. It clearly had become a much more formidable entity than it had been during Mr Strikwerda’s employment with it in the early 1960s. It bore a duty of care as an employer to provide Mr Edwards with a safe working environment. Whilst I am not satisfied that PHR actually knew about the dangers of exposure to asbestos over the time that Mr Edwards was exposed to it at work, given the state of knowledge in the 1970s about those dangers, it could have and should have made enquiries about the risks that working with asbestos entailed. Indeed, its lack of knowledge about the danger of asbestos, especially as time passed, was utterly inexcusable. It should have explored alternatives to asbestos millboard. If, at the relevant time, there was no alternative, it should have taken appropriate protective measures to minimise the harm to which its employees were exposed when working with or near asbestos millboard. Its departure from the standard of care that would be expected of the reasonable person acting in its position over the period of Mr Edward’s employment was very significant and became increasingly so as the years passed.
As for BISA, although it was the source of the asbestos millboard, it was not providing expertise in connection with it in the manner that BI (Contracting) Pty Ltd did in Strikwerda. It was merely providing the product that PHR was seeking. It did not install the product.
On the basis of the evidence of Mr Snelling in Williams (As Legal Personal Representative of the Estate of the late Russell John Charles Williams) & Another v BI Contracting Pty Ltd & Ors I find that Bradford Insulating Contracting Pty Ltd and BI Spraying Pty Ltd knew in about 1960 that asbestos was hazardous. In the absence of any evidence from BISA to the effect that it was an unrelated entity and did not share knowledge with Bradford Insulating Contracting Pty Ltd and BI Spraying Pty Ltd, I think it is appropriate to rely upon that failure to adduce that evidence as part of the reasoning process to find that BISA knew when it supplied asbestos millboard to PHR, that it could harm those who were exposed to it. It could have and should have provided warnings and information about the hazards that it presented. Its indifference to the health and safety of those who it knew would be exposed to the product that it supplied and which it knew was dangerous was a very significant departure from the standard of care that would be expected of the reasonable person.
In terms of culpability, I cannot differentiate between the degree of the departures by PHR and BISA from the standard of care of the reasonable person. In other words, I find that the extent of their culpability is the same.
Conclusion
In light of my conclusion that PHR has not proved its case based on a breach of contract, it is not appropriate to grant PHR an extension of time to enable it to pursue that claim. The action in contract is dismissed.
PHR has proved that BISA was tortiously responsible for the harm that Mr Edwards suffered. It has proved that BISA is liable in tort. By its own admission PHR was tortiously responsible for the harm that Mr Edwards suffered. The relative causative importance of their respective torts was the same. The degree of their respective departures from the standard of care of the reasonable person was the same. It follows that PHR is entitled to recover from BISA 50% of the judgment sum paid by it to Mr Edwards. I would like to hear from the parties as to the precise terms of the orders that follow and as to questions of interest and costs.