(re Floro) Bluescope Steel (AIS) Pty Limited v Amaca Pty Limited

[2007] NSWDDT 27

Dust Diseases Tribunal

of New South Wales

CITATION:	(re Floro) Bluescope Steel (AIS) Pty Limited v Amaca Pty Limited [2007] NSWDDT 27
PARTIES:	Bluescope Steel (AIS) Pty Limited Amaca Pty Limited
MATTER NUMBER(S):	166/2005/CC1 of
JUDGMENT OF:	Kearns J
CATCHWORDS:	Dust Diseases Tribunal :- dust diseases cross claim just and equitable contribution relative blameworthiness whether cross defendant had actual knowledge of dangers of asbestos onus of proof in relationship between cross defendant and parent company inference of actual knoweldge of dangers of asbestos causal potency and control by parties over plaintiff's daily working conditions relevance of standard presumptions in determining contribution
LEGISLATION CITED:	Dust Diseases Tribunal (Standard Presumptions - Apportioned) Order 2007
CASES CITED:	Rolls Royce Industrial Power (Pacific) Limited v James Hardie & Co Pty Limited; re Hay (No.4) (1999) 18 NSWCCR 653
DATES OF HEARING:	03/09/2007
DATE OF JUDGMENT:	19 October 2007
LEGAL REPRESENTATIVES:	Mr T Rowles, instructed by Sparke Helmore, appeared for the main cross claimant Mr J Sheller, instructed by Phillips Fox, appeared for the first cross defendant

JUDGMENT:

9

KEARNS J

1. Mr Floro (the plaintiff) contracted illness as a result of exposure to asbestos dust and fibre in the course of his employment by Bluescope Steel (AIS) Pty Limited (Bluescope). His illness was mesothelioma.

2. The plaintiff brought proceedings against Bluescope. Those proceedings were settled, resulting in a payment to the plaintiff in the sum of $425,000, inclusive of the plaintiff’s costs.

3. Bluescope has recovered some contribution towards that settlement figure. It recovered it from the Wallaby Grip group of companies. The amount it recovered was $106,250.

4. Now, Bluescope seeks a further contribution. It seeks a contribution to the balance of $318,750. It seeks a contribution from Amaca Pty Limited (Amaca) on the basis that Amaca is a person who would have been liable for the same damage at the suit of the plaintiff.

5. There is really only one question to be determined in this litigation and that is the just and equitable contribution that should be made by Amaca to Bluescope’s claim of $318,750. There is no doubt about Bluescope’s liability to the plaintiff, nor that Amaca would have been liable to the plaintiff if sued by him and the question is what is a just and equitable contribution in the circumstances.

6. Both parties approached this case on the basis that the two matters I had to consider in determining a just and equitable contribution were causal potency of their respective torts and relative blameworthiness.

7. Those two matters need to be considered against the background of the plaintiff’s exposure which was as follows.

8. The plaintiff was employed by Bluescope between about December 1962 and June 1970. Bluescope conducted the operation of the steelworks (the steelworks) at Port Kembla. The plaintiff’s duties at the steelworks involved those of an indentured apprentice bricklayer, a tradesman bricklayer and an engineer’s assistant. He carried out duties at places where dust and debris and asbestos products were present, including the number 1 and number 2 open hearths, the blast furnaces, the air and gas mains, the electric steel mill, the tin plate mill. He worked occasionally at the coke ovens, but does not recall any exposure there. From 1968, he visited other areas of the steelworks where asbestos products were present. (Exhibit CX1A)

9. The plaintiff estimated he was exposed to dust from asbestos products for at least a couple of hours every day while [he] worked as an apprentice bricklayer and bricklayer between December 1962 and February 1968. He estimated that after that, he was exposed to dust from asbestos products for a couple of hours every month when visiting various parts of the steelworks. The amount of exposure depended upon the job that was being done. He worked in areas where dust from asbestos products was present in the workspace for days while asbestos products were removed and replaced. (Exhibit CX1A)

10. The plaintiff had direct contact with asbestos gloves, gauntlets, aprons, millboard, rope and burner blocks. He had indirect contact with asbestos mats, lagging, fibre that was mixed in refractory mortar and fibres contained within old mortar and brickwork. (Exhibit CX1A)

11. Evidence was given by Mr Peter Cross. Neither this evidence, nor any other evidence, challenged the plaintiff’s evidence that he was exposed to asbestos dust and fibre in the course of his employment. The evidence of Mr Cross seemed more directed to showing that the asbestos product to which the plaintiff was exposed in the course of his employment was essentially product of Amaca.

12. Evidence was tendered from a number of other witnesses as to the conditions of work at the steelworks. Some of this evidence touched on areas where the plaintiff worked. Some of it touched on times the plaintiff worked at the steelworks. A lot of this evidence touched on neither. I am not assisted by this evidence except to the extent that it does directly or inferentially corroborate the plaintiff’s evidence as to his working conditions.

13. On this evidence, I need to determine apportionment between Bluescope and Amaca based on the two tests mentioned in para 6.

14. One of the issues debated in this case was whether or not Bluescope had actual knowledge of the health risks associated with asbestos. Mr Sheller submitted that the onus on this issue was on Bluescope. Mr Rowles accepted that. I think that must be so. It is Bluescope that is seeking the contribution and one of the elements that it seeks to prove in claiming the contribution is that Amaca had actual knowledge of the dangers of asbestos and that it did not.

15. Mr Sheller then sought to draw on a relationship between Bluescope and BHP to draw an inference that Bluescope had actual knowledge of the dangers of asbestos. He drew in particular from annual addresses by the chairman at the annual general meetings of BHP from the year 1959 onwards. There was reference in the 1959 address to the two companies being closely interwoven. The 1960 address demonstrated that BHP injected large capital expenditure into the steelworks at Port Kembla. The 1962 address refers to Australian Iron & Steel Pty Limited (AIS) as a subsidiary and notes that the BHP board had decided to adopt the same balancing date for both companies. The same report refers to the company’s workforce and, plainly, it is including within that workforce the workforce of the steelworks. A publication by Alan Trengove (Exhibit CDX5) refers to BHP acquiring all the ordinary shares issued by AIS and refers to the absorption of AIS into BHP. The same document refers to BHP doubling Australia’s steel making capacity and this plainly includes reference to the steelworks’ production.

16. I do not think these matters establish knowledge of the health risks associated with asbestos on the part of Bluescope. They show that Bluescope was a sizeable organisation and that it had a very close association with BHP. They also show, as Mr Sheller submitted, that Bluescope had all of BHP’s resources at its disposal and that BHP was prepared to provide it with substantial resources. They were, nevertheless, two separate companies and, without knowing that the relevant personnel of both were the same and the communications between the companies, I do not think I can come to a conclusion that Bluescope’s knowledge was the same as BHP’s, nor for that matter that these companies had actual knowledge of the dangers of asbestos. It requires other material, in my view, to come to that conclusion.

17. I think there is other material that enables one to come to the conclusion that Bluescope had actual knowledge of the dangers of asbestos at the time the plaintiff was employed by it. That information comes in part in the form of answers to interrogatories. The interrogatories and the answers were left in an unsatisfactory state, but that is the way the parties presented them to the Tribunal. Most of the answers, insofar as they conceded anything, conceded matters only on the basis of a belief. It beggars belief that an organisation of the size of the steelworks would not have employed safety officers and medical officers and it is probably a well-known fact that it did so. It is not surprising, therefore, to see in the answers to interrogatories that Bluescope has named a number of medical officers and a number of safety officers. What beggars belief, however, is that Bluescope merely believes that it employed the named medical officers and safety officers. There has to be any number of people alive today, probably even including some of the named medical officers and safety officers, who could put the status of this piece of information higher than a belief. When I combine that belief in the answers to interrogatories together with the size of the steelworks and the failure of Bluescope to call any of these named medical officers or safety officers, I come to the view that it did, in fact, employ doctors and safety officers in the relevant period.

18. From there, I come to the view that Bluescope had actual knowledge of the published risks associated with the use of asbestos in the relevant period. Mr Rowles submitted that I could not come to that view because it was a case of competing hypotheses. He submitted that either the personnel of Bluescope knew of the risks or they did not. He submitted that I would not find that they were aware of the risks, because to do so would involve accepting a hypothesis that there was, in effect, a conspiracy of silence amongst the relevant personnel amounting even to criminal conduct. The problem with that argument, as I see it, is that it does not follow that because persons were aware of the published risks associated with the use of asbestos and did nothing about it, that there was a conspiracy of silence and that they were guilty of criminal conduct. There are different levels of knowledge, assimilation of the knowledge and appreciation of the risks, especially in a context where exposure to a product does not produce immediate consequences. As to competing hypotheses, I find it far more unlikely that eight persons believed to be safety officers and four persons believed to be medical officers all were completely ignorant in the relevant period of the published risks associated with the dangers of using asbestos. My view is heightened by the failure of Bluescope to call any one of the persons to give evidence of his ignorance as was done, for example, in Rolls Royce Industrial Power (Pacific) Limited v James Hardie & Co Pty Limited; re Hay (No.4) (1999) 18 NSWCCR 653.

19. Mr Rowles acknowledged the difficulty of proving a negative, but Bluescope made no attempt to do so even at a level that was not difficult. There was no evidence as to whether or not any one or more of the safety officers or medical officers named in the interrogatories was alive or dead and I would certainly not be prepared to find that all had died. Nor would I be prepared to find that all were incapable of attending court to give evidence. No attempt was made to suggest that any was incapable of attending to give evidence.

20. Answers to interrogatories also disclose a belief that Bluescope maintained a library. Again, it seems to me that it is an unsatisfactory answer and the likelihood is that it did maintain a library. Such a library would almost certainly have included the Wagner article and the McNulty article (Exhibits CDX6 and CDX7). Should the library not have included these publications, one wonders on what materials the medical practitioners employed by Bluescope kept up to date.

21. Bluescope has failed to discharge its onus that it did not have actual knowledge of the health risks associated with asbestos during the period of the plaintiff’s employment. In the circumstances, I approach a just and equitable apportionment in this case on the basis that both parties had actual knowledge of risks associated with the use of asbestos.

22. In terms of causal potency, in addition to being exposed to product of Amaca, the plaintiff was exposed to product of other suppliers, no doubt including the Wallaby Grip group of companies. If product of suppliers other than Amaca contributed to the plaintiff’s condition, that must operate in some relief of Amaca on the question of causal potency. It is not a matter that can be quantified. Even if precision could be obtained as to the extent of the Amaca product as distinct from other product to which the plaintiff was exposed, it would not be possible to quantify in a precise way the causal potency of Amaca as distinct from the causal potency of Bluescope in causing the plaintiff’s condition. The thing to note is that there was product other than product of Amaca to which the plaintiff was exposed and which contributed to his condition. The other thing to note is that the exposure, other than the Amaca exposure, was relatively minor compared to the Amaca exposure. To a large extent, however, Amaca has obtained the relief it is entitled to on this point because Bluescope seeks contribution only to a portion of the plaintiff’s loss.

23. Another matter relevant to causal potency is the control that both parties had in relation to the circumstances in which the plaintiff was working. Amaca had an indirect control in the sense that it could have issued warnings with its product. In light of the finding I have made, however, as to actual knowledge on the part of Bluescope, there must be some query as to the likely effectiveness of such a warning. If Bluescope had actual knowledge of the risks associated with the use of asbestos, what would a warning have added? In a sense, it would have brought the problem to the attention of Bluescope. At one level, when one considers the terms in which a warning would be couched, a warning may not have been effective in relation to Bluescope. This is because a warning would almost certainly be couched in terms consistent with the published literature and, as Bluescope was aware of that, there was nothing in a warning that it would learn. At another level, however, a warning could have had some effect. It might have had an impact on one or more individuals resulting in some activity by way of safety measures being investigated and implemented. This would particularly be so if the warning came to the attention of relevant union officials. On the other hand, Bluescope was the plaintiff’s employer and it had the day-to-day control of the operations and was the one in a position to do something about the working conditions in which the plaintiff found himself. In terms of control, I consider that Bluescope was in a far stronger position to be able to take effective remedial action to avoid the plaintiff becoming injured.

24. Mr Rowles sought to emphasise the lack of warning by Hardies in this case by relying on Rolls Royce. He relied, in particular, on the passages from the judgment of Curtis J at paras 119 to 121. It can be dangerous to transpose the result of one case to another where the factual circumstances may well be different. In that case, Curtis J was satisfied that the employer was ignorant of the risks associated with the use of asbestos. Evidence was called by the employer from two persons as to their ignorance of the dangers of asbestos and his Honour accepted that evidence. No such evidence was called in this case. That difference really means there is little guidance to be gained from the Rolls Royce case.

25. This, like any other case, is a case to be determined on its own facts.

26. Mr Rowles submitted that I could and should obtain guidance from the standard presumptions under the Dust Diseases Tribunal (Standard Presumptions Apportioned) Order 2007. I reject this submission. The standard presumptions are in place for a particular purpose. They are in place as part of the claims resolution process. The purpose is to facilitate the relatively quick and cheap disposal of cases. As part of the claims resolution process, there is a provision dealing with contributions assessments. This is to allow assessments to be made between defendants and cross-defendants. It is to be done by a contributions assessor on the papers and in an arbitrary way. The contributions assessor does not bring to bear questions of causal potency and relative blameworthiness in his considerations. Further, the standard presumptions might have Bluescope as a Category 2 employer when, because of its actual knowledge, it should really be treated as a Category 1 employer. Based on the standard presumptions, Mr Rowles submitted I could be guided as to apportionment by allocating 65% to Amaca and 35% to Bluescope and he submitted that would be generous to Amaca.

27. Bluescope was the plaintiff’s employer under a high duty of care and with day to day control of the plaintiff and his working conditions. I think this factor calls for its contribution to be higher than that of Amaca and my view is that Amaca should bear 40% and Bluescope 60% of the remaining liability.

28. The parties were to provide me with figures for interest, but I have not received these.

29. There should be a verdict for Bluescope on its cross claim for 40% of $318,750 and 40% of the appropriate interest figure.

30. (a) I direct the parties to bring in short minutes of order reflecting these reasons.

(b) I grant liberty to the parties to apply as to costs.

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