(Re Oswald) Bluescope Steel (AIS) Pty Ltd v Amaca Pty Ltd

[2009] NSWDDT 5

Dust Diseases Tribunal

of New South Wales

CITATION:	(Re Oswald) Bluescope Steel (AIS) Pty Ltd v Amaca Pty Ltd [2009] NSWDDT 5 This decision has been amended. Please see the end of the judgment for a list of the amendments.
PARTIES:	Bluescope Steel (AIS) Pty Ltd Amaca Pty Ltd
MATTER NUMBER(S):	6006/1 of 2006
JUDGMENT OF:	Curtis J at 1
CATCHWORDS:	DUST DISEASES TRIBUNAL :- Cross Claim
LEGISLATION CITED:	Law Reform (Miscellaneous Provisions) Act 1946
CASES CITED:	Macquarie Pathology Services Pty Ltd v Sullivan (NSWCA unreported, 28 March 1995) Wynbergen v Hoyts Corporation Pty Ltd (1997) 149 ALR 25 Mclean v Tedman (1984) 155 CLR 306 Alford v Magee (1951) 85 CLR 437 Lennards Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 Meridian Global Funds Management Asia Ltd v Securities Commission (1995) 3 WLR 413 Brambles Holdings Ltd v Carey (1976) 15 SASR 270 State Rail Authority of NSW v Wallaby Grip Ltd and James Hardie & Coy Pty Ltd (Re Rayner) 18 NSWCCR 193 Mary Phyllis Zanier (Legal Representative of the Late Flavio Zanier v BHP Steel Ltd and Amaca Pty Ltd DDT 11 July 2003 Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Coy Pty Ltd (Re Hay) (1999) 18 NSWCCR 653 (Re Floro) Bluescope Steel (AIS)Pty Ltd v Amaca Pty Ltd [2007] NSW DDT 27
DATES OF HEARING:	23 and 24 June 2008, 9 and 10 March 2009
DATE OF JUDGMENT:	3 April 2009
LEGAL REPRESENTATIVES:	Mr P Webb QC with Mr T M Rowles instructed by Sparke Helmore appeared for the cross claimant Mr G M Watson SC instructed by DLA Phillips Fox appeared for the cross defendant

JUDGMENT:

Dust Diseases Tribunal of New South Wales

Matter Number 6006 of 2006/1

(Re Norman Charles Oswald)

Bluescope Steel (AIS) Pty Limited

v

Amaca Pty Limited

3 April 2009

JUDGMENT

CURTIS J

Introduction

1. Norman Charles Oswald was employed by BHP Steel (AIS) Pty Ltd, now Bluescope Steel (AIS) Pty Limited (Bluescope) as a refractory bricklayer at the Port Kembla Steelworks (‘the Steelworks’) between 1967 and 1971. He contracted mesothelioma as a result of inhaling asbestos fibre in the course of this employment, and on 23 October 2006 obtained a judgment against Bluescope in the sum of $500,000 plus costs, which were later agreed at $38,550.

2. Bluescope claimed contribution under s5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 from Wallaby Grip (BAE) Pty Limited and Amaca Pty Limited (Amaca), both of which supplied asbestos products used by Mr Oswald. Bluescope has accepted the payment of $57,014 (approximately 10 per cent) from Wallaby Grip in satisfaction of the claim against that company, leaving a balance of $481,536 to which it seeks contribution from Amaca.

3. Amaca accepts that the settlement struck between Bluescope and Mr Oswald was reasonable and that it is liable to contribute in some degree.

4. In response to the claim, Amaca says that the asbestos products which it supplied to Bluescope were responsible for only a part of the asbestos fibres inhaled by Mr Oswald, and that in any event, Bluescope as controller of Mr Oswald's working environment was far more responsible for his injuries than was Amaca, which merely supplied the asbestos products used in the work.

Mr Oswald's exposure to asbestos

5. Mr Oswald worked as a refractory bricklayer in the tinplate mill and on the open-hearth furnaces. This work involved cutting and shaping asbestos insulation blocks and millboard with a hacksaw before sealing the insulation with refractory bricks.

6. He was also exposed to asbestos dust released by other bricklayers working beside him, from demolition of old refractory bricks and asbestos insulation, from the work of laggers working above him, from asbestos rope, protective clothing and blankets, and from climbing over and brushing against asbestos insulated pipes and equipment. He said that he had “heavy daily exposure to dust containing silica, coal, and asbestos fibres”, describing that exposure as "of very high intensity… in hot, closed, and confined spaces".

7. Bluescope took no precautions, by way of providing face masks or otherwise, to protect Mr Oswald from the inhalation of asbestos fibres.

The legislation

8. S5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 creates the right to contribution. S5(2) of the act provides that:

In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.

9. The phrase "responsibility for damage" requires that the Tribunal consider the "relative blameworthiness and the relevant causal potency of the negligence of each party" (per Clarke JA in Macquarie Pathology Services Pty Ltd v Sullivan NSWCA unreported, 28 March 1995).

The causal potency of the fibre burden generated by Amaca's products

10. The new asbestos products to which Mr Oswald was exposed were asbestos insulation blocks, asbestos millboard, asbestos slurry, and asbestos pipe sections on steam pipes. He could not identify the suppliers, however, he said that the asbestos insulation blocks came in brown rectangular cardboard boxes.

11. Amaca admits that between 1967 and 1973 it supplied K-Lite blocks and Super High Temperature blocks to Bluescope. Although Wallaby Grip supplied Bluescope with some asbestos products, a complete description of those products is not revealed in the evidence.

12. There is evidence that Wallaby Grip may have sold asbestos insulation to BHP's shipbuilding works at Whyalla in South Australia. In cross-examination by Mr Watson SC for Amaca, Mr Peter Cross, Mr Oswald's foreman, agreed that some asbestos depicted in a Wallaby Grip brochure resembled those sold by James Hardie. Nevertheless he rejected the suggestion that the asbestos blocks used by Mr Oswald may have been purchased from Wallaby Grip because: "The material we had was from James Hardie… it was on the boxes, on the cartons". I am persuaded that Amaca sold to Bluescope all of the asbestos insulation blocks and asbestos millboard upon which Mr Oswald worked.

13. Mr Oswald's work involved a continuous cycle of demolition and replacement of asbestos insulation and refractory bricks, and his exposure to asbestos dust released by demolition of old asbestos material equalled or exceeded that of asbestos dust released in construction work. It is probable that Amaca initially supplied the demolished material.

14. Nevertheless, the asbestos fibres released from those products by the work of Mr Oswald, and those around him, were only a part of his total asbestos exposure. There is no evidence that Amaca supplied the asbestos slurry used by the laggers, and the asbestos rope, protective clothing, and blankets, which were additional sources of fibres. It is reasonable to suppose that 10 per cent of the asbestos fibres inhaled by Mr Oswald emanated from such products, perhaps reflecting Bluescope's settlement with Wallaby Grip.

15. I find that Amaca's products contributed 90 per cent of Mr Oswald's total fibre burden.

The causal potency of the breach of duty

16. In Wynbergen v Hoyts Corporation Pty Ltd (1997) 149 ALR 25 at 29 Hayne J said:

No doubt the making of the apportionment which the legislation requires involves comparison of the culpability of both parties i.e., the degree to which each has departed from the standard of what is reasonable, but that is not the only element to be considered. Regard must be had to the "relative importance of the acts of the parties in causing the damage" and it is "the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination”.

17. Amaca admits that it failed to warn Mr Oswald of the dangers of working with asbestos.

18. Bluescope asserts that not only should Amaca have warned Mr Oswald, but in addition, it should have warned Bluescope and/or withdrawn the asbestos products from sale.

19. Because I find, for reasons later discussed, that Bluescope knew of the dangers of asbestos, any failure by Amaca to warn Bluescope was not a cause of Mr Oswald's injury. There is insufficient evidence as to the cost or practicality of Bluescope’s using alternative asbestos-free insulation blocks at the Steelworks to permit a finding that Amaca should have withdrawn the asbestos-containing bricks from sale before 1967.

20. The respective breaches of duty are then, on the part of Amaca, the failure to place a warning label on the boxes of refractory bricks to the effect that inhalation of asbestos fibres could cause serious injury or death; and, on the part of Bluescope, the failure to warn Mr Oswald in similar terms; and also the failure to provide him with suitable protective equipment, a safe place of work, and a safe system of work.

21. An employer is bound to have regard to the possibility of negligence on the part of others over whom that employer has no control (Mclean v Tedman (1984) 155 CLR 306). At 313 of the judgment Mason, Wilson, Brennan and Dawson JJ said that accident prevention is unquestionably one of the modern responsibilities of an employer … and in deciding whether an employer has discharged his common law obligation to his employees the Court must take account of the power of the employer to prescribe, warn, command and enforce obedience to his commands (emphasis added).

22. In Alford v Magee (1952) 85 CLR 437, the High Court confirmed that in a plaintiff's action, a comparison between the negligence of the plaintiff and that of the defendant was not permitted. The court explained the last opportunity rule—pursuant to which a plaintiff may escape the consequence of his own contributory negligence when this was a complete defence—in terms of causation. The court observed that there are cases in which there is so substantial a difference between the positions of the plaintiff and defendant respectively that, although the action could not have happened without the plaintiff's negligence, it would be neither fair nor reasonable to regard any negligence on the part of the plaintiff as a cause of his injury.

This position may arise because the defendant had, and the plaintiff had not, a real opportunity, of which a “reasonable man” would have availed himself, of “avoiding the mischief”. It may arise because the defendant’s negligent conduct is substantially later in point of time than the plaintiff’s negligent conduct, and a reasonably behaving defendant would have seen its effect and avoided its “consequences”. It may arise because the defendant had an advantage over the plaintiff, in that he was “master of the situation”, but chose to run a risk... It may arise because the defendant had such an advantage over the plaintiff that he ought to have been “master of the situation” but unreasonably failed to take advantage of his superior position (at 461).

23. The inquiries suggested by the High Court, for the purpose of attributing sole legal responsibility for an injury to one party, seem apposite for the inquiry directed by s5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946. None of the factors to which the court referred operates in the present case to sever the causal link between the negligence of Amaca and Mr Oswald’s injury. Nevertheless, Bluescope alone controlled Mr Oswald's working environment.

24. Bluescope, perceiving that the boxes of asbestos blocks supplied by Amaca bore no warning, should have itself warned Mr Oswald of the need to take precautions, instituted safe working practices, and compelled observance of those practices. The consequences of Amaca's breach of duty could have been avoided had Bluescope exercised its powers of control over Mr Oswald's working environment. The observations of the High Court in Alford v Magee are particularly relevant to the failure by Bluescope to protect Mr Oswald from the inhalation of asbestos fibres released in the course of demolition. The negligence of Bluescope had far greater causal moment than that of Amaca.

Culpability of Bluescope

25. Bluescope contends that it is less culpable than Amaca because it did not have actual knowledge of the risks of Mr Oswald’s contracting mesothelioma. Much debate has occurred in this case, and in others before the Tribunal, concerning the relevance of contrasting actual, as against constructive, knowledge of a risk in the determination of culpability. Such an exercise may be useful when the culpability is that of natural persons, however, it is of limited utility when considering the culpability of corporations.

26. Knowledge, actual or constructive, is attributed to a corporation for the purpose of assigning liability, and s5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 proceeds upon the basis that a corporation claiming or resisting contribution is liable to the plaintiff. The inquiry directed by s5(2) is however concerned, not with liability, but with culpability.

Attributed Knowledge as a Basis for Assigning Legal Liability

27. The phrase "the directing mind and will" of a company as a descriptor of that person in whom corporate knowledge resides was coined by Viscount Haldane LC in Lennards Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705. Viscount Haldane was there concerned with the construction of s502 of the Merchant Shipping Act 1894, which provided a shipowner with a defence to a claim for the loss of cargo put on board the ship if he could show that the casualty happened "without his actual fault or privity." His Lordship identified, for the purpose of the statute, that person whose function it was in the company to discharge the relevant duties expected of a natural person who was a shipowner, describing that person, for the purpose of the statute, as the "directing mind and will" of the company, whose knowledge and conduct was to be attributed to the company.

28. However, as the Privy Council pointed out in Meridian Global Funds Management Asia Ltd v Securities Commission (1995) 3 WLR 413, it is not in every case necessary to identify a singular "directing mind and will" of a corporation in order that responsibility for an act or omission be attributed to that corporation. The question is one of construction rather than metaphysics. "It is a question of construction in each case as to whether the particular rule [of attribution] requires that the knowledge that an act has been done, or the state of mind with which it was done, should be attributed to the company" (at 423).

29. In Brambles Holdings Ltd v Carey (1976) 15 SASR 270 at 275, Bray CJ said that, in a proper case for the purpose of assigning legal responsibility, a corporation has the combined knowledge or belief possessed by more than one of its officers, and that it was wrong to say that any state of mind to be attributed to a corporation must always be the state of mind of one particular officer alone, and that the corporation can never know or believe more than that one man knows or believes.

Attributed knowledge as a basis for assigning culpability

30. In like manner to the attribution of legal liability, culpability may be attributed to a corporation by considering the knowledge, belief and culpability of more than one responsible officer of the company.

31. The culpability of a corporation in relation to harm negligently inflicted may be weighed by considering the extent to which the causal acts and omissions of responsible natural persons in the service of the company departed from the standards expected of a reasonable person possessed of the same knowledge, actual or constructive, and authority.

I propose to examine the culpability of Bluescope in these terms.

32. Dr Howe graduated in medicine in 1945. After some years in general practice in the Wollongong area, he was in 1957 employed by Bluescope in the medical department of the Steelworks.

33. In 1962, Dr Howe became the head of the department with the title Medical Superintendent. In 1976, he was appointed Superintendent Medical and Welfare Services, the most senior medical officer for all plants and organisations within the BHP umbrella, including Newcastle and Whyalla. Dr Howe says that prior to this formal appointment he was in fact the de facto chief medical officer for BHP.

34. Dr Howe, asked when he became aware of the dangers associated with asbestos, said that "Somewhere along the line, and I can't remember when, there were articles written from overseas on the dangers of asbestos".

35. The medical section of Bluescope maintained a library of a few textbooks and two or three journals of occupational medicine. Those journals included the British Journal of Industrial Medicine and the Australian Medical Journal. Dr Howe agreed that he read those journals, and that in the 1960s there were several articles published relating to the hazards associated with inhaling asbestos. He also said that from that time, there was a body of knowledge in the medical department at the Steelworks that inhaling asbestos could cause injury.

36. Because the dangers of contracting the disease of asbestosis from inhaling excessive quantities of asbestos dust were quite well-known before 1967, I take the doctor’s evidence to mean that it was not until the 1960s that his medical department knew that the inhalation of asbestos dust in relatively small quantities could cause mesothelioma.

37. In 1960, the British Journal of Industrial Medicine published the article by Wagner and others which first suggested an association between minimal asbestos inhalation and mesothelioma. The subjects of the study included housewives, domestic servants, cattle herders, farmers, a bailiff, an insurance agent, and an accountant. The authors wrote that: "The four industrial cases are significant. Two of the patients were lagging locomotive boilers and one was lagging steam pipes."

38. In 1962, the Medical Journal of Australia published an article entitled "Malignant Pleural Mesothelioma in an Asbestos Worker" by Dr James McNulty. In that article Dr McNulty said that: "Experience in Western Australia certainly confirms that blue asbestos is a very harmful and lethal fibre".

39. In 1965, the British Journal of Industrial Medicine published a study by Newhouse and others, which concluded that: "There seems little doubt that the risk of mesothelioma may arise from both occupational and domestic exposures to asbestos".

40. It is quite obvious that the time "somewhere along the line", when Dr Howe became aware of the dangers of mesothelioma was not later than 1965. Notwithstanding this learning, his stated belief gleaned from the articles that blue asbestos was a cause of mesothelioma, and his ignorance as to the types of asbestos used in the Steelworks, Dr Howe said that he never discussed the dangers of mesothelioma with management. This evidence is not entirely accurate. In 1977, after the issue was raised with Dr Howe by an engineer, Mr David Hodges, Dr Howe did belatedly discuss the dangers with management.

John Allen Thirwell

41. Mr Thirwell, after graduating with a Bachelor of Commerce in Industrial Relations, commenced working in the Industrial Relations Department of Bluescope in 1965. In 1977, he was promoted to the new post of Superintendent of Safety and Employee Development at the Steelworks. Before that time the positions of Safety Superintendent, and Superintendent Industrial Relations at the Steelworks were held by separate persons.

42. In 1968, each enterprise within the BHP umbrella produced a fortnightly report dealing with industrial relations. These reports were circulated between the various plants. On 8 November 1968, the Superintendent of Industrial Relations at Whyalla Shipyard included in his report the following passages:

Stoppages of Work

(i) Shipyard-Sheet Metal Workers

Sheet metal workers employed in the Shipyard ceased work at lunchtime on seven November in connection with a dispute involving work on material containing asbestos. See later reference herein.

…

3. Industrial Matters Preceding Or Pending

3.1 Board of Reference—Dirty Work

On the fourth instant we contacted the Chairman of the Board of Reference to inquire specifically what he had in mind that the parties should discuss in the conference he proposed. He advised us that subsequent to his return to Adelaide, he had read a number of articles on the disease asbestosis and had discussed the matter with Dr Wilson of the Department of Public Health and he was concerned that there might be some health hazard to our employees.

Subsequently we obtained certain medical and technical information on the subject. It would appear that the Chairman's fears are completely unfounded and that he had the matter completely out of context. Accordingly we have asked for the Board to be reconvened (and this has been set down in Adelaide on 13th instant) when we propose to submit to him that the Board should confine its interest to the specific claims before it and that he should take no action with respect to the alleged health hazard as this is a matter for which special authorities have been established under legislation of the South Australian Parliament. We have told the Chairman that we do not in any way wish to avoid an investigation into any alleged health hazard but rather we would welcome an inquiry but, in our view, such an inquiry must be conducted by qualified experts under the relevant State legislation.

43. A copy of this memorandum was received by the Superintendent Industrial Relations at Port Kembla and circulated within the Industrial Department. Mr Thirwell said that possibly as many as six Industrial Officers would have read the document.

44. On 5 December 1968 the Superintendent Industrial Relations at Whyalla included this passage in his report, which was also circulated to the Superintendent Industrial Relations at Port Kembla:

1.3 Asbestos — Alleged Health Hazard

Further to our last report Dr Wilson of the Public Health Department made an inspection on the 28th November of practically all work done by Shipyard employees in connection with materials containing some asbestos. We are now awaiting Dr Wilson's report and we have no positive indication as to what it might contain.

45. On 17 January 1969, the General Manager of the Whyalla Shipyard issued a press release stating that the Department of Public Health had now released its report on the investigation into the industrial dispute concerning asbestos. The report is not in evidence, however, the press release contained the following passages, which probably reflect the content of the report, and the information available to Bluescope had the Superintendent of Industrial Relations at Port Kembla troubled himself to obtain a copy.

The factors which bear upon the risk of asbestosis are well recognised, and are: the type of asbestos fibre, the concentration of fibres in the air, and the length of time of exposure to that concentration. The National Health and Medical Research Council has recommended a maximum allowable concentration of 5 million particles of asbestos per cubic foot for an exposure time of eight hours a day, five days per week.

At the present time the relationship between exposure to asbestos dust and mesothelioma is not so clearly defined as that between exposure and asbestosis. Prior to 1960 when the first association between asbestos dust and mesothelioma was first noted in South Africa, this tumour was so rare as to be considered a medical oddity. They are still rare, the total reported up to 1966 was only about 500 in all parts of the world. Evidence from several countries suggests that exposure to crocidolite may be of particular importance in this condition. No authenticated case of mesothelioma following exposure to the dust of the other types of asbestos has yet been reported, but extensive research is currently being conducted overseas to confirm this. There have been reports of mesothelioma occurring in people exposed for relatively short periods, or exposed to asbestos dust in a non occupational environment.

It is considered that any risk from asbestos dust would be negligible if the following recommendations are followed:

…

2. Lagging:

(a) any workman when required to shape asbestos blocks by cutting or sawing, should be supplied with an appropriate respirator.

(b) whenever lagging is carried out on the ship, all resulting debris should be cleaned up by vacuum cleaner at frequent intervals and at the completion of each job.

46. Mr Thirwell said that the contents of the two Industrial Relations reports from Whyalla would not have excited his interest. He said that as far back as 1968, as a student of industrial relations, he was aware of asbestos as an issue because health and safety issues were discussed at university. Nevertheless, he did not think asbestos was an issue at the Steelworks. He gave this evidence:

Question: What about health hazards to the workers or was that not your job?

Answer: No, I'm talking about priorities here. I'm saying that would not have been an issue, that if I had seen that at the Whyalla Steel Works it would not have excited me to go and talk to the people at the Port Kembla Steel Works about it.

Question: Are there priorities greater than the life and death of the workers?

Answer: In the sense that you are trying to have me come to a conclusion, I would not have been excited by that article to have gone to the Safety Superintendent about asbestos…

47. At the time of these events, Mr Thirwell was a very junior employee with little, if any, responsibility or power of control. The same could not be said of his superior Mr Ackhurst, the Superintendent, Industrial Relations, at Port Kembla. Because nothing was done in response to the memoranda, it must be assumed that Mr Ackhurst shared Mr Thirwell’s indifference to their content. Had the memoranda been referred to the Superintendent of Safety at Port Kembla, that man, acting reasonably, would have at least requested a copy of Dr Wilson's report from his opposite number at Whyalla, and become aware of its general content as described in the press release.

48. As it happens, the evidence concerning events at Whyalla is not all that significant, because I have found that by 1965, Dr Howe already knew from his reading that mesothelioma may occur in persons exposed to asbestos dust for relatively short periods. Dr Howe should have informed the Safety Superintendent at Port Kembla of the need to take some precautions when handling asbestos.

49. Bluescope explain the failure to call Mr Ackhurst by the tender of his death certificate. No explanation is given for absence of evidence from the Safety Superintendent employed at the Steelworks between 1967 and 1971.

Mr David Hodges

50. In the late 60s or early 70s Mr Hodges, an engineer, was appointed by Bluescope to a position dealing with environmental matters outside the physical scope of the Steelworks. In 1977 he was sent by Bluescope to attend a course at Sydney University in the School of Public Health and Tropical Medicine. This was a course on occupational hygiene. He was there made aware of the particular dangers of asbestos, and on his return, spoke to Dr Howe saying that something should be done about asbestos exposure in the Steelworks. From that time, the Steelworks ceased to purchase asbestos materials.

51. In cross-examination, Mr Hodges agreed that prior to his attendance at the course on occupational hygiene, he had a general knowledge of asbestos dangers. He said that; "like most members of the community, I realised there were perhaps problems but that really brought it home."

52. This concession by Mr Hodges is incompatible with any assertion by Bluescope that, before 1977, when Mr Hodges insisted to Dr Howe that it was “something we ought to be doing something about”, there was no responsible person at the Steelworks who knew that there were problems with asbestos.

Mr J J Grierson

53. Between 1950 and at least 1968, Bluescope owned and operated coal mines in the Wollongong area. The personnel who managed the mines were quite distinct from the personnel who managed the Steelworks. In 1968 Mr Grierson was employed by Bluescope as its Superintendent of Collieries.

54. Between 12 and 14 February 1968, the First Australian Pneumoconiosis Conference, subtitled A Conference on Airborne Dust in Industry; Its Measurement, Control and Effects on Health was held in Sydney. Mr Grierson, and three other employees of Bluescope's collieries, attended. Bluescope, amongst others, sponsored the attendance of Mr K M Morse of United States Steel Corporation, Pittsburgh, USA.

55. A wide variety of occupational diseases were discussed during that conference, including asbestosis and mesothelioma. In one paper, Pneumoconiosis in Queensland, the author, Dr E M Rathus, the Director of Industrial Medicine in the Queensland Health Department, described two cases of pleural mesothelioma, and stated that: "Both patients showed the usual association of minimal to moderate exposure to asbestos fibre".

56. Mr Grierson had previously attended the Third International Conference of Experts on Pneumoconiosis held in Sydney in February-March 1950. The dangers of contracting asbestosis and lung cancer from inhaling asbestos were discussed at that conference.

57. Mr Grierson, having been sent to the conferences as a representative of Bluescope, should have ensured that his learning was shared within other departments of the corporation.

Superintendent of Safety

58. Mr Thirwell confirmed that in 1968 such a position existed in the hierarchy of management at the Steelworks. The identity of the person or persons who held the office between 1967 and 1971 is not revealed, however no explanation is given for the failure to call any such officeholder. I infer that evidence from such a person would not assist Bluescope in establishing that it was ignorant of the dangers of asbestos.

59. Mr Oswald has described his asbestos exposure as being of very high intensity. In his statement to the Dust Diseases Board he said that he had “heavy daily exposure to dust containing silica coal and asbestos fibres” for a period of four years. Such exposure created a risk of contracting the asbestos related disease of asbestosis.

60. The dangers of contracting asbestosis as a result of inhaling excessive quantities of asbestos dust were well known before 1968. S41(2) of the Factories, Shops and Industries Act 1962 relevantly provided that:

Where in connection with any process carried on in a factory there is generated or given off any fume of such a character and to such an extent that the inhalation thereof would be likely to be injurious or offensive to persons employed in the factory, or any substantial quantity of dust of any kind, effective measures shall be taken to prevent the accumulation in any work room of such fume or dust and to protect such persons against the inhalation thereof.

The National Health and Medical Research Council had, before Mr Oswald was employed, recommended maximum allowable concentrations of asbestos dust to which workers may be exposed. I cannot accept that, as a general proposition, Bluescope’s Superintendent of Safety at Port Kembla was ignorant of the risk to health created by excessive quantities of dust.

61. Mr Thirwell said that he was aware of asbestos as an occupational health and safety "issue" from his student days. Nevertheless he did not believe it was an issue at the Steelworks. This latter belief could only have been held because he was ignorant of the extent to which Steelworks employees such as Mr Oswald were exposed to asbestos dust.

62. Bluescope employed between 400 and 500 refractory bricklayers, and probably as many laggers. It is beyond dispute that, at the time Mr Oswald was employed by Bluescope to work with asbestos, in the words of the press release which should have been read by Mr Ackhurst: Any workman when required to shape asbestos blocks by cutting or sawing, should be supplied with an appropriate respirator. The Superintendent of Safety at the Steelworks either failed to inform himself as to the extent of Mr Oswald's exposure to asbestos dust, or did nothing to reduce that exposure. In either circumstance his failure was blameworthy.

Management

63. Mr Webb QC for Bluescope submits that in the assessment of Bluescope's culpability for the purposes of determining contribution, I may only consider the state of mind, actual knowledge, and moral turpitude of persons responsible for the breach of duty employed in the Steelworks division. For this purpose, he argues, the knowledge of Mr Grierson in the colliery division is completely irrelevant.

64. The problem with this argument is that it draws within too narrow a compass the category of persons who are responsible for the breach. Those persons responsible for Mr Oswald's injury include the senior managers responsible for the organisational indiscipline, pursuant to which important information concerning the health of Bluescope's workers was compartmentalised within divisions of the company.

65. The knowledge of Mr Grierson is attributed to the company, as is the culpability of the managers personally responsible for the circumstance that Mr Grierson did not share his knowledge with Dr Howe, or the Superintendent of Safety in the Steelworks, (assuming that Superintendent to have been himself ignorant).

66. I also think it blameworthy that senior management at the Steelworks participated in the sharing of information concerning Industrial Relations with other BHP enterprises, yet did not seek to establish a similar regime to share information concerning Occupational Health and Safety.

67. Dr Howe gave evidence that during his time as Medical Superintendent, the steelworks had a workforce of 25,000 people. Dr Howe described the prime functions of the medical section as conducting pre-employment examinations, reviewing persons returning from injury or illness, and assessing loss of function for compensation matters. The doctors there employed also treated minor injuries, seriously injured workers being taken directly to hospital.

68. Dr Howe, who was called by Bluescope, gave no evidence that any function of Bluescope's Medical and Welfare Services department was expressly concerned with occupational health and safety. He said that if there was a major conference being held in Sydney on dust caused lung diseases, it was not important that he should attend. Although Dr Howe recalled learning that blue asbestos could cause mesothelioma, he also said that at no time during his employment by Bluescope was he made aware of the types of asbestos which were in use in the Steelworks.

69. The failure on the part of management to engage the medical practitioners employed in the Medical and Welfare Services department upon matters of occupational health and safety is blameworthy.

Culpability of Amaca

70. The culpability of Amaca is to be assessed in the circumstances of this case. Its culpability in relation to its failure to warn its own workers, and the end users of building products, is not relevant. Neither category of persons could rely upon an intermediate entity to protect them from the harmful consequences of ignorance.

71. We are here concerned with supply of asbestos insulation material consumed in high volumes by a vast industrial corporation whose responsible senior officers were aware of the risks of asbestosis and mesothelioma.

72. Nevertheless the culpability of Amaca in failing to warn Mr Oswald is not insignificant given the extensive knowledge it possessed as to the dangers of asbestos and the practical means of reducing those dangers.

73. In 1966 Amaca employed Dr S F McCullagh to inform himself and advise it upon the dangers of asbestos. In July 1966 Dr McCullagh advised Amaca factory managers that recent literature had reported fairly conclusive evidence that asbestos fibres when inhaled could cause mesothelioma, that there was no safe upper limit for asbestos dust, and that any exposure was dangerous and cumulative. Thereafter Amaca consciously suppressed dissemination of information in the public arena, and omitted to place warnings upon its products, for the specific purpose of: "[protecting] future sales which could be affected by asbestosis or lung cancer fears".

Relative Culpability

74. Notwithstanding the actual knowledge possessed by Bluescope’s Medical Superintendent and Superintendent of Collieries as to the dangers of mesothelioma resulting from relatively trivial exposure to asbestos, and the grievous managerial failures which permitted Mr Oswald's exposure to continue in circumstances where he was also at risk of contracting asbestosis, then a well-known disease, the conduct of Amaca is more blameworthy than that of Bluescope.

Previous decisions

75. I have been referred by Bluescope to several previous decisions which relate to apportionment between employers and asbestos suppliers, and recognise the importance of consistency in determinations by the Tribunal.

76. In State Rail Authority of NSW v Wallaby Grip Ltd and James Hardie & Coy Pty Ltd (Re Rayner) 18 NSWCCR 193, I apportioned liability one fifth to the employer and two fifths to each of two asbestos insulation suppliers. Significantly I based this apportionment upon my finding that, in 1938, the employer did not, and the suppliers did, have actual knowledge of the dangers of asbestos.

77. In Mary Phyllis Zanier (Legal Representative of the Late Flavio Zanier) v BHP Steel Ltd and Amaca Pty Ltd DDT 11 July 2003 I determined that Amaca was twice as culpable as the employer. The late Mr Zanier was employed by the steelworks between January 1963 and February 1964. In the course of this employment he was, for five per cent of the time, exposed to Amaca’s asbestos insulation products. Thereafter, between 1970 and 1985, as a self-employed builder he used asbestos cement products manufactured by Amaca.

78. I there said that: Of particular relevance in the present case is that the plaintiff's exposure at BHP was in 1963 when the dangers of contracting mesothelioma were not widely understood. The exposure to the products of Amaca continued until 1985, during which time the dangers became increasingly notorious within the medical, scientific and industrial communities.

79. In Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Coy Pty Ltd (Re Hay) (1999) 18 NSWCCR 653, the plaintiff was exposed to James Hardie asbestos insulation products at a power station between 1958 and 1961. I found upon the evidence then before me that it was reasonable to infer that the failure of James Hardie to include warnings with its insulation products was because James Hardie were concerned that "ignorance and fear" in the public arena would be increased by the perception that the products were sufficiently dangerous as to require warning and careful use.

80. Notwithstanding this finding, and the further finding that James Hardie knew of the employer's failure to observe the necessary precautions in the workplace, I apportioned liability equally between the employer and James Hardie.

81. O’Meally P in (Re Lawrence) BHP Billiton Ltd v Amaca Pty Ltd [2003] NSW DDT 18 considered the circumstance of a carpenter employed by BHP between 1961 and 1970 who worked upon asbestos materials supplied by Amaca. His Honour apportioned liability 50-50 in the absence of a finding that BHP had actual knowledge of the dangers of asbestos. He said: BHP had a duty, not merely to act when advice was given to it, but to seek out, acquire and apply information in respect of all activities known to carry risks of injury. This it failed to do… If BHP did not know of [the dangers] it could have acquired such information by consulting scientific or industrial journals.

82. Kearns J, in (Re Floro) Bluescope Steel (AIS)Pty Ltd v Amaca Pty Ltd [2007] NSW DDT 27, considered apportionment between Bluescope and Amaca in relation to Bluescope's liability to a plaintiff who was employed between 1962 and 1970 as a bricklayer and engineers’ assistant. His Honour apportioned liability 60 per cent to Bluescope and 40 per cent to Amaca, upon findings that the asbestos to which the plaintiff was exposed in the course of his employment was essentially the product of Amaca and that Bluescope had actual knowledge of the published risks associated with use of asbestos in the relevant period.

Conclusion

83. Bluescope's tortious conduct was less culpable than that of Amaca but it had greater causal effect. If Bluescope had acted reasonably Mr Oswald would not have suffered the consequence of Amaca's breach of duty.

84. The causal potency of Bluescope's breaches of duty exceeds the causal effects of Amaca's breach of duty to a greater extent than the culpability of Amaca exceeds the culpability of Bluescope. I apportion responsibility for the damage caused by Amaca's products 60 per cent to Bluescope and 40 per cent to Amaca.

85. Unlike the circumstances in Floro, Amaca’s products were responsible for only 90 per cent of Mr Osborne's total fibre burden, and Amaca cannot be liable to contribute to more than 90 per cent of Bluescope’s liability.

86. Amaca is not responsible for the combined contributions of both Wallaby Grip and BlueScope to the damage caused by Wallaby Grip’s products. That is at 10 per cent of the whole. That 10 per cent of the total liability of BlueScope is 10 per cent of 538,550 equals 53,855. When the balance then of $484,695 is to be apportioned between BlueScope and Amaca pursuant to reasons expressed in the judgment, Amaca is to pay 40 per cent of that sum. That is $193,878 plus interest from the dates of payment to the plaintiff..

Orders

87. I direct the parties to bring in short minutes of order consistent with these findings.

Mr P Webb QC with Mr T M Rowles instructed by Sparke Helmore the appeared for the cross claimant

Mr G M Watson SC instructed by DLA Phillips Fox appeared for the cross defendant

13/05/2009 - amended pursuant to slip rule - Paragraph(s) 86