(Re: Woelfl) State Rail Authority of New South Wales v Amaca Pty Ltd (No 2)
[2004] NSWDDT 52
•12/17/2004
Dust Diseases Tribunal
of New South Wales
CITATION: (Re: Woelfl) State Rail Authority of New South Wales v Amaca Pty Ltd & Anor (No 2) [2004] NSWDDT 52 PARTIES: State Rail Authority of New South Wales
Amaca Pty Ltd
Wallaby Grip LimitedMATTER NUMBER(S): 61/98/01 JUDGMENT OF: Walker J at 1 CATCHWORDS: :- LEGISLATION CITED: CASES CITED: DATES OF HEARING: 01/07/2004
15,16,17,18 & 19/11/2004DATE OF JUDGMENT:
12/17/2004LEGAL REPRESENTATIVES:
FOR CROSS-CLAIMANT: Mr Holmes, QC instructed by Moroney Betts Solicitors.
FOR FIRST CROSS-DEFENDANT: Mr Watson, SC instructed by Phillips Fox.
FOR SECOND CROSS-DEFENDANT: Mr Russell, SC instructed by Acuiti Legal
JUDGMENT:
THE APPLICATIONS
1. The cross claimant moves the Tribunal for findings that:
(a) The parties to these proceeding were parties to proceedings DDT 72 of 1996 ( In Re: Rayner) SRA v Wallaby Grip Limited and James Hardie & Coy Pty Ltd)
(b) The Dust Diseases Tribunal in Rayners Case held that both 1st and 2nd defendants had actual knowledge of the dangers to health posed by visible clouds of asbestos dust between 4 January 1938 and December 1950 whereas during this period the cross claimant did not have actual knowledge but had constructive knowledge of such dangers.
2. And declarations that:
(a) The defendants are estopped from re-agitating the findings of Curtis J on the question of the parties knowledge of the dangers of asbestos at the relevant time.
(b) It would be an abuse of process to allow re-agitation of those findings.
(c) The cross defendants application for leave pursuant to S 25B (2) of the Dust Diseases Tribunal Act 1989 to relitigate or re argue these issues previously determined be denied.
(d) That there is nothing in the enactment of the Transport ( Division of Functions) Act 1950, which renders the Commissioner for Railways the representative of the Crown of NSW, that warrants attributing to the SRA the knowledge of the Crown about the dangers of asbestos.
A.ISSUE ESTOPPEL
3. Russell SC concedes that the decision in Rayners Case constitutes an issue estoppel against the second cross defendant on the question of its knowledge of the dangers of asbestos at the relevant time. However the second cross defendant argues that, properly construed, the findings of Curtis J. in Rayner attributed constructive not actual knowledge to it.
4. Watson SC asserts that no estoppel can arise at law with regard to evidentiary facts, no matter how fundamental they may have been to the chain of proof or reasoning in the decision of Curtis J on the ultimate issue, and the decision in Rayner concerning his clients knowledge of the dangers of asbestos at the relevant time was no more than a determination of evidentiary facts.
THE LAW
5. The parties are agreed that the relevant law on issue estoppel is to be found in the decision of the Court of Appeal in Egri v DRG Australia Limited (1998) 19 NSWLR 600.
6. There the Court of Appeal held:
1. A final decision, once given by a competent tribunal, creates an issue estoppel in that it forever binds the parties and all those who claim through them in respect of any issue of fact or law which was legally indispensable to that decision.
2. The court then added the following rider upon which Watson SC rests his case: “However, no estoppel arises concerning evidentiary facts no matter how fundamental they may have been in the chain of proof”.
7. In the context of whether or not the finding of actual knowledge against the cross defendants in Rayners Case was a finding on an issue of fact which was legally indispensable to the ultimate decision or merely a finding of evidentiary facts Watson SC would characterise all findings of fact under s5 (2) of the Law Reform (Miscellaneous Provisions Act (1946) concerning relative blameworthiness between tortfeasors as “the idiosyncratic reaction of the judge to those facts in comparing them with the conduct of another party.” Watson SC maintains that such “fundamentally discretionary findings applicable in apportioning contribution…… are inappropriate to bind another party with for all time”.
8. Watson SC alludes to the decisions of the Court of Appeal in Dunnet v Brennan [2000] NSWCA 211 and Fitzgerald v Dansey [2001] which reaffirmed the long established principles which restrict an appellate courts power to review a trial judges decision on apportionment on the basis that an appeal court is not entitled to interfere if the trial judges apportionment was reasonably open. Appellate Courts are generally reluctant to interfere with a trial judge findings of fact given that judicial officers advantages of assessing the credibility of evidence. They are also reluctant to intervene in the exercise of judicial discretion. However the principles applied by appellate courts to reviewing findings of fact are not in issue here. The legal issue is whether the findings of fact made by the trial judge in Rayner about the defendant’s state of knowledge of the dangers of exposure to asbestos dust at the relevant time were legally indispensable to his ultimate conclusion on apportionment of liability between the tort feasors.
9. The issue in contention in Egri was whether the worker was still suffering disability and incapacity from a back injury. The question was whether a finding by the Workers Compensation Commission that a disc lesion had not been established from the medical evidence created an issue estoppel in a suit for common law damages for negligence brought in the Supreme Court against his employer.
10. At page 603F of the judgment of the Court of Appeal McHugh JA quoted with approval the statement by Dixon J in Blair v Curran (1939) 62 CLR 464 at 532 that:
“In matters of fact the issue estoppel is confined to those ultimate facts which the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgement decree or order. In the phraseology of Coleridge J in R v Inhabitants of the Township of Harrington Middle Quarter (1855) 119 ER 288 at 293 the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point of issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous”.
11. Justice McHugh saw the ultimate issues in question before the Workers Compensation Commission as the employers denial of two propositions viz:
1. That the worker sustained a back strain and
- 2. That the work sustained a disc lesion.
This conflict was determined by deciding it was only a back strain. The finding that there was no disc lesion was fundamental in determining what was the nature of the injury and whether the worker was still incapacitated .
12. The difficult question for courts determining issue estoppels lies in distinguishing between those matters fundamental to the decision, or necessarily involved in it as its legal justification or foundation, from matters which are not in point of law the essential groundwork of the conclusion. To arrive at a decision it is therefore necessarily to examine the reasons of Curtis J to ascertain whether the facts in contention in this case (namely the state of knowledge of the defendants of the dangers to health posed by visible clouds of asbestos dust between 4 January 1938 and December 1950) were fundamental and formed the essential groundwork to his ultimate conclusion.
13. The issue Judge Curtis was determining in the cross claim by the State Rail Authority against the cross defendants was apportionment of a verdict he had found in Mr Rayners favour between the parties to the present case pursuant to the provision of S 5 (2) of the Law Reform( Miscellaneous Provisions) Act 1946. That section required him to apportion liability between the parties responsible for the damage in a manner that was “just and equitable”. Fundamental to making that decision was a consideration of the facts to determine the relative blameworthiness of the parties and the relevant causal potency of the negligence of each party. ( See Macquarie Pathology Service Pty Ltd v Sullivan ( Unreported NSWCA 28 March 1995). In making that comparison of the relative culpability of the cross defendants Judge Curtis was obliged to weigh, in all the circumstances of the case, their relative departure from the duty of care they owed to the plaintiff. Of critical importance to ensuring justice and equity in reaching that determination of their relative blameworthiness was a factual determination of the state of their knowledge at the time the tort was committed about the dangers of exposing the plaintiff to clouds of asbestos dust in his work environment, the relative virulence of different forms of asbestos and the measures then reasonably available to protect workers from inhaling the dust.
14. His Honours ultimate determinations were :-
1. At [108] he found “there is no evidence that between 1938 and 1950 the SRA had actual knowledge of the dangers to health posed by visible clouds of asbestos dust. Hardies did know.”
2. At [109] he found “while the evidence is silent I find it inconceivable that Bells, a large commercial enterprise trading in asbestos had no actual knowledge of the dangers created by its products. In any event it was a major supplier. Action in ignorance of what it should have known would be almost as reprehensible as action with actual knowledge.”
3. Then at [110] Judge Curtis compared the relative potency as a carcinogen and length of exposure to Bells and Hardies asbestos products. He found that the potency of the Hardies product which product which contained crysotile was greater. However he also found that the exposure to the Bells product was much longer concluding, “Because of this greater exposure I believe that the causal potency of the product supplied by Hardies and Bells to be equally poised”.
4. The Judge Curtis took into account at [112] “the pre-eminent position of each of the cross defendants in the industry , their actual knowledge of the danger and the commercial nature of their operations contrasting, as it does, with the operation of a public railways service by the SRA”. He also took into account: “the unique knowledge professed by each cross defendant in relation to a product, the dangers of which were no readily apparent”. Finally he acknowledged “the non delegable duty of care of the SRA to the plaintiff and the fact that although not the crown it had more ready access to the resources of the Department of Occupational Health than employers in the private sphere.”
5. At [113] he apportioned 1/5th of the liability to the SRA and 2\5th’s each of the cross defendants.
The question is whether these determinations of fact made by Judge Curtis that I have just recited were legally indispensable to his ultimate decision on apportionment of liability or necessarily involved in it as it’s legal justification or foundation as Holmes QC submits or whether they were no more than mere evidentiary facts found in the chain of proof as Watson SC submits. The decision of Macquarie Pathology Service Pty Ltd v Sullivan, makes it clear that relative blameworthiness must be compared. The state of knowledge of each party being compared is undoubtedly a critical factor in making that determination. Moreover the decision in Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALR 529 at 532 held:
“ the whole conduct of each negligent party in relation to the circumstances of the accident must be subjected to comparative examination”.
16. The conduct of a party who, with knowledge of the dangers of a carcinogen fails to warn those exposed to it or take measures to protect them from it is patently more blameworthy than that of a party who had no actual knowledge. There is no question in my mind that the state of knowledge of the cross defendants in Rayners Case needed to be resolved by the Tribunal to provide the groundwork for its ultimate decision to apportion liability. The determinations of Curtis J that both the cross defendants had actual knowledge were legally indispensable to him discharging the requirements of s 5(2) of the Law Reform (Miscellaneous Provisions) Act 1946 that the contribution recoverable from each cross defendant be just and equitable having regard to the extent of that persons responsibility for the damage.
17. The ultimate issue in this case is identical to that in Rayner namely the apportionment of liability between the same three parties. The question of whether the cross defendants had actual knowledge of the dangers to health between 1938 and 1950 of exposure to asbestos again is critical to the Tribunal reaching conclusions as to the relative blameworthiness of the parties. Moreover the purpose of the 1st cross defendants raising them is to assert that the decision of Judge Curtis was erroneous. Judge Curtis’ findings of fact that both cross defendants had actual knowledge at the relevant times therefore precludes the cross defendants as between themselves and the cross claimant from ever again asserting the contrary in litigation between them.
18. The second defendant argues that Judge Curtis did not in fact find actual knowledge but found constructive knowledge. That submission is based on the shaky foundation of the second sentence in [109] where Judge Curtis comments that ignorance of what it ( i.e. Wallaby Grip) should have known would be almost as reprehensible as having actual knowledge. Rather than read into that comment a finding of constructive knowledge I interpret it to mean what it says- namely that in the case of Bells constructive knowledge would have been almost as reprehensible as actual knowledge. I regard that comment as no more than obiter dicta.
19. However I note that in the first sentence of [109] Judge Curtis finds it “inconceivable that Bells, a large commercial enterprise trading in asbestos, had no actual knowledge of the dangers created by its products and at [112] Judge Curtis made his finding on this issue perfectly clear when in referring to cross defendants he took into account: “their actual knowledge of the danger.”
20. There is no doubt in my mind that Judge Curtis found the second cross defendant had actual knowledge. Given its admission that its estopped from denying Judge Curtis’ findings of fact on knowledge that ends the matter for the second cross defendant.
Abuse of Process
21. The cross claimant also seeks to invoke the inherent jurisdiction of the court to dismiss the proceedings on the basis that it is an abuse of process to attempt to relitigate issues decided in or barred by earlier proceedings.
Holmes QC refers the court to the text by Spencer Bower, Turner and Handley (3rd Edition) on the doctrine of Res Judicata pages paras [445] to [454] where Justice Handley traces the evolution of the doctrine that it is an abuse of process to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings referring to decisions of the High Court on the extended doctrine of res judicata in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332: Chamberlain v Deputy Commissioner of Taxation No 2. (1991) 28 FCR 21. Justice Handley concluded at [451]:-
“Where one or more of the parties in the second action was not a successful party in the first; a second action by an unsuccessful party, who had a proper opportunity of being heard in the first may be stayed or dismissed or a defence struck out as an abuse of process where:
(a) it involves a collateral attack on the earlier decision especially where aggravating features are present such as an ulterior motive or purpose
, the absence of fresh evidence or other special circumstances, or prejudicial delay since the earlier decision;
(b) the later proceedings can be seen to be without merit ( frivolous and vexatious) in the light of the earlier decision, a fortiori where the parties are the same.
23. However Justice Handley then went on to say at [452] that the position was more complex where both proceedings involve the same parties or their privies. In these cases the court may be applying ordinary res judicata principles, the Henderson principle, or considering abuse of process.
The parties are agreed in this case that it is abuse of process that is in issue and that the legal principles necessary to determine it are to be found in the decision of the Court of Appeal in Rippon v Chilcotin Pty Ltd & Ors (2001) 53 NSWCR 198. At [28] of his judgment in that case Justice Handley said
“The present proceedings are an attempt to litigate or re-litigate issues which were either decided in or are barred by the earlier proceeding. In substance, ignoring the camouflage, the purchasers are attempting to re-litigate the issue of reliance on the 1991 figures which they lost. If they cannot succeed against anyone in respect of the 1991 figures because they did not rely upon them they could hardly succeed in establishing reliance on the earlier figures.”
25. Justice Handley then went on to cite with approval the approach of Justice Giles in State Bank of NSW Ltd v Stenhouse Ltd (1997) Aust Torts Rep (64,077) at (64089) who listed the guiding considerations in such determinations as: “oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice and amongst the matters to which regard may be had are:
(a) The importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or ultimate issue.
(b) The opportunity available and taken to fully litigate the issue;
(c) The terms and finality of the finding as to the issue;
(d) The identity between the relevant issues in the two proceeding;
(e) Any plea of fresh evidence including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings………
(f) The extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice and:
(g) An overall balancing of justice to the alleged abuser against the matters supportive of abuse of process”
26. Then at [33] Justice Handley pointed out that applying those considerations turned upon “precise identification of the issues”. That is an appropriate place to commence my determination.
Identification of the Issues
27.
In previously determining the question of an issue estoppel I decided that in deciding the ultimate issue in Rayners Case namely the apportionment of liability to the plaintiff between the parties that the fact of the state of knowledge of each party about the dangers of exposure to asbestos dust was legally indispensable to reaching that ultimate conclusion.
28. In this instance precisely the same issue of knowledge confronts the Tribunal. The cross defendants are seeking to re-agitate the decision of Judge Curtis in Rayner on the following bases:
The second cross defendant seeks to establish that although Judge Curtis found that it had actual knowledge he really meant it had constructive knowledge. I have found against the second cross defendant on that issue.
The first cross defendant seeks leave to relitigate the question of the state of knowledge of both itself and the cross claimant of the dangers of asbestos on the following grounds:
(a) At [T 201.34] Watson SC indicated that it was his clients intention “to call evidence which fundamentally attacks the relationship between Amaca and the State Rail Authority at the relevant time.” He was referring to the enactment of the Public Transport Act 1950 which he maintains permits this Tribunal to attribute the knowledge of the State of NSW about the dangers of exposure to asbestos to the SRA.
(b) At [T 202.12] Watson SC said the first cross defendant did not have at the time of Rayner but now has a full record of the proceedings of the Pneumoconiosis Conference of Sydney in 1950 an event attended by the Chief Medical Officer for the SRA Dr Mervyn Finlayson. That record was not before Judge Curtis.
(c) At [T 203.46] Watson SC indicated his client was “literally factually challenging the findings made by Judge Curtis.
29. Watson SC submitted that Judge Curtis “got it wrong, plainly wrong” in both the decisions of Rayner and Hay. Those decisions of fact were not appealed because only appeals on points of law are available.
30. When I pressed Watson SC to identify specifically the findings of fact he alleges Judge Curtis got wrong he was only prepared to cite three instances viz:
· The finding in Rayners Case recited at [19] of the S 25B notice that the first cross defendant “occupied a pre-eminent position in the asbestos industry and had actual knowledge of the dangers of the commercial use of asbestos” involved the drawing of incorrect inferences. Watson SC wants to put before this Court the documentary evidence before Judge Curtis namely the Dressen Report, the Merewether and Price Report and “a particular letter Judge Curtis relied upon”, to prove the findings of fact made by Judge Curtis were not available to him.
· The finding in Rayners Case at [22] about the pre eminent position of Hardies and their actual knowledge of the dangers is based upon an error of law subsequently corrected by the High Court in Hays Case where Judge Curtis wrongly used the word “contrasting” in comparing the conduct of Hardies and Bells with the SRA. Judge Curtis was wrong in law when he considered that a public body such as SRA was somehow protected by the law in a way that private bodies such as Bells Hardies were not.
· The findings in Hays Case at [27] concerning an advertising brochure from which Judge Curtis drew conclusions again were not available to him.
31. The first cross defendant in Rayners Case was unsuccessful. The preliminary question here is whether it had a proper opportunity to be heard in Rayners Case. There is no evidence to the contrary and I find it had a proper opportunity to be heard.
32. With the exception of the issue concerning the 1953 publication of the report of the Sydney Pneumoconiosis Conference and the two questions of law the first cross defendants case involves a collateral attack on Judge Curtis’ decisions of fact regarding Hardies actual knowledge of the dangers of exposure to asbestos dust at the relevant time.
33. There is an identity between the relevant issues in the two proceeding. I have found that the critical evidentiary issue namely the state of the parties knowledge about the dangers of asbestos was cardinal to the determination of the ultimate issue of apportionment.
34. There is no suggestion here that the terms and finality of the decision in Rayners Case is in question merely the use to which they can be put in this case using the provisions of S 25B. The cross claimant regards the prospect of relitigation as oppressive and unfair. Litigants in other asbestos cases involving the state of knowledge of the parties to this suit who have resolved their cases on the basis of the determination in Rayners Case which, like Hays Case, was a test case would be entitled to raise the issue of public confidence in the administration of justice of the issue of knowledge was relitigated.
35. To my mind the question of balancing of justice to the first cross defendant against matters raised by the cross claimant supportive of the abuse of power depends very much on the probative value of the “new” evidence in the form of the 1953 ILO report and the issues of law concerning the Public Transport Act 1950 and the legal question raised about in Hays Case.
36. Taking all the evidence in consideration I have reached the conclusion that the probative value of the 1953 ILO report is not of sufficient significance to outweigh concerns for the integrity of the system of administration of justice. My reasons are as follows:
Rayners Case was determined in June 1999 some 46 years after the publication of the ILO report on the Sydney Pneumoconiosis Conference. Judge Curtis had before him evidence about the Sydney Conference in 1950. However the two volume report subsequently compiled by the ILO in 1953 about the conference was not tendered. The alleged importance of the evidence was that the experts discussed at some length the dangers of exposure to asbestos and the Chief Medical Officer of the SRA a Dr Mervyn Finlayson attended as an observer. Judge Curtis must have been unimpressed by the probative value of the tendered evidence establishing that the SRA had actual knowledge of those dangers because at [108] of his judgment he declared “There is no evidence that between 1938 and 1958 the SRA had actual knowledge of the dangers to health posed by visible clouds of asbestos dust”. Indeed Judge Curtis made no reference at all to the conference or Dr Finlaysons attendance.
- Watson SC in submission on 18 November 2004 commencing at T 253.36 deals with the question of the probative value of the ILO report. He pointed out that many eminent international experts were present including Dr Merewether, Dr Greenburg, Professor Blackburn and Professor Lorimer Dodds. Also present was the SRA’s chief medical officer. Watson SC tabbed in excess of 70 references in the 700 odd pages of the report on proceedings of the conference which he said raised questions of the causal linkage between exposure to asbestos and lung disease such as asbestosis and cancer. Holmes QC took issue with many of those references in volume II because they were not drawn from the sittings of the conference or papers actually presented at the conference but constituted updates on matters such as comparative legislation completed after the conference concluded. Holmes QC, with the painstaking attention to detail for which he is famous, went to all of the references in the report and questioned the relevance of each and every one of them to the issue of the SRA’s knowledge of the dangers of asbestos. His forensic approach was to ask the court to put itself in the shoes of Dr Finlayson and to ask the question whether a mere medical officer would have come away from the conference with the impression that exposure of workers to asbestos was dangerous. He submitted that Dr Finlayson would have had no interest in asbestos anyway and would have focussed his attention on coal which was a product used or carried by the SRA in large amounts.
For the purpose of this determination on abuse of process it is not necessary to canvass in detail the hours of submissions made by Holmes QC on individual references in the reports. There is no way of determining whether, if Judge Curtis had had the benefit of the record of the discussion of the conference, the details of the learned papers and tables of epidemiological studies and comparative legislation that he might have been sufficiently impressed by it all to reach the conclusion that a medical officer from the SRA would have come away with the message that exposure of workers to asbestos was likely to cause asbestosis or cancer and they should be warned about the risk and protection needed. Having considered the evidence about the conference Judge Curtis did have before him and apparently rejected as having no probative value I very much doubt that the ILO volumes would have changed his mind.
The first cross defendant offers no credible excuse as to why it did not tender the ILO report in Rayners Case. Whilst S 25B does not impose a requirement that the evidence be new or fresh, Justice Giles provides such a requirement in his guideline (e) where he lists the reasons as to why it was not part of the earlier proceedings as a factor to be weighed by the Court along with the nature and significance of the evidence. I take the view that the 1st cross defendants failure to properly research the evidence in Rayner weighs heavily against it on this application.
I further take the view that because we are dealing here with the same parties and an identical issue in the two proceedings the balance of justice is tipped in favour of a finding supportive of abuse of process.
Finally I consider that in this specialised Tribunal, where the policy of the underpinning legislation ( including S 25B and S25 (3) ) is to simplify and shorten litigation and to avoid the impact and costs of relitigation upon plaintiffs, principles such as the finality of judicial determination and the public confidence in the administration of justice must be given their full weight in the absence of fresh evidence or other special circumstances.
37. It may be, as Watson SC submits, that another judge in another case not involving all three parties if presented with the material contained in the ILO report would arrive at a different conclusion concerning to Dr Finlaysons state of mind on the question of the dangers of asbestos after attending the 1950 Conference. However in the special circumstances of this case which does involve the same parties and in respect if which I have already found an issue estoppel, and in respect of evidence that is on no way fresh I take the view that it would be an abuse of process to reagitate the issue of the SRA’s knowledge based only on the evidence of the ILO report.
The Question of Law
38. Watson SC also raises two legal questions in the context of why reagitating the knowledge issue would not be an abuse of process:
(a) The finding in Rayners Case that Hardies commercial situation vis-a-vis a taxpayer funded polity was relevant to apportionment constituted a repetition of an error of law made by Judge Curtis in Hays Case which was subsequently corrected by the High Court.
(b) That the Public Transport Act 1950, which was not considered in Rayner because the plaintiffs exposure to asbestos whilst the Act was in force was de-minimus, operates to attribute knowledge of the state of NSW about the dangers of exposure to asbestos to its agency the SRA.
39. I have previously accepted Watson’s SC submission that questions of law are not caught by S 25B. Both these questions of law, if correctly stated, could be relied upon by the cross defendants in the substantive proceedings. There is no issue estoppel or abuse of process in respect of a question of law not decided or in respect of a question of law wrongly decided.
40. For all these reasons I determine that the 1st Cross Defendants application to relitigate the issue of the knowledge of the SRA decided in Rayners Case is an abuse of process.
APPLICATION FOR LEAVE TO RELITIGATE UNDER S 2B (2)
41. During submissions I tentatively raised with counsel the question of whether the cross defendants sought to argue the proposition that S 25B covered the field and modified, in dust diseases cases, the common law on issue estoppel and abuse of process particularly in regard to the discretion vested in the Tribunal under S 25B(2) to grant leave to relitigate. The parties indicated that they did not wish to argue such a case.
Accordingly I propose to approach this leave application on the basis that having found both an issue estoppel and an abuse of process on the issue of the parties knowledge of the dangers of asbestos arsing out of Rayners Case the cross defendants are estopped from moving the court to exercise its discretion under S 25B (2) to permit the relitigation of the issue of the parties knowledge of the dangers of asbestos determined by Judge Curtis in Rayners Case.
THE TRANSPORT (DIVISION OF FUNCTIONS) ACT 1950
43. It is agreed by the parties that while Judge Curtis in Rayners Case at [107] said that: “Parliament when constituting the Commissioner or Railways as an independent corporation by the Transport (Division of Functions) Act 1932 did not intend other than the Commissioner should have legal personality distinct from the Crown in respect of tortious liability”, he neither determined the legal effect of the 1950 Amending Act on the issue of attribution of the knowledge of the state to the SRA or applied it to Mr Rayners Case.
THE 1ST CROSS DEFENDANTS SUBMISSION
44. Watson Sc at T2 43.1 pointed out that Curtis J in Rayner found that the SRA was not the Crown at the relevant time (which was between 1938 and May 1950) The significant change came with the 1950 amending Act which commenced on 22 May 1950 and was only relevant to the last 7 months of Mr Rayners employment. Watson SC asks the Tribunal to draw from that change in legal status the conclusion that all the knowledge of the State of NSW ( notably its Department of Health) should be imputed to the SRA. The 1st Cross defendant has flagged evidence that it asserts would prove the State of NSW had actual knowledge of the dangers of asbestos at the relevant time.
45. Watson SC then calls in aid of his submission the decision of the High Court in Wynyard Investments Pty Ltd v Commissioner for Railways (NSW) (1955) 93 CLR 378 which decided at 385:
“ The history of the NSW Railways showing that the railways system of NSW, with immaterial exceptions, has always been a State activity, the fact that the legislation of 1932 provided that there should be a Ministry of Transport, presided over by the Minister of Transport ( later changed to the Minister for Transport) who was made by the Ministry of Transport Act a responsible Minister of the Crown, divided into departments, one of these being the Department of Railways administered by the Commissioner of Railways, and the complete subjugation of the Commissioner to ministerial control in all his activities by the legislation of 1950 would in themselves tend to prove an intention on the part of the Parliament of NSW to create a corporation in the person of the Commissioner no so that he would become a separate independent entity but in order to set up an agency of the Crown, constituting a branch of the department of the Ministry of Transport, capable of acquiring property and suing and being sued and having the administrative capacity to carry on in a convenient and permanent form an executive activity of state” [emphasis added].
46. Holmes QC dismisses the 1st Cross defendants reliance on Wynyard Investments by asserting that the imputation to the Commissioner of the actual or constructive knowledge of the State cannot be approached by simply asking whether the Commissioner was in some abstract sense or general sense an “agent” or “instrumentality” of the Crown or the State. In State Authority Superannuation Board v Commissioner of State Taxation WA [1997] 189 253 at p 280 McHugh and Gummow JJ state that the notion of “representing the crown” does not necessarily convey any clear meaning. Different questions will arise for example when asking whether a body falls within the “shield of the Crown” for the purposes of attracting one or more of its privileges or immunities from those which arise in asking whether a body is the “state” for constitutional purposes. Moreover in Ellis v Commissioner of Main Roads {1991)74 LGRA 96 it was held that to say that a body is the “state” for constitutional purposes or “represents” the crown so as to be an “agent” or “instrumentality” of the Crown for the purpose of attracting one or more of its privileges or immunities is not necessarily to say that the body is able to bring the crown into direct contractual relations or that the crown can be held to be vicariously liable for its actions.
47. According to Holmes QC the starting point for the rejection of the 1st Cross defendants submission is to recognise that an employee of the Commissioner of Railways was not at any relevant time an employee of the State. This he asserts follows from:
· The establishment of the Commissioner as a statutory corporation.
· The structure of Part VII of the Government Railways Act 1912 (NSW) which confers on the Commissioner alone rights and responsibilities of an employer in respect of employers of the Railways Service.
· The fact that the Commissioner when exercising his statutory functions – even at the direction of the Minister- did so as principle and not in any sense for or on behalf of the Crown.
48. Holmes QC then concluded that none of the grounds stated in Western Australia v Watson [1990] WAR 248 for imputing to the State the actual or constructive knowledge of its officers can apply to enable the imputation to the Commissioner of the actual or constructive knowledge of the State because
· the Commissioner and not the State was the employer
· the Commissioner and not the State therefore owed a non delegable duty of care as an employer
· Although, the Commissioner could be fixed directly with the actual or constructive knowledge of particular persons employed within the Railways service, the Commissioner could not be fixed with the knowledge of persons over whom he had no authority or control.
49. Holmes QC then went on to further argue that the power of Ministerial direction does not fix the Commissioner with the actual or constructive knowledge of the state because:
· the ministerial direction power was external to the body corporate comprising the Commissioner
· The exercise of the power was entirely within the discretion of the Minister; the Minister therefore did not become by reason of the existence of the power in any relevant sense the controlling mind or will of the Commissioner
· nor did the Minister become an agent of the Commissioner
· the Minister only had a power and not a duty; and
· the power was to direct and not to convey information.
50. Holmes QC then referred to s5 of the Crown Proceedings Act 1998 (NSW) which provides that the State of New South Wales may not be sued in respect of any claim against the SRA nor may the SRA be sued for claims against the Crown.
51. Finally Holmes QC referred to the decision of the Court of Appeal in Babcock International Ltd v Babcock Australia Ltd (2003) 24 NSWCCR 540. There, the Electricity Commission of NSW another statutory corporation subject to Ministerial direction and control was trying to avoid an imputation of knowledge of the Crown about the dangers of asbestos.
52. At [110] the Court of Appeal held “There is nothing in the nature of the position of the Minister who had powers of direction and control over the Electricity Commission that warrants attributing to his or her the knowledge of other Ministers of the Crown or government departments whose functions differ from the supply of electricity. There is nothing in the Electricity Commission Act itself that carries the remotest suggestion that the knowledge of other Ministers of the Crown should be attributed to the Electricity Commission. There is no reason not to treat the Electricity Commission as an independent entity, unconnected with the Ministers of the Crown other than the Minister having the control and direction of the Commission under s7 of the Act”.
53. If there was any room for doubt after all that then the Court of Appeal at [107] and [109] made it clear that even if the Electricity Act had stated that the Commission was the representative of the Crown, this did not render it the Crown’s representative for all purposes and did not deem it to be the Crown..
54. It is evident therefore that Watson SC’s submission is left without a feather to fly and that there is no basis in law for the 1st cross defendant reopening the question of the cross claimants knowledge of the dangers of asbestos based on the relevant knowledge of Department of Health.
- CURTIS J’S DECISION IN HAYS CASE
55. In SRA (NSW) v Wallaby Grip Ltd (Rayners Case) (1999) 18 NSWCCR 193 at [112] Judge Curtis said:
“In apportioning liability I take into account the pre-eminent position of each of the cross defendants in the industry, their actual knowledge of the danger, and the commercial nature of their objections contrasting as it does with the operation of a public railway service by the SRA. I also take into account the unique knowledge professed by each cross defendant in relation to a product, the dangers of which were not readily apparent ” (my emphasis).
56. Watson SC points to the use of the word “contrasting” and notes this same approach was eventually found by the High Court in Amaca Pty Ltd v The State of NSW (Hays Case) [2003] 1DDCR 39 to be an error of law on the basis that it was wrong to consider a public body to be somehow protected by the law in a way which a private body was not.
57. At [19] of its judgment the High Court said that Judge Curtis had erred in that “the reasons given for concluding that it was just and equitable that the State should contribute to the liability of James Hardie were irrelevant. That James Hardie was a commercial enterprise pursuing profit and the State a polity raising revenue by taxation are not considerations relevant to their respective responsibilities to contribute to the damages sustained by the injured plaintiff”.
58. The matter then returned to the Court of Appeal in Amaca v New South Wales (2004) 1DDCR 486 where the Court of Appeal found the State of NSW owed no duty of care even if it had actual knowledge and the issue of apportionment was therefore not considered.
59. When, in the substantive proceedings, the issue of apportionment under S 5 (2) of the Law Reform (Miscellaneous Provisions) Act 1946 is being determined, mindful of the High Courts decision in Hays Case, I will, of course, not be deciding the relative blameworthiness of the parties by taking into consideration the fact that Hardies are a commercial enterprise pursuing profits and the state is a polity funded by the taxpayers.
Summary of Findings
The determinations of Curtis J that both cross defendants had actual knowledge of the dangers of asbestos at the relevant time were legally indispensable to him discharging the requirements of S 5 (2) of the Law Reform ( Miscellaneous Provisions) Act 1946 that the contribution recoverable from each cross defendant be just and equitable having regard to the extent of that persons responsibility for the damage. [17]
The ultimate issue in this case is identical to that in Rayners Case namely the apportionment of liability between the same 3 parties. The questions of whether the cross defendants had actual knowledge of the dangers to health between 1938 and 1950 of exposure to asbestos is critical to the Tribunal reaching conclusions as to the relative blameworthiness of the parties. Judge Curtis’ findings of fact that both cross defendants had actual knowledge at the relevant times therefore precludes them as between themselves and the cross claimant from ever again asserting the contrary in litigation between them [17].
Judge Curtis found the second cross defendant had actual knowledge of the dangers of asbestos at the relevant time and the second cross defendant is estopped from asserting to the contrary.[20]
The evidence of the report of ILO Third International Conference of experts on Pneumonconiosis at Sydney published in 1953 is not of sufficient significance to outweigh concerns for the integrity at the system of administration of justice [36].
The 1st cross defendants application to relitigate the issue of the knowledge of the SRA decided in Rayners Case in an abuse of process and must be dismissed [40].
Having found both an issue estoppel and an abuse of process on the issue of the parties knowledge of the dangers of asbestos arising out of Rayners Case the cross defendant are estopped from moving the court to exercise its discretion pursuant to S 25B (2) of the Dust Diseases Tribunal Act 1989 to relitigate that issue. [42]
Following the decision in Babcock International Ltd v Babcock Australia Ltd (2003) 24 NSWCCR 540 there is no basis in law for the 1st Cross Defendant seeking to reopen the question of the cross claimants knowledge of the dangers of asbestos based on the relevant knowledge of the Department of Health. [54]
Exercise of Judical Discretion
60. The questions of estoppel and abuse of process which I have just determined came before this Tribunal only after I exercised my judicial discretion to allow the cross claimant to put on a reply to the cross defendants defences out of time. I gave an ex tempore ruling on the 18 November 2004 undertaking at the time to provide in this ruling more detailed reasons.
61. The application for leave by Holmes QC appears at pages 221 to 240 of the Transcript.
Chronology of Events
62. The objection by the cross defendants was essential based on the delay in filing the reply and a chronology of the proceedings assist understand the arguments:
29 April 1999 Cross Claim filed 19 June 2000 2nd Cross defendant files defence 24 June 2004 1st Cross defendant files defence 12 November 2004 Cross Claim issues serves s25B notice 15 November 2004 Cross defendants object to S 25B notice 15 November 2004 Cross Claimant seeks leave to file reply to Defences out of time.
63. Supreme Court Rule 15.2 provides that in the absence of a reply to a defence there shall be an implied joinder of issue on that defence. A reply should be filed if the cross claimant intends to reply upon matters which would take the cross defendants by surprise if they were not specifically pleaded (see Hall v Eve (1876) 4 CLD 34) Rule 15.4 requires that in defamation cases a reply should be filed and served within 14 days of service of the defence. There does not appear to be a rule imposing a time limit on replys in other suits but counsel for the parties are agreed that the reply is nevertheless well out of time and can only be filed with leave of the court.
64. There has been a great delay in filing the reply more than 5 years after the 2nd Cross defendant filed its defence and some 5 months after the 1st cross defendant filed its defence.
65. On the other hand the conduct of this case has been characterised by lengthy delays. The statement of Claim was filed on 19 March 1998 (fast approaching 6 years ago) and order for judgment made on 29 April 1998. The cross claim was issued promptly on the same day. The 2nd Cross defendant put on a defence some two months later but the 1st Cross defendant waited almost 6 years to put on its defence. Holmes QC, from the bar table, explains that this case was in limbo while test cases were being run in Rayner and Hay which explained the parties lack of interest in the Rules of Court or in progressing the matter.
66. However with Rayner and then Hay out of the way by May 2004 this matter eventually came to a hearing. When it did the cross defendants launched an attack on the cross claimants S 25B notice moving the court to strike it out. The cross claimant responded by seeking to file the reply which raised the issue of estoppel and abuse of process.
67. The cross claimant seeks the indulgence of the Court to permit the filing of the reply. Holmes QC explains that the case has been on the backburner with the consent of all parties for years while test cases proceeded through our appellate courts. Those cases having been only recently resolved the parties set about putting their pleadings in order in an apparently amicable fashion until the commencement of the substantive proceedings when the cross defendants sought to challenge the cross claimants S 25B evidence and indicated they wished to relitigate Rayners Case. Until that time the cross claimant had no notice that the decision in Rayners Case would be contested. Once it did it made the forensic decision to seek to put on a reply to raise issue estoppel and abuse of process arising out of the decision in Rayner.
68. The cross defendants were aware from the time they were served with the S 25B Notice that the cross claimant would be relying on the findings in Rayner. Indeed given that the parties had been waiting for years until Rayner and Hay were eventually decided no one could possibly be surprised or in any way prejudiced by the cross claimant seeking to put findings in Rayners Case into evidence. The Cross Claimant would also not have been surprised by the 1st Cross defendant seeking to relitigate Rayners Case on the basis of the ILO Report because the existence of that report became known to the Cross Claimant some time ago in a case before Judge Duck.
69. Having listened to the application I formed the view that the cross claimant had adequately explained the delay in issuing the reply. I also formed the view that the Cross Defendant having come prepared to do battle on the relitigation of Rayner were hardly at a disadvantage in arguing either the issue estoppel or abuse of process points.
70. For those reasons I exercised my discretion in the cross claimants favour and granted leave to file the reply out of time.
Holmes QC instructed by Moroney Betts Solicitors appeared for the applicant cross claimant.
Russell SC instructed by Acuiti Legal Solicitors appeared for the respondent 2nd cross defendant.Watson SC instructed by Phillips Fox Solicitors appeared for the respondent 1st cross defendant.
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