Return to Work Corporation of South Australia v BI (Contracting) Pty Ltd
[2022] SASCA 49
•2 June 2022
SUPREME COURT OF SOUTH AUSTRALIA
(Court of Appeal: Civil)
RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA v BI (CONTRACTING) PTY LTD & ORS
[2022] SASCA 49
Judgment of the Court of Appeal
(The Honourable Chief Justice Kourakis, the Honourable President Livesey and the Honourable Justice Bleby)
2 June 2022
WORKERS' COMPENSATION - WORKERS' COMPENSATION LEGISLATION FOR PARTICULAR INDUSTRIES AND DISEASES - DUST DISEASES - GENERALLY
TORTS - NEGLIGENCE - CONTRIBUTORY NEGLIGENCE - APPLICATION OF APPORTIONMENT LEGISLATION IN CASES OF CONTRIBUTORY NEGLIGENCE
The injured person was employed by Sigal and Construction Components as a carpenter in different periods. During the first period he was exposed to asbestos products manufactured by BI (Contracting) Pty Ltd (‘BIC’), and during the second he was exposed to asbestos products manufactured by Amaca.
Decades later he commenced action in respect of lung cancer against BIC as both employers were deregistered.
BIC joined the employers as third parties and notified RTWSA as administrator of the Statutory Revenue Fund under the Worker’s Compensation Act 1971 (SA). Both employers were insolvent and neither took any active role in the litigation which was defended by RTWSA.
BIC also joined insurers of the employers, including Vero, pursuant to s 11 of the Dust Diseases Act 2005 (SA) (‘Dust Diseases Act’), as well as Amaca, pursuant to the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) (‘Law Reform Act’).
BIC settled with the injured person and with Vero and Amaca, but otherwise proceeded to trial.
In the first instance, the judge found that each of BIC, Sigal and Construction Components breached a duty of care to the worker. She found 75 per cent of the worker’s causative exposure to be accounted for by his employment with Sigal, and 25 per cent to be accounted for by his employment with Construction Components. However, she also found that the actions of BIC related only to the period of employment with Sigal and that it was therefore necessary to make an apportionment between those two entities.
As to the question of allowing for the contribution made by Amaca, while a consent judgment was entered between the worker, BIC and Amaca giving effect to a settlement between them, the judge held that her apportionment could not include any allowance for the settlement made with Amaca.
As between BIC and Sigal, the judge apportioned liability for damages at 70 per cent to BIC and 30 per cent to Sigal. She deducted the five per cent representing the consent judgment against Vero.
The issues on appeal are whether:
•there was any evidence capable of supporting a finding that the injured person was exposed to asbestos during his period of employment with Construction Components. This issue raised the content of a notice under s 8(4) of the Dust Diseases Act and provoked an application by the respondent to adduce further evidence on the appeal;
•a settlement entered into by a defendant and an insurer, who had been joined separately from the insured, discharged any liability on the part of the insured; and
•the primary judge should have made a deduction to a percentage of damages awarded against a third party on account of an amount recovered by the defendant from another third party.
Held:
per Livesey P and Bleby JA (Kourakis CJ agreeing) allowing the appeal:
1.The judge appears to have been under the misapprehension that the worker had contracted mesothelioma, as opposed to lung cancer. It was not open for the primary judge to rely on findings of fact in the s 8(4) notice of findings which cited Amaba v Booth [2010] NSWCA 344, a mesothelioma case. It follows that there was no evidence to support the finding that the worker’s exposure to asbestos whilst employed with Construction Components was causative of his lung cancer.
2.As to BIC’s application to adduce further evidence on appeal, the failure to adduce relevant expert evidence or a proper s 8(4) notice at trial occurred in circumstances where that evidence and those findings were readily available to be adduced. BIC was unable to explain its failure. The public interest in the finality of litigation and the ready availability of the evidence and findings in lung cancer cases outweigh the considerations in favour of giving BIC an opportunity to repair its case. The applications are refused.
per Livesey P and Bleby JA:
3.Section 11(1) of the Dust Diseases Act permitted BIC to sue Vero instead of Sigal, as if Vero was Sigal. Where Vero was joined pursuant to s 11, the judgment entered into by BIC with Vero necessarily discharged liability on the part of Sigal. If something different was intended, then that had to be made clear in the terms of settlement or judgment.
per Kourakis CJ (dissenting):
4.Vero exercised the rights and powers it had as a party to the statutory action brought against it pursuant to s 11(1) of the Dust Diseases Act, and not those of Sigal in the contribution action brought against it, which was also before the Court. Vero was not empowered to compromise an action brought against any other party, including Sigal, to the proceedings. Nor could a judgment against Vero finally determine any legal controversy other than the extent of its liability under s 11(3) of the Dust Diseases Act.
per Livesey P and Bleby JA:
5.On the findings made by the trial judge, Amaca was a manufacturer of asbestos products to which the worker was exposed in his employment with Construction Components. The contribution sought by BIC against Amaca and other third parties under the Law Reform Act is determined according to what is ‘fair and equitable’. To allow for the 10 per cent that BIC recovered from Amaca would not apportion responsibility to a non-party. Rather, to fail to do so would cause BIC to be unjustly enriched, in that BIC would have recovered an amount in respect of the same exposure twice from different tortfeasors.
per Kourakis CJ (dissenting):
6.Sigal did not bring a contribution notice against Amaca. Even if Amaca or BIC were in some way able to set their compromise aside, it is impossible to identify any basis on which another third party whose unrelated conduct did contribute to the worker’s injury should have the benefit of it.
per Livesey P and Bleby JA (Kourakis CJ agreeing):
7. The Tribunal’s costs orders are set aside.
Dust Diseases Act 2005 (SA) ss 8, 11; Insurance Contracts Act 1984 (Cth) s 51; Workers Compensation Act 1971 (SA) s 118d; Return to Work Act 2014 (SA) cl 61, sch 9; Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) ss 6, 12; Corporations Act 2001 (Cth) s 601AG; Motor Vehicles Act 1959 (SA) s 113, referred to.
Holland v Jones (1917) 23 CLR 149; Amaba v Booth [2010] NSWCA 344; Mutemeri v Cheesman [1998] 4 VR 484; Carslake v Guardian Assurance Company (1977) 15 SASR 378; Motor Accident Commission v Leslie (2018) 130 SASR 540; BHP Billiton Ltd v Hamilton (2013) 117 SASR 329; BHP Billiton v Parker (2012) 113 SASR 206; Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342; Sydney Turf Club v Crowley [1971] 1 NSWLR 724; Sydney Turf Club v Crowley (1972) 126 CLR 420; Commercial & General Insurance Co Ltd v General Insurance Office (NSW) (1973) 129 CLR 374; Bratovich v Rheem (Aust) Pty Ltd (1971) 2 SASR 33; Colton Palmer & Preston Ltd v Allianz Australia Insurance Ltd (2009) 104 SASR 110; Orica Ltd v CGU Insurance Ltd (2003) 59 NSWLR 14; Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342; PJ Nash Pty Ltd v Food and Beverage Australia Limited [2021] SASCA 86; CDJ v VAJ (1998) 197 CLR 172; Sunlight Nominees Pty Ltd v Zotti and Zotti [2019] SASCFC 11; Steicke v Pederick (2019) 134 SASR 114; Viscariello v Livesey [2013] SASC 99; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; Orr v Holmes (1948) 76 CLR 632; Ratten v The Queen (1974) 131 CLR 510; Gallagher v The Queen (1986) 160 CLR 392; Mickelberg v The Queen (1989) 167 CLR 259; O'Brien v Komesaroff (1982) 150 CLR 310; Coulton v Holcombe (1986) 162 CLR 1; Amaca Pty Ltd (under New South Wales administered winding up) ACN 000 035 513) v Pfeiffer and Ors (2017) 129 SASR 258; Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574; Rasch Nominees Pty Ltd v Bartholomaeus [2012] SASC 70; Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pte Ltd (2009) 253 ALR 364 ; Speno Rail Maintenance Australia Pty Ltd v Hammersley Iron Pty Ltd (2000) 23 WAR 291; Saccardo Constructions Pty Ltd v Gammon (No 2) (1994) 63 SASR 333; BI (Contracting) Pty Ltd v David Jones Ltd [2019] SASCFC 138; Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 ; Burke v LFOT Pty Ltd (2002) 209 CLR 282; Friend v Brooker (2009) 239 CLR 129; Elf Enterprises v London Bridge Engineering (1997) TLR 607; Caledonia North Sea Ltd v London Bridge Engineering Co [2000] Lloyd’s Rep IR 249; Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342; The State of South Australia (in right of the South Australian Government Financing Authority) v Bradford Insulation (SA) Pty Ltd (in liquidation) and BI (Contracting) Pty Ltd (No 2) [2021] SAET 91, considered.
RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA v BI (CONTRACTING) PTY LTD & ORS
[2022] SASCA 49Court of Appeal – Civil: Kourakis CJ, Livesey P and Bleby JA
KOURAKIS CJ: I would allow the appeal on the first two grounds for the reasons given by Livesey P and Bleby JA. There is some reason to think that Return to Work SA (RTWSA) accepted that the findings in Amaca Pty Ltd (Under NSW Administered Winding Up) v Booth[1] set out in the second s 8(4) Notice provided by BI (Contracting) Pty Ltd (BIC) applied to the causation of both mesothelioma and lung cancer. I refer in particular to the failure of counsel for RTWSA to make the point that Amaca v Booth was not a lung cancer case, and on his reliance on the concept of an indivisible injury on another of the issues at trial. However, the sparse reference to Amaca v Booth in BIC’s submissions, the very late provision of the second s 8(4) Notice and the imprecision of the concept of an indivisible injury do not allow that conclusion to be made.
[1] Amaca Pty Ltd (Under NSW Administered Winding Up) v Booth [2010] NSWCA 344.
I would dismiss the appeal on ground 4 for the following reasons. BIC brought contribution actions against both Sigal and its insurer, Vero, which was on risk for part of the relevant period. The action against Sigal was brought pursuant to s 6 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) (the Apportionment Act). Section 11 of the Dust Diseases Act 2005 (SA) (the Dust Diseases Act) provides a statutory cause of action by which a dust disease action may be brought directly against an absent defendant’s insurer in the circumstances prescribed by s 11(1) of the Dust Diseases Act. A dust disease action is defined by s 3 of the Dust Diseases Act as an action in which a plaintiff claims damages for, or in relation to, death or disease resulting from a dust disease. Section 11(2) of the Dust Diseases Act places an insurer in the shoes of an absent defendant. Accepting for present purposes that s 11 of the Dust Diseases Act applies to contribution actions[2], the liabilities imposed on Vero by s 11(2) of the Dust Diseases Act were those of Sigal under s 6 of the Apportionment Act. The rights and powers conferred on Vero were to plead any defence which would have been available to Sigal and to bring any contribution action against another third party which Sigal might have brought. However, in the conduct of the litigation brought against it pursuant to s 11(1) of the Dust Diseases Act, Vero exercised the rights and powers it had as a party to the statutory action brought against it pursuant to s 11(1) of the Dust Diseases Act and not those of Sigal in the contribution action brought against it, which was also before the Court. Vero was not empowered to compromise an action brought against any other party, including Sigal, to the proceedings. Nor could a judgment against Vero finally determine any legal controversy other than the extent of its liability under s 11(3) of the Dust Diseases Act.
[2] It is not obvious to me how s 11 of the Dust Diseases Act can apply to contribution actions because they are not actions in which a plaintiff claims damages. Different considerations affect the question whether s 8 of the Dust Diseases Act applies to contribution actions as between defendants to a dust disease action.
It must be remembered that, as was the fact in this case, there may be several insurers of a defendant over the period of time in which, it is alleged, the injury was sustained. No one insurer can bind the other insurers by a compromise of the action against it. For example, if Vero had sought to compromise the action against it for $X intending to seek in equity a contribution from another insurer which was also a defendant, it could not bind the other insurer who took the position that the plaintiff would not obtain more than 70 per cent of $X. The other insurer would be entitled to dispute the quantum of the s 11(1) claim brought against it directly and would not be limited to disputing the reasonableness of Vero’s compromise in an equitable claim which Vero might bring.
In any event, Vero did not compromise the action against Sigal. It compromised only the claim brought against it. That claim was subject to the limit in s 11(3) of the Dust Diseases Act. The compromise is inscrutable. It cannot be known whether it compromised a dispute about whether Vero was properly joined, whether there was a cap on Vero’s indemnity or whether it could rely on an exclusion or breach in respect of its policy.
Indeed, there is a difficulty in applying s 11 of the Dust Diseases Act at all when the defendant/insured is not absent at all. Sigal was a party to a contribution action brought by BIC and continued to be so after judgment was entered against Vero. This is not a case of contribution proceedings which might have been brought against Sigal but were instead brought against Vero.
Accepting that both Sigal and Vero were properly joined, there are three necessary procedural consequences. First, if both contribution notices had proceeded to trial, the Judge could properly have entered judgment on the contribution action against Sigal for a greater sum than the judgment given against Vero. Secondly, Vero could not exercise its powers as a party to the action against it to consent to a judgment on the contribution action to which Sigal was a party against Sigal’s opposition. Thirdly, if Sigal was not joined as a third party in a contribution action, a Judge could not give judgment against Sigal on the contribution action against Vero.
I would dismiss the appeal on ground 3 for the reason that Sigal did not bring a contribution notice against Amaca. This ground remains only of marginal relevance because of RTWSA’s success on the first two grounds of appeal and the setting aside of the judgment against Construction Components Pty Ltd. However, RTWSA maintains that in some way BIC’s recovery from Amaca for its supply of materials to Construction Components Pty Ltd must be brought into account for the benefit of Sigal. That contention misunderstands the legal effect of the settlement between BIC and Amaca which was embodied in the order made by the South Australian Employment Tribunal on 8 June 2018.
Section 6(8)(a) of the Apportionment Act contemplates that a contribution action may be brought before judgment is given in the action brought by the plaintiff. It follows that a contribution action may be compromised, or even determined, before judgment is given in the plaintiff’s action. The compromise or judgment on that contribution action creates a new charter of legal rights and obligations as between the parties to the contribution action which remains binding on them even if that judgment or compromise is falsely premised on the respondent to the contribution action having caused the plaintiff’s injury. Even if Amaca or BIC were in some way able to set their compromise aside, it is impossible to identify any basis on which another third party whose unrelated conduct did contribute to the plaintiff’s injury should have the benefit of it.
I would hear the parties on the costs of the appeal and any other consequential orders flowing from RTWSA’s success on the first two grounds.
LIVESEY P AND BLEBY JA: On 21 May 2021, the South Australian Employment Tribunal gave judgment apportioning liability for damages awarded on a claim under the Dust Diseases Act 2005 (SA) (‘Dust Diseases Act’). The issues arising on this appeal against that judgment concern:
·whether there was any evidence capable of supporting a finding that the plaintiff was exposed to asbestos during one of his periods of employment. This issue has provoked an application by the first respondent to adduce further evidence on the appeal;
·whether a settlement entered into by a defendant and an insurer, who had been joined separately from their insured as a party, discharged any liability on the part of the insured; and
·whether the primary judge should have made a deduction to a percentage of damages awarded against a third party on account of an amount recovered by the defendant from another third party.
The appeal also raises a number of issues with respect to costs orders made by the primary judge.[3]
[3] Westell v BI (Contracting) Pty Ltd and Others [2021] SAET 140.
Background
On 15 January 2018, the plaintiff, Keith Westell, commenced a Dust Disease Civil Action in the South Australian Employment Tribunal against BI (Contracting) Pty Ltd (‘BIC’). By a Second Statement of Claim dated 29 May 2018, Mr Westell claimed in negligence against BIC for damages for personal injury, being asbestos related pleural plaques, asbestosis, lung cancer, shortness of breath and chest pain. The particulars of negligence alleged breaches of various duties by BIC.
Mr Westell was employed by Sigal Industries Pty Ltd as a carpenter during the period between 1962 and 1971. He was required to work at various sites in the Adelaide Metropolitan area, including the AMP Building at 1 King William Street. The claim alleged that he was required to work in the vicinity of BIC employees who were spraying insulation materials containing asbestos onto steel beams and structures, and to handle insulation materials containing asbestos.
On 21 May 2018, BIC was given leave to join the following third parties to the proceedings:
·Sigal Industries Pty Ltd (deregistered) (‘Sigal’), as the employer of Mr Westell during his period of work on the AMP Building;
·Construction Components Pty Ltd (deregistered) (‘Construction Components’), a later employer of Mr Westell, for also causing or allowing him to be exposed to asbestos in the course of his employment; and
·Amaca (a James Hardie subsidiary) as the manufacturer/supplier of asbestos products to which Mr Westell had been exposed in the course of his employment with Construction Components (and with an earlier employer, Ern Hibberd).
Also on 21 May 2018, Return to Work SA (‘RTWSA’), as administrator of the Statutory Reserve Fund established pursuant to the Workers Compensation Act 1971 (SA) (and continued by cl 61 of Schedule 9 to the Return to Work Act 2014 (SA)), applied to intervene. This followed BIC giving notice that Sigal and Construction Components were uninsured and unfunded in respect of certain periods during which they had, respectively, employed Mr Westell. On 29 May 2018, the Tribunal granted RTWSA leave to intervene.
On 8 June 2018, BIC joined two insurers of Sigal as third parties, pursuant to s 11 of the Dust Diseases Act, on the basis that Sigal was dissolved, being:
·AAI Ltd trading as Vero Insurance (‘Vero’), from which BIC sought contribution in respect of Sigal’s liability, on account of BIC having held a policy of workers compensation insurance with Vero’s predecessor from 1969 to 1970; and
·Insurance Australia Ltd (‘IAL’), from which BIC sought contribution in respect of Sigal’s liability, on account of BIC having held a policy of workers compensation insurance with IAL’s predecessor between 1962 and 1963.
On the same day, the Tribunal entered consent judgment in favour of Mr Westell against BIC, in the amount of $300,000 and consent judgment in favour of BIC against Amaca, for contribution of 10 per cent of Mr Westell’s claim and costs. BIC also reached a settlement in respect of its third party action against Vero, for five per cent of Mr Westell’s claim and costs. Judgment was not entered in respect of that settlement until 20 May 2019.
On 12 June 2018, BIC’s action against IAL proceeded to trial, with RTWSA intervening. Mr Westell gave evidence and was cross examined, but the trial does not appear to have proceeded further at that stage.
On 7 May 2019, the Supreme Court reinstated both Sigal and Construction Components, apparently on the application of RTWSA, in order to regularise the proceedings. Neither filed a Defence. A solicitor for a liquidator filed Notices of Appearance and appeared on the first day of trial to advise that those reinstated employers did not intend to take any active part in the proceedings.
On 17 May 2019, BIC filed a Notice of Discontinuance against IAL.
Then on 20 May 2019, the same day that consent judgment was entered in favour of BIC against Vero for five per cent of Mr Westell’s claim and costs, the trial of BIC’s claim for contribution against Sigal and Construction Components commenced. RTWSA, as administrator of the Statutory Reserve Fund, defended the action.
The primary judge found that Mr Westell was employed by Sigal between about 1962 and 1971. She further found that Mr Westall was required to work in the fitting out of the AMP building over two periods of time, over approximately two years, from about October 1967. During the second of those periods, he was involved in the fitting of partitions on the floors above the fifth floor of the AMP building.[4]
[4] [2021] SAET 102 at [27].
The judge further found that during the first of those periods, Mr Westell worked in and around areas being sprayed with asbestos material for a total of about six months. There was further exposure on occasions when partitions were fitted to ceilings, where asbestos material had to be removed from small surface areas in order to affix the ceiling channels for the partitions.[5]
[5] [2021] SAET 102 at [28].
The judge also found that Mr Westell was employed by Construction Components as a carpenter, from about 1971 or early 1972, until about 1978. He was engaged in the construction of transportable buildings. Those buildings were constructed using, among other materials, compressed asbestos cement, Versilux and plain asbestos sheeting. The judge appears to have accepted that Mr Westell would, in the course of this employment, cut asbestos material for a couple of days every three months or so, sometimes inside and sometimes outside.[6] She concluded:[7]
I find that Mr Westell received no warning as to the dangers of working with this asbestos material nor provided with any protective equipment. I therefore find that Mr Westell was exposed to asbestos material in the course of his employment with Construction Components for a couple of days every two to three months over the period of his employment of approximately seven years.
[6] [2021] SAET 102 at [33].
[7] [2021] SAET 102 at [34].
The judge found that each of BIC, Sigal and Construction Components breached a duty of care to Mr Westell. She took a broad axe approach to the relative days of exposure while Mr Westell was employed with each employer, noting the approximate nature of the figures, given uncertainties in Mr Westell’s evidence. She found 75 per cent of Mr Westell’s causative exposure to be accounted for by his employment with Sigal and 25 per cent to be accounted for by his employment with Construction Components.
The judge found that the actions of BIC related only to the period of employment with Sigal. It was necessary, therefore, to make an apportionment between those two entities. As to the question of allowing for contribution by Amaca, the judge was apprised of the terms of the settlement between Mr Westell, BIC and Amaca and had, indeed, entered consent judgment giving effect to that settlement. However, she held that as the settlement did not include an admission of liability, and in circumstances where there was no contribution action between Construction Components and Amaca, apportionment of liability could not include or make allowance for the liability of Amaca.[8]
[8] [2021] SAET 102 at [110]-[116].
In the event, the judge apportioned liability for damages at 70 per cent to BIC and 30 per cent to Sigal. She deducted the five per cent representing the consent judgment against Vero (as an insurer of Sigal). She concluded:[9]
Sigal’s liability therefore is 30% of 75% less the 5% paid by the Fifth Third Party [Vero] or 17.5% of the Plaintiff’s damages. The allocation to the Second Third Party Construction Components is 25% of the Plaintiff’s damages, so that the Defendant recovers a total of 42.5% of the Plaintiff’s damages from the two other tortfeasors.
[9] [2021] SAET 102 at [125].
The judge therefore ordered:
1. Judgment for the Defendant against the First Third Party [Sigal] for 17.5% of the Plaintiff’s Damages of $300,000 and 17.5% of his costs and disbursements.
2. Judgment for the Defendant against the Second Third Party [Construction Components] for 25% of the Plaintiff’s damages of $300,000 and 25% of his costs and disbursements.
In the circumstances of Sigal and Construction Components having been reregistered only for the purposes of the proceedings, the prospect arises, subject to the grounds of appeal, of BIC being entitled to make a claim for those amounts against the Statutory Reserve Fund, pursuant to s 118d(1) of the Workers Compensation Act 1971 (SA), as continued by cl 61 of Schedule 9 to the Return to Work Act 2014 (SA). Section 118d(1) provides:
118d. (1) Subject to this section, a person is entitled to make a claim against the fund–
(a) in respect of liabilities arising under a policy of workers compensation insurance that are, by reason of the insolvency of the insurance company by which the policy was issued, unsatisfied;
(b) in respect of workers compensation liabilities–
(i)that are not covered by a policy of workers compensation insurance;
and
(ii)that are, by reason of the insolvency of an employer or former employer, unsatisfied;
(c) in respect of costs–
(i)that were reasonably incurred in attempting to recover moneys from an insurance company in respect of liabilities arising under a policy workers compensation insurance, or from an employer in respect of workers compensation liabilities;
and
(ii)that are, by reason of the insolvency of the insurance company or the employer, not recoverable from the insurance company or employer.
In consequence, this appeal is brought by RTWSA as administrator of the Statutory Reserve Fund, RTWSA having defended the action at first instance.
Whether there was evidence to support the finding that Mr Westell’s exposure to asbestos whilst employed with Construction Components was causative of his contracting lung cancer, including by application of s 8(4) of the Dust Diseases Act (Grounds 1 and 2)
RTWSA does not complain about the primary judge’s findings to the effect that Mr Westell was exposed to asbestos during the course of his employment with Construction Components, in the terms set out above. Those findings reflected the evidence given by Mr Westell. However, RTWSA argued at trial, and contends on appeal, that there was no evidence that Mr Westell’s period of exposure with Construction Components was a contributing cause to his lung cancer and asbestosis, in the sense provided for by s 8(1) of the Dust Diseases Act. That section provides:
(1) If it is established in a dust disease action that a person (the injured person)—
(a) suffers or suffered from a dust disease; and
(b) was exposed to asbestos dust in circumstances in which the exposure might have caused or contributed to the disease,
it will be presumed, in the absence of proof to the contrary, that the exposure to asbestos dust caused or contributed to the injured person's dust disease.
The evidence of Professor Holmes
The evidence directly relevant to causation was contained in the expert reports of Professor Mark Holmes, who diagnosed lung cancer, asbestosis and asbestos related pleural plaques. Professor Holmes opined that Mr Westell’s asbestos exposure contributed to the development of his lung cancer.
Professor Holmes took a history from Mr Westell. His report of 12 December 2012 records:
Mr Westell migrated to Australia in 1957 from the United Kingdom. Prior to this he worked in the UK as a carpenter without asbestos exposure. In Australia he had numerous jobs as a carpenter. On occasion he would use hardy board but rarely cutting or nailing it. He usually worked on building new homes and there were others who did the fixing of sheets. His only significant exposure that he recalls is when he worked on the AMP building in Adelaide in the mid 1960’s. He worked as a carpenter. He worked alongside insulation workers who were spraying on blue asbestos. Although the insulation workers used protection, the carpenters did not. It was a dusty environment.
There is no other asbestos exposure that he is aware of and he had no asbestos exposure outside the workplace.
This was the only history that Professor Holmes took. Dr Anthony Kam provided a report dated 15 March 2018. However, Dr Kam did not examine or take a history from Mr Westell. For the purposes of his report, he reviewed the reports of Professor Holmes.
Professor Holmes expressed his conclusion as to causation of asbestos related pleural plaques, asbestosis and lung cancer in a report dated 15 January 2018:
I believe that his asbestos exposure is the cause of his asbestos related pleural plaque, asbestosis and lung cancer. Asbestos is a known lung carcinogen and the significance of [Mr Westell’s] exposure as evidenced by the development of asbestosis is consistent with asbestos contributing to the development of his carcinoma. It is noted that he also has approximately a 20 pack/year smoking history up until 2007 which would also have contributed to his development of primary lung cancer.
Subject to one matter, that conclusion of causation related only to Mr Westell’s reported employment with Sigal, as he had related his history to Professor Holmes. BIC raised squarely with the judge an argument that the opinion of Professor Holmes was in sufficiently broad and general terms to satisfy the requirement of s 8(1)(b), that Mr Westell’s exposure to asbestos while employed with Construction Components was in circumstances in which that exposure might have caused or contributed to his asbestosis and lung cancer.[10] However, the primary judge concluded that it was ‘clear that Mr Westell gave no history of exposure anywhere other than at the AMP building in the course of employment with Sigal’.[11]
[10] [2021] SAET 102 at [49]-[50].
[11] [2021] SAET 102 at [50].
The judge referred to BHP Billiton Ltd v Hamilton[12] in concluding that it was necessary, in order to satisfy the requirements of s 8(1)(b), that there be direct expert evidence linking a dust disease with a particular exposure. In that case, Blue J said of s 8(1):[13]
The subsection uses the definite article and the same phrase “the exposure” in both the formulation of the second precondition for the creation of the presumption and in the subject matter of the operative presumption itself. To establish the second precondition for the presumption, it is necessary to establish that the plaintiff’s exposure might have caused or contributed to the dust disease suffered by the plaintiff, not just any dust disease. The subsection operates against the background of the common law of causation which requires that ordinarily the plaintiff must prove on the balance of probabilities that the defendant’s conduct was a cause of or materially contributed to the injury.
[12] (2013) 117 SASR 329.
[13] BHP Billiton Ltd v Hamilton (2013) 117 SASR 329 at [63].
The primary judge also referred to BHP Billiton v Parker,[14] which Blue J had quoted in Hamilton, where Doyle CJ and White J observed:[15]
The disease from which Mr Parker suffers is one attributable to exposure to asbestos dust. The evidence establishes that Mr Parker was exposed to asbestos dust for a period of time that could not be put aside as trifling, and in circumstances such that one could not say that the risk of contracting a dust disease was negligible. To the contrary, the evidence was such that there was a risk of the exposure causing Mr Parker to contract a dust disease. Accordingly, the requirements of subpara (b) were established.
[14] (2012) 113 SASR 206.
[15] BHP Billiton v Parker (2012) 113 SASR 206 at [117]; BHP Billiton Ltd v Hamilton (2013) 117 SASR 329 at [67].
The judge found that in the present case, by contrast, there was no evidence from Professor Holmes establishing a comparable link between Mr Westell’s exposure whilst employed with Construction Components and any of the dust diseases which he contracted.
BIC suggested at the hearing of the appeal that the reference to ‘hardy board’ in Professor Holmes’s report of 12 December 2012 was a reference to the use of a James Hardie product in the course of his carpentry work with Construction Components. However, BIC did not file a Notice of Alternative Contention to the effect that the judge should have found causation to be established by this reference. It is clear enough, in any event, that Professor Holmes was only opining on the consequence of Mr Westell’s employment with Sigal.
The availability of s 8(4) of the Dust Diseases Act
The only other facility for proving a causative link between Mr Westell’s exposure with Construction Components and his dust diseases, to which the judge then turned, was s 8(4) of the Dust Diseases Act:
(4) If—
(a) a finding of fact has been made in a dust disease action by a court of this State, or a court or tribunal of the Commonwealth or another State or Territory; and
(b) the finding is, in the District Court's or SAET's opinion, of relevance to an action before it under this Act,
the District Court or SAET (as the case may be) may admit the finding in evidence and indicate to the parties that it proposes to make a corresponding finding in the case presently before it unless the party who would be adversely affected satisfies the District Court or SAET (as the case may be) that such a finding is inappropriate to the circumstances of the present case.
BIC served on the parties at trial a ‘Notice of Findings of Fact Relied upon’ pursuant to s 8(4), in circumstances explained below. The Notice contained several ‘facts’ to be relied on. None concerned a causal connection between asbestos exposure and lung cancer. The final ‘fact’ in the Notice read as follows:
If asbestos fibres are inhaled by a person, they will be at risk of some fibres lodging in their lung. If that happens, there is a risk some of those fibres will translocate to the pleura. If that happens, they are at risk of contracting mesothelioma. The concept of “risk” looks at the matter prospectively; if the risk materialises, a causal connection may be inferred.
Amaba Pty Ltd (Under NSW administered winding up) v Booth [2011] Aust Torts Reports 82-079 at 64,616 [118] and [119].[16]
(Footnote in original)
[16] This decision was upheld on appeal in the High Court of Australia.
The identified paragraphs in Amaba, which the judge set out in full, are as follows:[17]
This submission is also based on a misconception. It is a submission for the trial judge not for this Court. As has been adequately demonstrated above, there was evidence (from Professor Henderson among others) which provided a more than adequate basis for a conclusion that all inhalation of asbestos contributed to the injury. Furthermore, the references to the oral evidence of Professor Henderson, relied upon by the appellants, did not support the conclusion for which they were cited. For example, at Tcpt, 23/02/10, p 117 Professor Henderson was asked:
“Q. In the case of Mr Booth, are you able to say whether or not that particular risk of that last exposure came home?
A. No. I’d say particularly the risk from all of his exposures came home because the model which I adopt is that of a cumulative exposure dose response, so I think that all of the asbestos fibres that he’s inhaled, or at least a proportion of them, will contribute to the risk and to the ultimate development of the mesothelioma.”
That evidence, which his Honour effectively accepted, distinguished between the risk and the event. Thus, a person who is in a room containing asbestos dust is at risk of inhaling asbestos fibres. If the risk materialises and the fibre is inhaled, he will be at risk of some fibres lodging in his lung. If that happens, there is a risk that some of those fibres will translocate to the pleura. If that happens, he is at risk of contracting mesothelioma. The concept of “risk” looks at the matter prospectively; if the risk materialises, a causal connection may be inferred. Professor Henderson’s evidence accepted the causal connection at each stage. It was open to his Honour to conclude that Professor Henderson, for example, did not use risk synonymously with cause and to conclude that Professor Henderson did not “prefer” to describe the state of medical science in terms of risk; indeed, he described “risk” as “a very bad term”: Tcpt, p 117.
[17] Amaba v Booth [2010] NSWCA 344 at [118]-[119].
The primary judge emphasised the phrase in the first of these paragraphs, ‘a conclusion that all inhalation of asbestos contributed to the injury’. She then characterised the finding of fact she was asked to make, in the following way:[18]
It can be seen that the Court of Appeal quotes from the expert evidence of Professor Henderson at first instance to the effect that all inhalation of asbestos contributed to the injury or the contracting of mesothelioma. Importantly Professor Henderson refers to a model of cumulative exposure dose response so that all of the asbestos that the Plaintiff inhaled, or at least a proportion of them, will contribute to the risk and ultimate development of mesothelioma. The finding of fact that I am invited to accept is this general proposition that all of the exposure is causative.
[18] [2021] SAET 102 at [61].
The judge concluded that this finding of fact was relevant to the present action and thus fulfilled the preconditions of s 8(4). She concluded:[19]
I therefore find, not without some hesitation, on the basis of a combination of the evidence of Professor Holmes, my findings as to exposure to asbestos dust whilst Mr Westell was in the employ of Construction Components, combined with the finding of fact as to the effect of all exposure in a case of mesothelioma as described in Amaba v Booth, that the exposure to asbestos dust in the course of that employment caused or contributed to Mr Westell’s dust disease. No evidence to the contrary was advanced.
[19] [2021] SAET 102 at [65].
Taken with the ‘fact’ as drafted in the Notice, the ‘general proposition that all of the exposure is causative’ that the judge found she was being asked to accept, and did accept, was the general proposition that all of the exposure is causative of mesothelioma. Indeed, the judge appears to have been under a misapprehension that Mr Westell had contracted mesothelioma, as is evident from her introductory treatment of BIC’s application to adduce the ‘fact’ pursuant to s 8(4):[20]
This is a curious route for the Defendant to use to establish a causal link between asbestos exposure whilst the Plaintiff was in the employ of Construction Components and the mesothelioma which he suffers. However I see nothing in the wording of subsection (4) or subsection (1) to prevent such an approach to the evidence.
[20] [2021] SAET 102 at [58].
BIC suggested that this reference to mesothelioma was a ‘slip’. However, it appears to have provided the basis for establishing the relevance of the fact that BIC sought to adduce.
The initial response of BIC on the appeal was to say that while Amaba v Booth was a mesothelioma case, it could have easily relied on a series of lung cancer cases where the aetiology is the same. To this end, it pointed to cases where Professor Henderson’s ‘cumulative effect’ theory of causation as described in Amaba v Booth, set out in the passages reproduced above, have been endorsed, including with respect to lung cancer.[21] Professor Henderson gave evidence in those cases as well, applying the same process of analysis to the aetiology of lung cancer as an indivisible dust disease injury.
[21] Lorraine Fay Sim v Allianz Australia Ltd [2010] NSWDDT 19 at [185]-[193]; Allianz Australia Ltd v Sim; WorkCover Authority (NSW) v Sim; Wallaby Grip (BAE) Pty Ltd (In liq) v Sim [2012] NSWCA 68 at [116]-[122].
BIC contended, therefore, that the very proposition of fact relied on in Amaba v Booth is equally applicable to lung cancer cases and indeed has been so applied. It acknowledged that by looking to rely on those other cases on appeal it was, ‘in a strict sense’, seeking to rely on further evidence on appeal.
The application to adduce further evidence on appeal
That acknowledgment quickly morphed into an oral application to adduce further evidence on the appeal. Counsel for RTWSA (who had been counsel at trial) opposed the application, on the basis that had his client received notice that BIC was relying on any case other than Amaba v Booth for a relevant finding of fact, it would have required Professor Holmes to be called, to cross-examine him on the issue of causation. In the event, the appeal hearing on 8 December 2021 was adjourned for BIC to make an Interlocutory Application to adduce further evidence on the appeal in the form of these cases.
BIC subsequently filed an Interlocutory Application seeking permission to adduce the cases identified above, pursuant to s 8(4) of the Dust Diseases Act, ‘and any other findings of courts and tribunals to the same effect of which the First Respondent gives notice for the purposes of s 8 of the Dust Diseases Act as to the aetiology of asbestos-induced lung cancer’. That Interlocutory Application was supported by an affidavit of Anthony Steven Hillary, the solicitor with the conduct of the matter on behalf of BIC.
On 24 January 2022, RTWSA filed an affidavit of Tracey Anne Kerrigan, the solicitor with the conduct of the matter on behalf of RTWSA, in opposition to the Interlocutory Application.
The affidavit of Mr Hillary, an experienced solicitor in dust disease litigation, speaks to his understanding of the application of the theory of cumulative exposure to indivisible injury. It continues:
15. I have practiced [sic] in the area of dust disease claims for approximately the last 15 years. I have read very many of the decided cases in this area. Professor Henderson’s evidence features prominently in those cases. I expect that the Appellant and its advisors are also well familiar with such cases and with Professor Henderson’s evidence concerning the etiology of dust diseases, and have been so for many years.
16. It was my view in May 2019 that a reliance on Professor Henderson’s theories in respect of one such disease was relevant to an analysis of liability in respect of the other, such that it ought to make no difference when considering causation in a lung cancer case, to rely on Professor Henderson’s exposition in the context of a mesothelioma case and vice versa.
17. I was also aware that the Intervenor had agreed diagnosis, namely asbestos related lung cancer, and that such condition was indivisible.
It appears from this affidavit that Mr Hillary considered, at the time, that there was no material difference between Amaba v Booth and the lung cancer cases for the purpose of adducing a finding of fact relevant to causation pursuant to s 8(4). It is obvious that reasonable diligence would have uncovered the cases on which BIC now seeks to rely pursuant to s 8(4). Indeed, it may be inferred that Mr Hillary was aware of them. For its part, counsel for RTWSA submitted at trial that BIC’s reliance on Amaba v Booth was misconceived, as it was based on the medical evidence in that case.
The primary judge held that ‘Professor Henderson’s opinions concerning Mr Booth were based on a general model as to the cumulative effect of exposure. As such it is open to use s 8(4) to adopt that finding of fact into evidence’.[22] As observed above, however, this appears to have been on the premise that both cases related to mesothelioma.
[22] [2021] SAET 102 at [62].
The affidavit of Ms Kerrigan, filed on behalf of RTWSA in opposition to the Interlocutory Application to adduce further evidence, explains the forensic decision not to cross-examine Professor Holmes, in the absence of evidence capable of supporting a finding that any exposure at Construction Components caused or contributed to Mr Westell’s lung cancer. The affidavit concludes:
16. The Appellant says that it would be prejudiced if the First Respondent were to be allowed to rely on fresh evidence on the hearing of the Appeal. I am informed by Mr Harms and verily believe that if notice of an intention to rely on findings of causation in a lung cancer case had been given or if notice of an intention to call or rely on any other evidence on that issue had been provided by the First Respondent, he would have required Prof Holmes to give evidence so that he could cross-examine him on the issue of what, if any, contribution the exposure with Construction Components might have made. He would then also would [sic] have had the opportunity to cross-examine Prof Holmes on other important issues such as the relative virulence of different types of asbestos. I am informed by Mr Harms that it is his understanding that the risk of contracting a mesothelioma or lung cancer resulting from exposure to blue asbestos (the type to which Mr Westell was exposed in his employment with Sigal Industries) is very significantly higher than exposure to the types of asbestos used in asbestos cement products to which he was exposed in his employment with Construction Components.
Whether or not cross-examination could have dislodged the impact of the cumulative theory of causation of lung cancer as an indivisible injury had the correct cases been adduced, this affidavit identified an intention to argue, at least, that it affected the apportionment as between Sigal and Construction Components.
There was more to come. The appeal hearing was eventually relisted for the balance to be heard on 15 March 2022, and for BIC to prosecute the application to adduce further evidence in the form of the identified cases, pursuant to s 8(4). However, on 10 March 2022, BIC filed another interlocutory application, seeking to adduce a further expert report of Professor Holmes. The affidavit of Mr Hillary in support of this application identified that Mr Hillary had received instructions to obtain the report only two days earlier, on 8 March 2022. The effect of the opinions expressed in this further expert report is that Mr Westell’s employment with Construction Components was capable of causing his lung cancer, and that it was not possible to determine whether any exposure was more or less causative of the injury.
Counsel for RTWSA opposed this second interlocutory application as well. Following the adjournment of the appeal hearing on 8 December 2021, BIC was given to permission to file any application to adduce further evidence by 21 December 2021. The first application reflected the terms of the oral application made at the original hearing, namely, to adduce evidence of the identified cases pursuant to s 8(4) of the Dust Diseases Act. This second application was filed well over two months after that date, only just before the resumed hearing, and without prior notice. RTWSA claimed to be prejudiced by reason of the late application, in that had the new report been adduced at trial, it would have sought an alternative expert opinion. RTWSA also observed that the academic article on which Professor Homes based his further opinion had not been published at the time of the trial.
There are several issues arising with respect to the circumstances surrounding each application. In order to address them, it is necessary to consider further the circumstances in which the original, flawed evidence was adduced.
As identified above, the trial commenced on 20 May 2019. It concluded on 24 May 2019. Mr Hillary’s affidavit identifies that two Notices of Findings of Fact were created on behalf of his client BIC, on 22 and 24 May 2019, respectively. The affidavit exhibits the second of these Notices, which includes paragraph 9, referencing Amaba v Booth. Mr Hillary was unable to say how that reference came to be inserted in the Notice.
The affidavit of Ms Kerrigan identifies that the second Notice, exhibited by Mr Hillary, was in terms different from the first, which Ms Kerrigan exhibited to her affidavit. That first Notice does not include paragraph 9 of the second Notice or any reference to Amaba v Booth. Ms Kerrigan’s records indicate that at the time of receipt of the first Notice, counsel was satisfied that BIC would not be relying on any evidence other than the reports of Professor Holmes and Dr Kam.
Counsel for the RTWSA, Mr Harms, who was counsel at trial, explained from the bar table that he had not been aware of BIC’s intention to rely on Amaba v Booth until 24 May 2019, the final day of hearing. Senior counsel for BIC, Mr Whitington QC, readily accepted that assurance, which is consistent with the record.
BIC provided written submissions at the conclusion of the trial. Those written submissions made no reference to Amaba v Booth. Counsel for BIC referred to Amaba v Booth in oral submissions, but only to the extent of identifying its inclusion in the second Notice of Findings of Fact.
RTWSA did not provide written submissions at the trial. Its only reference to Amaba v Booth in oral submissions was as follows:
The reference to Booth on the last page in my submission is misconceived because that timing is based on the medical evidence in that case and what my friend is actually trying to do is to ignore what the medical evidence is in this case. So that finding can’t be applied unless the medical evidence is the same. That’s effectively the position. So it’s of no assistance to your Honour.
For its part, RTWSA submitted that this oral submission was based on a passage in Amaba v Booth addressing the circumstances in which a court might draw an inference of causation arising from risk. The medical evidence being different, it was unnecessary to refer to the fact that Amaba v Booth dealt with mesothelioma. That much may be so, but for the purpose of this appeal, it remains the fact that RTWSA drew no distinction on the basis that Amaba v Booth concerned mesothelioma only. BIC relies on this failure in its application, RTWSA now having taken the point.
Whether further evidence on appeal would be necessary for BIC to support the conclusion of the primary judge
At the resumed hearing on 15 March 2022, BIC mounted an argument that necessarily preceded its application to adduce further evidence, to the effect that the application was not necessary.
The argument did not go so far as to suggest that the primary judge could have taken judicial notice of the cross-applicability of theories of cumulative exposure in relation to indivisible injury. That was appropriate. In Holland v Jones,[23] Isaacs J said:[24]
The only guiding principle – apart from Statute – as to judicial notice which emerges from the various recorded cases, appears to be that wherever a fact is so generally known that every ordinary person may be reasonably presumed to be aware of it, the Court “notices” it, either simpliciter if it is at once satisfied of the fact without more, or after such information or investigation as it considers reliable and necessary in order to eliminate any reasonable doubt.
The basic essential is that the fact is to be of a class that is so generally known as to give rise to the presumption that all persons are aware of it. This excludes from the operation of judicial notice what are not “general” but “particular” facts. As to “particular” facts, even the Judge’s own personal knowledge is not to be imported into the case …. To import knowledge of a particular fact in issue would be to import evidence in the strict sense regarding a matter as to which the Court is supposed to have no knowledge whatever of its own.
[23] (1917) 23 CLR 149.
[24] Holland v Jones (1917) 23 CLR 149 at 153.
Thus, for example, within the scientific and medical fields, it has been held that a Court would be able to take judicial notice of the fact that HIV is a life endangering disease.[25] Judicial notice may be taken of elementary medical, anatomical and scientific facts.[26] The cross-applicability of theories of cumulative exposure in relation to indivisible injury should not be regarded as such a fact.
[25] Mutemeri v Cheesman [1998] 4 VR 484 at 492.
[26] Dyson Heydon, Cross on Evidence (LexisNexis Butterworths, 12th ed) [3020].
However, BIC advanced an argument that looked to avoid the strictures of judicial notice. A further issue at trial was whether BIC’s settlement with Vero had the effect of discharging Sigal’s entire liability. That issue remained in contest on this appeal and is considered below. In the context of addressing that issue at trial, counsel for RTWSA adopted the following written submission of BIC:
Lung cancer is a non-divisible condition. In the light of the indivisible nature of lung cancer, any defendant whose breach of duty materially contributes to the contraction of the disease will be jointly and severally liable for the plaintiff’s loss.
Counsel for RTWSA then continued:
So it’s an indivisible condition. So if there was more than one insurer, for example, of Sigal, then those insurers might be entitled to contribution from each other, but either one could be held liable for the full amount and then have to chase the other insurer for contribution.
BIC submitted that acceptance of the premise of indivisibility necessarily placed an evidential onus on RTWSA to displace causation, in circumstances where exposure while employed with Construction Components was proved.
In answer, RTWSA submitted that its position was, and had necessarily been at trial, that the condition of indivisibility does not necessarily mean that all exposure is causative. Mr Harms submitted that putting aside any trifling exposure, which he accepted was not found to be the case, causation was nonetheless subject to variable conditions. He observed, by way of example, that the article on which Professor Holmes relied in the further expert report proposed criteria for the attribution of lung cancers to asbestos exposure, depending on the cumulative period of exposure and the type of asbestos. Causation in lung cancer cases is also often complicated by a history of smoking.
For present purposes, it is sufficient to observe that RTWSA has identified its case that acceptance of lung cancer as an indivisible condition does not involve acceptance that all exposure is causative. It contests the proposition of logic made by BIC as syllogistic. This is consistent with the position RTWSA took at trial.
Once there was evidence that exposure with Sigal had caused the lung cancer, the next step, being the conclusion that the subsequent exposure with Construction Components was also causative, required evidence, whether to establish the proposition of logic on which BIC now relies, or to establish causation directly. This might have taken the form of findings of fact as to causation in lung cancer cases, adduced under s 8(4), or a further expert report, both of which are now sought to be adduced. In either case, it would have then been open to RTWSA to challenge that evidence. We therefore reject the argument that RTWSA had assumed an evidentiary onus with respect to causation from exposure at Construction Components. BIC’s application to adduce further evidence is necessary.
Determination of the applications to adduce further evidence
The interlocutory applications to adduce further evidence are made under UCR 217.10(1)(c). In P J Nash Pty Ltd v Food and Beverage Australia Limited, this Court said:[27]
The Court may, in its discretion, accept fresh evidence on appeal. In doing so, the Court must be satisfied the evidence could not, with reasonable diligence, have been obtained for use at trial and, if the evidence had been available, it is reasonably clear that an opposite outcome would have resulted.[28] The ultimate test is whether it is in the interests of justice to receive the fresh evidence. Public interest in the finality of litigation is also an important consideration.[29]
(Footnotes in original)
[27] PJ Nash Pty Ltd v Food and Beverage Australia Limited [2021] SASCA 86 at [66].
[28] Sunlight Nominees Pty Ltd v Zotti and Zotti [2019] SASCFC 11 at [39]–[42].
[29] Steicke v Pederick (2019) 134 SASR 114 at [7]; Viscariello v Livesey [2013] SASC 99 at [132].
In CDJ v VAJ,[30] the High Court expounded on the discretion to adduce further evidence on appeal pursuant to s 93A(2) of the Family Law Act 1975 (Cth). That exposition has long been accepted as applicable to this Court’s discretion. The plurality observed that the discretion was not expressed to be limited in any way,[31] and that it was relevant to consider its remedial nature:[32]
Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate that the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
[30] (1998) 197 CLR 172.
[31] CDJ v VAJ (1998) 197 CLR 172 at [107].
[32] CDJ v VAJ (1998) 197 CLR 172 at [109].
The importance of the principle of finality to the discretion is illustrated by its exposition by the High Court in D’Orta-Ekenaike v Victoria Legal Aid:[33]
The principal qualification to the general principle that controversies, once quelled, may not be reopened is provided by the appellate system. But even there, the importance of finality pervades the law. Restraints on the nature[34] and availability of appeals, rules about what points may be taken on appeal[35] and rules about when further evidence may be called in an appeal (in particular, the so‑called “fresh evidence rule”[36]) are all rules based on the need for finality. As was said in the joint reasons in Coulton v Holcombe[37]: “[i]t is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial”.
(Footnotes in original)
[33] (2005) 223 CLR 1.
[34] Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73.
[35] Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; O'Brien v Komesaroff (1982) 150 CLR 310; Coulton v Holcombe (1986) 162 CLR 1.
[36] Orr v Holmes (1948) 76 CLR 632; Ratten v The Queen (1974) 131 CLR 510 at 516‑517 per Barwick CJ; Gallagher v The Queen (1986) 160 CLR 392; Mickelberg v The Queen (1989) 167 CLR 259.
[37] (1986) 162 CLR 1 at 7.
BIC’s interlocutory applications are made in pursuit of the further, subsidiary purpose identified in CDJ v VAJ. That needs to be assessed against BIC’s failure at trial to have adduced relevant evidence under s 8(4) by way of findings of fact in lung cancer cases and all the other surrounding circumstances:[38]
The failure to have adduced the evidence before the primary judge will be a variable factor, the weight of which will depend upon all the other factors pertinent to the case. Where the evidence has been deliberately withheld, the failure to call it will ordinarily weigh heavily in the exercise of the discretion. In other cases, the failure to call the evidence even if it could have been discovered by the exercise of reasonable diligence may be of little significance. No invariable rule concerning the failure to call the evidence can or should be laid down in view of the wide discretion conferred on the court by the section.
[38] CDJ v VAJ (1998) 197 CLR 172 at [116].
In resisting the application to adduce further findings of fact under s 8(4), counsel for RTWSA on the appeal pointed to the following matters. First, the finding in Amaba v Booth on which the primary judge relied, as set out above, was not referred to at any time in submissions. The primary judge had not indicated to the parties that she proposed to make a corresponding finding, notwithstanding the chaussette to s 8(4) of the Dust Diseases Act. There is no evidence that had RTWSA submitted that Amaba v Booth was inapplicable as a mesothelioma case, BIC would have applied to reopen its case.
Further, Mr Harms submitted that had BIC relied on the relevant cases at trial, he would have sought to cross-examine Professor Holmes on the issue of causation and may have tendered further evidence relating to the relative virulence of different types of exposure.
In response to an observation that BIC had otherwise only relied on authorities relating to mesothelioma without objection, RTWSA submitted that these related to the issue of responsibility for exposure, not causation. In that context, the particular disease was irrelevant.
Mr Whitington QC accepted, in oral submissions, that counsel for RTWSA at trial was entitled to exploit the perceived gap in the evidence. He approached the interlocutory applications from the perspective of prejudice, accepting (in the alternative to his primary position, addressed above) that the gap had been established. He observed first that Mr Hillary (who had not been present at trial) had attempted to explain the form of the s 8(4) notice, its reliance on Amaba v Booth and how it could have referred to other cases.
Next, he observed that Ms Kerrigan’s affidavit in response explained RTWSA’s appreciation of the gap in the evidence, and at the very least implied that RTWSA saw no reason to have Professor Holmes called, given the limits of his expert report, as that would give BIC an opportunity to repair its case. He observed that part of RTWSA’s argument on the first application was that to allow BIC to adduce the correct cases on appeal would cause RTWSA prejudice, as it would have cross examined Professor Holmes in that instance at trial.
It was in response to that argument that BIC produced (albeit extremely belatedly) a further report of Professor Holmes, addressing causation in lung cancer cases directly. Mr Whitington QC invited RTWSA to cross-examine Professor Holmes on appeal; he submitted that by this means, any prejudice caused by the first application to adduce the further cases under s 8(4) could be cured.
There are, consequently, several considerations relevant to the exercise of the discretion, noting that BIC makes both interlocutory applications together, in combination.
There is no evidence that BIC would have applied to reopen its case, had RTWSA objected. Mr Hillary’s affidavit in this Court explained that at the relevant time, he saw no relevant distinction between causation of mesothelioma and of lung cancer, such that it should make no difference to rely on Professor Henderson’s exposition of causation of mesothelioma in a lung cancer case. However, Mr Hillary was not in attendance at the trial, and his evidence does not actually explain the decision to rely on Amaba v Booth.
Next, while the chaussette to s 8(4) is expressed in permissive terms, we have no doubt that it imposes a specific obligation of procedural fairness if the Court proposes to make such a finding. While the ground of appeal does not complain of a denial of procedural fairness, this statutory background informs the view to be taken of RTWSA’s failure to take issue with the relevance of the identified findings of fact.
Section 8(4) is an extraordinary provision that serves an important, but exceptional, forensic purpose in the area of dust diseases. It should be deployed with care. In this case, the second Notice of Findings of Fact was provided on the final day of trial, with no warning. The previous Notice had not contained the findings of fact relying on Amaba v Booth. More importantly, counsel for BIC did not identify in submissions the forensic purpose of adducing the identified findings of fact in Amaba v Booth. Neither did the primary judge indicate that she proposed to make a corresponding finding.
It is obvious that reasonable diligence would have allowed for the adducing of the cases that BIC now seeks to rely on. Further, for the reasons set out above, it would be artificially reductionist to place responsibility for the failure of BIC to adduce findings of fact in lung cancer cases on RTWSA’s failure to object.
BIC has offered a course to cure the prejudice created by the first application. This is to adduce yet further evidence and give RTWSA the opportunity to conduct a full forensic interrogation of causation in lung cancer cases. Here, the public interest in the finality of litigation assumes significance.[39]
[39] Steicke v Pederick (2019) 134 SASR 114 at [7]; PJ Nash Pty Ltd v Food and Beverage Australia Limited [2021] SASCA 86 at [66].
The failure to adduce the relevant findings of fact by way of a s 8(4) notice at trial occurred in the circumstances described above, where those findings were readily available to be adduced. BIC was unable to explain properly its failure, other than by reference to a general understanding that was incorrect, but not shown to have driven the decision. RTWSA, for its part, conducted its case accordingly. The effect of granting the applications would be to impose significant further time and expense in circumstances where the findings of fact in the lung cancer cases were readily available to BIC at trial.
In our view, the public interest in the finality of litigation and the ready availability of the findings of fact in the lung cancer cases at trial outweigh the considerations in favour of giving BIC an opportunity to repair its case. We would refuse the interlocutory applications to adduce further evidence.
Conclusions on Grounds 1 and 2
For the reasons given above, once the applications to adduce further evidence are refused, the conclusion follows that it was not open for the primary judge to rely on findings of fact in Amaba v Booth, pursuant to s 8(4) of the Dust Diseases Act. BIC consequently failed to prove that Mr Westell’s exposure to asbestos in the course of his employment with Construction Components was causative of his lung cancer. We would allow the appeal on Grounds 1 and 2.
Whether the settlement entered into by BIC and Vero, an insurer of Sigal, discharged liability on the part of Sigal (Grounds 4-5)
As identified above, the judge entered judgment for BIC against Sigal for 17.5 per cent of Mr Westell’s damages of $300,000 and 17.5 per cent of his costs and disbursements. That was after deducting five per cent representing the consent judgment against Vero as an insurer of Sigal. BIC’s third party claim against Vero pleaded that BIC had held a policy of workers compensation insurance with Vero’s predecessor between 1969 and 1970.
The contention of RTWSA is that when BIC accepted Vero’s offer of five per cent of the plaintiff’s damages and costs, it settled its cause of action against Sigal. When judgment was entered, the cause of action against Sigal merged in the judgment and ceased to have independent existence.
BIC’s claim against Vero was made pursuant to s 11 of the Dust Diseases Act. That section provides:
11—Dust disease action may be brought directly against insurer in certain cases
(1) If the defendant to a dust disease action—
(a) is dead or has been dissolved; or
(b) is insolvent; or
(c) cannot be found,
a dust disease action that might have been brought against the defendant (the absent defendant) may be brought instead directly against an insurer who insured the defendant against a liability to which the action relates.
(2) An insurer against whom an action is brought under subsection (1) has the same rights, powers, duties and liabilities in relation to the action as the absent defendant would have had if the action had been brought against the absent defendant.
(3) The extent of the insurer's liability cannot, however, exceed the extent to which the insurer would have been liable to indemnify the absent defendant if the action had been brought against the absent defendant.
The term ‘dust disease action’ is defined by s 3 to mean ‘a civil action in which the plaintiff’:
(a) claims damages for or in relation to a dust disease or the death of a person as a result of a dust disease;
(b) asserts that the dust disease was wholly or partly attributable to a breach of duty owed to the person who suffered the disease by another person …
The term ‘defendant’ is defined by s 3 to include a third party against whom contribution is sought. Whilst the term ‘plaintiff’ is not defined, it is apparently not confined to an ‘injured person’, which is defined by s 3 to mean ‘a person who is suffering from, or who has suffered from, a dust disease’.
The appeal proceeded on the mutual assumption that s 11 applied to a claim for contribution, whether as between defendant tortfeasors or as between a defendant tortfeasor and third party tortfeasors. The assumption is consistent with the approach taken in Amaca Pty Ltd (under New South Wales administered winding up) ACN 000 035 513) v Pfeiffer and Ors (‘Pfeiffer’) where the Full Court drew on s 4 and the general terms of s 8(2) to find that s 8(2) applied to a claim for contribution ‘in relation to’ a dust disease.[40]
[40] (2017) 129 SASR 258 at [5] (Kourakis CJ), [82]-[84] (Stanley J, with whom Peek J agreed), s 8(2) is ‘is capable of extending to claims for contribution between tortfeasors who are liable to contribute to an award of damages to a plaintiff’, albeit that it was not confined to a dust disease action.
Why it was thought necessary to reinstate Sigal after Vero was joined pursuant to s 11 was not explained.[41] Presumably this step was thought to be helpful to facilitate intervention by RTWSA. Nonetheless, neither Sigal nor Construction Components had management or assets in any conventional sense. The appearance by the liquidator appears to have been a formality. Neither employer appears to have taken any active role. Both remained quiescent even if not strictly absent; as they were insolvent, they fell within the contemplation of s 11(1). The defence of the action by RTWSA was conducted in the name of RTWSA.
[41] Compare, for example, other statutory mechanisms by which indemnity can be obtained directly from an insurer ostensibly without re-registering the insured company: s 51 of the Insurance Contracts Act 1984 (Cth) and s 601AG of the Corporations Act 2001 (Cth).
Section 11 is intended, like other provisions in the Dust Diseases Act, to have a beneficial effect.[42] It is intended to facilitate recovery by plaintiffs and other defendants against the insurer of the absent defendant by permitting action directly against the insurer of that absent defendant. That is a legislative technique similar to that which has been used in other contexts.[43] In Carslake v Guardian Assurance, Bray CJ described the right given by statute to sue an insurer directly as ‘quasi-contractual’,[44] whilst in Motor Accident Commission v Leslie, Kourakis CJ described it as a ‘statutory cause of action’.[45]
[42] See, e.g., BHP Billiton v Parker (2012) 113 SASR 206 at [222] (Doyle CJ and White J).
[43] See, e.g., s 113 of the Motor Vehicles Act 1959 (SA), Carslake v Guardian Assurance Company (1977) 15 SASR 378 and Motor Accident Commission v Leslie (2018) 130 SASR 540. The most obvious difference with s 113 is the absence of any need for notice under s 11 of the Dust Diseases Act.
[44] Carslake v Guardian Assurance Company (1977) 15 SASR 378 at 383.
[45] Motor Accident Commission v Leslie (2018) 130 SASR 540 at [9].
Whilst s 11 facilitates action directly against an insurer, its terms do not suggest an intention to go further, such as by altering the substantive law applicable to the liability of the absent defendant, whether as against the plaintiff or as against other defendants or third parties. That is demonstrated by s 11(2). The insurer has exactly the same rights and liabilities in relation to the dust disease action as the absent defendant.
The terms of s 11 provide no basis to infer an intention to alter the substantive law otherwise applicable to the insurance arrangements that apply between the absent defendant and that defendant’s insurer, or the principles of contribution in equity that apply as against insurers liable to indemnify the absent defendant.[46] The former point is demonstrated by s 11(3) which operates as a means of reinforcing what might otherwise be assumed, namely, that the insurer’s liability under s 11(2) cannot exceed the extent to which it would have been liable to indemnify the absent defendant. So, if the dust disease action had been brought against the absent defendant and the insurer was liable to indemnify, but that indemnity was subject to a monetary policy limit, the insurer would not ordinarily be required to indemnify for a sum in excess of the policy limit. Likewise, s 11(3) reinforces that where the insurer is sued directly, it cannot be expected to meet any monetary liability in excess of the policy limit.
[46] Where those insurers are under co-ordinate liabilities to make good the one loss, and must share the burden pro rata, Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 at 349‑350 (Kitto J); Sydney Turf Club v Crowley [1971] 1 NSWLR 724 (Jacobs, Mason and Manning JJA), upheld in the High Court, (1972) 126 CLR 420 at 424 (Barwick CJ); Commercial & General Insurance Co Ltd v General Insurance Office (NSW) (1973) 129 CLR 374 at 380.
Contrary to the observation made by the judge, s 11(3) says nothing about whether there is, whether usually or otherwise, more than one insurer of an absent defendant.
The limitation referred to in s 11(3) concerns the indemnification of the insured, not the rateable contribution that an insurer might ultimately be called on to make where there are multiple insurers, each liable to wholly indemnify the insured. The two kinds of action cannot be conflated. A rateable contribution, as will be seen, is determined under principles of double insurance, and then as between insurers. Absent a statutory cause of action, rateable contribution is not something that directly concerns the insured defendant or the plaintiff who is pursuing the insured. The insured defendant is ordinarily concerned with defending liability and obtaining indemnity in respect of that liability. The plaintiff (whether an injured person, a defendant or a third party) is ordinarily concerned with proving liability against another tortfeasor and ensuring that there is at least one insurer liable to indemnify in respect of that liability.
When joined under s 11, the insurer may potentially act in more than one capacity. That this may occur should not be permitted to elide the distinction between the insurer acting as the defendant, as s 11(2) permits, and the insurer acting against other insurers when seeking rateable contribution, as may be done under the general law. Section 11 is not concerned with the latter kind of action, although the potential availability of that kind of action may inform the approach taken, particularly in negotiations.
The judgment entered by BIC against Vero on 20 May 2019 was, relevantly, in the following terms:
BY CONSENT THE COURT ORDERS that:
1. Judgment be entered for the Defendant against the Fifth Third Party on a full and final basis, for:
(a)the sum of $15,000.00, being a 5% contribution to the judgment sum referred to in paragraph 1 of the Consent Judgment of 8 June 2018 as between the Plaintiff and Defendant; and a
(b)5% contribution to the Plaintiff’s party/party costs and disbursements to be agreed or taxed.
…
RTWSA’s argument was as follows. Section 11(1) authorises the bringing of an action against an insurer instead of against the insolvent or dissolved company. Were both able to be sued, questions would arise as to who had the conduct of the proceedings and the authority to settle.[47] Section 11(2) is explicit that an insurer sued under s 11(1) has the right to settle a claim which necessarily includes, importantly, securing a release of the insured.
[47] But see Bratovich v Rheem (Aust) Pty Ltd (1971) 2 SASR 33 at 34-35, where Bray CJ recognised the practice of allowing two counsel to appear for an employer, each representing the interests of different insurers of the respondent employer, but ‘this indulgence can have no effect whatever on the appellant’s rights’.
Next, BIC’s action against Sigal was an action for contribution from a joint tortfeasor, pursuant to s 6 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) (‘Law Reform Act’). In order to establish liability on the part of Sigal, BIC had to prove that Sigal was liable for damages for the same harm for which BIC was liable. A key part of the argument, as alluded to above, is that lung cancer is an indivisible injury, such that the tortfeasor only becomes liable once in respect of that exposure. As to this, RTWSA referred to the statement by Duggan J of this Court in Colton Palmer & Preston Ltd v Allianz Australia Insurance Ltd, to the effect that liability arises only once.[48] Duggan J was here expressing agreement with a statement to that effect by Spigelman CJ in Orica Ltd v CGU Insurance Ltd.[49]
[48] (2009) 104 SASR 110 at [56].
[49] (2003) 59 NSWLR 14 at [55].
Then, there being only one liability of Sigal for Mr Westell’s indivisible condition of lung cancer, there was only one cause of action. BIC pursued Vero on that cause of action and settled with it. That necessarily constituted a settlement of the action against Sigal, which merged into the judgment.
The primary judge distinguished Colton Palmer & Preston on the basis that that case was a common law claim for indemnity under an insurance policy, and that it did not have general application to cases under the Dust Diseases Act.[50] She did not engage directly with the proposition arising in that case, in reliance on Orica, that there was only one liability arising for the indivisible injury. The judge then placed weight on the settlement with Vero having taken place two weeks after the reinstatement of Sigal.[51] She observed that the Dust Diseases Act pursued a policy of expedition in dealing with claims, and to enable a plaintiff to bring a claim against an insurer directly.[52]
[50] [2021] SAET 102 at [71].
[51] [2021] SAET 102 at [72].
[52] [2021] SAET 102 at [73].
Importantly, the judge linked this purpose to the separate existence of the Statutory Reserve Fund:[53]
Although not expressly stated, the intent of the Dust Diseases Act, when it applies to parties who are employers, accords with the provisions regarding the Statutory Reserve Fund. This adds to the notion of a statutory scheme with its own procedural context.
It is to be expected that given the considerable delay between exposure to asbestos and the development of disease, that employers, and often insurers, are deregistered or cannot be found, so that it is expected there would be a need to call upon the Statutory Reserve Fund. Indeed part of the encouragement to deal expeditiously with the plaintiff is the knowledge of the defendant or defendants that they can proceed against third parties after they settle with the plaintiff.
(Footnote omitted)
[53] [2021] SAET 102 at [74]-[75].
The judge observed that there will often be more than one insurer, and that this is contemplated by s 11(3). She then reasoned that Vero’s time on risk was a fraction of Mr Westell’s total period of exposure with Westell, and that ‘to restrict the Defendant’s opportunity to claim contribution would seem unfair. It would discourage resolution by agreement if all insurers, even if listed as separate parties, must agree on a joint contribution’.[54]
[54] [2021] SAET 102 at [78].
There are several difficulties with this reasoning. First, when liability for a workers compensation injury is determined, and where there is more than one insurer on risk for that injury, respective obligations of indemnity will be resolved or determined as a matter of contribution. Time on risk may inform that resolution or determination.[55] That does not alter the basal position in a case such as this that there is a single liability for which each insurer is, subject to the terms of any policy, ordinarily liable to indemnify for the whole. Principles of contribution apply to ameliorate the effect of each insurer’s obligation to indemnify for the whole, according to equitable principles. To say that it is not ‘fair’ that an insurer who is only shown to have been on risk for a proportion of that time is liable for the whole is not to the point. Where causation for an indivisible injury is shown to have occurred over a long period of time covered by the period of insurance, that is a function of the risk accepted by the insurer.
[55] No argument was presented as to whether time on risk was the appropriate, or only, means by which to determine the rateable contributions of insurers pursuant to the principles of equitable or common law contribution. See, e.g., Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 at 349-350 (Kitto J) and KCT Sutton, Insurance Law in Australia, (LawBook, 3rd ed, 1999) [12.35]ff, p 993.
Secondly, while Colton Palmer & Preston was concerned with a different issue, that does not alter the correctness of the observation that an indivisible injury gives rise to a single liability for the whole, to which principles of contribution may then be applied.
Thirdly, while the Dust Diseases Act is undoubtedly informed by a policy of expedition, the judge’s reasoning appears to have elevated policy over the statutory provisions themselves. Specifically, there is no basis from which it can be reasoned that s 11 impliedly contemplates the calling on the Statutory Reserve Fund in pursuit of expedition, when insurers cannot be found, such as to modify liability.
The mere continuation of the Fund provides no foundation for a conclusion that a plaintiff can settle with an insurer of an employer and then pursue the employer for the balance, on the basis that the Statutory Reserve Fund is there to pick up the balance. To so reason ignores the words of s 118d(1)(b), which provides an entitlement to claim against the Fund:
(b)in respect of workers compensation liabilities–
(i)that are not covered by a policy of workers compensation insurance;
and
(ii)that are, by reason of the insolvency of an employer or former employer, unsatisfied;
(Emphases added)
Section 118d(1)(b) does not extend the availability of the Fund to a liability that is covered by a policy of workers compensation insurance, but where the insurer has settled with the plaintiff for less than the sum for which the insurer was on risk. It cannot displace the conclusion that the claim against the employer has merged.
Fourthly, and in any event, while BIC pleaded that Vero’s predecessor had held a policy of insurance between 1969 and 1970, it sought relief from Vero in the same terms against each of the third parties, namely:
Indemnity and/or alternatively contribution in respect of the Defendant’s liability to such extent that is just and equitable having regards to [each third party’s] responsibility for the Plaintiff’s injury, loss and damage, and any loss and/or damage suffered by the Plaintiff, pursuant to Section 25 of the Wrongs Act 1936 (SA) and/or Section 6 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) and/or Rule 36 of the District Court Rules 2006 (SA).
(Emphasis added)
That is to say, BIC sought relief against Vero by way of indemnity or contribution, to the extent that is just and equitable, on the correct premise that its own liability to Mr Westell was singular.
In defending the primary judge’s reasoning, BIC contended that the argument of RTWSA overlooked the effect of statutory modification of a cause of action on a party’s liability and the operation of s 11 of the Dust Diseases Act. Section 12 of the Law Reform Act provides that a judgment for damages against one person does not bar an action against another person who is liable for the same harm.
It is well understood that legislation such as s 12 ensures that the release of one joint tortfeasor does not release other joint tortfeasors.[56] That is a different issue. The point raised by RTWSA is not whether BIC, having settled with and entered judgment against Vero, can then pursue another joint tortfeasor. BIC is not pursuing another tortfeasor. It is still pursuing Sigal. By reason of s 11(2), Vero had the same rights and liabilities as Sigal in relation to the dust disease action: in relation to that action, Vero was, effectively, Sigal. The issue may therefore be described as whether a settlement with and judgment against Sigal put an end to Sigal’s liability. Ordinarily, the liability of a party merges in a judgment entered against that party.[57] That aspect of the doctrine of merger is not affected by s 12 of the Law Reform Act.
[56] Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574; Rasch Nominees Pty Ltd v Bartholomaeus [2012] SASC 70 at [253] (Kourakis J).
[57] Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507 at [20].
Neither does the presumption created by s 8(1) of the Dust Diseases Act assist. That presumption is that an established exposure to asbestos dust, in circumstances in which the exposure might have caused or contributed to a dust disease suffered by a person, did cause or contribute to the disease. The section facilitates proof; it does not alter any tenet of liability. Neither the judgment of the Full Court in BHP Billiton Ltd v Hamilton,[58] nor that in BHP Billiton Ltd v Parker,[59] on each of which BIC relied, holds to the contrary.
[58] (2013) 117 SASR 329 at [64]-[66] (Blue J), [218]-[224] (Stanley J), (Kourakis CJ agreeing with both).
[59] (2012) 113 SASR 206 at [117]-[118] (Doyle CJ and White J), [348] (Gray J).
BIC also contends that it pleaded a third party claim in relation to Vero’s obligation to provide indemnity in respect of a divisible part of the whole period of BIC’s potential liability to Mr Westell. For the reasons set about above, this contention is simply incorrect.
The judgment entered into by BIC and Vero necessarily discharged liability on the part of Sigal. As RTWSA pointed out, if the separate judgment against Sigal was able to stand, Sigal would still have recourse against Vero, never having released it. The reality is that having engaged the facility in s 11(1) of the Dust Diseases Act to sue Vero directly instead of Sigal, BIC in settling with, and entering judgment against, Vero must necessarily have discharged Sigal, the insured.
We would allow Ground 4 of the appeal.
Whilst this case does not raise any issue of multiple insurers, it does illustrate the need for care and precision regarding the way in which a claim made under s 11 against one or more insurers is resolved. The extent of an insurer’s potential liability to indemnify an absent defendant may well equate to an amount sufficient to meet all of the absent defendant’s liability for the injured person’s indivisible condition, or all of the absent defendant’s liability to make fair and equitable contribution under the Law Reform Act. That liability will usually exceed the extent of any rateable contribution the insurer might be called upon to make where it and other insurers are all liable to indemnify. The terms of any settlement, including by deed, must make clear the basis and limits of any resolution, particularly if it is intended not to be ‘full and final’ pursuant to s 11 but be subject to a continuing claim against any other insurer or entities liable to indemnify the absent defendant.
Indeed, it must be borne in mind that this is a case of indivisible loss and different considerations may apply to cases where the loss is divisible and the liability of the defendant may in effect be divisible.
In addition, and as earlier mentioned, care must be exercised when determining the capacity in which an insurer is acting. Where the insurer is acting for and on behalf of the insured, such as under s 11 or where the insurer has taken over the conduct of the defence, the insurer may by s 11 or the terms of the policy or pursuant to subrogation principles, be authorised to resolve the liability of the insured and, as a corollary, its own liability.
Whether a settlement or judgment entered into by an insurer affects the liability of other potential insurers or parties is a separate question. If an insurer, acting in the name of an insured, settles the insured’s liability that may well operate to the advantage of other insurers. For example, in Sydney Turf Club v Crowley, the Club was insured by the Government Insurance Office and it settled a claim against the Club by meeting the plaintiff’s claim.[60] It thereby indemnified the Club. The insurer then identified another insurer, the Australian Jockey Club and, in the name of the Sydney Turf Club, pursued a claim for indemnity against the other insurer, purportedly by way of subrogation. Although it succeeded at first instance, the appeal was allowed on the basis that the claim was misconceived. Where the insured had recovered the whole of the loss from one insurer the second insurer had a good defence to the insured’s claim against it.[61] The doctrine of subrogation had no role to play because the insurer did not acquire an independent cause of action, but succeeded to the insured’s cause of action against the third party, and that was ‘subject to all the defences which would be available if the action had been brought by the insured for his own benefit’.[62]
[60] [1971] 1 NSWLR 724 (Jacobs, Mason and Manning JJA), upheld in the High Court, (1972) 126 CLR 420 at 424 (Barwick CJ).
[61] Sydney Turf Club v Crowley [1971] 1 NSWLR 724, 730 (Jacobs JA, with whom Mason and Manning JJA agreed).
[62] Sydney Turf Club v Crowley [1971] 1 NSWLR 724 at 734 (Mason JA).
Rather, where both policies covered the same risk there was double insurance and the Government Insurance Office was confined to making a claim against the other insurer by way of ‘contribution in equity’.[63] Accordingly the claim made by the Government Insurance Office in the name of the Sydney Turf Club failed. It could only make a claim in its own right against the other insurer.
[63] Sydney Turf Club v Crowley [1971] 1 NSWLR 724 at 730C, 733D (Jacobs JA, with whom Mason and Manning JJA agreed), 734G-735A (Mason JA). See also Speno Rail Maintenance Australia Pty Ltd v Metals & Minerals Insurance Pte Ltd (2009) 253 ALR 364 (WASCA) at [215]-[217] (Beech AJA, as he was).
Different considerations apply where an insurer, acting in the name of the insured or under s 11, or indeed in its own name, resolves the liability of an absent defendant or its own liability in a way which is contestable or excessive. It will be difficult indeed to saddle other tortfeasors or insurers with the consequences of a resolution which is contestable or excessive. Where the insurer is acting in the name of the insured, or under s 11 for the absent defendant, against another tortfeasor, it cannot expect to recover more than a ‘fair and equitable’ contribution under the Law Reform Act.[64] Where the insurer is in its own right making a claim by way of contribution in equity against other insurers,[65] it cannot expect to recover more than a pro rata contribution to a liability to which every policy responds, a claim which is based on ‘reason, justice and fairness’, taking into account ‘all matters which go towards ensuring a just result’.[66]
[64] Saccardo Constructions Pty Ltd v Gammon (No 2) (1994) 63 SASR 333; BI (Contracting) Pty Ltd v David Jones Ltd [2019] SASCFC 138 at [55], [63] (Kelly J, with whom Kourakis CJ and Hinton J agreed): ‘contribution is … determined by reference to whether a judgment or settlement entered into was or was not reasonable’.
[65] Where those other insurers are under co-ordinate liabilities to make good the one loss, and must share the burden pro rata, Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 at 349-350 (Kitto J); Burke v LFOT Pty Ltd (2002) 209 CLR 282 at [15]-[16] (Gaudron A-CJ and Hayne J), [43] (McHugh J), [142]-[145] (Callinan J); Friend v Brooker (2009) 239 CLR 129 at [40]-[44] (French CJ, Gummow, Hayne and Bell JJ). This case does not raise the issue whether a right of indemnity under an insurance contract and a contractual right of indemnity are co-ordinate liabilities, Speno Rail Maintenance Australia Pty Ltd v Hammersley Iron Pty Ltd (2000) 23 WAR 291 at 325-327; Elf Enterprises v London Bridge Engineering (1997) TLR 607; Caledonia North Sea Ltd v London Bridge Engineering Co [2000] Lloyd’s Rep IR 249.
[66] KCT Sutton, Insurance Law in Australia, (LawBook, 3rd ed, 1999) [12.35]ff, p 993, citing, amongst others, Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 at 351 (Kitto J).
Section 11 does not suggest that these principles have been altered by it. Rather, it is because these principles become more difficult to apply, particularly when an insurer is potentially acting in more than one capacity, that there is a need for care and precision when structuring the terms of any settlement.
A similar potential for confusion was recognised by the High Court, in a different context, in Commercial & General Insurance Co Ltd v General Insurance Office (NSW):[67]
The doctrine [of contribution in equity] is not concerned with working out the rights of insurers and third parties. It is concerned with distributing the indemnity to which the insured is entitled under policies of insurance with two insurers. If the rights of insurers and third parties are involved, a further element is introduced, namely, what is, or could be, the result of the exercise by an insurer of his right of subrogation to the position of the person who has been indemnified.
[67] Commercial & General Insurance Co Ltd v General Insurance Office (NSW) (1973) 129 CLR 374, 380. See also at 384: ‘it is only in proceedings between the parties concerned, viz. the employer, the employee, and the third party insurer, that the questions which have arisen can properly be determined. In the working out of rights and obligations of insurers among themselves, it ought not to be assumed that there will be independent proceedings by some person not subject to the control of the insurer interested in the taking of such proceedings’.
If a settlement with an insurer is intended to fully and finally resolve the absent defendant’s liability then the insurer is exposed to having to meet the whole of that liability, at least to the extent of any indemnity under the policy or insurance contract with the absent defendant. It will then be a matter for that insurer to pursue contribution in equity from any other insurer. Where, by contrast, the settlement is only intended to resolve the insurer’s liability to make a rateable contribution in equity toward the insurer’s liability to indemnify the absent defendant, being a co‑ordinate liability shared by other insurers, then that must be made clear.
In this case BIC joined the insurer pursuant to s 11 and by judgment resolved Sigal’s liability fully and finally, ostensibly pursuant to s 11(2). If something different was intended, then that had to be made clear in the terms of settlement or judgment.
Whether the primary judge erred in failing to deduct from the percentage awarded against Construction Components the amount recovered by BIC from Amaca Pty Ltd (Ground 3)
Amaca was joined as a third party, relevantly, on the basis of it being the manufacturer of the products to which Mr Westell was exposed in his employment with Construction Components. BIC recovered a 10 per cent contribution from Amaca.
The primary judge declined to make a deduction from the amount that she found Construction Components liable to pay. She did so on the basis that the settlement of the action against Amaca did not include any admission of liability, and that there was no contribution action between Construction Components and Amaca. She relied on the Employment Tribunal decision of The State of South Australia (in right of the South Australian Government Financing Authority) v Bradford Insulation (SA) Pty Ltd (in liquidation) and BI (Contracting) Pty Ltd (No 2).[68] In that case, a Deputy President of the Tribunal struck out paragraphs of a defence seeking contribution against a non-party, BHP. The State had originally sought contribution from BHP and joined it as a defendant, but then discontinued as against it.
[68] [2021] SAET 91.
The primary judge further relied on the following conclusion of Kourakis CJ in Pfeiffer:[69]
I would dismiss ground 2 of Amaca’s appeal. Amaca did not claim contribution against Wallaby Grip (BAE) Pty Ltd (in liq) (BAE). Amaca’s submissions ignore the fundamental point that adjudications are made as between the parties to an action on their respective claims and defences, and in this case for their respective contributions to the contraction of mesothelioma by Mr Pfeiffer. Instead, Amaca argued that the contribution of World Services Pty Ltd (SFS) as against Amaca should have been greater because SFS’s wrongdoing was contributed to by BAE and Orica Ltd (Orica). Having failed to make a contribution claim against BAE, Amaca cannot claim a level of contribution from SFS on the basis that it should be fixed according to the relatively greater culpability of BAE.
[69] (2017) 129 SASR 258 at [3].
In circumstances where we would hold that the primary judge erred in giving judgment against each of Construction Components and Sigal, it is not strictly necessary to decide this ground. However, in case we are wrong in either case, we can indicate our conclusion briefly.
This is not a case where Amaca was not joined at all or where the action against it was simply discontinued. Rather, BIC joined Amaca as a third party which it claimed was ‘also liable in damages for the same harm’, see s 6(1) of the Law Reform Act. This was therefore not the type of case described by Stanley J in Pfeiffer, where the defendant sought the benefit of contribution from a third party that it did not join:[70]
In other words, a defendant cannot recover more from a third party than the amount of that defendant’s liability. It follows that if a plaintiff sues a single defendant and establishes only that the defendant is liable for some of the harm suffered, then the defendant may in turn seek contribution in respect of that defendant’s liability to the plaintiff. The defendant cannot seek contribution for harm beyond that for which the defendant is liable to the plaintiff. So, where a plaintiff sues two defendants, and each is found liable to the plaintiff in a defined proportion, and each defendant has sued different third parties, then each defendant is only entitled to contribution from the third parties it sued to the extent of that defendant’s defined proportion.
(Emphasis added)
[70] (2017) 129 SASR 258 at [53].
By contrast, in this case BIC pursued Amaca for contribution and recovered a 10 per cent contribution from Amaca. The primary judge entered judgment to that effect at the same time that she entered judgment for Mr Westell against BIC. Paragraph 8 of that Consent Judgment recorded that it was accepted that the payment of $30,000 from Amaca to BIC was a contribution to the judgment sum of $300,000 entered for Mr Westell against BIC.
Contribution under the Law Reform Act is determined according to what is ‘fair and equitable’, see s 6(5). To allow for the 10 per cent that BIC recovered from Amaca in the Construction Components apportionment would not apportion responsibility to a non-party. Rather, to fail to do so would cause BIC to be unjustly enriched, in that BIC would have recovered an amount in respect of the same exposure twice from different tortfeasors. While it does not affect the outcome of the appeal given our conclusions on the other substantive grounds, in our view, on the findings made at trial, the primary judge erred in this regard.
Of course, as we have found that BIC failed to prove causation during the period of employment with Construction Components, which was the only period during which exposure to Amaca products was relevant, the treatment of the applicable unjust enrichment issues may not be the same. It is not necessary to resolve that question in this appeal.
The costs grounds
Following the delivery of judgment, the primary judge heard argument on BIC’s application for costs, which included an application for indemnity costs. In the event, she ordered:
1.The Intervenor [RTWSA] to pay the Defendant’s [BIC] costs on a party/party basis from 22 May 2018 to 16 May 2019 inclusive and thereafter on an indemnity basis.
2.The Defendant is to have its costs incidental to this argument as to costs on an indemnity basis.
These orders clearly enough cannot survive the conclusions that we have reached on the substantive grounds of appeal. It is unnecessary to address the grounds attacking the costs orders. We would set aside the Tribunal’s costs orders.
Conclusion
We would order as follows.
1.The appeal is allowed on Grounds 1, 2 and 4.
2.The orders of the Tribunal dated 21 May 2021 and 12 July 2021 are set aside.
3.The claim by the defendant against the first third party, Sigal Industries Pty Ltd (in liquidation), is dismissed.
4.The claim by the defendant against the second third party, Construction Components Pty Ltd (in liquidation), is dismissed.
We would hear the parties as to costs.
36
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