MANUFACTURERS MUTUAL INSURANCE LTD v GOODYEAR AUSTRALIA and ORS NEW SOUTH WALES SUPREME COURT COURT OF APPEAL SHELLER and POWELL JJA, and SHEPPARD AJA 30 September 1997, 11 December 1997 [1997] NSWCA 195 Insurance — Dust disease — Which of three insurers obliged to indemnify employer for damages suffered by employee for employer's failure to take proper and adequate measures to protect employee from exposure to asbestos fibres from which he contracted mesothelioma — Workers' Compensation Act 1987 s151AB An employee of the first respondent, Goodyear Australia Ltd, contracted mesothelioma, a disease of gradual onset for the purposes of s151AB of the Workers' Compensation Act 1987. The employee recovered damages from Goodyear. The employee had been employed by Goodyear from 1 July 1957 to 27 November 1987. Throughout this period, there were, from time to time, free asbestos fibres in Goodyear's plant. From the mid 1970s until the plant closed in the 1990s after the employee's employment had ceased, Goodyear took continuous steps to monitor asbestos on its premises and to remove it or isolate it. There was no time, however, when there were not some asbestos fibres present in the plant. Over the period of the employee's employment with Goodyear, it had three insurers. These were National Employers' Mutual General Insurance, the second respondent, which had insured Goodyear from | January 1942 to 30 June 1958 and from 1 July 1962 to 30 June 1983, Manufacturers Mutual Insurance, the appellant which had insured Goodyear between 1 July 1983 and 30 June 1987, and MMI Worker's Compensation, the third respondent, which had insured Goodyear from | July 1987 to the date of the cessation of the plaintiff's employment on 27 November 1987. The Dust Diseases Tribunal found that the insurer at risk when the employee was last employed by the employer in work which exposed him to asbestos dust was Manufacturers Mutual and that it was the insurer who was to indemnify Goodyear for the amount of the damages which it was obliged to pay. Manufacturers Mutual had ceased to be the insurer on 30 June 1987, almost five months before the employment ceased. Held: That the insurer at risk was MMI Workers' Compensation because it was the insurer at risk when the employee was last employed by Goodyear in an employment to the nature of which the disease was due. Discussion of purpose and intention of s151AB of the Workers' Compensation Act 1987 and of its meaning and effect. Workers' Compensation Act 1987 s151AB (as in force prior to WorkCover Legislation Amendment Act 1995 taking effect) Workers' Compensation (Dust Diseases) Act 1942 Sheller JA In this case his Honour Judge Johns, sitting as the Dust Diseases Tribunal, came to a conclusion that the plaintiff, Ronald Valentine Jeal, whom Goodyear Australia Ltd (Goodyear) had employed from 1 July 1957 to 27 November 1987 and who successfully claimed to recover damages from Goodyear for injuries suffered by contracting mesothelioma, an occupational disease within the meaning of s151AB(6) of the Workers Compensation Act 1987, was, from 1 July 1987, not so employed in an employment to the nature of which the disease was due. Accordingly his Honour held that MMI Workers' Compensation (NSW) Ltd, the insurer under a policy of insurance obtained by Goodyear for the period from 1 July 1987 to the end of Mr Jeal's employment, was not liable to indemnify 2 UNREPORTED JUDGMENTS Goodyear under the policy for its liability to Mr Jeal. Applying s151AB of the Act as in force before the WorkCover Legislation (Amendment) Act 1995 came into effect on 20 December 1995, Judge Johns found that the insurer for the period from 1983 to 30 June 1987, Manufacturers Mutual Insurance Ltd, was bound to indemnify Goodyear under its policy. From that decision Manufacturers Mutual Insurance Ltd appealed on the basis that either the previous insurer for the period up to 30 June 1983, Insurers Guarantee Fund - National Employers Mutual General Insurance Association Ltd (In Liquidation), or MMI Workers Compensation (NSW) Ltd, was liable to indemnify Goodyear by operation of sIS1AB. I have had the benefit of reading the judgment in draft of Sheppard AJA. His Honour has set out the material terms of s151AB and carefully reviewed the cases, the facts and the reasons for judgment of Judge Johns. I am relieved from having to repeat that task. I agree with Sheppard AJA that Mr Jeal was employed at Goodyear in an employment to the nature of which the disease was due after Manufacturers Mutual Insurance Ltd came on risk in 1983. The more difficult question relates to the position from 1 July 1987. Judge Johns found that the employees of Goodyear risked inhaling asbestos dust between 1982 and 1986 and consequently were at risk of contracting mesothelioma. During this time Mr Jeal worked regularly in the area of the bagomatic presses. A memo from Mr Sadlowski, Goodyear's manager of engineering, dated 21 November 1986 stated: "The bottom line is that there is a significant amount of old asbestos insulation in our factory. Not all areas, however, pose immediate danger, if handled properly. Areas which are high risk are places where outside jacket has been torn, and loose fibre can be emitted. Another item identified as potential risk are [sic] 'frequent' maintenance areas. Major area [sic] falling under this category are the bagomatic presses, (the piping at rear between press and pits)." Until 1964 Mr Jeal worked in the heater pits. Thereafter he was transferred to the transport division. As a consequence of his duties he was in an about the domes on the bagomatic presses and would walk within five or six feet of them. He regularly worked in and about this area. However, Judge Johns found that between July and November 1987 Mr Jeal was not exposed to any asbestos dust. He did not go past any areas where warning signs of the danger of asbestos were to be found. His Honour thought it unlikely that at this time in 1987, given the pro-active stance of the company under the control of the plant manager in charge of the site, Mr Love, any asbestos material that would have been the source of any danger would have been left or would not have been barricaded with the signs. Judge Johns said: "Given that the plaintiff does not recall seeing any warning or barricades during this period it is unlikely in my view that he was exposed to any risk. In respect to the repair of the domes and the re-lagging of pipes, the plaintiff agreed that this work was not done in the last six months of his employment." However, as Sheppard AJA has pointed out, Mr Love's evidence shows that the continued presence of asbestos in the Goodyear factory presented a problem right up to the time that the factory closed in the 1990s. I agree that the preponderance of the evidence establishes that the risk continued through the entirety of Mr Jeal's employment and thereafter. In Tame v Commonwealth Collieries Pty Ltd (1947) 47 SR (NSW) 269 at 272 Jordan CJ said that "employment to the nature of which the disease was due" means an employment of such a kind as to involve a risk to the employee contracting the gradual process WAANUFACTURERS MUTUAL INSURANCE LTD v GOODYEAR AUSTRALIA and ORS (Sheppard AJA) disease which is disabling him. Such was the risk to which Mr Jeal was exposed and I do not think it could be said that his work during the second half of 1987 was carried on under conditions which made inhalation of asbestos dust impossible. Despite Goodyear's best efforts, the problem continued because of continual breakdown of the asbestos in the building and in the machinery in it. I also agree that on the medical evidence it is possible, in a real and not a fanciful sense, that after 1 July 1987 Mr Jeal inhaled asbestos dust from which he contracted the disease. The orders of the Court should be as Sheppard AJA proposes them. Powell JA I agree with Sheppard AJA. Sheppard AJA This appeal raises a question of the application of s151AB of the Workers' Compensation Act 1987 ("the Act"). S151AB is to be found in Division 5 of Pt5 of the Act. The appeal is brought from a judgment of the Dust Diseases Tribunal (Johns J) delivered on 19 June 1995. In the primary proceedings before the Tribunal, the plaintiff, Mr R V Jeal, sued two defendants for damages for negligence and on other causes of action because, so he alleged, he contracted pleural mesothelioma as a consequence of breaches of obligation on their part. The two defendants were Goodyear Australia Ltd ("Goodyear"), the first respondent to the appeal, by whom the plaintiff was employed from 1 July 1957 to 27 November 1987, and James Hardie & Coy Pty Ltd ("James Hardie") which owned and operated a factory on premises next door to those on which Goodyear's factory was situated. James Hardie is not a party to these proceedings and is not concerned with the outcome. The two factories are situated in the suburb of Camellia. The plaintiffs action was settled. By consent orders were made on 18 May 1995 that judgment be entered for $215,000 against each defendant. Cross-claims filed in the matter were stood over to 8 June 1995 when they were heard. The question which concerned the Tribunal was which of Goodyear's insurers over the years was liable to indemnify Goodyear for the amount of the damages recovered by the plaintiff from it. His Honour said that the second respondent to the appeal, the Insurers' Guarantee Fund - National Employers' Mutual General Insurance Association Ltd (in liquidation) ("the Insurers' Guarantee Fund") had insured Goodyear from 1 January 1942 to 30 June 1958 and from 1 July 1962 to 30 June 1983. The appellant, Manufacturers Mutual Insurance Ltd ("Manufacturers Mutual') insured Goodyear between | July 1983 and 30 June 1987. From 1 July 1987 to the date of the cessation of the plaintiff's employment on 27 November 1987, Goodyear was insured by MMI Workers' Compensation (NSW) Ltd ("MMI"), the third respondent. His Honour found that the plaintiff's employment was of such a kind as to expose him to the risk of inhaling asbestos dust and thus a risk of contracting mesothelioma by gradual process. The insurer at risk when the plaintiff was last employed by the employer in work which exposed him to asbestos dust was Manufacturers Mutual. It was therefore the insurer which was bound to indemnify Goodyear for the full amount of the damages which it was obliged to pay. Accordingly, his Honour ordered that Manufacturers Mutual indemnify Goodyear in respect of its liability arising in the plaintiff s action. It is from that order that Manufacturers Mutual appeals. 4 UNREPORTED JUDGMENTS The purpose of s151AB of the Act is to reduce the complexity and cost of resolving disputes amongst insurers which at various times have provided an employer with insurance cover. The section applies in the case of occupational diseases defined in s151AB(6) as diseases of such a nature as to be contracted by a gradual process. Included are "dust diseases" as defined in the Workers' Compensation (Dust Diseases) Act 1942. Mesothelioma is such a disease. S151AB may appear to have a somewhat arbitrary operation but the approach of the legislature was that, although that might sometimes be the case, the application of the section over time to a variety of situations, employers and insurers would probably not lead to very much overall unfairness in the long term. The form of s151AB of the Workers' Compensation Act which applies to the circumstances of the present case is not the form it took after the coming into force on 20 December 1995 of the WorkCover Legislation (Amendment) Act 1995 ("the WorkCover Act'). That Act made a number of amendments to the provisions of the Workers' Compensation Act including those of s151AB the terms of which were recast. The amendments to the Workers' Compensation Act are to be found in Schedule 1 to the WorkCover Act: see s3. C110 of Schedule 1 provided that the amendments made to s151AB by the WorkCover Act did not affect, inter alia, any court proceedings commenced by a worker for damages from a worker's employer (or other person referred to in s150) before that commencement. The proceedings by the plaintiff in the Tribunal were commenced on 10 November 1994, over a year before the WorkCover Act came into force. S151AB(1) and s151AB(2) in the form in which those subsections were at times relevant to the circumstances of this case were as follows: "(1) If an employer is liable independently of this Act for damages for an occupational disease contracted by a worker, the liability is to be taken (for the purpose of this section only) to have arisen when the worker was last employed by that employer in an employment to the nature of which the disease was due. (2) The purpose of this section is to identify (from among a number of insurers under policies of insurance obtained by a single employer for different periods) one insurer which is to indemnify the employer for the full amount of the damages or which is to pay the full amount of damages to the worker, without any right to a contribution from those other insurers." The phrase "an employment to the nature of which the disease was due" in sIS51AB(1) has been the subject of judicial consideration on a number of occasions. I refer only to two of the authorities. The first of these is CIC Workers' Compensation (NSW) Ltd v Alcan Australia Ltd (1994) 35 NSWLR 169, a decision of this Court. The form of the section considered by the Court was the same as that which arises for consideration by the Court in this case. The Court held that the insurer liable under the section was the insurer at risk when the worker was last employed by the employer to do work which exposed the worker to a risk of a disease of such a nature as to be contracted by a gradual process. The word "employment" in the section did not refer to the contract of employment but to the nature of the work performed under the contract. In this regard it is appropriate to mention another decision of this Court, CIC Workers' Compensation (NSW) Ltd v Kellogg (Australia) Ltd (1996) 40 NSWLR 442. In that case "employment" in the section was held to embrace not only the actual work tasks performed by an employee but also those of the employee's WAANUFACTURERS MUTUAL INSURANCE LTD v GOODYEAR AUSTRALIA and ORS (Sheppard AJA) movements through the employer's premises in the course of employment which exposed the employee to the risk of contracting an occupational disease. In Alcan Gleeson CJ referred to earlier forms of the legislation in force both in England and in Australia. Reference was made to the decision of the House of Lords in Blatchford v Staddon & Founds [1927] AC 461, to the decision of the High Court in Smith v Mann (1932) 47 CLR 426, and to the decision of the Full Court of this Court in Tame v Commonwealth Collieries Pty Ltd (1947) 47 SR (NSW) 269. There Jordan CJ had said (at 272): "T think that 'employment to the nature of which the disease was due' means an employment of such a kind as to involve a risk to the employee contracting the gradual process disease which is disabling him. In the present case, what is complained of is a disease contracted by a gradual process of the inhalation of silica dust. For the worker to succeed, it was necessary for him to satisfy the Commission that his employment with his last employer was of such a kind as to expose him to the risk of inhaling silica dust... I agree that if it had been established that, although his last employment was such as ordinarily involved a risk of inhaling silica dust, nevertheless work with his last employer was carried on under special conditions which made inhalation of silica dust impossible, the worker would have failed..." Eventually, Gleeson CJ said (at 176) that legislation on the same topic and, so far as the critical words were concerned, expressed in identical language, had been authoritatively interpreted by ultimate appellate courts. He considered that no arguments had been advanced which demonstrated that it ought to be concluded that the final words of s151AB had a meaning that was different, for example, from the meaning the same words had in s7(4) of the Workers' Compensation Act 1926 considered by the High Court in Smith and by Jordan CJ in Tame. The Chief Justice concluded that the problem being addressed was that of a disease contracted by a gradual process. The idea of a disease being due to employment of a certain nature directed attention, not to the contract of employment, but to the work being performed and the exposure to risk involved in that work. Later he said (at 177) that the applicant's exposure to asbestos must be regarded as a material factor in identifying the employment to the nature of which the disease was due. The employment referred to was not a contractual relationship with Alcan, but the engagement in a form of activity which exposed the applicant to a risk of disease of such a nature as to be contracted by a gradual process. The judgment of the Chief Justice was agreed in by Mahoney and Meagher JIA. As his Honour said, the question to be decided related to the potential liability between insurers in a case of an occupational disease of gradual onset. His Honour summarised the effect of the section by saying that liability for the purposes of the section arose when the worker was last employed by that employer in an employment to the nature of which the disease was due. His Honour said that the idea of a disease being due to employment of a certain nature directed attention, not to the contract of employment, but to the actual work being performed and the exposure to risk involved in that work. His Honour also said that employment to the nature of which the disease was due, meant an employment of such a kind as to involve a risk of the employee contracting "the gradual process disease" which was disabling him. His Honour's statements of principle were in accordance with the authorities. 6 UNREPORTED JUDGMENTS Dr MR Joseph, whom his Honour described as an eminent thoracic physician, gave evidence in the case. He said that the association between asbestos dust exposure and the onset of mesothelioma had been established for many years. His Honour said that it was clear from Dr Joseph's evidence that the longer the exposure, the heavier the exposure, and the greater the dose of asbestos dust which entered the lungs, the greater was the chance of fibres getting to the periphery of the lung where they could generate mesothelioma. Thus, the exposure was cumulative. His Honour said that it was clear from Dr Joseph's evidence that it was not possible to identify a particular instance and say that it was that particular exposure on that particular day that the plaintiff inhaled the asbestos fibres which were ultimately the cause of the tumor from which he suffered. His Honour pointed to the fact that Dr Joseph's evidence in this respect was not consistent with that of another doctor, Dr Gandevia. He gave evidence that any exposures to asbestos dust after 1983 were, in his view, irrelevant. He also said that there was no reported case with a latent period of less than 15 years. But Dr Joseph's evidence suggested that there had been cases, some within his own experience, where seven years was the latent period "albeit that that is very unusual". Dr Joseph said that no one could say at what particular point a person inhaled the particular fibres that caused the mesothelioma. Unless the fibres had been tagged with nuclear identification, it was not possible to say which of the fibres was the cause. Those fibres which breached the pleura were the cause of the disease. But Dr Joseph also said that it was the total exposure which was the cause. He was not prepared to differentiate any one period of exposure from any other. His Honour commented that, although the latency period was more often than not anything between 20 and 50 years, there had been cases reported with shorter latency periods. There had been cases of patients, as a consequence of fairly short exposures, who had developed the disease some years later. Dr Joseph agreed with Dr Gandevia that, if a man had exposure to asbestos 35 years before and a more recent exposure during the last 10 years, the first exposure was by far more likely to be the exposure which was responsible. That was not to say that the risk involved in later exposures could be discounted. Dr Joseph made it plain that it was not possible to prove that a particular exposure was the actual cause of the disease. He also said that "the dose relationship" meant that there was an increased risk of a person contracting the disease in cases where there were more fibres from which he could contract it. He said that the total dose did matter, so that all exposures were relevant. His Honour made no express finding in which he said he preferred the evidence of either doctor but the way he approached the problem suggests that, to the extent that there was inconsistency in the evidence of the two, he preferred the evidence of Dr Joseph. In the view I take of the matter, this matter is not of any significance. I shall explain why after I have reviewed the other evidence and referred to his Honour's findings. His Honour said that it was clear that Goodyear was concerned about asbestos dust in its factory as early as November 1979. This followed the diagnosis of a pleural mesothelioma in one of its long term employees. It was known that the type of cancer suffered by that employee was often asbestos related. As a consequence, sampling apparatus was set up at various locations within the Goodyear premises. Dust samples were taken from various places and certain recommendations were made by the Health Commission of New South Wales in respect of long term employees. The evidence established that the Goodyear WAANUFACTURERS MUTUAL INSURANCE LTD v GOODYEAR AUSTRALIA and ORS (Sheppard AJA) premises contained areas of asbestos contamination. In some cases this was quite significant. It was obvious that the asbestos contamination within the Goodyear premises was not confined to a single department. The particular types of asbestos dust found contained amosites and crocidolite, known as blue asbestos, which were known contaminants and could cause the disease. The Health Commission advised that the crocidolite be removed as soon as possible under prescribed procedures. The remainder of the asbestos insulation which was in good repair was to be enclosed in metal cladding. The evidence established that a process of removal of the accumulated dust containing asbestos fibres was to be undertaken during the annual plant shut down in 1979-80. A section of the factory was cleaned in 1979 and dust and air tests were then carried out on 24 December 1979. Concentrations of fibres were found to be below "hygiene" standards. The evidence also established that a plan of action in respect of the offending dust was to be implemented. On 13 June 1980 blue asbestos was found in the steam line lagging in the plant and action was taken to replace the material. The area known as truck bagomatics EF lines, which had shown crocidolite had been replaced by 13 June 1980 by fibreglass and metal cladding. A further sampling was taken in June and September 1982. Free asbestos particles in the Goodyear plant did not come only from sources within the Goodyear premises. As mentioned, James Hardie's plant was next door. James Hardie had a significant asbestos problem in its plant over many years. This continued at least until 1982. A significant quantity of asbestos particles found in the Goodyear premises were traced to James Hardie. Steps were taken to endeavour to remove them but they were another source from which the plaintiff may have contracted the disease from which he suffered. There was evidence that there was free asbestos at times on rafters and other surface areas usually high up in the plant. There was also evidence of these areas being cleaned, but the fact remains that the particles were there and came, probably, from both the James Hardie and the Goodyear plants. The fact that James Hardie was involved in this way explained why the plaintiff joined it as a defendant as well as Goodyear. His Honour said that by 21 September 1982 results of analysis by the Department of Industrial relations indicated that all samples were asbestos free. Mr Love who, in his latter years of employment with Goodyear, was the plant manager, gave evidence that in the early 1980s a protocol was laid down concerning the presence of asbestos within the plant and what was to be done if it was detected. Between 1983 and 1985 Mr Love was transferred to Goodyear in Malaysia. He returned as a manager in 1985 and in 1986 became the plant manager in charge of the whole site. His Honour said that removal of asbestos dust continued until 1990. If the asbestos in any piece of equipment broke loose and could not be sealed off and contained, it was removed. Mr Love said that the equipment was isolated and essentially barricaded off until action was taken to ensure that there was as little danger as possible. He said that appropriate signs were also used in the offending area. Safety committees of different divisions and a safety steering committee of the plant were made up of members of the work force, as well as of management. His Honour said that he accepted that Goodyear had become more pro-active in respect of its approach to asbestos from 1979 to 1982 and from 1985 to 1990. He said that in those years the unions were actively engaged with the company in relation to the asbestos danger. Mr Love could not give evidence of what, if anything, took place in regard to asbestos containment in the period between 8 UNREPORTED JUDGMENTS 1983 and 1985 when he was in Malaysia. There was no other evidence in respect of this period which disclosed what action, if any, the company took in those years. His Honour said that after his return Mr Love was the catalyst for the company becoming more active in identifying within the plant where asbestos material was to be found. He became "more directly responsible" in respect of the issue of the danger of asbestos to employees. Nevertheless, as his Honour said, there was no evidence which indicated what activity, during the period from 21 September 1982 to 24 April 1986, if any, Goodyear took in respect of asbestos that was still within its factory. A memorandum of 19 August 1986 showed that an audit of the condition of the press dome insulation found that it was in need of repair work in order to stop the spread of asbestos contaminant. The work had to be done immediately. His Honour said that it was not evident how long the presses had been in this condition. A reasonable inference, given that there was no evidence of continuous review of asbestos danger until 1986, was that the necessity for repair existed for a considerable period. Some specific areas required immediate attention. A meeting was necessary to develop and assist in the development of a plan to reduce the risk of asbestos exposure. A memorandum of 21 November 1986 identified areas of high risk from a significant amount of old asbestos insulation in the factory where the outside jacket had been torn and loose fibres could have been "emitted". Additionally, frequent maintenance areas, in particular the bagomatic presses, were identified as a potential risk. The reasonable inference to be drawn, so his Honour said, was that employees of Goodyear risked inhaling asbestos dust between 1982 and 1986. Consequently, these employees were at risk of contracting mesothelioma. It followed that if the plaintiff, as part of the normal requirements of his employment, was exposed to asbestos dust which was contained in Goodyear's premises until the end of 1986, then the insurer "on risk" at that time would be liable under s151AB. In his evidence the plaintiff said that until 1964 he worked in the heater pits. Thereafter he was transferred to the transport division. As a consequence of his duties in and about the domes on the bagomatic presses he needed to walk within five or six feet of them. The truck, bagomatic and passenger tyre curing sections were areas in and around which the plaintiff worked. His Honour said that despite the removal of the crocidolite within those areas and its replacement with fibreglass and metal cladding, there was asbestos in the bagomatic area near the domes. The plaintiff regularly worked in and about this area. His Honour said that between July and November 1987 the plaintiff was not exposed to any asbestos dust. In cross-examination the plaintiff "conceded" that during that time he did not go past any areas where warning signs of the danger of asbestos were to be found. His Honour thought it unlikely at this time in 1987, given the pro-active stance of the company under the control of Mr Love, that any asbestos material that would have been the source of any danger would have been left or would not have been barricaded with signs. He said that, given that the plaintiff did not recall seeing any warnings or barricades during this period, it was unlikely that the plaintiff was exposed to any risk. There was also the fact that the plaintiff "agreed" that he did not do any work in connection with the repair of the domes or the re-lagging of pipes in the last six months of his employment. WAANUFACTURERS MUTUAL INSURANCE LTD v GOODYEAR AUSTRALIA and ORS (Sheppard AJA) His Honour then came to his conclusions. He found that the plaintiff's employment was of such a kind as to expose him to the risk of inhaling asbestos dust and thus the risk of contracting mesothelioma by gradual process. The insurer at risk when the plaintiff was last employed by the employer in work which exposed him to asbestos dust was the appellant, Manufacturers Mutual. His Honour found that Manufacturers Mutual was therefore the insurer which was liable to indemnify Goodyear for the full amount of damages which it was obliged to pay. In his written submissions, counsel for Manufacturers Mutual said that the plaintiff was last employed in an employment to the nature of which the disease of mesothelioma was due: (a) in 1967 when he ceased work in the heater pits and was no longer exposed on a day to day basis to asbestos dust liberated into the atmosphere as a result of repair work to insulation in the pits; or (b) in late 1982 when airborne contamination by asbestos dust and fibre blown from the adjacent premises of James Hardie & Co ceased; or (c) on 27 November 1987 when the plaintiff accepted voluntary redundancy and ceased working in Goodyear's premises. Counsel submitted that the evidence did not establish any risk of inhalation of asbestos after the dates referred to in para(a) or para(b) above. After the date referred to in para(b), there existed only a potential risk of inhalation of asbestos dust and fibre if asbestos contained in insulation at any point in the factory was disturbed and that disturbance occurred at a time when the plaintiff was sufficiently close to that asbestos for asbestos dust and fibre to be released in respirable form in the area of his "breathing zone". Counsel said that, if any such exposure occurred, the plaintiff was not aware of it. He was not required to work on any machine the insulation of which contained asbestos, nor could he recall having seen any signs or barricades which would have been erected had any potentially dangerous source of asbestos contamination been identified. Counsel said that the evidence given by Mr Love that the safety protocol was introduced in 1981 or 1982 was not challenged. The evidence of the plaintiff that he never saw any signs or barricades would suggest that any work done in relation to any identified asbestos hazard thereafter was either performed outside the plaintiff's working hours, or at times when the plaintiff was not himself in the relevant area of Goodyear's premises. Counsel said that a number of findings and conclusions of the primary Judge were challenged. These were: (a) his Honour had overlooked the evidence of Mr WJ Love to the effect that a protocol was introduced in 1981 or 1982 in relation to the detection and removal of asbestos, involving the isolation of equipment, the erection of barricades to minimise danger and the erection of warning signs; (b) no evidence existed to support an inference that employees of Goodyear risked inhaling asbestos dust between 1982 and 1986. Further, it was submitted that even if such an inference could be drawn in relation to some unidentified workers, no inference could be drawn that the plaintiffs actual employment with Goodyear was one which involved an actual, rather than a potential risk, of inhaling asbestos during that period; (c) the plaintiff had given unchallenged evidence that at no stage did he ever see warning signs in relation to the danger of asbestos. It was submitted that the evidence would only support a conclusion that, if the plaintiff was exposed to a risk of inhaling asbestos dust until 30 June 1987, that risk continued until he had 10 UNREPORTED JUDGMENTS ceased employment in November 1987. Counsel for Manufacturers Mutual submitted that the only reasonable inference which could be drawn was that subsequent to 1981 or 1982, the employment of the plaintiff as a driver was not an employment to the nature of which the disease of mesothelioma could have been due. Counsel for Goodyear made some helpful submissions but did not put an ultimate point of view to the Court. The question was which of its former insurers was to bear the liability. Goodyear was covered by insurance and it was immaterial to it which insurer was found to be responsible. Counsel for the second respondent, Insurers' Guarantee Fund, said that his client had insured Goodyear during the periods 1 January 1942 to 30 June 1958 and | July 1962 to 30 June 1983. Counsel said that the primary Judge had found that the asbestos contamination within Goodyear's factory extended beyond one single department. That finding had not been challenged. He said that the plaintiff was required regularly to walk through a building known as building 8. In doing so, he passed within five or six feet of the domes on top of the bagomatic presses. He was required to work in the same building until November 1987 when his employment ceased. Counsel said that Mr Love's evidence was to the effect that the process of removing asbestos commenced in the mid 1970s and continued essentially until the time the plant closed. But the only area in which there was an attempt at comprehensive removal of asbestos was in respect of rafters in the area known as buildings No 8 and No 8A. Counsel said that no significant attempt was otherwise made to remove it. After vacuuming the rafters in the two buildings, no further systematic cleaning occurred. He referred to evidence of an accident at James Hardie as consequence of which contamination of Goodyear's premises occurred. He said that there was no evidence that any attempt was ever made to clean this up. Counsel also said that there had not been any systematic attempt to deal with the lagging on steam pipes. Nor had there been any such attempt in relation to the domes in the bagomatics or any incidental exposure to asbestos particles which might have come from adjoining premises of James Hardie on to other parts of the Goodyear premises. The second part of the submissions for the Insurers' Guarantee Fund dealt with his Honour's conclusions in relation to the period between July and November 1987 when the insurer was MMI. The Fund was concerned only to show that the risk continued after it ceased to have responsibility for the insurance on 30 June 1983. It was immaterial to it whether the insurer found to be liable to indemnify Goodyear was Manufacturers Mutual or MMI. Submissions were, however, made by counsel for the Insurers' Guarantee Fund in relation to that question, not for the purpose of urging a particular answer to it, but because the evidence of later events tended, so he submitted, to assist his own case by demonstrating that there was no basis for the view that his client could be responsible. The submissions included a helpful review of Mr Love's evidence. Counsel said that the evidence established that the plaintiff was required during the last two years of his employment to drive between Camellia and another Goodyear plant or to drive within the Camellia factory. The plaintiff said that he had observed work being performed on pipes and domes during this period. He had not seen any barricades or warning signs. He had said that the work may have been done within two or three years of his leaving his employment at the end of November 1987. He agreed that he was not suggesting that the work was done in the last six months of his employment. The point counsel makes is that this WAANUFACTURERS MUTUAL INSURANCE LTD v GOODYEAR AUSTRALIA and ORS (Sheppard AJA) evidence establishes that work was being done to remove asbestos in the premises during the last two or three years of the plaintiff's employment. Furthermore, Mr Love's evidence was to the effect that in the post-1986 period, action was taken to remove asbestos where there was a possible risk of exposure. The Department of Industrial Relations inspected the premises in November 1986. In a report commenting upon the result of that inspection, Goodyear concluded that there was a significant amount of old asbestos insulation in the factory areas which were "high risk". Counsel said that the trial Judge was entitled to draw the inference that as at November 1986, the plaintiff in the course of carrying out his employment was in fact exposed to a risk of contracting mesothelioma because of the employment. It was enough that he was required to move through the premises. That in itself would have exposed him to a risk of inhalation of asbestos particles and thereby to a risk of contracting the disease; cf Kellogg (supra). Counsel for MMI emphasised that his client was at risk only during the period from 1 July 1987 to 27 November 1987 when the employment ceased. His Honour had made a finding that during that period the plaintiff was not exposed to any asbestos dust. Furthermore, there was a protocol in force whereby any asbestos identified as hazardous was clearly marked by barricades, warning signs and warning tape. The plaintiff at no stage between July and November saw such signs. Counsel said that it followed from Mr Love's evidence that any asbestos material would either have been removed or would have been barricaded and posted with signs. He said that the Judge's findings were well founded on the evidence, particularly on the evidence of Mr Love and of the plaintiff. Finally, counsel submitted that, in the absence of any manifest error on the part of the trial Judge in dealing with the factual matters in question, the Court ought not interfere with the findings which were that, during the period from | July to 27 November 1987, there was no relevant exposure to asbestos and, accordingly, the employment was not employment to which the nature of the disease could be due. Before dealing with the competing submissions which have been made, it is necessary to refer to some of Mr Love's evidence. Mr Love said that his recollection was that asbestos in the Goodyear plant became "quite an issue" from the mid 1970s. He said there were two sources of asbestos contamination, one from lagging on pipes and other equipment and the other dust that would enter the building, particularly when westerly winds were blowing, from the premises next door. Mr Love said that steps were taken to remove asbestos from the mid 1970s. These continued "essentially" right through until the day the plant closed, ie after the plaintiff's employment had ceased. In answer to a question asked by his Honour, Mr Love agreed that there was continual removal of asbestos through to the 1 990s. He said that if asbestos broke loose from any piece of equipment that could not then be sealed off end contained, it would be removed. He referred to the 1981 or 1982 protocol and the problems which existed in buildings 8 and 8A. He referred to rafters being vacuumed to remove asbestos but added "even before that there was always concern about asbestos, particularly from the workers as much as from management". He said that regular sampling had been carried out. He referred to events after the beginning of 1980 and said that if there were a break in the insulation or the possibility of free asbestos in the air, the equipment was isolated and barricaded off until action was taken to ensure "you know to minimise any danger, as much danger as possible". He described the nature of the barricades and the signage. He referred to the fact 12 UNREPORTED JUDGMENTS that the company was a lot more pro-active after 1980. He said that the same protocol was in force when he returned from Malaysia in 1985. Mr Love agreed that Mr Jeal would have been "around the plant area from time to time as part of his normal duties". That was after he was moved out of the manufacturing area in 1964. He agreed that he would have to pass through the area from time to time in carrying out his duties in relation to the transport section of the operation. He was asked whether there were occasions when material could be disturbed without anybody knowing about it. He said that he could not answer the question with any degree of certainty. He also said that "there was most probably a great deal of dust present right throughout the whole site". A consideration of this evidence and of that of the plaintiff tends to establish, in my opinion, that asbestos remained a problem in the Goodyear plant at least until 1986. The evidence establishes that concerted efforts were made to minimise the problem, but it appears to have been of such a nature that the risk could not have been entirely eradicated unless much more drastic steps had been taken. These may have involved the dismantling of equipment or even the building itself. In the way that this matter has to be approached, there can therefore, in my opinion, be no question but that the risk remained when Manufacturers Mutual took over the insurance of Goodyear in 1983 from National Employers' Mutual General Insurance Association Ltd ie the Insurers' Guarantee Fund. His Honour's finding that the plaintiff was employed in an employment to the nature of which the disease was due after National Employers' Mutual ceased to be responsible. This was his Honour's conclusion. No error is reflected in it and his Honour's findings in relation to the Insurers' Guarantee Fund should be upheld. The appeal, insofar as it seeks to disturb these findings, ought therefore be dismissed. The more difficult question is to determine whether his Honour was in error in concluding that the risk of exposure to the disease ceased by the end of June 1987 when Manufacturers Mutual ceased to be the insurer. It was then that MMI took over. I do not think the question which is posed is without difficulty. One of the problems which confronts MMI is the evidence of Mr Love to which I have just referred to in which he said that there was asbestos present in lagging on piping until the plant closed. Furthermore, he agreed that there was always a great deal of dust in building No 8 and added that there was probably a great deal of dust present right throughout the whole site. He agreed that there was no way that one could tell what was present in the dust simply by observation. Plainly enough the problem continued until the 1990s. That was after the plaintiff's employment ceased in 1987. A principal reason why his Honour concluded that the risk to the plaintiff ceased by the end of June 1987 was that he accepted the plaintiff's evidence that he did not go past any areas where warning signs of the danger of asbestos were to be found. His Honour also said that it seemed unlikely that at this time in 1987, given the pro-active stance of the company "under the control of Mr Love", any asbestos material that would have been the source of any danger would have been left or would not have been barricaded with signs. His Honour appears to be accepting the situation that asbestos was not known to be present in any dangerous way unless there were signs erected but, of course, as Mr Love had to concede, there might be occasions when there was free asbestos emanating from a particular source which had not been discovered. Eventually his Honour concluded that, given that the plaintiff did not recall seeing any warning or barricades during this period, it was unlikely that he was exposed to any risk. He WAANUFACTURERS MUTUAL INSURANCE LTD v GOODYEAR AUSTRALIA and ORS (Sheppard AJA) also referred to evidence given by the plaintiff that work involving the repair of domes and the re-lagging of pipes was not done in the last six months of his employment. It was, of course, open to his Honour to accept that evidence. Inferentially he has. But my problem is that the evidence does not sit well with that of Mr Love, particularly in the light of the fact that it was his observation that the problem continued until the plant closed in the 1 990s. On the other hand, it seems to be common ground that there was no problem from the James Hardie premises after about 1982 and there is the plaintiff's evidence to which I have referred. The essential question is whether his Honour's reasons disclose error. His Honour was entitled to accept the plaintiff's evidence about certain work not being done in the last six months of his employment. That was a course which was open to him. Nevertheless, there is nothing in his Honour's judgment which suggests that he had any reservation about Mr Love's evidence. The totality of it paints a picture of an ongoing problem and of continuing efforts to overcome something which, because of the nature of the premises and the equipment in them, was never likely to disappear completely. The presence of asbestos presented Goodyear with a problem which was both pernicious and chronic. The plaintiff could not depose to more than what he observed; he had no technical knowledge and no comprehensive knowledge of the overall problem and its implications. The evidence given by Mr Love establishes that, despite his best efforts, the problem continued into the 1990s simply because of continual breakdown of the asbestos in the building and in the machinery in it. In my opinion, the preponderance of the evidence establishes that the risk continued throughout the entirety of the period of the plaintiff's employment and thereafter. At times it may have been less than it was at others. But it did not go away. The plaintiff may have genuinely thought that it had, but Mr Love's evidence makes it clear that it had not. In my opinion, the evidence demonstrates that the plaintiff remained at risk during the latter months of his employment when MMI was the insurer. Against the possibility that the Court might take that view, counsel for MMI made what he called a secondary submission. It was based on the medical evidence earlier referred to. In his submission, it was most unlikely that asbestos particles generated after 1 July 1987 were the cause of the plaintiff's mesothelioma. The plaintiffs evidence was that he first experienced symptoms in about April 1994, ie not quite seven years after 1 July 1987 and a little less than that after his employment ceased. Dr Joseph mentioned a period of seven years as being unusual but nevertheless within his own experience. As an absolute proposition, the submission has merit. But the difficulty with it is that it does not face up to the provisions of the Act as they have been construed in the various authorities. The relevant words of s151AB(1) are "... when the worker was last employed by that employer in an employment to the nature of which the disease was due". If the medical evidence had plainly excluded any possibility of the plaintiffs having contracted the disease as recently as seven years from exposure, that may have been one thing. I express no concluded view on this because it is not this case and it is preferable to wait until there is such a case before expressing any final opinion. As mentioned, the period between the commencement of MMI's assumption of risk on | July 1987 and the onset of symptoms was not quite seven years. On the face of the medical evidence, it is possible, in a real and not a fanciful sense, for the plaintiff to have been exposed after 1 July 1987 to asbestos fibres from which he may have contracted the 14 UNREPORTED JUDGMENTS disease. That is enough to bring MMI within the section. It may be thought that this is an artificial result, but, if that be so, it is because of the arbitrary operation of the section the purpose of which emerges from the terms of s151AB(2). I have said something of this in the early part of the judgment. In the result, I am of opinion that Manufacturers Mutual's appeal should succeed against MMI. The orders I propose are as follows: 1 The appeal be allowed in part. 2 The order made by the Dust Diseases Tribunal on 19 June 1995 be set aside. 3 In lieu thereof, it be ordered that the liability of the first respondent, Goodyear Australia Ltd, to the plaintiff be borne by the third respondent, MMI Workers Compensation (NSW) Ltd. 4 The appeal be otherwise dismissed. 5 The costs of the appeal of the appellant and of the first and second respondents be paid by the third respondent. 6 There be liberty to apply in relation to the costs before the Tribunal. The reservation of leave is necessary because there is no record of any order having been made dealing with the costs of the proceedings before the Tribunal. I would hope that the order for costs can be agreed upon without any need to approach the Court. In this regard, it should be mentioned that, so far as the record discloses, the order made by the Tribunal on 19 June 1995 has not been entered. I would direct that the order made by this Court not be entered until the Registrar is satisfied that the orders made by the Tribunal on 19 June 1995 have themselves been entered. 1. The appeal be allowed in part. 2. The order made by the Dust Diseases Tribunal on 19 June 1995 be set aside. 3. In lieu thereof, it be ordered that the liability of the first respondent, Goodyear Australia Ltd, to the plaintiff be borne by the third respondent, Mr Workers Compensation (NSW) Ltd. 4. The appeal be otherwise dismissed. 5. The costs of the appeal of the appellant and of the first and second respondents be paid by the third respondent. 6. There be liberty to apply in relation to the costs before the Tribunal. Direction: The order made by this Court is not to be entered until the Registrar is satisfied that the orders made by the Dust Diseases Tribunal on 19 June 1995 have themselves been entered. Counsel for the appellant: Mr J McIntyre Solicitor for the appellant: A O Ellison & Co Counsel for the first respondent: Mr J Sharpe Solicitor for the first respondent: Mallesons Stephen Jacques Counsel for the second respondent: Mr G J Parker Solicitor for the second respondent: P W Turk & Associates Counsel for the third respondent: Mr M Cranitch Solicitor for the third respondent: Hickson Lakeman & Holcombe