Eaton v Carrier Air Conditioning and Ors [2004] NSWDDT 18

Reported Decision (2004) 1 DDCR 716

Dust Diseases Tribunal of New South Wales

CITATION : Eaton v Carrier Air Conditioning and Ors [2004] NSWDDT 18 Isabella Margaret Eaton Administrator Ad Litem Representing the Estate of the Late George Eaton Carrier Air Conditioning Pty Ltd (first defendant) PARTIES : Amaca Pty Ltd (second defendant) McPhersons Ltd (third defendant) Wallaby Grip Ltd (fourth defendant) Wallaby Grip (Bae) Pty Limited (fifth defendant) MATTER NUMBER(S) : 84 of 2003 JUDGMENT OF: O'Meally P at 1 CATCHWORDS: :- Dust Diseases - mesothelioma - indivisible injury - all asbestos exposure causative of disease - breach of duty by manufacturers - duty of care of retailer of goods containing asbestos - actual or contructive knowledge of dangers of exposure - duty to protect end user - duty to warn or withdraw products from sale - breach of duty. LEGISLATION CITED: CASES CITED: DATES OF HEARING: 24 April, 26 November 2003; 12 & 13 May; 31 August; 1,2,3,9 & 10 September 2004 EX TEMPORE JUDGMENT DATE : 09/09/2004

PLAINTIFF: Mr M J Joseph, SC with R A O'Keefe instructed by Slater & Gordon SECOND DEFENDANT: Miss W S Strathdee instructed by Phillips Fox LEGAL REPRESENTATIVES: THIRD DEFENDANT: Mr G Watson, SC with Mr J C Sheller instructed by Cowley Hearne FOURTH & FIFTH DEFENDANTS: Mr D Russell, SC instructed by Acuiti Legal

JUDGMENT:

1. This is an action for damages brought by Isabella Margaret Eaton on behalf of the estate of her late husband George Eaton. I have decided to deliver reasons for judgment immediately. If I fail to deal with any matter I invite counsel to draw that matter to my attention at the conclusion of these reasons so it may then be dealt with. 2. By statement of claim issued on 12 March 2003 the late George Eaton commenced proceedings against Carrier Air Conditioning Pty Ltd, Amaca Pty Ltd (Amaca), McPhersons Pty Ltd (McPhersons), Wallaby Grip Ltd (WGL) and Wallaby Grip (BAE) Pty Ltd (WGBAE) (in Liquidation). 3. The case was brought on urgently and upon an undertaking given by the plaintiff that no Browne v Dunn (1893) 6 R 67 point would be taken the evidence of the late Mr Eaton was taken at his home outside Perth in Western Australia on 24 April 2003. On 25 June 2003 Mr Eaton died from the effects of malignant mesothelioma. The fact of his death from mesothelioma and that it was caused by exposure to asbestos dust and fibre are not in issue in the case. During the course of the proceedings his claim against the first defendant, Carrier Air Conditioning Pty Ltd was settled. Mrs Eaton maintains proceedings on behalf of the estate against Amaca, McPhersons, WGL and WGBAE. The Nature of The Case 4. The plaintiff's case is that the fourth and fifth defendants (BAE and WGBAE) stand in the shoes of the Bells companies, which supplied millboard for heater boxes used in air conditioning ducting, and the late Mr Eaton was exposed to asbestos from that millboard whilst employed by Chatterton and Stevens Pty Ltd (Chatterton & Stevens), manufacturers and installers of air conditioning systems, between 1955 and 1963 and whilst employed by Hillman and Howell Pty Ltd (Hillmans), also and air conditioning installation company, between 1963 and 1978. The allegation against Amaca is that whilst working on insulation sites for Chatterton & Stevens and for Hillmans the late Mr Eaton was exposed to asbestos dust and fibre which emanated from insulation material used on those sites and manufactured, supplied and produced by James Hardie & Coy Pty Ltd (JHC) in whose shoes it stands. It is alleged, additionally, that in the factories of both Chatterton and Stevens and Hillmans he was exposed to asbestos released from millboard supplied and, or, manufactured by JHC. 5. His case against the third defendant, McPhersons, is that it supplied millboard to both Chatterton and Stevens and Hillmans, that it knew or ought to have known of the dangers of exposure to asbestos products, that its failure to warn of those dangers or to withdraw material containing asbestos from sale was, in the circumstances of the case, a breach of duty owed by it to him as an end user of the retail products, and that breach of duty was a cause of his mesothelioma. Damages Agreed 6. During the course of submissions, which have been heard over a number of days, much has been conceded, and for the concessions made by counsel for all parties I am grateful. It is agreed that the plaintiff's damages should be assessed in the sum of $227,979.91. The progress of the case was interrupted after Mr Eaton's death and later by reason of the necessity to deal with urgent cases and because of my own absence overseas at various stages. Concessions and Issues 7. The fourth and fifth defendants concede that they are liable to pay damages to the plaintiff. The second defendant concedes a liability to pay damages if I am satisfied that the plaintiff was exposed to asbestos from any of its products. The third defendant denies liability saying that it owed no duty of care to the late Mr Eaton, that if it did there was no breach of duty and if there were a breach of duty such breach was not causative of the plaintiff's loss and damage. All Asbestos Exposure Causative of Mesothelioma 8. McPhersons did not concede, at least did not concede consistently, that all asbestos exposure during the accepted latency period for mesothelioma is causative of or makes a material contribution to that disease. Nevertheless, the evidence that all asbestos exposure makes a material contribution to mesothelioma is evidence which I would have thought is now beyond controversy. Not only has such a conclusion been reached in many cases before this, but the uncontradicted evidence in this case supports that view. The failure to maintain that concession was unjustified and unmeritorious. 9. Professor Musk, a respiratory physician practising in Perth, is an expert of national and international standing. He prepared at least two reports for this case. In the first of those, which bears date 7 February 2003, he said of Mr Eaton: It is my opinion that his mesothelioma is a result of asbestos exposure as a sheet metal worker as outlined. It is my opinion that each period in which the plaintiff was exposed to asbestos made a material contribution to his mesothelioma. 10. Dr James Leigh is not only a consultant occupational physician but an epidemiologist, whose evidence and reports are frequently before the Tribunal. He, also, prepared a number of reports for this case. His report of 21 April 2003 contained his opinion that: Each period of exposure, including all millboard work, contributed materially to causation of mesothelioma. And in a later report of 19 November 2003 said: …all cumulative exposure must be considered to have contributed to causation. 11. It is beyond controversy that all asbestos exposure during the course of the latency period, which generally is accepted to be anything between 10 and 60 years, is causative of mesothelioma and makes a material contribution to it. Difficulties of Recollection 12. This case, perhaps more so than any other I have heard, demonstrates how recollection and memory are affected by the passage of time. Witnesses have expressed beliefs and made assumptions and upon these I have been invited to make findings of fact or to reject as utterly unreliable evidence given. It is true that in respect of some witnesses I have difficulty in accepting the entirety of their evidence, but that is not to say that any of them was being deceitful or seeking to mislead the court. Because there are outstanding cross-claims, and cross-claims yet to be issued, I intend to decide only such facts as are necessary to determine the plaintiff's claim against the remaining defendants. The Liability of Amaca Pty Ltd 13. I have come to the view that the late Mr Eaton was exposed to asbestos dust and fibre from material manufactured and supplied by JHC. 14. Patrick Lennon was called by counsel for the fourth and fifth defendants. In 1957 he formed a company, under the name of P & M Insulation Pty Ltd, in which seemingly he and his wife were the principal shareholders. The late Mr Eaton and he were well known to one another. In the 1950s and 1960s his company was engaged as a subcontractor on what was described as a very large job at the University of New South Wales. This "large job" involved the installation and insulation of pipes and ducts throughout the university. He subcontracted to Chatterton and Stevens and Hillmans and it was in the performance of subcontracting to Chatterton and Stevens that he first met the late Mr Eaton. He did give evidence that he and Mr Eaton used and were exposed to asbestos from Hardies millboard. That evidence was made upon an assumption, which he ultimately conceded to be an assumption. I find it unnecessary now to determine whether such a conclusion should be drawn. Nevertheless, he gave evidence that not only at the University of New South Wales, but in the construction of the Law Courts building in Queens Square in Sydney and at construction sites for Remington and Smith Kline and French, Hardies insulation material was used. It is not doubted that Hardies was JHC. Mr Lennon gave evidence that insulation sectional material was cut and shaped by both himself and other laggers and that dust was released in the process, that Mr Eaton and he were both exposed to such dust, that it was visible in the air and it settled upon their work clothes. Upon this evidence, which I accept, I am satisfied that Mr Eaton was exposed to some quantity of asbestos dust and fibre from sectional products manufactured by JHC. Accordingly, Amaca is liable to the plaintiff. The Liability of McPhersons 15. McPhersons supplied millboard to both Chatterton and Stevens and Hillmans. 16. At all relevant times McPhersons Ltd was the largest retail outlet of hardware in the Commonwealth of Australia. Its answers to interrogatories reveal that at all relevant periods it had thousands of employees and its sales were millions of pounds and presumably millions of dollars. I say presumably millions of dollars because in respect of years post 1966 its answers are given to questions concerning its sales in pounds and not in dollars as might have been expected. 17. Mr L B Clucas was called by Amaca. He was employed by McPhersons as manager of its General Division. He said that until 1976 he was unaware that asbestos was dangerous. McPhersons did stock and retail millboard though the sale of asbestos products was but a small part of McPhersons business. He asserted, though with some concession that this may not have been the case, that McPhersons did not stock material produced by JHC and perhaps, other than millboard, McPhersons did not purchase from JHC "in my day." McPhersons had a number of premises in Sydney from which stock was sold. Mr Clucas said that in 1969 McPhersons opened premises in Alexandria and such millboard as was sold, was sold from its Bathurst Street premises only. The selling of asbestos, he said, was but a small part of McPhersons business, something in the order of .05 per cent of total sales. 18. Mr J C Kelso was called by the third defendant. He was employed by McPhersons between 1951 and 1982. From 1968 he was Marketing Manager for New South Wales and upon appointment to that position moved from Melbourne to Sydney. His evidence was that the Bathurst Street outlet closed in 1972 and that millboard was sold until then. In an affidavit he swore that such sales continued until 1973 or 1974. Mr Kelso had no recollection of millboard being sold from Alexandria. It was in 1975 or 1976 that he became aware of the dangers of asbestos, but at that stage McPhersons was not selling it, he said. 19. It is relevant for considerations which will later be made to note that under the McPhersons umbrella a research laboratory had been established. It was set up in 1938. The company had a reference library in which periodicals also were kept. Mr Kelso gave evidence that heat treatment was part of the business of McPhersons and products concerned with containing heat or with heat treatment were tested by McPhersons, though asbestos was not tested. 20. McPhersons produced and distributed catalogues which reveal that it had available for supply, not only asbestos materials, but also equipment which restricted the release of dust. The catalogues also disclosed that McPhersons sold respirators which contained cartridges to prevent or limit the inhalation of dust. 21. Mr Kelso's evidence was that none of the staff of McPhersons was trained to advise customers on safety issues because they relied, or because it relied, for such information on manufacturers. Nevertheless, it is relevant to observe that in respect of some products it sold safety advice was given; but one example is the suggestion that goggles be used with certain types of abrasion devices. McPhersons employed a doctor in a medical centre, though I infer his task was probably to treat injured employees of McPhersons. Even if that be so there is no reason why he could not have been consulted by McPhersons' management. Mr Kelso agreed that McPhersons employed chemists and undertook research into new products. He conceded a familiarity with the Protector brand of masks and cartridges. Significantly, he assumed that there was always a likelihood that anyone who used saws on asbestos products would inhale released dust. His evidence disclosed that McPhersons sent its senior executives overseas to study and to acquire the latest scientific knowledge. McPhersons had a chief chemist who went to America and Europe every five or six years to develop scientific knowledge. No technical or scientific employee, past or present, was called to give evidence. 22. Mr Kelso was recalled after the catalogues, to which reference has been made, were produced to the Court and they are now in evidence. On the occasion of his recall Mr Kelso said that he supposed he knew there were dangers to the health of persons inhaling dust. He knew that dust was created by the use of saws, particularly electric saws and that dust from that source would be inhaled by those who operated them. He knew it was beneficial to minimise the amount of dust inhaled. 23. He was cross-examined about a booklet described as the "Handyman Book" which McPhersons issued to its customers. In it there was a section dealing with "Safety Rules" but these related to the use of power driven tools. Mr Kelso said when asked, that the only explanation he could give why there was no reference in the safety rules to the need to minimise the inhalation of dust was that the book may have been written by an advertising executive. 24. It is put that I ought to draw some adverse conclusion against McPhersons because of the failure to call evidence, other than from the two employees to whom I have referred, on the basis that Mr Kelso was not approached to assist in the answers to interrogatories. I do not find it necessary to approach the case in that way. The principal question to be considered is whether McPhersons as a retailer owed a duty of care to an end user, that is in this case the employee of employers to which it sold asbestos material. 25. There is no argument that by the mid 1960s it was known to the medical, scientific and industrial communities that asbestos inhalation constituted a risk of injury, neither could there be. That question has been considered over and over and over again. A remaining question is whether a retailer in the position of McPhersons ought reasonably to have known that such exposure constituted a risk of injury. It should be observed immediately, however, that McPhersons does not accept that that, in the circumstances of this case, is a proper test and in that regard I was referred to a decision of Young CJ in Eq sitting in the Common Law Division of the Supreme Court. 26. In Elliott v Bali Bungy Co [2002] NSWSC 906 His Honour at [23] said that one of the defendants had submitted that: A vendor of goods does not owe a duty of care to undertake inspections to determine latent defects in the goods he sells and is not liable to third parties for defective goods unless he was aware of the defect or alternatively the defect was of a type that a qualified retailer would have taken steps to preclude. He went on to say: [24] Counsel cite, inter alia, as authority for that proposition the decision of Curtis J in Burns Philp & Co Ltd v J Blackwood & Son Ltd (2000) 21 NSWCR 96 at 100. However, it seems to me that that is no authority for the proposition. Indeed, Curtis J fixed on the last words of a sentence used in Fleming on Torts (now in the 9th Edition (LBC, Sydney, 1998) page 547): 'Retail dealers ... duty, in the first place, is to warn of dangers of which they know or should know'