DDT constructs s151AB in intermittent exposure case

Legal Directions

Amaca Pty Limited v AAI Limited & Anor Re: Hastings Unreported Dust Diseases Tribunal of New South Wales (1 March 2016)

Introduction

This case considered the construction of s151AB of the Workers Compensation Act 1987 (NSW) in circumstances where the worker received intermittent exposure to asbestos dust and fibre. Curtis DDTJ grappled with the assessment of whether it was necessary to consider the broad nature of employment, as distinct from the specific work duties performed by a worker during particular insurance periods, in assessing when that worker was ‘last exposed to employment to the nature of which the disease was due’.

Facts

Mr Hastings was employed as an apprentice then a tradesman carpenter by J.A. Westaway and Son Pty Limited (‘Westaway’), a building company, between 1981 and 19 December 1986. Westaway was relevantly insured by CGU between 14 December 1985 and 14 December 1986, and then by AAI between 14 December 1986 and 19 December 1986.

It was uncontroversial that Mr Hastings was exposed to asbestos dust and fibre in the course of employment, which exposure had caused him to develop mesothelioma in 2013.

The exposure from direct handling and fitting of new asbestos products uncontroversially ceased in early 1984; however, Mr Hastings’ evidence was that less than 50% of the jobs he performed after that date involved demolition of in situ asbestos-containing building products.

Curtis DDTJ found the evidence established that Mr Hastings periodically encountered asbestos-containing products during the 12 month CGU insurance period and that his work gave rise to a risk of exposure to asbestos dust and fibre from those products. His Honour held that the evidence did not establish the presence of asbestos dust and fibre in the last five days of employment [when AAI was the insurer].

The legislation

Section 151AB operates to deem liability to coincide with the date of injury so as to trigger cover under the NSW employer’s indemnity policy then on risk. The provision operates to deem liability to occur on the date when a worker was ‘last employed by the employer in employment to the nature of which the disease was due’.

CGU submitted that ‘employment’ should be constructed to mean the general nature of the work from a broad perspective. As such, the question of whether the plaintiff was at risk of exposure in the last five days was not relevant to the application of s151AB. Rather, as the evidence was that the work ‘had not changed’ during the last week of employment, regardless of whether there was a risk of exposure at all, the relevant ‘last employment’ fell in the AAI period.

AAI submitted that it was necessary for a finding to be made of the presence of asbestos-containing products on a site where Mr Hastings worked during the last week of employment. Thereafter, the work undertaken by Mr Hastings was required to be of a character to give rise to a risk of exposure to asbestos dust from those products. In short, it was necessary to have regard to specific work tasks undertaken during the final insurance period to assess whether the AAI policy responded.

Judgment

Curtis DDTJ preferred the construction of ‘employment’ propounded by AAI. His Honour considered the more natural construction was to equate that to ‘work’, which construction carried with it an obligation to consider the specific tasks and consequently, whether the risk of exposure, as a matter of fact, arose.

Comment

This case gives rise to an interesting conundrum. If CGU’s approach were to be accepted, the usual characteristics of day-to-day employment may include a period of leave, absence, through illness, or training coinciding with an alteration in insurance and the termination of employment. As such, on CGU’s construction, it is possible that an insurer would be liable to indemnify in circumstances where, as a matter of fact, there was no prospect of the worker being exposed to the agent potentially causative of the disease.

The trial judge found that approach to be counterintuitive and, in the author’s view, preferred a more ‘common sense’ approach, being that there must be evidence of the presence of the causative agent during the insurance period to give rise to the risk of exposure required to trigger s151AB.

On the face of the judgment, it follows that in order to establish a liability to indemnify, it is necessary to establish the presence of the causative agent so as to give rise to a risk of exposure during the insurance period.

Bearing in mind the novelty of the issue, it is expected that CGU will appeal.

Author Stephen Taylor-Jones, Partner, Sydney acted for AAI in these proceedings.


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