Zwiersen v Field & Hall Pty Limited & Ors [2016] VSC 16 (29 January 2016)

Legal Directions

Introduction

Zwiersen is a decision of Justice Rush of the Victorian Supreme Court concerning apportionment of liability between an employer and the manufacturers of asbestos containing insulation products.

The decision identifies that ‘broad ranging’ criterion are appropriately taken into account in assessing the relative culpability of tortfeasors and calls into question the reasonably common approach of apportioning liability fairly evenly between employers and manufacturers in toxic tort cases.

Facts

Mr Zwiersen was employed by Field & Hall as an electrician – initially between 1964 and 1971, then again between 1976 to 1981. He was exposed to asbestos dust and fibre from insulation products manufactured by the Hardie BI partnership (‘BI’), comprising James Hardie & Coy Pty Limited (‘Amaca’) in partnership with CSR Limited (‘CSR’) until 1971.

Mr Zwiersen’s work as an electrician required him to undertake work beneath laggers (not employed by Field & Hall) installing BI products in circumstances where very substantial quantities of dust drifted down into his workplace. He ultimately developed mesothelioma and sued Field & Hall, Amaca, and CSR (together with other parties not relevant to the apportionment case).

Mr Zwiersen’s case settled and litigation continued as to apportionment of liability between the tortfeasors for the payment of the settlement monies.

The evidence disclosed that Field & Hall had not taken any steps to clarify whether the workplace was safe. Had it done so, it would have properly identified the need to comply with Victorian Regulations about providing respiratory protection for Mr Zwiersen, and as such, it was in breach of the duty of care it owed to him as his employer – and probably also in breach of various Victorian industrial safety regulations.

Amaca, in its own right, and then from 1964 in partnership with CSR, was an enormously successful manufacturer of asbestos-containing insulation products and was the primary supplier to the large Australian industrial market.

Arguments

Field & Hall accepted that it was in breach of a duty of care owed to Mr Zwiersen but said that it did not have actual knowledge of the fact that asbestos dust and fibre were potentially harmful during the employment period. As such, it submitted that the deviation from the standard of care expected of it was less than the deviation in the standard of care expected from the more sophisticated Amaca and CSR such that those parties ought to contribute to a greater degree to the payment of damages.

Amaca and CSR unsuccessfully argued that the non-delegable nature of the duty owed as an employer rendered that duty more onerous such that a breach sounded in a greater degree of culpability. Justice Rush noted that a non-delegable duty does not render it more stringent nor more onerous. The content duty is not changed by the fact that the employer cannot delegate that to a third party (citing the decision of the High Court of Australia of Roads & Traffic Authority of NSW v Dederer).

Although not specifically identified in the judgment, the writer’s understanding is that the manufacturers submitted the apportionment ought to be 40 / 60 between the employer and manufacturer interests.

Analysis

Justice Rush stated that the assessment of apportionment involved the comparison both of the culpability and the relative importance of the acts of the parties in causing the damage. Put another way, the court must consider the relative blameworthiness and the relative causal potency of the negligence of each party.

In that regard, His Honour noted that Amaca and CSR were manufacturers and suppliers of asbestos-containing products and concluded, consistent with earlier decisions, that they had actual knowledge of the prospective dangers in circumstances where dissemination of the information by them would have alerted employers such as Field & Hall to the potential problem.

Uncontroversially, Amaca and CSR did not take any such steps. The evidence in other cases has been that insulation products manufactured by Hardie and BI were not supplied with any warnings, and Amaca did not place warnings on any asbestos-containing products until about 1977-1978, and then only on building products.

His Honour also noted that the manufacturers relied upon asbestos for the effectiveness of the products, used massive quantities of it, and could be expected to be ‘the repository of knowledge concerning the dangers of asbestos dust’.

Expert evidence was tended by Field & Hall detailing a chronological record of medical and scientific articles as to the developing recognition of the hazards of asbestos dust in causing lung disease, together with historical marketing and corporate documents / records of Amaca and the BI Partnership which, His Honour accepted, disclosed the magnitude of Hardie and the BI Partnership as regards the undertaking of an industrial business of an enormous capacity with a national reach.

In the circumstances, His Honour held that the level of deviation from the standard of care expected of Amaca and CSR was substantially greater than the deviation in the standard of care by Field & Hall.

In coming to apportionment, and after rejecting some mathematical calculations, Justice Rush weighed up the breach by an employer by failing to take steps to make any inquiry as to the conditions under which it directed its employee to work, against the resources of the manufacturers (being large companies involved in large scale production of asbestos insulation), who had actual knowledge and did not, by warning, alert employers to that risk. His Honour concluded that 20% of the liability ought to be apportioned to the employer and 80% to the manufacturers.

Comment

This decision in the Victorian Supreme Court is reasonably consistent with the decisions of Raynor and Woefl, both against the NSW Railways, as delivered by Judge Curtis of the NSW Dust Diseases Tribunal. In the NSW cases, the exposures in time were much earlier, from the 1930s into the 1950s, and the Trial Judge found that the Railways had actual knowledge of the risk presented by inhalation of asbestos dust during the employment periods. Also, different from Zwiersen, the Railways was personally using asbestos-containing products (rather than permitting its employees or bystanders to be exposed). Nonetheless, Judge Curtis also placed significant weight on the fact that the manufacturers had actual knowledge, were (relevantly) substantially more resourced, and that the use of asbestos fibre was fundamental to their businesses in concluding contribution at 20% (Raynor) and 25% (Woefl – being a later exposure period).

In the writer’s view, an appropriate consideration in assessing apportionment is the degree to which the employer is involved in the use and handling of asbestos as well as its size and level of sophistication. A small, unsophisticated employer which does not use asbestos, but is nonetheless liable because its employee is exposed as bystanders, will be less culpable than a large, sophisticated employer which extensively uses asbestos-containing products and thus causes its employees to be exposed through direct use. Also, generally speaking, a greater degree of culpability will fall upon a sophisticated employer if the exposure occurs later in time, as that employer would have deviated further from the expected standard of care by failing to take steps to identify the hazards to which it was exposing its workforce.

Zwiersen is interesting and helpful to employers because the exposure was reasonably late in time (mid-1960s to 1971), but, in assessing the relevant factors, Justice Rush took into account the greater degree of sophistication and involvement in the asbestos industry in apportioning a very significant share to the manufacturers.

Authored by Stephen Taylor-Jones, Partner, Sydney.


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