Amaca Pty Ltd (NSW External Administration) v A B & P Constructions Pty Ltd  NSWCA 220
The Court of Appeal dismissed Amaca’s argument that they had sufficiently warned the Plaintiff of the dangers of asbestos products.
The Plaintiff, Mr Lorizio, began his employment with Mr Restuccia, the principal of A B & P Constructions Pty Ltd, in about January 1980 as an apprentice carpenter. Mr Lorizio remained in this employ until mid 1998. Mr Restuccia was the worker's supervisor and together, they renovated and built new houses which involved demolition.
The demolition work sometimes involved old fibro houses which contained asbestos. Furthermore, the building of the new houses and renovations also involved new asbestos cement products such as Villaboard, Hardiflex, Hardiplank and Hardiplank Woodgrain.
Mr Lorizio estimated that between 1980 and 1998, approximately 10% of his work was with old fibro. Mr Restuccia indicated a lesser percentage in relation to this work. Mr Lorizio estimated that in the four to five years from 1980, approximately 20% of his work time involved new asbestos cement products. Mr Restuccia agreed with this estimate.
The Appellant, Amaca Pty Ltd, commenced fixing stickers on its products in 1978/1979 which stated that the products contained asbestos and cautioned the user about the dangers of their use. The caution was in white letters on a red background, stating "This product contains asbestos. Breathing asbestos dust can damage health. Keep dust down". Further warnings in relation to usage were also on a sticker. In about 1982, the sticker changed in form stating "Contains asbestos fibre. Avoid creating dust. Breathing asbestos may cause serious damage to health including cancer. Smoking greatly increases the risk. In accordance with N.H. & M.R.C. recommendation".
Amaca also issued technical bulletins and other brochures which were available at retail outlets selling the products which included information as to their use.
In the primary proceedings, Mr Restuccia indicated that he saw the brochures about the Appellant's products but was unaware until being told that asbestos had been taken out of the products that the asbestos was dangerous. Mr Restuccia confirmed that he did not do anything to inform himself of the potential hazards and risks.
Mr Lorizio stated that he had not been warned of any health risks associated with the use of asbestos cement building products, nor did he wear a mask, indicating "Had I known of any such risk I would not have worked with or used such fibro materials". Mr Lorizio's evidence made no mention of the stickers or brochures.
Mr Lorizio was diagnosed with mesothelioma in 2004 and his proceedings were settled for $1 million inclusive of costs.
The Respondent employer cross-claimed against the Appellant, Amaca, claiming contribution pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act 1946 on the basis that the Appellant manufactured the products and would, if sued by Mr Lorizio, have been liable for the "same damage" as was the Respondent.
Amaca's grounds of appeal were that the Trial Judge erred in incorrectly formulating the content of any duty of care, the breach of duty of care, in finding the breach of duty caused or contributed to the injuries suffered and also the finding on apportionment itself.
Amaca submitted that there was no duty to warn users of the health risks involved in the use of asbestos cement products and that at that time, there was no breach of its duty of care in failing to warn.
It was noted that the only duty of care was in relation to the manufacture of the new asbestos cement products and not the old fibro encountered in demolition or in renovation and extension work.
The leading judgment in the Court of Appeal was delivered by Giles, JA with whom Ipp, JA and Basten, JA substantially agreed. Giles, JA noted that in his reasons the trial judge had relied on Anderson v The City of Enfield (1983) 34 SASR 472 in which it was held that "the manufacturer and distributor of an inherently dangerous product owes a duty to give adequate warning to people into whose hands the product may come of the dangerous qualities of the product. It was indicated that the nature and extent of the warning which is necessary to discharge its duty must depend upon the degree of risk involved in the use of the product and the circumstances of its distribution".
King C J stated in that case that the "real point for determination" was whether the words of warning on the product in question were "adequate to bring home to a user, the gravity of the danger involved in contact with the skin by the product".
Giles, JA confirmed that the trial judge had relied on the English Court of Appeal decision of Wright v Dunlop Rubber Co Ltd (1972) KIR255 which stipulated that reasonable steps depend upon the particulars facts. This case is directly on point as it was stated that if a manufacturer discovers that the product is unsafe or has reason to believe that it may be unsafe, its duty may be to cease forthwith to manufacture or supply the product in its unsafe form. The factors which would be relevant include the gravity of the consequences if the risk should become a reality and the gravity of the consequences which would arise from the withdrawal of the product.
Giles JA confirmed that the trial judge ultimately found that "I do not think it is seriously disputed that by 1980, Hardies had a duty to warn, the question is whether or not that duty has been satisfactorily discharged".
Giles, JA confirmed that the Trial Judge was not satisfied that Amaca had sufficiently warned of the risks of the asbestos in the products through the use of various stickers and brochures.
The most important consideration on this point is the fact that the Trial Judge stated:- "These cautions contain no reference to contracting mesothelioma, cancer or other lung disease, they are anodyne in the extreme".
Duty of Care
After discussing the scope and content of the duty of care Giles, JA concluded that the correct approach was that the Appellant owed to Mr Lorizio a duty to take reasonable care to avoid the risk of physical injury; and whether it was in breach of that duty involved determining the reasonable response to the risk of injury and any failure in that reasonable response. Giles, JA held that giving a warning was not necessarily a reasonable response.
Breach of Duty
Giles, JA found that although the Trial Judge did not specifically refer to Wyong Shire Council v Shirt he carried out the balancing act of determining what was a reasonable response to the risk. He found there was realistically no occasion for more than an assessment of the strength of the warnings against the seriousness of the risk.
Giles, JA distinguished the case of McPherson's Ltd v Eaton as this case involved the question as to whether a retailer who did not know of risk to users of the products it sold owed a duty of care to users in relation to the products. It was held that it did not unless there was "something more".
The question on Appeal was the connection between the failure to warn and Mr Lorizio's condition. The Appellant submitted that stronger warnings, meeting the judge's requirement of adequacy to bring home the real risks, would not have made any difference.
Giles, JA found that there was material on which the Judge could find causation and there was no error of law in his implicit finding of causation.
Accordingly the Court of Appeal dismissed the Appeal with costs.
The Court of Appeal confirmed that in the particular factual situation found in this case the warnings placed by Amaca on its products commencing in 1978/1979 were clearly inadequate in the context of occupational exposure.
The Court of Appeal confirmed that the analysis of the content of the duty of care and the question of whether a breach of the duty has occurred should be kept distinct. In this case it held that the content of the appellant's duty of care was at the general level of a duty to take reasonable care to avoid physical injury. The reasonableness of the appellant's conduct was then to be assessed by regard to the risk of injury and the response of a reasonable man to the risk, in accordance with the balancing described by Mason,J in
Wyong Shire Council v Shirt.
Finally the Court also confirmed the correctness of the approach of Mason,P in McPhersons's Ltd v Eaton in which the Court of Appeal held that a retailer did not owe the kind of duty owed by a manufacturer to a consumer and that the law did not impose on a retailer a duty to inquire as to the potential risk of harm from use of products which it sold.
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