Amaca Pty Limited v State of New South Wales & Anor [2005] HCATrans 93 (4 March 2005)

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Amaca Pty Limited v State of New South Wales & Anor [2005] HCATrans 93 (4 March 2005)

Last Updated: 16 March 2005

[2005] HCATrans 093

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S216 of 2004

B e t w e e n -

AMACA PTY LIMITED (FORMERLY KNOWN AS JAMES HARDIE & COY PTY LIMITED)

Applicant

and

STATE OF NEW SOUTH WALES

First Respondent

ROLLS ROYCE INDUSTRIAL POWER (PACIFIC) LIMITED (FORMERLY KNOWN AS JOHN THOMPSON (AUSTRALIA) PTY LIMITED)

Second Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 4 MARCH 2005, AT 10.03 AM

Copyright in the High Court of Australia

__________________

MR F.M. DOUGLAS, QC: May it please the Court, I appear with MR G.M. WATSON for the applicant. (instructed by Allens Arthur Robinson)

MR J.M. IRELAND, QC: If the Court pleases I appear with my learned friend, MR J.F. BURN, on behalf of the respondent. (instructed by Crown Solicitor’s Office (NSW))

GLEESON CJ: There is a certificate from the Deputy Registrar to the effect that she has been informed by the solicitor for the second respondent that the second respondent will submit to any order of the Court, save as to costs. Yes, Mr Douglas.

MR DOUGLAS: At page 186 of the application book, the Court of Appeal posed the relevant question to be determined as being whether the State was a tortfeasor which, if sued, would have been liable to Mr Hay, and that in turn depended upon whether, on the facts found at trial, the State owed Mr Hay a duty of care. It was accepted by the parties in the Court of Appeal that should the State owe such a duty of care to Mr Hay, the matter ought to be remitted to the Dust Diseases Tribunal, pursuant to section 32 of the Dust Diseases Tribunal Act, to enable the Tribunal to determine the issues of breach, causation and damages which would then arise.

There was no dispute on the appeal that the question of duty was a point of law and that the powers of the court were limited to correcting decisions on a point of law. At page 190 of the application book, the Court of Appeal summarised a number of propositions drawn from Sutherland Shire Council v Heyman and subsequently analysed in the decisions of Pyrenees, Crimmins and Graham Barclay Oysters.

In Crimmins’ Case Justice McHugh put forward a number of criteria which, for a novel case, where a plaintiff alleges that a statutory authority owes him or her a common law duty of care, are a useful checklist in order to determine whether in fact there is a duty of care which is owed by that statutory authority. The first of those considerations was whether it was reasonably foreseeable that an act or omission of the State, including the failure to exercise a statutory power, would result in injury to the plaintiff or his or her interest.

In this case there was a statutory power which the Department of Labour and Industry, through its inspectors, had to effectively take a number of measures to prevent work on site where there were dangerous activities being carried on, including the emanation of dust, including asbestos dust, which could be injurious to persons working on the site. One would have thought that that first criteria was fulfilled.

The second matter which Justice McHugh referred to in Crimmins’ Case was whether the State had power to protect persons working on building sites – I will just use that including the plaintiff, rather than the public at large – from the risk of harm. We would have thought that criteria was satisfied.

The third is that the plaintiff or the plaintiff’s interests were vulnerable in the sense that the plaintiff could not reasonably be expected to adequately safeguard itself or those interests from harm. In this particular case the Court of Appeal referred to decisions in the economic loss area so as to say, in a sense, that Mr Hay was not vulnerable.

The fourth matter is whether the State knew of the risk of harm to persons working on the site, because of the receipt of a Jones Report and because of the knowledge gained by the inspectors prior to the receipt of the Jones Report. In this case the Court of Appeal decided the matter on the basis that the State, both before and after the receipt of the Jones Report, knew of the risk of harm to persons such as Mr Hay, working on the building site.

That is, in our respectful submission, a very important question because, were there no such knowledge, there would, if one goes to a fifth criteria that Justice McHugh laid down, that is, the reasons of policy – if in fact there was no such knowledge, then reasons of policy may intrude so as to prevent the formation of a duty of care in a case such as this. The consideration of the questions relevant to the issue of a duty of care are to be found at page 225 of the application book, under the heading:

Did the State owe Mr Hay a duty of care?

where, in paragraph 140, it is said that from a general standpoint:

a public authority, which is under no statutory obligation to exercise a power, owes no common law duty of care to do so.

Reference is then made to Sutherland Shire Council v Heyman and to the effect that none of the categories in Heyman’s Case are relevant to this particular case, but we do rely upon what was said by Justice McHugh in Crimmins as a basis on which one can approach a novel question of law in this particular area.

GLEESON CJ: Was it the State Department of Labour and Industry that was the particular authority that owed the duty, or the Department of Health, or what?

MR DOUGLAS: It was the State Department of Labour and Industry though its inspectors, your Honour, because they had a power. The statutory powers are set out in the judgment, commencing - - -

GLEESON CJ: There is no question of vicarious liability of the State for negligence on the part of some inspector?

MR DOUGLAS: That was raised, your Honour, in the sense that Mr Slade, who was the inspector who used to supervise the other inspectors, had knowledge of the Jones Report.

GLEESON CJ: So the suggestion is that Mr Slade, personally, could have been sued?

MR DOUGLAS: That would have been possible, but he was not.

GLEESON CJ: It would have to be right, would it not? If the State is vicariously liable on the basis of Mr Slade’s negligence, it must be that Mr Slade was a potential defendant.

MR DOUGLAS: Yes, your Honour.

GLEESON CJ: Mr Slade owed a duty of care to the workers because he was a Department of Labour and Industry inspector.

MR DOUGLAS: Yes, your Honour. Obviously, Mr Slade is not a party to the proceedings, but the case was put against the State primarily as being responsible for the knowledge that it – again, through its inspectors, by the numerous inspections which had taken place on the site since the early 1950s and also from the knowledge which it gained from the Jones Report. The relevant statutory regime is set out at paragraph 107 and following, where there was a power to appoint inspectors under the Act, under the Occupational Health and Safety Act. Then:

The Scaffolding and Lifts Regulations 1950 provided that the qualifications of the Chief Inspector and of every Inspector were to be such as determined from time to time by the Public Service Board of New South Wales.

Then in section 15 is the relevant statutory power which was relied upon.

GLEESON CJ: It is a pretty large proposition, is it not, that these inspectors, appointed to supervise occupational health and safety, owe a personal duty of care to the workers who are working in the factories that they inspect and the State is vicariously liable for their negligence?

MR DOUGLAS: That is not the only way in which the matter can be put, your Honour. Obviously, if the inspectors fail in the exercise of their duty, then the State can in fact be personally liable for that. It is not just merely a situation of vicarious - - -

McHUGH J: That is the better way of putting your case, is it not?

MR DOUGLAS: Yes.

McHUGH J: I would have thought it was very difficult to say the inspectors had a personal duty of care. The argument has to be that it is the State that had the duty of care and that the inspectors were the instruments by which the State sought to discharge its duty.

MR DOUGLAS: Yes, your Honour. I probably rose too quickly to the Chief Justice’s suggestion. I am told by Mr Watson that at trial we did not run a vicarious liability case.

McHUGH J: Did not?

MR DOUGLAS: Just a personal duty of care. It was based upon section 15 and the reports which were made and discussed within the Department and the findings were made that in fact there was knowledge on the part of the State and of Mr Slade of the contents of the Jones Report.

GLEESON CJ: It amounts to the proposition, does it not, that the State owed its duty of care by reason of its capacity as a government?

MR DOUGLAS: No, it is because it had set up a Department. The sole purpose of the existence of this Department and of its inspectors - - -

GLEESON CJ: That is what governments do, they govern, and every time they govern they set up departments and intrude into the way people conduct their businesses. If that attracts a duty of care, it has pretty far-reaching consequences, does it not?

MR DOUGLAS: It would if in fact they owed a duty of care to every person on every building site in New South Wales, because merely of the existence of the fact that the Department had been set up and inspectors had been appointed. The critical question, as we would see it in this case, is the question of knowledge, and the Court of Appeal decided the case on the basis that there was knowledge on the part of the State and of its inspectors of the risk of harm to persons in the position of Mr Hay from the early 1950s up until the time in 1958. I think Mr Hay continued to work for the Department up until 1961.

I accept what your Honour the Chief Justice puts to me that if it were a duty of care owed to every person on every building site in New South Wales, that would be a very difficult case to run.

McHUGH J: But even the proposition for which you contend is far-reaching, is it not, because it appears to come to this, that whenever a public authority has knowledge of a risk to an individual or individuals, it comes under a common law duty that requires it to exercise its powers of protection or prevention.

MR DOUGLAS: Your Honour, our proposition I do not think goes as widely as that, because it is more akin to Pyrenees. Of course, in this particular case there were findings by the trial judge and recorded in the Court of Appeal’s judgment to the effect that there were inspectors on-site continuously, and, secondly, there was a written report, the Jones Report, which did highlight, at least on one occasion, that there were exposures in excess of the.....standard.

McHUGH J: Pyrenees, which is probably the case closest for which you contend, was a case where there was action taken by the Council. The Council had given a direction. So they had set out to exercise their powers, but did not do it properly.

MR DOUGLAS: But in this case you have a report, the Jones Report, which was actually circulated to the major construction companies on-site. Now, whilst it was not as specific in the action which it required to be taken as was the report in Pyrenees, it - - -

McHUGH J: Mr Douglas, I think you are faced with dilemma. Either you have to say this is just a simple question of fact case as to whether or not there was a duty in the particular circumstances in this case or you have to state a proposition as high as this, that whenever a public authority has knowledge of a risk and has a statutory power that could eliminate that risk, it has a common law duty to exercise the power. That seems to be the only point of principle which could arise in this case. Otherwise, it is a fact case.

MR DOUGLAS: Your Honour, I would have to take the matter one step further and that is that they have embarked upon the exercise of their statutory powers. We say that they did embark upon the exercise of their statutory powers in this case by carrying out inspections of the site, reporting on the conditions at the site, reporting not only internally, but to the major construction companies on the site, and making recommendations as to how exposures could be avoided.

We say, in that respect, we are within the realm of Pyrenees and that the distinctions which have been drawn by the Court of Appeal seeking to distinguish this case from Pyrenees are not valid distinctions. There have been, in aspects of their reasoning, erroneous considerations taken into account, including looking at the matter more or less from the perspective of whether James Hardie ought to be able to recover something from the State as distinct from the question, if the State was the only solvent defendant left standing, would Mr Hay have been able to recover from the State in circumstances where the State had the knowledge which the Court of Appeal assumed? And, secondly, where the State had embarked upon the exercise of its statutory powers, would the court deny to someone in the position of Mr Hay the right to recover against the State of New South Wales?

The reasoning to the effect that Mr Hay was not vulnerable and also the reasoning to the effect that one can distinguish this from Pyrenees on the basis that the State was not the sole entity with knowledge of the potential dangers of asbestos dust at the power station seem to us to be more questions which go to contribution.

McHUGH J: The Court of Appeal did not seem to disagree with the basic principle for which you contended, but said that you really were not within it. At paragraph 153 it said:

The Jones report, however, was not akin to the letter to the Council in Pyrenees. Although it set out recommendations (that were not implemented), it was not a document that called for or was capable of compelling affirmative action on the part of Rolls Royce or anyone else. It was not a statutory direction to eliminate the risk (as the letter in Pyrenees was).

Now, what is wrong with that?

MR DOUGLAS: There was reference in Pyrenees to basic administrative steps which could have been taken, short of the letter, which would have ensured that the property did not burn down. Those are to be found in the judgment of Justice Gummow at page 384 to 385 at paragraph 154, referred to in paragraph 8 of our submissions in reply at page 256. The sort of things which his Honour found – and I recognise these are matters going more to breach than to duty, but nonetheless they inform the question of duty – he said that if the State had acted appropriately on the Jones Report,
through Mr Slade, they could have then just raised these matters more appropriately with the building companies on-site, Rolls Royce and Pacific Power, and that Mr Hay would not have been subjected to the risk of injury which he was in fact subjected to.

There is a contemplation in Pyrenees that steps short of the formal notification, which was found to be determinative in Pyrenees, can, in some circumstances, and we would say in the circumstances of this case, appropriately give rise to the existence of a duty of care. I do not think I could put the matter any higher than that, your Honour.

GLEESON CJ: Thank you, Mr Douglas. We do not need to hear you, Mr Ireland.

The Court is of the view that there are insufficient prospects of success of an appeal to warrant a grant of special leave in this matter and the application is dismissed with costs.

AT 10.19 AM THE MATTER WAS CONCLUDED