Amaca Pty Limited v Werfel & Anor [2021] HCATrans 146 (10 September 2021)

Last Updated: 16 September 2021

[2021] HCATrans 146

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Adelaide No A4 of 2021

B e t w e e n -

AMACA PTY LIMITED (UNDER NSW ADMINISTERED WINDING UP) (ACN 000 035 512)

Applicant

and

MATHEW HARRISON WERFEL

First Respondent

THE STATE OF SOUTH AUSTRALIA

Second Respondent

Application for special leave to appeal

KIEFEL CJ
KEANE J
GLEESON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA BY VIDEO CONNECTION TO BRISBANE AND SYDNEY

ON FRIDAY, 10 SEPTEMBER 2021, AT 10.47 AM

Copyright in the High Court of Australia

MR J.T. GLEESON, SC appears with MR M.J. HOOPER for the applicant. (instructed by Holman Webb Lawyers)

MR B.W. WALKER, SC appears with MR S. TZOUGANATOS for the first respondent. (instructed by Turner Freeman Lawyers)

KIEFEL CJ: There is a submitting appearance for the second respondent. Yes, Mr Gleeson.

MR GLEESON: Thank you, your Honours. The primary question of law raised by the application could be expressed this way. It is accepted that there is an established category of duty of care between a manufacturer and an end user of the product supplied, using the product as intended. The question is whether that duty should be extended to persons who may come into contact with the product in situ perhaps many years or decades later, casually or otherwise, in circumstances where the only suggested practical means of discharge of the duty is a long‑term, perhaps indefinite, public warning campaign.

Our contention is that the alleged duty so extended raises problems of indeterminacy of the class to whom the duty is owed, the time period over which the duty is owed, and the content of the duty such that it is a bridge too far for the common law to recognise such a duty.

Your Honours, to show that that is the critical issue between the parties, could I ask you to go please to page 321 of the book to paragraphs 8 and 9 of the respondent’s submissions. In those paragraphs Mr Walker contends that the present case falls comfortably within Donoghue v Stevenson itself and he references at footnotes 18 to 20 a series of authorities which he says makes that clear. Those authorities in the footnotes, save for the case of Hannell, a decision of ‑ ‑ ‑

KIEFEL CJ: Mr Gleeson, the question of duty as found in this case is very similar to the expression of duty in Hannell’s Case, is it not? This case is really about whether or not the duty was breached and what is required of a party such as Amaca by way of advertisement. That is really the area for this case, is it not?

MR GLEESON: Your Honour, there are two ways of looking at it. The first way is, as a pure question of duty, is the approach of Chief Justice Martin in Hannell correct that one simply cannot conceive of the duty. It is also true, your Honour, that if one comes to breach, yes, there is a very central question in this case of whether the alleged risk was such that the reasonable precaution to be taken was this extended, perhaps indefinite, long‑term warning campaign. So, I seek to put the application first on duty, but, secondly, if necessary, on breach. We seek to put it both ways, your Honour.

Much of the argument is a little similar at both levels, because if one accepts that the alleged duty is said to be owed to any person that may come into product with Amaca product at any time, then the duty is effectively owed to all of us, to the whole nation, because the product is ubiquitous. If one asks, what is the time period over which the duty is owed, for the Full Court it commenced at least in 1990, but possibly earlier, and the Full Court has never said how long the duty runs for.

It seems that it runs at least until 2004, because of Mr Werfel’s exposure, so it runs at least 14 years, but potentially more years at either end, and then when one comes to the critical question of content of the duty, what is it that is the standard by which the duty is to be discharged, we do submit there is a radical indeterminacy, because how is one to determine what is the content of the long‑running public relations campaign which it is said Amaca must engage in? So, your Honours, we seek to put it on both of those levels.

KIEFEL CJ: You are on thinner ground, though, in relation to breach because they are largely questions of fact, are they not? In relation to duty, you are really arguing for the minority reasons in Hannell.

MR GLEESON: We are arguing for Chief Justice Martin’s reasons, which, in expression, were in minority on duty. However, we submit that the majority in Hannell, when they said they were resolving the case at the level of breach, in fact were grappling with the question, does the duty extend in its discharge to the indefinite public warning campaign? The reasons why they said it did not, we submit, are equally applicable in this case.

Your Honours, just before leaving duty, it is important, we submit, that the duty would need to be formulated in a way which provided a workable standard for its discharge by the tribunal of fact - a workable standard over this long‑term period, which is at least 15 years, but potentially very much longer, and one of the questions in fact raised by the Full Court’s approach here is, has this duty ended, even today? How does one know when enough is enough, how does one know when the warning campaign has done as much as it can do? Is Amaca, even today, required to be engaging in the public warning campaign by the law of tort?

We submit they are fairly profound questions, and, really, the whole notion of a public warning campaign is something which lies in the field of a legislative response rather than the law of negligence because, essentially, one has to ask a whole range of questions, what will be the type of warning that must be given, how long must it run for, who should pay for it, when is it to be recalibrated, when does it end?

Your Honours, the only further thing I would say on duty is that the decision has implications beyond Amaca, although they are very profound for Amaca, as you will appreciate, because the fund is diminishing, and they have implications beyond asbestos. They really extend to any manufacturer whose product has been placed into the stream of commerce, has been used, and where, at some later point, perhaps years or decades later, questions arise about its safety and the question is whether a public relations - or a public warning campaign is then required.

Your Honours, what I wish to say about breach was that it is an essential element, applying Wyong v Shirt, to be able to identify the content of the campaign required, and the length of time for which it is said to run in order that one could assess the other factors in the calculus such as the cost, the likely efficacy, and the extent to which it would impede the legitimate business interests of Amaca.

If the Court could go, on that question please, to the ultimate conclusion which is at page 211, paragraph 320, wat is there said is that the breach was the:

failing to make frequent public announcements that there was a material risk –

and the failure:

to adopt strategies and campaigns to the effect of those suggested by Ms Pascoe and Mr Roberts.

However, as we have submitted in writing, there was no uniformity between Ms Pascoe and Mr Roberts upon what this campaign was meant to look like. For Ms Pascoe, you will see that on page 189, paragraph 248, that she was looking for:

an ongoing education campaign for 20 years, or perhaps longer having regard to the mesothelioma latency period.

There is a description in very general terms of what such a campaign might look like. By contrast with Mr Roberts, this is page 195, paragraph 270, he referred to a campaign for the first year, that was his written evidence, and then, under testimony:

he envisaged shorter, less intense follow up publicity in subsequent years.

So, the radical difference and disparity is tolerably clear. Now, if the campaign is said to have been required from 1990, or perhaps the mid‑1980s, which the court also contemplated, on Mr Roberts’ view it is not in any way clear what the campaign was meant to look like in the years when Mr Werfel might have been the beneficiary of it.

There is, we would submit, with respect, in that very generalised finding at paragraph 320, a failure to identify the precaution with anywhere near the degree of precision with which the Wyong v Shirt question would then be answered. Your Honours, all I need to say about causation is that it is the lack of precision in the identification of the precaution, the required step which in turn made it not possible on the balance of probabilities to accept that any campaign would have come to Mr Werfel’s attention, let alone been acted upon by him.

So, returning to your Honour the Chief Justice’s original question, the only authority that has grappled with this type of case is Hannell. The other authorities cited by Mr Walker are all in the conventional category. It is a quite important and, indeed, profound question in terms of the responsibilities of Amaca and of other manufacturers in like position to know whether the law of negligence brings them into this relationship with this class of persons with whom they have at the time had no direct or even indirect dealing. For those reasons, we submit it is a suitable application for leave, your Honours.

KIEFEL CJ: Thank you, Mr Gleeson. Yes, Mr Walker.

MR WALKER: Your Honours, of course we do take the point that does not bear much elaboration that all such cases - and in particular this is as good current example – are entirely fact specific. Contrast between this factually and Hannell is, for example, obvious.

The second matter is this. There is not truly any question of law concerning duty or even scope or content. It is a question of the evaluative assessment of the reasonable response which may of course include consideration of what has become called scope or content, but really concludes with a decision one way or the other on breach. There is nothing unconventional about what has occurred in this case and in particular there is no extension, as has been proposed, to standard manufacturer’s liability.

In terms of the class of possible plaintiff, the suggestion is made in the special leave application which is not borne out surely by a comparison with manufacturer’s liability cases over the generations, but there is some distinction between so‑called end users and others who may come into contact with dangerous goods. Who is the end user of a bassinet? Is it the mother or the baby or is it the older toddler sibling who was injured by the collapsing machinery, and do you redouble it to neighbours’ children who reasonably come to visit, et cetera, et cetera, et cetera. The end user is not a matter, obviously since Donoghue v Stevenson, as concludes with a person in contractual privity.

Use as intended, the other matter that my learned friend proposes badges this as a case raising a matter of law, of a principle kind worthy of this Court’s detailed attention to its facts, is, of course, here, the use of a building material intended for indefinite use, I do not mean perpetual but I do mean indefinite use, in domestic settings where, by definition at least nowadays, the property may be alienated, and there may be visitors from time to time, where there may be work bees, of neighbours, for example, to help each other with refurbishing their fencing from time to time.

So, in our submission, the notion that there is any extension being called for by a defence of the outcome and reasoning in this case, ought to be rejected. There is no extension perceptible at all. It is the role, with respect, of trial courts and intermediate courts and appeals by way of rehearing, to apply generally enunciated principles of the law of negligence to multifarious and infinitely variable fact situations. That then leaves the matter of what might be called “enormity”, my word, I accept, on my friends, the notion that this might be expensive.

We can put to one side that the expense in question is the expense of an appropriate, reasonable response by way, for example, of a public information campaign. There was no evidence of any of that, so we can put that to one side. The expense in question would appear to be the possibility of damages requiring to be paid. That is not, in our submission, a proper common law response in the absence of any legislative capping.

So, there was no question of principle, let alone legal principle, involved which would make the case suitable for special leave, by reference to the fact that there may be, relatively speaking, quite a lot of people who may have such claims.

Your Honours will have noted how that is at distinct odds with another strand of argument against us to obtain special leave, namely that the risk was vanishingly small, could not be calculated. The risk is large enough for there to have been persons counted who have died by reason of it materialising in their case. The risk is obviously large enough for our learned friends to point, with a degree of forensic horror, at the idea of the amount of damages that might be payable if the decision is not disturbed.

So, in our submission, one then comes down to the notion, which is important and at the heart of considerations of duty of care, namely, indeterminacy. My friend multiplied matters of indeterminacy, including by the duration of what might be called campaign, public information, or even more bluntly, warning.

It would be a novelty in the common law if my learned friend’s invitation were taken up to regard it as, as a matter of legal principle, unthinkable that warnings should have indefinite duration. Until the seas run dry, or flooded upon melting of the ice caps, your Honours, deep water and shallow water will respectively still continue to have useful meaning by way of admonition and information, warning, to those who might otherwise act to their detriment in an opposite belief.

No one seriously suggests that, by reason of the expense of maintenance, erection and supervision that there should be some time limit after which it is no longer necessary for deep water or shallow water signs to be present. Now, that is a humble example, but it is an example which is sufficiently common in order to suggest that we are talking real money as to the difference between a three‑year erection of a warning sign and an indefinite requirement for a warning sign. That level of indeterminacy goes nowhere.

The other matter of indeterminacy that I wanted to address concerns what might be called the indeterminacy said of the way in which we presented the case. The Full Court, the Court of Appeal upheld the case with respect to the kind of campaign that might have been necessary. This is the worst possible vehicle to explore that question because there was no attempt by this entity, who had conducted advertising campaigns to sell the goods, of indefinite duration and, no doubt, considerable expense, there was no attempt to do anything by way of an appropriate warning.

So, distinctions between good‑hearted attempts to inform the public of the menace at the bottom of their backyard simply does not arise for consideration in this case. No doubt, if and when there is ever such a case where applicants such as the present one are able to point, historically, to having made any efforts at all, no doubt there will require to be very fact‑specific inquiry as to whether, against the standard of reasonableness, there is no other standard to be proposed. The efforts were such as to discharge a duty plainly owed to persons who might otherwise be killed by the dangerous product having been commercialised, the dangers appreciated, and silence observed concerning the precautions to be taken in approaching the material.

It is for those reasons, in our submission, that one simply cannot proceed on the basis that because there was, as my friend would put it, a measure of ordinary lack of complete concord between experts in the PR area, that the plaintiff therefore loses. It is not true, as a matter of
common law, that there has to be such precise stipulation of a reasonable response where a range of responses is possible, or else the plaintiff fails.

Certainly, the plaintiff bears an onus of showing that that which it proposes would have had the effect of avoiding the loss, but where the defendant has done nothing whatever then it lies ill in the mouth of the defendant to say, “You haven’t said precisely what PR campaign that would have achieved the purpose”. It was for the courts below to form the evaluative assessment as to whether there was as a reasonable response the existence notionally of a campaign that would probably have avoided the loss.

It would be very difficult, with respect, to regard as plausible, by way of argument from a commercial entity whose advertising has generated revenue and profits, that they would not equally be adept at funding and conducting advertising to warn about the way in which their dangerous products should be attended to by those coming into physical proximity with them.

It is for those reasons, in our submission, that this is nothing other than a case which is producing an outcome according to entirely orthodox unextended principles of common law of negligence in relation to facts which include long‑term - that is, indefinite duration – physical threats to people who come into contact with the defendant’s products. That is a case which, in our submission, requires no attention by this Court to any matter of principle, let alone of law, and no error has been shown of a kind worthy of this Court’s attention in the courts below. May it please the Court.

KIEFEL CJ: Any reply, Mr Gleeson?

MR GLEESON: Yes, thank you, your Honours. Could I deal first with one point raised by Mr Walker which should be cleared away before coming back to the issue of principle. Mr Walker said this is the worst possible case to explore any question of content because this manufacturer did nothing by way of warning. Could I show that is wrong, in a number of places. Firstly, page 189 of the book, paragraph 245. In the middle of the paragraph the court said:

To some extent, the warning campaign which Mr Werfel contends was necessary to discharge James Hardie’s duty differed only as a matter of degree -

from that which James Hardie had been putting publicly. Page 209, paragraph 314, first sentence; page 210, paragraph 319; paragraph 320, failing to make frequent announcements; and perhaps also, as emerges in the causation section, page 215. There is an example there at the top of the
page of what was actually said. So that point, we submit, should be put to one side.

What that brings us back to is Mr Walker accepts that the class of persons to whom the duty is said to be owed is as we have described it, which is not much less than the entire nation. As to the time period, he has not challenged that it may run indefinitely, and he has not proposed any criterion by which the law would determine when the duty has ended, or when the breach issue has disappeared. As to content, he has not proposed, we would submit, any workable standard by which the tribunal of fact is to judge the question of breach.

So, ultimately, it does bring us back to Hannell in a sense, and if your Honours could just finally, on our application, go back to page 180 please, to the top paragraph which quotes from Chief Justice Martin’s view in Hannell, and we contend for the correctness of that at a level of principle based upon underlying fact‑findings which are similar, if not identical, to those that we have in this case.

Then, finally, even if the matter was approached at a level of breach, on page 206 you have the full findings of the other judges in Hannell, including the important findings of the last of those cited paragraphs, [366], and I would submit that what is there said in those final sentences exactly captures our case. For those reasons, it is a suitable vehicle for leave, your Honours.

KIEFEL CJ: Thank you. The Court will adjourn to consider the course that it will take.

AT 11.13 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.18 AM:

KIEFEL CJ: This matter raises the question whether a duty of care was breached by the applicant’s failure sufficiently to warn of dangers inherent in its product that was widely distributed. It falls to be resolved largely as a question of fact. No question of general principle arises. The matter does not warrant the grant of special leave. Special leave is refused, with costs.

The Court will now adjourn.

AT 11.19 AM THE MATTER WAS CONCLUDED