Damage...the gist of the action and a question of fact Damage...the gist of the action and a question of fact

Damage...the gist of the action and a question of fact

14 October 2015 | Public & Product Liability

On 12 August 2015 the High Court unanimously dismissed the employer’s appeal against a finding as to when the injured worker’s cause of action in negligence for mesothelioma caused by the inhalation of asbestos fibres accrued and whether it was statute barred.  The High Court published its reasons on 7 October 2015 in Alcan Gove Pty Ltd v Zorko Zabic [2015] HCA 33.

The injured worker was employed as a manual labourer at the employer’s alumina refinery near Nhulunbuy, on the Gove Peninsula in the Northern Territory, from 1974 until the end of 1977.  He regularly carried out running repairs and maintenance of the network of pipelines at the refinery.  Asbestos lagging was used extensively to insulate the pipes and the injured worker removed asbestos lagging from pipes on hundreds of occasions during the period 1974 to 1977.

The injured worker first began to experience chest pains in January 2014.  It was agreed that malignant mesothelioma probably commenced within one to two years before, and almost certainly within 5 years before, the onset of symptoms.  The injured worker claimed damages for the employer’s negligence.  At the time the injured worker’s claim proceeded to trial before the Supreme Court of the Northern Territory he was 74 years old and had about 6 months to live.

At trial the quantum of damages was agreed and the employer did not mount a positive case in defence of the injured worker’s claim in negligence.  The Trial Judge was satisfied that the injured worker’s malignant mesothelioma was caused by the employer’s breach of its duty of care.  The Trial Judge however dismissed the injured worker’s claim on the basis that it was statute barred.

On 1 January 1987 the substantive provisions of the Workers Rehabilitation & Compensation Act (NT) (the Act) came into force (now known as the Return to Work Act).  The Act abolished common law actions in negligence with respect to workplace injuries and provided for limited statutory rights to compensation for injured workers.[1]  However, where a cause of action in respect of an injury arose before the commencement date of 1 January 1987, the Act provided that a claim (including a claim at common law) in respect of that injury may be made, commenced or continued after the commencement of the Act as if it had never commenced.

The expert evidence at trial was that initial molecular changes occur in the mesothelial cells soon after inhalation of asbestos fibres.  To begin with, those changes are asymptomatic, and otherwise undetectable, and do not in all cases lead to mesothelioma.  In cases like the injured workers however where they do lead to mesothelioma, the changes typically lie dominant for years until an unknown “trigger” sets off the development of abnormal genetic switches resulting in malignancy which culminates in the malignant mesothelial tumour which constitutes mesothelioma.

At the trial at first instance, the Trial Judge characterised the issue as being “the same” as the issue in Orica Ltd v CGU Insurance Ltd (2003) 59 NSWLR 14.  In that matter the New South Wales Court of Appeal concluded that the kind of injury which is suffered by reason of no more than the inhalation of asbestos fibres is not compensable damage and therefore that a cause of action does not accrue unless and until mesothelioma develops.  The Trial Judge took the view that the medical evidence and other facts were essentially the same as in Orica.  The Trial Judge considered each of the particulars of damage claimed by the injured worker and observed that he was not suffering from any of those problems prior to or as at 1 January 1987.

The Trial Judge found that because the injured worker had not suffered damage prior to 1 January 1987, his cause of action in negligence for contracting malignant mesothelioma had not arisen before that date.  It therefore followed that the injured worker’s claim for damages against the employer after his malignant mesothelioma developed was statute barred and not preserved by the Act.  The Trial Judge held that the injured worker’s cause of action did not accrue until the onset of malignant mesothelioma and was therefore statute barred as it did not accrue until well after 1 January 1987.  Although it was not necessary to determine the issue, the Trial Judge would have extended time to enable the injured worker’s action to be commenced and proceed on the merits under the relevant limitation of actions legislation.

The injured worker appealed to the Court of Appeal.  In unanimously upholding the injured worker’s appeal, the Court of Appeal found that his cause of action arose when the changes to his mesothelial cells commenced which was prior to 1 January 1987.   Therefore, the injured worker’s common law claim was preserved by the Act.

The Court of Appeal noted that the Trial Judge did consider whether the changes in the injured worker’s mesothelial cells following his inhalation of the asbestos fibres constituted damage.  The Court of Appeal characterised the issue as being whether the initial mesothelial cell changes, which in hindsight could be seen to have lead inexorably to mesothelioma, amounted to compensable damage.  The Court of Appeal found that hindsight was permitted in determining when a case of action accrues.  The Court of Appeal found that a court should not be limited to ascertaining whether relevant facts were approvable or discoverable at a particular time and the aim was to ascertain when relevant facts, namely the presence of compensable damage, objectively came into existence.

The Court of Appeal found that the toxic carcinogen amphibole asbestosis had lodged in the injured worker’s lungs and caused genetic change leading to aberrant and abnormal cell growth which culminated many years later into malignant mesothelioma.  The Court of Appeal found that the cause of action arose when the non-negligible damage was first suffered and the subsequent mesothelioma was part of the damage arising in the accrued cause of action.  Although the medical evidence was to the effect that a person with abnormalities in the mesothelial cells may or may not acquire malignant mesothelioma, with the benefit of hindsight the Court of Appeal found that the injured worker’s condition was such that the cells would so develop. 

The Court of Appeal found that the injured worker sustained compensable damage at the time when such inhalation caused changes in his mesothelial cells which, according to the medical evidence, began to occur very soon after his exposure to asbestos and prior to 1 January 1987.  Even though such changes were not symptomatic, and even if such changes may not have been discoverable by medical investigation methods available at the time, or even now, the Court of Appeal held that the subsequent development of the injured worker’s malignant mesothelioma established that the damage to his mesothelial cells, prior to 1 January 1987, was material damage, and thus compensable.  The Court of Appeal found that damage inevitably and inexorably lead to the onset of malignant mesothelioma.

Special leave to appeal to the High Court was granted to the employer.[2]  The appeal was heard on 4 August 2015 and the only issue before the High Court was whether the injured worker’s cause of action in negligence for damages for mesothelioma in the course of his employment with the employer accrued before 1 January 1987.

The High Court found that the law is clear that actual damage or injury is an essential element of a cause of action in negligence for personal injury.  The High Court found that what may qualify as actionable damage is a question of fact and degree and ultimately of policy.

The High Court noted that over the last 30 years there had been a number of decisions concerning actionable damage in relation to mesothelioma, and while they provide a degree of guidance as to relevant considerations, the question is essentially one of fact and each case turns on its own facts and circumstances.  The High Court summarised that the effect of previous decisions appeared to be that:

  • "The mere risk of contracting mesothelioma which arises upon the inhalation of asbestos fibres is not compensable damage, because the risk may not eventuate;
  • Pleural plaques or pleural thickening, which may occur shortly after inhalation of asbestos fibres, although a form of physical injury, are not compensable damage because they are asymptomatic and there is not evidence that the pleural plaques or thickening had any potentiality for harm, whether considered on its own or in conjunction with some other process;
  • The risk of contracting mesothelioma to which a claimant is exposed upon the inhalation of asbestos fibres does not become compensable damage by reason only that, with the benefit of hindsight, it is possible say that the risk has eventuated and therefore that the inhalation of asbestosis fibres caused the claimant’s mesothelioma; and
  • Nevertheless, the kind of mesothelial cell changes which sometimes occur shortly after the inhalation of asbestosis fibres may be regarded as compensable damage if, in the case of a claimant who is suffering from mesothelioma, and so with the benefit of hindsight, it can be seen that those mesothelial cell changes were the beginning of a continuum that lead inexorably to the onset of mesothelioma."

The High Court noted that the difficulty with the Trial Judge’s reliance on Orica was that neither the issue nor the evidence in that case was precisely the same.  There was no evidence in Orica nor any consideration of whether the claim kind of initial molecular mesothelial cell changes which occurred in this case amount to compensable damage if they may be seen in hindsight to have led inexorably to mesothelioma.

Although the injured worker did not develop a malignant mesothelial tumour until shortly before first experiencing the symptoms of mesothelioma in 2013 or 2014, based upon the expert evidence concerning the pathology of the disease, the High Court found that it could be inferred that the asbestos fibres inhaled between 1974 and 1977 or shortly afterwards (and in any case before 1 January 1987) resulted in initial molecular changes to mesothelial cells which ultimately culminating in the malignant mesothelial tumour. 

The High Court noted that initial mesothelial cell changes do not develop into compensable in the absence of a “trigger”.  The evidence of the precise nature of the “trigger” was therefore decisive in the case.

The High Court found that it was necessary for the Court of Appeal to be able to infer that, once the initial mesothelial cell changes had occurred, the trigger had already existed or was otherwise bound to occur, and this was dependent on the nature of the trigger.  If it is exogenous (which is to say outside the cell) the point at which the initial mesothelial cell changes become bound to lead to mesothelioma will depend on the nature and timing of the trigger.  However, where the evidence established that the trigger is endogenous, which is to say a state of affairs inside the cells which creates an inherent predisposition or susceptibility to mesothelioma, it may logically be inferred that once the initial mesothelial cell changes occurred they were bound to lead to mesothelioma.

The High Court found that the Court of Appeal proceeded on the basis that the trigger was endogenous.  The High Court found that although the relevant medical reports did not specifically state that the trigger was endogenous, it was implicit in each medical report that the trigger was an endogenous cytogenic process within the cells.  The High Court found that this conclusion was fortified by the employer’s decision not to cross-examine the medical experts at trial, not to call other expert evidence to contradict them, not otherwise to suggest at trial or on appeal that the trigger was not endogenous, and not to contend that the trigger was in any way in the nature of a novus actus interveniens.

On the question of whether it could be inferred in hindsight that a cause of action had accrued before it could have been detected, on the available evidence, the High Court found that there was no reason why it could not be inferred that there were initial molecular changes in the mesothelial cells which preceded the appearance of symptoms of mesothelioma, and that those initial cell changes lead inevitably and inexorably to mesothelioma.  The High Court said that the question was then whether, at a matter of law, there was any reason why the initial changes in the mesothelial cells which it could be inferred were bound from the time of their onset to lead inevitably and inexorably to mesothelioma should not be seen as compensable damage sufficient for the cause of action in negligence to have accrued at that point.  The High Court found that it assists to answer that question to consider what the position would have been if, at the time of the initial mesothelial cell changes occurred, there had been evidence available to establish that they had occurred and that, because of the injured worker’s predisposition to mesothelioma, they were bound inevitably and inexorably to lead to mesothelioma.  The High Court found that in those circumstances, the injured worker would have had a cause of action in negligence for damages for personal injury caused by the inhalation of asbestos fibres, which was bound to lead to mesothelioma.  Although the malignant tumour would not have begun at that point, and there would remain a chance that the injured worker would die from other causes before it began, the High Court found that the fact that the injured worker would otherwise be bound to die from mesothelioma would be sufficient to found a cause of action in negligence for loss of expectation of life, and if the tumour began before the matter came to trial, the injured worker would be entitled to add to his claim of damages the fact that it had begun.

Given with the benefit of hindsight it can be seen that initial mesothelial cell changes occurred shortly after the injured worker’s inhalation of asbestos fibres, and that they were bound to and did lead inevitably and inexorably to the malignant mesothelioma from which he now suffers, the High Court found that the injured worker’s cause of action in negligence accrued when the those initial mesothelial cell changes occurred, and as the Court of Appeal held, damages for the mesothelial tumour from which he now suffers are recoverable in that cause of action.

Finally, the High Court observed that it did not detract from that conclusion that time may run under statutes of limitation against persons who have been exposed to asbestos fibres but who have not yet contracted mesothelioma (or another disease) as a result.  The High Court noted that their position will be protected by statutes of limitation which either set the limitation periods for personal injury by reference to the time at which the cause of action becomes discoverable or provide for postponement of limitation periods until after the time when material facts can reasonably be ascertained by the plaintiff.

The High Court’s decision serves as a useful reminder that damage constitutes the gist of any action in negligence and what may qualify as actionable damage is a question of fact and degree.


[1] “Injury” under the Act includes a disease and the aggravation of a pre-existing disease.  “Disease” is defined to include a physical ailment, element, disorder, defect or morbid condition whether of sudden or gradual development. 

[2] We expect that special leave was granted given the apparent disparity at the court of appeal level between the NT Court of Appeal in this matter and the NSW Court of Appeal in Orica.

Rhett Kennedy

Rhett Kennedy

Principal

Stewart Boland

Stewart Boland

Special Counsel