Litigation and Future Claims
CSR’s strategy almost worked. In 1988 the company came within 24 hours of having to pay
out nothing, instead of the recorded pay outs in damages and compensation in Australia and
the U.S. which now amount to hundreds of millions of dollars.
170
A year earlier, on 2
nd
January 1987, at the request of the Asbestos Diseases Society of Australia, legal firm Slater
and Gordon had opened an office in Perth to run test cases on behalf of Wittenoom victims.
The firm believed that with the available evidence and the statute of limitations
defence removed, they could mount a successful claim. The extension granted by the
Western Australian Government to the statute of limitations in 1984 was about to expire on
the 18
th
January 1987. Three days before its expiration, lawyers Luisa Formato and John
Gordon issued approximately 400 civil damages claims, mostly on behalf of the Wittenoom
victims. The writs were issued against Midalco Pty Ltd and CSR, since many of the writs
related to pre-1959, when apparently Midalco had no insurance and, by 1987, no assets. A
search of the Corporate Affairs Office in 1983 showed that Midalco Pty Ltd’s net assets
167
Vojakovic & Gordon, Op Cit. p. 389.
168
Ibid. pp. 388-389. J. F. Blaxland, CSR’s Corporate Secretary presented the final secret strategy
recommendations to CSR in 1977. Ian Burgess, by 1987 was Managing Director of CSR.
169
Ibid. p. 382
170
Vojakovic & Gordon, Op Cit. p. 382. McCulloch (2006), Op Cit. p. 15.
309
amounted to $337.
171
In an attempt to dissuade claimants, CSR issued press statements to
remind Wittenoom victims of the previously unsuccessful claims. Any public suggestion that
CSR were responsible was countered with the threat of defamation proceedings.
172
In 1988 the success of several cases signalled the start of the fracturing of CSR’s
strategy. In Victoria, Klaus Rabenault was awarded $426,000 compensation and $250,000
punitive damages, upheld despite CSR’s appeal. Meanwhile in Perth, after losing his test
case in November 1987, Wally Simpson won his retrial. By August 1988 Heys and Barrow
had won their case against CSR.
173
The Heys and Barrow case would never have gone
ahead in November 1987 if the failed test case of Wally Simpson had been decided the day
prior to the start of their proceedings. Legal firm Slater and Gordon was under enormous
financial pressure, having lost the Simpson case and from having put substantial sums of its
own money into the issuing of the 400 writs the year before. The case of mesothelioma
victims Peter Heys and Tim Barrow ran for 180 days. Several motions of inadequate
discovery were required for CSR to hand over the list of the 20,000 documents Malcolm King
had collected in the 1970s, confirming CSR’s knowledge regarding asbestos-related disease
and other related matters.
174
Had ABA Ltd secretary Joan Joosten’s lawyer possessed these,
instead of the 30 or so documents CSR had handed over in legal discovery during her case
in 1979, Joan Joosten may at least have died knowing she had been awarded damages.
175
Instead, the late Joan Joosten’s husband would have to wait for the class action nearly ten
years later.
Later in 1988, an anonymous source within CSR disclosed CSR’s internal strategy
planning, which had taken place between 1974 and 1980, to journalist, Michael Gill.
176
One
can only surmise that this source was within the senior ranks of CSR, as the strategy was
171
Vojakovic & Gordon, Op Cit. p. 397. The Attorney-General of W.A. Joe Berenson reported this
finding during his introduction to the amendments to the Statute of Limitations — the result of lobbying
by the Asbestos Diseases Society of Australia — which changed the law for asbestos victims to seek
damages for their illness to read from the time of exposure to the time of the victim learning they had
an asbestos related disease.
172
Ibid. pp. 404-405.
173
Vojakovic & Gordon, Op Cit. p. 406. See also Hills, Op Cit. pp. 119 & 124.
174
Vojakovic & Gordon, Op Cit. p.393.
175
Interview with John Gordon, barrister, Melbourne, June 2011. Gordon worked for Slater and
Gordon and was involved in the negotiated settlement.
176
Vojakovic & Gordon, Op Cit. p. 410.
310
only known to a handful of CSR’s executives.
177
Gill passed on the information to asbestos
victims’ legal representatives, Slater and Gordon. With this information, in 1989 Slater and
Gordon won a class action for 288 Wittenoom workers. The Deed of Covenant showed the
total pay out was $18,425,000. The agreement included a clause that Slater and Gordon
“would not produce to any other entities the documents and knowledge in its possession in
return for the payment of $700,000”.
178
CSR prolonged the process by imposing conditions
which drew out the waiting period before the final award of damages was paid to the
claimants.
179
After the settlement, CSR released a statement to allay shareholders concerns
about the extent of their future liabilities. The public record shows those liabilities exceeded
the amount of $35 million CSR reported to its shareholders in July 1989.
180
Subsequently,
Slater and Gordon pursued CSR for payment of damages to residents who developed an
asbestos-related disease.
181
Between the mine’s closure and 2006, CSR has paid out in
excess of A$500 million in damages and compensation in Australia. By March 2000, CSR
had paid out in excess of A$100 million in U.S. settlements and legal fees.
182
Few of those interviewed for this research spoke about their damages claims. On the
11
th
October 1989, a week after the delivery of the judgement in favour of the class action,
Sperandio Delpero was interviewed on SBS radio. He still did not know how much he was to
receive in damages. He had been told he should receive $310,000. To Umberto
Martinengo’s questions: “Is that a fair figure?” he replied:
No, non è tanto giusta…..ma adesso non cela farò
neanche a spenderli se me li danno. Dunque è meglio
che me li prenda e che me li godo quattro giorni. Almeno
posso… abito in una casa di asbestos. Mi comprerò una
macchina che mi goderò quattro giorni se posso.
183
177
Motley Rice Plaintiff’s Exhibit no. 10652: 29 April 1977: Meeting re: Wittenoom claims. In
attendance were CSR directors; J. F. Blaxland (who prepares the report), Malcolm King, R. W. Harvey
and F. N. Lewis.
178
Motley Rice Plaintiff’s Exhibit no. 10739: Re CSR (& ABA & SGIO)/Slater and Gordon Agreement
with CSR’s lawyers. This agreement was for a period of five years from the date of signing, i.e. till
1994.
179
Interview with John Gordon, barrister, Melbourne, July 2008.
180
CSR (1989), State Library of Western Australia, Battye Library, PR8679, Wittenoom articles,
‘Wittenoom and Asbestos: the answers to questions some shareholders have asked’, 3 July.
181
Vojakovic & Gordon, Op Cit. pp. 407-408.
182
McCulloch (2006), p.15.
183
Interview by radio journalist Umberto Martinengo, SBS Italian radio program, with Sperandio
Delpero. 11 October 1989. It’s not really fair…..but I won’t even make it to spend it [his damages
payment] if they give it to me. So it’s better that I take it and that I enjoy my remaining days. At least I
can… I live in an asbestos house. I’ll buy a car which I can enjoy the short time that I have, if I can.
311
Delpero died in 1996, at the age of 71. Bruno Giannasi, aged 67, and his wife Valentina were
also part of that class settlement, reached the year after Bruno Giannasi’s death. Alvaro,
their son, remembers that his mother was awarded more than his father because of her loss
of earnings, because she was her husband’s full-time carer.
With CSR’s breach of its duty of care and proof of their negligence established, the
way opened for other victims to seek damages. From the 1990s, as more ex-Wittenoom
workers were diagnosed with mesothelioma, they would pursue common law claims for
damages, including psychiatric injuries.
184
One claimant, Liborio Napolitano, had gone to
Wittenoom as a 21 year old. He suffered from severe depression and lived with the fear of
developing and dying from the horrific mesothelioma symptoms. He did so in 1996.
185
Several participants mentioned out of court settlements, reached as victims became too ill to
face the stress of a courtroom process, in their final months before dying from mesothelioma.
The confidentiality clauses contained in such settlements preclude public scrutiny. The
complex decisions arrived at by judges have perhaps steered victims to out of court
settlements, for asbestos victims still have to go through the emotionally-charged process of
proving their claim. Decisions have not always been in favour of the plaintiffs, requiring them
to pursue the appeals process.
186
This makes the comments of Maria Martino at her late
husband’s court hearing, in the later stages of his illness, all that more poignant:
We would take Michael with us but he wouldn’t sit in on
the hearing because it wasn’t very nice sitting listening to
the defence trying to defend a company against a child
that was just up there with his family and being a child
and playing — doing what normal kids do — that was
really hard. To sit there and listen to them tell you that
your life expectancy is only worth [so many] dollars…
How can you put prices like that on a man with young
kids?
187
184
In W.A. court searches I found the cases of Liborio Napolitano-vs-CSR Ltd & Midalco Pty Ltd
[1994] Supreme Court of Western Australia, 30 August. Della Maddalena-vs-CSR Ltd & ANOR [2002]
WADC 260, 2002, District Court Of Western Australia, 17 December 2002. Della Maddalena-vs-CSR
LTD & ANOR [2004] The Full Court Of Supreme Court Of Western Australia, 13 October. CSR Ltd &
Anor and Arturo Della Maddalena [2006] High Court of Australia, 2nd February. Francesco Candeloro
vs CSR and Midalco Pty Ltd [1996] District Court of Western Australia, 9 May.
185
Napolitano, Op Cit.
186
See, for example, Della Maddalena-vs-CSR Ltd & ANOR [2002] WADC 260, 2002, District Court Of
Western Australia, 17 December. Della Maddalena-vs-CSR LTD & ANOR [2004] The Full Supreme
Court Of Western Australia, 13 October. CSR Ltd & Anor and Arturo Della Maddalena [2006] High
Court of Australia, 2nd February.
187
Interview with Maria Martino, Perth, November, 2010.
312
In 2010 the availability of funds for compensation payments to future asbestos victims
was in doubt. CSR’s proposed demerger — with the new CSR solely responsible for meeting
asbestos claims, but with less capital and no access to Sucrogen’s assets and earnings —
had raised this question in view of concerns of a further reduction in assets.
188
In the event of
the sugar division being sold, in 2010 the Australian Manufacturing Workers’ Union
requested that “an amount be set aside as a safety net available in the event of an
unexpected increase in compensation payments”. The union also requested a meeting be
arranged with all interested stake holders and all asbestos support groups to discuss with the
actuaries their modelling in relation to “a possible future scenario whereby, whether on a
temporary or permanent basis, the claims could not be paid and CSR’s liabilities dramatically
increased”.
189
Representations by various unions to gain CSR’s assurances for funds to be
set aside for future claims did not receive a definitive response.
190
By July 2010 the sale of Sucrogen to Wilmar, a Singaporean publicly listed
multinational company, had been concluded. CSR had a range of capital management
options to utilise proceeds from the deal — with an expected net profit of about $1.6 billion,
subject to capital gains tax liability and transaction costs. CSR confirmed that “it continues to
accept its responsibilities with respect to its asbestos liabilities and will maintain a
responsible capital structure to support its future obligations”. CSR Chairman Jeremy
Sutcliffe stated that in determining the use of the cash from the sale and CSR’s asbestos
provisioning they would need to look at three things, the first of which was to: “recognize our
historic asbestos liabilities… nothing changes. We’ve embarked upon very detailed
disclosure year on year and that’s going to continue”.
191
The Treasurer, Wayne Swann,
approved the sale under the foreign acquisition law “subject to legally enforceable
188
Maiden, Malcolm (2010), 'History was against CSR on asbestos',
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