Litigation in Australia: CSR and James Hardie
Asbestos exposure at CSR and James Hardie’s asbestos mines and in CSR, James Hardie
and Wunderlich manufacturing plants has led to the deaths of many workers, their wives and
children. Surviving families have faced the prospect of a difficult financial future.
105
As early
as the 1930s but more particularly in the 1970s, the first victims who pursued common law
claims were unsuccessful for three reasons: CSR and James Hardie contested victims’
100
A company’s ownership of both the asbestos mines and factories.
101
McCulloch & Tweedale, Op Cit. pp. 50-1.
102
Lak, Daniel, Aljazeera website (2012), ‘Canada axes support for asbestos mining’.
http://www.aljazeera.com/indepth/features/2012/10/201210167129546890.html
, 17
th
October.
103
McCulloch & Tweedale, Op Cit. pp. 152 & 225.
104
Ibid. p. 226.
105
McCulloch (1986), Op Cit. Asbestos Diseases Society of Australia Inc., Op Cit. Peacock, M. (2009),
Killer Company: Bernie Banton's fight with James Hardie asbestos (Sydney ABC Books for the
Australian Broadcasting Corporation).
40
claims; both companies prepared effective strategies to avoid damages payments; if either of
those strategies failed the death of a plaintiff put paid to the court hearing or decreased the
amount surviving family could receive.
106
For decades the James Hardie Company has either contested or gone to great
lengths to avoid damages payments.
107
In 2001 the company moved offshore, having
assured the NSW government that it would provide for future asbestos victims. James Hardie
had established the Medical Research and Compensation Foundation (MRCF) to meet future
asbestos claims.
108
The foundation was, however, more than a billion dollars short of
funds.
109
With the revelation that the MRCF was bankrupt, in 2007 corporate regulator ASIC
(Australian Securities and Investment Commission) charged the 2001 directors with
breaching various sections of the Corporations Act 2001.
110
In 2009 the company’s seven
non-executive directors were found guilty of breaching their duties as directors of the
company and banned from public office for five years and each fined $30,000. CEO Peter
Macdonald was fined $350,000 and banned for 15 years.
111
Their successful appeal in 2010
was eventually overturned. ASIC successfully appealed to the High Court in May 2012.
112
In
November 2012 the term of the directors’ disqualification had been halved on appeal.
113
While many asbestos victims applied for compensation under the act, most people who
developed a terminal disease chose not to face the trauma of court proceedings; others did
not realise they could claim or did not know their condition was asbestos-related.
114
In the case of early ABA compensation claimants, the award of damages was
uncertain because of the few documents CSR or ABA Limited handed over during legal
106
McCulloch (1986), Op Cit. Hills, Op Cit. Vojakovic & Gordon, Op Cit. Peacock (2009), Op Cit.
107
Motley Rice Plaintiff’s Exhibit no. 10653: Department of Labour Worker's Compensation Act -
Dangerous Industrial Processes and Disease Arising Therefore. Motley Rice Plaintiff’s Exhibit no.
10654: Workers’ Compensation Reports: pp. 129-132, In the Workers’ Compensation Commission of
New South Wales — Jones vs James Hardie and Co. Ltd, 1939. Peacock (2009), Op Cit.
108
Peacock (2009), Op Cit, Chapter 10.
109
Peacock (2009), Op Cit. p. 216.
110
Australian Securities and Investments Commission (2007b). 'ASIC Commences Proceedings
Relating to James Hardie' [online], 15 February.
111
Asbestos Diseases Foundation Newsfeed: www.adfa.org.au/news2012.htm#woodsreef page 3
“High Court Rules Directors of Asbestos Company James Hardier Mislead”. Insurance Business
online. ‘James Hardie vs ASIC: monitor public statements or risk court wrath’, 4 May 2012.
112
Asbestos Diseases Foundation Newsfeed: www.adfa.org.au/news2012.htm#woodsreef page 3
“High Court Rules Directors of Asbestos Company James Hardie Mislead”.
113
ABC NEWS, Monday 12 November 2012 3:38 p.m. AEDT, posted at
http://www.abc.net.au/news/2012-11-12/hardie-directors-have-disqualifications-reduced/4367320.
114
Peacock (2009), Op Cit. p. 87.
41
discovery. Yet by the late 1970s CSR had gathered 20,000 documents that related to
Wittenoom. These were released only after several motions of inadequate discovery were
brought against them in the Heys and Barrow case of 1988.
115
In 1977 CSR Company
Secretary Blaxland had concluded that their negligence could be established and could
extend to a pre-1960 mesothelioma case.
116
On legal advice, they hid behind Midalco’s
limited liability. Midalco (previously known as ABA Limited) had been stripped of its assets in
1975 but not liquidated. They would not have the money to pay an award of damages in the
event of being sued.
117
The first writ issued by a mesothelioma victim was that of Cornelius Maas in Western
Australia in 1978. CSR and the SGIO (State Government Insurance Office) decided that to
settle would be setting a dangerous precedent. They fought Maas’s claim in an attempt to
dissuade future claims. Unless Maas obtained a judgement before his death, his writ would
founder. His wife would be entitled to an award under the Fatal Accidents Act, but this would
be no greater than the benefit under the Workers’ Compensation Act. Maas died two weeks
after the issuing of his writ.
118
A year later Joan Joosten, the ABA secretary in Wittenoom,
developed mesothelioma. She issued a writ against Midalco.
119
The judge ruled that the
company had not been negligent. Joosten appealed to the Full Court of Western Australia in
1980, but died on the morning of the 10 March when her appeal was to be heard.
120
Discouraged by the Joosten decision, it would be several years and after the change to the
Statute of Limitations legislation before a case was mounted against CSR in Western
Australia. In 1983 under pressure from the Asbestos Diseases Society of Australia, the
Western Australian Labour government made amendments to the Statute of Limitations:
persons whose time for making a claim had expired received a further three years from 18
January 1984 in which to lodge a claim.
121
For everyone else it was six years from the time
115
Vojakovic & Gordon, Op Cit. p. 393.
116
Vojakovic & Gordon, Op Cit. p. 386. Motley Rice Plaintiff’s Exhibit no. 10647: Report on Asbestos
Wittenoom, from Company Secretary J. F. Blaxland to General Manager, 29 April 1977.
117
Vojakovic & Gordon, Op Cit. pp. 378 & 388-397.
118
Vojakovic & Gordon, Op Cit. pp. 381-2. Asbestos Diseases Society of Australia Inc., Op Cit. pp. 14-
15.
119
ABA Limited had undergone a name change in 1975.
120
Asbestos Diseases Society of Australia Inc., Op Cit. pp. 14-15.
121
Vojakovic & Gordon, Op Cit., p. 397.
42
they discovered they had an asbestos-related disease.
122
The first successful worker’s claim for common law damages for an asbestos-related
disease occurred in 1985 in the Victorian Supreme Court action of Pilmer v. McPhersons Ltd.
Pilmer’s award of $270,000 damages prompted the Asbestos Diseases Society to approach
his lawyers, Slater and Gordon, to bring other cases before the Western Australian courts.
Their first case, Simpson v. Midalco in 1987, was unsuccessful. Pressure to abandon other
claims was considerable because of the mounting costs from the Joosten and Simpson court
losses. The ADSA and Slater and Gordon continued to represent plaintiffs.
In 1987 Slater and Gordon’s Perth office issued some 400 claims for civil damages
against Midalco and CSR. Most were on behalf of Wittenoom victims, since many of the writs
related to the pre-1959 period when it was said Midalco had no insurance and by 1987 no
assets. In an attempt to dissuade potential claimants, CSR press statements reminded
Wittenoom victims of the lack of success of previous claims. Public suggestions that CSR
was liable for the victims’ damages claims met with threats of defamation proceedings.
123
CSR’s secret strategy almost worked. The tide turned against them when in 1988 the
Rabenalt v. Midalco case in Victoria was decided in favour of the plaintiff, Rabenalt. He was
awarded compensatory damages of $426,000 and punitive damages of $250,000. CSR
appealed, but the appeal court determined there was a clear case of “continuing, conscious
and contumelious disregard” by ABA Limited for Rabenalt’s right to be free of the risk of
injury and disease.
124
Not long after, the Court of Appeal in the Wally Simpson case ordered
a retrial, with CSR quickly settling. In the 1988 Heys and Barrow case CSR were ordered to
present the 20,000 documents they held. Peter Heys died several months prior to and
Barrow shortly after the successful decision was handed down in August.
125
By October 1988
someone within CSR leaked the company’s secret strategy, paving the way for the
settlement of the class action claims made in 1987 against Midalco and CSR.
Following the success of the class action in 1989, CSR announced they would never
122
Interview with John Gordon, barrister, Melbourne, July 2008.
123
Vojakovic & Gordon, Op Cit. p. 405.
124
Asbestos Diseases Society of Australia Inc., Op Cit. pp. 14-21.
125
Ibid. pp. 14-21. The case had taken 180 days.
43
pay damages for environmental asbestos exposure. The company, which had changed
lawyers, unsuccessfully employed similar delaying tactics to deter environmental exposure
claimants. Courts would award substantial damages to the children and wives about to die of
mesothelioma. CSR went so far as to appeal to the High Court of Australia to refuse a
statutory compensation payment to the widow of a former CSR fitter and turner. The three
judges did not even leave the bench in order to dismiss CSR’s application.
126
As of March
2000 CSR had paid out in excess of A$100 million in settlements and legal fees in the U.S.,
while in Australia by 2006, the payout was in excess of A$ 500 million in damages and
compensation.
127
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