Amaca v Latz

[2017] SASCFC 145


The plaintiff was diagnosed with terminal mesothelioma in October 2016. He alleged he contracted the disease as a result of his exposure to products manufactured by James Hardie and Coy Pty Ltd (“James Hardie”), between 1976 and 1977 when he constructed a fence on his property using a James Hardie product called Super Six.

The plaintiff sued Amaca Pty Ltd (“Amaca”) as the successor to James Hardie.

District Court Decision

The Court at first instance found that the plaintiff had suffered mesothelioma as a result of his exposure to the James Hardie product and Amaca as the successor to James Hardie was liable to the plaintiff for his injuries.

In determining the plaintiff’s damages, there were a number of unusual issues which were required to be considered by the Court, including whether his State pension should be considered future economic loss and whether exemplary or punitive damages should be awarded.

Economic Loss

The plaintiff was employed by the State of South Australia between 1974 and 2007 and as a result of that service was entitled to a State pension upon his retirement if he met certain criteria. The plaintiff met the criteria and was entitled to a weekly benefit as a result of the State pension in the amount of $981 net per week. This pension was to be paid for the remainder of the plaintiff’s life and then upon his death two thirds of the benefit would be paid to spouse, eligible partner or children either in a weekly or lump sum amount.

The Court held that the plaintiff was entitled to recover for the loss of his State pension for the remainder of his expected life with no reduction made for the benefit that would be paid to his de facto partner upon his death. In its reasoning, the Court likened such a benefit to the de facto partner, like a permanent disability insurance benefit and had the plaintiff taken out such insurance, the entitlement to an insurance payout would not feature in the assessment of damages and would not reduce the recovery for economic loss of the State pension.

Exemplary Damages

Counsel for the plaintiff contended that the Court “make an emphatic statement on behalf of the public at large condemning James Hardie for what it did and to send a message to others that something like this should never happen again”, and considered the case a watershed moment.

The Court in determining the award considered that James Hardie was well aware that by 1976 when the plaintiff used its product, there was a risk of dying as a result of using its product which could be minimised by taking some precautions which James Hardie failed to give him and its failure to do so was motivated by thirst for profit.

The Court noted that if James Hardie were to be held accountable to today’s standards, then the award for exemplary damages would be significantly higher. But taking into account the community attitudes and standards when the plaintiff would have been injured a more modest award was in order and awarded $30,000.

Court of Appeal Full Court Civil Decision

There were several issues on appeal and cross appeal by the Appellant/Defendant and Respondent/Plaintiff, but the most significant related to the economic loss and exemplary damages.

Economic Loss

In the Court of Appeal, Amaca contended that the benefit that was to be paid to the plaintiff’s de facto partner should be considered in the benefit for future economic loss.

The Court of Appeal held that the Judge at first instance erred in not deducting the benefit that would be paid to the de facto partner and that it was not the intention of the fund that the plaintiff could continue to vicariously enjoy the pension payable by the fund and at the same time receive the same amount as damages payable by Amaca by reason of his loss of that very pension, or in other words, the plaintiff could not receive the same benefit twice.

Exemplary Damages

The Court of Appeal noted the primary Judge’s findings with respect to the knowledge that James Hardie about the risk to the health of persons who used its products dated as far back as 1938 and that with the passage of time only became more increasingly aware of the risk to health their products created.

The Court of Appeal held that the award for exemplary damages given at first instance, even with the consideration of the restraint of courts awarding exemplary damages, is manifestly inadequate and that the award should be increased to $250,000.

The Court noted in providing such an award it was designed to act as a deterrent to Amaca and others minded to behave in a similar way and demonstrate the Court’s disapproval of such conduct.

Why this case is important

The Court has shown that it is not willing to tolerate companies or corporate persons who engage in conduct such as James Hardie did and manufacturer products which cause significant risk to health to escape punishment and is willing to award substantial exemplary/punitive damages on behalf of injured persons to deter future companies or corporate persons from making the same mistake.

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