New benchmark set for general damages and exemplary damages for a mesothelioma claim caused by asbestos exposure – Latz v Amaca P/L (formerly James Hardie & Co P/L) [2017] SADC 56

The plaintiff was diagnosed with terminal malignant mesothelioma in October 2016. He alleged that he contracted this disease as a result of exposure to asbestos that was manufactured and supplied by James Hardie and Coy Pty Ltd (James Hardie), which occurred between 1976 and 1977. The plaintiff sued Amaca Pty Ltd (the defendant) as the successor to James Hardie.

Liability

The defendant disputed liability on the basis that the evidence fell short in establishing that the plaintiff was exposed to asbestos as alleged. Upon considering the facts, Gilchrist J accepted the plaintiff's evidence and found in favour of the plaintiff on the issue of liability. His Honour went on to consider damages.

General damages

The plaintiff submitted that the assessment of general damages must commence with the recognition that there is one common law of Australia and it was appropriate for the District Court to take into account comparable awards, both in South Australia and in other jurisdictions, when assessing damages for pain and suffering.

The plaintiff submitted that, taking into consideration awards of general damages in other jurisdictions, an appropriate award for general damages would be in the order of $300,000.

The defendant submitted that the range of damages awarded in South Australia for mesothelioma claims in the last 10 years reflected a range between $100,000 and $190,000. The defendant argued that there was no warrant to increase the awards on account of significant changes in the cost of living etc, and the appropriate award in this matter was $175,000.

Gilchrist J followed the approach set down by the Full Court of the Supreme Court of South Australia in BHP Billiton Limited v Hamilton² and assessed general damages in the sum of $230,000.

Exemplary damages

The plaintiff submitted that the District Court, through its award of exemplary damages, should make an emphatic statement condemning the defendant for its conduct, sending a message to others that conduct of this nature should never happen again.

Conversely, the defendant submitted that the District Court should not entertain an award for exemplary damages because the defendant is a party to a charitable trust established to compensate the victims of asbestos diseases. The defendant went on to argue that if the District Court was minded to make an award, then the award should be in line with Parker v BHP³ in which the trial judge awarded $20,000 for exemplary damages.

His Honour stated that if he were judging James Hardie's misconduct by today's standards, he would have awarded a very large sum for exemplary damages; however, as he was looking at exemplary damages by reference to community attitudes and standards in 1976, he made a far more modest award. Nonetheless, his Honour found that the defendant was fully informed about the dangers of asbestos and whilst its misconduct was not malicious or intentional in the sense it did not deliberately intend to harm, its conduct amounted to reckless indifference. His Honour found that the defendant's culpability was greater than BHP's had been in Parker v BHP, and therefore the award must be greater. An award of $30,000 was made for exemplary damages.

Sullivan v Gordon‑type damages

His Honour also gave guidance as to the types of services that will be allowed under Sullivan v Gordon‑type damages. His Honour stated that the words 'domestic services' are generally regarded as referring to the variety of household services that are performed for an individual or a family, such as cooking, caring for children and elderly dependents, and housekeeping (for example, doing laundry and ironing, cleaning and household maintenance, shopping for food and items used in the house, and other household errands).
The plaintiff claimed $121,048 for past and future gratuitous domestic services, which included time spent with his grandchildren each week. In his Honour's view, there was a distinction between babysitting and spending time with grandchildren as part of the loving relationship between grandparents and grandchildren, and concluded that much of the time the plaintiff spent with his grandchildren was not in the nature of domestic services. Accordingly, his Honour allowed $100,000 for past and future Sullivan v Gordon damages.

The District Court's decision has set a new benchmark award for general damages for a plaintiff with mesothelioma. His Honour was persuaded to review and take into account awards made in other jurisdictions when assessing damages for pain and suffering. It remains to be seen whether this case will be the start of a trend of increasing awards for general damages. This was the first case in South Australia in which exemplary damages have been awarded against Amaca Pty Ltd.

Underwriters and reinsurers will need to be aware of the trend in South Australia and adjust their reserves accordingly.
It remains to be seen whether plaintiffs exposed in the 1980s will press for an increase in exemplary damages from the $30,000 awarded in this matter.