Babcock International Limited v Babcock Australia Limited & Eraring Energy; Babcock Australia Limited v Eraring Energy & Babcock International Limited [2003] NSWCA 6 (5 February 2003)

Last Updated: 6 February 2003

NEW SOUTH WALES COURT OF APPEAL

CITATION: Babcock International Limited v Babcock Australia Limited & Eraring Energy; Babcock Australia Limited v Eraring Energy & Babcock International Limited [2003] NSWCA 6

FILE NUMBER(S):

40031/02

40627/01

HEARING DATE(S): 09/12/02, 10/12/02,11/12/02

JUDGMENT DATE: 05/02/2003

PARTIES:

Babcock International Limited (Appellant) v Babcock Australia Limited (1st Respondent) and Eraring Energy (2nd Respondent)

Babcock Australia Limited (Appellant) v Eraring Energy (1st Respondent) & Babcock International Limited (2nd Respondent)

JUDGMENT OF: Sheller JA Heydon JA Ipp JA

LOWER COURT JURISDICTION: Dust Diseases Tribunal

LOWER COURT FILE NUMBER(S): DDT 17/1992

LOWER COURT JUDICIAL OFFICER: Curtis J

COUNSEL:

T F Bathurst QC/ M C L Dicker (Appellant: CA 40031/01; Second Respondent:CA 40627/01)

G Inatey SC/ D T Miller (Appellant: CA 40627/01; 1st Respondent: CA 40031/01)

B M J Toomey QC/J A Gracie/T Moisidis (2nd Respondent: CA 40627/01)

SOLICITORS:

Mallesons Stephen Jaques (Appellant: CA 40031/02; 2nd Respondent: CA 40627/01)

Moray & Agnew (Appellant: CA 40627/01; 1st Respondent: CA 40031/02)

Goldrick Farrell Mullan (2nd Respondent: CA 40031/02; 1st Respondent: CA 40627/01)

CATCHWORDS:

TORT - Duty of care of designers of works, suppliers, contractors and employers to employees exposed to asbestos - Contribution proceedings under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 - Claim for damages by one joint tortfeasor in direct action for damages against other joint tortfeasor for amount first tortfeasor required by contribution proceedings to pay plaintiff - Pure economic loss - Damages representing the costs incurred in defending a third party claim - Apportionment of liability under the Law Reform (Miscellaneous Provisions) Act 1946 - Knowledge of statutory corporations - Right of appeal from the Dust Diseases Tribunal. D

LEGISLATION CITED:

Electricity Commission Act 1950, ss 5(1)(b), 6(1), 7

Law Reform (Miscellaneous Provisions) Act 1946, s 5

Law Reform (Miscellaneous Provisions) Act 1965, s 9

Dust Diseases Tribunal Act 1989, ss 25B(1), 32(1)

Hydro-Electric Commission Act 1944 (Tas)

Factory and Work Shop Act 1901 (UK), s 79

DECISION:

See paragraphs 159 to 166

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40031/02

CA 40627/01

DDT 17/1992

SHELLER JA

HEYDON JA

IPP JA

Wednesday 5 February 2003

BABCOCK INTERNATIONAL LIMITED v BABCOCK AUSTRALIA LIMITED & 1 OR

BABCOCK AUSTRALIA LIMITED v ERARING ENERGY & 1 OR

FACTS

Robert William Royal was employed by Babcock Australia Limited ("BAL") between 14 June 1954 and 22 March 1957. During this period, BAL was contracted to construct boilers required for the Wangi Power Station. Mr Royal participated in the construction of boilers, which involved the use of asbestos rope. During this period he contracted asbestos related diseases.

The Commissioner for Railways initially undertook the works for Wangi Power Station and accepted Babcock International Limited's ("BIL") tender to construct the boilers. BAL was a wholly owned subsidiary of BIL and, at BIL's request, the Commissioner consented to a novation of the contract to BAL.

The Commissioner was succeeded by the Electricity Commission, Pacific Power and Eraring Energy. Throughout Mr Royal's employment by BAL, the Electricity Commission owned Wangi Power Station. Pacific Power and Eraring Energy were successively liable for the negligent acts and omissions, and breaches of statutory duty by the Electricity Commission.

Mr Royal brought an action in the Dust Diseases Tribunal against BAL and Pacific Power for damages suffered as a result of asbestos related diseases he contracted throughout the course of his employment. O'Meally P held that BAL and Pacific Power had caused Mr Royal to be negligently exposed to asbestos. There was a verdict and judgment for Mr Royal in the sum of $145,000. Eraring Energy then succeeded Pacific Power's rights and obligations.

Thereafter, pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946, BAL and Eraring Energy commenced proceedings in the Dust Diseases Tribunal seeking orders to apportion liability between themselves. They also sought contribution from BIL, asserting that BIL owed a duty of care to Mr Royal as the designer of the works and systems of work and supplier of asbestos to BAL (the "contribution proceedings").

Curtis J held that BIL owed a duty of care to Mr Royal, which it had breached by supplying asbestos rope to BAL without appropriate warnings. BIL's culpability was held to be far greater than BALs or the Electricity Commissions because BIL had actual knowledge of the dangers of asbestos exposure and exercised extensive control over BAL. Liability was apportioned 10% to Eraring Energy, 15% to BAL and 75% to BIL.

Furthermore, BAL claimed damages in negligence from BIL and Eraring Energy, claiming that they had negligently cased it to suffer economic loss, being the capital, interest and costs from the first proceedings (the "direct action"). Curtis J held that BIL was liable to BAL with regard to the economic losses incurred by BAL in the first proceedings.

Curtis J undertook certain calculations seemingly intending to give effect to the apportionment of 10: 15: 75, but in the context of making orders in the direct action. The apportionment of liability in the direct action was, however, inconsistent with the apportionment in the contribution proceedings. The orders made by Curtis J further took into account a payment of $72,500 by James Hardie and Coy Pty Limited to BAL. Subsequent to the judgment of O'Meally P, BAL cross-claimed for contribution against James Hardie. BAL and James Hardie agreed that James Hardie would pay $72,500 to BAL "and final settlement of any claim [BAL] has or had against James Hardie arising out of the injury sustained by Mr Royal ...". Curtis J assumed that the sum was paid, and relying on the onus of proof and the state of the pleadings, held that BAL's claims against BIL were satisfied to the extent of $72,500.

BIL and BAL appealed from the judgment of Curtis J.

HELD (per Ipp JA, Heydon JA and Sheller JA agreeing):

1. BIL's first ground of appeal, that Curtis J failed to appropriately apply the Law Reform (Miscellaneous Provisions) Act 1946 when assessing contribution in circumstances where one party seeking such contribution had been successful in a direct claim against the other, was upheld. It was not open to Curtis J to make findings in the direct action about the degrees of fault of BAL and BIL that differed from the findings in the contribution proceedings. Curtis J dealt with the degree to which BAL and BIL were responsible for the capital, interest and costs in the contribution proceedings, as between themselves and to Mr Royal. Thus, as the liability of BIL was completely absorbed by the contribution orders, there was no additional amount for which BAL could hold BIL liable in the direct action.

2. BIL's second ground of appeal (and BAL's first ground of appeal), that Curtis J erred in finding that Eraring Energy did not have actual knowledge of the danger of asbestos (and therefore erred in assessing contribution), was dismissed. Curtis J was correct in holding that the knowledge of the Minister of Health and Department of Health should not be imputed to the Electricity Commission, and therefore, to Eraring Energy. One should not attribute to statutory corporations, knowledge of Ministers of the Crown whose responsibilities are unrelated to the corporation and who have no direct statutory connection with it: Launceston Corporation v The Hydro-Electric Commission (WA) [1959] HCA 12; (1959) 100 CLR 654; State Superannuation Board v Commissioner for State Taxation (WA) [1996] HCA 32; (1996) 189 CLR 253.

3. BIL's third ground of appeal, that Curtis J erred in finding that BIL had actual knowledge of the danger of asbestos (and therefore erred in assessing contribution), was dismissed. Curtis J was justified in finding that Mr Critchley, the works manager for BIL, had actual knowledge of the danger. As he occupied so senior a position in BIL's management, his knowledge could be viewed as that of the company: Smorgon v Australia & New Zealand Banking Group Limited: Federal Commissioner of Taxation v Smorgon [1976] HCA 53; (1976) 134 CLR 475; Meridian Global Funds Management Asia Limited v Securities Commission [1995] 2 AC 500.

4. BIL's fourth ground of appeal, that Curtis J incorrectly apportioned fault, was dismissed. BIL alone had actual knowledge of the dangers of asbestos exposure. BIL had effective control of BAL and supplied the asbestos to BAL with instructions of how to construct the boilers. Thus, they were most culpable.

5. BIL's fifth ground of appeal, that Curtis J erred in treating a notice filed by it under s25B of the Dust Diseases Tribunal Act 1989 as an admission, was accepted. However, this error had no effect on the result of the case.

6. BIL's sixth ground of appeal, that Curtis J erred in finding that BIL owed a common law duty to protect BAL from economics loss and claims for damages in negligence arising out of the boiler construction, was dismissed. Claims for damages representing the costs incurred in defending a third party claim have previously been recognised and accepted: Hammond and Company v Bussey (1887) 20 QBD 79; Dein v Wentworth Goldfield Proprietary Company (1989) 15 WN(NSW) 280.

7. BAL's second ground of appeal, that Curtis J erred in treating a sum of $72,500 paid by James Hardie to BAL as pro tanto satisfaction of BAL's cross claims against BIL and Eraring Energy, was dismissed. The onus was on BAL to prove the extent to which any part of the $72,500 was applied to payment of its costs rather than satisfaction of the claim.

SUMMARY, ORDERS AND REMARKS AS TO COSTS

1. BIL's first ground of appeal upheld. The responsibility, between themselves, of BIL, BAL, and Eraring Energy for the capital, interest, and costs of the judgment and verdict awarded by O'Meally P to Mr Royal be shared in the proportion of 75% as regards BIL, 15% as regards BAL, and as regards Eraring Energy 10%.

2. The order made by Curtis J that BIL pay to BAL $96,252.10 is set aside and the parties are directed to bring in short minutes of order at the hearing on 7 February 2003 referred to in paragraph 166.

3. BIL's sixth ground of appeal dismissed. The order of Curtis J that BIL pay to BAL 83% of BAL's costs incurred in Mr Royal's action (subject to the deduction of $72,500) stands.

4. BIL's second ground of appeal and BAL's first ground of cross-appeal dismissed.

5. BIL's third and fourth grounds of appeal dismissed.

6. BIL's fifth ground of appeal upheld, but would make no orders consequential upon this.

7. BAL's second ground of cross appeal dismissed.

8. During the course of the appeal, Mr Inatey referred to an abandonment by BIL of certain grounds of appeal and indicated that he would seek a special order for the costs of the appeal. Sheller JA, the presiding judge, then requested Mr Inatey to set out in written form exactly what orders should be made as to costs and the reasons for any submissions so made. His Honour requested that the other parties respond in writing to Mr Inatey's submissions. Unfortunately, this request has not been complied with. No order as to costs at this stage. Matter to be adjourned to not before 10.30 am on 7 February 2003, at which time the court will hear oral submissions as to costs with the intent that final orders will be made there and then. Each party will be allowed no more than 10 minutes for oral submissions. Each party should file written submissions as to costs, with a minute of proposed orders, by not later than 4.00 pm on 6 February 2003.

********

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40031/02

CA 40627/01

DDT 17/1992

SHELLER JA

HEYDON JA

IPP JA

Wednesday, 5 February 2003

BABCOCK INTERNATIONAL LIMITED v BABCOCK AUSTRALIA LIMITED & 1 OR

BABCOCK AUSTRALIA LIMITED v ERARING ENERGY & 1 OR

Judgment

1 SHELLER JA: I agree with Ipp JA.

2 HEYDON JA: I agree with Ipp JA.

3 IPP JA:

Three sets of proceedings

4 Between 14 June 1954 and 22 March 1957, Robert William Royal was employed by Babcock Australia Limited ("BAL") as an iron worker. During that period, BAL was the contractor constructing the boilers required for the Wangi Power Station and Mr Royal participated in that work. In that period, and in the course of that employment with BAL, he contracted asbestos related diseases.

5 The Commissioner for Railways initially undertook the works for the Wangi Power Station. The Commissioner was succeeded in that capacity by the Electricity Commission, Pacific Power and Eraring Energy. During the period of Mr Royal's employment by BAL, the power station was owned and occupied by the Electricity Commission, for whose negligent acts and omissions and breaches of statutory duty, Pacific Power and Eraring Energy were successively liable.

6 In regard to the position of Eraring Energy, the trial judge (Curtis J) explained:

"Eraring Energy is the successor in title to such assets and liabilities of the Commissioner for Railways and the Electricity Commission of New South Wales (Elcom) and Pacific Power (PP) as relate to the Wangi Power Station. Elcom came into existence on 22 May 1950 pursuant to the Electricity Act 1950. Elcom was established by that Act for the purpose of acquiring the major power generating organisations in New South Wales and amalgamating them into one system capable of supplying the needs of all electric distributing organisations within the State including those of the Commissioner for Railways. The Commissioner for Railways had originally established his own power stations to supply metropolitan traction needs and over the years came to supply electricity in bulk to local government bodies. It was the Commissioner who commissioned the power station at Wangi, however, the works were by force of the Electricity Act transferred to Elcom whose officers supervised construction".

7 Initially, Babcock International Limited ("BIL") had tendered for the boiler construction contract relating to the construction of the Wangi Power Station. The tender was for the construction of boilers that BIL had designed. The Commissioner for Railways accepted BIL's tender. At that time BAL was the wholly owned subsidiary of BIL. After the boiler construction contract between BIL and the Commissioner had been entered into, BIL requested the Commissioner to consent to a novation of the contract to BAL and the Commissioner agreed. BAL then undertook the construction of the boilers.

8 Mr Royal brought an action in the Dust Diseases Tribunal against BAL and Pacific Power for the damages he suffered in consequence of the asbestos related diseases which he contracted. O'Meally P held that both BAL and Pacific Power had caused Mr Royal to be negligently exposed to asbestos and each was responsible for the consequences of that negligent exposure. He held that there should be a verdict and judgment for Mr Royal in the sum of $145,000. Thereafter, Eraring Energy succeeded to the rights and obligations of Pacific Power.

9 BAL and Eraring Energy then commenced proceedings in the Dust Diseases Tribunal seeking orders pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 apportioning liability between themselves. In addition they each sought a contribution from BIL pursuant to that statute, contending that BIL (as designer of the works and systems of work and supplier of asbestos to BAL) owed a duty of care to Mr Royal. I shall refer to these proceedings as the "contribution proceedings".

10 In addition, by a separate and independent action, though it was pleaded as a cross-claim, BAL claimed damages in negligence from BIL and Eraring Energy. BAL claimed that BIL and Eraring Energy had negligently caused it to suffer economic loss (being the capital, interest and costs it had been ordered to pay Mr Royal in the first mentioned proceedings, together with its own costs of defending Mr Royal's proceedings and defending and prosecuting cross claims arising out of them). I shall refer to this action as the "direct action".

The findings of Curtis J

11 Curtis J heard the contribution proceedings and the direct action concurrently. On 19 July 2001 he delivered judgment in both.

12 As regards the contribution proceedings, his Honour held that BIL owed a duty of care to Mr Royal. He found that at the relevant time BIL exercised substantial control over the activities of BAL. Further, through one Mr Critchley (described by his Honour as "the controller of all BIL's works in Great Britain"), BIL had actual knowledge that asbestos, used in the construction of boilers designed and supplied by it to BAL as part of the Wangi Power Station contract, "occasioned to the persons engaged upon the work a real risk of death or serious injury". He held that despite this knowledge, BIL had not taken any steps to warn Mr Royal of the dangers of asbestos and had not provided appropriate instructions for the safe working of the asbestos material it had supplied. BIL had thereby breached the duty of care it owed Mr Royal.

13 Curtis J found that while BAL and the Electricity Commission (the relevant predecessor of Eraring Energy), at the relevant time, each owed a duty of care to Mr Royal, and each should have known of the dangers caused by exposure to asbestos, neither had actual knowledge of those dangers. Each, nevertheless, had breached the duty of care it owed Mr Royal.

14 His Honour found that, factually, the greatest contribution to Mr Royal's injuries came from fibres liberated from certain asbestos rope that BIL had supplied. The rope was used to caulk gaps between steam pipes that were part of the boiler apparatus. Curtis J said in this regard:

"This rope was supplied exclusively by BIL as were the detailed instructions for use. It was not possible to follow those instructions without generating dangerous concentrations of respirable asbestos fibre. The supply of the rope without warnings and the publication of the erecting instructions without instruction to wear a respirator are primarily responsible for the damage. The tortious omissions on the part of BAL and [the Electricity Commision] in this regard, being failures to supervise the caulking work, pale in comparison".

15 By reason of BIL's actual knowledge of the dangers of asbestos, and the control it exercised over BAL, Curtis J held that the culpability of BIL for the damages suffered by Mr Royal was far greater than that of BAL and the Electricity Commission. Curtis J was of the view that BAL was "itself a victim of Mr Critchley's failure to institute a safe system of work". He observed that the culpability of the Electricity Commission was less than that of BAL "because it was after all the client of BAL and not subject to the duties of an employer".

16 Accordingly, Curtis J said that liability for the verdict awarded in favour of Mr Royal should be apportioned 10% to Eraring Energy, 15% to BAL and 75% to BIL. For reasons that I shall explain, the monetary orders he made were not, however, in accordance with this apportionment. This result underlies the first and sixth grounds of BIL's appeal.

17 Curtis J dismissed BAL's claim against Eraring Energy in the direct action but upheld BAL's claim against BIL in that action. He observed that BIL had supplied BAL a product, being the asbestos rope, known by BIL to be dangerous if precautions as to its use were not observed. Further, BIL had designed the insulation of the boilers and provided to BAL the specifications and instructions for the insulation of the boilers. BIL knew at the time that construction of the boilers pursuant to that design and those specifications and instructions would create dangers to the health of persons engaged upon the works if precautions were not observed. His Honour noted that BIL had cause to believe that BAL and its employees were ignorant of the dangers and that workmen would not take precautions in using the rope or otherwise constructing the boilers. Nevertheless, BIL took no steps to warn BAL or its workmen of the dangers in question. For these reasons Curtis J concluded that:

"BIL is liable to BAL in respect of the losses occasioned by [Mr Royal's] judgment against BAL."

18 Curtis J then embarked on a number of calculations apparently intended to give effect to the apportionment of 10% to Eraring Energy, 15% to BAL and 75% to BIL, but in the context of making orders in the direct action. These calculations are not without complexity and I shall return to them in due course. These calculations led to monetary orders made by his Honour.

19 The orders Curtis J made took into account a payment of $72,500 by James Hardie & Coy Pty Limited to BAL, made in the following circumstances. After O'Meally P had awarded judgment in favour of Mr Royal against BAL (and Pacific Power), BAL cross-claimed for contribution against James Hardie. Shortly before the commencement of the trial before Curtis J, BAL and James Hardie agreed that "James Hardie would pay to [BAL] the sum of $72,500 in full and final settlement of any claim [BAL] has or had against James Hardie arising out of the injury sustained by Mr Royal ...". Curtis J assumed that the sum of $72,500 was paid by James Hardie to BAL (and it is not now contended that that assumption was unfounded).

20 BIL submitted to Curtis J that the claims of BAL had been satisfied pro tanto to the extent of $72,500. BAL disputed this but led no evidence in regard to this issue. Relying on the onus of proof and the state of the pleadings Curtis J found that BAL's claims against BIL were satisfied to the extent of $72,500.

The grounds of appeal

21 BIL appeals against certain of the orders made by Curtis J. The respondents to the appeal are BAL and Eraring Energy. BAL also filed a notice of appeal against them in two respects. The respondents to BAL's appeal are BIL and Eraring Energy.

22 BIL's notice of appeal contains very many grounds of appeal. Mr Bathurst QC (who together with Mr Dicker appeared for BIL), when opening the appeal for BIL, informed the Court that BIL contended that Curtis J erred in six respects, and the appeal was being pursued solely on that basis. The six respects are as follows:

(1) "Accepting all other findings of fact and law made by his Honour, his orders fail to properly take into account the appropriate method of assessing contribution under the Law Reform (Miscellaneous Provisions) Act 1946 when one of the parties seeking contribution has also been successful in a direct claim against the other".

(2) Curtis J erred in assessing contribution on the basis that Eraring Energy (or its relevant predecessor) did not have actual knowledge of the danger of asbestos.

(3) His Honour erred in assessing contribution on the basis that BIL had actual knowledge of the danger of asbestos (in contrast to BAL and Eraring Energy or its relevant predecessor).

(4) In assessing the relevant contribution to be made by each party, Curtis J failed to take into account "the scope of the respective obligations owed by each of the parties to the appeal to Mr Royal," and, hence, arrived at an inappropriate apportionment.

(5) His Honour erred in treating a notice, filed by the appellant under s 25B of the Dust Diseases Tribunal Act 1989, as an admission.

(6) "His Honour erred in finding a duty at common law was owed by BIL to BAL to protect it from claims of economic loss and claims for damages from workers arising from the installation of boilers using asbestos rope".

23 BIL, in effect, abandoned all other grounds of appeal and I shall regard and refer to the six points referred to above as BIL's grounds of appeal.

24 BAL relied on two grounds of appeal. These are:

(1) Curtis J erred in finding that "between 1 January 1951 and 22 March 1957 Eraring Energy (formerly, the Electricity Commission of New South Wales) was not in law the Crown in right of the State of New South Wales so as to then be vested with the actual knowledge of the State as regards the danger arising from the inhalation of asbestos dust and fibre ..." .

(2) Curtis J erred in treating the sum of $72,500 received by BAL from James Hardie as being pro tanto satisfaction of BAL's cross-claims against Eraring Energy and BIL in tort and for contribution pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946.

25 BIL's first ground of appeal overlaps with BAL's second ground of appeal and I shall deal with these together.

The application of Azzopardi

26 There are restrictions on an appellant's right of appeal from the Dust Diseases Tribunal. Section 32(1) of the Dust Diseases Tribunal Act 1989 provides:

"A party who is dissatisfied with a decision of the Tribunal in point of law or on a question as to the admission or rejection of evidence may appeal to the Supreme Court".

27 The words of s 32(1) are the same as those considered in the workers compensation legislation the subject of Azzopardi v Tasman UEV Industries Limited (1985) 4 NSWLR 139. Mr Bathurst sought to put his submissions, insofar as they related to evidentiary matters, in accordance with the observations of Hodgson CJ in Eq (with whom on this point Sheller JA and Beazley JA agreed) in Ambulance Service of New South Wales v Daniel [2000] NSWCA 116 where his Honour stated at [56]:

"In the main judgment in [Azzopardi], that of Glass JA, a clear distinction was drawn between the situation where the finding of fact in question is made in favour of a person bearing the onus of proof, and the situation where the finding of fact is made against the person bearing the onus of proof. In the former situation, the question is not whether there is any evidence at all on the point, but rather whether the evidence on the point is sufficient, in the sense that it is evidence which if fully accepted could properly base the finding of fact".

28 The correctness of this approach was not, in substance, disputed, and I shall adopt it.

Concessions by BIL

29 In the course of the appeal, two concessions were made on behalf of BIL.

30 Firstly, BIL accepted that it was open to Curtis J to find that BIL was a supplier of the asbestos rope which contained the asbestos fibres, inhalation of which caused injury to Mr Royal.

31 Secondly, BIL accepted, consistently with CSR Limited v Wren (1997) 44 NSWLR 463, that BIL owed a duty to Mr Royal to provide warnings against damage from inhalation of asbestos in the use of the asbestos rope.

32 Thus, BIL argued the appeal on the basis that it was liable to contribute to the damages claimed by Mr Royal in the action brought by him against BAL and Eraring Energy.

The work done by Mr Royal

33 The Wangi Power Station comprised six Babcock and Wilcox water tube boilers, each serving a turbine and a generator. For 92 weeks between 14 June 1955 and 22 March 1957, Mr Royal worked upon the construction of the furnaces for numbers 2 and 3 boilers.

34 Each boiler consisted of a furnace chambers located over a continuously fed coal fire within which hot gases heated a maze of metal tubes, in which steam was created to drive the turbine. The walls and roof of the chamber were thickly sealed with asbestos. Part of the apparatus involved pipes that were caulked by short sections of asbestos rope.

35 The boiler apparatus was invented and patented by BIL and known as the "Bailey Water-Cooled Furnace Wall".

36 Ninety per cent of the work performed by Mr Royal at Wangi was upon construction of the Bailey Wall. His task was to caulk the gaps between the pipes with asbestos rope. The manner in which the caulking was to be performed was prescribed in a manual written and published by BIL some time prior to 1948. It was in use in the late 1930's. BIL supplied the rope in question.

37 Mr Royal's practice was to cut lengths of the asbestos rope for the caulking of the rows of pipes. He thereby inevitably created considerable asbestos dust in the environment in which he worked.

BIL's first ground of appeal: the relationship between the findings in the contribution proceedings and those in the direct action.

38 I reiterate that in his judgment delivered on 19 July 2001 Curtis J held that liability in respect of Mr Royal's verdict be apportioned 10% as to Eraring Energy, 15% as to BAL and 75% as to BIL.

39 It is apparent from the judgment as a whole that his Honour intended that the apportionment applicable should apply to the capital of $145,000, interest and costs. There is no challenge to this approach.

40 Having made his findings as to the apportionment, Curtis J turned his attention to the direct action. As I have mentioned, he concluded that BIL was liable to BAL in respect of the losses occasioned by Mr Royal's judgment against it.

41 The learned judge then proceeded:

"118 It is apparent that the entitlement of BAL to damages consequent upon that breach is to be reduced because of contributory negligence. In the circumstances of this case I believe it to be just and equitable that BAL's entitlement to damages be reduced to accord with that sum to which it may otherwise be entitled to recover from BIL pursuant to the Law Reform (Miscellaneous Provisions) Act 1946. This reflects a finding of 17% contributory negligence".

42 His Honour considered that, as BAL's direct claim against Eraring Energy had failed, Eraring's liability remained at 10% of the verdict. But as BAL's direct claim against BIL had succeeded, he concluded that new calculations had to be made in respect of the balance of 90%, being the aggregate of BIL's 75% and BAL's 15%.

43 Curtis J did not explain what he meant by the sentence in paragraph 118 of his judgment that "[t]his reflects a finding of 17% contributory negligence" and he did not explain how he arrived at the 17%.

44 Seventeen percent of 90 is approximately equivalent to 15% of 100. Thus, I infer that Curtis J was saying that BAL was entitled to recover the aggregate amount it was required to pay Mr Royal in respect of the verdict granted in favour of Mr Royal against BAL (namely, 90% of the verdict), subject to that amount being reduced by 17%. The 17% in question being the approximate arithmetical equivalent of 15% of the entire verdict granted in favour of Mr Royal. As I understand his Honour's reasons, the 17% represents the extent of BAL's contributory negligence (in the direct action).

45 As Mr Royal's costs had not yet been taxed, the total sum to be apportioned was unknown and his Honour observed that he could not give judgment for any party in a sum certain.

46 Curtis J said further:

"The claim of BAL against BIL in tort, however, must also include the costs incurred by BAL in resisting [Mr Royal's] claim subject to the deduction of 17% for contributory negligence. These costs were a foreseeable loss".

47 Curtis J ordered the sum (relating to the direct acton) which, by paragraph 184 of his judgment of 19 July 2001, he ordered BIL to pay BAL, to be reduced by the $72,500 paid by James Hardie to BAL.

48 On 14 December 2001 Curtis J delivered a supplementary judgment in which he said:

"It is patent that neither the reasoning contained within the terms of paragraph 118 nor the order made in paragraph 184 can stand compatibly with correct application of the law. Section 9 of the Law Reform (Miscellaneous Provisions) Act 1965 permits reduction of the damages recoverable in tort only after those damages have been identified and quantified".

49 The learned judge proceeded to say that the damage suffered by BAL (for which BIL was liable) comprised BAL's net liability to Mr Royal for Mr Royal's judgment, costs after interest the deduction of the $72,500 paid by James Hardie and the payment made by Eraring Energy pursuant to its liability under s 5 of the Law Reform (Miscellaneous Provisions) Act. His Honour then observed:

"It is logically impossible to order that BIL pay to BAL the same sum pursuant to the terms of s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 as it must pay to BAL when an independent claim in tort for the damages, merely quantified by the terms of that Act is made out".

50 Curtis J then noted that his intention expressed in paragraph 118 of his earlier judgment (quoted in paragraph 42 above) "was to achieve a result whereby the entitlement in tort would be a neutral factor in the final judgment". I understand that to mean that his Honour intended that the entitlement of BAL under the direct action would bring about no different result than the apportionment of 10% as to Eraring Energy, 15% as to BAL and 75% as to BIL. He confirmed that:

"It was my opinion at the time I gave judgment, and it remains my opinion, that the relative responsibilities for [Mr Royal's] damages as between BIL and BAL are in the proportion of 90 to 15, that is in round figures 83% as to 17%".

It seems to me that his Honour was intending to convey that, of the 90% that BAL was required to pay Mr Royal pursuant to the judgment of O'Meally P, BIL should pay 83% and BAL 17%. This would still result in an overall apportionment of approximately 10% as to Eraring Energy, 15% as to BAL and 75% as to BIL

51 Curtis J said that he would, in effect, substitute for paragraph 118 of his previous judgment the following:

"The loss occasioned to BAL by the tortious conduct of BIL comprises 15% of [Mr Royal's] judgment and costs plus interest on the monies paid by BAL in that regard. It is apparent that the entitlement of BAL to damages is to be reduced because of contributory negligence. In the circumstances of this case, bearing in mind the share of BAL and the responsibility for the damage, the entitlement of BAL to claim in tort should be reduced by a finding of 17% contributory negligence".

52 He proceeded:

"Upon these findings BIL is liable to pay to BAL 83% of 15% of the total of [Mr Royal's] judgment and costs and BAL remains liable for 17% of 15% of that amount. Seventeen per cent of 15% is 2.55%. It follows that the order in paragraph 184 should read:

`[BIL] is to pay [BAL] that sum, if any, by which [BAL's] payment towards [Mr Royal's] judgment and costs exceeds 2.55% of the total thereof, plus 83% of [BAL's] costs incurred in [Mr Royal's] action less $72,500'".

Curtis J then made orders consequent upon these observations.

53 The effect of the last-mentioned order was, as Mr Bathurst submitted, effectively to increase BIL's liability to 87.45% of Mr Royal's verdict. In other words, by the order made pursuant to the supplementary judgment, Eraring Energy was liable for 10% of Mr Royal's verdict, BAL was made liable for 2.55% and BIL was made liable for 87.45%. This, it seems to me, is a result quite different to that which Curtis J really intended (that being "to achieve a result whereby the entitlement in tort would be a neutral factor in the final judgment").

54 With respect to his Honour, I have found the arithmetic calculations he undertook not always easy to follow. The details of the calculations are frequently not made explicit and in some instances the legal basis for them is left to the reader to infer. The consequence of these complexities, however, is that despite saying, in his judgment of 19 July 2001, that "I apportion liability 10% to Eraring Energy, 15% to BAL and 75% to BIL," the final result following Curtis J's supplementary judgment of 14 December 2001 is that liability was apportioned 10% to Eraring Energy, 2.55% to BAL and 87.45% to BIL.

55 Mr Bathurst submitted that the approach of Curtis J involved a double counting in the sense described in Daniels v Anderson (1995) 37 NSWLR 438 by Clarke and Sheller JJA at 579 to 580. The facts in this case, however, are not comparable to those in Daniels v Anderson. Curtis J did not make orders requiring BIL to pay twice for the same damage (cf Doyle v Pick and Rickwood [1965] WAR 95 at 96).

56 Nevertheless, it seems to me, there is a serious problem in the approach adopted by Curtis J, namely, the inconsistency between the apportionment in the contribution proceedings and that in the direct action.

57 Before considering the implications and consequences of that inconsistency, I reiterate that it does seem to me to have been his Honour's basal intent to hold that the responsibility for Mr Royal's damages should be apportioned 10% as to Eraring Energy, 75% as to BIL and 15% as to BAL. In the light of my conclusions in regard to the other grounds of appeal, to which I later refer, I would make no alteration to this apportionment.

58 The particulars of negligence pleaded by BAL against BIL in the contribution proceedings were in substance the same as those pleaded by BAL against BIL in the direct action. Mr Inatey SC, who together with Mr Miller appeared for BAL, correctly accepted that the conduct of BIL that formed the basis of Curtis J's findings in the contribution proceedings was the same conduct that formed the basis of his Honour's J's findings in the direct action.

59 In fixing upon the apportionment between the three tortfeasors in the contribution proceedings, Curtis J was required to examine the departure of each one of them from the standards of the reasonable person: Watt v Bretag (1982) 56 ALJR 760. In other words, the negligence of each one of the tortfeasors has to be compared with the others. The finding of fault as to 10: 75: 15 is the product of such an examination.

60 Curtis J was required to undertake a similar exercise regarding the negligence of BIL and the contributory negligence of BAL in the direct action. On the face of it, there is nothing to suggest that the apportionment in the two sets of proceedings should differ.

61 Mr Inatey submitted that, although BIL's conduct was the same in both sets of proceedings, the apportionment could differ because the damages were different. He submitted that the difference arose because in the contribution action the damages involved were the damages suffered by Mr Royal, whereas in the direct action the damages were those suffered by BAL. He argued that the two losses were different and separate; hence it was open to Curtis J to make different findings as to fault.

62 I accept that the damages in each instance are different in the sense that they were sustained by different parties. But I see no justification in the particular circumstances of this case for distinguishing between the degrees of fault in the two different sets of proceedings. I accept that the causal potency of the negligence conduct in each instance is of vital importance and, where damages differ, causal potency may differ. In such circumstances, the same negligent conduct may have different causal consequences and hence may give rise to different degrees of fault where more than one tortfeasor is involved. But in the circumstances of this case, there is no relevant difference in the causative effect of the conduct of BAL and BIL insofar as it brought about, on the one hand, Mr Royal's damages, and, on the other, BAL's damages. The incurring by Mr Royal of damages, caused by the conduct of BAL and BIL, resulted in BAL suffering damages brought about by the very same conduct.

63 In the circumstances, I consider that it was not open to Curtis J to make findings in the direct action concerning the degrees of fault of BAL and BIL that differed from the findings he made in the contribution proceedings. In any event, as I understand his Honour's judgment, he did not intend that result.

64 Mr Bathurst submitted that, leaving aside any question of BAL's costs of resisting Mr Royal's claim, a final determination of the contribution proceedings (being that BIL is liable to pay 75%, BAL 15% and Eraring Energy 10%) should result in there being no liability to BIL under the direct claim "because any loss and damage which would otherwise have been suffered was taken up in the contribution claim". I agree with this submission.

65 In my opinion, an order should be made that, in regard to Mr Royal's verdict, BIL is liable to contribute 75%, BAL 15% and Eraring Energy 10%. That order should make it plain that that apportionment applies to the capital amount of the judgment, interest, and the costs payable by BAL to Mr Royal. Once that is the case, no damages are sustained by BAL in respect of these matters and the claim in the direct action that is made for these heads of damage should fail.

66 Putting the matter in a different way, the findings made by Curtis J in the contribution proceedings dealt with capital, interest and costs and determined the degree to which each of BAL and BIL was responsible for the capital, interest and costs payable, as between themselves, to Mr Royal. Once those findings had been made, the liability of BIL for those matters was fully taken up in the contribution orders made. Accordingly, once the contribution findings were made, there was no additional amount, comprising any part of the verdict, for which BAL could hold BIL liable. The question of negligent responsibility for the items comprising the verdict was finally determined as between BAL and BIL.

67 Thus, save in regard to BAL's costs of defending the proceedings brought by Mr Royal, the findings made by Curtis J in the contribution proceedings preclude any claim for damages by BAL against BIL.

68 Accordingly, I would uphold this ground of appeal.

The sixth ground of appeal: the duty of care owed by BIL to BAL

69 It is convenient to deal with BIL's sixth ground of appeal at this stage. It is related to the first ground in that, in the light of the conclusion to which I have come in regard to the first ground of appeal, the only head of damage capable of being claimed under the direct action is the 83% of BAL's costs that it incurred in defending Mr Royal's claim.

70 It is important to note that, in regard to the sixth ground of appeal, BIL only challenges the finding that, at common law, BIL owed BAL a duty of care to protect it from claims of economic loss (resulting from workers' claims against it for damages arising from the installation of boilers using asbestos rope). In particular, there is no challenge to the following:

(a) the finding of Curtis J that the breach of the duty under challenge caused the economic loss claimed;

(b) the assumption that economic loss was constituted (at least in part) by 83% of BAL's costs incurred in defending Mr Royal's claim (and no further form of quantification of the costs was required before the court was able to determine the damage payable).

(c) the finding, implicit in his Honour's judgment, that it was reasonable for BAL to defend the claim brought against it by Mr Royal, and so incur those costs.

71 BIL's argument was based substantially on the following observations of Brennan J in Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at 487:

"I venture to repeat what I said in John Pfeiffer Pty Limited v Canny [1981] HCA 52; (1981) 148 CLR 218 at 241 to 242.

`His duty of care is a thing written on the wind unless damage is caused by the breach of that duty; there is no actionable negligence unless duty breach and consequential damage coincide ... for the purposes of determining liability in a given case, each element can be defined only in terms of the others'.

It is impermissible to postulate a duty of care to avoid one kind of damage - say, personal injury - and finding the defendant guilty of failing to discharge that duty, to hold him liable for the damage actually suffered that is of another and independent kind - say, economic loss. Not only may the respective duties differ in what is required to discharge them; the duties may be owed to different persons or classes of persons. That is not to say that a plaintiff who suffers damage of some kind will succeed or fail in an action to recover damages according to his classification of the damage he suffered. The question is always whether the defendant was under a duty to avoid or prevent that damage, but the actual nature of the damage suffered is relevant to the existence and extent of any duty to avoid or prevent it".

72 BIL submitted that BAL's claim in essence was one for damages representing the costs of defending the claim for negligence against it, in circumstances where BAL did not dispute that it was negligent at least to a limited degree. It was said that such a claim is novel; a claim on such a basis has not previously been recognised by the law.

73 BIL also drew attention to the fact that BAL's claim against BIL is a claim for pure economic loss, and the difficulties of establishing claims of this kind are well known: Perre v Apand Pty Limited [1999] HCA 36; (1999) 198 CLR 180.

74 BIL submitted, further, that it had not assumed responsibility for ensuring that BAL would comply with its common law and statutory obligations. Hence, it would be wrong to impose a duty of care upon it that would, in essence, rest on such an assumption.

75 I turn firstly to the argument that the claim for legal costs incurred in resisting the claim of a third party is novel.

76 Claims in contract for damages comprising the reasonable costs of defending an action brought against the plaintiff by a third party have long been recognised. In Hammond and Company v Bussey (1887) 20 QBD 79 the plaintiff bought coal, by description, from the defendant and resold it to sub-vendees. The coal did not answer the description, but this was not apparent until after the coal had been burnt by the sub-vendees. The sub-vendees sued the plaintiff who was ordered to pay damages and costs to the sub-vendees. The plaintiff then sued the defendant and claimed the costs of reasonably defending the sub-vendees' action as damages. Lord Esher MR said at 93:

"To my mind it is perfectly clear that, according to a reasonable business view of the reasonably probable course of business, the parties may be supposed to have contemplated, at the time when the contract was made, as the inevitable, or, at any rate, the highly probable result of a breach of it, that there would be a lawsuit between the plaintiffs and their sub-vendees, in which it would be reasonable for the plaintiffs to defend, and in which, if it turned out that there was a breach of the warranty, the plaintiffs would lose, and that they would thereby necessarily incur costs. Costs incurred under such circumstances appear to me to fall within the second branch of the rule in Hadley v Baxendale (9 Ex 341)."

77 This approach was adopted in Australia in Dein v Wentworth Goldfield Proprietary Company (1899) 15 WN(NSW) 280; see also Underwriters at Lloyds v Ellis (unreported, 25 February 1998, NSWCA).

78 Since the nineteenth century, a similar approach has also been recognised in claims brought in tort. In Tindall v Bell (1843) 11 M & W 228 a ship of the plaintiffs was run down. The plaintiffs were obliged to engage a steam tug for its salvage. Litigation between the owners of the tug and the plaintiffs ensued. The plaintiffs were obliged to pay the tug owners salvage and other monies for costs and charges. The plaintiffs then sued the owners of the vessel that had collided with their ship. The damages claimed included the costs that the plaintiffs had paid to the tug owners and, in addition, the plaintiffs' own costs incurred in defending the tug owners' suit. Parke B at 232 accepted that the "true principle of determination" was that:

"when the mischief is done, the necessary consequences of it are, what a reasonable man would do under similar circumstances, where he had no other judgment but his own to resort to; and it may be one of them that he should incur litigation".

79 The plaintiffs in Tindall v Bell failed because the Court was not satisfied that they conducted themselves as "prudent men reasonably ought to do". The point, however, is that the Court had no difficulty with the remedy sought.

80 A similar result occurred in Ronneberg v Falkland Islands Company [1864] EngR 482; (1864) 17 CB(NS) 1. This is another shipping case involving legal costs incurred by the plaintiffs, this time in attempting to protect cargo in Valparaiso. Willes J said at 14:

"The plaintiffs also claimed to be reimbursed for the costs they incurred at Valparaiso. In order to make out their rights to recover these, they were bound to show that they were the necessary consequence of the wrong, and that a reasonable person would have defended the suit there".

Again, the Court was not satisfied that the conduct of the plaintiffs was reasonable and the plaintiffs failed. But the action was recognised as being sustainable in law.

81 In The Wallsend [1907] P 302 the Court appears to have accepted that an action in negligence for damages comprising the costs of unsuccessfully defending litigation was available in law, but the plaintiff failed because the judge was not satisfied that the conduct of the plaintiff in defending the action giving rise to the legal costs in question was reasonable.

82 In Osman v J Ralph Moss Limited [1970] 1 Lloyds Rep 313 (CA) the defendants, who were insurance brokers, recommended to the plaintiff that he should insure with a motor insurance company known to be in financial difficulties. The defendants wrote to the plaintiff stating that he was effectively insured by the company. In fact, unbeknown to the plaintiff, he was not insured. He was involved in an accident and was fined for driving while uninsured. He was held civilly liable to the third party involved in the accident. The plaintiff claimed damages from the defendant insurance brokers, including the fines and costs in the criminal proceedings, the amount he was required to pay to the third party for the damage to the latter's car (which included the costs of the action), and his costs in defending the third party's claim. The English Court of Appeal held that the defendant brokers were guilty of negligence and that the damage claimed by the plaintiff was not too remote. The basis of the latter finding was that it was foreseeable that the plaintiff might be involved in an accident caused by his own negligence, and that he would in consequence be proceeded against civilly and also prosecuted criminally. The Court held that he was entitled to the damages that he claimed, including a reasonable amount for his own legal costs (see at 317 to 318).

83 In the circumstances I do not regard BAL's claim as being novel. As I have attempted to demonstrate, claims of this kind have long been known to the law. This, in essence, also disposes of the argument based on Perre v Apand. There is no need for any expansion of the category of claims for economic loss; claims such as that now made by BAL fall within the categories that have been recognised and accepted.

84 I turn now to the argument that BIL had not assumed responsibility for ensuring that BAL would comply with its common law and statutory obligations. I accept Mr Inatey's submission that BIL, as a supplier of goods known to be dangerous, owed BAL a duty to warn it of the dangers associated with the product: CSR Limited v Wren. BIL is liable for the damages recognised by the law as being caused by the breach of that duty. Those damages may include the reasonable costs of litigation brought about by its negligence. The liability of BIL does not depend on whether it assumed responsibility for ensuring that BAL would comply with its common law and statutory obligations.

85 Accordingly, I would dismiss the sixth ground of appeal.

86 Curtis J ordered that BIL pay to BAL 83% of BAL's costs incurred in Mr Royal's action, less $72,500. For reasons which I later give I would dismiss BAL's appeal in regard to the reductive effect of the $72,500. Accordingly, I would make no change to this part of his Honour's order.

BIL's second ground of appeal and the first ground of BAL's appeal: the knowledge of Eraring Energy

87 Both BIL and BAL contend that Curtis J erred in finding that the Electricity Commission (the relevant predecessor of Eraring Energy) did not have actual knowledge of the danger of asbestos at the relevant time. The principal argument in this respect was advanced by BIL. BAL supported BIL's submissions.

88 BIL's argument was put in the following terms:

"[BIL] does not contend that at the time of Mr Royal's employment on the Wangi site, employers of [Eraring Energy's] predecessor, the Electricity Commission of New South Wales, themselves had actual knowledge of the dangers but rather the knowledge of the state of the dangers associated with asbestos should be imputed or attributed to the Electricity Commission in circumstances where it was carrying out its activities as an instrumentality of the Crown".

89 Before Curtis J, Eraring Energy admitted that it was culpable because at all relevant times the Electricity Commission ought to have known of the dangers created by the inhalation of asbestos dust. BIL (and BAL), however, asserted before Curtis J that the Electricity Commission had actual knowledge of the dangers faced by Mr Royal when employed at Wangi, yet still failed to protect him. Curtis J found that there was no responsible officer of the Electricity Commission who appreciated the dangers of asbestos to which workers were exposed. He was not persuaded that those employees of the Electricity Commission who supervised the construction at Wangi possessed actual appreciation of those dangers.

90 BIL (and BAL) contended in the alternative that between 1951 and 1957 the Electricity Commission was the Crown in the right of the State of New South Wales and that the Electricity Commission, in law, had the actual knowledge of the State of New South Wales, particularly the knowledge of the Department of Health, as regards the dangers arising from the inhalation of asbestos.

91 The parties accepted that the Department of Health (and the Minister of Health) were aware of the dangers of asbestos. Curtis J, however, concluded that the knowledge of the Crown residing in the Minister of Health at the relevant time was not to be imputed to the Electricity Commission and that any culpability on the part of the Minister of Health in failing to communicate his knowledge to the Electricity Commission was irrelevant to the culpability of the Electricity Commission.

92 The finding by Curtis J that the Electricity Commission did not have actual knowledge of the dangers of asbestos, and that the knowledge of the Minister of Health was not to be imputed to it, was an important factor in his Honour's decision in regard to the apportioning of fault.

93 Mr Bathurst submitted that the knowledge of the Department of Health should indeed be imputed to the Electricity Commission. He submitted that the Electricity Commission, at the relevant time, carried out its functions as an instrument of the government, performing its functions as an agent of the Crown. He relied on Electricity Commission of New South Wales v Australian United Press Limited (1954) 55 SR(NSW) 118 where it was held that the Electricity Commission of New South Wales was a statutory body representing the Crown.

94 Mr Bathurst drew attention to s 7 of the Electricity Commission Act 1950 which provided:

"In the exercise and discharge of its powers, authorities, duties and functions the Commission shall be subject in all respects to the control and direction of the Minister".

He submitted that the analogy of a corporation should be applied and submitted that the Minister, in his or her capacity as a representative of the Crown, was the directing mind and will of the Electricity Commission. On this basis the knowledge of the Minister - and, importantly, the knowledge of the entire government which the Minister represented - is to be assumed to be the knowledge of the Electricity Commission. Mr Bathurst relied on two authorities that he submitted supported this proposition. These were HMS Truculent: The Admiralty v The Divina (Owners) [1951] 2 All ER 968 and Western Australia v Watson [1990] WAR 248.

95 In the HMS Truculent Willmer J said at 979:

"It appears to me that there is an analogy between the constitution and functions of the Board of Admiralty and those of the Board of Directors of a limited company. Just as a limited company acts and transacts its business through its Board of Directors, so His Majesty, in relation His Majesty's ships, acts through the Board of Admiralty. Again, just as in the case of some companies an individual member of the Board may be authorised to act in the name of the Board, so that his act is in law the act of the company, so also in the case of the Admiralty an individual member of the Board may act in the name of the Board as a whole".

96 Applying these principles, Willmer J held that knowledge of the Third Sea Lord, who was the responsible member of the Board of Admiralty, was the "directing mind" of the Admiralty and, hence, the Admiralty itself.

97 In Western Australia v Watson the Full Court of the Supreme Court of Western Australia held that, in the case of a government, the analogy of a board of directors could be applied to the Cabinet or the Executive Council. Therefore, where the State is the employer, the knowledge of any relevant danger by the Minister responsible for the department in which an employee is employed is knowledge possessed by the State. Further, if another Minister of the Crown acquires such knowledge in the capacity as Minister, the government and the State must be taken to have acquired that knowledge. Such knowledge constitutes actual knowledge possessed by the State.

98 The Truculent is authority for the proposition that the analogy of a board of directors of a company could be applied to the Board of the Admiralty. It is not authority for any other proposition relevant to this ground of appeal.

99 Western Australia v Watson applied the analogy of a board of directors to the Cabinet or Executive Council. I shall assume, without deciding, that such an analogy is appropriate. But even accepting that the principles of company law are applicable to government bodies, that does not answer the question whether the knowledge of the Minister of Health should be attributed to the Minister who controlled and directed the Electricity Commission pursuant to s 7 of the Electricity Commission Act.

100 The question in Western Australia v Watson was whether the knowledge of one government department should be attributed to the State. There was no statutory corporation involved. There was no issue as to whether the knowledge of one government department should be attributed to a statutory corporation, that being the issue in this case (namely, whether the knowledge of the Minister of Health is to be attributed to the Electricity Commission).

101 Due weight must be given to the corporate nature of the Electricity Commission. In this regard s 6(1) of the Act provided:

"The Commission shall be a body corporate, with perpetual succession and a common seal, and may be sue or be sued in its corporate name, and shall be capable of purchasing, holding, granting, demising, disposing of or otherwise dealing with real and person property, and of doing an suffering all such acts and things as bodies corporate may by law do and suffer".

By s 5(1)(b) of the Act the Commission consisted of five commissioners appointed by the Governor. By s 6(4)(b) three of the commissioners formed a quorum and a decision of a majority of the commissioners present at a meeting of the Commission was to be the decision of the Commission.

102 In my view the corporate nature of the Commission distinguishes this case from Western Australia v Watson and what was said in that case as to attribution of knowledge does not apply to the present situation.

103 The characteristics of a statutory body akin to the Electricity Commission were discussed by Denning LJ in Tamlin v Hannaford [1950]1 KB 18 at 22. Denning LJ noted that the British Transport Commission, the statutory corporation in that case, had defined powers that it could not exceed. It was directed by a group of persons whose duty it was to see that those powers were properly used. The Electricity Commission was no different.

104 Like the British Transport Commission, the Electricity Commission did not obtain its finance from shareholders; there were indeed no shareholders. Essentially the Electricity Commission was financed by public funds, that is, by taxpayers. The function of the Electricity Commission was to supply electricity and to maintain, operate, improve and extend all works for or in relation to the generation and supply of electricity. These are functions vital to the interests of the community. It is in this context that s 7 of the Act provided that the Electricity Commission was subject to the control and direction of the Minister.

105 The British Transport Commission was also set up to perform functions vital to the public interest. It was a corporation which, by the relevant statute, was placed under the control of the Minister of Transport. Denning LJ said in this regard at 23 to 24:

"The protection of the interests of all these - taxpayer, user and beneficiary - is entrusted by Parliament to the Minister of Transport. He is given powers over this corporation which are as great as those possessed by a man who holds all the shares in a private company, subject, however, as such a man is not, to a duty to account to Parliament for his stewardship. It is the Minister who appoints the directors - the members of the Commission - and fixes their remuneration. They must give him any information he wants; and, lest they should not prove amenable to his suggestions as to the policy they should adopt, he is given power to give them directions of a general nature, in matters which appear to him to affect the national interest, as to which he is the sole judge, and they are then bound to obey. These are great powers but still we cannot regard the corporation as being his agent, any more than a company is the agent of the shareholders, or even of a sole shareholder. In the eye of the law, the corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants, and its property is not Crown property. It is as much bound by Acts of Parliament as any other subject of the King. It is, of course, a public authority and its purposes, no doubt, are public purposes, but it is not a government department nor do its powers fall within the province of government".

106 Tamlin v Hannaford was approved in Launceston Corporation v The Hydro-Electric Commission [1959] HCA 12; (1959) 100 CLR 654 at 661. Launceston Corporation v The Hydro-Electric Commission concerned the Hydro-Electric Commission of Tasmania, an independent statutory corporation constituted under the Hydro-Electric Commission Act 1944 (Tas). The High Court held that from an examination of the Act "the proper conclusion is that the Commission is an independent statutory corporation and is not a servant of the Crown such that its occupation of land should be regarded as occupation on behalf of Her Majesty or for the purposes of Her Majesty". The High Court pointed out that in the discharge of its statutory duties the Hydro-Electric Commission was in some respects subject to Ministerial power. The provisions of the statute ensured Ministerial and Parliamentary supervision of the Commission. The High Court said in this regard that these matters did not "constitute the Commission the servant of the Crown or require the conclusion that it is not an independent statutory corporation". The High Court pointed out that "the Commission is a public authority with public purposes, as distinct from a private undertaking engaged upon a merely commercial enterprise, and that its powers are to exercised for the good of the State". Their Honours concluded (at 662):

"Both in England and in Australia there is evidence of a strong tendency to regard a statutory corporation formed to carry on public functions as distinct from the Crown unless Parliament has by express provision given that the character of a servant of the Crown".

107 In State Authority Superannuation Board v Commissioner of State Taxation (WA) [1996] HCA 32; (1996) 189 CLR 253 McHugh and Gummow JJ observed at 280 that the particular legislation under consideration in that case classified the State Authority Superannuation Board as "representative" of the Crown. Their Honours then noted that the legislation in question did not render the State Authority Superannuation Board the representative of the Crown for all purposes, still less did it deem it to be the Crown. Similarly, even if the Electricity Commission Act constituted the Electricity Commission a representative of the Crown (and it is not necessary to express a view in this regard), it did not render the Electricity Commission the representative of the Crown for all purposes and did not deem it to be the Crown.

108 Tamlin v Hannaford, Launceston Corporation v The Hydro-Electric Commission and State Superannuation Board v Commissioner of State Taxation emphasise the distinct and separate nature of statutory corporations such as the Electricity Commission. They emphasise that the mere fact that corporations of this kind are under the control of a Minister of the Crown does not mean that they are to be regarded as part of the Crown. From their tenor it can be said there is no good reason in policy or principle for attributing to a statutory corporation knowledge of Ministers of the Crown whose duties are unrelated to the corporation and who have no direct statutory connection with it.

109 Thus, even if the Electricity Commission was the agent of the Crown for the purposes of supplying electricity and related matters it does not follow that the Electricity Commission was the representative of the Crown in other matters, including matters of health.

110 There is nothing in the nature of the position of the Minister who had powers of direction and control over the Electricity Commission that warrants attributing to him or her the knowledge of other Ministers of the Crown or government departments whose functions differ from the supply of electricity. There is nothing in the Electricity Commission Act itself that carries the remotest suggestion that the knowledge of other Ministers of the Crown should be attributed to the Electricity Commission. There is no reason not to treat the Electricity Commission as an independent entity, unconnected with Ministers of the Crown other than the Minister having the control and direction of the Commission under s 7 of the Act.

111 In the circumstances I conclude that Curtis J was correct in holding that the knowledge of the Minister of Health and the Department of Health should not be attributed to the Electricity Commission and, hence, to Eraring Energy. I would dismiss this ground of appeal.

BIL's third ground of appeal: the knowledge of BIL

112 BIL submitted that Curtis J erred in assessing contribution on the basis that BIL had actual knowledge of the danger of asbestos.

113 As mentioned, Curtis J's finding that BIL had actual knowledge was based primarily on his conclusion that Mr Critchley, the works manager of BIL in England between April 1930 and December 1933, had received information which would have made him aware of the dangers associated with asbestos, that he thereby became aware of those dangers and that knowledge of those dangers should thereafter be attributed to BIL. Mr Bathurst made three submissions in this regard.

(1) The information in question was not adequate to provide evidence that Mr Critchley was in fact aware of the dangers of asbestos.

(2) In any event the knowledge that Mr Critchley acquired should not be attributed to BIL.

(3) Curtis J wrongly held that information acquired by Mr Critchley between 1930 and 1933 constituted knowledge on the part of BIL between 1955 and 1957 when Mr Royal was employed with BAL (Mr Critchley retired from BIL with effect from 31 December 1933).

114 On 27 February 1930 Mr Critchley was appointed general works manager of BIL. He was given "control over all the company works in Great Britain". At that time BIL was an enormous industrial enterprise.

115 On 22 December 1930 Mr Critchley was elected to the executive committee of the North West Engineering Trade Employers Association of which BIL was then the largest member and the biggest financial contributor. This Association was in turn a member of the Engineering and Allied Employers National Federation. BIL was the largest member of the North West Engineering and Allied Employers Association.

116 In 1930 the Home Office issued a report known as the Merewether and Price Report upon the effects of asbestos on the lungs of workers in the asbestos industry. On 23 January 1931 the Joint Secretary of the Engineering and Allied Employers National Federation wrote a letter to the Under Secretary of State referring to a draft scheme for compensating workmen or their families where asbestosis caused disabling injury or death. The letter discussed the application of the scheme to the handling of asbestos within the engineering industry for the purpose of insulating boilers, steam pipes and other works. On 5 February 1931 a reply was sent on behalf of the Home Secretary saying that the scheme was intended to apply not only when carried on in asbestos works but also when carried on "in engineering works, shipyards or elsewhere". The reply referred to the employment of workmen under conditions likely to give rise to asbestosis and stated that it was intended that such workmen should be within the scope of the scheme.

117 On 17 February 1931 the Secretary of the North West Engineering Trades and Employees Association distributed copies of these letters to members of the Association together with extracts of the draft scheme. The Secretary called for responses from the members. On 13 May 1931 the Secretary of the Association advised members that the scheme was to come into force on 1 June 1931. The Secretary wrote:

"The Federation advise that it is desirable that firms who come within the provisions of the schemes and are already insured against liability under the Workmen's Compensation Acts under existing Schemes should see that the extension of their liability under the new Schemes is covered before 1st June on which date the new Schemes will become operative".

Curtis J pointed out that there was evidence that insurance matters fell within Mr Critchley's field of responsibility as general works manager of BIL.

118 On 15 September 1931 the Under Secretary of State for the Home Office wrote to the National Federation of Engineering and Allied Employers forwarding a draft of proposed regulations for protection of workers employed in certain processes involving exposure to asbestos dust. He referred to the two reports of Merewether and Price and stated:

"The Secretary of State has decided to give effect to the recommendations contained in these two reports. For that purpose as required by s 79 of the Factory and Work Shop Act 1901 he has formally certified as dangerous the manipulation of asbestos and the manufacture or repair of articles composed wholly or partly of asbestos and processes incidental thereto and is now issuing the enclosed regulations in draft ... ".

A copy of this letter was distributed to members of the North West Engineering Trades Employers Association who were invited to respond. On 19 January 1932 members were advised that the regulations would come into operation on 1 March 1932.

119 On 28 September 1932 the Secretary of the Association wrote to members drawing attention to a memorandum issued by the Home Office on the industrial diseases of silicosis and asbestosis.

120 These matters were all referred to by Curtis J in his reasons. In my opinion they amply justify his finding that Mr Critchley had actual knowledge of the dangers of asbestosis.

121 The main business of BIL was the making of boilers. At the time BIL was a world leader in the field of making and supplying boilers. It exported its boilers all over the world for a very large variety of applications. Mr Critchley had direct responsibility for the manufacture by BIL of all its boilers throughout the United Kingdom. In these circumstances the correspondence from the Home Secretary and North West Engineering Employers Association, the provisions of the draft scheme and the regulations would have been of vital importance to him and to BIL.

122 In my opinion Mr Critchley occupied so senior position in the management of BIL that his knowledge of the dangers of asbestos may be viewed as that of the company: Smorgon v Australia & New Zealand Banking Group Limited: Federal Commissioner of Taxation v Smorgon [1976] HCA 53; (1976) 134 CLR 475, Meridian Global Funds Management Asia Limited v Securities Commission [1995] 2 AC 500.

123 I would add that the information contained in the correspondence from the Home Secretary and North West Engineering Employers Association, the provisions of the draft scheme and the regulations were of such importance to BIL that a strong inference arises that many others in responsible positions in BIL must have become aware of the dangers of asbestos. This inference was not rebutted. Accordingly, I would not uphold Mr Bathurst's second argument.

124 I now turn to Mr Bathurst's third argument, namely that Curtis J erred in finding that the knowledge of BIL as to the dangers of exposure to asbestos, which the company had in the early 1930's when Mr Critchley was general works manager, continued until the period 1955 to 1957 when Mr Royal was employed by BAL.

125 I have already noted that the knowledge possessed by Mr Critchley in the early 1930's was of fundamental importance to BIL. It was also of fundamental importance to the health of its workers. The very strong probabilities are that Mr Critchley and others who, at the time, were possessed of the information, would not have remained silent about the dangers referred to in the material in question, they would surely have communicated it to others of authority within the company.

126 The dangers were so serious as to result in 1931 in the Secretary of State formally certifying (pursuant to s 79 of the Factory and Work Shop Act 1901 (UK)) as dangerous the manipulation of asbestos and the manufacture or repair of articles composed wholly or partly of asbestos and processes incidental thereto.

127 Moreover, due regard must be had to the Asbestos Industry Regulations 1931 dated December 31, 1931, made by the Secretary of State under s 79 of the Factory and Work Shop Act 1901. These regulations applied to all factories and workshops in which various processes relating to asbestos were carried on, including the breaking and crushing of asbestos and the making of insulation slabs or sections composed of asbestos. There is a clear inference that the regulations applied to the manufacture of boilers by BIL. The regulations required various safety measures to be carried out when working with asbestos.

128 There was a dispute between the parties as to the period during which these regulations remained in force. The dispute was not resolved. It is however clear that they remained in force at least from 1932 to 1937.

129 Additionally on 1 June 1931 the Asbestos Industry (Asbestosis Scheme 1931) came into force. This applied to all workmen employed in, amongst other things, breaking and crushing asbestos and in making insulation slabs or sections composed wholly or partly of asbestos. The Scheme provided for compensation to a workman or his dependants where the Medical Board certified that the death of a workman had been caused by asbestosis or that a workman was totally or partially disabled by asbestosis to such a degree as to make it dangerous for him to continue work in the relevant processes. The Scheme itself reflects the general knowledge in the United Kingdom of the dangers of asbestosis.

130 The Scheme itself must have been of fundamental importance to BIL. BIL had 17,000 employees in the United Kingdom and many must have been working in processes to which the Scheme had application.

131 From all these matters, a strong inference arises that the knowledge of the dangers of exposure to asbestos would have been known generally within BIL from the 1930's onwards. The situation was one in which BIL's workers were at risk, the risks were recognised by Parliament (hence the regulations) and, by the Scheme, Parliament had made an attempt to ensure that workers suffering from asbestosis would be compensated. These matters must have been of general concern to BIL and it is to be inferred that that concern (and the knowledge that must have brought about that concern) could not have terminated when Mr Critchley left the employ of BIL. BIL led no evidence in refutation of this inference.

132 It must be said that the matters that support a finding that BIL had actual knowledge of the dangers of exposure to asbestos also bear on the question whether BAL had actual knowledge of those dangers. However, there has been no appeal against his Honour's finding that BAL did not have actual knowledge of those dangers and it is unnecessary to go into this question any further.

133 In my opinion, the evidentiary material before Curtis J fully justified his Honour's findings that BIL had actual knowledge of the dangers of exposure to asbestos at the time Mr Royal was employed by BAL. I would dismiss this ground of appeal.

BIL's fourth ground of appeal: the apportionment of fault

134 BIL challenged the apportionment of fault determined by Curtis J. In particular it submitted that his Honour wrongly found that BIL bore 75% of the responsibility for Mr Royal's damage.

135 A significant part of BIL's submissions in regard to this ground rested on the proposition that the Electricity Commission should be regarded as having actual knowledge of the dangers of exposure to asbestos at the relevant time and that BIL should not be held to have had actual knowledge. I have found against these submissions.

136 BIL submitted however that, in any event, irrespective of the knowledge or otherwise of the Electricity Commission and BIL, Curtis J should not have held that BIL was substantially responsible for Mr Royal's damages.

137 BIL's first argument was that the negligent conduct of Mr Critchley occurred about 25 years before the injuries were suffered by Mr Royal, and this lessened the culpability of BIL. In my view, however, there is nothing in this point, as on the findings, the actual knowledge on the part of BIL continued until the time of Mr Royal's injuries, and it is irrelevant that Mr Critchley left the employ of BIL in 1933.

138 Next, BIL submitted that the case should be regarded as an apportionment between a supplier (BIL), who failed to warn an employer (BAL) who had a non-delegable duty to provide a safe system of work, and an occupier (the Electricity Commission) who had a duty to take reasonable care for the safety of persons on the premises. According to BIL, the circumstances were such that each ought to have known of the danger; hence each was equally at fault. The problem with this submission is that it ignores the finding that BIL had actual knowledge of the dangers whereas the Electricity Commission and BAL did not.

139 Thirdly, BIL submitted that Curtis J incorrectly held that BAL, in material respects, was subject to the control of BIL.

140 The degree of control exercised by BIL over BAL was extensively canvassed at the trial. I do not think it necessary to go into any significant detail in this regard, save to say the following. BIL, under the name of Babcock and Wilcox Limited, was incorporated in London in 1890. The company grew rapidly and its boilers were sold in many countries throughout the world. Its capital increased exponentially. From 1908 BIL maintained a presence in Australia and since 1923 had its own factory in this country. In 1948 it effected a corporate rearrangement. BIL in Australia became BAL. BAL was then a wholly owned subsidiary of BIL. BIL supplied BAL with equipment and other materials and trained BAL staff in its methods. There was ample evidence that BAL was substantially dependent on BIL in the areas of know how, methodology and supply, and was in important respects under its direction. In my opinion the findings made by Curtis J in this regard were justified.

141 Thus, there was good reason for Curtis J to attribute most of the blame for Mr Royal's injuries to BIL. BIL, alone, had actual knowledge of the dangers of exposure to asbestos. BIL was the supplier of the relevant asbestos to BAL. BIL provided BAL with the necessary instructions as to the construction of the boilers. BIL had effective control over the operations of BAL. While both BAL and Eraring Energy should have known of the dangers of asbestos exposure they did not in fact have that knowledge. It cannot be said, in my opinion, that Curtis J erred in the apportionment of 75: 15: 10. I would dismiss this ground of appeal.

BIL's fifth ground of appeal: the s 25B notice

142 BIL submitted that Curtis J erred in treating a notice filed by it under s 25B of the Dust Diseases Tribunal Act as an admission. Section 25B(1) of the Act provides:

"Issues of a general nature determined in proceedings before the Tribunal (including proceedings on an appeal from the Tribunal) may not be relitigated or reargued in other proceedings before the Tribunal without the leave of the Tribunal, whether or not the proceedings are between the same parties".

143 In the course of the proceedings before Curtis J, BIL filed a notice in which it asserted that, by virtue of s 25B, certain judicial statements made in other proceedings before the Tribunal ought to bind the parties. Curtis J said that he regarded the assertion by BIL to that effect as being an admission by it.

144 His Honour was plainly wrong in this respect. The filing of a notice pursuant to s 25B does not amount to an admission by the party filing it. Mr Bathurst submitted that the filing of the notice was nothing more than an act of drawing to the Court's attention that there were matters in the case to which s 25B applied. I think he was entirely correct in this respect.

145 Mr Bathurst properly conceded that it was not clear that this error influenced his Honour to any great extent. It is not therefore necessary to say anything further in regard to this matter. While his Honour did err as submitted, it had no effect on the result of the case.

The second ground of BAL's appeal: the payment by James Hardie of $72,500

146 BAL submitted that Curtis J erred in treating the sum of $72,500 paid by James Hardie to BAL "as being pro tanto satisfaction of [BAL's] cross claims against Eraring Energy and [BIL] in tort and for contribution pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946".

147 The background to the payment of $72,500 by James Hardie is as follows. After Mr Royal's claim had been determined, Eraring Energy and BAL brought cross claims against a number of cross defendants including James Hardie. Prior to the commencement of the trial before Curtis J, the cross claim brought by BAL against James Hardie for contribution was settled.

148 The settlement was recorded in a deed of release and indemnity. The deed recorded:

"It has been agreed between [BAL] and James Hardie that James Hardie would pay to [BAL] the sum of $72,500 in full and final settlement of any claim [BAL] has or had against James Hardie arising out of the injury sustained by Mr Royal ...".

149 Curtis J noted that the deed had been tendered by BIL in the course of summary judgment proceedings (which were unsuccessful) and although the deed had not been formally placed in evidence in the trial, its existence and terms were not in dispute. His Honour therefore assumed "that the sum of $72,500 has been paid by James Hardie to BAL".

150 BIL contended before Curtis J that the claims of BAL had been satisfied pro tanto to the extent of $72,500. BAL, in response, submitted that no defence of partial satisfaction had been pleaded and, furthermore, "there is no objective or other basis for treating the whole or any substantial part of that inclusive $72,500 sum as being in (whole or partial) satisfaction of diminution of, BAL's total claims for contribution from all the parties to the proceedings". The latter argument was based on the submission that the payment of $72,500 was partly in settlement of costs - it was said that, as the amount of the costs involved had not been put before the court, it was not possible to say how much of the $72,500 was to go against the capital claimed, and hence the payment should be ignored.

151 A defence of partial satisfaction was indeed not pleaded by BIL. At the time the defence was filed BAL had not come to terms with James Hardie. Curtis J noted that upon learning of the deed between James Hardie and BAL, BIL unsuccessfully opposed the application by BAL to discontinue its cross claim against James Hardie and thereafter, again unsuccessfully, sought orders that BAL's cross claim against BIL be struck out upon the ground that payment by James Hardie to BAL pursuant to the deed extinguished by satisfaction all BAL's remaining claims for contribution.

152 Curtis J relied on Leotta v Public Transport Commission (NSW) (1976) 9 ALR 437 for the proposition that a failure to amend pleadings is not fatal to the assertion of a legal right if facts necessary to found such a right emerge and are contested in the course of the trial. His Honour referred to the following observation by Jacobs J in Maloney v Commissioner for Railways (1978) 18 ALR 147 at 151:

"[A] defendant cannot lie by as the evidence supporting the case emerged and then at the end of the trial submit that the issues of fact raised by that case should not be submitted to the jury or even wait for appeal and then claim that the case which emerged should not have been left to the jury".

153 Curtis J concluded:

"This trial has been conducted by BIL from its very commencement in interlocutory skirmishes upon the basis that BAL should account in some fashion for the monies received from James Hardie. BAL has never put in issue the fact that the monies were paid. It has acquiesced in the factual contention, advanced by BIL as the basis of entitlement to interlocutory relief. Because of the way in which this trial has been conducted, I see no procedural unfairness in, or procedural bar to, the determination of the satisfaction issue raised between BAL and BIL".

154 In my opinion, his Honour was entirely justified in this conclusion.

155 In addition to the deed of indemnity and the reference therein to the payment of $72,500 by James Hardie to BAL, there was another piece of evidentiary material on which Curtis J relied for his finding that BAL had received the payment of $72,500. During the course of final addresses at the trial, counsel for BAL said to Curtis J "we have clearly said in our submissions that we have received an inclusive of costs figure of $72,500". His Honour asked counsel to specify in respect of which part of BAL's loss the $72,500 was paid. Counsel replied:

"Your Honour, I cannot say what part because the agreement between my client and Hardies does not specify a part".

156 Curtis J concluded:

"The present problem to my mind is best resolved by recourse to the onus of proof. It is patent from the pleadings between BAL and James Hardie, the deed and the admissions of counsel, that the sum of $72,500 was paid by James Hardie to BAL and received by BAL in extinction of the claim made by BAL against James Hardie for contribution to its liability upon the plaintiff's judgment. It is for BAL to prove the extent to which any part of this sum was applied not in satisfaction of the claim but in payment of its costs. As no evidence is offered I am compelled to find that the claims in tort and for contribution by BAL have been satisfied to the extent of $72,500."

157 BAL contends that Curtis J erred in the approach he adopted and should have held that BIL bore the onus of proof which it did not discharge. Mr Inatey, on behalf of BAL, accepted that Curtis J properly had knowledge of the deed. He said that the $72,500 was paid to BAL "inclusive of costs not net of costs". He repeated the submission that, as the amount of costs payable to BAL was not before the Court, it was not possible to identify what part of the $72,500 related to the capital amount of BAL's claim against James Hardie and, the onus being on BIL to establish that amount (and BIL not having discharged that onus) the $72,500 should be ignored.

158 In my opinion, Curtis J correctly held that the evidentiary material before him resulted in a prima facie case being established that the $72,500 had been paid in satisfaction of BAL's claim. That is to say, in my opinion, his Honour was correct in saying that, on the material before him, it appeared that the $72,500 had been received by BAL "in extinction of the claim made by BAL against James Hardie for contribution to its liability upon [BIL's] judgment". On that basis, his Honour was correct in saying "it is for BAL to prove the extent to which any part of this sum was applied not in satisfaction of the claim but in payment of its costs". As BAL led no evidence in this respect I consider that Curtis J correctly found that the claims in tort and for contribution by BAL have been satisfied to the extent of $72,500. I would dismiss this ground of appeal.

Summary, orders and remarks as to costs.

159 I would uphold BIL's first ground of appeal. I would make an order declaring that the responsibility, between themselves, of BIL, BAL, and Eraring Energy for the capital, interest, and costs of the judgment and verdict awarded by O'Meally P to Mr Royal be shared in the proportion of 75% as regards BIL, 15% as regards BAL, and as regards Eraring Energy 10%.

160 The order made by Curtis J that BIL pay to BAL $96,252.10 is set aside and the parties are directed to bring in short minutes of order at the hearing on 7 February 2003 referred to in paragraph 166.

161 I would dismiss BIL's sixth ground of appeal. I would make no change to the order of Curtis J that BIL pay to BAL 83% of BAL's costs incurred in Mr Royal's action (subject to the deduction of $72,500).

162 I would dismiss BIL's second ground of appeal and BAL's first ground of cross-appeal.

163 I would dismiss BIL's third and fourth grounds of appeal.

164 I would uphold BIL's fifth ground of appeal but would make no orders consequential upon this.

165 I would dismiss BAL's second ground of cross appeal.

166 During the course of the appeal, Mr Inatey referred to an abandonment by BIL of certain grounds of appeal and indicated that he would seek a special order for the costs of the appeal. Sheller JA, the presiding judge, then requested Mr Inatey to set out in written form exactly what orders should be made as to costs and the reasons for any submissions so made. His Honour requested that the other parties respond in writing to Mr Inatey's submissions. Unfortunately, this request has not been complied with. For that reason, I would not at this stage suggest any orders as to costs. But I propose that the matter be adjourned to not before 10.30 am on 7 February 2003, at which time the court will hear oral submissions as to costs with the intent that final orders will be made there and then. Each party will be allowed no more than 10 minutes for oral submissions. Each party should file written submissions as to costs, with a minute of proposed orders, by not later than 4.00 pm on 6 February 2003.

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LAST UPDATED: 05/02/2003