Supreme Court of South Australia Increases Exemplary Damages Award

The decision of Amaca Pty Ltd v Latz [2017] SASCFC 145 was handed down by the South Australian Supreme Court on 30 October 2017. The case involved a plaintiff who was exposed to James Hardie products containing asbestos in the 1970s, as a result of which he contracted terminal mesothelioma.

His claim was initially heard in the South Australian District Court where, amongst other things, he was awarded $30,000 in exemplary damages, Judge Brian Gilchrist finding there that James Hardie had showed “reckless indifference” by continuing to sell asbestos products despite knowing they could kill people, that they overlooked safety and were driven by a “thirst for profit“.

Elements of the decision were appealed by both parties. While some aspects of the damages award were reduced, the case is significant for the fact the South Australian Supreme Court ordered the award for exemplary damages to be increased to $250,000 on appeal, making it the largest ever such award in South Australian history.

The first ever exemplary damages award in Australia arising out of asbestos exposure was that of Midalco Pty Ltd v Rabenalt [1989] VR 461. In that case exemplary damages of $250,000 were awarded at first instance, the decision being confirmed on appeal.

It is interesting to note that despite the passage of almost 30 years, the awards of exemplary damages in these two cases were identical. We doubt though that this could be considered a high water mark or tariff for such awards.

It is worth remembering though that exemplary damages awards are ordinarily not covered in employers’ indemnity policies, so this is effectively a self-insured risk for employers. Claims involving exemplary damages can then become difficult to defend as an insurer is unlikely to wish to defend a claim in respect to which there is an uninsured component.

Awards like this have, in the past, generated some relatively short-lived activity by Western Australian plaintiff lawyers who have then sought exemplary damages on behalf of their clients. Whether Latz will revive interest in exemplary damages in Western Australia is yet to be seen.

The author Stephen Williams is Recommended in Doyles Leading Dust Diseases Lawyers (Defendant) – Western Australia, 2017

The information published in this paper is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.