The insured was a company which designed and manufactured power station equipment. Its business was described in its public liability schedule as ‘engineers’.
A worker was employed by some transport companies between 1968 and 1973 to work at a power station operated by the Electricity Commission of NSW. When boilers which had been designed, manufactured and installed by the insured were repaired by the Commission and by the insured, asbestos fibres were released and inhaled by the worker.
The worker contracted mesothelioma. He obtained settlements from his employer and from the Electricity Commission. Subsequently the Commission successfully sued the insured for contribution. Vero refused to indemnify the insured.
Their policy excluded claims arising out of a breach of the duty owed in a professional capacity by The Insured. It was a condition that the insured should exercise reasonable care that only competent employees are employed and shall take all reasonable precautions to prevent bodily injury. The usual stuff.
Vero said the exclusion applied, and the condition had been breached, and the injury did not occur during the period of insurance.
The NSW Court of Appeal decided that the insured did not owe a professional duty of care to the worker, so the exclusion did not apply. It had not been proven that the insured had actual knowledge at the relevant time of the dangers of asbestos. As a result it could not be demonstrated that the insured deliberately courted the danger, so the condition about reasonable precautions had not been breached. Finally, the injury occurred when the initial exposure to asbestos took place, which was during the period of insurance.
However, the Court did notice that the trial judge had failed address the question of whether the insured had taken reasonable care to employ only competent employees, and it sent the case back to the trial judge to decide that point. Vero v Power Technologies.
The Court applied well-established principles in dealing with all three issues.
FURTHER ENQUIRIES
