Adams v Cape Industries Plc

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE SLADE
Judgment Date27 July 1989
Judgment citation (vLex)[1989] EWCA Civ J0727-2
Docket Number89/0752
Date27 July 1989

[1989] EWCA Civ J0727-2

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL PROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

SCOTT J.

Royal Courts of Justice

Before:

Lord Justice Slade

Lord Justice Mustill

and

Lord Justice Ralph Gibson

89/0752

Jimmy Wayne Adams & Ors.
Appellants (Plaintiffs)
and
Cape Industries PLC & Capasco Ltd.
Respondents (Defendants)

MR. T. MORISON Q.C. AND MR. C. FALCONER (instructed by Messrs Oppenheimer Nathan & Vandyke) appeared on behalf of the Appellants (Plaintiffs).

SIR GODFRAY Le QUESNE Q.C., MR. J. PLAYFORD Q.C. and MR. A. BRUNNER (instructed by Messrs Davies Arnold & Cooper) appeared on behalf of the Respondents (Defendants).

LORD JUSTICE SLADE
1

2

This is the judgment of the Court, to which all its members have contributed, on an appeal by the plaintiffs in 205 consolidated actions. On 27th July 1988, Scott J. dismissed all their claims. The trial in the Court below lasted some 35 days and the argument before this Court extended over some 17 days. The case raises important points of law and some substantial issues of fact.

3

Having reserved judgment at the end of the argument on 3rd May last, we subsequently came to the firm conclusion that the appeal must be dismissed and that in the particular circumstances of this case it was right that the parties should be informed of our decision at once, rather than having to wait for some more weeks before we were in a position to give the reasons for our decision.

4

On 24th May last we accordingly announced that the appeal would be dismissed and that we would give the reasons for our decision in writing at a later date, at which date the Order dismissing the appeal would be drawn up. This we now do.

5

The plaintiffs in these proceedings are persons, or the personal representatives of persons, in whose favour awards of damages were made by the judgment, dated 12th September 1983, of the Honourable Judge Steger, a United States Federal District Court judge, in the District Court for the Eastern District of Texas, U.S.A. ("the Tyler Court"). The judgment was a default judgment against Cape Industries PLC ("Cape") and Capasco Ltd. ("Capasco"), companies registered in England and the sole defendants in all the actions before this court. They had taken no part in the proceedings in which the judgment was made. The judgment was for the specific sums payable to individual plaintiffs set out in an appendix to the judgment: $37,000 each for 67 plaintiffs; $60,000 each for 31 plaintiffs; $85,000 each for 47 plaintiffs and $120,000 each for 61 plaintiffs. The total of the individual awards was $15.654 m. and the awards were directed to bear interest at 9% from judgment until payment.

6

The awards were made in respect of claims for damages for personal injuries and consequential loss allegedly suffered by each plaintiff as a result of exposure to asbestos fibres emitted from the premises of a primary asbestos insulation factory in Owentown, Smith County, Texas, which was operated from 1954 to 1962 by Unarco Industries Inc. ("Unarco") and from 1962 to 1972 by Pittsburgh Corning Corporation ("PCC"). The basis of liability of Cape and Capasco was alleged to be negligent acts and omissions and breaches of implied and express warranties.

7

The relationship of Cape and Capasco to the emission of asbestos fibres from the Owentown factory was, in summary, that Cape owned the shares in subsidiary companies in South Africa which had mined the asbestos and in its subsidiary Capasco. Capasco was concerned in organising the sale of asbestos, mined in South Africa, throughout the world to those who wished to use it in various industrial processes. Between 1953 and 1978 when it was dissolved, another subsidiary of Cape, North American Asbestos Corporation ("NAAC") assisted in the marketing of asbestos of the Cape Group in the U.S.A. The plaintiffs' contention was that the defendants had been responsible for the supply of asbestos fibres directly or indirectly to Unarco and PCC without giving proper warning of the dangers thereof.

8

Summary of the Proceedings in the Tyler Court

9

Different sets of proceedings with reference to claims arising from the processing of asbestos in the Owentown factory had extended over many years. An account of what took place is necessary for a proper understanding of the course of the present proceedings. The first action was commenced in the Tyler Court in January 1974 and was framed as a "class" action in which the plaintiffs sued on "behalf of themselves and all other similarly situated". A second action was commenced in the same month. They were assigned to Judge Steger. Cape was one of the defendants. Capasco was added as a defendant in 1976. Egnep (Proprietary) Ltd. ("Egnep"), a wholly owned South African subsidiary of Cape, engaged in mining asbestos, was also a defendant. All filed motions to quash service on the ground of lack of jurisdiction.

10

By July 1974 it was apparent that hundreds of claimants, alleging injury caused by the amosite asbestos used in the Owentown plant, were intending to pursue claims. Judge Steger in December 1974 ruled that the actions should not proceed as class actions; that they should be conducted under the Federal "Rules for complex and multi-district litigation"; and that intervention in the proceedings should be allowed freely for those claimants who wished to join. In consequence a large number of claimants were added. In December 1974 a third action with reference to asbestos from the Owentown plant was commenced in the Tyler Court in which the only defendant was the USA. All these proceedings together have been known as the Tyler 1 proceedings. They were separate and distinct from the proceedings in which the appellants, now before this court, obtained their judgment in September 1983.

11

The motions by Cape, Capasco said Egnep to dismiss the Tyler 1 proceedings as against them on the ground of lack of jurisdiction were dismissed by Judge Steger in August 1977. That dismissal was not final and it was open to the Cape companies to take the jurisdiction point at the trial of the action. They filed answers in which they pleaded to the merits of the claim while maintaining their objection to jurisdiction.

12

The number of claimants in the Tyler 1 proceedings had by mid 1977 risen to more than 400 and was still increasing. Trial was set for 12th September 1977. The purpose of Judge Steger in fixing that date included that of causing the parties to consider settlement. On 12th September 1977 settlement discussions proceeded in which Judge Steger took part in a manner which would be unusual, if not impossible, in this country but which was effective and normal under the United States system of civil justice. By 28th September 1977 a settlement figure of $20 m. was agreed for all the claimants who then numbered 462. Upon agreement of the settlement figure it was ordered that as from 28th September 1977 no further intervention in any of the Tyler 1 actions would be permitted.

13

The sum of $20 m. was provided by the defendants in agreed proportions: £5.2 m. by NAAC, Cape and Egnep; $1 m. by Unarco (who had operated the Owentown plant from 1954 to 1962); $8.05 m. by PCC (who had operated the plant from 1962 to 1972) and its shareholders and £5.75 m. by the United States government. The settlement was recorded and approved in a final judgment in the Tyler 1 actions dated 5th May 1978. The reference to shareholders in PCC is to Pittsburgh P.G. Industries Inc. ("PPG") and to Corning Glassworks Inc. who had been joined as defendants on the basis that each had taken such part in the management decisions regarding the use of asbestos as to be liable for injuries arising from that use. (J.6E).

14

Upon prohibition by the order of Judge Steger of further interventions in the Tyler 1 proceedings, new actions were commence by claimants in what have been called the Tyler 2 proceedings. There were 8 separate actions. They were assigned to Judge Steger. The first was commenced on 19th April 1978 and the last on 19th November 1979. There followed intervention by a very large number of claimants. Cape, Egnep and NAAC were defendants in all the actions. Capasco was a defendant in three only. PCC, PPG, Corning Glassworks Inc. and OCAW, a trade union to which some claimants had belonged, were also defendants in all actions. The United States Government was a defendant in some actions and third party defendant in others.

15

In December 1981 Judge Steger gave directions by which each claimant was required to provide specified information with reference to his claim "on personal knowledge and attested to under penalty of perjury". As a result of those directions, and of the response, or lack of response, thereto, a large number of claimants had their claims summarily dismissed "without prejudice". The number of plaintiffs left in the Tyler 2 actions was about 206. It is to be assumed that each of those remaining claimants had responded to the order of December 1981 by alleging some physical condition that was capable of having been caused by exposure to asbestos dust and of constituting an injury.

16

Cape, Capasco and Egnep took the decision to play no part in any of the Tyler 2 actions. They had initially regarded the Tyler 1 actions as having little more than nuisance value. They could not understand how tortious liability to the Owentown workers could be imposed upon the Cape companies merely on the ground that Cape subsidiary companies had mined the asbestos and sold it into the United States of America. They had had expectations of success on their jurisdiction objection. They had, however, succumbed to the pressure for settlement. They were unwilling to be left as the...

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