ACLN - Issue #38

Health &Safety

The Legal Implications of Substandard Air Quality

- Penelope Pengilley,Freehill Hollingdale &Page, Melbourne andJohn Taberner and David Brigden, FreehillHollingdale & Page, Sydney.

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INTRODUCTIONThis paper deals with the legal issues surrounding

substandard indoor air quality and in particular the legalobligations and duties of property owners and managers.

A. BUILDING OWNERS

The Common Law Duty of Care ­Occupiers' Liability

(a) BUilding owner in possession

Duty of CareAt common law, occupiers of land and premises owe

a duty to persons entering their premises and may be liablefor injury suffered by them. This liability is governed bythe general principles of negligence. Historically, underthe special rules of occupiers' liability, the categorisationofthe entrantwas decisive ofthe occupier's duty. Differentstandards of care and often slender distinctions wereimposed upon occupiers depending upon whether theentrant was for example a trespasser or an invitee. The lawwas becoming exceedingly pedantic and confusing.

However, since the High Court decision in 1987 ofAustralian Safeways Stores Pty LtdvZaluzna (1987) Aust.Torts Reports 80-073 162 CLR 479, these rules no longerapply. Instead, actions in negligence against occupiers ofland or premises are now governed exclusively by thegeneral principles of negligence.

To determine an occupier's liability all the relevantcircumstances are considered; in particular:

• the nature of the occupier's occupation ofpremises;and

• the manner of the entrant's entry.

There must be a reasonable foreseeability of a real riskofinjury to the entrant or to the class ofperson ofwhich theentrant is a member.

A risk of injury which is unlikely may be foreseeableso long as the the risk is not far-fetched or fanciful.

Standard of Care at Common Law and pursuantto the Occupiers' Liability Act

Following the Australian Safeways case an occupier'sobligation is measured by the standard of reasonable care.The degree of"reasonableness "required varies accordingto the circumstances surrounding the plaintiff's entry onthe premises. A comment on the standard of care owed byan occupier was made by Kirby P of the New South WalesCourt of Appeal in Western Suburbs Hospital v Currie(1987) 9 NSWLR 511. He said that it was clear that a dutyof care was owed because of the particular position of apublic hospital which encourages and facilitates visitors.

Breach of DutyThe occupier will breach the required standard of care

if reasonable precautions are not taken to remove a risk ofinjury to entrants.

An occupier will not breach the required standard ofcare only because an expert could detect a danger that wasnot within the expertise of the ordinary occupier to detect.However, an occupier would be in breach if an expertdraws its attention to a fault in the premises it controls andthe occupier fails to act on the expert's advice. Likewise,if it comes to the occupier's attention that it should haveconsulted an expert on the matter.

Consequently, a building owner may be liable forinjury sufferedby entrants causedby faulty air-conditioningunits where the building owner has been warned of thedefect in the air-conditioning by an expert.

Similarly, if a manufacturer warns a building owner ofa risk involved in the use of a faulty air-conditioning unitand injury is suffered by people entering the building as aresult of the defect, the manufacturer has fulfilled thecommon law duty of care it owes to the building owner.However, the building owner will be liable as an occupierfor the injury suffered by the entrant.

The relevance of Australian Standards to thestandard of care

Other matters that would be material to whether a dutyof care exists and in what degree include AustralianStandards on air quality and ventilation. It could be argued

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that the risks associated with the failure to meet thesestandards would probably be reasonably foreseeable.

Although there is little in the way of litigation orlegislation concerning indoor air quality hazards, there hasbeen a plethora of standards on air quality and ventilationproduced or appearing in Australia in recent years. Theleading standard is Australian Standard AS3666-1989"Air-handling and water systems of buildings - Microbialcontrol" setby the Australian Standards Association. Thisstandardhas legislative force in New SouthWales pursuantto the regulations under the Public Health Act.

The standard examines requirements for air­conditioning systems, cooling towers andhotwater systemsincluding aspects of design, installation and maintenance.A defendant in an indoor air quality case whose buildingfailed to measure up to any relevantrequirement ofAS3666would be hard-pressed to escape liability.

Who is an Occupier?The plaintiff must establish that the defendant is an

occupier. The test for occupation is satisfied if control oroccupationofthe landorstructurecanbeproved; possessionand ownership by themselves are insufficient.

Control is the primary factor in assessing liability. Itis not necessary that a person should have the entire controlover premises in order to be an occupier. Nor is itnecessary to show exclusive occupation. It is sufficient ifa person has some degree of control such as that given bya legal right to invite the plaintiff to enter the premises.

It is not necessary to be in actual physical possessionofpremises in order to be an occupier ofthem. In addition,there may be more than one occupier ofthe same premises.Two or more persons may be occupiers. Wherever thereare two or more occupiers each is under a duty to use caretowards persons coming onto the premises. This dutydepends on the occupier's degree of control.

Note thatwhenadangerexists next to the areacontrolledby an occupier, it may owe a duty ofcare to persons injuredby the danger whether or not it is in control or occupationof that area. When a plaintiff has been forced to useadjacent land because ofconditions on the occupier's land,liability is usually attributed to the first occupier, not to theoccupier of the adjacent land.

(b) Where the building owner retains partialpossession and has control over the air­conditioning system

An interestingproblem arises where the owner/managerhas partial possession or control over the air-conditioningsystem, whilst the rest of the premises are leased. In sucha case it is likely that the injury or disease would becontracted on the demised premises.

In those circumstances, what is the liability of thebuilding owner?

It has been said that:"The price ofthe enjoyment of land is a duty to takeaffirmative action to protect neighbours againstdangers arising on the land, but because thedefendant has done nothing to create the danger, he

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is to be judged by reference to what is reasonable toexpect him to do, given his resources, not by thenormal objective standard of the reasonable man."(Rogers, The Law o/Torts, p125)

A building owner who retains partial possession orcontrol owes a duty of care to individuals present in thebuilding. Remember that to be liable as an occupier, it isnot necessary to have total control over the premises.There may be two or more occupiers of the premises, thestandard of the duty they owe will be proportional to thedegree of control they have over the premises.

There are cases concerning landlords which appear tobe on point. In Cunard v Antifyre [1933] 1 KB 551 thelandlord retained control of the roof and guttering of thepremises. The plaintiff was a tenant of one of the flats inthe building. In December 1931, due to the landlord'sneglect, a heavy piece of guttering fell from the main roofthrough the glass roofofthe plaintiff's kitchen injuring theplaintiff.

The Court found that as occupier, the defendants wereunder a duty to take reasonable care that the gutteringshould not fall and that the injured plaintiff and herhusband, as occupiers ofa flat in the same building, shouldhave been in their reasonable contemplation as personsclosely and directly affected by any neglect of that duty,and that the plaintiffs were entitled to succeed. It wasimmaterial that the tenements were part of the samestructure.

This case was approvedby StableJ inTaylor vLiverpoolCorporation [1939] 3 ALL ER 329 at p.337; a case whichconcerned a brick which fell from a chimney hitting atenant's daughter on the head. He said:

"In my judgment, the cause of the trouble was thisdefective brick in the chimneystack, of which thelandlord was in exclusive occupation andpossession, the ordinary principles of tort apply,and I think that the landlord - I call him the landlord,it is a mere accident that he was the owner of thechimneystack - who negligently allowed thebrickwork to remain for a matter of 5 years in thisdangerous state was equally liable at law whetherthe brick fell on his tenant, on his tenant's daughter,or on a casual passer-by, and whether the tenant orthe daughter or the passer-by was in the yard or onthe highway or on the property of an adjoiningowner. " (at p .337)

(c) Where the building is entirely leasedAt common law, a landlord is generally not liable for

injury suffered on premises which are wholly leased. Therule is "caveat lessee", and the tenant takes premises asfound, in the absence of any express agreement (Cheeterv Cator (1918) 1 KB 247). The terms of the lease mayexpressly negate this rule. The rule applies even where thedanger existed at the time the lease was entered into(Cavalier v Pope (1906) AC 428).

Until recently, the knowledge of the landlord wasconsidered to be immaterial so long as there was no

ACLN - Issue #38

attempt deliberately to conceal damages (Bottomley vBannister (1932) 1KB 458). However, in Manton vPerryandHaddin (1985) 60 ALJ 410 a single Judge of the NSWDistrict Court said that the level ofawareness ofthe dangerof the landlord and the condition of the premises will berelevant to the landlord's duty.

Naturally, a building owner who undertakes themaintenance ofthe building (especially the air-conditioningsystem) owes a duty of care. Access to an area formaintenance has been equated with control of the area(Haseldine v C A Daw and Son Ltd (1941) 2 KB 901)

(d) Defences to negligence

Voluntary Assumption of RiskFor a defendant to have the benefit of the defence that

the plaintiff voluntarily assumed the risk of injury, thedefendant must prove on the balance of probabilities thatthe plaintiff consented, expressly or impliedly, to the risk.

Forexpress consent, it is clear thatparties can expresslyagree to a modification or variation of their rights (PholoProduction Limited v Securicor Transport Limited (1980)AC 829). For example, a lease could provide that thetenant consented to all risks of disease on the premises.However, a tenant could not contract away the rights of itsemployees although itcouldagree to indemnify the landlordin the event any of its employees sued.

Greater protection would be given by making such aterm a condition ofentry into the premises, for example, byuse of a disclaimer which is displayed at the entry of thepremises. Theremustbe reasonable notice ofthe disclaimerto a person entering the building (Ashdown v Williams(1957) 1 QB 409; White vBlackmore (1972) 2AB 651). Adisclaimer may not exclude liability where the visitor hasno real choice whether or not to enter (Burnett v BritishWaterways (1973) 1 WLR 700).

However, it is highly unlikely that such premiseswould be attractive to commercial tenants!

Further, the requirement would have to be imposedbefore the building was tenanted or at a time when all thetenants were renegotiating their leases. Otherwise, itwould be a unilateral attempt to vary contractual rightssuch as express or implied terms relating to access, andwould be unenforceable.

The defence of voluntary assumption of risk may alsobe implied. If the person has full and actual knowledge ofthe hazard (Letang v Ottawa Railway (1926) AC 279), itmust be shown objectively that the plaintiff assumed boththe legal and physical risk of injury Smith v Baker (1891)AC 325. It is unlikely that entry to a building would beimplied consent to the physical risk ofdisease and the legalrisk of curtailment of any right of action.

The acceptance of risk must also be voluntary. In anemployment context the standard of proof of the defencewill be higher, as the Court regards the worker's freedomas inhibited by the economic necessity of employment.Where a worker obeys under protest or merely reads adisclaimer the defence may not be attracted (Bowater vRowley Regis Corporation (1944) KB 467; Burnett vBritish Waterways).

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Crimes Act 1900 (NSW)Recent changes to the English law suggest that in the

event that a person died in circumstances where a buildingowner or other entity having responsibility for themaintenance of the air-conditioning system was guilty ofwilful neglect or gross neglect, that entity could be chargedwith manslaughter. The likelihood of a conviction woulddepend upon whether the wilful neglect orgross negligencewas referable to someone who could be regarded as themind and will of the company - say the Managing Directoror the Chief Executive Officer. Criminal negligencerequires a very high degree of carelessness going beyondcivil negligence. The Crown must prove criminalnegligence beyond reasonable doubt whereas the far lowercivil onus of proof on the balance of probabilities isrequired in mere civil negligence.

Common Law Nuisance - Private NuisancePrivate Nuisance is the interference with an occupier's

right to the beneficial use of his own land by somethingoutside the land. A wide range ofmatters could amount toprivate nuisance including such things as offensive smells,andreasonablefears for one's ownsafetyorhealth (Newmanv Conair (1972) 33 DLR (3d) 474).

To bring a successful action in nuisance, a number ofrequirements must be satisfied. Firstly, the plaintiff musthave title to sue arising from possession as an owner ortenant. Secondly the interference must be unreasonable.

At common law, the creator of a nuisance is liable forthe damage caused. Where a nuisance arises from thedefendant's neglect, he may be under a duty to abate thenuisance, the likelihood of liability will be increased if thecreator of the nuisance has not taken reasonable steps toprevent the nuisance (Daily Telegraph v Stuart (1928) 28SR (NSW) 291). Factors affecting the standard ofthe dutyinclude the gravity of the danger, and the difficulty andcosts involved in abatement (Goldman vHargrave (1967)1 AC 645). A stricter duty giving rise to liability wassuggested in WringevCohen(1940) 1BK299. Theremaybe no nuisance if damage was only the result of thesensitivity of the plaintiff (Bloodworth v Cormack (1949)NZLR 1058).

An action inprivate nuisance couldpossibly be broughtby a tenant whose employees had been affected bycontaminated air-conditioning.

Occupational Health and Safety Act 1983 (NSW)Several sections of the Act are directly relevant to

building owners. Others which will be discussed laterhave direct relevance to employers and so, because ofpossible recourse against lessors, are also indirectly relevantto lessors. Section 17(2) deals with building owners whomay by virtue of any contract or lease have an obligation:

(a) to maintain or repair premises used for work(non-domestic premises); or

(b) an obligation to protect the safety ofor absence ofrisks to health arising from any plant or substance.

An occupier is not defined in the Act, but a control testwhich includes contractual obligations as above is applied.

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"Place of work" is simply defined as premises wherepersons work be they as employees or self-employer(section 4).

Health is not defined in the Act but is generallyaccepted to include work-related injuries and disease suchas occupational deafness, occupational cancers andlegionnaires disease.

From these definitions, it is clear that a building ownermay have the requisite control for the purposes of the Act.Consequently, a building owner may be found liable forhealth risks attributable to poor indoor air quality wherethebuilding ownerhas controlofthe temperature, humidity,ventilation and air-conditioning ofbuilding inwhichpeoplework.

The section which imposes a general duty regardingemployees on all employers is section 15. It would bedirectly relevant to those building owners who occupy orwhose employees work within a building. The section willbe discussed later in the context of employers' duties.

Another section, section 16, imposes a duty onemployers regarding non employees. It says that everyemployer and self employed persons shall ensure so far asis practicable that persons (other than employees) are notexposed to risks to their health or safety arising from theconductoftheundertaking oftheemployeror self-employedperson.

The penalties for breach of the Act are stiff with amaximum fine of $250,000 for a corporation and $25,000for an individual.

Note that a breach of the Act is a criminal offence.Thus, guiltmustbe established"beyondreasonable doubt"whilst civil liability for breach of a duty of care need onlybe established "on the balance of probabilities".

Legionnaires' Disease - Regulations Pursuant tothe Public Health Act 1991

The regulations require compliance with the "NewSouth Wales Code of Practice for the Control ofLegionnaires' Disease " published by the NSW HealthDepartment (the "NSW Code of Practice").

The NSW Code of Practice, amongst other things:• suggests ways of minimising hazards from

legionella;• outlines the legal requirements for the operation

and maintenance of regulated systems;• details methods of water treatment, cleaning,

filtering, emergency decontamination procedures;• details safe working practices, building

construction and modification, sampling andmonitoring procedures;

• provides minimum standards for legionellacolonisation of water;

• provides pro forma:- applications for approval or product/process for

disinfection;- sample quarterly report on maintenance ofwater

cooling systems;- minimum standards for air filtration for air­

condition systems.

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Monitoring and ComplianceRegulations under the Public Health Act require that

air-conditioning systems be inspected for legionellabacteria, andrecords be maintained aboutbothmaintenanceand operating requirements.

The Public Health Regulations prescribe requirementsfor the installation, operation and maintenance of thefollowing regulated systems:

(a) air:-.handling systems;(b) evaporative cooling systems;(c) hot water systems;(d) humidifying systems;(e) warm water systems;(f) water cooling systems; and(g) their associated equipment and fittings.

"Air handling system " is defined to include air­conditioners and air-conditioning systems.

"Hot water system" means a system designed to heatand deliver water at a temperature of at least 60°C at eachoutlet.

"Warm water system" means a system designed toheat and deliver water at at temperature of less than 60°Cat each outlet.

"Water cooling system" means a cooling tower and itsassociated equipment and pipework.

Specific ObligationsSpecifically, the Regulations require, amongst other

things, that:(a) the Standards Association of Australia Standard

3666 be complied with;(b) (since 18 May 1992) an operation manual and

maintenance manual be given to the occupier bythe installer when a regulated system is installed.The system must be operated and maintained asrequired by the operation manual and themaintenance manual;

(c) (since 18May 1992) occupiers must maintain theoperation and maintenance manuals.(1) Operations manuals must include:

• physical details of the system (withillustrations);

• operating and shut down procedures;(2) Copies of the operation manuals must:

• bekept in areadily accessible position(24 hours a day) where the system beinstalled;

• be made available, when requested,to any maintenance contractor orauthorised officer who attends thepremises.

(3) Maintenance manuals must:• include physical details ofthe system;• include maintenance and shut down

procedures;• show the date and details of every

maintenance inspection;• show the date and nature of

ACLN - Issue #38

maintenance work carried out;• show the name (and, where applicable,

the employer ) and signature of theperson carrying out the maintenance.

(4) Copies of the maintenance manual must:• bekept in a readily accessible position

(24 hours a day) where the system isinstalled;

• be made available, when requested,to any maintenance contractor orauthorised office who attends thepremises;

(d) (since 18 May 1992) each local authority is tomaintain a register of water-cooling systems,evaporative cooling systems and warm watersystems installed on premises. It is an offence notto provide particulars to the local council withinone month of a request to do so;

(e) all records must be kept for a least 7 years;(f) the following prescribed action is required:

(1) monthly inspections for:• water treatment units for warm water

systems;• air handling systems;• water cooling systems;

(2) annual inspections for:• air handling systems;• warm water systems;

(3) periodic maintenance for:• evaporative air coolers;

(4) monthly maintenance for:• air handling systems;

(5) quarterly maintenance cleaning for:• water cooling systems;• evaporative cooling systems;

(6) annual maintenance for:• air handling systems;

(7) shut down and start up procedure for:• air handling systems;• water cooling systems;

(8) compliance with drainage and dischargeof liquid procedure for all regulatedsystems;

(9) maintenance must be carried out in areasonable time (where an inspectionreveals maintenance work necessary);

(10) procedures relating to seasonally operatedsystems;

(11) compliance with prescribed precautionstobe takenduring maintenance ofregulatedsystems;

(g) the following prescribedequipmentmustbe fitted:(1) supply air filters on air handling systems;

and(2) the equipment prescribed by AS3666;

(h) approval from the Director General for Health is

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required for:(1) systems automatically producing warm

water for ablution processes;(2) disinfection processes; and(3) cleaning of a water cooling system at

intervals longer than three months;

(i) (from 18 November 1992) an approveddisinfection process must be fitted and operatedfor warm water systems and water coolingsystems.

ReportingThe NSW Code imposes the following further

obligations in regard to reporting of maintenance work:(a) quarterly maintenance reports must record

maintenance work carried out on water coolingsystems or warm water systems;

(b) it is the duty of the person doing the work toprovide the report.

OffencesIt is an offence to fail to comply with the prescribed

requirements or to fail to comply with directions given byregulatory authorities.

Civil Claims for Breach of Statutory DutyIn addition to the various duties owed by the occupiers,

employers and manufacturers, the common law has alsodeveloped the notion of breach of statutory duty whichenables plaintiffs to recover compensation for loss anddamage in certain circumstances. To succeed a plaintiffmust prove:

• that the conduct that injures the plaintiffconstitutesa breach of a statutory duty imposed on thedefendant;

• that the injury was of a type that the statutory dutywas intended to prevent; and

• that the plaintiff was within the class of personswhom the statutory duty is designed to protect.

Once a plaintiffcan bring himselfor herself within theclass ofpersons whom the statute was designed to protect,theplaintiffneednotbe concernedwith issues ofremotenessof causation.

However, while a building owner in Victoria could befound liable for breach of statutory duty in respect of theVictorian Occupational Health & Safety Act, in NewSouth Wales such a right of action has been abolishedunder the equivalent Act.

ACLN - Issue #38

B. EMPLOYERS' DUTIES OF CAREProperty owners and managers also have obligations

as employers.

Common Law Duty of Care - NegligenceAt common law, a worker injured in the course of his

employment could sue his employer in negligence.Common law negligence is established by proving theexistence of a duty of care, the breach of that duty and acausal relationship between the breach of duty and theoriginal injury complained of.

At common law an employer owes a duty to takereasonable care for the health and safety of each of itsemployees. This duty requires that the employer provide:

• safe premises;• safe plant and equipment; and• a safe system of work;

for each employee.

The standard of care is reasonable care, and what isreasonable will depend upon:

• the probability of foreseeable harm;• the gravity of the harm that was foreseeable;

and• the practicability of adopting measures to

prevent foreseeable harm.

It is important to stress that the duty is owed to eachemployee as an individual. You take the worker as youfind him or her. Consequently, if the risk is greater to oneemployee than to another - for example, because of anallergy or peculiar susceptibility - then the duty owed willbe greater. Likewise, if the consequences of injury aregreater.

In the context of the employer/employee relationship,it was said:

"... in considering generally the precautions whichan employer ought to take for the protection of hisworkmen, it must, in my view, be right to take intoaccountbothelements, the likelihood ofan accidenthappening and the gravity of the consequences ... Ithink that the more serious the damage which willhappen if an accident occurs the more thorough arethe precautions which an employer must take "Paris v Stephen Borough Council [1961] AC 367per Lord Morten, 385.

This duty cannot be passed to another by contractalthough should an employer engage a contractor tomaintain safe premises for the employer's employees, theemployer may be able to recover from the contractor eitherin contract or in negligence in the event that the employerwas found liable to an employee for failing to provide safepremises.

Such an arrangement would not protect an employer inthe event of a charge under s.15 of the OccupationalHealth and Safety Act.

Thus, it may be that the employer would be required todo all that is practicable to be satisfied that the air-

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conditioning and ventilation was safe and without risks tohealth. If the building owner refused to co-operate andthere was evidence of a foreseeable risk that the buildingwas contaminated, the employermay be required to removeits employees.

This would be akin to shutting the factory should therisk warrant it.

Concerning this option in Latemer vA.E.C. Ltd [1953]AC 643 Lord Tucker said:

"My Lords, I do not question that such a drastic stepmay be required on the part ofa reasonably prudentemployer if the risk to his employees is sufficientlygrave, and to this extent, it must always be aquestion of degree ..."(p659)

If a building must be vacated for one week or more, orpossibly vacated permanently, an employer may claimagainst the building owner for any economic loss it suffers.This could include loss ofprofits, employee's wages whilethe building is vacated, or the costs of relocating itsbusiness. In addition the building owner may suffer loss ofrent and a diminution in property value.

Occupational Health and SafetyActs in NewSouthWales

There are three sections already noted briefly above ofthe Occupational Health & Safety Act 1983 (NSW) ( "theOSH Act") which could create liability for an owner oremployer with a "sick building".

Section 15"15(1): Every employer shall ensure the health,safety and welfare at work of all his employees. "

This is a requirement of strict liability, regardless ofthe measures taken by the employer or the susceptibility ofan employee. It is also a "blanket" provision, that coversall types of employees in all work situations.

A wide view ofemployer liability under section 15 hasbeen taken in the cases of prosecutions under the section:

Carrington Slipways Pty Limited v Callaghan(1985) 11 IR 467;Gardener Bros Pty Limited v McAuliffe (1986) 15IR 477;Shannon v Comalco Aluminium Limited (1986) 19IR 358;Italo Australia Construction Pty Limited v Parkes(1988) 24 IR 428;McVernon vRoyce Roofing Industries Pty Limited(1988) 25 IR 383.

In the case ofDawson v SRA (1988) 26 IR 359 at 366,Miller CIM noted that the duty under section 15 wasabsolute, so despite an employee being negligent, if anemployer had failed to sufficiently supervise, there couldbe a successful prosecution under the section.

All of these cases involve facts far removed fromsubstandard air quality (usually fatal industrial accidents).

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Nevertheless, it appears clear that, if employees fall ill atwork by virtue of the air-conditioning system or poorquality air, there will be liability for the employer undersection 15 ofthe Act. However, because there are no casesunder section 15 directly concerned with air quality, it is amoot point as to what quality and quantity of evidence isneeded to obtain a successfulprosecutionunder the section.On the one hand, the courts· may be persuaded on theauthority of the worker's compensation cases discussedabove to find that the employer has not fulfilled the strictduty imposed by the section. On the other hand, becausethe section contemplates prosecutions being brought by aGovernment body rather than civil actions by an employeeseeking compensation, a court will require evidence on thecriminal standard of "beyond reasonable doubt", ratherthan merely on the "balance of probabilities".

Section 53 of the OSH Act states:"53. It shall be a defence to any proceedings againstapersonfor an offence against this Actorregulationsfor the person to prove that:(a) it was not reasonably practicable for him to

comply with the provision of this Act or theregulations, the breach of which constitutedthe offence; or

(b) the commission of the offence was due tocauses over which he had no control andagainst the happening ofwhichwas impracticalfor him to make provision."

Section 53 would appear to offer a defence in anyprosecution under section 15 to an employer who hasadequately maintained his air-conditioning system, butwhose employee is struck down with an illness due tosubstandard air quality, in a milder form. The defence mayalso be available in the more serious case ofLegionnaires'Disease, where an outbreak may occur in a clean air­conditioning system despite all reasonable measures toprevent it.

However, the defence has not been successfullyobtained in any reported prosecution under section 15 todate. The cases establish that the defence must be provedon the balance of probabilities. In Edwards v NationalCoal Board [1949] 1 All ER 743 it was held that the words"reasonably practicable" in this context raise a question offact, not a question oflaw, and involve a comparison ofthedifficulties to be surmounted (including time, trouble andexpense) with the magnitude and duration of risk. InCarrington S1ipways, WatsonJheld that it is for a defendantto show, on the balance of probabilities, that preventivemeasures were not practicable.

Section 15 provides a penalty of $250,000 in the caseofcorporations and $20,000 in all other cases. It is unclearhow great the penalty would be in the case of a large-scaleoutbreak of Legionnaires' Disease in a poorly maintainedair-conditioning system. However, given the greateremphasis on environmental compliance and the creationof explicit Codes for Legionella one would expect veryhigh penalties in this situation.

The OSH Act outlines who has authority to bring an

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action under section 15, or any other relevant action underthe OSH Act. Section 48(1) provides that proceedingsmay not be initiated without the consent of the Minister ora prescribed office, an inspector as defined or the secretaryofan industrial union as defined. "Prescribed officers" areinspectors appointed under the Act. Section 48(1) stillleaves the right to take action open to anyone, providedthey obtain consent referred to in the section. Section 47provides that actions are to be dealt with summarily by aLocal Court, an industrial magistrate, or the SupremeCourt in its summary jurisdiction.

Section 16Section 16 imposes on employers a liability similar to

that imposed by section 15, for persons who, although notemployed by the employer, are at the employer's place ofwork as a result of the conduct of his undertaking, forexample, contractors. It also imposes liability on the self­employed. Again, the penalty is $100,000 for corporationsand $10,000 in all other cases. No prosecutions have, asyet, been reported under section 16, but as it is couched insimilar terms to section 15, the statement concerning thatsection are likely to be applicable. Section 53 is also adefence to a section 16 prosecution.

Section 17"17(1): Each person who has, to any extent, controlof:

(a) non-domestic premises which have beenmade available to persons (not being hisemployees) as a place of work, or the meansof access thereto and egress therefrom; or

(b) any plant or substance in any non-domesticpremises which has been provided for theuse or operation of persons at work (notbeing his employees);

shall ensure that the premises, the means of accessthereto oregress therefrom or the plant or substance,as the case may be, are or is safe and without risksto health.

Penalty: $250,000 in the case of a corporation and$25,000 in any other case. "

Section 17 would impose liability on a lessor who, forexample, has responsibility for the air-conditioning in acommercial building, and the liability is in respect of allpersons who use the building. The lessorwill be responsibleunder the section for sickness (attributable to the building) contractedby any person, is whateverpart ofthe building,including lifts and entry foyers. Once again, liability isstrict.

Section 17 also imposes this liability on persons who"control" the building.

In Collins vSRA (1986) 5 NSWLR 209, the New SouthWales Supreme Court held that the SRA escaped liabilitybecause ofthe negligence ofinferioremployees. FollowingCollins, section 17 was amended into its present form so as

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to impose a strict liability rather than the previous qualifiedliability. All the section 17 cases since Collins havedistinguished it and, in the view of the amendment tosection 17, it would seem most likely to be distinguishedin any future section 17 cases. Accordingly, all commentsmade in relation to section 15 are probably relevant tosection 17. Once again, section 53 provides a defence.

Section 22Section 22 of the aSH Act removes any civil right of

action arising under the aSH Act. Accordingly, an actionfor breach of statutory duty by a worker as a ground forcompensation is not available in New South Wales undersections 15, 16 or 17.

New South Wales Worker's Compensation ActLiability for an employer under the Workers'

Compensation Act 1987 (NSW) ("the NSW Act") arisesprincipally under section 9:

"9.(1) A worker who has received an injury(and, in the case of the death of the worker, hisor her dependants) shall receive compensationfrom the worker's employer in accordancewith this Act.(2) Compensation is payable whether theinjury was received by the worker at or awayfrom the worker's place of employment. "

"Injury" is defined in section 4 of the NSW Act asfollows:

"4. In this Act ­'injury' -

(a) means personal injury arising out ofor in thecourse of employment;

(b) includes-(i) a disease which is contracted by a

worker in the course of employmentand to which the employment was acontributing factor; and

(ii) the aggravation, acceleration,exacerbation or deterioration of anydisease, where the employment was acontributing factor to the aggravation,acceleration, exacerbation ordeterioration; but

(iii) excludes a dust disease as defined."

To successfully claim for an injury under the NSWAct, an employee must provide on the balance ofprobabilities:

(a) firstly, that the disease was contracted "in thecourse of employment "; and

(b) secondly, that the employmentwas "acontributingfactor ".

Where the employee's InjUry is "aggravated" byemployment, only the second element needs to beestablished.

The courts have, in the past, had great trouble grappling

21

with "disease" in workers' compensation cases. Therewas a great deal of litigation where workers sought to havetheir ailment classed as an injury rather than a disease,because injuries were easier to prove. The classification ofan injury into physical injury, disease or aggravation ofdisease was further complicated when the disease could belinked to a physical injury.

The history of the law in this area is one of increasingphysical judicial dissatisfaction with the classification ofvarious ailments into injury, disease and aggravation ofdisease. A useful review of the development of the law isfound in Hockey v Yelland (1984) 56 ALR 215.

It is important to note that liability for an employerunder section 9 ofthe NSW Act is strict. It is irrelevant, forthe purposes of liability, that, for example, an air­conditioning system was clean and well maintained, if thecausal connection between the air-conditioning systemand the illness can be made.

It should also be noted that section 149 of the Actabolishes common law rights of action in respect ofinjuries under the NSW Act except for some limited andinapplicable exceptions.

Worker's Compensation Casesand Air-conditioning

In Bishop v The Commonwealth ofAustralia (1982) 5ALD 247, in the Federal Administrative Appeals Tribunal,a surveyor who became ill when required to work in hislocal base office sought compensation under theCompensation (Commonwealth GovernmentEmployees)Act 1971 (Cth.) (now repealed). The cause of the illnesswas identified as aggravation of his allergy to tobaccosmoke. The case establishes that:

• air quality of a building can be the subject of acompensation order; and

• the aggravation of an allergy that involved nopathological change in the subject's condition isnot a bar to compensation.

The decision is relevant as the definitions of diseaseand aggravation of disease are similar in all worker'scompensation legislation.

In Glover v Australian TelecommunicationsCommission (1984) 6 ALN 188 a Commonwealth publicservant sought compensation under the Compensation(CommonwealthGovemmentEmployees) Act 1971 (Cth.)before the Federal Administrative Appeals Tribunal. Theapplicant claimed aggravation of an existing asthmacondition caused by air-conditioning systems of thebuildings in which he had been asked to work.

Deputy President Todd agreed with an initial rulingagainst compensation but saw no difficulty in holding thata disease aggravated by an air-conditioned environmentcouldbe the subjectofacompensationorder, with sufficientevidence. However, Deputy President Todd noted that inthis case, there was insufficient evidence to establish acausal nexus between the applicant's complaint and the airquality in the buildings. On evidence he found there was"no more upon which to act than the genuine belief of the

ACLN - Issue #38

sufferer" himself. The aggravation ofthe asthma followedno specialpattern, norcouldanything in the air-conditioningsystems be identified by the applicant as a specific causeof his complaint. Consequently, the applicant failed, butthe Tribunal seems to indicate that it would be sympatheticto a claim where adequate evidence was presented.

In Carey v Australian Telecommunication (1985) 2AAR 457, another Commonwealth employee soughtcompensation before the Federal Administrative AppealsTribunal under the Compensation (CommonwealthGovernment Employees) Act 1971 (Cth). Here, a postalclerk, with a history of asthmatic complaints, claimed thaton moving to an air-conditioned building, his conditionnoticeably deteriorated. The Tribunal followed Gloverand found that the applicant had presented sufficientevidence. He demonstrated agenuine respiratory condition,and presented evidence that moulds and dust found in thebuilding's air-conditioning system aggravated hiscondition.

Telecom presented evidence that the air-conditioningsystem had been well maintained and clean,. On this pointthe Tribunal stated:

"Irrespective of the state of maintenance andcleanliness, the fact is that certain moulds, fungiand other substances are being circulated by thesystem and, for whatever reason, they have anadverse effectonthe applicant. .. Ifevery componentwas cleaneddaily, ifeverynutandboltwas tightenedregularly, if the system was a paragon of punkahs,he would still be incapacitated."

In the Tribunal's view, liability under the Act was strictand, once the causal connection was made between theapplicant's illness and the building's air-conditioningsystem, liability accrued regardless of the measures takenby the employer.

In Accident Compensation Commission (VictoriaCollege) v Bradley (Judge Mulvany, AccidentCompensation Tribunal of Victoria, unreported, 29 May1989), a case very similar on its facts to Carey, theapplicant was a librarian employed in a school ofTechnicaland Further Education that claimed, under the AccidentCompensation Act 1984 (Vic). Evidence was presented tothe effect that the applicant was highly sensitive to aircontamination. The aggravation ofher condition was dueto recirculation through the building's air-conditioningsystem of formaldehyde fumes from building materials ina new library building. The levels of formaldehyde werewithin acceptable standards but the Judge was satisfied asto the causal connection between the applicant's injuryand the building's air-conditioning system, and, under theAct, liability was strict. Although Carey was not cited, theprinciples of that case were used.

The case is notable in that Mrs Bradley cited "sick­building syndrome " as one of her conditions in herstatement claiming compensation. This is quite possiblythe first claim of its kind in Australia.

Favell Mort Limited v Murray (1975) 133 CLR 580touched on the subject of diseases contracted in buildings.

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An employee of Favalle Mort had contracted Menigo­Encephalitis, possibly during a flight back to Australia,during the course of his employment. Barwick CJ madethe following obiter statement at 584:

"Had he been required by his employment to be atsome particular place in a confined area, such as abuilding, and he was there attacked by a virus withthe consequence experienced by him in this case,there would not seem to me to have been the samedifficulty in accepting that he received the virus atthe place where his employment required him to beand that, in consequence, that obligation of hisemploymentcontributedto his injury in the extendedmeaning of the word."

Again, this supports the view that diseases contractedin a building can be the subject ofa worker's compensationclaim. It is also the only High Court reference to "sickbuilding syndrome" (SBS). From the reports of the abovecases, it appears none of them relied on or cited the ChiefJustice's statement.

Curiously, there are no Australian cases concerningLegionnaire's Disease. All actions that, in the media, werestated as commenced or likely to commence have not beenreported and appear to have been settled out of court.

Other types of SBS, which have far less serioussymptoms, have not been the subject of litigation outsidethe workplace in Australia. As such, the common law is ill­defined as it relates to indoor air quality problems.

The smoking/tobacco casesThe FederalCourt inAustraliaFederation ofConsumer

Organisations Inc v Tobacco Institute of Australia Ltd(1991) 27 FCR 149 found that there is evidence to supportthe proposition that cigarette smoke causes disease in non­smokers. On appeal, the Full Court of the Federal Courtfound that there is considerable evidence of a connectionbetween passive smoking and lung cancer, asthma andrespiratory diseases (1993 ATPR 41-199).

In the context ofcompensation available to employeesfor diseases attributable to or aggravated by theiremployment, the inhalation of cigarette smoke by non­smoking employees in the workplace resulting incompensationclaims for illness causedby passive smoking.

The above case involved a claim by the AustralianFederation ofConsumerOrganisations that the respondentwas guilty of a contravention of section 52 of the TradePractices Act by reason of an advertisement published inanumber ofnewspapers on 1July 1986. The advertisementincluded the following statement: "and yet there is littleevidence and nothing which proves scientifically thatcigarette smoke causes disease in non-smokers".

The applicant claimed that this advertisement wasmisleading and deceptive or likely to mislead or deceive.The meaning that the advertisement conveyed to a readerwas that there was little data or material which affordedgrounds for believing that cigarette smoke causes diseasein non-smokers.

Passive smoking involves the inhalation of sidestream

ACLN - Issue #38

and exhaled mainstream smoke. Sidestream smoke is thesmoke which is not inhaled by the smoker and exhaledmainstream smoke is the smoke inhaled by the smoker andsubsequently exhaled. Environment tobacco smoke is thecombination of these two forms of smoke. Environmenttobacco smoke ages prior to inhalation by the non-smoker.

The applicant established that it was misleading to saythat there was little evidence that passive smoking waslinked to cancer. In fact there was much evidence adducedto show that it caused lung cancer. This evidence camefrom epidemiological studies supported by biologicalplausibility. "Little evidence" means evidence which is soinconsequential as not to support areasonable apprehensionthat passive smoking may give rise to a health problemtherefore this statement was false. The statement that therewas no scientific proofwas also erroneous. The conclusionthat cigarette smoke causes lung cancer was drawn fromthe totality of the available data, and compelling scientificevidence.

There was overwhelming evidence, which was notdisputed by the respondent, that passive smoking causessome people to experience asthma attacks. It was foundthat although there was no evidence to prove that cigarettesmoke caused the underlying condition of asthma, asthmaattacks could constitute what a reader would perceive as adisease and therefore the statement was misleading in thisrespect.

Justice Morling refused to exercise his discretion infavour of the respondent. He found that there was a strongpublic interest in the respondent being prevented frommaking the statement as it could mislead non-smokers intobelieving that their health and the health of others wouldnot be affected by smoking.

The applicant sought injunctive reliefand an order thatthe respondent publish a correcting advertisement wasrefused. This refusal was based on the fact that JusticeMorling considered that few people reading the correctionwould recall the original advertisement (which waspublished in July 1986). It was thought to be sufficient thatthe respondent would be prevented from making such astatement in the future. While the Full Court said aninjunction was unnecessary it confirmed the substance ofJustice Morling's findings.

The proposition that employees may bring successfulclaims against employers for diseases caused by passivesmoking is supported by the recent New South Wales caseof Liesel Scholem v Department of Health, unreporteddecision dated 27 May 1992, where the plaintiff wasawarded damages in compensation for aggravated asthmacontracted by the plaintiffin the course ofher employmentbecause of passive smoking in the workplace.

The Australian Industrial Relations Commission hasalso- recognised the right of employees to ban smoking(Albany International Pty Limited and AmalgamatedFootwear and Textile Works Union (No. 21636 of 1990)).

Occupiers' liability(a) The employer owns the premises

Where.an employer owns the business premises the

23

same duty of care is owed at common law that a buildingowner as occupier owes to entrants of its building.

(b) The employer leases some or all of therelevant premises, but has no control overthe air-conditioning system

A person must have control of premises to be anoccupier of them. Complete control is not necessary, if aperson has some degree of control over some part of thepremises that person will be an occupier ofthose premises.

Where there are multiple occupiers of one building,each occupier owes a duty of care in relation to those partsof the building over which that occupier has control.Where half of the building is leased by one tenant, and theother half by another tenant, the respective tenants areoccupiers only in respect of those portions of the buildingtheir tenancy relates to.

This is supported by Wheat v E. Lacon & Co Ltd(1966) AC 552, where a company owned a hotel. Thecompany entrusted the management of the hotel to amanager. The agreement between the company and themanager required the manager to carry on the business ofselling the company's drinks on its behalf in the licensedportion of the premises, on the ground floor of the hotel.The agreement also entitled the manager to occupy the topfloor of the hotel, and to use the top floor as his privateliving quarters.

The plaintiff was injured by a hand rail whilst stayingin the top floor of the hotel as the paying guest of themanager. The plaintiff brought an action against thecompany for occupiers' liability.

In determining the issue of liability, the Court ofAppeal made a distinction between:

• the licensed or "public" portion of the premises,being the portion over which the company wasdeemed to have control; and

• the top floor of the premises, being the portion overwhich the company retained some measure ofcontrol, but overwhich the primary control rested inthe manager.

The Court of Appeal held that the manager was liableas occupier in relation to the private portion on the top floorof the .hotel. The company was not liable because themanager was deemed to be the person with primary controlover the top floor.

This case would directly apply to the situation wherean employer leased some or all of its business premises buthadno controlover its air-conditioning. FollowingWheat'scase the employer having control over all elements of thepremises, other than the air-conditioning, would be anoccupier in relation to all elements of the premises otherthan the air-conditioning. The building owner, by retainingcontrol over the air-conditioning, would be deemed to bethe "occupier" of the premises for that purpose.

Although an employer would not be liable as anoccupier it would be liable as an employer under thegeneral principles of negligence for injuries arising fromdefects in the air-conditioning system, even though it has

ACLN - Issue #38

no control over it. The duties of an employer under thegeneral principles of negligence, including the duty toprovide a safe system and place of work, cannot bedelegated.

(c) The employer leases all of the relevantpremises, and has control over the air­conditioning

An employer that leases the business premises, andcontrols the air-conditioning system, will be liable for anyinjury suffered by an entrant onto the premises as a resultof defects within that air-conditioning system.

The employer must exercise reasonable care inattending to the maintenance of the air-conditioning itcontrols and in preventing it from causing injury. Whetherthe standard of "reasonableness" has been reached, willdepend on all the circumstances of the case.

C. CONSEQUENCES OF THESE LEGAL DUTIESOF CARE

How these duties operate in practiceWhere a person sustains an injury caused by poor air

quality due to a faulty air-conditioning system that personmay have a claim against the building owner, employertenant, manufacturer, and/or the designer or installer, ofthe system.

Indeed all of these parties may be liable as follows:• The building owner may be liable as an occupier at

common law, under the Occupational Health andSafety Act, and the Public and Health Act;

• The employer may be liable at common law andunder the Occupational Health and Safety Act andWorker's Compensation Act;

• The manufacturer may be liable at common law andunder the Occupational Health and Safety Act andTrade Practices Act; and

• The installer may be liable at common law andunder the Occupational Health and Safety Act.

So what happens?

Contribution and indemnityBoth the common law and the NSW Law Reform

(Miscellaneous Provisions) Act 1946 recognise that morethan one party could be liable to a plaintiff. Thus, aplaintiff may be successful against all of the buildingowner, his or her employer and the manufacturer of plant.This does not mean that the plaintiff will get double ortriple compensation, rather that there will be anapportionment of liability between the parties. However,the parties can also agree upon contribution amongthemselves and it may be that between building owner andemployer, at least, there are contractual terms which mayregulate the situation.

InjunctionsWhere a building is known to be a risk to those entering

it and it would be impracticable for its tenants to leave and

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the building owner or person responsible for the air­conditioning refuses to attend to the problem, it is possiblethat the tenant could obtain an injunction forcing thebuilding owner to do so.

If the building owner did not comply, it could be liablefor contempt of court.

To obtain an interlocutory or interim injunction, aplaintiff would have to show that the defendant had a dutyto attend to the problem either at common law or pursuantto a term of the lease and was failing to fulfil that duty. Infact, if the claim was pursuant to a contract, strictlyspeaking it would be for specific performance of thecontract - an order compelling performance - rather thanfor an injunction. The plaintiff would have to show astrong primafacie case and that the balance ofconveniencefavoured it. The plaintiffwould probably also have to givean undertaking as to damages to the defendant to protectthe defendant in the event the defendant is ultimatelysuccessful.

The Court would also have to be satisfied that the orderbeing sought could be expressed in sufficiently certainterms that the defendant is able to understand what it isrequired to do. In some instances this could be difficult,particularly if there is scientific or technical controversyabout the matter. The problem for the plaintiffhere wouldbe that the Court will not make an order that is uncertainand thus oppressive to the defendant.

A final injunction would be dependent upon whetherthe plaintiff can make out its case.

In emergency situations a plaintiff may be able toobtain an ex parte injunction, without the building owneror its representative being present, restraining or directingthe building owner from taking or to take some action, suchas that referred to above. However, unless the urgency isgreat, the Courts generally prefer to give the other party thechance to be heard. This said, an interlocutory injunctioncould still be obtained very quickly, say, within twentyfour hours, if necessary.

D. ALLOCATING LIABILITY AS BETWEENPARTIES

Lease Agreements Between Building Owners andEmployer Tenants

(a) Express termsParties may allocate the responsibility for air­

conditioning systems and the risk of these claims betweenthem by contract for example, abuilding ownermay obtaina hold harmless clause - a clause in which the other partyagrees to indemnify the first party from all harm - fromtenants respecting all common law claims of this nature.

However it is not possible for either the building owneroremployertenant to "contractout" ofthe criminal liabilitiesimposed by legislation.

Shouldcommercial leases include warranties regardingthe indoor air quality of a leased premises? By negotiationand express agreement between the parties it is possible fora building owner lessor to assume an "all care but no

ACLN - Issue #38

responsibility" approach towards indoor air quality, andthe maintenance of air-conditioning and ventilation units.The majority ofcommercial leases state that the lessor willendeavour to ensure that the air-conditioning of leasedpremises is kept working and reasonably available for theuse ofthe lessee during building operating hours. By itselfsuch a term would not protect a building owner fromliability for injury suffered by the relevant building'sentrants. Sometimes this term was followed by a warrantygiven by the lessee to the lessor that:

"If any of the air-conditioning fails to function forany reason the lessee shall not by reason of suchfailure be entitled to determine this lease nor shallthe lessee have any right of action or claim forcompensation or damages against the lessor inrespect thereof."

This may protect the building owner/lessor should theair-conditioning fail to function but it may not operatewhere the air-conditioning was turned offor where it failedto function properly.

It should be noted that the above provision would notdeny employees and other entrants rights to compensationfrom the building owner for any injury or disease sufferedby them. Therefore, the building owner would be liable asan occupier of the building at common law. However, thebuilding owner and the employer tenant could agree as towho is to bear the loss in these circumstances and if anappropriate hold harmless clause could be inserted.

Similarly, an express warranty given by a buildingowner to repair and maintain an air-conditioning andventilation unit could be construed by a court as evidenceof the building owner's assumption of responsibility inrelation to injuries suffered that are caused by the air­conditioning and ventilation unit.

A term that treats the cleaning and fumigating of theleased premises as the employer tenant's responsibility, tothe exclusion of the building owner, may protect thebuilding ownerfrom liability at commonlaw. Forexample:

"The lessee will in the event of any infectiousillness occurring in the premises forthwith givenotice thereof to the lessor and to the proper publicauthorities and to the expense of the lesseethoroughly fumigate and disinfect the premises tothe satisfaction of the lessor and such publicauthorities and otherwise comply with theirreasonable and lawful requirements with regard tothe same."

But there are problems with this clause. A sufficientlysophisticated and knowledgeable employer tenant couldsuccessfully insist on its deletion from the lease whennegotiating with the building owner. A clause limited to"infectious illnesses " may not include things such asasbestos is related illnesses or diseases caused by passivesmoking andenvironmental tobacco smoke, such as asthmaor emphysema, but it would include legionnaire's disease.Such an employer tenant may be unwilling to accept aclause that relates to illness in general, but may accept aclaim relating to infectious diseases.

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(b) Implied termsAll contracts, including leases, may contain implied

terms such as:• a general duty of co-operation;• duty not to impair the basis of the contract;• duty to comply with reasonable requests;• duty to act in accordance with the contract's

objectives;• duty to apply care and skill;• duties implied to cure an omission;• terms implied on the basis of custom or usage;• terms derived from prior transactions; or• terms implied on the basis of necessity.

A court may imply from general custom and usage inindustry that a building owner controls the maintenance ofthe air-conditioning and ventilation unit in leasedpremises;and therefore is responsible to compensate, or contributeto the compensation of, an injured entrant or inhabitant ofthat building as an occupier.

Where a building owner and employer tenant have inthe past both assumed responsibility as occupiers of abuilding for any injury or illness contracted by an entrantor inhabitant of leased premises, the Court may imply aterm into the lease that both parties are responsible tocompensate for such an injury or illness. The Court maydecide this upon the principle that where parties to acontract have had prior dealing with each other, terms maybe implied into the contract incorporating terms madeknown to either party on.prior occasions.

According to the High Court in BP Refinery (WesternPort) Pty Ltd v Shire ofHastings (1977) 16 ALR 363 atp.365, Courts are in general reluctant to imply a term intoa contract unless it is satisfied that the implied term is:

• reasonable and equitable;• necessary to give business efficacy to the contract,

so that no term will be implied if the contract iseffective without it;

• so obvious that it "goes without saying";• capable of clear expression; and• does not contradict any express term ofthe contract.

It may not be necessary, but rather may be harmful tothe business efficacy of a lease, for a Court to imply a termthat protects a building owner and increases the liability ofan employer tenant. In addition, such a term could not gowithout saying, being so obvious to the Court that it wouldimply it. Such a term may contradict an express term ofthelease; for example, an express warranty given by abuilding owner to maintain and provide the services of anair-conditioning and ventilation unit during the building'soperating hours.

For the above reasons, it is preferable that the partiesto a commercial lease expressly agree who has theresponsibility of maintaining and controlling the air­conditioning and ventilation system ofthe leasedpremises.

ACLN - Issue #38

E. PRACTICAL CONSIDERATIONS

Controversy Amongst ExpertsWhatshouldabuilding ownerdo ifthere is acontroversy

amongst scientists regarding:• the relationship between various physical ailments

and diseases and indoor air quality; and• the things that can be done to minimise the risk?

If a building owner follows the advice of its expertsthat:

• an air-conditioning and ventilation unit does noteffect the quality of indoor air; or

• if certain actions are taken, the risk involved in theuse ofan inadequate air-conditioning system to thehealthofabuilding's inhabitants will be minimised,and that risk is not minimised;

and injury or disease is subsequently suffered as a result ofthe poor quality of indoor air in that building, could thebuilding owner be liable to compensate for the injurysuffered?

Ifabuilding owneris informedby experts and scientiststhat unless certain actions are taken, it runs the risk ofinjury being suffered by inhabitants of the building, andthe building owner does not follow that advice, it will beliable for any injury that is suffered.

However if the building owner can produce evidenceof scientific or technical advice obtained, this may providethe basis of an argument that the building owner has takenall reasonable steps in the circumstances. The success ofsuch an argument is likely to depend upon:

• the degree of scientific certainty or uncertainly inthe area;

• whether there is a respectable alternative opinion;• whether a second opinion was obtained;• the degree ofrisk represented by the deficiencies in

the air-conditioning system.

If there is some evidence, albeit inconclusive, thatthere is a link between certain contaminates and a seriousor potentially fatal physical ailment or disease then thecourt may decide that in the circumstances the risk wassuch that steps should have been taken to eradicate orotherwise neutralise the contaminant. If, at the time, thestate of science was such that no one recognised that thecontaminantposedarisk, thenthe defendantwouldprobablybe able to take advantage of the state of the art defence andso say that given the state of knowledge at the time, it hadnot been negligent.

This may provide a defence or partial defence to anaction for compensation for injury suffered as a result offaulty air-conditioning and ventilation units in its control.

Generally speaking, once these issues have beenraised,it would be prudent for a building owner to err on the sideof caution.

Future Trends and RecommendationsThe level of interest in Australia in substandard indoor

air quality is increasing and it is gaining greater mediaattention. The law is likely to respond to this increasing

26

interest. This is evidenced by the amendments to thePublic Health Act, 1991 (NSW) relating to Legionnairesdisease. This is matched by the building industry itselfwhich has had to respond to complaints from its clients ofbuildings that are poorly designed and poorly ventilated.Owners cannot afford their building to be popularlydiagnosed as sick.

It appears to be just a matter of time before legislationor a Code is approved setting standards for indoor airpollutants as has occurred in the United States.

It is also likely that the law will impose strict liabilityon property owners and managers. The only situationwhere a property owner may avoid liability is where atenant has full occupation and control ofproperty, but eventhere the marketplace may make itdifficult for the propertyowner to shift liability to the tenant. 0