Asbestos washed off a plumber's clothes - and now his insurer cannot walk away easily.
In a decision delivered June 4, 2026, the South Australian Employment Tribunal refused to throw out a claim aimed directly at an insurer, showing how hard it is to escape a direct action under dust disease law.
The matter began with an applicant, Sheila Smith. She claimed that between about 1985 and 2011 she inhaled asbestos dust and fibre while she "regularly shook out, scrubbed and washed" the work clothes of her de facto partner, Barry Stiles, in a confined home laundry. She said she was also exposed when she embraced or had contact with him after work each day, and that she contracted mesothelioma as a result.
Stiles worked as a plumber, and the applicant pleaded that he handled materials containing asbestos that were manufactured and supplied by Amaca - the company formerly known as James Hardie & Coy. Amaca admitted it manufactured and supplied various types of asbestos cement building products in South Australia between about January 1, 1961 and 1982, but denied it was negligent.
Smith's damages claim against Amaca was finalised by consent orders made on August 11, 2025. Amaca then pressed on against a third party: Insurance Australia Limited. Amaca pleaded that the insurer provided public liability cover to Stiles trading as Downs Plumbing, and claimed it should contribute to what Amaca agreed to pay.
That is what makes the case matter to insurers. Amaca's path to the insurer runs through section 11 of the Dust Diseases Act 2005 (SA), which lets a dust disease claim be brought directly against an insurer when the defendant "is dead or has been dissolved," "is insolvent," or "cannot be found." The insurer then "has the same rights, powers, duties and liabilities" the absent defendant would have had, capped at what it would have owed to indemnify that person.
The insurer asked the Tribunal to strike the claim out. It argued that Downs Plumbing was a partnership between Smith and Stiles, that Stiles is alive, and that a partnership is not a legal entity capable of being "dissolved" under section 11. Because Smith was herself a partner, it said, the partnership could not be a fellow wrongdoer against her. Its solicitor's letter called the proceedings "misconceived."
Amaca acknowledged its first pleading was flawed - it had wrongly asserted the insurer's own negligence - and sought leave to amend. Its reframed case: Smith's injuries flowed from the negligence of Stiles acting for the firm, the partners are "absent defendants" because the partnership is dissolved or insolvent, and the policy covered both the firm and its members.
Judge Rossi declined to strike the claim out. He found it reasonably arguable that the partnership did not, as a matter of law, stop Smith from suing Stiles over her domestic exposure. He also found it arguable that if Stiles could not pay his debts he might be an insolvent "absent defendant," and that if the business had ceased trading it might be "dissolved" - either of which could let the claim reach the insurer.
He made no final ruling. The judge stressed that the power to summarily terminate proceedings "must be exercised with exceptional caution," and that the real issue is whether there is an underlying cause of action, not simply whether one was pleaded. He left the meaning of section 11 for trial, once the facts about how Downs Plumbing operated and how Smith was exposed are tested with evidence.
The lessons for insurers are clear. A direct-action statute can draw an insurer into a dust disease fight even after the original claimant has settled and gone. A spouse-run partnership does not automatically shield the insurer. And knocking out such a claim early is tough when coverage and partnership questions hinge on facts only a trial can settle.
The strike-out application was dismissed. Amaca has until June 25, 2026 to file an amended third party claim, and the parties will be heard separately on costs.
