Allianz Australia Insurance Ltd v Pomfret

60 NSWLR 18 March v Stramare (E&MH) Pty Ltd [1991] HCA 12 ; 171 CLR 506 MMI Insurance Compensation (NSW) Ltd v Baker (1997) 41 NSWLR 289 Orica Limited v CGU Insurance Limited [2003] NSWCA 331; 59 NSWLR 14 QBE Insurance (Australia) Limited v Dust Diseases Tribunal of NSW [2011] NSWCA 421 Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10; [2011] 2 AC 229 Smith v Mann [1932] HCA 30; 47 CLR 426 Tame v Commonwealth Collieries Pty Ltd (1947) 47 SR (NSW) 269 Thompson v Smiths Shiprepairers (North Shields) Ltd [1984] 1 QB 405 University of NSW v AAI Ltd [2014] NSWCA 153 Wakelin v London & South Western Railway Co (1886) 12 App Cas 41 Wardley Australia Limited v Western Australia [1992] HCA 55; 174 CLR 514 WorkCover Authority of New South Wales v Chubb Australia Limited [2000] NSWCA 221; 20 NSWLCCR 614 Wunderlich Ltd v Manufacturers Mutual Insurance Ltd [1981] 2 NSWLR 678 Texts Cited: Malcolm Clarke, The Law of Insurance Contracts (5th ed, 2006, informa) Pearce and Geddes, Statutory Interpretation in Australia (7th ed, 2011) at [3.44]-[3.49] Category: Principal judgment Parties: Allianz Australia Insurance Ltd (Appellant) Wade Alfred Pomfret (First Respondent) Wallaby Grip (BAE) Pty Limited (in liquidation) (Second Respondent) Representation: Counsel: D Hooke SC with D Toomey (Appellant) B M Toomey QC with A McSpedden (First Respondent)

Solicitors: Rankin Ellison Lawyers (Appellant) Turner Freeman Lawyers (First Respondent) K & L Gates (Second Respondent) File Number(s): 2014/187360 Decision under appeal Court or tribunal: Dust Diseases Tribunal of NSW Date of Decision: 03 June 2013 Before: Kearns DCJ File Number(s): DDT No. 49 of 2014

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] The worker, Mr Pomfret, was employed by Ceeco Products Pty Limited ("Ceeco") in 1974 and again from early 1976 until 23 December 1978. During these periods, he was exposed to asbestos dust and fibre. Up until 31 January 1978, a contract of insurance existed between Allianz Australia Insurance Ltd ("Allianz"), or its predecessor, and Ceeco. By this contract Ceeco was indemnified against any common law liability as employer arising during the policy period. Ceeco has been deregistered. Mr Pomfret brought proceedings directly against Allianz, as Ceeco's insurer, to recover compensation for asbestosis and asbestos related pleural diseases. Those proceedings were brought to enforce a charge under s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). That claim was for injury, being asbestosis, caused by exposure to fibre and dust whilst in his employment by Ceeco prior to 31 January 1978. Section 151AB(1) Workers Compensation Act 1987 (NSW) deems an employer's liability for an occupational disease to arise 'when the worker was last employed by the employer in employment to the nature of which the disease was due'. Allianz contended that the relevant 'disease' was asbestosis and that it was not liable to indemnify Ceeco because Mr Pomfret continued to be employed until 23 December 1978. When Mr Pomfret was 'last employed' in conditions to the nature of which that occupational disease was due, it was not 'on risk' at that time. Kearns J in the Dust Diseases Tribunal held that there was an arguable case that Allianz was liable to indemnify Ceeco in respect of its liability as Mr Pomfret's employer. Allianz sought leave to appeal that decision. The issues for determination on appeal were: (i) Whether leave should be granted to appeal the decision of Kearns J in the Dust Diseases Tribunal of NSW; (ii) Whether, in construing s 151AB(1)(a) Workers Compensation Act 1987 (NSW), 'disease' refers only to the harm or injury for which liability is claimed or to the whole of the occupational disease contracted by the employee; and (iii) Whether the primary judge correctly concluded that there was an arguable case that Allianz was liable to indemnify Ceeco in respect of Mr Pomfret's claim. The court held, granting leave to appeal and dismissing the appeal: In relation to (i) (Per Meagher JA, Beazley P, McColl, Basten and Macfarlan JJA agreeing) Leave to appeal should be granted because the question as to the construction of s 151AB(1)(a) Workers Compensation Act 1987 (NSW) is of general application and importance, and has also arisen in the appeal CGU Insurance Ltd v Davies [2015] NSWCA 5: [1], [2], [27], [28], [32]. In relation to (ii) (Per Meagher JA, Beazley P, McColl, Basten and Macfarlan JJA agreeing) The purpose of s 151AB is to identify the insurer liable to indemnify an employer liable for an occupational disease of gradual onset contracted over a period of employment involving exposure to the relevant harmful conditions: [1], [2], [10], [28], [54]-[57], [62] (Per Meagher JA, Beazley P, McColl, Basten and Macfarlan JJA agreeing) The "disease" referred to in s 151AB(1)(a) is the "occupational disease" for which the employer is liable in damages. That liability may only be for injury or harm caused by a particular period of exposure: [1], [2], [18], [28], [84]. MMI Insurance Compensation (NSW) Ltd v Baker (1997) 41 NSWLR 289; FAI Traders Insurance Co Ltd v HIH Winterthur Workers Compensation (NSW) Pty Ltd (1998) 45 NSWLR 257 applied. (Per Meagher JA, Beazley P, McColl, Basten and Macfarlan JJA agreeing) Irrespective of whether the employee claims that the employer is liable for all harm or injury caused by an occupational disease or only for that resulting from exposure during a particular period, it must be established that the period of exposure caused or substantially contributed to the harm or injury which is the subject of the claim: [1], [2], [23], [28], [58] Wakelin v London & South Western Railway Co (1886) 12 App Cas 41; Bonnington Castings Ltd v Wardlaw [1956] AC 613; March v Stramare (E&MH) Pty Ltd [1991] HCA 12; 171 CLR 506; Amaca Pty Ltd v Ellis [2010] HCA 5; 240 CLR 111; Amaca Pty Ltd v Booth [2011] HCA 53; 246 CLR 36 applied. (Per Meagher JA, Beazley P, McColl and Macfarlan JJA agreeing) Whether an occupational disease may be the subject of liability limited to injury or harm caused by a particular period of exposure is a question of fact. Injuries in relation to which such a claim may be made are described as 'divisible', as opposed to 'indivisible'. An injury which is a dust disease may be divisible if the progress and severity of the disease are related to the quantity of the harmful agent ingested such that it is possible to say that some injury arose from a particular period of exposure: [1], [2], [28], [48], [78], [85]. Dingle v Associated Newspapers Ltd [1961] 2 QB 162; WorkCover Authority of NSW v Chubb Australia Limited [2000] NSWCA 221; 20 NSWLCCR 614 applied. QBE Insurance (Australia) Limited v Dust Diseases Tribunal of NSW [2011] NSWCA 421 considered. Thompson v Smith Ship Repairers (North Shields) Ltd [1984] 1 QB 405; Holtby v Brigham & Cowan (Hull) Ltd [2000] 3 All ER 421; Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10; [2011] 2 AC 229 referred to. (Per Basten JA) If the harm is 'indivisible', the shorter period may render causation more difficult to establish; if the harm is 'divisible' causation may be established, but the degree of harm may be limited. Section 151AB is not concerned with these questions: [23]-[26] WorkCover Authority of NSW v Chubb Australia Limited [2000] NSWCA 221; 20 NSWLCCR 614 considered but not applied. In relation to (iii) (Per Meagher JA, Beazley P, McColl, Basten and Macfarlan JJA agreeing) The primary judge correctly concluded that there was an arguable case that Allianz was liable to indemnify Ceeco in respect of the claimed liability to the worker, Mr Pomfret: [1], [2], [27], [28], [88].

Judgment

1. BEAZLEY P: I have had the advantage of reading in draft the reasons of Meagher JA. I agree with his Honour's reasons and the orders he proposes.
2. McCOLL JA: I agree with Meagher JA's reasons and the orders his Honour proposes.
3. BASTEN JA: The applicant, Allianz Australia Insurance Ltd, provided a statutory policy insuring Mr Pomfret's employer, Ceeco Products Pty Ltd, against liability for damages arising from his employment. Allianz was "on risk" until 31 January 1978 (that is there was a policy of insurance issued to the plaintiff's employer, responding to a claim for damages by the plaintiff, in force until that date). During that period the plaintiff was exposed to asbestos dust. The plaintiff remained in that employment after 31 January 1978, until 23 December 1978. By the time the illness became symptomatic, Ceeco had long since been deregistered, but the plaintiff proceeded directly against Allianz.
4. The further amended statement of claim dated 3 June 2014 stated that the plaintiff made "no allegations of negligence, breach of contract or breach of statutory duties and does not seek damages against [Allianz] in respect of any exposure to asbestos that the plaintiff may have had during employment with Ceeco after 31 January 1978". Nevertheless such exposure was pleaded with respect to the second defendant (Wallaby Grip, which was the manufacturer of the asbestos gloves which produced the dust) throughout the period of employment with Ceeco Pty Ltd. The employer's liability is "taken to have arisen" at the date "when the worker was last employed by the employer in employment to the nature of which the disease was due", within the terms of s 151AB(1)(a) of the Workers Compensation Act 1987 (NSW). Accordingly, Allianz submitted, as there was no policy of insurance issued by it to Ceeco in force when the plaintiff was last so employed, Allianz' earlier policy did not respond to that liability.
5. Whether that submission should be accepted depends upon the proper construction of s 151AB(1)(a) read as a whole. The section now provides: 151AB Special insurance provisions relating to occupational diseases (1) If an employer is liable independently of this Act for damages for an occupational disease contracted by a worker, the following provisions have effect for the purposes of any policy of insurance obtained by the employer: (a) the liability is taken to have arisen when the worker was last employed by the employer in employment to the nature of which the disease was due ….

The respondent worker's claim for damages

1. The respondent was employed by Ceeco in 1974 and from early 1976 until 23 December 1978 as a dye setter and operator and was exposed to asbestos in each of those periods. Allianz was Ceeco's workers' compensation insurer, or is liable as the successor of that insurer, for those periods but only up to 31 January 1978. Ceeco's workers' compensation insurer between that date and 23 December 1978, if there was one, has not been identified. Ceeco has been deregistered and accordingly has ceased to exist (Corporations Act 2001 (Cth), s 601AD(1)).
2. On an application for leave under s 6(4) an applicant must demonstrate an arguable case of liability as against the insured (Ceeco) and an arguable case that the insurer's policy responds to that liability: see the decision of this Court in Energize Fitness Pty Ltd v Vero Insurance Limited [2012] NSWCA 213 at [52] - [56] per Campbell JA.
3. The claim against Allianz is made by the further amended statement of claim which the primary judge gave the respondent leave to file at the same time as leave was granted to him to proceed against Allianz. The principal amendment made by that pleading was to limit the allegations of negligence, breach of contract and breach of statutory duty against Ceeco to a period of employment and exposure which ended on 31 January 1978, notwithstanding that the respondent continued to be employed by Ceeco, and exposed to asbestos dust in that employment, until 23 December 1978.
4. That pleading includes the following allegations: 2B From a date in about early 1974 to a date in about late 1974 and from a date in about early 1976 to 31 January 1978 the Plaintiff was employed by [Ceeco] as a dye setter and was exposed to asbestos from regularly handling and wearing asbestos gloves through the course of his employment at Ceeco's factory located at Belmore, New South Wales. As a consequence, the Plaintiff was exposed to and inhaled asbestos dust and fibre. 2C At all material times there existed between Ceeco and [Allianz] a contract of insurance whereby [Allianz] agreed upon the payment of certain premiums to indemnify against liability for damages for Ceeco in respect of any claim for damages arising independently of the Workers Compensation Act 1926. [Reference is then made to the claim to relief under s 6 of the Law Reform (Miscellaneous Provisions) Act 1946] 2D The Plaintiff makes no allegations of negligence, breach of contract or breach of statutory duties and does not seek damages against [Allianz] in respect of any exposure to asbestos that the Plaintiff may have had during employment with Ceeco after 31 January 1978. … 7 As a consequence of the Plaintiff's exposure to asbestos whilst employed by [Chariot another and subsequent employer] and Ceeco and from products containing asbestos manufactured by [Wallaby Grip, a supplier of asbestos products to Chariot and Ceeco], the Plaintiff has contracted asbestosis, asbestos related pleural disease and asbestos related pleural plaques and has suffered pain, injury, loss and damage. 8 The cause of the Plaintiff's pain, injury, loss and damage was the negligence of the Defendants and breaches by Chariot and Ceeco of contractual obligations owed to the Plaintiff and breaches of statutory duty owed by Chariot and Ceeco.

The terms of the workers compensation policy

1. It is common ground that the contract of insurance by or under which Allianz was liable to indemnify Ceeco took the form of the compulsory employer's indemnity policy which the latter was required to obtain by s 18(1) of the Workers Compensation Act 1926 (NSW) (1926 Act). Regulation 1 of the Workers' Compensation Regulations (NSW) as applicable in 1978 and 1979 required that the policy contain the following promises by the insurer: NOW THIS POLICY WITNESSETH that in consideration of the payment by the Employer to the Insurer of the above-mentioned Premium … IF, [in the policy period], the Employer shall be liable to pay compensation under the Act to or in respect of any person who is or is deemed by the Act to be a worker of such Employer or to pay any other amount not exceeding one hundred thousand dollars in respect of his liability independently of the Act for any injury to any such person, THEN, and in every such case the Insurer will indemnify the Employer against all such sums for which the Employer shall be so liable; … PROVIDED … AND it is hereby further agreed that the above indemnity is made subject to the due and proper observance and fulfilment by the Employer of the conditions hereunder, and the Insurer shall be (a) directly liable to any worker and in the event of his death, to his dependants, to pay the compensation or other amount for which the Employer is liable and in respect of which the Employer is indemnified under this Policy; and (b) bound by and subject to any judgment, order, decision or award given or made against the Employer under the provisions of the Act or in respect of his liability independently of the Act and in respect of which the Employer is indemnified under this Policy …
2. At this point, three matters can be noted about the terms of that insurance. First, it indemnifies against any common law liability of the employer (described as "liability independently of the Act") which accrues within the policy period. In Orica Limited v CGU Insurance Limited [2003] NSWCA 331; 59 NSWLR 14, this Court (Spigelman CJ and Mason P, Santow JA dissenting) held that it is the liability, rather than any occurrence or event giving rise to it, which must happen in the policy period: at [28], [32], [63], [70]; cf University of NSW v AAI Limited [2014] NSWCA 153 at [51]. Secondly, that liability must be for any "injury" which, as used in the policy, includes a dust disease as defined in the Workers' Compensation (Dust Diseases) Act 1942 (NSW), as amended in 1967, and the aggravation, acceleration, exacerbation or deterioration of such a disease: 1926 Act, s 18(1). Those diseases include asbestosis and silicosis. The effect of these provisions was to require an employer whose workers were exposed to dust diseases to insure its common law liability in respect of those diseases, notwithstanding that it had no liability under the 1926 Act to pay workers' compensation in relation to them because they were excluded from the definition of "injury" in s 6(1) of that Act. Thirdly, the terms of the policy provided, as s 18(3)(a) of the 1926 Act required, that the insurer was liable to pay the amount of the indemnity to the worker or to his or her dependants.

Section 151AB of the 1987 Act

1. This section applies to an employer's liability arising before or after 30 June 1987 and to any policy of insurance issued before or after that date: s 151AB(5). It applies only in relation to liabilities for damages for occupational diseases which are defined in s 151AB(6) to mean "a disease of such a nature as to be contracted by a gradual process" and to include a dust disease as defined in the Workers' Compensation (Dust Diseases) Act 1942, a total or partial loss of sight which is of gradual onset and the condition known as "boilermaker's deafness". These diseases, because they are of gradual onset, usually involve difficult factual and legal questions as to when liability arises. They relevantly include asbestosis, asbestos related pleural diseases and silicosis. They also include mesothelioma. The definition of "dust disease" in the 1942 Act, unlike that in s 18(1) of the 1926 Act, does not include the aggravation, acceleration, or deterioration of these diseases.
2. As the liability of Ceeco which the respondent seeks to enforce directly against Allianz is for damages for asbestosis and asbestos related pleural diseases, the provisions of s 151AB apply to the policies of insurance under which Allianz is liable. Allianz says that the effect of the application of s 151AB(1)(a) in the circumstances described above is to deem Ceeco's liability to the respondent to have arisen after 31 January 1978, at a time when neither it nor its predecessor was on risk.
3. The legislative history of that provision, and of similar provisions applying in relation to the liability to pay workers' compensation for diseases of gradual onset, has been described, in varying degrees of detail, by Gleeson CJ in CIC Workers' Compensation (NSW) Ltd v Alcan Australia Ltd (1994) 35 NSWLR 169 at 173 - 175; McColl JA in ICI Australia Operations Pty Limited v WorkCover Authority of New South Wales [2004] NSWCA 55; 60 NSWLR 18 at [97] - [113] and, more recently, Basten JA in University of NSW v AAI Limited at [14] - [16].
4. In its current form, s 151AB provides: 151AB Special insurance provisions relating to occupational diseases 1. If an employer is liable independently of this Act for damages for an occupational disease contracted by a worker, the following provisions have effect for the purposes of any policy of insurance obtained by the employer: 1. the liability is taken to have arisen when the worker was last employed by the employer in employment to the nature of which the disease was due, subject to paragraph (b), 2. if the worker was employed by the employer in employment to the nature of which the disease was due both before and after the relevant commencement, the liability is taken to have arisen both when the worker was last employed by the employer in employment to the nature of which the disease was due before the relevant commencement and when the worker was last employed by the employer in employment to the nature of which the disease was due after the relevant commencement. 1. In a case in which subsection (1)(b) applies, 2 insurers will be liable under policies of insurance to indemnify the employer (or pay damages to the worker) and the following provisions apply with respect to those insurers (referred to in this subsection as the responsible insurers): 1. Of the responsible insurers, the one that is the insurer in respect of the employer's liability that arose after the relevant commencement is to be the insurer primarily responsible for the claim. 2. The responsible insurers can however agree as to which of them is to be primarily responsible for the claim or the court can order that one of them is to be the insurer primarily responsible, and any such agreement or order overrides paragraph (a). 3. The insurer who is primarily responsible for the claim is to act for both the responsible insurers in respect of any claim for the damages and has sole liability for the claim (that is, it is to indemnify the employer for the full amount of the damages or is to pay the full amount of damages to the worker, without any right to a contribution from any other insurer, except as provided by paragraph (d)). 4. The insurer who is primarily responsible is entitled to recover from the other responsible insurer half of the amount paid as damages to the worker, half of the amount paid in respect of the worker's legal costs and half of such reasonable amount as the insurer primarily responsible may have incurred in respect of its own legal expenses in the matter. 1. If 2 or more employers are jointly or severally liable for damages referred to in this section, the provisions of this section apply separately to each employer. 2. This section does not affect the amount of damages recoverable by a worker. 3. This section applies to any liability arising before or after the commencement of this Act and to any policy of insurance issued before or after that commencement.

Allianz's argument and the decision of the primary judge

1. Allianz submits that the inquiry called for by s 151AB(1)(a) as to "when the worker was last employed by the employer in employment to the nature of which the disease was due" is not limited to the particular injury or harm constituted by the disease for which the worker seeks to hold the employer liable. On the respondent's case, that is injury or harm caused only by exposure to asbestos during periods of employment ending on 31 January 1978. Allianz contends that the "disease" referred to in subs (1)(a) is the whole of any relevant occupational disease contracted by the worker and includes in relation to the respondent any injury or harm due to asbestosis or asbestos related pleural disease caused by exposure after 31 January 1978. As it was not on risk at that later time, Allianz says that there is no arguable case that it is liable to indemnify Ceeco. That is because, by s 151AB(1)(a), Ceeco's liability to the respondent is taken to have arisen after 31 January 1978. For that reason Allianz says that the respondent's application for leave to enforce the charge arising under s 6(1) should have been refused.
2. The primary judge rejected that argument holding that s 151AB(1) is directed to determining the time at which an employer's liability for damages for an occupational disease is to be taken to have arisen. For that reason it must be read as concerned only with the period or periods of employment that could have caused the injury or "disease" which is the subject of the relevant liability: [6].
3. In so concluding, his Honour referred to and relied upon his decision in Davies v ACN 000008195 Pty Ltd (formerly R Fowler Ltd) [2013] NSWDDT 10, which is the subject of CGU's appeal. It was not contested in that case that the worker, who had contracted silicosis and aggravated silicosis, known as progressive massive fibrosis, could claim damages for injury from that disease caused by a specific period of exposure.
4. Whether an occupational disease may be the subject of a claim limited to disease due to a particular period of exposure is a question of fact which depends upon the scientific and medical evidence as to the way in which the disease is caused and progresses: Dingle v Associated Newspapers Ltd [1961] 2 QB 162 at 189. Injuries consisting of diseases in relation to which such a claim may be made are described as "divisible", as opposed to "indivisible". The sense in which these descriptors are used in this context is explained in a series of English decisions including Dingle v Associated Newspapers Ltd at 188 - 189; Thompson v Smiths Shiprepairers (North Shields) Ltd [1984] 1 QB 405 at 437 - 444; Holtby v Brigham & Cowan (Hull) Ltd [2000] 3 All ER 421 at [20] - [23]; and Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10; [2011] 2 AC 229 at [12] - [17].

Discussion

1. The physiological mechanisms that produce diseases contracted by a gradual process involve the ingestion or inhalation over time of an outside agent, such as asbestos fibre or silica dust, or exposure over time to harmful working conditions, such as excessive noise. The manner in which these diseases are contracted and progress varies from disease to disease. In some cases there is a dose threshold which must be reached before the disease starts and then becomes symptomatic: Sienkiewicz v Greif at [13] - [14].
2. In its argument before this Court, Allianz does not rely on there being any distinction between the way s 151AB(1) applies to occupational diseases, whether divisible or indivisible. It says that the "disease" referred to in subs (1)(a) is the "occupational disease contracted by" the worker that is referred to in the opening words of the subsection. What is described is a single occupational disease and that remains so irrespective of whether the damages for which the employer is liable are for the whole or only part of that disease, and in the latter case, only for the part caused or capable of being caused by a particular period of exposure.
3. The resolution of this question of construction depends primarily on the language of these provisions, understood in their immediate context, and "in the light" of the purpose of the current form of s 151AB, which is made clear in the earlier provisions upon which it is based.
4. In the context of workers' compensation legislation, it has long been recognised that diseases contracted by a gradual process present particular difficulties for identifying, from amongst a number of employers and insurers, the employer and insurer responsible, either for payment of workers' compensation or for satisfying any common law liability. That is because the worker may have been exposed to the same disease causing conditions for long periods of time and in successive employments with different employers.
5. When making the same observation, Gleeson CJ in CIC Workers' Compensation v Alcan Australia at 173-174 cited Viscount Sumner's explanation of the need for legislative intervention in relation to such diseases given in Blatchford v Staddon and Founds [1927] AC 461 at 467: Their peculiar character made much more extensive provision necessary. They come on gradually; their first steps may not be perceptible for some time; their rate of progress may vary widely; they have various ups and downs. … In the case of such diseases an applicant, who had not been long in the employment of the respondent, would naturally be met with the suggestion that his disease had been previously contracted and therefore did not arise out of it, and meeting this defence by proof that it actually arose during and out of his employment by the respondent he might well find the difficulty insuperable.

Decision

1. The pre-condition that must be satisfied for the application of s 151AB(1) is that an employer is liable for damages for an injury (relevantly an occupational disease) contracted following a period of exposure to conditions capable of causing that injury. The object of the subsection is to identify from the insurers on risk during that period the insurer liable to indemnify the employer for the full amount of those damages, and without the benefit of contribution from any other insurer. It does so by deeming the time at which the employer's liability for that injury arises. That time is the end of the period during which the worker was exposed to the conditions capable of causing the injury for which the employer is liable in damages.
2. The "disease" referred to in subs 1(a) is the "occupational disease" for which the employer is liable in damages: MMI Insurance v Baker; FAI v HIH Winterthur; GIO v ABB Installation. That liability may be for injury or harm from a disease caused by a particular period of exposure, provided that injury or harm is separate from injury or harm from the disease caused by any other periods of exposure: MMI Insurance v Baker; FAI v HIH Winterthur; GIO General v ABB Installation; WorkCover Authority v Chubb.
3. The identification of the liability upon which s 151AB is to operate must in the first instance depend on the formulation of the worker's claim and the underlying cause of action on which that claim is based: MMI Insurance v Baker; FAI v HIH Winterthur; GIO v Colgate Palmolive. However the way in which that claim is formulated cannot have the consequence, in the application of s 151AB, that a liability for damages may arise in respect of part only of the injury or harm constituted by the contracting of an indivisible disease: WorkCover Authority v Chubb.
4. A construction of s 151AB(1) as applying to the disease and liability which is the subject of the worker's claim finds support in the language of s 151AB(2) which contemplates a "claim" for damages made by the worker and that the insurer "primarily responsible" will conduct and pay for the defence of that claim and indemnify the employer or pay the worker the full amount of the claim as determined or agreed.
5. The interpretation of s 151AB urged by Allianz (and CGU) should be rejected. Accepting, as each does, that an employer may be liable for injury caused by exposure to asbestos or silica dust during a particular period, the application of that interpretation could impose the liability to indemnify on a later insurer who was not on risk during any part of the period of employment and exposure giving rise to the employer's liability, that liability being circumscribed by the ambit of the applicant's claim. That outcome is inconsistent with the scheme and object of the section which, as the Explanatory note to s 18(6B) made clear, is to fix the last of the insurers on risk during that period with the whole of the liability, notwithstanding that the other insurers on risk during the period might otherwise "each be partly liable to contribute to the liability" of the employer.

Proposed orders

1. The following orders should be made: 1. Grant leave to the applicant to appeal from the decision and orders of the Dust Diseases Tribunal of New South Wales (Kearns J) of 3 June 2014. 2. Direct that the applicant file and serve a notice of appeal in the form of the draft notice contained in the White Book within seven days of the date of this order. 3. Appeal dismissed. 4. Applicant/appellant pay the respondent's costs of the application for leave and the appeal.

Amendments 15 July 2015 - [38] - second sentence amended from "That policy, by reg 1.... included the following" to "Regulation 1... required that the policy contain" [39] - words "as amended in 1967" inserted [48] and [59] - reference to "Thompson v Smith Ship Repairers" changed to "Thompson v Smiths Shiprepairers" [56] - reference to "Workmans' Compensation Act" changed to "Workmen's Compensation Act" [86] - reference to "primarily responsible" changed to "primarily liable" 06 August 2015 - [11] - correcting spelling of "referable". [12] - amending "adopt" to read "adapt". [14] - correcting citation of MMI v Baker from (1990) to read (1997). [16] - correcting page number from 295 to 294 in citation of MMI v Baker. [24] - correcting "20 NSWLCCR" to read "NSWCCR". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 August 2015