Allianz Australia v TIO [2008] NTCA 12

Total incapacity as a result of two separate injuries - application of s 126A Work Health Act (NT) - whether appellant entitled to recover from respondent part of compensation paid in respect of claim for total incapacity

INSURANCE - DOUBLE INSURANCE - WORKERS' COMPENSATION LIABILITY

Whether extension of time should have been granted - when time begins - interpretation of s 126A of the Act - requirement to give notice

Pearce and Geddes, Statutory Interpretation in Australia, 6th ed, LexisNexis Butterworths, Sydney, 2006

Interpretation Act 1978 (NT), s 62A; Work Health Act 1986 (NT), s 3, s 4, s 53, s 55, s 64, s 65, s 69, s 70, s 71, s 72, s 73, s 80, s 82, s 85, s 103D, s 103J and s 126A; Work Health Amendment Act 1998 (NT), s 27; Workers' Compensation Act 1926 (NSW), s 7(1)(a), s 9(1) and s 11(2)

Accident Compensation Commission v CE Health Underwriting & Insurance (Australia) Pty Ltd [1994] HCA 68; (1994) 68 ALJR 525; Albion Insurance Co Ltd v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342; Australian Eagle Insurance Co Ltd v Federation Insurance Ltd (1976) 15 SASR 282; Bushby v Morris [1980] 1 NSWLR 81; HIH Casualty & General Insurance Ltd v Territory Insurance Office [1998] NTSC 3; (1998) 120 NTR 24; Maddalozzo v Maddick [1992] NTSC 46; (1998) 108 FLR 159; National Employers' Mutual General Insurance Association Ltd v Calver & Ors [1983] 3 NSWLR 107, applied.

Arnotts Snack Products Pty Ltd v Yacob [1985] HCA 2; (1985) 155 CLR 171; Commercial & General Insurance Co Ltd v Government Insurance Office (NSW) (1973) 129 CLR 374; Foresight Pty Ltd (t/a Bridgestone Tyre Service) v Maddick (1991) 1 NTLR 209; Woodruffe v Northern Territory [2000] NTCA 8; (2000) 10 NTLR 52; Work Social Club Katherine Inc v Rozycki [1998] NTCA 6; (1998) 120 NTR 9, referred.

Insurers' Guarantee Fund - NEM General Insurance Associated Ltd v GIO General Ltd (1994) 33 NSWLR 247; National & General Insurance Company Limited v South British Insurance Co Ltd & Ors [1982] HCA 62; (1982) 149 CLR 327, distinguished.

Manufacturers Mutual Insurance Ltd & Ors v National Employers' Mutual General Insurance Association Ltd & Ors (1991) 6 ANZ Insurance Cases 61-038, overruled.

Allianz Australia v TIO [2008] NTCA 12

[1]

I agree with the orders proposed by Mildren J and with his Honour's reasons.

[2]

This appeal raises questions as to the proper construction to be given to s 126A of the Work Health Act, now called the Workers' Rehabilitation and Compensation Act.

[3]

A worker, Shane Nayda (Nayda), was, at all material times, employed by Newmont Mining Services Pty Ltd (Newmont) as a diesel fitter. On 3 October 1993, Nayda suffered an injury to his back arising out of or in the course of his employment when lifting a heavy tub of dirt (the 1993 injury). As a result, he was off work completely for about one week and on light duties for a further fortnight, before resuming the full duties of his employment. Thereafter, he suffered intermittent back pain, controlled by non-prescription analgesics. It is a matter of controversy whether the 1993 injury was only a soft tissue injury, or whether it involved more lasting damage to spinal structures. Compensation was paid by his employer under the Work Health Act. At that time, the respondent (TIO) was Newmont's approved insurer and TIO indemnified Newmont under its policy of insurance.

[4]

On 25 May 2000, Nayda felt sudden low back pain whilst lifting packets of steel at his place of work (the 2000 injury). He went on to light duties for a few days until he consulted a medical practitioner on 2 June 2000. He was off work until he was certified fit to return to work on 13 June 2000, when he resumed his normal duties. The injury was reportedly a soft tissue "ligamentous/muscular injury" of the lumbar spine. It is not clear whether he received weekly or other compensation for the 2000 injury. At the time of the 2000 injury, Newmont's approved insurer was the appellant (Allianz).

[5]

On 14 August 2001, Nayda felt a sharp pain in his lower back as he was lifting a spare wheel and tyre at his place of employment (the 2001 injury). Nayda was either totally, or at least partially, incapacitated from his normal duties until July 2002. Thereafter he was certified fit for restricted duties and returned to work. Nayda lodged a claim for compensation with his employer on 17 August 2001. On 30 August 2001, Allianz, on behalf of Newmont, accepted the claim and reimbursed Newmont for weekly compensation paid to Nayda in respect of the 2001 injury from 15 November 2001 to 30 May 2002.

[6]

On 3 June 2002, Allianz received a report from Dr Bastian, who examined Nayda on behalf of the employer. At the time of the examination, Nayda was undergoing a gradual return to work program with Newmont. Dr Bastian's report included an opinion that "Nayda's presentation is consistent with an aggravation of an ongoing back condition which stems back to [the 1993 injury]... the aggravation has resulted in a deterioration of his back condition and capacity for work which is permanent". Allianz did not notify TIO after receiving Dr Bastian's report that TIO may be liable to indemnify Newmont,[1] although Allianz knew of TIO's potential liability at that time.

[7]

Nayda continued in his employment working on restricted duties and continued to receive compensation in respect of the 2001 injury. On 19 August 2005, Newmont cancelled payments to Nayda. On 31 August 2005, Nayda's employment was terminated based, apparently, on a medical report from Dr Burke, who examined Nayda at the request of Allianz. On 5 September 2005, Nayda gave a notice of dispute to "NT Work Safe", which I presume means the Work Health Authority. I assume that the notice was given under s 103D of the Act, which then triggers to process of mediation of the dispute before a claim for compensation can be brought in the Work Health Court.[2]

[8]

On 23 September 2005, Allianz received a supplementary report from Dr Burke in which he attributed 80 per cent of the responsibility for Nayda's back condition to the 1993 injury and 20 per cent to the 2001 injury.

[9]

On 24 October 2005, Allianz instructed solicitors for the first time. On 4 November 2005 Allianz's solicitors gave TIO notice pursuant to s 126A.

[10]

On 7 April 2006, Nayda filed a Statement of Claim for compensation in the Work Health Court in which he claimed that he continued to be partially incapacitated as a consequence of the 2001 injury or, alternatively, as a consequence of a combination of the 1993, 2000 and 2001 injuries. In the same proceedings on 15 August 2006, Allianz made a claim against TIO under s 126A(3) for a declaration that TIO was liable to indemnify Newmont, in whole or in part, for Newmont's liability and for an order that TIO reimburse Allianz 53.75 per cent of the compensation paid by Allianz in respect of the claim made following the 2001 injury.

[11]

On 7 March 2007, Allianz settled Nayda's claim against Newmont. As to the claim against TIO, the Work Health Court was informed that agreement had been reached as to what the contribution between them should be in percentage terms, subject to the resolution of two issues, one relating to the question of notice and the other relating to the question as to whether s 126A empowered an order for contribution in the circumstances of this case.

[12]

This section provided at the relevant time:

(1) Subject to subsection (2), where an employer is liable under this Act to pay compensation to a worker, the approved insurer of the employer at the time the claim is made shall indemnify the employer for the full amount of the employer's liability to the worker notwithstanding that the approved insurer may allege that, at the time the injury was sustained or the disease was caused, the liability to indemnify the employer (whether in whole or in part) was that of another approved insurer.

(2) Where an approved insurer who has indemnified an employer for the employer's liability to pay compensation to a worker under this Act is aware that another approved insurer may be liable to indemnify the employer for all or a part of the compensation paid, the first-mentioned insurer -

(a) shall notify the other insurer as soon as practicable after becoming aware of the insurer's potential liability; and

(b) may, within 6 months after becoming aware of the other insurer's potential liability or such longer period as the Court may allow -

(i) commence proceedings under Division 4 of Part VI to recover from the other insurer all or a part of the compensation paid; or

(ii) where other proceedings in respect of the claim for compensation have been commenced under that Division, join the other insurer as a party to those proceedings.

(3) Where an approved insurer has indemnified an employer for the employer's liability to pay compensation to a worker under this Act and it is subsequently established that another approved insurer was liable to indemnify that employer in whole or in part, that other insurer shall reimburse the first-mentioned insurer such amount or amounts -

(b) in the absence of such agreement, as the Court determines.

[13]

After an extensive review of the authorities, the Work Health Court held that s 126A was intended to permit liability "in a case such as this" (i.e. where there are successive injuries all or some of which contribute to a worker's incapacity and where there are different insurers at the time of each injury) "to be split and that Allianz may... allege that the liability was in whole or in part that of TIO".

[14]

However, the Court held that Allianz was aware of TIO's potential liability and should have notified TIO as soon as practicable after receiving Dr Bastian's report of 3 June 2002. As it had not, and no explanation was offered for its failure to do so, an extension of time under s 126A(2)(b) was refused. However, if the Court was wrong in that finding and the requirement to give notice did not arise until after Allianz received the supplementary report of Dr Burke on 23 September 2005, the Court would have held that the notice given on 4 November was "just about within the bounds of 'as soon as practicable'" and the application for an extension of time would have been granted.

[15]

Consequently, Allianz's application for leave to extend time was dismissed.

[16]

On appeal to the Supreme Court, Angel J held that the Work Health Court should have granted an extension of time in respect of the 2001 injury and payment of compensation made from September 2005, but not earlier. His Honour held that s 126A(2) only applied once an approved insurer has indemnified the employer. Therefore, Allianz's awareness that TIO may be liable to indemnify Newmont can be no earlier than the time Allianz indemnified Newmont. Allianz's obligation to indemnify Newmont could not arise until Nayda made a claim for compensation for total incapacity in 2005 which was first particularised in the Statement of Claim filed on 7 April 2006. The obligation to notify TIO with respect to the worker's 2005 claim for compensation on the basis of total liability only arose once a claim for that compensation was made by the worker. Accordingly, as the Work Health Court found that notification was made 'as soon as practicable' (in respect of the 2005 claim) the extension of time ought to have been granted in those circumstances if the Court was satisfied that Allianz could obtain relief from TIO under s 126A of the Act.

[17]

However, Angel J held that on the proper construction of s 126A, no relief was available because TIO was only responsible to indemnify Newmont's liability to pay compensation in the relevant period of insurance. Further, the principle of double insurance did not apply because the employer was not insured with both insurers against the same risk when one policy insured against liabilities incurred in one period, whereas the other policy insured against liabilities incurred in another period. His Honour, in arriving at this conclusion, applied the reasoning in Manufacturers Mutual Insurance Ltd & Ors v National Employers' Mutual General Insurance Association Ltd & Ors;[3] National & General Insurance Company Limited v South British Insurance Co Ltd & Ors;[4] and Insurer's Guarantee Fund - NEM General Insurance Associated Limited v GIO General Limited.[5] No doubt his Honour felt obliged to follow those decisions, sitting at first instance, although none were strictly speaking binding upon him.

[18]

Accordingly, his Honour dismissed the appeal.

[19]

Allianz has appealed to this Court on the ground, essentially, that both Allianz and TIO were liable to indemnify Newmont in respect of the claim made in 2005 for total incapacity because the incapacity was caused by both the 1993 injury and the 2001 injury. Consequently, on the true construction of s 126A, Allianz is entitled to recover from TIO part of the compensation paid after Allianz made payments of compensation in respect of the 2005 claim. TIO's position is that the decision of Angel J was correct on this point.

[20]

Alternatively, TIO has filed a notice of contention claiming that Angel J was in error in concluding that an extension of time should have been otherwise granted. TIO's position is that the Work Health Court's decision on this point was correct.

Was TIO liable to indemnify Newmont in respect of the 2005 claim?

[21]

It is convenient to begin with s 53 of the Act as it existed up to and prior to 2007 when the section was amended (albeit not materially):

"Subject to this Part, where a worker suffers an injury within or outside the Territory and that injury results in or materially contributes to his or her -

(a) death;

(b) impairment; or

(c) incapacity,

there is payable by his or her employer to the worker or the worker's dependants, in accordance with this Part, such compensation as is prescribed." (emphasis mine)

[22]

Section 53 is in quite different terms to s 7(1)(a) and s 9(1) of the Workers' Compensation Act 1926 (NSW). In particular, the latter provision required that "total or partial incapacity for work results from the injury" and did not include the words "or materially contributes to".

[23]

Consequently (and notwithstanding the decision of the Privy Council in Bushby v Morris[6]), the Court of Appeal in National Employers' Mutual General Insurance Association Ltd v Calver & Ors[7] said:[8]

"The question whether an incapacity results from a particular injury is as the law now stands not the same as whether the injury is a contributing cause of the incapacity."

[24]

In my opinion, a worker who suffers an "injury" is entitled to compensation under the Act. "Injury" is defined by s 3 and it includes a physical or mental injury; or a disease; or the aggravation, acceleration, exacerbation, recurrence or deterioration of a pre-existing disease, provided that the injury arises out of or in the course of the worker's employment.[9]

[25]

Where the injury results in or materially contributes to incapacity or impairment, subject to giving notice in accordance with s 80, the worker is entitled to weekly payments or other compensation under the Act. There is no reason to limit "injury" to a single injury. If the worker sustains a series of injuries which result in, or materially contribute to his incapacity or impairment, he is still entitled to compensation under the Act.

[26]

The employer's liability to pay compensation for incapacity does not arise until the incapacity results in financial loss.[10] The liability to pay compensation for impairment depends on different considerations.[11] There may also be a liability to pay medical expenses under s 73 whether or not the worker has suffered either an incapacity or an impairment.

[27]

In the normal course of events, the insurer who is at risk at the time when the employer becomes liable to pay compensation under the Act, is liable to indemnify the employer. This will frequently be at, or shortly after, the injury. In the case of a claim for weekly payments, although the liability might not arise until months or years after the injury because the injury did not immediately result in financial loss, the insurer at risk at the time of the injury is the insurer liable to indemnify the employer against incapacity once it supervenes.[12] The employer is required under s 53 to pay compensation for weekly payments if the injury "results in or materially contributes to" his incapacity. Since the decision of the Privy Council in Bushby v Morris,[13] an injury or incapacity may be attributable to more than one cause.[14]

[28]

If a worker suffers incapacity as the result of more than one injury or if the incapacity is materially contributed to by more than injury, the worker can claim in respect of each injury against his employer. If more than one employer is involved, he may claim against each employer. Liability is attracted to each employer and each insurer on risk at the time of each injury.[15] It follows from this that if the incapacity results from or is materially contributed to by more than one injury, each employer, if there is more than one, is liable to pay the full amount of compensation payable under the Act in respect of the incapacity and each employer is entitled to indemnity from its respective insurer at the date of the relevant injury. Similarly, if there is only one employer, but more than one insurer, each insurer is liable to indemnify the employer for the full amount of the compensation payable in respect of the incapacity.

[29]

Applying these principles to the facts of the present case, the Work Health Court should have found that both TIO and Allianz were required to indemnify Newmont, notwithstanding that at the time of the incapacity which flowed from the 2001 injury, Allianz was Newmont's worker's compensation insurer.[16]

[30]

In these circumstances, if one insurer indemnifies the insured under its policy, it may recover contribution from the other insurer under the principles which apply to double insurance. In Albion Insurance Co Ltd v Government Insurance Office (NSW),[17] Barwick CJ, McTiernan & Menzies JJ said:

"The doctrine, however, only applies when each insurer insures against the same risk, although it is not necessary that the insurances should be identical. Thus one insurer may insure properties A and B against fire and the other insurer may only insure property A against fire. Again, one policy may be for a limited amount and the other may be for an unlimited amount. One policy may cover the risk of a whole voyage and the other may cover only part of the voyage. Differences of this sort may affect the amount of contribution recoverable but they do not bear upon the question whether or not each insurer has insured against the same risk so as to give rise to some contribution. The element essential for contribution is that, whatever else may be covered by either of the policies, each must cover the risk which has given rise to the claim. There is no double insurance unless each insurer is liable under his policy to indemnify the insured in whole or in part against the happening which has given rise to the insured's loss or liability...

The matter can, we think, be decided simply enough by enquiring whether payment by one insurer of the policy holder's claim for indemnity would provide the other insurer with a defence to a like claim against it."

[31]

Kitto J, with whom Windeyer J agreed, said:[18]

"What attracts the right of contribution between insurers, then, is not any similarity between the relevant insurance contracts as regards their general nature or purpose or the extent of the rights and obligations they create, but is simply the fact that each contract is a contract of indemnity and covers the identical loss that the identical insured has sustained..."

[32]

These principles have been applied on numerous occasions and cannot be doubted.[19]

[33]

However, Angel J held, following certain decisions of the Court of Appeal of New South Wales, that there was no double insurance in this case. The first of these decisions was Manufacturers Mutual Insurance Ltd & Ors v National Employers' Mutual General Insurance Association Ltd & Ors.[20] In my opinion that case was wrongly decided and should not be followed. As Brennan J observed in Accident Compensation Commission v C E Health Underwriting & Insurance (Aust) Pty Ltd,[21] the view of Samuels JA (with whom Meagher JA agreed), is inconsistent with Bushby v Morris[22] and Australian Eagle Insurance Company Limited v Federation Insurance Ltd.[23] In other words, Samuels JA did not accept that incapacity could arise as the result of separate injuries arising at different times. Further, although Samuels JA referred to Albion Insurance Co Ltd v Government Insurance Office (NSW),[24] his Honour did not properly apply the principles set out in that decision which was binding upon him.

[34]

Priestley JA said that:[25]

"...an insurer indemnifying an employer in respect of injury in one period is not dealing with the same risk as an insurer indemnifying an employer in respect of injury in a different period, even if the incapacity for which an award is made under s 11 is in fact the result of more than one injury."

[35]

In my opinion, this is, with respect, clearly wrong. The question is what is the risk or happening which gave rise to the insured's loss or liability and is each insurer liable to indemnify Newmont against that loss in whole or in part. In a case such as this, the relevant happening is the incapacity resulting from or materially contributed to by the respective injuries, because it is that happening which gave rise to the loss against which each insurer is liable to indemnify the employer. If one insurer had met Newmont's claim, Newmont could not have sought indemnity from the other in respect of the worker's claim for weekly payments arising from his incapacity.

[36]

Next, his Honour referred to National & General Insurance Company Limited v South British Insurance Co Ltd & Ors.[26] However, the decision in that case turned upon s 11(2) of the Worker's Compensation Act 1926 (NSW) which in the circumstances, there arising, deemed a particular employer to be solely liable for the incapacity. There is no similar provision in the Work Health Act and, in any event, this is not a case involving two different employers. Furthermore, the liability imposed under s 126A(1) is expressed to be "subject to subsection (2)" and is upon the insurer at the time the claim is made. That decision is clearly distinguishable.

[37]

The third decision upon which Angel J relied is Insurer's Guarantee Fund - NEM General Insurance Associated Limited v GIO General Limited.[27] That was another decision which turned on s 11(2) of the Worker's Compensation Act 1926 (NSW) and is not relevant to the outcome of this case.[28]

[38]

In my opinion, Australian Eagle Insurance Company Limited v Federation Insurance Ltd[29] was correctly decided and is not relevantly distinguishable. There is double insurance on the facts of this case.

[39]

This section was first introduced into the Act by an amendment passed by Act No 78 of 1993, s 22. Subsequently, by Act No 18 of 1998, s 27, s 126A(4) was added.

[40]

The purpose of s 126A(1) is to require the insurer of the employer at the time the claim is made by a worker to indemnify the employer for the full amount of the employer's liability to the worker, notwithstanding that another insurer is wholly or partially liable to indemnify the employer. The words "at the time the claim is made" are ambiguous. What is the claim being referred to? Is it the claim under the Act by the worker, or the claim by the employer for indemnity? I think the context suggests that it is the claim by the worker. Until a claim is made in accordance with s 82, the machinery provisions of the Act dealing with acceptance, deferment or disputing liability for compensation are not triggered.[30] Once a claim for weekly compensation is accepted, the employer cannot cancel or reduce weekly payments, except as provided by s 69. One of the circumstances where the employer may cancel weekly payments under s 69 without notice is where the worker has returned to work.[31] If the worker has ceased to be incapacitated for work, but has not returned to work, the statement required by s 69(1) must be accompanied by a medical certificate as required s 69(3). If the worker, having returned to work suffers a further injury resulting in incapacity or otherwise becomes incapacitated as a result of the original injury, the worker would need to lodge a further claim under s 82. The worker, for example, may have returned to work prematurely or may have returned to work on light duties but have been unable to perform them. In any event, it is the employer's insurer at the time the claim is made who must indemnify the employer and this is so even if the incapacity giving rise to the claim is the result of, or was materially contributed to by, an injury which occurred at a time when that insurer was either not liable to indemnify the employer at all or only liable to provide a partial indemnity to the employer.

[41]

The concept of a partial liability to indemnity could arise when there are separate injuries both of which caused separate compensable consequences. There may be an injury to the right arm, for example, resulting only in medical expenses payable under s 73, but no impairment and an earlier injury to the left arm resulting in impairment as well as medical expenses. The claim for both injuries might arise at the same time. More usually, the two injuries may combine to cause a single "permanent impairment" of the whole person.[32] In each of these situations, the insurer at the time of the claim must indemnify the employer.

[42]

Subsection 126A(2) refers to "am approved insurer who has indemnified an employer for the employer's liability to pay compensation under this Act (who) is aware that another approved insurer may be liable to indemnify the employer for all or a part of the compensation paid..." Angel J interpreted this to mean that the requirement to notify under s 126A(2)(a) could not arise until the insurer has in fact indemnified the employer. The subsection does not provide, as it might have done, that "where an approved insurer is liable to indemnify an employer... for all of the compensation paid or to be paid..." The difficulty which arises is that s 126A(2)(a) requires the insurer "who has indemnified and employer... is aware that another approved insurer may be liable to indemnify the employer for all or a part of the compensation paid..." to notify "the other insurer as soon as practicable after becoming aware of the insurer's potential liability". It was pointed out during argument that the insurer might become aware of the other insurer's potential liability well before the compensation has been paid or the indemnity given. One possibility is that the solution to this conundrum is found in the expression "as soon as practicable". That expression was discussed in Maddalozzo v Maddick[33] and in HIH Casualty & General Insurance Ltd v Territory Insurance Office.[34] Clearly the meaning to this expression must take its meaning from the context and from the whole of the surrounding circumstances. But does it necessarily follow that "as soon as practicable after becoming aware..." means "and after having indemnified the employer" as Kearney J held in HIH Casualty & General Insurance Ltd v Territory Insurance Office?[35] One of the difficulties with this possible construction is that the language of s 126A(2)(b) seems to suggest that the six months period for commencing or joining the other insurer runs from the time the insurer became aware of the other insurer's potential liability. Yet, s 126A(2)(b)(i) refers to the recovery of "compensation paid".[36]

[43]

There is a further difficulty with s 126A(2)(b)(ii) which refers to "other proceedings in respect of the claim for compensation under that Division" which suggests that the insurer who "became aware" may join the other insurer even though no compensation has been paid by the employer to the worker.

[44]

There is also a difficulty in that logically there can be no indemnity until there has been a claim. The right to join another insurer under s 126A(2)(b)(ii) depends upon there being "other proceedings in respect of the claim...". Does this mean that the "period of six months after becoming aware of the other insurer's potential liability" should be read to mean that the "awareness" cannot arise until after a "claim" has been made?

[45]

To add to the confusion, s 126A(3) provides that when an approved insurer "has indemnified an employer... and it is subsequently established that another approved insurer was liable to indemnify the employer in whole or in part, the other insurer should reimburse the first named insurer..." This would suggest that the first insurer cannot recover against the second insurer unless it has already met the claim by payment. In the case of incapacity, a worker may be entitled to ongoing weekly payments, so that if the words "has indemnified" means "has paid", this would lead to a multiplicity of recovery actions, each arising whenever the insurer has made a payment. I do not think that this is what was intended. I agree with Kearney J in HIH Casualty & General Insurance Ltd v Territory Insurance Office[37] that the meaning of "has indemnified" means "has accepted liability under the policy".

[46]

It is impossible to reconcile these conflicting provisions by resorting to the language chosen by the draftsman in accordance with the ordinary rules of English grammar. In these circumstances the task of this Court is to divine the intention of the legislature having regard to the requirement that a construction which promotes the purpose or object underlying the Act is to be preferred to a construction which does not promote that purpose or object.[38] Although that provision is limited to the object and purpose of the Act, the object and purpose of the particular provisions must also be considered.[39]

[47]

One of the purposes of the Act is to provide for a system for the expedient finalisation of claims for compensation by workers. As the Minister said in his second reading speech of the Bill which introduced a package of reforms to the Act in 1993, including s 126A, "justice is best achieved with a system in which expedient, independent resolution of disputes is the underpinning imperative".[40] The purpose of placing liability on the insurer of the employer at the time of the claim under s 126A(1) was to eliminate delays from insurers, when there was a dispute or potential dispute between insurers and employers. The other underlying purpose is to enable the insurer who has met a claim to obtain reimbursement, in whole or in part, from another insurer who was liable to indemnify the employer in whole or in part. Clearly s 126A intended to confer jurisdiction on the Work Health Court to resolve issues between insurers and the intention was that this could be done either in proceedings commenced in the Court under Division 6, Part 2 by one insurer against another, or, if the worker's claim was disputed, in third party proceedings even if the insurer liable to pay had not in fact paid. Although the right to reimbursement apparently depends upon payment having been made, I see no reason why the Court could not make a declaratory order in favour of one insurer against another contingent upon payment being made to the employer by the first insurer.

[48]

Looked at in this way, I think that s 126A(2) must be read to mean 'when an approved insurer who has indemnified an employer (in the sense of accepted liability under the policy) after a claim has been made against the employer under subsection (1)'. The requirement to give notice under s 126A(2)(a) then arises "as soon as practicable" after the insurer becoming aware of the other insurer's potential liability whether or not the first insurer has paid the employer. However, this cannot arise before a claim has been made. So far as s 126A(2)(b)(i) is concerned, if the six months period has expired before the compensation has been paid, the Court has the power to allow an extension of time. In my opinion, it would enhance the purposes of s 126A if the second insurer was given prompt notice. A construction that allowed notice to be deferred until after payment had been made would be potentially unfair to the other insurer, which may wish to put a case that the worker either did not suffer the injury alleged, or was not incapacitated for work, so that the employer was not liable.

[49]

However, there is one other difficulty with this construction. As submitted by counsel for the respondent, s 126A(3) uses the expression "that another approved insurer was liable to indemnify that employer in whole or in part". It was submitted that s 126A does not use the word "contribution". We were referred to s 55 of the Act which deals with the case of separate employments each contributing towards a disease. Under s 55(4), an employer who proves that the disease was accelerated or aggravated by later employment may recover such amount as the Court may determine from an earlier employer. However, s 55 is structurally different from s 126A, because under s 55(1) the last employer is liable to the worker. In this respect, it is a provision of the same type as s 11(2) of the Worker's Compensation Act 1926 (NSW). Without specific provision, on the authority of National & General Insurance Company Limited v South British Insurance Co Ltd & Ors[41] there could be no contribution from an earlier employer because the last employer was deemed to be solely liable. Subsection 55(3) and s 55(4) are intended to overcome that difficulty and enable the last employer to recover contribution from an earlier employer. I do not consider that s 55 stands in the way of the construction contended for by the appellant.

[50]

As to the lack of any reference to "contribution" or some similar word in s 126A, I do not think this matters. Where there is double insurance, both insurers are liable to indemnify the employer in respect of the same loss. Consequently, such a case would fall squarely within the words "subsequently established that another approved insurer was liable to indemnify that employer in whole..." However, I do not consider that s 126A(3) is limited to cases of double insurance. It may apply also to cases where the insurer liable at the time of the claim is obliged under s 126A(1) to indemnify an employer in circumstances where the injury giving rise to the incapacity occurred at a time when another insurer was on risk and it may also apply in relatively rare cases where there are separate injuries with separate consequences which apply to each insurer.

[51]

In my opinion s 126A is a remedial provision which should be given a broad construction consistent with the purposes of the Act so as to give the most complete remedy consistent with the language employed and to which its words are fairly open.[42]

[52]

For these reasons I consider that, subject to the need to obtain an extension of time, the appellant was entitled to seek contribution from the respondent.

[53]

In my opinion, the interpretation of s 126A which I have arrived at leads to the conclusion that the intention is of the legislature is that time only begins to run under s 126A(2) once a claim has been made by the worker against his employer and the insurer has accepted liability under the policy for that claim. Under s 84, the claim must be forwarded to the insurer within three working days. Once the claim has been received by the insurer, the insurer is required to notify the other insurer under s 126A(2)(a) as soon as practicable after it becomes aware of the other approved insurer's potential liability. Awareness in this sense only arises in respect of the claim actually made and not some earlier claim.

[54]

Counsel for TIO submitted that if this conclusion is correct, it would lead to absurdity. There could be multiple claims over many years for payment of medical expenses or other benefits under the Act and each time the insurer liable under s 126A(1) would have another six months after becoming aware of the other insurer's "potential liability". I do not accept this submission. In respect of weekly payments there is no need for a worker to lodge a fresh claim every week. The liability continues until the employer is entitled to stop payments under s 69. Admittedly, other claims could arise, but I think it is unlikely that the employer would receive a multiple of successive claims in respect of injuries, each giving rise to another six month time frame for recovery proceedings. But even if such a case did arise, I do not see why that is absurd.

[55]

In HIH Casualty & General Insurance Ltd v Territory Insurance Office,[43] Kearney J held that the requirement to give notice under s 126A(2)(a) was not a condition precedent to the right of an insurer to seek to make a recovery against another insurer, but that a failure to give notice in accordance with that provision is relevant to whether or not an extension of time is to be granted under s 126A(2)(b). I think that Kearney J's reasoning in that case is sound on that point. I also agree with Kearney J that the whole period of the delay, not just the delay in the first six months, must be explained.

[56]

I also agree with Angel J that the test of awareness does not depend upon when the first insurer had reasonable grounds for supposing that another insurer was potentially liable, but depends on when the first insurer actually became aware.

[57]

The question then is, as Angel J found, when did Allianz, a claim for compensation by Nayda having been made upon Newmont and having accepted liability under its policy to Newmont in respect of that claim, actually become aware that TIO was potentially liable to Newmont in respect of that claim?

[58]

The learned Magistrate found that the relevant awareness arose on 23 September 2005 and the notice given on 4 November 2005 was given at a time which was as soon as practicable. The six months period would then run from 4 November. He also found that if 4 November was the relevant date, he would have allowed an extension of time. Angel J held that that conclusion was open on the evidence. Although that finding is challenged, no submission was made in support of it. The extension of time sought was until 15 August 2006 and so the extension sought was a matter of some three months. Further, the learned Magistrate found that on 15 June 2006, TIO requested Allianz not to commence proceedings against it without further notice, so that he disregarded any delay after that date. There was also evidence that Allianz had arranged for Nayda to be further medically examined during the period between November 2005 and June 2006 and that a letter of claim had been sent to TIO by Allianz's solicitors on 2 June 2006. There was no evidence of any prejudice to TIO by the short delay. I think Angel J was correct in his finding that the Work Health Court was right to conclude that, on these facts, an extension of time was warranted.

[59]

I would allow the appeal and dismiss the notice of contention. I would order that the judgments of the Work Health Court and Angel J be set aside and, in lieu thereof, order that time be extended with respect to the claim for contribution in respect of compensation paid on and after 31 August 2005.

[60]

I have had the benefit of reading the reasons for judgment prepared by Mildren J. The factual background to this matter and the provisions of s 126A of the Work Health Act, now called the Workers Rehabilitation and Compensation Act, are set out in his Honour's reasons.

[61]

I would allow the appeal. I add a few comments of my own.

[62]

The decision in this matter involves an interpretation of s 126A of the Work Health Act.

[63]

Subsection (1) of s 126A maintains the worker's right to be paid compensation by the approved insurer of the employer at the time the worker makes a claim irrespective of any argument that may arise as to the liability of another insurance company.

[64]

In interpreting s 126A(2)(a) and (b), I have followed with respect, Kearney J in HIH Casualty & General Insurance Ltd v Territory Insurance Office.[44] That notification, in terms of s 126A(2)(a), is not a pre-condition to the grant of an extension of time under s 126A(2)(b). Kearney J also held that:[45]

"An applicant under s 126A(2)(b) for an extension of time beyond the six months which the statute allows, must as part of its case for the exercise of the discretion in its favour, explain the reasons why it should be granted leave; these will normally encompass the reasons for any delays that have occurred, over the whole period."

[65]

The evidence on this aspect is contained in the affidavit of Alison Robertson, sworn 6 March 2007, which states that instructions were received from the appellant on 24 October 2005 following receipt of the report of Dr Nicholas Burke on 23 September 2005. The report of Dr Burke attributed 80 percent of responsibility for the worker's condition and symptoms to the 1993 injury. As at that date, the respondent was the insurer. Dr Burke attributed 20 percent of responsibility for the worker's condition to the 2001 event.

[66]

The appellant did not commence proceedings within six months after becoming aware of the other insurer's potential liability and sought an extension of time under s 126A(2)(b). On my reading of the provisions of s 126A(2)(b), the Court does have a discretion to extend time.

[67]

The affidavit of Alison Margaret Robertson, sworn 6 March 2007, goes on to outline details of other correspondence and reports forwarded to solicitors for the respondent. Notice was given to the respondent on 4 November 2005 that it may be liable to contribute, under s 126A, in respect of the worker's claim. There followed further correspondence between solicitors for the appellant and solicitors for the respondent as outlined in the affidavit of Alison Margret Robertson. On 15 May 2006, solicitors for the appellant requested a supplementary report from Dr Geoffrey Graham on contribution issues. On 2 June 2006, solicitors for the appellant forwarded a letter to solicitors for the respondent claiming contribution of 53.75 percent based on Dr Graham's report. The contribution claim was filed on 15 August 2006 following a series of further correspondence between the respective solicitors.

[68]

On 5 March 2007, solicitors for the appellant filed an interlocutory application to the Work Health Court for the following orders:

The applicant be given leave nunc pro tunc to commence these proceedings pursuant to s 126A(a)(b)(i).

Such further orders as the Court deems appropriate.

[69]

This application was refused by the Work Health Court on the basis that the appellant should have notified the respondent of the potential liability as soon as practicable after receiving a report from Dr John Bastian dated 3 June 2002. However, the Work Health Court also found that if 23 September 2005, the day the appellant received Dr Burke's report saying that 80 percent of the workers incapacity was due to the 1993 injury was the starting date, it would seem the discretion of the Court to allow a longer period than six months for the commencement of proceedings should be exercised in favour of the appellant. This was on the basis that, notice having been given on 4 November 2005, was as soon as practicable and the six months would run from 4 November 2005. The judge at the first instance found that such a conclusion was open to the learned stipendiary magistrate on the evidence.

[70]

On appeal to the Supreme Court, the Judge refused the application for extension of time on the basis that s 126A deals with rights of indemnity as between insurers and that entitlement to indemnity depends upon the proper construction of the statutory policy of insurance. The Judge at first instance concluded that, on a proper construction of the statutory policy of indemnity between the respondent and the employer, the respondent was not promising to do anything in relation to the risk for which the appellant insured. He found the Work Health Court can therefore grant no relief to the appellant against the respondent under s 126A Work Health Act (NT). Accordingly, the appeal from the Work Health Court was dismissed. I am not able to agree with that decision.

[71]

On the facts of this case there was double insurance.[46]

"There is double insurance when an assured is insured against the same risk with two independent insurers. To insure doubly is lawful but the assured cannot recover more than the loss suffered and for which there is indemnity under each of the policies. The insured may claim indemnity from either insurer. However, as both insurers are liable, the doctrine of contribution between insurers has been evolved. It began in the second half of the eighteenth century with Lord Mansfield's decisions with respect to marine insurers and there is no doubt that it now applies generally to insurance which provides the insured with an indemnity. There is no reason why the doctrine should not apply to insurance against liability to third parties and there is every reason in principle that it should. The doctrine, however, only applies when each insurer insures against the same risk, although it is not necessary that the insurances should be identical..."

[72]

I accept with respect the reasoning of Kearney J in HIH Casualty & General Insurance Ltd v Territory Insurance Office[47] and his finding that under s 126A(2) when an approved insurer "has indemnified" an employer this means "has accepted liability under the policy". This is how the words "has indemnified" should be read with respect to s 126A(3).

[73]

My reading of s 126A(3) is that this enables contribution to be claimed and made in the circumstances of this case even though the word contribution is not specifically used. Instead the words used are "indemnify... in whole or in part". Section 126A makes provision for the Work Health Court to deal with disputes between insurers.

[74]

The appellant has explained the delay in commencing proceedings. The respondent has not pointed to any prejudice to it arising from this delay.

[75]

I would allow the appeal and dismiss the Notice of Contention.

[76]

I agree with the orders as proposed by Mildren J.

[3] (1991) 6 ANZ Insurance Cases 61-038.

[4] [1982] HCA 62; (1982) 149 CLR 327.

[5] (1994) 33 NSWLR 247.

[6] [1980] 1 NSWLR 81.

[7] (1983) 3 NSWLR 107.

[8] National Employers' Mutual General Insurance Association Ltd v Calver & Ors (1983) 3 NSWLR 107 at 109 per Moffitt P. See also Reynolds JA at 114, Hutley JA concurring.

[9] See also s 4 of the Act for the meaning of this expression.

[10] See s 64 and s 65 of the Act; Arnotts Snack Products Pty Ltd v Yacob [1985] HCA 2; (1985) 155 CLR 171; Foresight Pty Ltd (t/a Bridgestone Tyre Service) v Maddick (1991) 1 NTLR 209 at 211; Work Social Club v Rozycki [1998] NTCA 6; (1998) 120 NTR 9 at 17-18; and see the definition of "incapacity" in s 3(1).

[12] Manufacturers Mutual Insurance Ltd & Ors v National Employers' Mutual General Insurance Association Ltd & Ors (1991) 6 ANZ Insurance Cases 61-038 at 76, 964; Accident Compensation Commission v C E Health Underwriting & Insurance (Aust) Pty Ltd [1994] HCA 68; (1994) 68 ALJR 525 at 526.

[13] [1980] 1 NSWLR 81.

[14] Accident Compensation Commission v C E Health Underwriting & Insurance (Aust) Pty Ltd [1994] HCA 68; (1994) 68 ALJR 525 at 526.

[15] See Accident Compensation Commission v C E Health Underwriting & Insurance (Aust) Pty Ltd [1994] HCA 68; (1994) 68 ALJR 525 at 527.

[16] See Australian Eagle Insurance Company Limited v Federation Insurance Ltd (1976) 15 SASR 282; Accident Compensation Commission v C E Health Underwriting & Insurance (Aust) Pty Ltd [1994] HCA 68; (1994) 68 ALJR 525 at 526-527.

[17] [1969] HCA 55; (1969) 121 CLR 342 at 345-346.

[18] Albion Insurance Co Ltd v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342 at 352.

[19] See for example, Commercial & General Insurance Co Ltd v Government Insurance Office (NSW) (1973) 129 CLR 374; Australian Eagle Insurance Company Limited v Federation Insurance Ltd (1976) 15 SASR 282 (which was a case very similar to the present).

[20] (1991) 6 ANZ Insurance Cases 61-038.

[21] [1994] HCA 68; (1994) 68 ALJR 525 at 527 fn 9.

[22] [1980] 1 NSWLR 81.

[23] (1976) 15 SASR 282.

[24] [1969] HCA 55; (1969) 121 CLR 342.

[25] Manufacturers Mutual Insurance Ltd & Ors v National Employers' Mutual General Insurance Association Ltd & Ors (1991) 6 ANZ Insurance Cases 61-038 at 76,965.

[26] [1982] HCA 62; (1982) 149 CLR 327.

[27] (1994) 33 NSWLR 247.

[28] See also Accident Compensation Commission v C E Health Underwriting & Insurance (Aust) Pty Ltd [1994] HCA 68; (1994) 68 ALJR 525 at 527 fn 10.

[29] (1976) 15 SASR 282.

[32] See s 70, s 71 and s 72 of the Act.

[33] [1992] NTSC 46; (1998) 108 FLR 159 at 168-170.

[34] [1998] NTSC 3; (1998) 120 NTR 24.

[35] [1998] NTSC 3; (1998) 120 NTR 24.

[36] I note that, in this respect, s 126A(2)(b)(i) refers to Division 4 of Part VI (since amended to read Part 6, Division 4) but there is in fact no Division 4 of Part VI or Part 6, Division 4. Presumably this is an error or should refer to Part 6, Division 2. The provisions of Division 2 were in Division 4 until 1989.

[37] [1998] NTSC 3; (1998) 120 NTR 24.

[39] See Pearce and Geddes, Statutory Interpretation in Australia, 6th ed, LexisNexis Butterworths, Sydney, 2006, para 2.5.

[40] Hansard, Debates, 18 August 1993, p 8985.

[41] [1982] HCA 62; (1982) 149 CLR 327.

[42] Woodruffe v Northern Territory of Australia [2000] NTCA 8; (2000) 10 NTLR 52 at 62 [29].

[43] [1998] NTSC 3; (1998) 120 NTR 24.

[44] [1998] NTSC 3; (1998) 120 NTR 24.

[45] HIH Casualty & General Insurance Ltd v Territory Insurance Office [1998] NTSC 3; (1998) 120 NTR 24 at 46.

[46] Albion Insurance Co Ltd v Government Insurance Office of NSW [1969] HCA 55; (1969) 121 CLR 342 at 345.

[47] [1998] NTSC 3; (1998) 120 NTR 24.