Hih Casualty & General Insurance Ltd v Territory Insurance Office

• Jurisdiction: Northern Territory
• Court: Supreme Court
• Judge: Kearney J
• Judgment Date: 23 January 1998
• Neutral Citation: [1998] NTSC 3
• Date: 23 January 1998
• Docket Number: FILE NO: No. 169 of 1995

[1998] NTSC 3

SUPREME COURT OF THE NORTHERN TERRITORY

IN THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA AT DARWIN

Judgment of:

Kearney J

FILE NO: No. 169 of 1995

Between:

In The Matter of the Work Health Act

And In The Matter of an appeal from a decision of the Work Health Court

Hih Casualty & General Insurance Ltd

Appellant

and

Territory Insurance Office

Respondent

REPRESENTATION:

Counsel:

Appellant: S. R. Southwood

Respondent: A. J. Lindsay

Coulton v Holcombe (1986) 162 CLR 1, applied.

Water Board v Moustakas (1988) 77 ALR 193, applied.

Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342, applied.

Spika Trading Pty Ltd v Harrison (1990) 19 NSWLR 211, followed.

Accident Compensation Commission v Baltica General Insurance Co Ltd [1993] 1 VR 467, followed.

Street v Retravision (1995) 16 ACSR 780, referred to.

Mutual Insurance Ltd & Ors v National Employers' Mutual General Insurance Association Ltd (1990) 6 ANZ Insurance Cases 61–038, considered.

Forbes v Davies & Anor (1994) Aust Torts Reports 81–279, applied.

Egerton v Moore [1912] 2 KB 308, distinguished.

Farmer v Cotton's Trustees [1915] AC 922, followed.

Albison v Newroyd Mill Ltd [(1925) 134 LT 171, followed.

Hunter Resources Ltd v Melville (1987–88) 164 CLR 234, distinguished.

McMillan v Territory Insurance Office (1988) 57 NTR 24, followed.

Maddalozzo v Maddick (1992) 84 NTR 27, distinguished.

Murray v Baxter (1914) 18 CLR 622, distinguished.

McLean v Discount and Finance Ltd (1939) 64 CLR 312, referred to.

Mahoney v McManus (1981) 36 ALR 549, referred to.

Borg Warner (Aust) Ltd v Switzerland General Insurance Co Ltd (1989) 16 NSWLR 421, referred to.

Work Health Act (NT), s126A(1).

Work Health Act (NT), s126A(2)(b).

Work Health Act (NT), ss126A(2)(a), 126A(2)(b).

Work Health Act (NT), ss126A(2), 126A(2)(b)(i), 126A(2)(b)(ii).

Appeal and New Trial — General principles — Whether points and objections not taken below may be entertained on appeal —

Insurance — Workers” Compensation Insurance — “Double insurance” — Meaning of — Whether double insurance exists where statute imposes duty on current insurer to indemnify for an incapacity wholly attributable to injury for which prior insurer liable —

Workers' Compensation — Entitlement to and liability for compensation — Liability for contribution by one approved insurer to another — Considerations material to whether time to institute contribution proceedings should be extended —

Workers' Compensation — Entitlement to and liability for compensation — Liability for contribution by one approved insurer to another — Requirement to notify ‘as soon as practicable after becoming aware’ of other insurer's potential liability — Circumstances relevant to that requirement — Whether notification a condition precedent to recovering contribution —

Workers' Compensation — Entitlement to and liability for compensation — Whether expression ‘has indemnified’ in s126A(2) connotes actual payment — Whether explanation for delay required only for 6 months period in s126A(2)(b) — Whether separate proceedings for contribution may be instituted after worker has instituted proceedings for compensation —

REASONS FOR JUDGMENT

1 (Delivered 23 January 1998)

The appeal

2 This appeal arises from litigation between two insurers approved for the purposes of the Work Health Act (‘the Act’). It challenges a decision of the Work Health Court (‘the Court’) dismissing the appellant insurer's application under s126A(2)(b) of the Act to extend the time within which it could commence proceedings against the respondent insurer. The proceedings were to recover contribution in respect of certain compensation paid to an injured worker by his employer, for which the appellant, as insurer at the time the worker made his claim, had indemnified the employer (in the sense that it had actually paid the employer that sum), pursuant to its statutory obligation to do so under s126A(1) of the Act.

Section 126A of the Act provides:

‘(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.’

(emphasis added)

3 The appeal is limited to ‘a question of law’; see s116(1). The appellant relied on two grounds of appeal, viz: —

The application to the Court

(a) Background — the issues, as pleaded and joined

• (1) In finding (see p15) that the appellant had failed to notify the respondent ‘as soon as practicable after becoming aware of the [respondent's] potential liability’ in terms of S126A(2)(a), the Court erred because —

  • (a) it was reasonable for the appellant to have obtained specialist medical opinion on the worker's injury, before notifying the respondent of its “potential liability”; and

  • (b) it was unreasonable to require (see p14) that the appellant notify the respondent of its ‘potential liability’ as soon as practicable after 10 November 1993 on the basis that the appellant became aware of it on that date because of the information in the worker's claim form of 8 November 1993.

• (2) In declining to extend under S126A(2)(b) the time in which the appellant could institute its contribution proceedings, the Court erred —

  • (a) in finding (see p15) that the ‘material in support’ of the appellant's application to extend time was ‘so vague and unsatisfactory that in all the circumstances, including considerations of public policy, time should not be extended’;

  • (b) in its consideration of ‘public policy’ aspects (see p15); and

  • (c) in deciding that the fact that the appellant had not joined the respondent under s26A(2)(b)(ii) in the (earlier) worker's proceedings, or ‘involved [it] in negotiations’ (see p15) was relevant to the exercise of the discretion to extend time because to do so would give rise to separate proceedings to deal with an issue which should have been raised and dealt with in the worker's proceedings; in particular, the Court failed to have adequate regard to the provisions of Section 126A(2)(a).

4 The appellant in its application of 4 January 1995 to the Court pleaded its claim for contribution as follows.

Particulars

The employer has paid to the worker compensation for incapacity from 22 September 1993 to 21 November 1993 together with medical, pharmaceutical, hospital and like expenses.

‘ STATEMENT OF CLAIM

• 1. At all material times the applicant [the appellant] and the respondent are approved insurers pursuant to the Work Health Act (“the Act”).

• 2. At all material times Serge Katarski was a worker (“the worker”) in the employ of the Power & Water Authority (“the employer”).

• 3. On or about 8 October 1989 the worker suffered a crush injury to his lower left leg arising out of or in the course of his employment with the employer (“the original injury”).

• 4. In about August 1993, the worker suffered an aggravation of the original injury arising out of or in the course of his employment with the employer (“the subsequent injury”).

• 5. The employer has accepted liability for the worker's original and subsequent injuries.

• 6. The applicant has indemnified the employer for its liability for the worker's subsequent injury.

• 7. The respondent was the approved Work Health insurer for the employer at the time of the worker's original injury in October 1989.

• 8. By letter dated 22 March 1994 the applicant's solicitor notified the respondent of the respondent's liability to indemnify the employer, pursuant to Section 126A(2)(a) of the Act.

• 9. By letter dated 2 April 1994 the respondent's solicitor denied its liability to indemnify the employer pursuant to Section 126A of the Act.

• 10. The applicant has indemnified the employer for its liability for the worker's subsequent injuries (sic, injury).

5 11. Pursuant to Section 126A(2) of the Act, the respondent is liable to reimburse the applicant in respect of the applicant's indemnity to the employer for its liability for the worker's subsequent injury.

6 12. The applicant seeks: —

• (a) an extension of time pursuant to Section 126A(2)(b) to commence these proceedings to recover from the respondent all of the compensation paid to the worker by the applicant;

• (b) reimbursement of compensation for incapacity from 22 September 1993 to 21 November 1993;

• (c) reimbursement of medical, pharmaceutical, hospital and like expenses;

• (d) the costs of this application.’

7 (emphasis added)

8 The respondent in its Answer of 10 February 1995 admitted pars1, 7 and 9 of the Statement of Claim, did not admit pars2, 3, 4, 5, 6, 8 and 10, and denied pars11 and 12. It pleaded a Counterclaim not relevant to this appeal.

9 The...