Zurich Australia Insurance Limited v GIO General
Limited  NSWCA 47
The worker suffered injuries in a motor vehicle accident in the
course of his employment. His employer, Tiger Tours, operated the
vehicle while Caringbah Bus, an associated company of Tiger Tours,
was the registered owner of the vehicle.
The worker sued Caringbah Bus for damages in the District Court
under the Motor Accident Compensation Act 1999
('MACA'). He did not sue Tiger Tours,
and Caringbah Bus did not join Tiger Tours as a cross defendant.
Caringbah Bus admitted liability.
An issue between the worker and Caringbah Bus in the District
Court proceeding was whether s151Z(2) of the Workers
Compensation Act 1987 ('WCA')
operated to reduce the damages recoverable by the worker from
The Court held that s151Z(2) did not apply on the basis that
both Tiger Tours and Caringbah Bus were owners of the vehicle
within the definition in MACA, which had the effect that s151Z(2)
did not apply as its operation was made irrelevant pursuant to
s151E(2) of WCA.
Zurich (the CTP insurer of Caringbah Bus and Tiger Tours) sought
a declaration in the Supreme Court that dual insurance applied as
between Zurich and GIO (the workers compensation insurer of Tiger
Tours) such that it was entitled to contribution from GIO.
Adopting the approach of Handley JA in Mercantile Mutual
Insurance (Aust) Limited v QBE Workers Compensation (NSW)
Limited  NSWCA 409, the trial judge held that dual
insurance did not apply as liability in Tiger Tours had not
'actually crystallised.' The liability that
had to be proved was not a liability that might have come into
existence had the worker taken some course other than that in fact
The Court of Appeal confirmed the basic proposition that dual
insurance shall apply where one insured is entitled to indemnity
from two insurers in respect of the same liability. It also
affirmed the principle that it can be extended to where there are
two different insureds which could each be liable for the same
injury as determined by the Court in AMP Workers Compensation
(NSW) Limited v QBE Insurance Limited (2001) NSWCA 267.
It was further held that the transcript of the District Court
proceedings which Zurich tendered as part of the evidence in
support of their case established:
Caringbah Bus and Tiger Tours were both held in the District
Court proceedings to be owners of the vehicle
Zurich indemnified Caringbah Bus in respect of its liability
under the MACA whilst Zurich and GIO indemnified Tiger Tours in
respect of its liability to the worker
During the District Court proceedings GIO accepted
Zurich's concession of liability and the settlement amount
whilst Tiger Tours was not a party to the proceedings
Zurich's payment to the worker relieved both Caringbah
Bus and Tiger Tours of their liabilities. This also relieved GIO
from its liability to indemnify Tiger Tours
The risk covered by Zurich was the same substantive risk
covered by GIO.
The Court of Appeal allowed the appeal and rejected the trial
judge's reading of Mercantile Mutual. Giles JA
held, that the liability had crystallised by way of judgment or
settlement and whilst it placed the whole burden on one of the
insurers it did not defeat that insurer's right to
contribution. It found the trial judge was in error in deciding
there was no evidence to establish a liability in Tiger Tours.
In accepting there was evidence to establish a liability in
Tiger Tours, the Court of Appeal rejected the argument from GIO
that the circumstances of the claim, which involved two corporate
entities as opposed to a negligent employee and an employer who was
vicariously liable, as was the case in AMP v QBE, was
sufficient to distinguish this case from AMP v QBE.
The Court of Appeal found the choice of the plaintiff in
deciding who to sue should not result in the burden of liability
falling upon one insurer.
Accordingly dual insurance applied and Zurich was therefore
entitled to contribution.
This decision confirms the extension of the dual insurance
principle as determined in AMP v QBE. The choice of the
plaintiff to sue one of the insureds as opposed to another may not
result in one insurer shouldering the burden of a liability and
relieving the other insurer from any liability. Insurers need to be
vigilant as to the prospects of establishing dual insurance. Of
course, it 'works' both ways.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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