QBE Insurance (Australia) Limited v Stewart & Anor  NSWCA 66
Ipp JA, Gyles AJA and Brereton J
- The Court of Appeal was asked to consider whether or not a workers compensation insurer is liable to indemnify for an amount greater than the statutory level of cover in circumstances where a copy of the relevant policy of insurance no longer exists. In particular, it considered whether or not an insurer bears the onus of establishing that the statutory level of cover applied.
- The majority of the Court of Appeal, Brereton J dissenting, found that the insurer was entitled to rely upon the level of cover afforded under the common law extension to the statutory form of employers' indemnity policy as prescribed by the Workers Compensation Act 1926 (NSW).
- Angus Stewart commenced proceedings in the Dust Diseases Tribunal of New South Wales seeking damages in respect to the condition of mesothelioma alleged to have arisen from his exposure to asbestos whilst employed by Pilkington Bros (Australia) Limited from 1964 to 1967.
- Proceedings in the Tribunal were commenced against QBE Insurance (Australia) Limited on the basis that it was the relevant workers compensation insurer of the Plaintiff's employer at the relevant time. Proceedings were also issued against the alleged manufacturer and supplier of the asbestos products to which the Plaintiff was exposed.
- Judgment was entered in favour of the Plaintiff against the Defendants sued and QBE was granted leave to appeal.
- In the absence of any proof of the level of cover available pursuant to the common law extension to the statutory form of workers compensation policy, it was held that QBE had an unlimited level of cover as distinct from the amount of $40,000, being the minimum limit of an employers' indemnity policy under the Workers Compensation Act 1926 (NSW) as at 1967.
Court of Appeal Proceedings
- The first issue raised on appeal was in relation to the liability of the employer to the Plaintiff and the second issue raised was the extent of the liability of QBE as an insurer.
- In dealing with the liability issue, QBE argued that there was no evidence before the trial judge demonstrating that an alternative system of work which would have obviated the risk of injury was available. Furthermore, it was submitted that the trial judge did not identify the warnings that the employer ought to have given to the Plaintiff.
- The Court of Appeal agreed with QBE that there was no evidence regarding alternative systems of work but found that there was just enough evidence for the trial judge to conclude that the employer failed to warn the Plaintiff of the relevant risks of exposure to asbestos products.
- In the primary proceedings, QBE did not produce any evidence in relation to any contract of insurance between it or its predecessors and the employer. There was therefore no evidence before the trial judge in relation to the level of cover available under the relevant policy of insurance.
- The statutory form of workers compensation policy as prescribed by the Act at the relevant time provided a minimum level of cover of Ł20,000 ($40,000).
- The trial judge adopted the findings of Curtis J in Di Cecco v Mercantile Mutual Insurance (Workers Compensation) Limited  NSW DDT1 in which it was held that the insurer bore the onus of establishing that the relevant policy of insurance was limited in its cover.
- The trial judge found that it was within the power of QBE to have called evidence from a number of people in the insurance industry as to practices in similar circumstances which may have assisted in determining whether at the relevant time, policies within the industry tended to be underwritten for the statutory limit only, an amount greater than the statutory limit or perhaps without a limit.
- The Court of Appeal noted that in its Defence of the primary action, QBE expressly put the extent of cover in issue. The Court of Appeal then held that the trial judge erred in following the decision of Curtis J, in Di Cecco holding that the insurer bore the onus to establish that the policy of insurance was limited. The fact that QBE could not produce a copy of the relevant policy did not transfer the onus of proof from the Plaintiff to QBE.
- In his dissenting judgment (on insurance only), Brereton J found that the Plaintiff was not required to plead or prove every term of the contract; it need only plead and prove sufficient to establish the existence of an enforceable contract of insurance containing the terms on which it relied. However, if QBE intended to rely upon any other term of the contract, it bore the onus of proving that term.
- Brereton J, held that a fundamental contractual and pleading principle requires a party relying on a term of a contract to show that it did all that was reasonable in the circumstances to bring the relevant term to the attention of the Plaintiff. Brereton J found that QBE bore the onus of proving any limitation of the level of cover available and that it failed to discharge that onus.
- The decision upheld and supported the otherwise current practice adopted by workers compensation insurers in the Dust Diseases Tribunal that in the absence of any proof to the contrary, an insurer is entitled to rely upon the statutory level of cover.
- The decision also significantly reduces the potential exposure for New South Wales workers compensation insurers faced with latent disease claims, the circumstances of which often make it difficult to locate a policy or policies of insurance and identify the level of cover available.
- As the decision contained a strong dissenting judgment on the issue of insurance and bearing in mind the importance of the issue to all insurers it is possible that an application for special leave to the High Court may be considered.
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