The Supreme Court of NSW has confirmed that questions of dual
insurance are to be answered by reference to actual crystallised
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
of NSW and claimed damages 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 breach of duty of care
to the worker.
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 District Court held that s151Z(2) did not apply on the basis
that Tiger Tours, and Caringbah Bus, was an owner 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) sought a declaration
in the NSW 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.
Zurich contended that the fact Tiger Tours and Caringbah Bus
were separate legal entities did not preclude the application of
dual insurance when Tiger Tours was held to be a joint owner of the
vehicle and therefore entitled to indemnity under the relevant CTP
Zurich relied on AMP Workers Compensation Services (NSW)
Limited v QBE Insurance Limited (2001) 53 NSWLR 35. In that
case, an employee who suffered injuries in a motor vehicle accident
sued another employee who was found to be the negligent driver of
the vehicle which was owned by their employer. The relevant CTP
insurer indemnified the negligent employee as the driver of the
vehicle and successfully obtained contribution from the workers
compensation insurer based upon dual insurance.
GIO sought to distinguish AMP v QBE on the basis that
Tiger Tours, was a separate legal identity from Caringbah Bus.
Further, there was no relationship of agency, vicarious liability
or partnership between Tiger Tours and Caringbah Bus, unlike in
AMP v QBE where the employer was vicariously liable for
negligent driving of its employee.
Barrett J did not directly discuss these submissions in his
judgment. Adopting the approach of Handley JA in Mercantile
Mutual Insurance (Aust) Limited v QBE Workers Compensation (NSW)
Limited  NSWCA 409, His Honour held that dual insurance
could not be applied as liability in Tiger Tours was 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 taken. On
the other hand, the liability Caringbah Bus owed to the worker was
not a liability which was covered by the workers compensation
policy. In other words, there was no established liability to which
any insurance indemnifying Tiger Tours could possibly respond.
There is little doubt that in light of the comments by the bench
in the District Court proceedings brought by the worker, the CTP
insurer felt aggrieved. However, this claim highlights the strict
thresholds that must be established in claims for general
insurance. From a practical point of view, the CTP insurer may have
achieved a different result should they have encouraged the worker
to have commenced against Tiger Tours in the District Court.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Contractors and principals should ensure they have appropriate insurance coverage instead of relying on indemnity clauses.
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