INSURERS GUARANTEE FUND - NEM GENERAL INSURANCE ASSOCIATION (IN LIQ) v MANUFACTURERS MUTUAL INSURANCE WORKERS COMPENSATION LTD and ORS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, MEAGHER and COLE JJA 16 April 1996, 14 August 1996 [1996] NSWCA 264 WORKERS COMPENSATION ACT — contribution between insurers — s22(1A) — The Council of Sutherland Shire vy Baltica General Insurance Company Ltd followed — absence of power to reopen award — court applies current law on rehearing — jurisdiction to make award. Priestley JA The facts of this case are set out in the reasons of Cole JA which I have had the benefit of reading in draft. Also set out in his reasons are the arguments upon which the appellant found itself obliged to rely in the particular circumstances of this case. The situation was the result of the succession of amendments made to the Workers Compensation Act 1987 to make it clear that the Compensation Court had both appropriate powers to apportion the monetary consequences of liability to workers under the Act between relevant employers, and also appropriate powers of apportionment between insurers of employers. The efforts of the legislature culminated in amendments made by Acts 30 and 89 of 1995. Appellants in a number of cases sought to say that even these amendments had not resulted in the Compensation Court's having the apportionment power, but submissions to this effect were rejected by this court in Council of Shire v Baltica General Insurance Co Ltd and Ors, (unreported, 28 March 1996), and associated cases. The consequence of those decisions is that if, on the basis that Burke CCJ had no apportionment power at the time he purported to exercise it, and the attacked orders were set aside, this court in exercising jurisdiction under s75A of the Supreme Court Act 1970 would, for the reasons indicated by Cole JA, arrive at the same conclusion as did Burke CCJ. I therefore agree with Cole JA that the appeal should be dismissed with costs. Ladd that I do not think it necessary in this case to consider the status and effect of the decision of this court in Insurers Guarantee Fund v GIO (1994) 33 NSWLR 247. That case was one which demonstrated what I called in Baltica "this court's long standing affection for one inflexible meaning of the word 'apportionment'". I did not intend by what I said in Baltica, to commit myself to any particular view of the status and effect of The Insurers Guarantee Fund case and related cases; similarly in the present case I wish to reserve my opinion, as, whatever view is taken of them, the result in the present appeal will be the same. Meagher JA I agree with Cole JA Cole JA 2 UNREPORTED JUDGMENTS The undisputed facts were as follows: 1. The worker, the third respondent, was employed by the Royal Freemasons Benevolent Institute of New South Wales, the second respondent, between 23 June 1977 and 4 December 1985. The worker sustained four instances of back injury on 28 January 1985, 29 August 1985, 1 November 1987 and 13 August 1988. 2. The worker claimed compensation. On 19 September 1990 in proceedings No 5831 of 1989 Manser CCJ made an order for weekly payments of $173.50 and continuing. 3. After he had done so, namely on 18 October 1991, s22 of the Workers Compensation Act 1987 was amended by Act No 2 of 1991. In its new form s22(1) provided that: "Tf: (a) the death of incapacity of a worker; or (b) a loss suffered by a worker as referred to in Division 4 of Pt3; or (c) a liability under Division 3 of Pt3 to a worker, results from more than one injury to the worker, liability to pay compensation under this Act is to be apportioned in such manner as the Compensation Court determines." 4. The appellant was the insurer of the employer from 23 June 1977 to 4 December 1985. Thereafter the worker's compensation insurer of the employer was the first respondent, Manufacturers Mutual Insurance Workers Compensation NSW ("MMI"). Thus the first two injuries occurred whilst the appellant was on risk and the last two whilst the first respondent was on risk 5. On 2 December 1991 the employer through its insurer MMI filed an application for diminution to $15.00 per week or termination, both from 24 September 1991, of the award of Manser CCJ. Those proceedings were No 13745 of 1991 6. On 7 September 1992 the employer "in the interests of MMI" filed a notice of motion in proceedings No.5831 of 1989 seeking an order: "That the award of his Honour Judge Manser dated 19 September 1990 be apportioned as to liability between National Employers Mutual and General Insurance Co Ltd and Manufacturers Mutual Insurance Workers Compensation New South Wales Ltd in such manner as the court deems fit." That motion was adjourned for hearing at the same time as MMI's application for termination or diminution of the weekly compensation award. 7. Both the application and the motion were heard by Burke CCJ on 9 December 1992. On that day his Honour made orders varying the weekly compensation ordered in proceedings No 5831 of 1989 by Manser CCJ by reducing the weekly compensation to $80.00 per week and continuing. Further, his Honour ordered the payment pursuant to s66 of a lump sum payment of $2,500.00 in respect of permanent impairment of the worker's back. 8. Burke CCJ reserved his decision on the motion for apportionment. In reasons delivered 1 February 1994 in matter No 13745 of 1991 his Honour ordered: "The liability of the respondent (the employer) in respect of weekly payments and other benefits as awarded in matter 5831/89 as varied in matter 13745/91 and the liability pursuant to s66 awarded in the latter matter be apportioned 50% to National Employers Mutual and 50% to Manufacturers Mutual Insurance." It is from that order that this appeal is brought. Mr West QC, who appeared for the appellant, acknowledged on this appeal that since the introduction of s22(1A) in September 1995 which read: "Death, incapacity, loss or liability that results partly from one injury and partly from one URSURERS GUARANTEE FUND - NEM GENERAL INSURANCE ASSOCIATION (IN LIG3 v MANUFACTURERS MUTUAL INSURANCE WORKERS COMPENSATION LTD and ORS (Cole JA) or more other injuries is taken to have resulted from more than one injury", the introduction of s22A, s22B and s22C, and since the recent decision of this court in The Council of Sutherland Shire v Baltica General Insurance Company Ltd and Ors!, it was now held to be the law that the Compensation Court had power to apportion liability for an award between successive insurers where the incapacity giving rise to the award resulted from successive injuries during periods when different insurers were on risk. Mr West QC also accepted that as the appeal to this court was pursuant to s75A of the Supreme Court Act, the appeal constituted a rehearing and this court was obliged to apply the law at the date of the rehearing. Thus this court would be likely to apply Baltica. In argument it was made clear that the court was disposed to follow Baltica both because it was regarded as correct, and, being a recent decision of this court, should not be permitted to be reargued. The question then arose whether Burke CCJ had erred sufficiently to entitle this court to interfere. Mr West QC conceded that his Honour was in error for he had held there was a power of apportionment between successive insurers contrary to the decision of this Court in Insurer's Guarantee Fund-NEM General Insurance Association Ltd (In liquidation) v GIO General Ltd? which decision preceded the 1995 amendments. That concession was correctly made. The 1995 amendments effected a change to the law. In November 1982 the High Court decided in National and General Insurance Co Ltd v South British Insurance Co Ltd3 that where incapacity resulted after a worker suffered a series of accidents over time, liability for worker's compensation fell upon the employer, and its insurer, at the time of the last accident. Notwithstanding a number of amendments to the Workers Compensation Act between 1982 and 1993. on 15 March 1994 this court in Insurers Guarantee Fund-NEM General Insurance Association Ltd (in liquidation) v GIO General Ltd4 held that as there was only the one liability upon that last employer, and as one liability could not be "apportioned", the Workers Compensation Court had no power to apportion liability in respect of an award for weekly payments between successive employers or insurers. It was held there could be apportionment only where there was a common liability in two or more employers or insurers. Burke CCJ gave his decision apportioning both the weekly award payments and the s66 lump sum award between successive insurers on 1 February 1994. In accordance with this court's decision in Insurers Guarantee Fund v GIO, that decision was at that time wrong. Thus Mr West QC accepted that subject to the arguments to which I will come, the appeal must fail. To seek to avoid this position Mr West formally submitted that Baltica was incorrectly decided. In my opinion for the reasons indicated at the hearing, this court should follow Baltica. Once it does so there has been no basis shown for disturbing Burke CCJ's apportionment. Next it was submitted that Burke CCJ had no jurisdiction to reopen the award made by Manser CCJ. Mr West QC accepted that pursuant to s55 Workers Compensation Act 1987 the Compensation Court had a power to review weekly payments because of changed circumstances as Burke CCJ had done. This left . Unreported, 28 March 1996. . (1994) 33 NSWLR 247. . (1982) 149 CLR 327. . (1994) 33 NSWLR 247. RwWNS 4 UNREPORTED JUDGMENTS the argument that where s55 refers to "the Compensation Court", it meant the same persona as constituted the court initially. Mr West QC acknowledged that that argument was not tenable in the light of Pt2 of the Compensation Court Act 1984, in particular s4, s6, s7 and s17. Death or incapacity of a judge could not deprive a worker or employer of a right to seek a variation. It follows that as Burke CCJ had the jurisdiction to entertain the application for variation of the weekly payments there could be no jurisdictional challenge to, at least, that aspect of the proceedings before him. The remaining aspect of the proceedings was the s66 lump sum award. Mr West made clear that his client did not challenge either the making of the lump sum award of $2,500.00, or the apportionment of that sum between the two insurers for the reason that his client had agreed with the worker that it would not do so. This latter aspect may thus be put to one side. That left Mr West with one remaining associated argument. It was that the only power to review a previously made award was that in s55. There was no power to review a previously made award for the purpose of apportioning it between insurers. No power of apportionment between successive employers or insurers existed before September 1995 and accordingly in December 1992 when Burke CCJ heard the motion for apportionment, and in February 1994 when his Honour gave judgment there was no power to "reopen the award" for the purpose of apportionment although there was for variation purposes. $22A(1)(b) commenced on | September 1995. It provided: "In the case of the apportionment of liability between insurers of the same employer to be on the basis of the relative length of the employer's period of insurance with each insurer concerned during which the worker concerned was employed by the employer (not including any period of insurance after the last relevant injury was received), or on such other basis as the Court considers just and equitable in the special circumstances of the case." S22A did not apply retrospectively in respect of apportionment regarding awards made in respect of injuries entirely suffered prior to 1 September 1995. Schedule 6 Pt2 cl6 to the Act under the heading "Transitional - apportionment and contribution" provided: "6.(1) S22A and the amendments made to s22 by Schedule 4 to the Workers Compensation Legislation Amendment Act 1995 extend to a situation where one or more of the injuries concerned was received before the commencement of the Act and one or more of those injuries was received after that commencement, but not to a situation where all the injuries concerned were received before that commencement and not so as to affect any decision of a court made before the commencement of s22A. (2) S22B extends to injuries received by a worker before the commencement of that section (even before the commencement of this Act), but not so as to affect any decision of a court made before the commencement of that section. (3) S22A (9) (as inserted by the WorkCover Legislation Amendment Act 1995) was inserted for the purpose of avoiding doubt and accordingly is taken to have applied from the commencement of s22A." Consistently with the decision of this court in Insurers Guarantee Fund v GIO, prior to that introduction there was no power to apportion as between successive insurers of the same employer. Accordingly, Burke CCJ did not have jurisdiction to entertain an application for contribution between successive insurers of a URSURERS GUARANTEE FUND - NEM GENERAL INSURANCE ASSOCIATION (IN LIG5 v MANUFACTURERS MUTUAL INSURANCE WORKERS COMPENSATION LTD and ORS (Cole JA) single employer in respect of an existing award. There was no statutory power to bring such an application, or to hear or grant it. Even if it was entertained it should have been dismissed. Thus I think Mr West's submission regarding absence of power is correct. The consequence of an order made beyond power is not that it is unappellable; it is that an appeal from it must be upheld in the sense that the order made must be set aside. However once this court does that, recognising the error of Burke CCJ both in entertaining the application for apportionment and further in making the order he did, this Court must then deal with the notice of motion as on a rehearing applying the current law. So doing there is now jurisdiction to entertain and make the order which Burke CCJ did, and Baltica validates those orders. There is no basis for disturbing the apportionment of equal liability between the two insurers. As the result is that the orders of Burke CCJ are not disturbed, the appeal must be dismissed with costs. Appeal dismissed with costs. Counsel for the appellant: JN West QC and FFJ Davis Solicitors for the appellant: NW Aussel Counsel for the respondent: GB Beauchamp Solicitors for the respondent: MacMahon Drake Balding