Reported Decision : 52 NSWLR 193 New South Wales Court of Appeal CITATION : ZURICH AUSTRALIAN INSURANCE LIMITED v CSR LIMITED [2001] NSWCA 261 FILE NUMBER(S) : CA 40571/00 HEARING DATE(S) : 16 July 2001 JUDGMENT DATE : 13 August 2001 PARTIES : Zurich Australian Insurance Limited (Appellant) CSR Limited (Respondent) JUDGMENT OF : Spigelman CJ at 1; Mason P at 102; Handley JA at 103 LOWER COURT JURISDICTION : District Court LOWER COURT ED 1336/99 FILE NUMBER(S) : LOWER COURT Black DCJ JUDICIAL OFFICER : COUNSEL : D Rofe QC / K Rewell (Appellant) J Hislop QC / R Tonner (Respondent) SOLICITORS : Keddies (Appellant) Moray & Agnew (Respondent) CATCHWORDS : MOTOR VEHICLE LAW - "injury" - "defect" in use or operation - Motor Accidents Act 1988, s3(1) - INSURANCE LAW - self-insurer employer - indemnity not contribution from third party insurer - no co-ordinate liability. Employers' Liability Act 1880 (Eng) Employers' Liability Act 1894 (WA) Motor Accidents Act 1988 Motor Accidents Amendment Act 1995 LEGISLATION CITED : Motor Accidents Amendment Bill 1995 Motor Vehicles (Third Party Insurance) Act 1942 Motor Vehicles (Third Party Insurance) Act 1978 Workers Compensation Act 1926 Workers Compensation Act 1987 Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 AMP General Insurance v Brett (1999) 27 MVR 492 AMP General Insurance Ltd v Mayne Nickless Ltd (2000) 50 NSWLR 61 Australian Iron & Steel Pty Ltd v Government Insurance Office (NSW) (1985) 2 MVR 362 Balfour Beatty Power Constructions (Australia) Pty Ltd v Government Insurance Office (NSW) (1996) 24 MVR 162 Bialkower v Achos Pty Ltd (1998) 83 FCR 1 Burke v LFOT Pty Ltd (2001) 178 ALR 161 Cockburn v GIO Finance Ltd (No 2) [2001] NSWCA 177 Craythorne v Swinburne (1807) 33 ER 482 Cripps v Judge (1884) 13 QBD 583 Cummings v Lewis (1993) 41 FCR 559 Falzon v Mayne Nickless Ltd (Mahoney DCJ, unreported, 4 May 1999) Heske v Samuelson (1883) 12 QBD 30 In re Denton's Estate; Licences Insurances Corporation and Guarantee Fund Ltd v Denton [1904] 2 Ch 178 James Nimmo & Co Ltd v Connell [1924] AC 593 CASES CITED: Johnson & Johnson Pty Ltd v Manufacturers Insurance Ltd [2000] NSWSC 155 Mahoney v McManus (1981) 180 CLR 370 Metcalf v The Great Boulder Proprietary Gold Mines Ltd (1906) 3 CLR 543 Morgan v Hutchins (1890) 59 LJQB 197 NRMA Insurance Ltd v NSW Grain Corporation (1995) 22 MVR 317 R v Young (1999) 46 NSWLR 681 Raffle v AGC (Advances) Ltd (1989) ASC 55-933 at 58,530 Scholefield Goodman & Sons Ltd v Zyngier [1986] AC 563 Smith v Cock [1911] AC 317 Stratti v Stratti (2000) 50 NSWLR 324 Street v Retravision (NSW) Pty Ltd (1995) 56 FCR 588 Tate v Latham & Son [1897] 1 QB 502 Topfelt Pty Ltd v State Bank of New South Wales Ltd (1993) 47 FCR 226 Walsh v Whiteley (1888) 21 QBD 371 Weblin v Ballard (1886) 17 QBD 122 Willetts v Watt & Co [1892] 2 QB 92 Yarmouth v France (1887) 19 QBD 647 DECISION : Appeal dismissed with costs. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40571/00 ED 1336/99 SPIGELMAN CJ MASON P HANDLEY JA Monday 13 August 2001 ZURICH AUSTRALIAN INSURANCE LIMITED v CSR LIMITED On 15 April 1996 an employee of the Respondent suffered a serious injury to his back in the course of his employment. He was lifting a loading ramp weighing 79 kgs which was part of a custom built trailer attached to a truck. The trailer had no aids to assist in the lowering and lifting of the ramps. The employee sued his employer, the Respondent. Judgment was entered by consent. The Respondent is licensed as a self-insurer under the Workers' Compensation Act 1987. Around 30 September 1995 the Appellant issued a compulsory third party notice under the Motor Accidents Act 1988 ("the Act") to the Respondent in relation to the truck involved in the accident. Under the policy the Appellant insured the Respondent against liability for death or injury caused by the fault of the owner or driver of the truck and trailer in its use and operation. The Respondent made a claim pursuant to the policy. The Appellant contended that it was not required to pay. At trial, Black DCJ found that the definition of "injury" in s3(1) of the Act that existed at the time the policy was issued was not altered by the provisions of the Motor Accidents Amendment Act 1995 ("the Amendment Act") which came into effect on 1 January 1996 and which narrowed the definition of "injury". His Honour held that the employee's injury came within that definition. Accordingly, his Honour did not need to consider whether the injury was caused by a "defect" in the vehicle, which was the applicable part of the new definition. His Honour also held that the Respondent was entitled to an indemnity from the Appellant, not merely contribution. Held per Spigelman CJ, Mason P and Handley JA agreeing A Definition 1 The employee's injury occurred after the commencement of the Amendment Act and, on its true construction, the new definition applied to the policy. AMP General Insurance Ltd v Mayne Nickless Ltd (2000) 50 NSWLR 61 applied. B Did the injury fall within the new definition? "fault" and "use and operation" 2 Nothing in the language, scope, purpose or operation of the Act suggests that a dual characterisation of "fault" as it appears in the definition is impermissible. Provided the fault may be characterised in the way set out in the definition, it does not matters that some other characterisation of "fault", for example an unsafe system of work, may also be appropriate. NRMA Insurance Ltd v NSW Grain Corporation (1995) 22 MVR 317, Balfour Beatty Power Constructions (Australia) Pty Ltd v Government Insurance Office (NSW) (1996) 24 MVR 162 and AMP General Insurance v Brett (1999) 27 MVR 492 referred to. ii "such" 3 The word "such" in par (a)(iv) of the definition is a reference to the earlier use of the words "use or operation" in the opening words of par (a). iii "defect" 4 Lifting of each ramp by one worker was an intended mode of operation of the trailer. This was a "defect" within par (a)(iv) of the definition as the trailer was not fit for the purpose for which it was designed or the use to which it was intended to be put. Heske v Samuelson (1883) 12 QBD 30, Walsh v Whiteley (1888) 21 QBD 371, Morgan v Hutchins (1890) 59 LJQB 197, Tate v Latham & Son [1897] 1 QB 502, Metcalf v The Great Boulder Proprietary Gold Mines Ltd (1906) 3 CLR 543, James Nimmo & Co Ltd v Connell [1924] AC 5, Topfelt Pty Ltd v State Bank of New South Wales Ltd (1993) 47 FCR 226 discussed. C Contribution 5 A person who has paid an amount pursuant to an obligation to do so can only claim contribution from another where both persons share an obligation which is "common" or "co-ordinate". Smith v Cock [1911] AC 317, Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342, Mahoney v McManus (1981) 180 CLR 370, Scholefield Goodman & Sons Ltd v Zyngier [1986] AC 563, Street v Retravision (NSW) Pty Ltd (1995) 56 FCR 588, Bialkower v Achos Pty Ltd (1998) 83 FCR 1, Stratti v Stratti (2000) 50 NSWLR 324, Burke v LFOT Pty Ltd (2001) 178 ALR 161, Cockburn v GIO Finance Ltd (No 2) [2001] NSWCA 177 referred to. 6 The Appellant's liability was at a different level from that of the Respondent and, accordingly, was not co-ordinate. Scholefield Goodman & Sons Ltd v Zyngier (supra), Craythorne v Swinburne (1807) 33 ER 482, In re Denton's Estate; Licences Insurances Corporation and Guarantee Fund Ltd v Denton [1904] 2 Ch 178 referred to. 7 The Respondent's obligation to the employee was a primary obligation. The Appellant had no obligation to him. The Appellant's obligation to indemnify the Respondent was a secondary, rather than a primary, obligation. Street v Retravision (NSW) Pty Ltd (1995) 56 FCR 588 applied. Order Appeal dismissed with costs. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40571/00 ED 1336/99 SPIGELMAN CJ MASON P HANDLEY JA Monday 13 August 2001 ZURICH AUSTRALIAN INSURANCE LIMITED v CSR LIMITED JUDGMENT 1 SPIGELMAN CJ: On 15 April 1996, Thomas Maxwell Langley suffered a serious injury to his back. This occurred in the course of his employment with CSR Ltd ("the Respondent"). Mr Langley was engaged in lifting a ramp weighing 79 kgs which was part of a trailer attached to a truck owned by the Respondent. The trailer had been custom built to the requirements of the Respondent for the purpose of carrying a roller. The roller would ascend onto and descend from the trailer on two ramps, which could be lowered and raised between a vertical position and the ground. There were no mechanical aids, or other devices, on the trailer to assist in the lowering and lifting of the ramps. Mr Langley was doing this on his own. 2 Mr Langley sued the Respondent and on 7 October 1998, attained judgment by consent for the sum of $300,000. That sum was inclusive of costs, but clear of workers' compensation payments made to that date which totalled $23,579.23. So much was uncontroversial and is not in issue. 3 The present proceedings arose in the following way. Since 15 July 1926, the Respondent has been licensed as a self-insurer under Div 5 of Pt 7 of the Workers' Compensation Act 1987 and corresponding earlier legislation. The effect of that was to relieve the Respondent, as employer, from the payment of premiums to a licensed insurer for insurance of workers' compensation risk and to allow it to carry its own underwriting risk and to take control of its own claims' administration. 4 Around 30 September 1995, Zurich Australian Insurance Ltd ("the Appellant") issued a compulsory third party policy under the Motor Accidents Act 1988 ("the Act") to the Respondent in relation to the truck that was involved in the injury to Mr Langley. Under that policy, the Appellant insured the Respondent, as owner of the truck, against liability in respect of death or injury to a person caused by the fault of the owner or driver of the truck and any trailer attached to it, in its use and operation. 5 The word "injury" is defined in s3 of the Act. At the time that the policy was issued, the definition of injury in the Act was: " injury means personal or bodily injury, and includes: (a) pre-natal injury; and (b) **** (c) psychological or psychiatric injury; and (d) damage to artificial members, eyes or teeth, crutches or other aids or spectacle glasses;" 6 The definition of injury was amended by the Motor Accidents Amendment Act 1995 ("the Amendment Act"). The new definition is: " injury : (a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during: (i) the driving of the vehicle, or (ii) a collision, or action taken to avoid a collision, with the vehicle, or (iii) the vehicle's running out of control, or (iv) such use or operation by a defect in the vehicle, and (b) includes: (i) pre-natal injury, and (ii) psychological or psychiatric injury, and (iii) damage to artificial members, eyes or teeth, crutches other aids or spectacle glasses." 7 Clause 1 of the third party policy then contained in Sch 1 of the Act, extended insurance cover for "liability … caused by the fault of the owner or driver of the vehicle … in the use or operation of the vehicle". Accordingly, the words "use or operation" and "fault", perhaps redundantly, are repeated both expressly in cl 1 and by reason of the incorporation into that clause of the definition of "injury" (and of "death") from s3(1) of the Act. 8 The word "motor vehicle" is defined in s3(1) to mean "a motor vehicle or trailer". Section 3B of the Act says, relevantly, that a reference in the Act to "the use and operation of a motor vehicle" extends to the use or operation of "a trailer attached to the motor vehicle". 9 The amendment to the definition of "injury" came into effect on 1 January 1996. As noted, the relevant policy was taken out around 30 September 1995 and the accident occurred on 15 April 1996. 10 The Respondent made a claim on the Appellant pursuant to the policy for $339,345.31. This figure was the sum of the judgment entered and the amount paid under workers' compensation legislation, plus costs of $15,766.08 incurred by the Respondent in defending the claim against Mr Langley. The Appellant contended that it was not required to pay the claim. Issues at Trial 11 There were three issues that arose in the proceedings held before his Honour Judge Black QC. The first was whether the definition of injury in the Amendment Act replaced the previous definition of injury in the policy issued on 30 September 1995. It was common ground that if the Amendment Act did not alter the definition then Mr Langley's accident was covered under the previous wording of "injury" contained in s3. 12 His Honour came to the conclusion that the terms of the policy under which the Respondent claimed against the Appellant were not altered by the Amendment Act and, accordingly, the definition of injury was not altered. In coming to this conclusion, Black DCJ agreed with what was said by Mahoney DCJ in Falzon v Mayne Nickless Ltd (Mahoney DCJ, unreported, 4 May 1999) where his Honour had said: "No part of the 1995 amending legislation, that I have been taken to, evinces any legislative intention to alter retrospectively any contractual rights conferred upon the defendant pursuant to the policy of insurance which had effected with AMP before the 1995 amending legislation came into effect." 13 Black DCJ said: "In my judgment it would require very clear legislative intention retrospectively to affect contracts of insurance which had already been entered into and in the absence of finding any such intention I respectfully agree with the views of His Honour Judge Mahoney which I regard as on all fours with the present case and accordingly I find that the terms of the policy under which the Plaintiff claims against the defendant were not altered by the Motor Accidents (Amendment) Act 1995, and in particular that the definition of injury was not altered." 14 The second issue before Black DCJ was whether it could be said that Mr Langley's accident was caused by "a defect in the vehicle" which was part of the new definition of injury brought about as a result of the Amendment Act. This issue did not need to be considered, because it only arose if the terms of the policy were altered by reason of the Amendment Act. His Honour said: "As I have found the definition of injury was not altered I say no more about it." 15 The third issue was whether the Respondent was entitled to an indemnity, or merely contribution, from the Appellant and, if so, to what extent. The issue arose because the Respondent was a self-insurer. 16 Black DCJ referred to the decision of Yeldham J in Australian Iron & Steel Pty Ltd v Government Insurance Office (NSW) (1985) 2 MVR 362. Counsel for the Appellant submitted before his Honour that Yeldham J had not dealt with the relevant issue in that case. Nevertheless, it was accepted that if Black DCJ took the view that Yeldham J had dealt with the issue in his judgment, then that judgment was binding on his Honour. 17 Black DCJ said that Yeldham J did deal with the issue. His Honour said that the judgment focuses on the very issue of: "… whether the doctrine of double insurance applied and Mr Justice Yeldham held that it did not. In my view his reasoning is indistinguishable from the present case and accordingly in my judgment the Plaintiff is entitled to an indemnity from the Defendant and the issue of the contribution does not arise." 18 His Honour found a verdict for the Respondent and judgment was entered in the sum of $339,345.31 with costs. Appeal 19 The Appellant appeals on seven grounds: "1. His Honour was in error in finding that the terms of the Policy under which the Respondent claimed against the Defendant were not altered by the Motor Accidents (Amendment) Act 1995 ('the Amendment Act') and in finding in particular that the definition of 'injury' in the Amendment Act did not apply to the facts of this case and consequently was not altered by that Act. 2. His Honour should have found that on a proper construction of Part 7 of Schedule 4 to the Motor Accidents Act 1988 ('the Act') as amended by the Amendment Act, the Respondent was not entitled to indemnity from the Appellant in respect of the Respondent's liability to Mr Langley its employee, unless his injury was a result of and was caused by a defect in the custom built trailer ('trailer'). 3. His Honour was in error:- (a) in concluding that it was not necessary to find whether or not the injury was caused by a defect in the trailer within s.3 of the Act as amended by the Amendment Act; (b) in not finding that the injury was not caused by a defect in the trailer within s.3 of the Act as so amended. 4. His Honour was in error in concluding that it was not necessary to find and therefore not finding the following facts on the basis of the Agreed Facts tendered into evidence:- (a) that there was no evidence of fault in the use and operation of the trailer; and/or (b) that upon a proper construction of the definition of 'injury' in s.3 of the Act as amended by the Amendment Act, the words 'such use or operation' in a(iv) referred only to the uses or operations of:- (i) the driving of the vehicle; and/or (ii) a collision or action taken to avoid a collision ; and/or (iii) the vehicle running out of control ; and not to the words 'use or operation' where first appearing in (a); (c) that upon a proper construction of the amended definition of 'injury', the Policy did not respond to the Plaintiff's claim. 5. Alternatively if the Policy did respond to the Respondent's Claim, His Honour should have found that CSR was entitled merely to a contribution and in unequal proportions pursuant to the general law right of contribution. (a) His Honour should have found that the liability of the Respondent to compensation its employee Langley, pursuant to the Worker's Compensation Act 1987 for injuries sustained by its negligent system of work and the obligation of the Appellant imposed by Statute also to compensate Langley for injuries sustained in a motor vehicle accident were common or co-ordinate liabilities attracting the doctrine of contribution under the general law. (b) His Honour was in error having found the Policy responded to the Respondent's claim, in concluding that he was bound by the decision of Yeldham J in Australia Iron and Steel Pty Limited v Government Insurance Office (1985) 2 MVR 362 and in finding that the Respondent was entitled to an indemnity from the Appellant so that the issue of contribution did not arise. 6. Alternatively, if the Policy did respond to the Respondent's claim, and if the Respondent was entitled merely to contribution, His Honour was in error on the basis of the Agreed Facts tendered in not finding that the major responsibility for the injuries rested with the Respondent employer who had designed and had custom made the trailer without mechanical aids and who did not ensure that when in operation there was sufficient manual assistance and that the role of the Respondent as trailer owner in causing the injuries was insignificant by contrast to the role of the Respondent as employer. 7. The Appellant seeks leave to argue that to the extent that the facts in the cases of NRMA Insurance Limited v NSW Grain Corporation (1995) 22 MVR 317; Balfour Beatty Power Constructions (Australia) Pty Limited v GIO of NSW (1996) 24 MVR 162 and AMP General Insurance v Brett & Anor (1998) 27 MVR 492 are not distinguishable, those cases were wrongly decided." Ground 1 20 Ground 1 was based on the submission that his Honour erred in following the decision of Mahoney DCJ because Mahoney DCJ's judgment was overturned on appeal by this Court: AMP General Insurance Ltd v Mayne Nickless Ltd (2000) 50 NSWLR 61. 21 Fitzgerald JA, with whom Stein JA and Foster AJA agreed, discussed the interaction of the Amendment Act with the provisions of Pt 7 of Sch 4 to the Act. Fitzgerald JA said that the definition of "injury" that existed before the Amendment Act had effect, would have continued to apply to the policy between AMP and Mayne Nickless in that case, were it not for the effect of cl 17(2) and (3) of Pt 7 to Sch 4. 22 Clause 17(2) says that the amendment to the definition of "injury" applies "only in relation to motor accidents occurring on or after the commencement of the amendment". His Honour said: "Accordingly, on the proper construction of Part 7 of Schedule 4 to the Act , Mayne Nickless was not entitled to indemnity from AMP in respect of its liability to Mr Falzon unless his injury was 'a result of and … cause … by a defect in the vehicle'." (at [15]) 23 The Respondent "formally" submitted that Fitzgerald JA's reasoning was wrong, but did not seek leave to re-argue the case. This Court should apply it. As in that case, Mr Langley's accident occurred after the commencement of the change in definition and, accordingly, the new definition applied to the policy. Black DCJ erred in this regard. Grounds 2, 3, 4 and 7 24 These grounds were argued together. Black DCJ did not consider these issues because his Honour came to the conclusion that the Amendment Act did not have a retrospective effect. 25 The Appellant submitted that the new definition of "injury" was intended to significantly limit the interpretation that had been given to that word under the Motor Vehicles (Third Party Insurance) Act 1978 and to bring the Act into line with the definitions contained in the equivalent acts in Queensland, South Australia and Western Australia. 26 Reference was made to the Second Reading Speech to the Motor Accidents Amendment Bill 1995. This task of this Court is to construe the definition of "injury" for purposes of its application to the facts of this case. It is plain from the words of the new definition that its purpose was to restrict the ambit of the definition as it had hitherto existed. The issue is to identify the operation of the section, in its new form, in its application to the facts before the Court. I have not found the Second Reading Speech of assistance for this task. To accept that the Parliament intended to restrict the operation of the Act, does not mean that every word used by Parliament must be given its most restricted operation. The restriction adopted by Parliament was reflected in specific words which must be construed in the normal way. 27 It was common ground that the part of the definition of injury which made the Appellant's policy respond, was (a)(iv): " … personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle … caused during: … (iv) such use or operation by a defect in the vehicle … ." 28 The full context of this sub-paragraph is relevant to one of the Appellant's submissions and is set out above. 29 The first submission was, essentially, one of characterisation. The Appellant submitted that the injury was not caused "in the use and operation of" the trailer. The injury was caused by an unsafe system of work or in the design of the trailer. Nothing in the language used, or the scope, purpose or operation of the Act, suggests that a dual characterisation of "fault" is impermissible. The definition applies so long as the fault may be characterised in the way set out within it. It matters not that some other characterisation may also be appropriate. 30 This issue has been determined against the Appellant in this Court. See NRMA Insurance Ltd v NSW Grain Corporation (1995) 22 MVR 317 esp at 319; Balfour Beatty Power Constructions (Australia) Pty Ltd v Government Insurance Office (NSW) (1996) 24 MVR 162 at 163-164; AMP General Insurance v Brett (1999) 27 MVR 492 at 495. In my opinion the reasoning in these cases is correct and should be followed. 31 The second submission was that the word "such" in (a)(iv) did not refer to the words "use or operation" in the opening words of par (a), but referred to the "use or operation" comprised in (i), (ii) and (iii), i.e. "driving", "collision" and "running out of control". This construction would deprive (iv) of all content. Paragraph (a)(i) applies to any injury "caused during … driving". That encompasses every injury "caused during driving by a defect in the vehicle". The same is true of pars (ii) and (iii). The construction advanced by the Appellant would leave (iv) with no work to do. 32 The word "such" in (iv) is, in my opinion, a reference to the preceding use of the precise words which immediately follow it, i.e. "use and operation". The repetition of this phrase in (iv) was necessitated by the fact that the sub-paragraphs are all qualified by the word "during". It makes sense to speak of something occurring "during" driving, a collision or running out of control. It makes no sense to speak of something occurring "during" a defect. The words are repeated to identify a time dimension for (iv). 33 The final submission under these grounds concerned the word "defect". The Appellant submitted that there was no relevant defect in the trailer for which the Respondent was responsible. 34 The Appellant submitted that the trailer was custom built to the requirements of the Respondent and that the finished product had no shortcoming, flaw or imperfection. The Appellant submitted that with a proper system of work - for example if two workers had lifted the trailer ramp - no injury would have occurred. It was submitted that failure to fit the trailer with mechanical lifting aids - whether in the form of a spring, as subsequently installed, or otherwise - did not render the trailer 'defective' within the meaning of the Act. 35 The Appellant in its submissions focused on alternative ways of ensuring that the trailer could operate without risk of injury, by means of what it called a "team lift". This directed attention away from the intrinsic nature of the vehicle as a piece of equipment and towards the system of work. 36 Subsequent to Mr Langley's injury, the Respondent arranged a torsion spring to be fitted to each ramp hinge to assist in the lifting of the ramps. The Respondent submitted that the absence of such a spring was a relevant defect in the vehicle. 37 Although, as I have indicated, each ramp weighed 79 kgs, the force required to lift a ramp to an upright position involved the equivalent of lifting 160 kgs. The Statement of Agreed Facts before this Court included: "The force required to lift the loading ramps into place was approximately 160 kilograms. Generally, no person should be required to lift, lower or carry loads above 55 kgs, unless mechanical assistance or team lifting arrangements are provided to lower the risk of injury." 38 The Agreed Facts do not indicate anything about the usual practice with respect to the operation of the roller for the transport of which the trailer had been specifically designed. Nothing appears in the Agreed Facts which indicates how many workers would, in the normal course, be available to conduct a lift. 39 The Respondent relied on the proposition that a safe system of work would not be provided if two workers conducted the lifting, by reason of the fact that the safe figure was agreed at 55 kgs and the force required was the equivalent of 160 kgs. Nothing appears from the Agreed Facts which would suggest that a team of three persons would be likely to be available in the usual circumstance in which the trailer was to be used. I would be prepared to infer that the usual team would be only one or two persons, but it is not necessary to do so. 40 Photographs of the trailer and its ramps in the materials before the Court, indicate that each ramp is fitted with a single handle on its outside. Lifting by the handle is plainly the most convenient mode of conducting the lift. No doubt other workers could get a grip on the ramp at some other point. However, the absence of provision for anything more than one handle, being on only one side of the ramp, indicates that the ramp was designed for circumstances in which only a single worker conducted the lift. 41 It is not necessary for this Court to have an agreed fact as to the usual mode of operation of the trailer. It is sufficient, for purposes of this case, to conclude that lifting by one person was an intended mode of operation. What is a "Defect"? 42 In Topfelt Pty Ltd v State Bank of New South Wales Ltd (1993) 47 FCR 226, Lockhart J said, at 237F-G: "According to its ordinary usage a 'defect' means a lack of absence of something necessary or essential for completeness; a shortcoming or deficiency; an imperfection. A defect according to ordinary understanding is not necessarily something which is of a minor nature, it may be either major or minor. The word 'defect' has been considered by judgments of courts in a variety of contexts: see, for example, Tate v Latham & Son [1897] 1 QB 502 per Bruce J at 506-507 ('defect in the condition'); Dawson v African Consolidated Land and Training Co [1898] 1 Ch 6 ('defect in appointment'); Sanderson v National Coal Board [1961] 2 QB 244 ('patent defect'); Metcalf v Great Boulder Pty Gold Mines Ltd (1905) 3 CLR 543 ('defect in condition'); Hampson v Clyne (1967) 86 WN (Pt 1) (NSW) 321; Re Gagliardi; Ex parte Mount (1984) 5 FCR 52 ('defect' as failure to sign and file a certificate)." 43 The word "defect" may, in specific contexts, be given a wide meaning to encompass any form of shortcoming. The word may be given a more restrictive meaning depending on the context. The construction propounded by the Appellant was that in the Act the word "defect" should be understood as a reference to a "flaw which affects (the) proper function" of the vehicle. 44 Reading down general words is one of the most frequently occurring tasks of statutory construction. (I have referred to a number of authorities in R v Young (1999) 46 NSWLR 681 at [23]-[25] and in my Sir Ninian Stephen Lecture "Statutory Interpretation: Identifying the Linguistic Register" (1999) 4 Newcastle Law Review 1.) The full dictionary definition of a word as general as "defect" will rarely be appropriate. 45 The line of authority which considers a statutory formulation most closely analogous to that under consideration in the present case is that based on the English Employers' Liability Act 1880 and its progeny. That Act stated, relevantly, that: "1 Where … personal injury is caused to a workman (1) By reason of any defect in the condition of the ways, works, machinery, or plant connected with or used in the business of the employer; … the workman … shall have the same right of compensation and remedies against the employer as if the workman had not been a workman of nor in the service of the employer, nor engaged in his work. 2 A workman shall not to be entitled … to any right of compensation or remedy against the employer … (1) Under sub-section one of section one, unless the defect therein mentioned arose from, or had not been discovered or remedied owing to the negligence of the employer, or of some person in the service of the employer … ." 46 In an approach which, in my opinion, is applicable to the Motor Accidents Act, machinery etc was found to be "defective" if it was not fit for the purpose for which it was designed or the use for which it was intended. 47 Lord Coleridge said in Heske v Samuelson (1883) 12 QBD 30 at 31: "The question is whether the fact that the machine was unfit for the purpose for which it was applied, constitutes a 'defect in its condition' within 43 & 44 Vict.c. 42. The question really almost answers itself. If it was not in a proper condition for the purpose for which it was applied there was a defect within its condition within the meaning of the Act." 48 Similarly Lord Atkinson said in James Nimmo & Co Ltd v Connell [1924] AC 593 at 603: "In my view … there is a defect within the meaning of s1, sub-s1, in the condition of ways and works in a mine when from any cause they are in a condition which renders them unfit for the uses for which they were designed, to which they were intended to be put, and are in fact being put." 49 In accordance with this approach, relevant defects were found to exist in a range of circumstances: · the absence of fencing around the sides of a lift which permitted materials to fall onto a worker (Heske v Samuelson (supra)). · a ladder which was, of itself, sound but of insufficient strength for the loads associated with the specific building works (Cripps v Judge (1884) 13 QBD 583). · a ladder which was, of itself, sound but unstable when placed against a bend in a pipe without hooks or stays (Weblin v Ballard (1886) 17 QBD 122). · a vicious horse used for drawing trolleys was a "defect in plant" (Yarmouth v France (1887) 19 QBD 647). · the accumulation of inflammable gas in a mine was a "defect in the condition of a way" (James Nimmo & Co (supra)). 50 In Walsh v Whiteley (1888) 21 QBD 371, Lindley and Lopes LJJ said at 378: "Reading those sections and subsections together we think there must be a defect implying negligence in the employer. The negligence of the employer appears to be a necessary element without which the workman is not to be entitled to any compensation or remedy. It must be a defect in the condition of the machine, having regard to the use to which it is to be applied or to the mode to which it is to be used. It may be a defect either in the original construction of the machine, or a defect arising from its not being kept up to the mark, but it is essential that there should be evidence of negligence of the employer or some person in his service entrusted with the duty of seeing that the machine is in proper condition. It must be a defect in the original construction or subsequent condition of the machine rendering it unfit for the purposes to which it is applied when used with reasonable care and caution, and a defect arising from a negligence of the employer." 51 This passage was adopted and applied by the High Court in Metcalf v The Great Boulder Proprietary Gold Mines Ltd (1906) 3 CLR 543, to which I will further refer below. 52 In James Nimmo & Co (supra), Lord Atkinson referred to Walsh v Whiteley at 606: "This judgment supports completely my contention that it is the use to which a thing is intended to be put and is being put which must be considered when the question whether or not there is a defect in its condition has to be determined." 53 A number of cases suggest that the absence of appropriate provision for the safety of workers was, of itself, a defect. 54 In Morgan v Hutchins (1890) 59 LJQB 197 a machine worked perfectly, save that it had an unguarded side wheel and cogs. Noting that "without labour it is useless as a machine", Lord Esher considered its "condition … that the workman cannot do his part with safety … is … a defect in the condition of a machine the working of which is a necessary performance" (at 198-199). 55 Similarly in Tate v Latham & Son [1897] 1 QB 502, a guard had been removed from a saw bench. Bruce J, adopting at 506, a definition of "defect" as "a lack or absence of something essential to completeness", concluded that some form of guard was "necessary to the completeness" of a saw bench. This conclusion was supported on appeal by Lord Esher MR and Chitty LJ at 509 and 510. 56 In Walsh v Whiteley, the majority held that there was no defect because if the machine had been used with "proper care and caution" the accident would not have happened. Lord Esher MR, dissenting said at 377: "It has been argued that there is no defect in the condition of the machine, if it is fit for the purpose for which it is employed - that is to say, that, if it is fit for the purpose for which it is employed, it is not defective within the meaning of the Act though it is dangerous to the workman using it. Remembering that this is a statute passed to extend the liability of the employer in favour of workmen and for their greater safety, I do not think that, in considering what is a defective machine, we can confine that consideration to the question of the purpose for which it is used. The defect not applied to by the Act is not in my opinion a defect with reference to the purpose for which a machine is employed, but a defect with reference to the safety of the workmen using it: then that defect may be either in the original construction of the machine or in the use to which the machine is put." 57 In the subsequent decision of Morgan v Hutchins (supra), Lord Esher MR said at 199: "In Walsh v Whiteley I think it was assumed by the whole Court that if the machinery were dangerous to a workman without any fault of his own, it came within the Act. The only doubt that existed in the minds of the two members of the Court was whether the defect had arisen from the negligence of the employer." 58 His Lordship distinguished Walsh v Whiteley on the basis, in effect, that it was concerned with s2(1) (i.e. Was there negligence?), rather than with s1(1) (i.e. Was there a defect?). 59 This line of authority was considered by the High Court in Metcalf v The Great Boulder Proprietary Gold Mines Ltd (supra). The Employers' Liability Act 1894 (WA) provided in s3 a right of compensation in certain circumstances including: "Where … personal injury is caused to a workman … by reason of any defect in the condition of the ways, works, machinery, or plant connected with or used in the business of the employer … ." 60 In that case the injury occurred in the following way. An employee was descending in a cage to a mine. The cage was used both for transport of employees and for the lifting of ore to the surface. When used for the latter purpose it was the practice to let down certain supports, referred to as "chairs", at any level of the mine at which minerals were being extracted. The effect of letting down chairs was to form a fixed bed for the cage to rest upon, instead of remaining suspended from the rope. After minerals had been extracted it was the practice to lift the chairs so that the shaft was left free for the cage descending to a lower level of subsequent occasion. The injury was caused by the fact that on this occasion the chairs had not been lifted, so that as the employee was descending in the shaft, the cage collided with the chairs. 61 Griffiths CJ, with whom Barton J agreed, said at 550: "It was not seriously disputed that a shaft is a 'way' within the meaning of the Act, but it was contended for the respondents that the term 'defect in the condition' imports something wrong in the appliances themselves, and does not cover the case of a negligent use of a properly-constructed appliance. On the other hand it was contended that, when a way - in this case a shaft - is obstructed by an obstacle, which prevents the passage of a cage to a particular part of it, this is a defect in the condition of the shaft, regarded as a way or means of approach to that part. It is not suggested that there was any defect in the condition of the shaft, qua shaft or, in the chairs, qua chairs, or that the chairs were not proper appliances to be used for the purpose already explained. The alleged defect, therefore, consists in the accidental leaving of the chairs lowered instead of raised." 62 Griffiths CJ referred to Walsh v Whiteley (supra) at 378 per Lopes and Lindley LJJ. The Chief Justice adopted their Lordships' formulation and applied it to the facts of the case before the High Court, concluding at 552: " …the term 'defect in condition' means a defect in original construction or subsequent condition, rendering the appliance unfit for the purpose to which it is applied, when used with reasonable care and caution." 63 His Honour's reference to "subsequent condition" in addition to "original construction" recognises the possibility of a defect emerging e.g. by reason of inadequate maintenance. 64 Griffiths CJ referred to the judgment in Willetts v Watt & Co [1892] 2 QB 92 where Lord Esher MR at 98 and Fry LJ at 100 and 101 distinguished between a "defect" in the "way" and "negligent user". Subsequently, the House of Lords has doubted this distinction. In John Nimmo & Co (supra) Lord Atkinson described the distinction as "rather peculiar" (at 605). (See also at 623 per Lord Dunedin.) Griffiths CJ did not apply this distinction in terms in Metcalf. The operative part of his Honour's reasons was to the effect that the failure to raise the chairs, did not render the cage "unfit for the purpose for which it was applied when used with reasonable care and caution". 65 O'Connor J came to the same conclusion as Griffith CJ. His Honour said at 556 that the shaft in the mine: " … was without defect; it was properly equipped; the cage and other apparatus for carrying them in were properly appointed and furnished with all necessary appliances for carrying the men safely; the system of working the way was not complained of. But the way, the cage, the signals, and other appliances no matter how perfect in themselves, must be worked with reasonable care, otherwise accidents are very likely to happen. Where the injury complained of has been caused to a workman by the negligent working of a 'way', cage, signals, or other appliances, in themselves without defect, and the negligence was that of a fellow-servant, not within the class of persons for whose negligence the Act has made the employer liable, the plaintiff cannot succeed." 66 As these authorities suggest, fine issues of characterisation can arise in the application of the appropriate test to particular facts. The distinction between a "defect" and "negligent user" may not always prove helpful, as many sets of facts are capable of being characterised in both ways. The issue is unlikely to arise often under the Act, because one of the other sub-paragraphs of the definition of injury is likely to be applicable in the case of "negligent user". 67 The emphasis given by the High Court in Metcalf, and in the English authorities, to the fitness for the use to which the machinery etc is intended to be put is, in my opinion, an appropriate perspective from which to approach the question of a "defect in the vehicle" for the purposes of the Motor Accidents Act. The statutory context, like that of the English Employers' Liability Acts, is compensation for personal injury arising from the fault of a person in control of the circumstances in which machinery is operated. 68 The defect must be "in" the vehicle. A vehicle is not "defective" only because its operation in a particular manner may lead to injury. However, the manner in which it is intended to operate may determine whether there is a "defect" "in" the vehicle. 69 In the present case, the Respondent submitted that the absence of any form of hydraulic or mechanical assistant for lifting was a "defect" for purposes of the Act. The Appellant emphasised the possibility of a team lift as a safe system of work for the trailer in its extant condition. In the circumstances of the present case, the Appellant's characterisation should be rejected. 70 I have concluded above that the design of the trailer was such that it was intended to be used in circumstances where a single worker lifted each ramp. When this happened it was, in my opinion, the use or operation a vehicle in which there was a "defect" for its intended use. It was not negligent use of a vehicle otherwise fit for the purpose or use to which it was intended to be put. 71 The Appellant's submissions on these grounds should be rejected. Ground 5 72 The Appellant submitted that Black DCJ erred in relying on the decision of Yeldham J in Australian Iron & Steel Pty Ltd v Government Insurance Office (supra) ("the AIS case"). It submitted that the relevant issue in the present case was not one of "double insurance", to which Yeldham J referred in accordance with the submissions made to him. The Appellant submitted that the Appellant and the Respondent had a "co-ordinate liability" to compensate Mr Langley. 73 In the AIS case, an employee was injured in the course of his employment when using a forklift truck. The Defendant ("GIO") was the insurer of the forklift. The forklift had been hired to the plaintiff ("AIS"). AIS was a self-insurer under the provisions of the Workers' Compensation Act 1926. It sought an order that GIO pay to AIS the money AIS paid to the worker by way of indemnity under its policy of insurance pursuant to the Motor Vehicles (Third Party Insurance) Act 1942. 74 The issue in the AIS case was identified by Yeldham J at 363: "The more important, and more difficult, question is whether, because the plaintiff at all material times was a self-insurer under the Workers Compensation Act 1926 (NSW) it was entitled, not to complete indemnity in respect of its liability to the injured man, but only to recover contribution from the defendant under the doctrine of double insurance." 75 Yeldham J set out the statutory provisions and said at 364-365: "It is plain that the scheme of the [ Workers' Compensation ] Act, so far as is relevant, is to require employers in general to obtain insurance against their liabilities to pay workers' compensation or against their liabilities independently of the Act for damages, or alternatively, in the case of some employers of substance, to exempt them from that obligation. Although styled 'self-insurers' in a number of the provisions in the Act, the reality of the situation in my view is that, as employers, they are personally obliged to satisfy the liabilities imposed upon them, both in relation to compensation and damages, by various sections of the Act or at common law (in the case of damages). It is sections such as 7, 8, 10 and 16 which oblige an employer to compensate his workers in the case of death or injury. The effect of s 18(1A) is that in an appropriate case the employer may receive exemption, in the form of a licence, from the obligation which would otherwise rest upon him under s 18(1) to obtain a policy of insurance indemnifying him in respect of his liability to pay compensation and damages." 76 Counsel for the GIO had submitted that the effect of subs 18(1) and (1A) of the Workers' Compensation Act 1926 was to put the self-insurer in the position of an insurance company. On this basis it was submitted that the doctrine of double insurance applied between GIO and AIS. Yeldham J concluded at 366: "On behalf of the defendant it was submitted that the principle of contribution does not operate merely as between insurers 'but between people bound to indemnify others … it is dual indemnity and not dual insurance'. Counsel argued that it was to the liability of the plaintiff that one must look and not to whether or not it is an insurer in the strict sense. But, in my opinion, the answer to this submission is that, in the circumstances of the present case, the plaintiff is not in any way liable as an indemnifier, but it is responsible for its own liability, imposed upon it as an employer of workmen by the provisions of the Workers' Compensation Act. Nor do I accept the submission made on behalf of the defendant that the various provisions of the Act indicate a legislative intention that a 'self insurer', who is thereby the holder of a licence under s 18(1A), is to be treated as though he were an insurer. The matter cannot be resolved merely by looking to the use of the term 'self insurer' as used in the Act, or to the definition of 'insurer' in s 6. The reality of the situation is that such an employer is not an insurer at all. It has exemption from the obligation imposed upon all other employers to obtain a policy as specified in s 18. The liability imposed upon a so-called 'self-insurer' derives from the sections which I have earlier mentioned and it is in no way related to insurance or to the absence of it. Such an employer is simply uninsured but, because it is the holder of the appropriate licence under s 18(1A), and because of the express provisions of s 18C, the Uninsured Liability Scheme is not involved in the case of an employer exempted, by reason of a licence under s 18(1A), from the obligation to insure imposed by s 18(1). In my opinion the circumstances of the present case do not attract the doctrine of double insurance and the defendant is obliged to indemnify the plaintiff in respect of the whole of the latter's liability to its injured employee." 77 The Appellant submitted that Yeldham J was "no doubt" correct in concluding that that case did not attract the doctrine of double insurance. However, the Appellant submitted that Yeldham J was in error in failing to consider whether there was a "right of contribution" in equity. 78 The Appellant referred to the case of Johnson & Johnson Pty Ltd v Manufacturers Insurance Ltd [2000] NSWSC 155 where Young J said: "In the Australian Iron & Steel case to which I have already referred, Yeldham J considered the case of a self insurer. The summons in the Commercial List before him sought 'an order that the defendant pay a certain amount by way of indemnity'. However, the main thrust of the case appears to be a claim for contribution between a self insurer and an insurance company. His Honour said there was no such claim because the self insurer was not to be treated as though he were an insurer. He said at 365, 'The reality off the situation is that such an employer is not an insurer at all … such an employer is simply uninsured …'." (at [23]) 79 Young J added: "… the Australian Iron & Steel case … seems to be authority for the proposition that there would be no general law right of contribution. Although Yeldham J was an acknowledged expert in this area of the law, I would have thought that it was arguable that even though the principle of contribution between joint insurers did not apply, some other form of contribution might because, after all, the general principle of contribution is that it is obtainable if there are co-ordinate liabilities and the law as to what is a co-ordinate liability has been clarified in more recent times (see, for instance Street & Malls v Retravision (NSW) Pty Limited (1995) 56 FCR 588 at 597 and Hanave Pty Limited v LFOT Pty Limited (1999) 168 ALR 318, 327. See also the remarks of Santow J in FAI Traders Insurance Co Limited v Mercantile Mutual Insurance (Workers Compensation) Limited 31 August 1998, unreported, pp 13 and 14)." (at [29]) 80 The Workers' Compensation Act 1987 is now in force. No submission was made that there was any material difference in the scheme for self-insurers from that considered by Yeldham J in AIS. The scheme is not materially different. Section 18(1) of the 1926 Act is now found in substantially identical terms in s155(1) of the 1987 Act. The effect of the former s18(1A) which provided that s18(1) "shall not apply" to an employer with a license as a self-insurer, is now reflected in the introductory words of s155(1): "An employer (other than a self-insurer) shall obtain …". 81 The position is the same as that considered by Yeldham J. A self-insurer is not liable "as an indemnifier" but "is responsible for its own liability". Part 7 of Div 5 makes provision for employers to be licensed as self-insurers. 82 The Appellant submitted that "in reality" the Respondent's liability under the Workers' Compensation Act to "indemnify" Mr Langley is "not more direct" than the Appellant's liability to indemnify the Respondent under the Act and, "thereby, indemnify" Mr Langley. The Appellant submitted that equity looks to substance not to form and that Mr Langley could have brought an action under the Act against the Appellant directly if the Respondent could not have been served (s54 of the Act). 83 The submissions contained references to the Appellant's obligation "to compensate Langley", this formulation assumed what it sought to prove by eliding the crucial step that the Appellant's obligations was to indemnify the Appellant. It had no obligation to the worker. 84 The Appellant referred to s54 of the Act which provides: "54(1) If a person against whom a claim can be made is dead or cannot be served with process, the claimant and a person claiming contribution or indemnity between joint tortfeasors may: (a) take proceedings in respect of the claim against the person's insurer, and (b) recover in those proceedings an amount for which the claimant or the person claiming contribution or indemnity could have obtained a judgement against the insured person. (2) The fact that a person cannot be served with process shall not be regarded as having been proved unless it is established that all reasonable inquiries have been made in an effort to effect service. 85 The relevance of this section will be considered below. 86 The Respondent submitted that the present case is indistinguishable from the AIS case and that Black DCJ was correct in applying it. The Respondent submitted that the Appellant's contention that it was entitled to a general law right of contribution should be rejected on the basis that the Respondent's liability imposed by the common law is different from the Appellant's liability. 87 The Respondent submitted that it was required to pay damages to a person injured by its fault, it had no liability to "indemnify" anyone. In contrast, the Respondent submitted, the Appellant's liability was to "indemnify" the Respondent against its liability to the person injured. Accordingly, the liabilities of the Appellant and Respondent are distinct and separate and not common or "co-ordinate" and, accordingly, the doctrine of contribution under the general law is not attracted in this case. Co-ordinate Liability 88 A person who has paid an amount pursuant to an obligation so to do, can only claim contribution from another where both persons share an obligation which is "common" or "co-ordinate" with respect to the same subject matter. (See Smith v Cock [1911] AC 317 at 326; Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 at 350; Mahoney v McManus (1981) 180 CLR 370 at 378; Bialkower v Achos Pty Ltd (1998) 83 FCR 1 at 12; Stratti v Stratti (2000) 50 NSWLR 324 at [17]-[18]; Burke v LFOT Pty Ltd (2001) 178 ALR 161 at [3], [13]-[14], [102], [126]-[127]; Cockburn v GIO Finance Ltd (No 2) [2001] NSWCA 177 at [27]-[30]. Meagher, Gummow & Lehane Equity Doctrines and Remedies (3rd ed) at [1006]-[1016]; Mason and Carter Restitution Law in Australia 1995 at [620]-[622]; Gummow Change and Continuity; Statute, Equity and Federalism 1999 at 57-60). 89 There may be other circumstances in which equity will intervene to similar effect e.g. where persons have engaged in a common enterprise or design. (See Cummings v Lewis (1993) 41 FCR 559 at 593-599; Glover "Contribution" in Parkinson (ed) The Principles of Equity (1996) at [1409].) No such alternative basis for contribution was suggested here. 90 In Scholefield Goodman & Sons Ltd v Zyngier [1986] AC 563, an issue of contribution arose, on appeal to the Privy Council from the Supreme Court of Victoria, between the drawer of a dishonoured bill of exchange and a third party who guaranteed the bill for the benefit of the discounting bank. The principle applied at 575A by the Privy Council, in rejecting the claim for contribution, was: "Contribution is founded on the principle that equality is equity, and there is no room for the application of this doctrine unless the surety against whom contribution is claimed has placed himself on the same level of liability as a surety who claims contribution from him." 91 A specific application of this principle is found in the cases which hold that a surety for a surety is not a co-surety of the same debt. (See Craythorne v Swinburne (1807) 33 ER 482; In re Denton's Estate; Licences Insurances Corporation and Guarantee Fund Ltd v Denton [1904] 2 Ch 178; Raffle v AGC (Advances) Ltd (1989) ASC 55-933 at 58,530.) 92 The Appellant did not seek to characterise the Respondent as an insurer indemnifying itself, at the same level of liability as the Appellant vis-à-vis an insurer. Nor could it have done so. The characterisation, for purposes of the statute, of the Respondent as a "self-insurer" does not transform its status in a relevant way. 93 Ground 5 and the Appellant's submissions are to the effect that, as a matter of substance, the common or co-ordinate subject matter of the respective obligations of the parties was the injured worker. However, the Appellant had no obligation to, or relationship with, the injured worker. It indemnified the Respondent by reason of the Respondent's obligations to that worker. That was a different level of liability, albeit with respect to the same quantified amount. 94 In Street v Retravision (NSW) Pty Ltd (1995) 56 FCR 588 Gummow J considered the imposition under s592 of the Corporation Law of a joint and several liability on directors and managers of a company for debts incurred by the company whilst insolvent. Contribution was sought from directors and managers by a surety which had been found liable under a guarantee of the company's debts. 95 Gummow J said at 597: The respondents submit that even if it be assumed, contrary to their contention, that they are jointly and severally liable for the payment of Terry's debts to Retravision, by force of the operation of s 592(1), nevertheless their liabilities are not 'co-ordinate' with those of the applicants as guarantors in the sense required by the authorities." 96 Gummow J, having referred to Craythorne v Swinburne and Scholefield Goodman v Zyngier and to s592(5) of the Law, which said that a director or manager made liable under s592(1) could not recoup any amount paid from the company, added: "… on the assumed facts in the present case, the effect of s 592(1) is to render the respondents jointly and severally liable (with the debtor Terry's) to the creditor. This is a matter of primary obligation. I have referred to the significance in that regard of s 592(5). There is no right to exoneration by the debtor. On the other hand, the liabilities of the applicants under the instruments of guarantee were not primary obligations in that sense. Clause 1 of both guarantees obliged the applicants to pay to Retravision on demand by Retravision all moneys which Terry's might become liable to pay to Retravision. The clause went on to provide that to the extent to which the guarantees might be void or unenforceable, by reason of the obligations of Terry's to Retravision having ceased to be enforceable against Terry's, the guarantors indemnified Retravision 'in respect of any failure of [Terry's] to make any such payment as would otherwise have formed part of the moneys the subject of the Guarantee'. … … cl 1 of the guarantee places the applicants on a level of liability, to use the phrase of the Judicial Committee, which is conceptually distinct, as a matter of basic legal principle, from that of those having a direct primary liability, joint and several, to the creditor in respect of the guaranteed debt. In my view, nothing turns upon the circumstance that the liabilities under the instruments of guarantee have been pursued to judgment in favour of the creditor. There is no common interest and no common burden, with joinder in a common end and purpose by the several obligations, to repeat the language of Eyre LCB in Dering [ v Earl of Winchelsea (1787) 29 ER 1184]." (at 599-600) 97 In the present case, the Respondent's obligation to the worker was a primary obligation, in the sense employed by Gummow J in Street v Retravision. (See also Gummow Change and Continuity: Statute, Equity and Federalism 1999 at 60.) The Appellant had no obligation to the worker at all. Although its obligation to indemnify the Respondent was quantified by reference to the Respondent's obligation to the worker, it was a secondary rather than a primary obligation. 98 I have set out s54 of the Act above. This entitles the worker to sue the insurer direct, but only when he or she cannot enforce his or her rights against the employer. This confirms that the obligation of the Appellant is a secondary obligation. 99 This ground should be dismissed. Ground 6 100 In view of the conclusion I have reached on Ground 5, this ground does not arise. Conclusion 101 The appeal should be dismissed with costs. 102 MASON P: I agree with Spigelman CJ. 103 HANDLEY JA: I agree with the Chief Justice. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.