New South Wales Supreme Court CITATION : GIO Workers Compensation (NSW) Ltd v AMP General Insurance Ltd [2001] NSWSC 1102 FILE NUMBER(S) : SC 4975/99 HEARING DATE(S) : 22 October 2001 JUDGMENT DATE : 30 November 2001 PARTIES : GIO Workers Compensation (NSW) Limited (Plaintiff) AMP General Insurance Limited (Defendant) JUDGMENT OF : Master McLaughlin COUNSEL : M.J. Jenkins (Plaintiff) K. Andrews (Defendant) SOLICITORS : William K. Chambers, Solicitor (Plaintiff) Gillis Delaney Brown Lawyers (Defendant) CATCHWORDS : Insurance - Contribution between insurers - Two policies - Whether there is identicality of risk - Injury to employee at work, whilst driving a bobcat - Injury was caused by the fault of the owner of the vehicle - Whether the injury was caused in the use or operation of the vehicle Motor Accidents Act 1988 LEGISLATION CITED : Supreme Court Rules Workers Compensation Act 1987 Workplace Injury Management and Workers Compenation Act 1998 Albion Insurance Company Limited v Government Insurance Office of New South Wales (1969) 121 CLR 342 AMP Workers Compensation v QBE [2001] NSWCA 267 (19 September 2001, Court of Appeal, unreported) Government Insurance Office (NSW) v R G Green & Lloyd Pty Limited (1966) 114 CLR 437 CASES CITED : Government Insurance Office of New South Wales v QBE Insurance Limited (1985) 2 NSWLR 543 Mercantile Mutual Insurance (Aust.) Limited v Moulding (1995) 22 MVR 325 NRMA Insurance Limited v NSW Grain Corporation (1995) 22 MVR 317 QBE Insurance Limited v AMP Workers' Compensation Services (NSW) Pty Ltd (21 November 2000, Santow J, unreported) DECISION : See paragraph 44 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Master McLaughlin Friday, 30 November 2001 4975/99 GIO WORKERS COMPENSATION (NSW) LIMITED -V- AMP GENERAL INSURANCE LIMITED JUDGMENT 1 MASTER: On 3 September 2001 Mr Justice Young, Chief Judge in Equity, made an order in Chambers that the whole proceedings may be heard by a Master. 2 These are proceedings for contribution between insurers. 3 The proceedings arise out of an incident on 23 September 1996 when one Raymond Henry Cameron (referred to in the pleadings as "the worker") sustained bodily injuries during the course of his employment by the Sydney Market Authority (referred to in the pleadings as "the employer") at the Flemington Markets at Flemington. Those injuries were sustained whilst Mr Cameron was driving a bobcat, in circumstances which I will later describe in greater detail. 4 At the relevant time the Plaintiff, GIO Workers Compensation (NSW) Limited, was the New South Wales insurer of the employer, pursuant to the Workers Compensation Act 1987. At the relevant time the Defendant, AMP General Insurance Limited, was the compulsory Third Party Motor Vehicle insurer of the bobcat which Mr Cameron was driving at the time when he sustained his injuries. That bobcat was registered in New South Wales pursuant to the Motor Accidents Act 1988, its registered number being SMA-419. 5 The proceedings were instituted by statement of claim filed by the Plaintiff on 9 December 1999. 6 By that pleading the Plaintiff asserted that the accident to Mr Cameron occurred in the use or operation of the bobcat, that being a motor vehicle within the meaning of the Motor Accidents Act 1988, and that the injury to Mr Cameron was caused by the fault of the owner or driver of the bobcat. The pleading also referred to proceedings commenced by Mr Cameron in the District Court of New South Wales against the employer, claiming modified Common Law damages in respect of the accident, and asserted that those District Court proceedings were determined after an arbitration hearing on 13 August 1999. Mr Cameron obtained an award against the employer in the sum of $224,324.14, and that award has become a judgment of the District Court. 7 By the statement of claim the Plaintiff pleaded that the Plaintiff and the Defendant have a co-ordinate liability in respect of the damages payable, obliging the Defendant to contribute to that liability; that the Plaintiff has made demand of the Defendant to contribute to the District Court judgment; and that the Defendant has refused, failed or neglected to contribute to any part of the District Court judgment, or at all. 8 The Plaintiff claims the sum of $112,162.07, together with interest thereon and costs. (It will be observed that the foregoing sum claimed is one half of the amount of the judgment in favour of Mr Cameron against the employer in the sum of $224,324.14.) 9 At the hearing it was stated on behalf of the Defendant that the Defendant did not dispute the quantum of the foregoing claim, but only its liability to make any contribution to the judgment which had been paid by the Plaintiff to Mr Cameron. 10 It was also at the hearing noted that the Defendant agreed that the Plaintiff had paid on behalf of Sydney Market Authority the District Court judgment debt to Mr Cameron by making payment of the amount of that judgment to Mr Cameron's solicitor on 21 October 1999. 11 Various other matters were in agreement between the parties, including the fact that the Plaintiff pursuant to rights of subrogation and rights pursuant to the Workers Compensation Act 1987 conducted on behalf of the Sydney Market Authority the defence of the proceedings brought by Mr Cameron in the District Court against that employer. Further, that in those District Court proceedings the Plaintiff conceded that Mr Cameron's claim for damages should be assessed pursuant to the Workers Compensation Act 1987 and not the Motor Accidents Act 1988. 12 The Defendant filed a defence on 4 February 2000. By that pleading the Defendant expressly did not admit certain paragraphs in the statement of claim; and the Defendant denied paragraph 13 in the statement of claim (which asserted that the injury to Mr Cameron was caused by the owner or driver of the bobcat). 13 By paragraph 3 of the defence the Defendant pleaded as follows, In answer to the whole of the statement of claim the Defendant says that the worker was awarded compensation pursuant to the Workers Compensation Act 1987 and by virtue of section 16 of the Motor Accidents Act 1988 any third party policy effected pursuant to the Motor Accidents Act 1988 does not extend to insure the owner of the vehicle against a liability to pay compensation under the Workers Compensation Acts (or any corresponding law of another State or a Territory of Commonwealth [ sic ]) to a worker employed by the owner or driver of the vehicle. 14 Subsequently, on 18 May 2000, an application by the Defendant for an order that the statement of claim be struck out, pursuant to Part 13 rule 5 of the Supreme Court Rules, was dismissed by Master Macready. 15 The Plaintiff grounds its claim for contribution upon the principle enunciated by the High Court of Australia in Albion Insurance Company Limited v Government Insurance Office of New South Wales (1969) 121 CLR 342, where it was held that a right of contribution between insurers exists where more than one policy covers the risk that has given rise to the claim, whatever else may be insured by the policy. The basis of the principle relating to contribution between insurers is encapsulated in the following passage from the judgment of Kitto J, at 352, What attracts the right of contribution between insurers, then, is not any similarity between the relevant insurance contracts as regards their general nature or purpose or the extent of the rights and obligations they create, but is simply the fact that each contract is a contract of indemnity and covers the identical loss that the identical insured has sustained; for that is the situation in which "the insured is to receive but one satisfaction" (to use Lord Mansfield's expression [in Godin v London Assurance Co. (1758) 1 Burr. 489 at 492 [97ER 419 at 420]]) and accordingly all the insurances are "regarded as truly one insurance": Sickness and Accident Assurance Association Limited v General Accident Assurance Corporation Limited (1892) 19 Rettie 977 at 980; 29 ScLR 836 at 837 [a decision of the Lord Ordinary in the Court of Session of Scotland]. 16 In the instant case it was submitted on behalf of the Plaintiff that the policy held by the Sydney Market Authority with the Defendant (being a policy of insurance in respect to the bobcat, pursuant to the provisions of the Motor Accidents Act) covered the risk of injury to Mr Cameron, and that, in consequence, the Plaintiff, having met the entirety of the judgment obtained by Mr Cameron against the employer (the Plaintiff having done so pursuant to the terms of its policy with the employer), was entitled to contribution from the Defendant to the extent of one half of the amount of that judgment. 17 The Defendant, on the other hand, has submitted that the policy which the Sydney Market Authority held with the Defendant, being a Third Party Policy pursuant to the Motor Accidents Act 1988, did not cover the Sydney Market Authority in respect to the injuries sustained by Mr Cameron. 18 It will be appreciated that, pursuant to the foregoing principles enunciated by the High Court of Australia in Albion Insurance, if each of the two policies had application to the incident in which Mr Cameron sustained bodily injury, then the Plaintiff is entitled to contribution from the Defendant in the amount claimed. If, however, the policy held by the Sydney Market Authority with the Defendant did not extend to cover the circumstances of the injury sustained by Mr Cameron, then the Plaintiff will not be entitled to any contribution from the Defendant. 19 The effect of the Third Party Policy held by the employer with the Defendant is set forth in Section 9 of the Motor Accidents Act, as follows, A third-party policy under this Act is a policy that: (a) insures the owner of the motor vehicle to which the policy relates and any other person who at any time drives the vehicle (whether or not with the consent of the owner) against liability in respect of the death of or injury to a person caused by the fault of the owner or driver of the vehicle: (i) if the motor vehicle is not one to which subparagraph (ii) applies – in the use or operation of the vehicle in any part of the Commonwealth (whether or not on a road or road related area), or … 20 The form of such a policy is set forth in Schedule 1 to the Act. 21 In the instant case (as in Albion Insurance Company Limited, at 347 per Barwick CJ, McTiernan and Menzies JJ), it is not the principle, but the application of the principle which has given rise to the problem. Essentially, the application of the principle to the facts in the instant case can be resolved by answering the question, Did each of the policies held by the Sydney Market Authority indemnify that employer against liability for the injuries sustained by Mr Cameron, or did only the policy held by the employer with the Plaintiff indemnify it against liability for those injuries sustained by Mr Cameron? 22 It does not appear to be disputed, either by the Plaintiff or by the Defendant, that the terms of the workers compensation policy which the employer held with the Plaintiff indemnified the employer against the claim of Mr Cameron. It becomes necessary, therefore, to proceed to a consideration of whether or not the policy held by the employer with the Defendant also had the same effect. 23 I have already set forth the relevant provision of the Motor Accidents Act (section 9), which provides that the effect of the policy held by the Sydney Market Authority with the Defendant is that that insured is indemnified "against liability in respect of…injury to a person caused by the fault of the owner or driver of the vehicle…in the use or operation of the vehicle". 24 The essential question, then, is whether the injury to Mr Cameron was "caused by the fault of the owner or driver of the vehicle…in the use or operation of the vehicle". 25 I do not regard the fact that in the District Court proceedings the Plaintiff conceded that the damages should be assessed pursuant to the Workers Compensation Act and not the Motor Accidents Act as being in any way determinative of the answer to the foregoing question. 26 Neither do I consider that the preclusion (pursuant to section 16(a) of the Motor Accidents Act) from a third-party policy of a liability to pay compensation under the Workers Compensation Acts has application to the circumstances of the instant case, since "compensation" in section 16(a) means workers compensation (see the definition contained in section 4 of the Workplace Injury Management and Workers Compensation Act 1998, that statute being one of the statutes encompassed by the phrase Workers Compensation Acts: section 3(1) of the Motor Accidents Act) and does not mean damages; especially it does not mean the Common Law remedy of damages under Part 5 of the Workers Compensation Act. 27 In this regard it should be noted that the parties in the instant case were in agreement that the District Court award to Mr Cameron reflects Common Law damages (under Division 3 of Part 5 of the Workers Compensation Act). 28 Whether or not the injury sustained by Mr Cameron was "caused by the fault of the owner or driver of the vehicle…in the use or operation of the vehicle" must, of course, depend upon the circumstances of the incident which gave rise to that injury. 29 At the hearing before me evidence was given by Mr Cameron. That evidence was adduced on behalf of the Plaintiff, in the face of opposition by the Defendant. The entirety of the evidence of Mr Cameron was oral evidence, no affidavit having been sworn by Mr Cameron. 30 At the time of the hearing Mr Cameron was retired. He had commenced employment with the Sydney Market Authority in about February 1989. In about 1991 or 1992 Mr Cameron's duties in his employment were involved with driving a bobcat. That bobcat was fitted with a device known as a rubbish cage. It was coupled to the front of the bobcat and was used to gather rubbish. The cage was about three metres wide and about one and a half metres deep, and consisted of two sides and a back. The sides of the cage fitted at right angles to the back of the cage. The cage did not have a floor. The back of the cage was fitted to the front of the bobcat, whilst the two sides of the cage, being in the nature of arms, projected beyond and in front of the bobcat. 31 From about 1991 or 1992 it became part of Mr Cameron's employment duties to drive the bobcat and the cage at the Flemington Markets at Flemington. The bobcat and the cage were used for the purpose of cleaning the floor of the Flemington Markets. Mr Cameron described the manner in which he used the bobcat and cage for that cleaning purpose. He drove the bobcat in a forward direction, scooping up all the rubbish into the cage. He then drove the bobcat with the accumulated rubbish in the cage to a central point in one of the sheds in the Flemington Markets, being that known as D shed. The rubbish was then removed from the cage in D shed. 32 Mr Cameron described the rubbish which he collected in the course of his duties using the bobcat and the rubbish cage as consisting primarily of leaves (such as cabbage leaves) and empty boxes, "mostly just rubbish in general". The surface upon which he drove the bobcat and from which he collected the rubbish by use of the cage was concrete. 33 Inside the cabin of the bobcat were controls which enabled Mr Cameron to raise and lower the cage. However, he explained that whilst it was possible for that procedure to be performed, the practical consequence of raising the cage above the ground level would be that the cage would be ineffectual for the purpose of gathering the rubbish, since the rubbish would remain on the surface whilst the cage passed above it, and, in the words of Mr Cameron, "so you would be defeating the purpose of doing it". 34 At about 11am on 23 September 1996 Mr Cameron was performing his duties in cleaning the Flemington Markets by using the bobcat and the rubbish cage. He was in the vicinity of shed D. He described how he was driving along in a westerly direction on the north road at the Flemington Markets. He was scraping up the rubbish as he went, and he picked up in the rubbish cage a big load of leaves which had been in the middle of the road. Mr Cameron then saw a pile of empty cardboard boxes on what he referred to as the fence line, so he turned right in order to gather up those empty boxes into the rubbish cage. He then turned left to go into D shed, in order to deposit the cage, which by then was full. As he turned left to go across the road the bobcat struck an electrical manhole which was close to ground level, bringing the vehicle to a sudden stop. It was this sudden stopping which caused the injuries to Mr Cameron. After a period Mr Cameron alighted from the bobcat, after he had called for assistance, because, in his own works, "I thought I had done damage to myself". 35 He looked at what had caused the problem and saw what he described as a manhole or an electrical pit, which was furnished with two metal covers. In the middle of the covers was a steel plate. The steel plate was lying horizontal with the ground, and was about twenty or thirty millimetres above ground level. It was the steel plate which the bobcat struck. Mr Cameron has seen the cover plates projecting above the ground on occasions before 23 September 1996. Apparently complaints had been made over a considerable period by Mr Cameron and other employees to their team leaders about the existence of those electrical cover plates. 36 It was the evidence of Mr Cameron that he had never been given directions or instructions by his employer to avoid driving the bobcat with the cage attached in the area of the protruding plates, or to avoid having the cage lowered down to ground level in that area. 37 As was observed by Clarke JA in delivering the principal judgment of the Court of Appeal of New South Wales in NRMA Insurance Limited v NSW Grain Corporation (1995) 22 MVR 317 at 319, obviously it is not any fault of the owner of driver which will enliven indemnity under the policy. It is only the fault of the owner or driver in the use or operation of the vehicle which will give rise to a right to indemnity. His Honour in that case rejected the submissions that if the correct characterisation of the conduct of the insured is that of liability as an employer for providing an unsafe system of work, then the negligence is not to be regarded as "in the use of the vehicle", and there will be no liability to indemnify under the policy. His Honour said, I do not agree with the proposition that because it is proper to characterise the negligence as a failure to employ a safe system of work that that means that it is not negligence "in the use of a vehicle". 38 In the instant case, the protrusion on the floor surface may well have constituted an unsafe system of work in the circumstances surrounding the accident. But that fact would not of itself mean that the negligence is not to be regarded as arising "in the use of the vehicle". It is very clear from the evidence of Mr Cameron that the accident occurred in the use of a registered motor vehicle. In my conclusion, and consistently with the foregoing decision of the Court of Appeal and the reasoning of Clarke JA, the injury was caused in the use of the vehicle. 39 It is also appropriate here to record that in the District Court proceedings the arbitrator not only found the Sydney Market Authority to be negligent but found no negligence on the part of Mr Cameron. 40 Clarke JA, at 321, relied upon the following passage from the judgment of Windeyer J in the High Court of Australia in Government Insurance Office (NSW) v R G Green & Lloyd Pty Limited (1966) 114 CLR 437 at 446, where, in considering the phrase "in the use or operation of the vehicle", Windeyer J said that he could see no sound reason for restricting the phrase, and added that "any use that is not utterly foreign to its character as a motor vehicle is, I consider, covered by the words". (See, also, Mercantile Mutual Insurance (Aust.) Limited v Moulding (1995) 22 MVR 325; Government Insurance Office of New South Wales v QBE Insurance Limited (1985) 2 NSWLR 543; QBE Insurance Limited v AMP Workers' Compensation Services (NSW) Pty Ltd (21 November 2000, Santow J, unreported); AMP Workers Compensation v QBE [2001] NSWCA 267 (19 September 2001, Court of Appeal, unreported.) 41 It will be appreciated that in the instant case the use of the bobcat by the employee was for the purpose of gathering rubbish and detritus from the floor of the premises of the Sydney Market Authority, and that, for such purpose, the bobcat was furnished with the rubbish cage. The use of the bobcat for that purpose would have been totally ineffectual if the lower parts of the cage (the bottom surfaces of the back and sides) were to have been at a height where they would not have encountered the protrusion from the ground which was the immediate cause of the accident and of the consequent injury to Mr Cameron. The work which Mr Cameron was required to perform involved, of necessity, the back and sides of the cage being level with the surface of the ground. 42 It seems to me that, in those circumstances, not only was the injury caused in the use or operation of the vehicle, but that the injury was caused by the fault of the owner of the vehicle, in that the owner (being the insured, the Sydney Market Authority) did not provide for Mr Cameron a safe system of work in respect to the use of the bobcat and the rubbish cage. In those circumstances, therefore, the policy held by the Sydney Market Authority with the Defendant had application to the injuries sustained by Mr Cameron, and indemnified the insured in respect of those injuries. It follows, therefore, that the Plaintiff will be entitled to contribution from the Defendant, such contribution being in the amount claimed in the statement of claim. 43 The Plaintiff performed a calculation of interest (in accordance with a document headed "Plaintiff's Schedule as to Interest", which will be retained in the Court file), up to and including the date of hearing, 22 October 2001. Upon the Plaintiff's calculation, interest up to and including that date totalled $23,414.23. Interest from 23 October 2001 to 30 November 2001 (39 days) at 10 percent will, upon my calculation, totals an additional amount of $1,198.44. Thus the interest from 21 October 1999 until 30 November 2001 totals $24,612.67. 44 I make the following orders: (1). I order that the Defendant pay to the Plaintiff the sum of $112,162.07, together with interest thereon at Supreme Court Rates from 13 August 1999 to the date hereof, in the sum of $24,612.67. (2). I reserve to the Plaintiff liberty to apply in respect to the calculation of the foregoing interest. (3). I order that the Defendant pay the costs of the Plaintiff. 45 The exhibits may be returned. ******** Last Modified: 01/18/2002 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.