Court of Appeal Supreme Court New South Wales Medium Neutral Citation: University of New South Wales v AAI Limited [2014] NSWCA 153 Hearing dates: 14/05/2014 Decision date: 16 June 2014 Before: Basten JA at [1]; Leeming JA at [49]; Ball J at [69] Decision: Application for leave to appeal refused with costs [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: APPEAL - decision in point of law - interlocutory decision of Dust Diseases Tribunal - whether leave to appeal should be granted WORKERS COMPENSATION - operation of s 151AC Workers Compensation Act 1987 (NSW) where one or more insurers insolvent Legislation Cited: Civil Liability Act 2002 (NSW), s 3B Dust Diseases Tribunal Act 1989 (NSW), s 32 Dust Diseases Tribunal Rules (NSW), r 12 Workers' Compensation Act 1926 (NSW), s 18 Workers Compensation Act 1987 (NSW), ss 15, 151, 151AB, 151AC, 151AAA, 155, 224B, 225, 226, 227, 231, 232, 236 Workers Compensation (Amendment) Act 1991 (NSW), Sch 4(5) Workers Compensation Regulation 2010 (NSW), Sch 3 Cases Cited: Carr v Western Australia [2007] HCA 47; (2007) 232 CLR 138 Chubb Insurance Company of Australia Limited v Moore [2013] NSWCA 212 CIC Workers' Compensation (NSW) Ltd v Alcan Australia Ltd (1994) 35 NSWLR 169 Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36; (2013) 87 ALJR 1009 Fardon v Attorney General (Qld) [2004] HCA 46; (2004) 223 CLR 575 Government Insurance Office of New South Wales v Colgate Palmolive Pty Ltd [2001] NSWCA 24; (2001) 50 NSWLR 729 Lapcevic v Collier [2002] NSWCA 300 Public Trustee v McKay [1969] NZLR 995 Pye v Minister for Lands for New South Wales [1954] 1 WLR 1410 QBE Insurance Ltd v Bull [1999] NSWCA 185; (1999) 18 NSWCCR 170 QBE Insurance (Australia) Ltd v Dust Diseases Tribunal of NSW [2011] NSWCA 421 Smalley v Motor Accident Authority of New South Wales [2013] NSWCA 318 Texts Cited: New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 29 October 1998 at 9437 (Second Reading Speech: Workers Compensation Legislation Amendment (Dust Diseases and Other Matters) Bill) Category: Principal judgment Parties: University of New South Wales (Applicant) AAI Limited (Respondent) Representation: Counsel: GJ Parker SC (Applicant) TGR Parker SC with J Sharpe (Respondent) Solicitors: Moray & Agnew (Applicant) Kemp & Co Lawyers (Respondent) File Number(s): CA 2013/322374 Publication restriction: Nil Decision under appeal Jurisdiction: 9115 Citation: (Re: Kevin Joseph Horsell) University of New South Wales v AAI Ltd; AAI Ltd v University of New South Wales [2013] NSWDDT 11 Date of Decision: 03 October 2013 Before: Finnane DCJ File Number(s): 220/13 headnote [This headnote is not to be read as part of the judgment] This appeal concerns the operation of ss 151AB and 151AC of Workers Compensation Act 1987 (NSW) ("the Act"). Relevantly, s 151AB provides, with respect to dust diseases and other specified conditions, that for the purpose of any policy of insurance obtained by an employer, the employer's liability is taken to have arisen "when the worker was last employed by the employer in employment to the nature of which the disease was due": s 151AB(1)(a). Section 151AC provides that, if there is a dispute as to which of two or more insurers is liable to indemnify the employer under s 151AB, then, pending resolution of the dispute, the insurer designated either in accordance with s 151AC(3) or by the Dust Diseases Tribunal is to be treated as the insurer liable to indemnify the employer for the purposes of s 151AB. In the present case, Kevin Joseph Horsell was diagnosed as suffering from mesothelioma in 2012 after being exposed to asbestos dust and fibre in the course of his employment with the appellant, the University of New South Wales. Mr Horsell commenced proceedings against the appellant in the Tribunal, which the appellant settled for $400,000. The appellant then sought an order from the Tribunal that the respondent, AAI Ltd, be appointed as the "designated insurer" pursuant to s 151AC. Four insurers had provided cover to the appellant during the period when Mr Horsell may have been exposed to asbestos. At the time the appellant sought an order that the respondent be the designated insurer, two were insolvent and the respondent had assumed the obligations of the third. The Tribunal found that, as a result, there was no dispute concerning which insurer was liable because only one insurer remained. Consequently, it declined to make the order sought. The appellant sought leave to appeal from the Tribunal's decision. It submitted that the amalgamation and insolvency events affecting the four insurers did not alter the fact that there was a "dispute" as to the liability of the four insurers for the purposes of s 151AC. The question before the Court was whether s 151AC, properly construed, applied where there is only one solvent insurer among a number of insurers potentially liable to indemnify an employer at the time a claim is made under the Act. The Court held that leave to appeal be refused with costs (Basten JA dissenting). Per Leeming JA and Ball J: section 151AC does not apply unless, at the time the dispute concerning which insurer was liable under s 151AB arises, there is more than one insurer that is a party to that dispute: [62], [101], [103]. That conclusion was consistent with the language of s 151AC. It also avoided the anomalous result that would arise if the respondent, having been appointed the designated insurer and indemnified the appellant in that capacity, could not recover that payment from the insurer that was ultimately liable due to the insolvency of that insurer in circumstances where the Act contained, in Pt 7 Div 7, special provisions dealing with the payment of claims that were covered by an insurer that had become insolvent. Per Ball J; Leeming JA agreeing: there were other issues concerning the correct interpretation of s 151AC that could not be resolved on the present application, including the question whether the section applied where one or more insurers who may be liable under s 151AB are insolvent. Moreover, in this case, no prejudice was suffered by the appellant as a consequence of the Tribunal's refusal to make the order it sought. In those circumstances, leave to appeal should be refused with costs: [68], [104]. Per Basten JA in dissent: sections 151AB and 151AC should be read as dealing with the allocation of liability by reference to policies of insurance and insurers as they existed at the time when the worker's injury occurred, rather than at the time the dispute arose: [26], [35]. That interpretation was available on the language of the sections and was supported by their legislative history. It avoided a curious consequence of the construction favoured by the majority that ss 151AB and 151AC could have a differential operation depending on when a claim was made: [3]. For those reasons, leave to appeal should be granted, the appeal should be allowed with costs and the matter remitted to the Tribunal for redetermination according to law. Judgment 1BASTEN JA: Mr Kevin Joseph Horsell was employed by the University of New South Wales ("the appellant") between October 1965 and February 2004. In the course of his employment he was exposed to asbestos dust. He contracted mesothelioma. In June 2013, he commenced proceedings against the appellant in the Dust Diseases Tribunal. The appellant settled the proceedings without admission of liability. The appellant has brought a cross-claim against Amaca Pty Ltd, presumably as the manufacturer of the asbestos products used at the University, although the details of that claim are not before this Court. The appellant also seeks to recover the amount of the judgment from an appropriate insurer. Before this Court is an application for leave to appeal from an interlocutory (procedural) judgment in the Tribunal in respect of the proposed appointment of the respondent as the "designated insurer" which would bear primary liability, subject to a possible subsequent apportionment. 2The background to the proceedings and parts of the relevant statutory provisions are to be found in the judgment of Ball J and need not be repeated here. Ball J concludes that the Tribunal was correct to reject the application on the basis that there was only one solvent insurer at the time of the hearing. 3I acknowledge the elegance of Ball J's construction, focusing on the language of ss 151AB and 151AC of the Workers Compensation Act 1987 (NSW). However, the conclusion has a curious consequence, namely that a provision allocating liability between insurers can have differential operation from time to time, depending on the solvency of each insurer. Further, that consequence only comes about where there is more than one potentially liable insurer. 4The conclusion that these provisions (and in particular s 151AC) only operate with respect to solvent insurers involves a limitation not expressed in terms. It is no doubt an available implication, but viewing the provisions in their historical context suggests that no such limitation should be implied; the curious consequence is thus avoided. 5The facts of a particular case will be critical to the proper exercise of a discretionary power; however, to determine the scope of the power, a question of statutory construction, by reference to the facts revealed in the particular case, may result in an unduly constrained construction. In the present case, the question of which of a number of insurers might be liable for the damages payable to the worker only arose after the employer had already settled the claim by the worker. It is possible, as a matter of construction, that ss 151AB and 151AC do not apply in such circumstances: however, that was not the basis upon which the appellant's claim was rejected by the Tribunal. Frequently the operation of the provisions will arise shortly after a claim has been made or at least when the scope of any dispute arising from the claim has been identified. The relevant provisions could then be called in aid by the employer seeking to have a relevant insurer defend the claim, or by the worker who has a right of action directly against the insurer pursuant to the mandatory terms of such a policy, where it is not clear which insurer should be joined: Workers Compensation Act, s 159(2). 6Although the worker's claim was for damages, not workers' compensation, the outcome of the proceedings turns on the operation of the Workers Compensation Act. That is for two reasons. First, Pt 5 of the Workers Compensation Act deals with claims for damages brought under the "common law", or, in the language adopted in a number of provisions, in respect of a liability "that exists [or arises] independently of this Act": see, eg, ss 151 and 151AAA(1). Secondly, the Act imposes on an employer an obligation to obtain insurance with respect to the employer's "liability under this Act" and in respect of "the employer's liability independently of this Act", for any injury to such a worker: s 155(1). (The first phrase applies to workers' compensation, the latter to damages.) The term "injury" includes a dust disease and the aggravation, acceleration, exacerbation or deterioration of a dust disease: s 155(1A). The terms and conditions of such insurance are governed by the Act and now by the Workers Compensation Regulation 2010 (NSW), Sch 3. 7Although a claim for damages arises independently of the Act, that is, under the general law, such claims are regulated and "modified" by Pt 5, Div 3 of the Workers Compensation Act. (Modifications of the general law by the Civil Liability Act 2002 (NSW) are excluded: Civil Liability Act s 3B(1)(f).) 8Some injuries, and particularly diseases having a long latency, raise questions as to the date at which liability arises. With respect to diseases "contracted by a gradual process" the Act identifies the time at which the injury is deemed to have happened: s 15. With respect to a policy of insurance issued before 1 September 1995, a liability under the general law is deemed to arise "at the time of injury": s 151AAA. However, special provision is made with respect to any condition identified as "an occupational disease", defined in s 151AB(6). These include dust diseases as defined in the Workers' Compensation (Dust Diseases) Act 1942 (NSW). Mesothelioma is such a disease. 9With respect to occupational diseases, the Act contains "special insurance provisions" in ss 151AB and 151AC. Both of the provisions were introduced after the worker's exposure in the present case. Each provision contains transitional provisions rendering them applicable in the present case, in terms to which reference will be made below. 10The first section is not set out in full by Ball J and reads as follows: 151AB Special insurance provisions relating to occupational diseases (1) If an employer is liable independently of this Act for damages for an occupational disease contracted by a worker, the following provisions have effect for the purposes of any policy of insurance obtained by the employer: (a) the liability is taken to have arisen when the worker was last employed by the employer in employment to the nature of which the disease was due, subject to paragraph (b), (b) if the worker was employed by the employer in employment to the nature of which the disease was due both before and after the relevant commencement, the liability is taken to have arisen both when the worker was last employed by the employer in employment to the nature of which the disease was due before the relevant commencement and when the worker was last employed by the employer in employment to the nature of which the disease was due after the relevant commencement. (2) In a case in which subsection (1) (b) applies, 2 insurers will be liable under policies of insurance to indemnify the employer (or pay damages to the worker) and the following provisions apply with respect to those insurers (referred to in this subsection as the responsible insurers): (a) Of the responsible insurers, the one that is the insurer in respect of the employer's liability that arose after the relevant commencement is to be the insurer primarily responsible for the claim. (b) The responsible insurers can however agree as to which of them is to be primarily responsible for the claim or the court can order that one of them is to be the insurer primarily responsible, and any such agreement or order overrides paragraph (a). (c) The insurer who is primarily responsible for the claim is to act for both the responsible insurers in respect of any claim for the damages and has sole liability for the claim (that is, it is to indemnify the employer for the full amount of the damages or is to pay the full amount of damages to the worker, without any right to a contribution from any other insurer, except as provided by paragraph (d)). (d) The insurer who is primarily responsible is entitled to recover from the other responsible insurer half of the amount paid as damages to the worker, half of the amount paid in respect of the worker's legal costs and half of such reasonable amount as the insurer primarily responsible may have incurred in respect of its own legal expenses in the matter. (3) If 2 or more employers are jointly or severally liable for damages referred to in this section, the provisions of this section apply separately to each employer. (4) This section does not affect the amount of damages recoverable by a worker. (5) This section applies to any liability arising before or after the commencement of this Act and to any policy of insurance issued before or after that commencement. (6) In sections 151AB and 151AC: occupational disease means a disease of such a nature as to be contracted by a gradual process, and includes: (a) a dust disease as defined by the Workers' Compensation (Dust Diseases) Act 1942, and (b) total or partial loss of sight which is of gradual onset, and (c) the condition known as "boilermaker's deafness" or any deafness of similar origin. relevant commencement means: (a) except as provided by paragraph (b)-4 pm on 30 June 1987, or (b in the case of an employer who was insured under a policy of insurance that was assigned as referred to in clause 10 of Part 15 of Schedule 6 to this Act-the commencement of the period of insurance of the policy so assigned. 11As appears from the chapeau to subs (1), the section makes provision, with respect to the liability of an employer for damages, "for the purposes of any policy of insurance". The first 'special provision' relates to the time at which liability is taken to have arisen. That is said to depend upon two factors, the first of which is the nature of the employment to which the disease was due. (It has been held that this does not require proof of a consequence, but rather "exposure to a risk which may be causative of the disease": Government Insurance Office of New South Wales v Colgate Palmolive Pty Ltd [2001] NSWCA 24; 50 NSWLR 729 at [7] (Heydon JA, Priestley and Sheller JJA agreeing).) In the case of mesothelioma, that is employment in the course of which the worker is exposed to asbestos dust. The section seeks to remove elements of uncertainty by identifying the point at which liability arises as the time when the worker was last so employed. Nevertheless, that point in time is likely to be contentious and contested. With respect to annual policies of insurance, the application of the section may not be known until any relevant dispute is resolved. 12The second 'special provision', upon which the identification of the time of liability turns, is the date identified as the "relevant commencement": par (b). That is, sufficiently for present purposes, 30 June 1987: subs (6), relevant commencement, par (a). (The date is the date of commencement of the Workers Compensation Act, which changed the availability of damages for workplace injuries.) As noted by subs (2), the effect of subs (1)(b) is that two insurers may be liable either to indemnify the employer or, in accordance with the prescribed terms of the policy, to pay damages directly to the worker. 13Where, in accordance with par (b), liability is imposed on two insurers, that which would be liable during the last period of relevant employment (after 30 June 1987) is deemed to have primary responsibility, which means that it has sole liability for the claim (subs (2)(c)), although it can recover half of the damages and costs from the other: subs (2)(d). In addition, the later insurer is required to act for both with respect to the claim: subs (2)(c). Consistently with its purpose, the section applies to any "liability" arising and any "policy of insurance" issued before or after the commencement of the Act: subs (5). 14Section 151AB was inserted in 1991, some seven years prior to its replacement in 1998, at which time s 151AC was inserted. Section 151AC seeks to address the issue which can arise where there is a dispute as to which of two or more insurers is liable to indemnify the employer under s 151AB. However, before turning to the operation of s 151AC (which is central to the present dispute) it is helpful to consider s 151AB in its historical context. On the facts of the present case, that is not an artificial exercise: Mr Horsell alleged that he was exposed to asbestos dust and fibre from October 1965 until the early 1980s. Other evidence indicated that he may have been exposed in October or November 1987. Had his mesothelioma developed prior to 1998, the appellant's entitlement to recover would have been determined under s 151AB as then in force, absent s 151AC. 15Although s 151AB was not included in the Workers Compensation Act when enacted in 1987, it had a precursor in the Workers' Compensation Act 1926 (NSW), s 18, which appeared in Pt III, Insurance. That provision relevantly read: Compulsory insurance 18 ... (6B) For the purposes of any policy of insurance or indemnity obtained by an employer ..., the liability of the employer, independently of this Act, for an injury, being an occupational disease, to a worker shall be deemed to have arisen when the worker was last employed by the employer in an employment to the nature of which the disease was due. In this paragraph "occupational disease" means a disease which is of such a nature as to be contracted by a gradual process .... 16Section 151AB, as introduced by the Workers Compensation (Amendment) Act 1991 (NSW), (the "1991 amendment Act") Sch 4 (5), was in substantially similar terms to the current provision, except that there was no distinction between periods (before and after 30 June 1987) and thus no equivalent to subs (1)(b) and subs (2). The purpose of the section was separately identified in then subs (2) in the following terms: (2) The purpose of this section is to identify (from among a number of insurers under policies of insurance obtained by a single employer for different periods) one insurer which is to indemnify the employer for the full amount of the damages or which is to pay the full amount of damages to the worker, without any right to a contribution from those other insurers. 17There can be no doubt that, as originally enacted, s 151AB allocated responsibility as between various insurers and policies of insurance, which may well have expired before any proceedings were commenced. In making that allocation, there is no reason to read in a qualification or unstated condition, namely that the insurer thus identified was solvent or still in existence. Such a limitation would potentially create a different scheme for allocating responsibility. It would not have been a critical consideration for either worker or employer, insolvency (which could occur before, during or after the proceedings) being otherwise dealt with. 18The possibility that an insurer might be insolvent or no longer in existence was (and is) separately dealt with in Pt 7 of the Workers Compensation Act. There is provision for an Insurers' Guarantee Fund (created by s 227) under the control of the WorkCover Authority of New South Wales ("the Authority"). Part 7 deals separately with (a) "defaulting insurers", being those which the Minister is satisfied are unable to meet claims and liabilities under policies of insurance issued or renewed by them (s 224B); (b) "insolvent insurers", being those in relation to which an order is in force under s 226 and, (c) "insurers", being licensed insurers, former licensed insurers and self-insurers: s 225(1). The Minister is empowered to declare that an insurer is an insolvent insurer for the purposes of Pt 7, Div 7 if satisfied that a liquidator has been appointed or "that an insurer has been dissolved": s 226(1). 19The Authority becomes the agent of both the employer and the worker under a policy issued by an insolvent insurer: s 231(1). Where an employer, or the liquidator of the insurer, has satisfied a claim or judgment, the Authority is empowered to pay that amount out of the Guarantee Fund, but without obligation to do so: s 232. The Division further provides: 236 Payments of workers compensation when insolvent insurer dissolved (1) When an insolvent insurer has been dissolved, the payments of compensation under judgments or awards relating to policies of insurance issued by the insolvent insurer which would, but for the dissolution taking place, be payable by the insolvent insurer shall continue and be paid out of the Guarantee Fund by the Authority. (2) When an insolvent insurer has been dissolved, a person who would have had, but for the dissolution of the insolvent insurer, an entitlement to payment of any amount arising from or relating to any policy of insurance issued by the insolvent insurer ... shall be entitled to payment of that amount out of the Guarantee Fund. 20Although no duty is imposed on the Authority to repay liabilities incurred by the employer or the liquidator of the insurer, the evident purpose of Pt 7, Div 7 is to provide a safety net through the Guarantee Fund, in circumstances where, despite the tightly regulated scheme designed to ensure that workers and employers are covered with respect to workplace injuries, the insurer is unable to meet its liability under its policies. Despite the heading of s 236 (which was taken from the 1926 Act, s 30Z), subs (2) is not limited to awards of compensation, but is apt to cover awards of damages. 21There are two additional points to be made with respect to the operation of s 151AB, as enacted. First, as stated in the explanatory note to the 1991 amendment Act: "The proposed section applies where a number of insurers may each be partly liable to contribute to the liability of an employer for common law damages to a worker who suffers from an occupational disease. This situation would arise if an employer has, over the period when the worker contracted the disease, obtained policies of insurance from different insurers. The proposed section provides that the insurer which last insured the employer in respect of the worker is liable to indemnify the employer for all the damages and is not entitled to claim contributions from previous insurers." 22In this sense, the original purpose of s 151AB is similar to that underlying s 15: it deems a point in time when liability arises or, in the terms of s 15, when the injury "happened". Perhaps ironically, the explanatory note adopts a description of the test which is closer to that in s 151AC than to that in s 151AB. 23The second additional point is that the operation of the section was limited to the identification of the insurer liable to indemnify the employer. It did not expressly incorporate any procedural consequence. Accordingly, there was no reason to think that this provision, with its lengthy if broken history, operated only in circumstances where the insurer to which liability was allocated was solvent. 24In 1995, subss 151AB(1) and (2) were replaced so as to incorporate the differential operation with respect to exposure before and after 30 June 1987. This amendment introduced subs (2) in substantially the current form, including the provision, now in subs (2)(c), that the insurer primarily responsible for the claim "is to act for both the responsible insurers in respect of any claim for the damages". The new direction as to procedure could imply the need for a solvent insurer. However, it is doubtful that this provision, directed purely to the case where liability arose both before and after the specified date, was intended to change the structure and operation of the provision so as, by a side wind, to limit its operation generally to solvent insurers in circumstances where the primary operation of the provision remained allocation of liability for damages and, as suggested above, no such limitation was to be implied. The preferable view is that the procedural direction was seen as merely consequential on the allocation of liability. 25The explanatory note in the 1991 amendment Act which introduced Div 6A (defaulting insurers) referred specifically to difficulties in reaching agreement in relation to payment into and from the Fund during "the recent failure of NEM Insurance to pay claims". It is implausible that s 151AB, being introduced by the same amending legislation, would not have expressly excluded insolvent insurers, if that had been an intended limitation on the allocation of liability. 26Accordingly, the provisions of s 151AB as enacted should be read as dealing with allocation of liability by reference to a policy of insurance and an insurer as they existed at the relevant time, namely, when liability is deemed to have arisen. The consequences of subsequent insolvency and dissolution are to be addressed under Pt 7, Div 7, as in any case which did not involve a deemed allocation of liability. 27The next question is whether the introduction of s 151AC demands a different approach. 28On one view, it would be surprising if s 151AC changed the operation of s 151AB. It purported to apply "in relation to an employer" who is liable for damages for a dust disease "where there is a dispute as to which of 2 or more insurers ... is liable to indemnify the employer under any of the provisions of section 151AB": s 151AC(1). Thus, the new section addressed the inherent factual uncertainty created by the test adopted in s 151AB, namely the time at which the worker was, for example, last exposed to asbestos dust. The facts of the present case illustrate the difficulty: ignoring the possible exposure in late 1987, Mr Horsell could only say that his exposure ended in "the early 1980s". Between 1 January 1980 and 31 December 1984, the appellant had policies with three separate insurers. The purpose of s 151AC was to identify one as the "designated insurer", pending resolution of the factual issue. 29Section 151AC is a lengthy provision containing 15 subsections. The focus of submissions was the mechanical provisions found in subss (3) and (4). Before addressing those, it is convenient to set out subss (1) and (2), dealing with the application and function of the section: 151AC Further special insurance provisions relating to dust diseases (1) Application of this section This section applies in relation to an employer who is liable independently of this Act for damages for a dust disease as defined by the Workers' Compensation (Dust Diseases) Act 1942 contracted by a worker, where there is a dispute as to which of 2 or more insurers in a category of insurers is liable to indemnify the employer under any of the provisions of section 151AB. (2) Designated insurer to be responsible pending resolution of dispute For the purposes of section 151AB, and pending resolution of the dispute, the insurer who is the designated insurer in the relevant category under this section is to be treated as being the insurer who is so liable to indemnify the employer. Section 151AB has effect, and is to be construed, accordingly. 30A number of elements should be noted. First, the opening words of subs (1), stating that the section applies "in relation to an employer", reflect the operation of s 151AB, namely that where there is more than one employer potentially jointly or severally liable for damages, the provisions apply separately to each employer: s 151AB(3). 31Secondly, although the provision speaks of an employer "who is liable", it must be understood in its context (namely, unresolved proceedings) to include a person who is claimed to be liable: QBE Insurance Ltd v Bull [1999] NSWCA 185; 18 NSWCCR 169 at [9]. While it is understandable that the provision has been given an expansive operation in this respect, it would be curious if, as the respondent contended, the section had no application once an employer had been found to be liable. 32Thirdly, a similar generic construction should be given to similar language with respect to the insurers. Thus a dispute as to which insurer "is liable to indemnify the employer" must also refer to a dispute as to which insurer is claimed to be liable to indemnify the employer. That the matter is in dispute is a pre-condition to the operation of the section. 33Fourthly, the section does not require, as the respondent contended, a dispute "between insurers". If there are three insurers potentially liable, the fact that each denies liability without implicating any other reveals a dispute as to which is liable, but not a dispute between the insurers. Rather, there is a dispute between the employer and each of the insurers claimed to be liable which denies liability. That situation satisfies the language of the provision, given the context which is the contestability of the period (if any) during which the worker may have been exposed to asbestos dust. 34Fifthly, as expressly stated twice in subs (2), the purpose of the provision is to allow s 151AB to operate effectively and to identify its effect, rather than to create a new and different system for the allocation of liability. 35Sixthly, care must be taken in placing weight on the use of the present tense. Too literal an approach to the language of these provisions can run foul of the flexibility and imprecision with which verb tenses are used in English: see Public Trustee v McKay [1969] NZLR 995 at 1002 (McCarthy J). Thus, in s 151AC(1), in the clause "where there is a dispute" the word "is" is undoubtedly used in the present tense; however, the words "which [insurer] is liable to indemnify the employer" are aptly described as descriptive of the purpose of the provision and are without temporal connotation: see Pye v Minister for Lands for New South Wales [1954] 1 WLR 1410 at 1425 (Lord Porter). The word "is" in such a clause involves "the use of the continuous present": Fardon v Attorney General (Qld) [2004] HCA 46; 223 CLR 575 at [112] (Gummow J). In relation to s 151Z of the Workers Compensation Act, which appears in the same division as the provisions under consideration, the construction proposed here has been adopted, namely that, "[i]n s 151Z(2) the word 'is' refers back to the time when the injury occurred and to the circumstances creating liability to pay damages in respect of such injury": Lapcevic v Collier [2002] NSWCA 300 at [68] (Beazley JA). That construction should be adopted with respect to the identification of liability of an insurer for the purposes of ss 151AB and 151AC. 36Turning to subs (3) and the mechanism for resolving a dispute, the course adopted is to remove the need to identify when the worker was last exposed to (for example) asbestos dust and replace that test with the less contentious test of "the last of those insurers to be the employer's insurer while the worker was employed ... by that employer". 37That simple solution was complicated by the continuing differentiation between the periods before and after 30 June 1987. While s 151AB required identification of the nature of the employment before and after that period, s 151AC referred to "a liability that arose" before or after that date. Again, it is only possible to make sense of the provision by assuming that it refers to a liability that is claimed to have arisen in one or other or both periods. The claim will usually emanate from the employer or worker, although it could arise on a cross-claim between insurers. 38As with s 151AB, it is true that if the section identifies an insurer (in this case described as "designated" rather than "primarily responsible"), which is insolvent or has been dissolved, to the extent that s 151AB requires that insurer to "act ... in respect of any claim for the damages" the provision may be ineffective. But that is not necessarily the practical outcome; s 229 requires that "[t]he liquidator of an insolvent insurer shall, on receiving any claim relating to any policy of insurance issued by the insolvent insurer, forward the claim to the Authority". The Authority has wide powers to act with respect to such claims: see, eg, s 231(5). These are provisions which will apply in any case where a particular policy responded to a claim, without the need for reliance on s 151AB. 39In this case, the respondent is not insolvent: its primary argument is that an "insolvent insurer" is not an insurer which can be "liable" to indemnify its insured, nor one with which a dispute could arise. The essential implausibility of such a construction was sought to be bolstered by arguments about consequential unfairness. It noted that if required to indemnify the appellant as the designated insurer pursuant to s 151AB(1), it would be unable to recover under s 151AC(10) against the insurer ultimately held to be liable, if it were not liable and if the other insurer were insolvent. Its only opportunity for recovery would be against the Guarantee Fund, which would depend on a discretionary decision of the Authority. Whether repayment could be sought under s 232(1) need not be determined; nor is it necessary to decide the likely limits of the "absolute discretion" conferred by s 232(4). In practical terms the respondent's position would be no better if the other insurer were a defaulting insurer (but not "insolvent"), or if it became insolvent shortly after the respondent was appointed the designated insurer: like all creditors, it would have to make a claim in the insolvency. 40The respondent's construction could have a further anomalous consequence: if, to take a variation on the present facts, there were three insurers of which all but the last were solvent at the date of claim, the insurer at the time when liability is deemed to have arisen, being an "insolvent insurer", it will not be liable. Yet the second will be available to be the designated insurer under s 151AC, with no chance of recovery against the third. That is so despite the fact that the employer would have a right to recover from the Fund pursuant to s 236(2). 41The factors outlined above lead to the preferable construction that where a claim is made with respect to the liability of an insolvent insurer, both procedural and substantive outcomes must be determined by applying Pt 7, Div 7, and will not be found within Pt 5 of the Workers Compensation Act. Application of principles 42In the absence of acceptance by any insurer that it was liable to indemnify the appellant, the appellant brought proceedings seeking to have one specific insurer (the respondent) appointed as designated insurer. The trial judge dismissed the application on the basis that s 151AC applies only "where there is a dispute as to which of 2 or more insurers in a category of insurers is liable to indemnify". He concluded that there was "no dispute as such" for two reasons. He did so on the basis that the only relevant period was the period before 30 June 1987. The appellant had insurance during that period with: (i) GIO General Ltd (prior to 1 January 1981); (ii) National Employers Mutual General Insurance Association Ltd ("NEM") (1 January 1981 - 31 December 1983); (iii) Vero Insurance Ltd ("Vero") (1 January 1984 - 31 December 1986), and (iv) FAI Traders Insurance Company Pty Ltd ("FAI") (1 January 1987 - 30 June 1987). 43Vero changed its name to AAI Ltd (the respondent). The case was run on the basis that, pursuant to a deed of restructure entered into in 2013, GIO transferred its reserves to the respondent, which undertook to honour policies of insurance written by GIO. Accordingly, it was accepted that GIO and the respondent are effectively one insurer. Both NEM and FAI are insolvent insurers. NEM is apparently deregistered, although that does not prevent it being an insolvent insurer for the purposes of Pt 7, Div 7 if, as appears to have been assumed, it has been declared to be such pursuant to s 226. 44As has been noted, the procedural consequence of identifying one insurer for the purposes of ss 151AB and 151AC is to identify which of several insurers may be responsible for dealing with a claim. Assuming that that purpose may be thwarted where the insurer sought to be appointed as designated or primarily responsible insurer is insolvent, that is not the present case. There remains the substantive purpose of the provision which is to identify which insurer is primarily responsible and carries sole immediate liability for indemnifying the employer. That purpose is not frustrated by the insolvency of other possibly liable insurers. It remains a matter of some moment as to which insurer issued a policy which responds to the claim against the employer. If it were found to be GIO, the respondent would be liable; if it were found to be another insurer, recovery by the respondent would depend on the state of the liquidation and the operation of Pt 7, Div 7. 45Thus, on the basis that the provisions in Pt 5 do not address the consequences of insolvency of insurers, the terms of s 151AC(1) and (2) were engaged. That is because the term "category of insurer" covered those insurers who had issued policies in relation to the period before 30 June 1987 and because there was more than one such insurer. Conclusion 46For these reasons, I would set aside the orders made by the Tribunal on 3 October 2013. The next question is whether this Court can go further, as the appellant sought, and order that the respondent be the designated insurer. 47On the view that it is unlikely that the Tribunal would order an insolvent insurer to be the designated insurer pursuant to s 151AC(4), it might follow that the appropriate order would be that the respondent be the designated insurer. However, there was no discussion in this Court as to whether there might be grounds upon which the Tribunal could otherwise decline to make such an order and there may be other issues which require to be resolved. In the circumstances, it is necessary to remit the matter to the Tribunal for redetermination according to law. 48In my view, the following orders should be made: (1) Grant leave to appeal. (2) Allow the appeal and set aside the orders made by the Dust Diseases Tribunal on 3 October 2013. (3) Order that the respondent pay the appellant's costs of the proceedings in this Court. 49LEEMING JA: Basten JA and Ball J have each described the factual background and legislation to this application for leave to appeal. Basten JA would grant leave and allow the appeal, while Ball J would refuse leave to appeal. The essential difference between their Honours is one of construction of s 151AC of the Workers Compensation Act 1987 (NSW). I agree with Ball J that leave to appeal should be refused. I have reached that conclusion for the following reasons, which do not repeat the underlying facts or legislative provisions. Nature of the legislative regime 50It is convenient at the outset to notice seven features about ss 151AB and 151AC. First, the presently relevant premise of s 151AC is that "there is a dispute as to which of 2 or more insurers" in a category of insurers is liable to indemnify the employer under any of the provisions in s 151AB. It is useful to unpack that language immediately. Section 151AC only applies if (a) there are at least two insurers, (b) they fall within the same category of insurers, (c) they are claimed to be liable under s 151AB, and (d) there be a dispute as to which of them is liable. 51Secondly, the nature of the compulsory insurance required by the Act (s 155) is, and for very many years has been, very closely prescribed. The present provisions are found in r 56 and Schedule 3 of the Workers Compensation Regulation 2010. The matter of present relevance is that the policy is an occurrence based policy, not a claims made policy. Speaking generally, liability is enlivened by the occurring of an event, rather than the making of a claim: see Chubb Insurance Company of Australia Limited v Moore [2013] NSWCA 212 at [73]-[74]. 52Thirdly, the liability arising from workers who contract diseases of gradual onset, and diseases with long latency (such as dust diseases) is apt to be problematic where an insurer has written an occurrence based policy: see QBE Insurance (Australia) Ltd v Dust Diseases Tribunal of NSW [2011] NSWCA 421 at [10] and the cases there referred to. Some of those problems are addressed in ss 151AB and 151AC. The former deals with a larger class of diseases which includes, but is not confined to, dust diseases. 53Fourthly, and speaking generally, the solution to the problems posed by s 151AB was, in essence, to create two statutory fictions. One of the statutory fictions is in effect a transitional provision, dealing with the position before and after the commencement of the Act. It applies where the worker was employed in employment to whose nature the disease was due both before and after the Act commenced ("relevant commencement" is defined to be the day on which the Act commenced). These transitional provisions, which in each case deem two insurers to be liable, are what give rise to different "categories" of insurers: see s 151AC(3) and (15). They may be put to one side for present purposes, because s 151AC applies only where there is a dispute as to which of two or more insurers within a category of insurers is liable. 54The second statutory fiction created by s 151AB is that the time when the liability arose (which is to say, the time when the occurrence to which the insurance policy responds occurred) is the time when the worker was last employed in employment to whose nature the disease was due. This amounts to an exhaustive statement of when the occurrence is taken to have taken place. The effect may be to impose liability upon an insurer which would otherwise not be liable, and to relieve other insurers of liability for losses for which they would otherwise have been liable: QBE Insurance at [9] and [11]. Where the employment spans before and after 30 June 1987, two insurers will be deemed to be liable and s 151AB(2) makes provision for contribution between them. 55Fifthly, the essential effect of s 151AB in the case of dust diseases is that complex questions of causation are replaced by a factual inquiry as to the nature of the worker's employment. That said, there remains scope for dispute as to when was the last time the worker was employed in employment to whose nature the dust disease was due. 56Sixthly, the point of s 151AC is to provide an interim resolution of that dispute. Some dust diseases, once contracted, cause death very rapidly, such that it is important for the worker and the employer to be indemnified swiftly, whilst preserving the insurers' rights to investigate and determine the nature of the workers' employment. The legislative solution is a further statutory fiction. The "designated insurer" is deemed to be liable to indemnify the employer ("is to be treated" in s 151AC(2)) but only for a limited purpose and a limited time. The limited purpose is for the regime established by s 151AB. The limited time is "pending resolution of the dispute". That temporary deeming effected by s 151AC feeds into the operation of s 151AB and in particular the "transitional" statutory fiction referred to above. 57Seventhly, the remaining provisions of s 151AC deal with the resolution of the dispute and the consequential reimbursement by the insurer ultimately found to be liable. Insurers which are potentially liable but which are not designated have leave to make submissions on damages (s 151AC(6)). Subsections (7) and (8) deal with means by which the dispute may be resolved, subsection (9) prescribes when the dispute is resolved, and subsections (10) and (11) deal with the consequential reimbursement by the liable insurer of the designated insurer. 58I do not think that any of the foregoing propositions are controversial. Indeed, I think that most if not all of those propositions are express or implicit in the reasoning process of both of the other members of the Court. The relationship between ss 151AB and 151AC and insolvency 59As indicated above, the potential for dispute as to when was the last time the worker was employed in employment to whose nature the dust disease was due is what gives rise to s 151AC. Importantly, that dispute is also the only dispute addressed by the section. That appears directly from s 151AC(9), and implicitly from the other provisions dealing with potentially liable insurers mentioned above. Section 151AC is not dealing with all of the difficulties arising out of a dispute about the factual question as to when the employment to whose nature the disease was due ended. Section 151AC merely makes a provisional resolution of that dispute whilst leaving for later the determination whether the designated insurer is in fact liable. 60The issue which has led Basten JA to differ from Ball J is whether that regime extends to "insolvent insurers". Once again, that term does not bear its ordinary meaning: it is given a special meaning by this Act, which makes provisions for declarations by the Minister and, inter alia, a Guarantee Fund in Division 7 of Part 7. Once again, the Act employs a fiction. The application for leave proceeded on the basis that both NEM and FAI were "insolvent insurers" (it seemed to be common ground that the former has ceased to exist while the latter remains in liquidation). 61This is not the occasion for a comprehensive analysis of all aspects of the sections. It is sufficient for present purposes to focus upon the simplest case, which is where there are two insurers, one of which is solvent, the other "insolvent" (in the special sense used in the Act) and there is a dispute as to which of them is liable to indemnify. I do not consider that s 151AC applies to such a dispute. 62First, that is the natural meaning of the section and in particular the language of "insurer" and "is liable", both of which tend to presuppose a presently existing legal person subject to enforceable obligations. "Liable" in this context plainly means an obligation to pay pursuant to the policy of insurance: cf Smalley v Motor Accident Authority of New South Wales [2013] NSWCA 318 at [49]. I acknowledge, as Basten JA has noted, that the use of the present tense is not decisive. 63Secondly, the point of ascertaining a designated insurer is not merely to make a payment. The designated insurer in the course of defending a claim may and quite probably will have to make decisions on behalf of all potentially liable insurers (such as the matters to be put in issue and whether any cross-claims should be served), until the question of when the last time the worker was employed in employment to whose nature the dust disease was due is resolved. Once that question is resolved, then the section proceeds on the basis that any reimbursement can be made as of right from the "insurer who is liable", and that insurer can resume carriage of the remainder of the proceedings. 64Ultimately, the regime reflects a practical working out of the disputed obligations of two or more insurers to indemnify their insured. It is not merely a regime which favours the insured employer and the worker. The provisions also attempt to accommodate the rights of the insurers as between themselves. To my mind, that regime sits ill with what occurs in a winding up, when a separate, federal regime operates, in which the ordinary contractual liabilities are replaced by a right to prove in the winding up. Hence the attraction of confining the legal meaning of "insurer" and "is liable" to the literal meaning of those words. 65Thirdly, the Act makes special provision for what it defines to be insolvent insurers in Division 7 of Part 7. (For the purposes of these reasons, I put to one side the question of the interrelationship of Division 7 of Part 7 and the provisions of the Corporations Act 2001 (Cth) dealing with insolvency and deregistration, which were not the subject of argument.) It is not necessary to address those provisions (aspects of which do not lack complexity) in any detail. What matters for present purposes is that those provisions apply quite differently from the limited provisions in ss 151AB and 151AC. In particular, there is no entitlement on the part of an employer or to the liquidator of an insolvent insurer to payment from the Fund: s 232(4). It is one thing to oblige an insurer whose liability comes about by means of a statutory fiction to pay upfront and to have recourse later on when the question of liability is resolved to contribution from another insurer. It is quite another for that insurer's right of recourse to be at best a discretionary claim on the Fund, when the other insurer is being wound up, or indeed has ceased to exist. (To be clear, I am not expressing any view as to the rights of a liquidator of an insolvent insurer upon the Fund save that they are no more than discretionary.) 66Finally, as to purpose, it was said by the employer that the point of the provision was to ensure that payment could be made by a provisionally liable insurer upfront, to meet the (possibly urgent) need of the worker or employer. That is so. But, as is often the case, a general legislative purpose beneficial to one party does not mean that all questions of construction are to be resolved favourably to that party. The beneficial purpose invoked by the employer is at too high a level of generality to assist in the construction of the critical provisions; cf Carr v Western Australia [2007] HCA 47; (2007) 232 CLR 138 at [5], reproduced and applied in Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36; (2013) 87 ALJR 1009 at [40]: "That general rule of interpretation [that legislation should be construed so as to promote its purpose] may be of little assistance where a statutory provision strikes a balance between competing interests, and the problem of interpretation is that there is uncertainty as to how far the provision goes in seeking to achieve the underlying purpose or object of the Act. Legislation rarely pursues a single purpose at all costs. Where the problem is one of doubt about the extent to which the legislation pursues a purpose, stating the purpose is unlikely to solve the problem." Sections 151AB and 151AC are examples of provisions which strike a balance between the competing interests of worker, employer and insurers. 67For those reasons, I respectfully disagree with the construction of the Act preferred by Basten JA. I do not consider that s 151AC addresses the doubly misfortunate position of a worker and employer who are faced not merely with a dispute as to which of two insurers is liable, but also with the additional problem that only one of the potentially liable insurers is solvent and the other is insolvent. The section ameliorates the general problem where there is a dispute. The Act elsewhere ameliorates the additional problem of insolvency. I do not favour a construction whereby this very precise regime, which is replete with statutory fictions, would be extended beyond its terms, in a way which sits ill with the provisions expressly dealing with insolvency. 68That said, there are large questions not addressed in the foregoing analysis. In particular, I have focussed only upon the simplest case, where the dispute is between a solvent and an insolvent insurer. For the reasons given by Ball J, these (larger) questions should not be resolved in this application, with the result that leave should be refused, with costs. 69BALL J: By notice of motion in proceedings brought against it in the Dust Diseases Tribunal by a former employee suffering from mesothelioma, the University ("the applicant") sought an order that the respondent, AAI Limited ("AAI"), be "appointed" designated insurer for the defendant in the proceedings under s 151AC(4) of the Workers Compensation Act 1987 (NSW) ("the Act"). On 3 October 2013, the Tribunal (Finnane DCJ) refused to make that order. The applicant sought leave to appeal to this Court. That application was heard concurrently with the substantive appeal. The legislation 70Occupational diseases which may develop following exposure over a long period of time to the conditions causing the disease, such as mesothelioma and deafness, raise particular problems in identifying which of a number of insurers who may have provided liability cover to an employer during the relevant period are liable to indemnify the employer for its liability to the injured employee. 71With respect to dust diseases and other specified conditions, s 151AB of the Act seeks to address those difficulties by providing that, for the purposes of any policy of insurance obtained by the employer, the employer's liability is taken to have arisen "when the worker was last employed by the employer in employment to the nature of which the disease was due": s151AB(1)(a). If the worker was employed in that capacity both before and after 4.00 pm on 30 June 1987 (the commencement time of the section), the liability is taken to have arisen both when the worker was last employed in that capacity before that time and when the worker was last employed in that capacity after that time: s 151AB(1)(b). In that event, if the employer is covered by different insurers at the two times liability is deemed to arise, the insurer liable after 30 June 1987 is, absent agreement between the insurers or order of the court, taken to be the insurer primarily responsible for the claim and is entitled to recover from the other insurer half the amount paid as damages to the worker and half the reasonable costs of the claim: s 151AB(2). 72The expression "employment to the nature of which the disease was due" means employment that exposed the employee to the risk of such injury: see CIC Workers' Compensation (NSW) Ltd v Alcan Australia Ltd (1994) 35 NSWLR 169; QBE Insurance (Australia) Ltd v Dust Diseases Tribunal of NSW [2011] NSWCA 421 at [11] per Macfarlan JA. 73The question when an employee was last exposed to the risk of contracting a dust disease, including mesothelioma, may itself raise a difficult factual question. As a result, there may be uncertainty concerning which insurer (or insurers) is liable to indemnify the employer under s 151AB of the Act against claims arising from diseases of that type. 74Section 151AC of the Act deals with that difficulty. Section 151AC(1) provides that the section applies: "...in relation to an employer who is liable independently of this Act for damages for a dust disease as defined by the Workers' Compensation (Dust Diseases) Act 1942 contracted by a worker, where there is a dispute as to which of 2 or more insurers in a category of insurers is liable to indemnify the employer under any of the provisions of section 151AB." "Category" of insurers is defined in s 151AC(15) to mean "the category consisting of the insurers in dispute as referred to in a paragraph of subsection (3)" (quoted below). The reference to an employer "who is liable" has been construed as including an employer who is claimed to be liable: QBE Insurance Ltd v Bull [1999] NSWCA 185; (1999) 18 NSWCCR 170 at [9]. 75Section 151AC(2) provides that "pending resolution of the dispute", the designated insurer in the relevant category is to be treated as the insurer liable to indemnify the employer for the purposes of s 151AB. 76The designated insurer or designated insurers are determined in accordance with s 151AC(3) and (4), which provide: (3) Identification of designated insurer The following provisions have effect for the purpose of determining which insurer among the following categories of insurers is the designated insurer for the purposes of this section: (a) If, in the case of a liability that arose before the relevant commencement, there is a dispute as to which of 2 or more insurers is liable to indemnify the employer under section 151AB, the insurer who was the last of those insurers to be the employer's insurer while the worker was employed before that commencement by that employer is the designated insurer. (b) If, in the case of a liability that arose after the relevant commencement, there is a dispute as to which of 2 or more insurers is liable to indemnify the employer under section 151AB, the insurer who was the last of those insurers to be the employer's insurer while the worker was employed after that commencement by that employer is the designated insurer. (c) If, in the case of a liability that arose partly before and partly after the relevant commencement, there is a dispute as to which of 2 or more insurers is liable to indemnify the employer under section 151AB in respect of any liability that arose before that commencement, the insurer who was the last of those insurers to be the employer's insurer while the worker was employed before that commencement by that employer is the designated insurer. (d) If, in the case of a liability that arose partly before and partly after the relevant commencement, there is a dispute as to which of 2 or more insurers is liable to indemnify the employer under section 151AB in respect of any liability that arose after that commencement, the insurer who was the last of those insurers to be the employer's insurer while the worker was employed after that commencement by that employer is the designated insurer. (4) However, the insurers in a category may agree as to which of them is to be the designated insurer or the Dust Diseases Tribunal can order that any one of them is to be the designated insurer, and any such agreement or order overrides subsection (3). 77The result of these provisions is that, where liability arises solely before 4.00 pm on 30 June 1987 or solely after that time, there is one designated insurer and that insurer is responsible, pending resolution of the dispute, for the claim. Where liability arises both before and after 4.00 pm on 30 June 1987, there are two designated insurers and the designated insurer in respect of the liability arising after 4.00 pm on 30 June 1987 is responsible, pending resolution of the dispute, for the claim. 78Subsections (7), (8) and (9) and (12) deal with the resolution of disputes between insurers concerning which insurer is ultimately liable. They provide: (7) Methods of resolving dispute The dispute may be resolved by such processes as the parties to the dispute agree or as are otherwise available. (8) Arbitration under special provisions However, if the dispute has not been resolved by the relevant time, it is to be resolved by arbitration under section 38 of the Dust Diseases Tribunal Act 1989, unless the Dust Diseases Tribunal otherwise orders (whether before or after the arbitration commences). The relevant time is: (a) subject to paragraph (b), the time when the total amount of damages is assessed and payable, or (b) if the designated insurer pays the total amount of damages assessed, together with all costs payable, to or in respect of the worker, such later time as one of the parties to the dispute notifies to the other party or parties to the dispute. (9) Nature of resolution of dispute For the purposes of this section, the dispute is not resolved until it has been determined which of the insurers in dispute was the insurer when the worker was last employed at the relevant time by the employer in an employment to the nature of which the disease was due. That insurer is referred to in the following provisions of this section as an insurer who is liable. ... (12) Parties to dispute An insurer may be or become a party to the dispute even though the insurer was not a party to or represented in the original proceedings before the Dust Diseases Tribunal. Without limiting the foregoing, an insurer becomes a party to the dispute on being joined as a party to an arbitration under section 38 of the Dust Diseases Tribunal Act 1989. 79Subsections (10) and (11) deal with the recovery by the designated insurer of amounts due from the insurer or insurers who are liable. Among other things, subsection (10) imposes an obligation on "the insurer who is liable" to reimburse or indemnify the designated insurer for the amounts paid by the designated insurer in that capacity (including costs). 80The Tribunal has power to dispense with the operation of s 151AC in relation to a particular case or a particular insurer: see s 151AC(13); r 12 of the Dust Diseases Tribunal Rules (NSW). 81Although s 151AC benefits insured employers because it identifies an insurer from whom they are entitled to recover immediately, its principal purpose is to benefit workers by ensuring that they are not out of pocket pending resolution of the dispute between insurers. As the Minister explained in giving the Second Reading Speech in the New South Wales Legislative Assembly (see Parliamentary Debates (Hansard), 29 October 1998 at 9437): "Several of the other items in the bill aim to make resolution of common law claims in the Dust Diseases Tribunal faster and more efficient. One of those items involves situations where the worker's employer has been covered by two or more insurers over the period during which the worker was employed in dust-exposed duties. At present, disputes between those insurers about which of them is liable have the capacity to hold up payment of damages to workers who have a clear entitlement. The proposed changes address that problem by designating the last relevant insurer as the one responsible for dealing with the worker's claim. Separate arbitration arranged through the tribunal is then provided to resolve the insurance issues, following determination of the worker's claim." See QBE Insurance Ltd v Bull [1999] NSWCA 185; (1999) 18 NSWCCR 170 at [7]. Background 82Mr Horsell, the plaintiff in the proceedings before the Tribunal, had been employed by the applicant at Kensington from 6 October 1965 until 6 February 2004. The evidence before the Tribunal was that he had been exposed to and had inhaled asbestos dust and fibre from the time he commenced employment until the early 1980s. There was also some evidence before the Tribunal that he may have been exposed to asbestos cement sheeting in about October 1987. There was no evidence before the Tribunal that Mr Horsell had been exposed during the course of his employment to asbestos during the period from the early 1980s to October 1987. 83Mr Horsell was diagnosed as suffering from mesothelioma in late 2012. That diagnosis was confirmed on 3 January 2013. He commenced proceedings in the Tribunal against the applicant on 28 June 2013 alleging that the applicant was in breach of various duties it owed to him by permitting him to be exposed to asbestos during the course of his employment from about 1965 until about 2004. On 19 July 2013, the applicant settled the proceedings without any admission of liability for $400,000. That sum has since been paid by it. 84During the period of Mr Horsell's employment up until 30 June 1987, the applicant was insured with a number of insurers against liability to pay compensation outside the relevant Workers Compensation Acts. The primary judge noted that the parties agreed that prior to 1 January 1981 the applicant was insured with GIO General Limited; between 1 January 1981 and 31 December 1983 with National Employers' Mutual Insurance Association Limited ("NEM"), between 1 January 1984 and 31 December 1986 with AAI (then known as Vero Insurance Limited) and between 1 January 1987 and 30 June 1987 with FAI Traders Insurance Company Pty Limited. Since then, it has been self-insured. NEM was placed into liquidation in May 1990 and was deregistered in October 2013. FAI was placed into liquidation in August 2001, but it appears that it remains registered. Pursuant to arrangements that are unclear from the material before the court, in 2013, AAI "assumed the liabilities" of GIO General (to use the words of the primary judge). 85Section 226 provides for the Minister, by order published in the Gazette, to declare that an insurer is an insolvent insurer. The parties have seemingly proceeded on the basis that such orders have been made in relation to NEM and FAI. Following the making of such orders, all the rights vested in FAI and NEM and all the obligations imposed on them relating to their respective policies of insurance and Mr Horsell's claim were vested in the applicant by s 231(5) of the Act. Under s 232(1) of the Act, where an employer insured under a policy of insurance issued by an insolvent insurer has satisfied any claim, the "Authority" (that is, WorkCover) may pay out of the Insurers' Guarantee Fund established in accordance with s 227 of the Act an amount equal to the whole or any part of the amount paid by the employer. Section 232(2) gives a similar right to a liquidator of an insolvent insurer who has paid a claim. Section 232(4) makes it clear that the power to reimburse an employer or liquidator is exercisable at the absolute discretion of the Authority. It is common ground that the Authority is not, by virtue of these provisions, an insurer for the purpose of ss 151AB and 151AC. 86On 11 July 2013, Moray & Agnew, the solicitors for the applicant, wrote to GIO and Hunt & Hunt, the solicitors for "the Insurer's Guarantee Fund" in its capacity as the entity from which the applicant was entitled to seek indemnity in respect of a claim that it would have had against NEM. Relevantly, the letter asserted that, in the period before 30 June 1987, Mr Horsell was exposed to asbestos up until the early 1980s; and that, depending on the precise date, the last date he was exposed was either at a time when the applicant was insured with GIO (up until 1 January 1981) or when the applicant was insured with NEM (up until 31 December 1983). The solicitors went on to observe that the applicant would continue to deal with Mr Horsell's claim. 87Hunt & Hunt replied to that letter on 18 July 2013. They denied that the Fund was liable on the basis that the evidence suggested that Mr Horsell was last exposed to asbestos in October 1987. 88On 23 July 2013, Moray & Agnew sent a further letter to GIO, Hunt & Hunt and Thompson Cooper, the solicitors for the Fund in its capacity as the entity from which the applicant was entitled to seek indemnity in respect of a claim that it would have had against FAI. Moray & Agnew pointed out that, insofar as Hunt & Hunt asserted that the Fund was not liable because Mr Horsell had been exposed to asbestos after 30 June 1987, that involved a misunderstanding of the operation of s 151AB. After setting out the correct insurance position and observing that the applicant had settled Mr Horsell's claim, Moray & Agnew indicated that, unless the insurers could resolve which of them was liable to indemnify the applicant within seven days, the applicant would make an application for one of them to be appointed a designated insurer for the purposes of s 151AC of the Act. 89Both firms of solicitors acting for the Fund responded to that letter stating that the Fund was not an insurer and consequently could not be appointed a designated insurer. Both also asserted that that left GIO as the only insurer capable of being designated and that consequently there was not a dispute as to which of two or more insurers in a category of insurers was liable, with the result that s 151AC did not apply. Following further correspondence, the applicant filed the motion that gave rise to the decision which is the subject of this appeal. Decision at first instance 90The primary judge declined to make an order appointing AAI as the designated insurer. After setting out the relevant facts and observing that s 151AC applies where there is a dispute as to which of two or more insurers is liable to indemnify the employer, his Honour said: "There is no dispute as such. GIO General and Vero are now effectively one insurer. They are not disputing amongst themselves anything. There are no other insurers who are disputing anything. The fund that was set up to deal with NEM and FAI's insolvency is not an insurer. It cannot be a dispute in the terms of this section between AAI and that fund, it therefore follows that section 151AC does not apply." The parties' submissions on appeal 91Leave to appeal from an interlocutory decision of the Tribunal is required by s 32(4)(a) of the Dust Diseases Tribunal Act 1989 (NSW). An appeal only lies from a decision of the Tribunal "in point of law": s 32(1). 92The applicant submitted that the primary judge erred in point of law because he misconstrued the word "dispute" in s 151AC(1) of the Act and consequently failed to address the question raised by the section. Section 151AC(1) required the judge to address the nature of the dispute, not the parties to it. Here, there was a dispute as to which of the four insurers who had provided cover to the applicant during the period prior to 4.00 pm on 30 June 1987 was liable. The fact that only one of those insurers was a party to that dispute following amalgamations and insolvencies, and the fact that as a consequence only one insurer may have been available for appointment under s 151AC(4), did not alter the fact that there was a dispute as to the liability of the four insurers. 93The applicant submitted that that interpretation was consistent with the purpose of the provision, which was to ensure that, if there was a dispute concerning which insurer was liable, then one would be designated and that insurer would assume initial liability for the worker's claim. That would ensure that a worker who had a clear entitlement to compensation was not left out of pocket because there was a dispute concerning which insurer was liable. True it was that in this case the applicant had conducted the defence of the claim, negotiated its settlement and paid the settlement amount. But in many cases, employers would not be in a position to do so; and in those, the purpose of the provision would be defeated unless the section was given the construction for which the applicant contended. 94The applicant submitted that where there was no obvious alternative to AAI, it was open to and appropriate for this Court to make an order that AAI be the designated insurer. However, if the Court was not willing to do that, it accepted that the matter should be remitted to the Tribunal to determine the application in accordance with the Court's judgment. 95AAI resisted the grant of leave on three bases. First, it submitted that the purpose of s 151AC was to ensure that the worker's claim was not delayed by the dispute between the insurers. In the present case, that claim has been dealt with so that there was no further work for the section to do and it was not engaged for that reason. Second, it submitted that, on the material before the court, it was unclear whether there was a dispute of the requisite character. There could be no dispute with NEM because it no longer existed. The same may be true of FAI because it was in liquidation. The Authority could not be a party to the dispute because it was not an insurer; and, even assuming that GIO and AAI could be treated as different insurers, it was not obvious that there was a dispute between them concerning which was liable. The mere fact that both had denied liability was not sufficient to establish that there was a dispute as to which was liable: QBE Insurance (Australia) Ltd v Dust Diseases Tribunal of NSW [2011] NSWCA 421. Third, AAI submitted that there was no utility in the application. It will still be necessary to resolve the underlying dispute, which is likely to depend on further factual investigations and may depend on the interpretation of s 151AB. Even if the effect of designation was to impose an obligation on AAI to pay the applicant the amount of the claim in advance of the resolution of the dispute, that was not a significant consideration in the context of this case. There was no question concerning the solvency of either AAI or the applicant and any delay in payment to the applicant could be addressed by an award of interest. Those matters made the case an unsuitable vehicle for determining any substantive issue concerning the operation of s 151AC. Consideration 96Section 151AC is triggered if there is a dispute as to which of two or more insurers in a category of insurers is liable to indemnify the employer. An insurer is only in a category of insurers if the insurer falls within one of the paragraphs of subs (3) and is in dispute concerning the question whether it is liable to indemnify the employer in respect of a liability that arose under s 151AB before 4.00 pm on 30 June 1987 or a liability that arose after that time. Subsection (3) in substance provides that the designated insurer is the insurer who last provided cover in the period before 4.00 pm on 30 June 1987 and the insurer who last provided cover after that time. The insurers in each category can choose an alternative designated insurer or the Tribunal can order that any one of them be the designated insurer. 97Contrary to the submissions of the applicant, it is not possible in applying these provisions to separate the dispute from the parties to it. The applicant would read the expression in s 151AC(1) "dispute as to which of 2 or more insurers in a category of insurers is liable" as a reference to a dispute concerning which of the policies as issued responded, and it would determine the question whether or not a dispute existed by asking whether parties who had an interest in that question were in dispute concerning the answer to it, whether or not they could be described as "insurers". 98But that interpretation cannot be reconciled with the words of the section. Two things are apparent from subss (1) and (3) and the definition of "category" of insurers. The first is that it is necessary to identify a dispute. Without a dispute, the question of designation cannot arise. Second, it is necessary to identify the insurers who are "in dispute", since it is from the class of insurers who are in dispute and fall within one of the categories set out in subs (3) that the designated insurer is to be identified. Under subs (4), the Tribunal can only order that "any one of them" - that is, any one of the insurers in dispute - be the designated insurer. 99The conclusions of the previous paragraph are reinforced by the other provisions of s 151AC. In particular, subs (9) says that the dispute is not resolved until it has been determined "which of the insurers in dispute was the insurer when the worker was last employed at the relevant time by the employer in an employment to the nature of which the disease was due" (emphasis added). Subsection (10) sets out the obligations of the "insurer who is liable" if it is not the designated insurer. Subsection (12) provides that "[a]n insurer may be or become a party to the dispute even though the insurer was not a party to or represented in the original proceedings ..." (emphasis added). The interpretation contended for the by applicant cannot readily be reconciled with these provisions, which are expressly confined to insurers. 100The interpretation contended for by the applicants would also have the odd consequence that the insurer identified by subs (3) may not exist or may be insolvent. The applicant seeks to address that difficulty by submitting that it is always open to the Tribunal to appoint an insurer under subs (4). From a practical point of view, that may be so, but it is difficult to read subs (3) as contemplating that there will be no designated insurer if a dispute exists that triggers its operation. 101Section 151AC was clearly drafted on the assumption that all the insurers who may be liable in respect of a claim are solvent. Section 232 of the Act deals with the situation where the insurer who is liable is insolvent. Neither section deals expressly with the position where there is a dispute concerning when liability arose under s 151AB where one or more of the relevant insurers is insolvent or no longer exists. If s 151AC is engaged where one or more relevant insurers is insolvent, and it is open as the applicant suggests for the Tribunal to designate a solvent insurer where none is selected by subs (3), that may have the effect of making an insurer who is solvent the designated insurer, with the consequence that that insurer becomes responsible for paying the worker's claim. However, that will occur in circumstances where the Act does not provide any mechanism for that insurer to recover from the Fund if ultimately it is determined that the liability arose at a time when the employer was insured with an insolvent insurer and where no other mechanism for recovery may be available. The result would be to make an insurer, who had no liability for a claim, liable for the claim of an insolvent insurer in circumstances where the Act contains specific provisions to deal with that eventuality. 102The applicant submitted that the Authority could be made a party to the dispute resolution mechanism set out in s 151AC and that that was consistent with the fact that subs (7) referred to the "parties" to the dispute. It was submitted that the expression "parties" was sufficiently wide to encompass the Authority. However, for the reasons already given, that submission is difficult to reconcile with the other provisions of the section dealing with dispute resolution. Moreover, the submission does not explain how, as a party to the dispute, the Authority could be made liable to pay out of the Fund amounts required to reimburse the designated insurer for amounts that it has paid and for which it is not liable. 103These points raise the question whether s 151AC was intended to apply where one or more of the relevant insurers is insolvent and, if it does, whether the Tribunal should make an order dispensing with the operation of s 151AC pursuant to r 12 of the Dust Diseases Tribunal Rules. The first of these possibilities was not the subject of submissions to the Court and I express no view on it. The second is a matter for the Tribunal having regard to the particular circumstances of the case. Whatever the position, the primary judge was correct to conclude that s 151AC could not apply unless there was more than one insurer who was a party to the dispute. 104There are issues concerning the correct construction of s 151AC that cannot be resolved in the present case. However, the primary judge was correct in the conclusion that he reached. Moreover, even if he was not, the position was that the employee had been paid his compensation so that the principal aim of the section had been achieved. The liability was borne by the applicant who is entitled to make a claim to be reimbursed from the Fund. On the material before the Tribunal, the question appeared to be whether the applicant's liability arose at the time that the applicant had cover from NEM (that is, between 1 January 1981 and 31 December 1983), which, on the available evidence seemed likely, or at the time the applicant had cover from GIO (that is, before 1 January 1981) or from AAI (that is, between 1 January 1984 and 31 December 1986). That question would need to be resolved whether or not the Tribunal made an order that AAI was the designated insurer; and further complications would have arisen if AAI had been appointed but was ultimately found not to be liable. The applicant could point to no prejudice it suffered as a consequence of the dismissal of its motion, other than the fact that it was out of pocket for at most $400,000 together with the costs it incurred in respect of Mr Horsell's claim. The primary judge's refusal to order that AAI be the designated insurer was, in the circumstances, a practical and sensible one. For those reasons, I would refuse leave to appeal with costs. ********** Amendments 27 March 2015 - Typographical errors amended in paras 1, 6, 16, 30, 37 and 38 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. Decision last updated: 27 March 2015