Allianz Australia Insurance Ltd v Insurance Australia Ltd trading as NRMA Insurance - [2006] ACTSC 35

ALLIANZ AUSTRALIA INSURANCE LTD v INSURANCE AUSTRALIA LTD trading as NRMA INSURANCE [2006] ACTSC 35 (21 APRIL 2006)

INSURANCE – double insurance – liability to contribute where workers’ compensation deduction made from judgment sum – deduction not authorised by workers’ compensation legislation.
WORKERS’ COMPENSATION – rehabilitation expenses – settlement negotiations between plaintiff and worker for common law claims – whether agreed settlement amount should include a provision to indemnify the employer for rehabilitation expenses paid – employer’s expenditure not recoverable under Workers Compensation Act 1951 (ACT), s 15C – expenditure not received by worker nor categorised as ‘compensation paid or payable to a person for the benefit of the worker’.

Corporations Law, s 601 AG

Workers Compensation Act 1951 (ACT), s 15C
Motor Traffic Act 1936 (ACT) (repealed), s 54
Workers Compensation Amendment Bill 2006 (ACT), s 13

Albion Insurance Company Limited v Government Insurance Office of New South Wales (1969) 121 CLR 342
Commercial and General Insurance Company Limited v Government Insurance Office of New South Wales (1973) 129 CLR 374
Andrikis v The Nominal Defendant (2004) 190 FLR 136
Brooker v Adecco Australia & Adecco Centacom P/L & Australian Capital Territory [2002] ACTSC 71 (26 July 2002)

No. SC 569 of 2005

Judge: Gray J
Supreme Court of the ACT

Date: 21 April 2006

IN THE SUPREME COURT OF THE       )
  )          No. SC 569 of 2005
AUSTRALIAN CAPITAL TERRITORY    )

BETWEEN:ALLIANZ AUSTRALIA INSURANCE LTD
Plaintiff

AND:INSURANCE AUSTRALIA LTD trading as NRMA INSURANCE
Defendant

ORDER

Judge:  Gray J
Date:  21 April 2006
Place:  Canberra

THE COURT ORDERS THAT:

The parties be heard further as to the orders that should be made.

This is a dispute between two insurance companies as to the application of the principle of double insurance where both insurers indemnified their insured in respect of the same incident which gave rise to a claim in damages against that insured.

The plaintiff, Allianz Australia Insurance Ltd (Allianz), was the insurer of an employer of a worker who sued his employer for damages for personal injury arising out of his employment and which also arose out of the use of a motor vehicle. The defendant, Insurance Australia Ltd trading as NRMA Insurance (ICA), was the comprehensive third party insurer of the employer as the owner of the motor vehicle.

The worker’s claim

The worker’s claim against the employer was for the employer’s negligence, breach of contract of employment and breach of statutory duty. The incident giving rise to the claim for damages involved the worker lifting a large crate containing “refrigerated parts” off the back of the employer’s truck. There were two incidents, one on 19 June 1997 and a similar attempted lift on the next day. The worker alleged injury to his neck and right shoulder and, as a result of the incident, he claimed that he was unable to work. His claim for damages proceeded directly against the plaintiff as the employer company had been deregistered under the Corporations Law after the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Allianz Australia Insurance Ltd v Insurance Australia Ltd trading as NRMA Insurance [2006] ACTSC 35
Case: [2006] ACTSC 35
Decision Date

CaseChat Overview and Summary

The Supreme Court of the Australian Capital Territory considered a dispute between Allianz Australia Insurance Ltd (Allianz), the worker's compensation insurer, and Insurance Australia Ltd trading as NRMA Insurance (ICA), the third-party motor vehicle insurer. The issue arose from a claim made by an employee against their employer, Allianz's insured, for personal injury stemming from workplace incidents involving a motor vehicle. The central legal issue was the application of the double insurance principle and whether the employer was entitled to reimbursement for rehabilitation expenses paid under the Workers' Compensation Act 1951 (ACT).

The court examined the terms of both insurance policies and the legislative framework governing workers' compensation and motor vehicle insurance. Allianz's policy covered the employer's liability for damages arising from the incident, including those independent of the Workers Compensation Act 1951 (ACT). ICA's policy, authorized under the repealed Motor Traffic Act 1936 (ACT), insured the employer as the owner of the vehicle against liability for injuries caused by its use. The court recognized the principle that insurers must contribute equally to the burden of the insured's claim when double insurance exists.

The court found that the rehabilitation expenses were not compensation payable under the Workers Compensation Act and therefore should not have been deducted from the judgment sum. The court held that the deduction was improper as it did not relate to the worker's common law claim against the employer. The court concluded that ICA should contribute to half the settlement amount and half the costs of the proceedings, subject to Allianz rectifying the payment to the worker.

The court deferred making final orders regarding the costs and contributions pending further submissions from the parties. The decision emphasized the importance of correctly interpreting insurance policies and statutory provisions to ensure that all parties fulfill their obligations under the double insurance principle.

Orders