Australian and International Insurances Ltd v Workers' Compensation Commission (NSW)

Australian and International Insurances Ltd (the appellant) appealed to the High Court of Australia from a decision of the Supreme Court of New South Wales, which had affirmed a determination made by the Workers' Compensation Commission of New South Wales (the respondent). The dispute concerned the appellant's liability to pay compensation under the *Workers' Compensation Act 1926* (NSW) to a worker who had suffered injury.

The central legal issue before the High Court was whether the appellant, as an insurer, was entitled to rely on a defence under section 18(3) of the *Workers' Compensation Act 1926* (NSW) to avoid liability for the worker's injury. This defence was predicated on the employer's alleged failure to notify the insurer of the worker's claim within the prescribed time. The court was required to determine the proper construction of section 18(3) and its application to the facts of the case, particularly in relation to the insurer's knowledge of the claim.

The High Court, in allowing the appeal, held that the appellant was not entitled to rely on the defence under section 18(3). The court reasoned that the employer's notification to the insurer, although not in strict compliance with the formal requirements of the Act, was sufficient to bring the claim to the insurer's attention. The insurer had been made aware of the worker's injury and the potential claim, and had in fact commenced investigations and made payments of compensation. Therefore, the insurer had not been prejudiced by any delay or informality in the notification process, and the statutory defence was not available. The court applied the principle that a statutory defence should not be invoked where the purpose of the provision, which is to prevent prejudice to the insurer, has not been frustrated.