CGU Insurance Limited v AAI Limited; CGU Insurance Limited v AAI Limited

The appeal concerned the liability of insurers under the *Workers Compensation Act 1987* (NSW) for the indemnified employer of a worker exposed to asbestos. The dispute centred on when an insurer's liability for an occupational disease caused by asbestos exposure was deemed to arise, specifically in relation to section 151AB of the Act. The primary judge had made certain orders regarding this liability and costs, which were under challenge.

The Court of Appeal was required to determine whether, for the purposes of section 151AB, the liability of an insurer for an injury or disease caused by exposure to asbestos fibre during a particular period arose when the worker was last employed in that period, or if a more detailed inquiry into the actual employment or the nature of the employment was necessary. Additionally, the court considered whether a *Bullock* order for costs was appropriately made against the unsuccessful party, and whether an order for costs on an indemnity basis was warranted.

The Court of Appeal allowed the appeal, setting aside the orders of the Dust Diseases Tribunal. The court reasoned that the liability of the insurer under section 151AB arose at the time of the last employment in the relevant period, without requiring a specific inquiry into the actual employment or its nature beyond that. The court found that the primary judge had erred in this regard. Consequently, the court made new orders, including judgment in favour of the cross-claimant against the first cross-defendant for a specified sum and a proportion of the plaintiff's costs, as well as costs orders concerning the cross-claim and the second cross-defendant. The second matter was dismissed with no order as to costs.