Gordian Runoff Ltd v Heyday Group Pty Ltd

Gordian Runoff Ltd (the insurer) appealed a decision concerning a workers compensation policy issued to a sub-contractor. The dispute arose after an injured worker obtained judgments against both the sub-contractor (the insured employer) and the head-contractor (a non-employer joint tortfeasor). The head-contractor sought to recover an amount it had paid to the worker, pursuant to a contractual indemnity from the sub-contractor, from the sub-contractor's workers compensation insurer.

The central legal issue before the Court of Appeal was whether the insurer's statutory workers compensation policy responded to the claim made by the head-contractor. Specifically, the court had to determine if the insurer was liable to indemnify the head-contractor for the amount it paid to the injured worker, given that the head-contractor was a joint tortfeasor with the insured employer, and there was a contractual indemnity between them. This involved considering the application of section 151Z(2) of the *Workers Compensation Act 1987* (NSW) and the principles of joint and concurrent tortfeasorship under the *Law Reform (Miscellaneous Provisions) Act 1946* (NSW).

The Court of Appeal reasoned that the insurer's liability under section 151Z(2) was engaged only in respect of the liability of the employer. The section did not extend to indemnifying a non-employer joint tortfeasor for amounts paid to an injured worker, even where that non-employer tortfeasor had a contractual right of indemnity against the employer. The court affirmed that the statutory policy was designed to cover the employer's liability to its employees, not to indemnify other parties who might be found liable as concurrent tortfeasors. The appeal was accordingly dismissed.