ICI Australia Operations Pty Ltd v Workcover Authority of New South Wales - [2004] NSWCA 55

No judgment structure available for this case.

Reported Decision:
60 NSWLR 18

Court of Appeal

CITATION: ICI Australia Operations Pty Limited (now known as Orica Australia Pty Limited) & 1 Ors v The WorkCover Authority of New South Wales [2004] NSWCA 55 revised - 12/03/2004

HEARING DATE(S): 2 May 2003

JUDGMENT DATE:
11 March 2004

JUDGMENT OF: Mason P at 1; Meagher JA at 2; McColl JA at 4

DECISION: The Appeal 1. Appeal allowed. 2. Declare that the WorkCover Authority of New South Wales is liable to indemnify ICI Australia Operations Pty Limited (now known as Orica Australia Pty Limited) in respect of the damages and costs paid to George Roland Brazier in and arising out of proceedings in the Dust Diseases Tribunal of New South Wales numbered 169 of 1997 between George Roland Brazier and ICI Australia Operations Pty Limited (now known as Orica Australia Pty Limited). 3. Order the WorkCover Authority of New South Wales to pay the costs of and associated with the Appeal and in the Court below. The Cross-Appeal 1. Cross-Appeal dismissed. 2. Cross-appellant to pay the costs of the Cross-Appeal.

CATCHWORDS: WORKERS COMPENSATION - DUST DISEASES - INSURANCE - meaning of "employment to the nature of which the disease was due" in s 151AB of the Workers Compensation Act 1987 - whether the Court is required to have regard to the actual occupational disease suffered by the worker - standard of proof required - extent to which Judges of the Dust Diseases Tribunal are entitled to rely upon their knowledge as members of a specialised tribunal - insolvent insurers - whether s 232 of the Workers Compensation Act 1987 confers a discretion on the WorkCover Authority to make payments out of the Insurers' Guarantee Fund - capacity in which an insurer designated pursuant to s 151AC of the Workers Compensation Act 1987 makes a payment to or on behalf of an employer - whether the WorkCover Authority has power to reimburse an employer pursuant to s 232 where the employer's liability has been discharged by the designated insurer - effect of undertaking to the Dust Diseases Tribunal by the WorkCover Authority that it would reimburse employer - D

LEGISLATION CITED: Commonwealth Employees Compensation Act 1930-1956 s 10(1)
Courts Legislation Amendment Act 1998 (NSW)
Dust Diseases Tribunal Act 1989 (NSW) s 11A, s 32, s 32(1)
Interpretation Act 1987 (NSW) s 5, s 9
WorkCover Legislation (Amendment) Act 1995 (NSW)
Workers Compensation (Benefits) Amendment Act 1989 (NSW)
Workers' Compensation Act 1912 (NSW) s 12
Workers' Compensation Act 1926 (NSW) s 6, s 7, s 7(4), s 7(5), s 18(1), s 18(6A), s 18(6B), Part IIIB, s 30Q(2)
Workers Compensation Act 1987 (NSW) s 3, s 34, s 93, s 124, Part 5 Division 5, s 151AB, s 151AB(1), s 151AB(1)(a), s 151AB(1)(b), s 151AB(2), s 151AB(6), s 151AC, s 151AC(1), s 151AC(2), s 151AC(5), s 151AC(5)(a), s 151AC(6), s 151AC(9), s 151AC(10), s 151AC(10)(a), s 159, s 159(2), s 159(3), s 159(5), Part 7 Division 3, Part 7 Division 6, s 218(2), s 221, s 221(2), s 221(4), s 221A, s 222, Part 7 Division 7, s 225, s 225(1), s 226, s 226(1), s 227, s 227(1), s 227(2), s 227(3), s 227(4), s 228, s 228(1), s 228(2), s 228(2A), s 228(2B), s 228(4), s 229, s 230, s 231, s 231(2), s 231(2)(b), s 231(3), s 231(4), s 231(7), s 232, s 232(1), s 232(2), s 232(3), s 232(4), s 233, s 233(1), s 233(2), s 233(3), s 233(4), s 234, s 234(1), s 234(1)(a), s 235, s 236, s 236(2), s 236(3), s 236(4)
Workers Compensation (Amendment) Act 1985 (NSW) Schedule 5
Workers Compensation (Amendment) Act 1991 No 2 (NSW) Schedule 3 [9]
Workers' Compensation (Dust Diseases) Act 1942 (NSW) s 3, Schedule 1
Workers' Compensation (Dust Diseases) Amendment Act 1967 (NSW)
Workers Compensation Legislation Amendment Act 1998 (NSW) Schedule [163]
Workers Compensation Legislation Amendment (Dust Diseases & Other Matters) Act 1998 (NSW)
Workmen's Compensation Act 1906 (UK) s 8, s 8(1), s 8(1)(a), s 8(1)(c)(iii)
Workmen's Compensation Act 1925 (UK) s 43
Workmen's Compensation Ordinance 1949 (NT) s 9(1)(a)

CASES CITED: Anderson Stuart v Treleaven (2000) 49 NSWLR 88
Austin v Zurich General Accident & Liability Insurance Company Limited [1945] KB 250
Azzopardi v Tasman UEB Industries (1985) 4 NSWLR 139
Blatchford v Staddon and Founds [1927] AC 461
Brazier v ICI Australia Operations Pty Ltd (2000) 19 NSWCCR 623
Bryer v Metropolitan Water Sewerage & Drainage Board (1939) 39 SR (NSW) 321
Bull v Attorney-General (NSW) (1913) 17 CLR 370
Castellain v Preston (1883) 11 QBD 380
Chubb Australia Limited v Mercantile Mutual Insurance (Workers Compensation) Limited [1999] NSW DDT 7; (1999) 17 NSWCCR 537
CIC Workers' Compensation (NSW) Limited v Alcan Australia Limited (1994) 35 NSWLR 169
CIC Workers' Compensation (NSW) Ltd v Kellogg (Australia) Pty Ltd (1996) 40 NSWLR 422
Commissioner of State Revenue (Victoria) v Royal Insurance Australia Limited (1994) 182 CLR 51
Connair Pty Ltd v Frederiksen (1979) 142 CLR 485
Di Cecco v Mercantile Mutual Insurance (Workers Compensation) Limited [2002] NSWDDT 1; (2002) 23 NSWCCR 143
Ellerbeck Collieries Limited v Cornhill Insurance Co [1932] 1 KB 401
Enterprise Colorvideo Productions Pty Limited v Corporate Affairs Commission (NSW) [1984] 1 NSWLR 223
Fisher v Hebburn Ltd (1960) 105 CLR 188
GIO General Ltd v ABB Installation & Service Pty Ltd [2000] NSWCA 118; (2000) 19 NSWCCR 720
Government Insurance Office of NSW v Colgate Palmolive Pty Ltd (2001) NSWCA 24; (2001) 50 NSWLR 729; (2001) NSWCCR 436
Hopwood v Textile Paper Tube Co Ltd [1946] 1 All ER 618
J & H Timbers Pty Limited v Nelson (1972) 126 CLR 625
Kealley v Jones [1979] 1 NSWLR 723
Kemp v Darling Island Stevedoring & Lighterage Co Limited (1959) 76 WN (NSW) 707
King v Victoria Insurance [1896] AC 250
Malathounis v H & J Pappas t/as Pappas Excavations & Ors (1996) 13 NSWCCR 438
Manufacturers' Mutual Insurance Ltd v Goodyear Australia Ltd (1997) 15 NSWCCR 538
Orica Limited v CGU Insurance Ltd [2003] NSWCA 331
Pavey & Mathews Pty Limited v Paul (1987) 162 CLR 221
QBE Insurance Limited v Bull [1999] NSWCA 185; (1999) 18 NSWCCR 169
R v City of Westminster Assessment Committee [1941] 1 KB 53
R v Norfolk County Council (1891) 60 LJ QB 379
Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516
Samad v District Court of New South Wales (2002) 209 CLR 140
Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262
Smith v Mann [1932] HCA 30; (1932) 47 CLR 426
State Mines Control Authority v GIO (NSW) (1964) 65 (SR) (NSW) 258
Sydney Turf Club v Crowley [1971] 1 NSWLR 724
Tame v Commonwealth Collieries Pty Limited (1947) 47 SR (NSW) 269
The Commonwealth v Bourne (1960) 104 CLR 32
The Commonwealth v Thompson (1960) 104 CLR 48
Thorby v Goldberg (1964) 112 CLR 597
Transport Accident Commission v C.M.T. Construction of Metropolitan Tunnels and Another (1988) 165 CLR 436
Wallaby Grip (BAE) Pty Limited (in liq) v Macleay Area Health Service (1998); 17 NSWCCR 355
Ward v Williams (1955) 92 CLR 496
Wellcome Australia Ltd v Australian Eagle Insurance Co Ltd (1993) 34 NSWLR 269
WorkCover Authority of NSW v Chubb Australia Ltd [2000] NSWCA 221; (2000) 20 NSWCCR 614
Workers Compensation Board of Queensland v WorkCover Authority of New South Wales (1995) 36 NSWLR 732
Wunderlich Ltd v Manufacturers' Mutual Insurance Ltd [1981] 2 NSWLR 678

PARTIES :
ICI Operations Pty Limited (now known as Orica Australia Pty Limited) (First Appellant/First Cross-Claimant)
CGU Insurance Limited (Second Appellant/Second Cross-Claimant)
The WorkCover Authority of New South Wales (Respondent/Cross-Defendant)
FAI Traders Insurance Company Ltd (Third Respondent/Cross-Appellant)
FAI Workers Compensation (NSW) Ltd (Fourth Respondent/Cross-Appellant)

FILE NUMBER(S): CA 40628/02

COUNSEL: Mr J D Hislop QC/Mr G P F Rundle (First/Second Appellants) & (First/Second Cross-Respondents) (ICI/CGU)
Mr G F Little SC/Mr G J Parker (First Respondent/Cross-Appellant) (Workcover)
Mr C R R Hoeben SC/N E Chen (Third Respondent/Third Cross-Respondent) (FAI Traders)
Mr G M Watson SC (Fourth Respondent/Fourth Cross-Respondent) (FAI Workers Compensation)

SOLICITORS: Phillips Fox (First/Second Appellants) & (First/Second Cross-Respondents) (ICI/CGU)
Turks Legal (First Respondent/Cross-Appellant) (WorkCover)
Sparke Helmore (Third Respondent/Third Cross-Respondent) (FAI Traders)
Moray & Agnew (Fourth Respondent/Fourth Cross-Respondent) (FAI Workers Compensation)

LOWER COURTJURISDICTION: Dust Diseases Tribunal

LOWER COURT FILE NUMBER(S): DDT 169/97

LOWER COURT
JUDICIAL OFFICER : Curtis J

CA 40628/02
DDT 169/97

MASON P
MEAGHER JA
McCOLL JA
Thursday, 11 March 2004

ICI AUSTRALIA OPERATIONS PTY LIMITED (now known as ORICA AUSTRALIA PTY LIMITED) & 1 Ors v THE WORKCOVER AUTHORITY OF NEW SOUTH WALES

George Roland Brazier was employed by ICI Australia Operations Pty Limited (“ICI”) between 1950 to 1951, 1953 to 1954 and 1955 to 8 July 1988. He commenced proceedings in the Dust Diseases Tribunal against ICI on 3 November 1997 in which he sought to recover damages in relation to medical conditions from which he alleged he suffered as a result of exposure to the inhalation of asbestos dust and fibres during his employment. Mr Brazier’s proceedings were settled in August 2000 for $100,000 plus costs. Those monies were paid to Mr Brazier by CGU Insurance Limited (“CGU”) which had been appointed ICI’s designated insurer pursuant to s 151AC(2) of the Workers Compensation Act 1987 (NSW) (“the Act”).

Mr Brazier’s proceedings against ICI led to three hearings in the Dust Diseases Tribunal. The first concerned ICI’s application for an order pursuant to s 151AC of the Act which led to Armitage J appointing CGU the designated insurer on 26 April 2000. In the second hearing, Curtis J determined, for the purposes of s 151AB of the Act, that Mr Brazier had last been employed by ICI in employment to the nature of which his disease was due in August 1984 (the “Liability Proceedings”). The effect of that conclusion was that the insurer on risk during the relevant period was NEM, which was an “insolvent insurer” for the purposes of s 226(1) of the Act. Part 7 Division 7 of the Act gives the WorkCover Authority of NSW (the “WorkCover Authority”) the power to make payments from the Insurers’ Guarantee Fund to, among others, employers who would, but for an insurer’s insolvency, be entitled to indemnity under an insurance policy issued by the insolvent insurer. ICI and CGU sought to recover the damages and costs associated with Mr Brazier’s proceedings from the Insurers’ Guarantee Fund. In the final hearing Curtis J held they were not entitled to recover those monies (the “Indemnity Proceedings”).

ICI and CGU appealed, challenging Curtis J’s decision in the Indemnity Proceedings (the “Indemnity Appeal”). The WorkCover Authority cross-appealed, challenging Curtis J’s decision in the Liability Proceedings that Mr Brazier was last employed in August 1984 in an employment to the nature of which his disease was due (the “Liability Cross-Appeal”).

HELD per McColl JA (Mason P and Meagher JA agreeing):

Allowing the appeal:

1. Section 232 of the Act confers a discretion on the WorkCover Authority whether to make payments out of the Insurers’ Guarantee Fund: Workers Compensation Board of Queensland v WorkCover Authority of New South Wales (1995) 36 NSWLR 732; Samad v District Court of New South Wales (2002) 209 CLR 140 referred to; Chubb Australia Limited v Mercantile Mutual Insurance (Workers Compensation) Limited [1999] NSW DDT 7; (1999) 17 NSWCCR 537 overruled.

2. An insurer designated pursuant to s 151AC of the Act which discharges an employer’s liability for damages in respect of an occupational disease contracted by a worker makes that payment as statutory agent for the employer: QBE Insurance Limited v Bull [1999] NSWCA 185, (1999) 18 NSWCCR 169 referred to and explained.

3. The WorkCover Authority has power to reimburse an employer pursuant to s 232 of the Act where the employer’s liability for damages in respect of an occupational disease contracted by a worker has been discharged by an insurer designated pursuant to s 151AC of the Act: QBE Insurance Limited v Bull [1999] NSWCA 185, (1999) 18 NSWCCR 169 explained.

4. By undertaking to Armitage J that it would reimburse ICI pursuant to s 232 of the Act in relation to any liability ICI incurred to Mr Brazier, the WorkCover Authority effectively and lawfully bound itself as to how it would exercise its statutory discretion: Thorby v Goldberg (1964) 112 CLR 597 referred to.

5. The WorkCover Authority was bound to honour its undertaking to Armitage J.

Dismissing the cross-appeal:

6. In determining, for the purposes of s 151AB of the Act, when a worker was last employed “in employment to the nature of which the disease was due”, the Court is required to have regard to the actual occupational disease suffered by the worker: Blatchford v Staddon and Founds [1927] AC 461; Smith v Mann [1932] HCA 30, (1932) 47 CLR 426; Tame v Commonwealth Collieries Pty Ltd (1947) 47 SR (NSW) 269; CIC Workers’ Compensation (NSW) Limited v Alcan Australia Limited (1994) 35 NSWLR 169; The Commonwealth v Bourne (1960) 104 CLR 32; The Commonwealth v Thompson (1960) 104 CLR 48; Connair Pty Ltd v Frederiksen (1979) 142 CLR 485; Wunderlich Ltd v Manufacturers’ Mutual Insurance Ltd [1981] 2 NSWLR 678; Wellcome Australia Ltd v Australian Eagle Insurance Co Ltd (1993) 34 NSWLR 269; CIC Workers’ Compensation (NSW) Ltd v Kellogg (Australia) Pty Ltd (1996) 40 NSWLR 422; Manufacturers’ Mutual Insurance Ltd v Goodyear Australia Ltd (1997) 15 NSWCCR 538; GIO General Ltd v ABB Installation & Service Pty Ltd [2000] NSWCA 118; (2000) 19 NSWCCR 720; WorkCover Authority of NSW v Chubb Australia Ltd [2000] NSWCA 221, (2000) 20 NSWCCR 614; Government Insurance Office of NSW v Colgate Palmolive Pty Ltd [2001] NSWCA 24; (2001) 50 NSWLR 729; (2001) NSWCCR 436 referred to.
7. To satisfy the test prescribed by s 151AB of the Act it must be established, on the balance of probabilities, that the nature of the worker’s employment exposed the worker to a risk of contracting the actual occupational disease from which he or she suffered: The Commonwealth v Bourne (1960) 104 CLR 32; Hopwood v Textile Paper Tube Co Ltd [1946] 1 All ER 618; GIO General Ltd v ABB Installation & Service Pty Ltd [2000] NSWCA 118; (2000) 19 NSWCCR 720; Manufacturers’ Mutual Insurance Ltd v Goodyear Australia Ltd (1997) 15 NSWCCR 538; GIO General Ltd v ABB Installation & Service Pty Ltd [2000] NSWCA 118; (2000) 19 NSWCCR 720 referred to.

8. Curtis J was entitled to rely upon his knowledge as a member of a specialised tribunal to express a view about the quantity of exposure to asbestos dust which might cause mesothelioma as opposed to that which might cause the diseases from which Mr Brazier suffered: Bryer v Metropolitan Water Sewerage & Drainage Board (1939) 39 SR (NSW) 321; Tame v Commonwealth Collieries Pty Ltd (1947) 47 SR (NSW) 269; J & H Timbers Pty Limited v Nelson (1972) 126 CLR 625; Kealley v Jones [1979] 1 NSWLR 723; Kemp v Darling Island Stevedoring & Lighterage Co Limited (1959) 76 WN (NSW) 707; Mechanical Advantage Group Pty Limited v George [2003] NSWCA 121, (2003) 25 NSWCCR 368; GIO General Ltd v ABB Installation & Service Pty Ltd [2000] NSWCA 118; (2000) 19 NSWCCR 720; Wallaby Grip (BAE) Pty Limited (in liq) v Macleay Area Health Service (1998) 17 NSWCCR 355 referred to.

ORDERS:

The Appeal

3. Order the WorkCover Authority of New South Wales to pay the costs of and associated with the Appeal and in the Court below.

The Cross-Appeal

2. Cross-appellant to pay the costs of the Cross-Appeal.

INDEX

Para No

Introduction
4

The Issues on Appeal
10

Outline of Statutory Background
15

Statement of the Case

The Pleadings
22

The Designated Insurer Proceedings
35

The Liability Proceedings
39

The Indemnity Proceedings
57

The Liability Cross-Appeal
75

The Authority’s Submissions
76

FAI Traders’ Submissions
88

FAI Workers’ Submissions
93

ICI
96

Industrial Diseases of Gradual Onset: Statutory Background

Nature of Employment Test: s 151AB
97

Insurers and Dust Diseases: s 151AC
115

Judicial Consideration

Nature of Employment Test and Employees
120

Nature of Employment Test and Insurers
144

The Liability Cross-Appeal: Consideration

Nature of Employment Test

Identifying the Disease
192

The level of exposure to risk
208

No Evidence Submission
216

The Liability Cross-Appeal: Conclusion
235

The Indemnity Appeal
237

Statutory Background
241

ICI’s Submissions
258

The Authority’s Submissions
271

The Indemnity Appeal: Consideration

Role of the Designated Insurer
287

Duty or Discretion
308

Content of the Authority’s Discretion
348

The Indemnity Appeal: Conclusion
374

Relief
376

Orders
378

CA 40628/02
DDT 169/97

MASON P
MEAGHER JA
McCOLL JA
Thursday, 11 March 2004

ICI AUSTRALIA OPERATIONS PTY LIMITED (now known as ORICA AUSTRALIA PTY LIMITED) & 1 Ors v THE WORKCOVER AUTHORITY OF NEW SOUTH WALES

Judgment

1 MASON P: I agree with McColl JA whose reasons for judgment I have had the privilege of reading.

2 MEAGHER JA: I agree with the orders proposed by McColl JA.

3 I agree generally with her Honour’s reasons.

4 McCOLL JA: George Roland Brazier was employed by ICI Australia Operations Pty Limited (“ICI”) between 1950 to 1951, 1953 to 1954 and 1955 to 8 July 1988. He commenced proceedings against ICI on 3 November 1997 in the Dust Diseases Tribunal in which he sought to recover damages in relation to medical conditions from which he alleged he suffered as a result of exposure to the inhalation of asbestos dust and fibres during his employment. Mr Brazier’s proceedings were settled in August 2000 for $100,000 plus costs. Those monies were paid to Mr Brazier by CGU Insurance Limited (“CGU”) which had been appointed ICI’s designated insurer pursuant to s 151AC(2) of the Workers Compensation Act 1987 (NSW) (the “1987 Compensation Act”).

5 The proceedings have a complex history. Mr Brazier’s proceedings against ICI led to three hearings in the Dust Diseases Tribunal. The first hearing concerned ICI’s application for the order pursuant to s 151AC of the 1987 Compensation Act for the appointment of a “designated insurer” (the “Designated Insurer Proceedings”). These proceedings led to Armitage J appointing CGU the designated insurer on 26 April 2000 in circumstances to which I will refer in more detail below. In the second hearing Curtis J determined, for the purposes of s 151AB of the 1987 Compensation Act, that Mr Brazier had last been employed by ICI in employment to the nature of which his disease was due in August 1984 (the “Liability Proceedings”).

6 During the period of Mr Brazier’s employment, ICI had arranged workers compensation insurance with a succession of insurers as set out below:

Date	Insurer
Prior to 30 September 1973	CGU
30 September 1973 to 30 September 1985	National Employers Mutual General Indemnity Association Limited (“NEM”)
30 September 1985 to 30 September 1987	FAI Traders Insurance Limited (“FAI Traders”)
30 September 1987 to 30 September 1989	FAI Workers Compensation (NSW) Limited (“FAI Workers”)

7 The effect of Curtis J’s conclusion in the Liability Proceedings was that the insurer on risk during the relevant period was NEM. It was common ground that, at all relevant times, NEM was an “insolvent insurer” for the purposes of s 226(1) of the 1987 Compensation Act.

8 The WorkCover Authority of NSW (the “Authority”) manages the Insurers’ Guarantee Fund (the “Guarantee Fund”) pursuant to Part 7, Division 7 of the 1987 Compensation Act. Division 7 gives the Authority power to make payments from the Guarantee Fund to, among others, employers who would, but for an insurer’s insolvency, be entitled to indemnity under an insurance policy issued by the insolvent insurer.

9 ICI and CGU sought to recover the damages and costs associated with Mr Brazier’s proceedings from the Guarantee Fund. In the final hearing Curtis J held they were not entitled to recover those monies (the “Indemnity Proceedings”).

The Issues on Appeal

10 ICI and CGU filed a Notice of Appeal challenging Curtis J’s decision in the Indemnity Proceedings rejecting their claim against the Authority for indemnity in respect of the amounts paid to satisfy Mr Brazier’s judgment and costs (the “Indemnity Appeal”).

11 The Authority filed a Notice of Cross-Appeal in which it challenged Curtis J’s decision in the Liability Proceedings that Mr Brazier was last employed on 15 August 1984 in an employment to the nature of which his disease was due (the “Liability Cross-Appeal”).

12 FAI Traders and FAI Workers were joined as respondents to the Liability Cross-Appeal.

13 In the course of the hearing of the appeal ICI/CGU sought and were granted leave to file an amended Notice of Appeal joining FAI Traders and FAI Workers as respondents to their appeal. The Amended Notice of Appeal complained that Curtis J had erred in not finding that either FAI Traders or FAI Workers was the insurer liable pursuant to s 151AB. It sought orders requiring one or other of those parties to indemnify ICI/CGU in respect of the judgment and costs paid and incurred in respect of Mr Brazier’s claim.

14 Although ICI and CGU were both parties to the proceedings below and were both appellants, their counsel, Mr Hislop QC, acknowledged that the claim against the Authority was in fact a claim on behalf of ICI and that ICI alone would have been the “appropriate vehicle” to mount the claim. The Authority did not dispute that proposition.

Outline of Statutory Background

15 The appeal and cross-appeal raise issues concerning two statutory schemes.

16 The first statutory scheme is that established by sections 151AB and 151AC of Part 5, Division 5 of the 1987 Compensation Act. Those provisions constitute part of a legislative scheme intended to ensure the efficient disposition of proceedings brought by an employee in relation to a disease of such a nature as to be contracted by gradual process (an “occupational disease”) against an employer insured for its workers’ compensation liabilities by a number of insurers during the period in which the occupational disease is said to have been contracted.

17 Section 151AB provides, in substance, that if an employer is liable at common law for damages for an occupational disease contracted by a worker, then, in order to identify from among a number of insurers under policies of insurance obtained by the employer for different periods which insurer or insurers is liable to indemnify the employer for the full amount of the damages or which is liable to pay the full amount of damages to the worker, the employer’s liability is taken to have arisen when the worker was last employed by that employer in an employment to the nature of which the disease was due.

18 The issue raised in relation to s 151AB concerns the nature of the test posed by the words “employment to the nature of which the disease was due” (the “nature of employment test”). The issue is whether the nature of employment test requires determining whether the nature of a worker’s employment exposed the worker to a risk of contracting the actual dust disease from which the worker suffered or, rather, requires determining whether the nature of the worker’s employment exposed the worker to a risk of contracting any dust-related disease.

19 The second statutory scheme is that established by Part 7, Division 7 of the 1987 Compensation Act to deal with the liabilities of an insolvent insurer. Three questions arise. First, is the Authority under an obligation or does it have a discretion whether to make payments out of the Guarantee Fund to an employer insured by an insolvent insurer where that employer has satisfied a judgment in respect of which it has not been indemnified under the policy issued by the insolvent insurer? Secondly, if it is under an obligation to make such payments, does it have power to make such payments where an insurer designated as such pursuant to s 151AC of the 1987Compensation Act discharged the employer’s liability? Thirdly, if it has a discretion whether to make such payments, do the circumstances of this case nevertheless require that it indemnify ICI in respect of the monies paid and costs incurred in respect of Mr Brazier’s proceedings?

20 The issues concerning Division 7 involve, as a subsidiary issue, the role of an insurer, designated as an insurer pursuant to s 151AC, which has indemnified an employer in respect of its liability for damages for an occupational disease contracted by an employee or former employee in circumstances where the insurer which, on the proper application of the nature of employment test, is the “insurer who is liable” (s 151AC(9)) to indemnify the employer for that liability, is insolvent.

21 Section 151AC provides, in substance, that where there is a dispute as to which of two or more insurers is liable to indemnify an employer who is liable at common law for damages for an occupational disease contracted by a worker, then for the purposes of s 151AB, and pending resolution of the dispute, the Dust Diseases Tribunal may designate an insurer which is “treated as being the insurer liable to indemnify the employer”.

Statement of the Case

The Pleadings

22 On 26 September 1999 ICI filed a First Cross-Claim against the Authority pleading that pursuant to the 1987 Compensation Act, the Authority was its agent and attorney in respect of the NEM policy. It asserted that if Mr Brazier recovered damages the Authority was liable to indemnify it in respect of such damages pursuant to s 151AB of the 1987 Compensation Act. It sought a declaration and orders to give effect to that assertion.

23 In March 2000 ICI, pursuant to an Amended Notice of Motion, sought orders that any of CGU, the Authority as the agent and attorney of NEM or FAI Traders be designated as its insurer pursuant to s 151AC.

24 On 5 June 2000 Mr Brazier filed an Amended Statement of Claim in which he alleged that in the course of his employment with ICI he had been exposed to asbestos fibres in circumstances constituting negligence and/or breach of statutory duty by ICI. The periods of exposure upon which he relied were 1950-1951, 1953-1954 and 1955-1982. He claimed provisional damages pursuant to s 11A of the Dust Diseases Tribunal Act 1989 (NSW) for the conditions of pleural plaques, extensive bilateral pleural thickening, asbestos related pleural disease and pulmonary asbestosis. He also sought an order that he might claim further damages pursuant to s 11A if he developed further asbestos related diseases.

25 CGU was appointed ICI’s designated insurer on 26 April 2000.

26 Mr Brazier’s claim was settled on 14 August 2000. CGU paid him damages in the sum of $100,000 as well as his costs of $56,103.

27 On 7 September 2000 ICI filed a Third Cross-Claim against FAI Traders and FAI Workers claiming indemnity pursuant to s 151AB in respect of the damages paid to Mr Brazier.

28 Subsequent to the settlement of Mr Brazier’s claim, ICI amended its First Cross-Claim against the Authority. In its Amended First Cross-Claim it pleaded that Mr Brazier had recovered damages from it in respect of the periods referred to in the Amended Statement of Claim, that the damages had been satisfied by CGU after it was named as the designated insurer, and that CGU had not indemnified ICI pursuant to s 151AB. ICI sought a declaration that the Authority was liable to indemnify it in relation to the damages paid to Mr Brazier.

29 ICI also amended its cross-claim against FAI Traders and FAI Workers. In its Amended Third Cross-Claim it pleaded that during the period from about 1982 until 1988, Mr Brazier had performed his employment duties in its fitters’ shop and been exposed to asbestos dust and fibres. It pleaded that Mr Brazier had recovered damages from it in respect of the periods referred to in the Amended Statement of Claim, that that amount had been satisfied by CGU after it was named as the designated insurer and that CGU had not indemnified ICI pursuant to s 151AB. ICI sought a declaration that either FAI Traders or FAI Workers was liable to indemnify it in relation to the damages paid to Mr Brazier.

30 ICI’s Amended First and Third Cross-Claims were amended yet again. The amendments added CGU as the Second Cross-Claimant. The Further Amended First and Third Cross-Claims asserted as against the Authority, FAI Traders and FAI Workers respectively that CGU was not ICI’s insurer at the time when Mr Brazier was last employed in employment to the nature of which his disease was due. ICI and CGU asserted that one or other of NEM, FAI Traders or FAI Workers was the insurer on risk when Mr Brazier was last employed in employment to the nature of which his disease was due. Insofar as the Authority was concerned, ICI/CGU asserted that NEM was relevantly on risk for the purpose of the nature of employment test and, again asserted that Mr Brazier’s damages had been satisfied by CGU after it was named as the designated insurer and that CGU had not indemnified ICI pursuant to s 151AB.

31 CGU claimed that any of the Authority, FAI Traders or FAI Workers was liable to indemnify it pursuant to s 151AC in respect to the damages paid to Mr Brazier. ICI and CGU sought orders giving effect to that assertion.

32 The Authority filed a defence to ICI/CGU’s Further Amended First Cross- Claim. It did not admit that NEM was on risk when Mr Brazier was last employed in employment to the nature of which the disease was due. It pleaded that it was not an insurer for the purposes of s 151AB or s 151AC and that it was not liable or entitled to make any payment except in accordance with Division 7 of Part 7 of the 1987 Compensation Act. It denied that ICI had satisfied the judgment. It relied without elaboration upon s 232(4) of the 1987 Compensation Act.

33 On 9 June 2002 ICI and CGU filed a Second Further Amended First Cross-Claim against the Authority in which they pleaded that ICI had satisfied Mr Brazier’s judgment by CGU’s payment to him of $100,000 by way of damages and $56,103 by way of costs. They also pleaded they had incurred expenses in defending his claim. In addition to the relief already sought, they sought a declaration that ICI had satisfied a claim, judgment or award in respect of which it had not been indemnified by NEM. The declaration picked up the terminology of s 232(1) of the 1987 Compensation Act.

34 The Authority does not appear to have filed a further defence to this document, no doubt taking the view that its earlier denial that ICI had satisfied Mr Brazier’s judgment sufficiently traversed the claim for a declaration.

The Designated Insurer Proceedings

35 The Designated Insurer Proceedings were heard by Armitage J, who, on 26 April 2000, ordered that CGU be designated as ICI’s insurer pursuant to s 151AC in relation to any liability ICI had to Mr Brazier in the proceedings: Brazier v ICI Australia Operations Pty Ltd (2000) 19 NSWCCR 623.

36 There is only one aspect of the Designated Insurer Proceedings which requires attention. Mr Parker, who appeared for the Authority before Armitage J, opposed ICI’s application that the Authority be appointed a designated insurer on the basis of two statements he proffered to the Court. He read those statements onto the record in the following terms:

“Mr Parker: ‘The WorkCover Authority consents to the defendant having conduct of the defence’ and secondly, ‘if the defendant satisfies any judgment then under section 232 of the 1987 Act the WorkCover Authority will reimburse the employer for the judgment paid.’ ”

37 Armitage J dealt with those statements in his judgment in two passages as follows:

Workers’ Compensation

Act

4. Mr Parker was careful not to paraphrase that obligation, and properly so, since he represents a statutory body with obligations defined within the four corners of the statute constituting it, but effectively that undertaking would seem to mean that if findings of fact are made which would, but for the insolvency of NEMGIA, have resulted in that insurer being liable under s 151AB of the Act, then the WorkCover Authority will indemnify the defendant in respect of what would otherwise have been the contractual obligation of NEMGIA to meet any judgment against the defendant.

Chubb Australia Limited v Mercantile Mutual Insurance (Workers’ Compensation) Limited

Chubb Australia

6. It seems to me in those circumstances, therefore, that if I were to nominate the WorkCover Authority as the designated insurer within s 151AC of the Act, the result may well be that the WorkCover Authority may seek to preserve its position and immediately file a notice of appeal and refuse to indemnify the defendant in respect of any verdict in the plaintiff’s favour against it in the proceedings.

….

Chubb Australia

15. Mr Parker urges, as did Mr Virtue for CGU Insurance Limited as I understood him, that the appropriate course was for me to refuse any order that a designated insurer be appointed, and to leave the defendant to conduct its own defence and to seek indemnity from whichever insurer was liable, depending on the factual findings made by the Tribunal. That course … seems to me to deny to the defendant the benefits of s 151AC and I do not propose to take it.

16. I have some misgivings about appointing CGU Insurance Limited as the designated insurer, in view of Mr Virtue’s well argued submission that on the pleadings, upon which he says I should decide this motion, the period of risk….which is last in line on the plaintiff’s own allegation of exposure to asbestos until the year 1982 is that of NEMGIA and, he says, if the Tribunal makes a factual finding of negligent asbestos exposure until 1982, the obligation under s 232 of the WorkCover Authority to indemnify the defendant is triggered. That may be so, but it seems to me that the purpose of s 151AC is to provide the defendant with an insurer which will conduct the proceedings on its behalf and meet any verdict against it, subject to the right of the insurer to seek indemnity elsewhere. That purpose will only be effected…if I designate CGU Insurance Limited as the designated insurer.”

38 It will be recalled that ICI was last insured by CGU prior to 30 September 1973.

The Liability Proceedings

39 Following the settlement with Mr Brazier, Curtis J heard ICI/CGU’s cross-claims. It appears to have been common ground in the Liability Proceedings that the settlement with Mr Brazier should be treated as satisfying the threshold to s 151AB, in other words, that ICI was liable independently of the 1987 Compensation Act for an occupational disease contracted by Mr Brazier.

40 Curtis J directed himself that, in order to determine the nature of employment test, he was required to resolve “the question…of whether the employment exposed the worker to a risk of contracting the actual disease from which he suffers.”

41 Curtis J found that Mr Brazier suffered from asbestos related pleural disease and asbestosis caused by the inhalation of significant quantities of asbestos fibre. Those are two of the diseases specified in Schedule 1 to the Workers’ Compensation (Dust Diseases) Act 1942 and, therefore, fell within the definition of an “occupational disease” in s 151AB(6) of the 1987 Compensation Act.

42 Curtis J then turned to determine when Mr Brazier was last employed by ICI in employment to the nature of which his disease was due.

43 He stated that the diseases from which Mr Brazier suffered were “caused by inhalation of significant quantities of asbestos fibre, unlike the disease of mesothelioma which may be due to relatively trifling exposure to asbestos”.

44 He referred to evidence from Mr Brazier of “substantial exposure to asbestos dust and fibre” in ICI’s employment prior to 1982. He also took into account Mr Brazier’s evidence that ICI started to phase out asbestos lagging in about 1982, evidence from Mr Forbes (a maintenance foreman employed by ICI at the same site at which Mr Brazier had worked) that nearly all asbestos had been removed prior to 1985 and evidence from Mr Adis (the works engineer at ICI’s premises during most of the relevant period) that there was little asbestos remaining by the late eighties. He also referred to an ICI memorandum dated 15 August 1984 which stated that “all low level (up to 5 metres above the ground) asbestos has been removed and replaced by acceptable insulating material…all other asbestos removal is to be undertaken as part of a series of expansion project (sic) …during the following three years …”

45 Mr Brazier thought there was no asbestos at ICI after 1982, but could not say for certain. Neither Mr Forbes or Mr Adis could say there was no asbestos up until Mr Brazier ceased working for ICI in 1988. Mr Forbes thought if there was any, it would have been “tiny hidden amounts”. Mr Adis thought there was “little remaining by the late eighties”.

46 ICI/CGU tendered an asbestos survey conducted by Dames and Moore Pty Limited which indicated that as at 11 June 1997 there was corrugated asbestos cement sheeting comprising the walls of the ICI factory and that those walls had been subjected to damage in the years after installation. Although Curtis J concluded that the Dames and Moore Pty Limited report meant he could not rely upon the ICI memorandum of 15 August 1984 that all asbestos up to 5 metres above the ground had been removed and replaced, he also noted that the authors of the Dames and Moore report concluded the risk to the health of building occupants was low as the asbestos present within the plant was identified as “hard”. That meant that the “asbestos fibre [was] not released when rubbed between the fingers but the structure of the matrix is destroyed by mechanical abrading such as cutting and hammering”.

47 Curtis J held that the evidence demonstrated that it was probable that between 1973 and 1984 Mr Brazier was employed by ICI in employment during which “he was exposed to the probable inhalation…. of substantial quantities of asbestos dust and fibre”.

48 His Honour accepted that it was possible Mr Brazier was exposed to the inhalation of asbestos fibre after 1984, but was not actually persuaded that Mr Brazier did, at any time after that date, inhale asbestos fibre. Indeed, he concluded that more probably than not after 1984 Mr Brazier inhaled no asbestos dust or fibre.

49 Curtis J recorded “the possibility” that until 1988 when Mr Brazier last worked for ICI, he may have inhaled asbestos fibre if asbestos sheeting which was still present in ICI’s premises as late as 11 June 1997 suffered damage at a time when he was working nearby. While he concluded that that possibility might have exposed Mr Brazier to the risk of contracting mesothelioma, which, as I have noted, his Honour had already said might be caused by relatively trifling exposure to asbestos, it would not, he held, have exposed Mr Brazier to the risk of contracting the diseases which actually afflicted him.

50 He noted that a worker was only exposed to the risk of asbestosis if he inhaled fibre in substantial quantities. He concluded that proof of a possibility, that possibility “being less than 50%”, that a worker may have inhaled some asbestos fibre during a particular period did not “satisfy proof that upon the probabilities that employment in that period was of the nature to which a disease is due (sic).”

51 Curtis J’s findings require close scrutiny to determine precisely how he resolved the nature of employment test. Having regard to the test which his Honour had posed for himself, which required identification of employment which exposed the worker to “a risk of contracting the actual disease from which he suffered”, it is apparent in my view that he reached his conclusion by the following process of reasoning.

52 First, his Honour concluded that it was probable that between 1973 and 1984 Mr Brazier was employed by ICI in employment to the nature of which his diseases were due because he was exposed to the probable inhalation in that period of substantial quantities of asbestos dust and fibre. In his Honour’s view those diseases were caused by inhalation of significant quantities of asbestos fibre.

53 Secondly, his Honour concluded that it was possible that after 1984 Mr Brazier was exposed to the inhalation of asbestos fibre if asbestos sheeting suffered damage at a time when he was working nearby but that even if Mr Brazier had inhaled asbestos fibre after 1984 and until 1988, that inhalation might have exposed him to the risk of contracting the disease of mesothelioma, but not to the risk of contracting asbestosis and asbestos related pleural disease.

54 Accordingly he held Mr Brazier was last employed by ICI in employment to the nature of which his occupational disease was due on 15 August 1984 when ICI’s asbestos removal programme had been substantially completed.

55 NEM was ICI’s workers’ compensation insurer as at 15 August 1984.

56 The consequence of Curtis J’s decision in the liability proceedings was that ICI/CGU’s cross-claims against FAI Traders and FAI Workers were dismissed with costs.

The Indemnity Proceedings

57 As a result of the finding that Mr Brazier was last employed by ICI in employment to the nature of which his occupational disease was due on 15 August 1984, ICI/CGU pursued the Second Further Amended First Cross-Claim seeking indemnity from the Authority for the payments made to Mr Brazier. Although, as on the appeal, the same counsel appeared for both ICI and CGU, some of the arguments advanced appeared to found the claim for relief on circumstances unique to each party. As I have already recorded, that was not the position on appeal where, in essence, all arguments were advanced on behalf of ICI. In order that Curtis J’s approach in the Indemnity Proceedings can be understood I have sought to identify whether a particular claim was advanced on behalf of ICI or CGU jointly or severally.

58 ICI/CGU put the claim against the Authority in a number of ways. First, they claimed a right to indemnity arising from the terms of the 1987 Compensation Act. Alternatively CGU claimed that in the circumstances of the case it was entitled to judgment based upon principles of unjust enrichment. CGU also submitted that the Authority might not, in the purported exercise of its powers pursuant to s 232(1) of the 1987 Compensation Act, exercise its discretion capriciously or without cause. Finally ICI/CGU relied upon an estoppel founded on the undertaking the Authority gave in the Designated Insurer Proceedings.

59 CGU contended it had a statutory right to indemnity because NEM, an insolvent insurer, was on risk when Mr Brazier was last employed by ICI in an employment to the nature of which his disease was due. It submitted that because, pursuant to s 151AB(1) and s 151AC(10) of the 1987 Compensation Act, NEM, if solvent, would be liable to reimburse CGU, the Authority was compelled by s 231(2), s 232(1), s 234(1) and s 236(2) of the Act to reimburse CGU. Curtis J appears to have dealt with this argument by characterising CGU’s claim as not being an adjustment claim pursuant to s 151AC(10).

60 His Honour found that a categorisation of the claim as one pursuant to s 151AC(10) was inappropriate because that section provides for an adjustment between the designated insurer and the “insurer who is liable”. As his Honour pointed out in Workers Compensation Board of Queensland v WorkCover Authority of New South Wales (1995) 36 NSWLR 732, Rolfe J held that the Authority was not an insurer and was not, therefore, subject to claims in the nature of contribution based upon principles of double insurance. By parity of reasoning, CGU could not claim the Authority was an “insurer” for the purposes of s 151AC(10).

61 Curtis J characterised CGU’s claim as designated insurer as founded on subrogation, relying upon the principle expounded in Sydney Turf Club v Crowley [1971] 1 NSWLR 724 at 730 by Jacobs JA (with whom Manning JA agreed) holding that:

“If an insured claimed to be indemnified by one insurer and that insurer disclaims liability, but honestly and by way of ex gratia payment with reservation of his rights pays the amount of the claim, then he is entitled to be subrogated to the rights of the insured against the real insurer.”

62 In Curtis J’s view, application of this principle constituted an exception to the rule that an insured having been fully indemnified has no further rights against an insurer: cf Austin v Zurich General Accident & Liability Insurance Company Limited [1945] KB 250 at 258 per Uthwatt J and would justify a payment to the designated insurer.

63 Curtis J concluded that the power conferred by s 232(1) was adequate to authorise payment by the Authority to a designated insurer which had indemnified an employer whose actual insurer was insolvent. In his Honour’s view no violence was done to the operation of the section by permitting payment to a designated insurer claiming in the name of the employer, by way of subrogation, whatever rights the employer may have to claim against the Authority.

64 Curtis J considered an alternative proposition, namely that a designated insurer may be considered the agent of the employer in discharging a judgment entered against the employer. In such circumstances, in his Honour’s view, s 232(1) would permit the Authority to reimburse the employer who would then account to the designated insurer.

65 In his Honour’s view either the subrogation route or the agency proposition would permit “a workable solution to what may otherwise be a patently unfair operation of s 151AC.”

66 Curtis J concluded, however, that neither of his “workable solutions” could avail ICI/CGU because, in his view, s 232(4) of the 1987 Compensation Act gave the Authority an absolute discretion to decide whether to make a payment from the Guarantee Fund pursuant to s 232(1). He also held that s 232(4) in terms prevented any right to reimbursement accruing on behalf of ICI to which CGU could become subrogated.

67 Having reached this conclusion, his Honour remarked that it might seem strange that “Parliament by this privative enactment intended that the Authority may resist the apparently just claim of CGU” but drew some solace from McClelland J’s observation in Enterprise Colorvideo Productions Pty Limited v Corporate Affairs Commission (NSW) [1984] 1 NSWLR 223 at 228:

“It is still no part of the judicial function, under the cloak of construction, to amend statutes merely to overcome shortcomings in their operations.”

68 His Honour surmised that the unambiguous discretion he found was reposed in the Authority pursuant to s 232(4) might have been intended by Parliament to provide a device to control unrestricted access to a possibly limited resource. He found some support for that proposition in the fact that both subsections 232(1) and 232(2) permitted reimbursement of an employer or liquidator respectively of an amount that might be the whole or any part of the award or amount paid by them.

69 Curtis J acknowledged that his conclusions were inconsistent with Armitage J’s decision in Chubb Australia Limited v Mercantile Mutual Insurance (Workers Compensation) Limited [1999] NSW DDT 7; (1999) 17 NSWCCR 537 but expressed the view that he believed Armitage J’s comments at paras 58 to 65 of that judgment to be wrong. In Chubb Armitage J concluded, in effect, that the Authority was under a statutory obligation pursuant to Division 7 to indemnify an insolvent insurer in respect of its liability to an employer, either for workers’ compensation payments under the 1987 Compensation Act or for damages at common law. I shall consider that judgment in greater detail below.

70 CGU advanced three other arguments before Curtis J to make good its claim for indemnity. The first was founded upon unjust enrichment relying upon Commissioner of State Revenue (Victoria) v Royal Insurance Australia Limited (1994) 182 CLR 51. Curtis J rejected that argument because he held that an action founded in unjust enrichment was premised upon there being an unmet legal obligation. He held that because the Authority was under no legal obligation to pay or repay monies to ICI/CGU, relief founded on unjust enrichment was not available.

71 The second argument was that the Authority could not act capriciously or without cause in exercising its discretion pursuant to s 232(1). Curtis J accepted the submission as a proposition of law but found there was no material before him upon which he could find as a fact that the Authority had refused to indemnify CGU capriciously or otherwise than in a responsible exercise of its statutory discretion.

72 Finally, his Honour considered the argument that the undertaking given by the Authority in the Designated Insurer Proceedings estopped the Authority from denying it was liable to indemnify ICI in respect of Mr Brazier’s judgment.

73 Curtis J held that a careful reading of the transcript in which the Authority’s undertaking was given confirmed that it was given contingently and that it did not give rise to any estoppel pursuant to which the Authority might be prevented from asserting that it was not obliged to indemnify ICI in respect of Mr Brazier’s judgment. Although his Honour did not specify the contingency to which, in his view, the undertaking was subject, it appears that he believed it was subject to the condition that no designated insurer was appointed and that ICI conducted the defence to Mr Brazier’s claim itself.

74 Curtis J entered a verdict for the Authority on ICI/CGU’s Cross-Claim.

The Liability Cross-Appeal

75 It is appropriate to consider first the Liability Cross-Appeal in which the Authority challenges Curtis J’s decision in the s 151AB proceedings. It was common ground that if the Liability Cross-Appeal succeeds the Indemnity Appeal becomes redundant. However if the Liability Cross-Appeal succeeds, the consequence of ICI’s Amended Notice of Appeal would be that one or other of FAI Traders or FAI Workers would be the insurer liable pursuant to s 151AC(9) of the 1987 Compensation Act.

Nature of Employment Test: The Authority’s Submissions

76 The Authority contended that Curtis J had erred in law by applying the wrong legal test to determine the nature of employment test: cf s 32(1) Dust Diseases Tribunal Act 1989.

77 The Authority submitted that the nature of employment test did not require proof that any particular quantity of asbestos fibre was available for inhalation or that any particular exposure was causative of the disease in fact. It referred to CIC Workers’ Compensation (NSW) Limited v Alcan Australia Limited (1994) 35 NSWLR 169 at 176-177; GIO General Ltd v ABB Installation & Service Pty Ltd [2000] NSWCA 118; (2000) 19 NSWCCR 720 at [19]; WorkCover Authority of NSW v Chubb Australia Ltd [2000] NSWCA 221; (2000) 20 NSWCCR 614 and Government Insurance Office of NSW v Colgate Palmolive Pty Ltd (2001) NSWCA 24 at [35]; (2001) 50 NSWLR 729; (2001) NSWCCR 436.

78 The Authority submitted that as each of the diseases identified in Mr Brazier’s Amended Statement of Claim was due to exposure to asbestos in employment, Curtis J should have determined whether “the employment after 15 August 1984 carried a risk of exposing a worker (not necessarily the plaintiff) to the risk of a disease from the inhalation of asbestos.” It submitted that the risk did not have to be a real risk nor did there have to be evidence that the worker had actually come into contact with the asbestos. It submitted that Government Insurance Office v Colgate Palmolive, above, was “clear authority” for these propositions.

79 It argued that the test Curtis J posed would require the Court to receive evidence as to the quantity of asbestos fibre necessary to contract a particular disease and may result in a different insurer being liable depending on the disease in fact contracted by the plaintiff. It submitted that in circumstances where the plaintiff had the misfortune of contracting both asbestosis and mesothelioma, one insurer might be liable for the former and another for the latter.

80 The Authority submitted that Curtis J’s finding that “more probably than not after 1984 Mr Brazier inhaled no asbestos dust or fibre” was to be read in the context of the words which immediately succeeded it, namely “the possibility that until 1988 when he last worked for ICI he may have inhaled asbestos fibre if asbestos sheeting suffered damage at a time when he was working nearby”. It submitted that it was apparent from Curtis J’s finding that there was asbestos sheeting present in the factory after August 1984 and that from time to time it was damaged, thus liberating asbestos fibre. It referred to Mr Brazier’s and Mr Forbes’ evidence that neither of them could exclude the possibility that Mr Brazier had inhaled fibre after 1985. Accordingly, the Authority submitted that notwithstanding the fact that Curtis J expressed himself in the language of “possibility”, he thought it probable that Mr Brazier inhaled asbestos fibre to the date of his retirement in July 1988.

81 On this basis, as the disease conditions of which Mr Brazier complained were due to the inhalation of asbestos fibre, it submitted that if Curtis J had applied the “correct” nature of employment test, he would have found that Mr Brazier continued to be exposed to a risk of inhaling asbestos fibre and dust up until the date of his retirement on 8 July 1988.

82 In oral submissions, Mr Little SC also submitted that the nature of employment test could be satisfied where there was a possibility rather than a probability that Mr Brazier may have been be exposed to asbestos after August 1984.

83 Mr Little SC contended that despite the change in the nature of Mr Brazier’s exposure to asbestos after August 1984 by virtue of the quantitative reduction in the risk of exposure to asbestos fibre Curtis J had identified, the nature of Mr Brazier’s employment had not changed.

84 The Authority’s argument that the nature of employment test did not require proof that a worker was exposed to the risk of inhaling any particular quantity of asbestos fibre was related to its argument that the test did not require proof that the worker was exposed to a risk of incurring the actual occupational disease in question.

85 The Authority also raised an evidentiary issue. It accepted that Mr Brazier’s diseases were attributable to the inhalation of asbestos. It argued, however, that there was no evidence before Curtis J which enabled him to determine the quantity of asbestos fibre necessary to be inhaled to cause the conditions in respect of which Mr Brazier sued when compared with the quantity to be inhaled to cause mesothelioma.

86 No party complained that the Authority was precluded from raising the no evidence issue because s 32 of the Dust Diseases Tribunal Act 1989 limits an appeal to this Court to a point of law or a question as to the admission or rejection of evidence. In my view, in any event, the contention that Curtis J made a determination in the absence of evidence to support the finding is a question of law: see Anderson Stuart v Treleaven (2000) 49 NSWLR 88 at 102 [67].

87 The Authority submitted that the Court of Appeal should correct Curtis J’s error of law by declaring FAI Workers - ICI’s insurer from 30 September 1987 until 30 September 1989 - to be the insurer liable pursuant to s 151AB.

Nature of Employment Test: FAI Traders’ Submissions

88 FAI Traders submitted that the Authority’s argument amounted to a submission that the words “the disease” in s 151AB(1) were used generically to mean “an asbestos-related disease” but did not mean the actual occupational disease contracted by the worker. It submitted that the point was wrong, involved a misreading of s 151AB(1) and was contrary to authority.

89 FAI Traders submitted that the vice of the Authority’s submissions was that they sought to elide the concept of “employment to the nature of which the disease was due” which involves a generic element, with the concept of “disease” as used in s 151AB(1) which required identification of the actual occupational disease contracted by the worker. It submitted that the first step required by s 151AB(1) was to identify the actual occupational disease contracted by the worker as, until that was done with some particularity, it was not possible to determine the nature of employment test.

90 Accordingly, it submitted that once Curtis J had determined that Mr Brazier was suffering from asbestosis and an asbestos related pleural disease, it was logical, indeed necessary, for his Honour to look at the nature of Mr Brazier’s employment to determine whether it had exposed him to a risk of developing those diseases. FAI Traders submitted that Curtis J found that the employment after 15 August 1984 did not expose Mr Brazier to such a risk and that that was a finding of fact which was open to his Honour.

91 FAI Traders submitted that it was notorious, and known to Curtis J as a judge of the Dust Diseases Tribunal, that relatively light exposure to asbestos can cause the condition of mesothelioma but that substantial exposure was required to cause asbestosis or an asbestos related pleural disease. It submitted that Curtis J had found as a fact that after 15 August 1984 there was no possibility of such exposure and consequently no risk of developing those diseases.

92 Finally, FAI Traders submitted that even if it was found that Curtis J had posed the wrong legal test, and, I infer, that the correct test was that for which the Authority contended, the last period during which Mr Brazier was employed in an employment to the nature of which the disease was due was in July 1988, which was outside the period of cover provided by FAI Traders. On that basis, the correct insurer for the purposes of s 151AB was FAI Workers – the insurer on risk at that date. Accordingly, it submitted the judgment in its favour entered by Curtis J in the Liability Proceedings should stand.

Nature of Employment Test: FAI Workers’ Submissions

93 FAI Workers submitted that Curtis J’s findings were decisive. In particular it pointed to his recording of the “possibility that until 1988 when [Mr Brazier] last worked for ICI he may have inhaled asbestos fibre if asbestos sheeting suffered damage at a time when he was working nearby.” FAI Workers submitted there was no evidence that any asbestos sheeting was damaged between 1984 and 1988.

94 It submitted that Curtis J correctly directed himself by inquiring into when Mr Brazier was last exposed to asbestos in circumstances potentially causative of the diseases from which he suffered. In the light of his factual findings, FAI Traders submitted that it was inevitable (and correct) that Curtis J arrived at the conclusion that there had been no relevant exposure to asbestos after 15 August 1984.

95 As to the Authority’s submission that the true legal inquiry for the purposes of s 151AB was whether the continuing employment was in circumstances in which Mr Brazier could have contracted any asbestos disease - even if he had not contracted such a disease - FAI Workers submitted that the Authority’s submission did not accord with the plain words of s 151AB, that it was inconsistent with authority, referring to Tame v Commonwealth Collieries Pty Limited (1947) 47 SR (NSW) 269 at 272 and, finally, that if the submission was correct it would lead to absurd results.

Nature of Employment Test: ICI

96 ICI made no substantive submissions on the cross-appeal, resting, as I understand its position, on the outcome of this controversy as between the Authority, FAI Traders and FAI Workers.

Industrial Diseases of Gradual Onset: Statutory Background

Nature of Employment Test: section 151AB

97 The phrase “in employment to the nature of which the disease was due” in s 151AB has a lengthy legislative history. It is derived from the phrase, “due to the nature of employment”, used in s 8(1)(a) of the Workmen’s Compensation Act 1906 (UK), a provision intended to facilitate a worker’s ability to recover statutory worker’s compensation in relation to a disabling industrial disease.

98 Section 8(1) provided, in substance, that where the disablement or death of a workman was caused by an industrial disease “and the disease (was) due to the nature of any employment in which the workman was employed at any time within the twelve months previous to the date of the disablement or suspension”, the workman or his dependents was entitled to compensation as if the disease was a personal injury by accident arising out of, and in the course of, that employment. The section went on to provide that where the disease was “of such a nature as to be contracted by a gradual process” the compensation should be recoverable from the employer who last employed the workman during the period of 12 months "in the employment to the nature of which the disease was due".

99 The English legislation making specific provision for workers who contracted diseases by gradual process was adopted in New South Wales, first in s 12 of the Workers’ Compensation Act 1912 and then in s 7 of the Workers’ Compensation Act 1926 (NSW) (the “1926 Compensation Act”). Section 7 dealt with an employer’s liability to pay compensation to workers in respect of injuries, which were defined to include a disease contracted in the course of employment (s 6). Subsection 7(4) substantially reproduced s 8(1)(c)(iii) of the Workmen’s Compensation Act 1906 (UK). It provided:

“(4) Where the injury is a disease which is of such a nature as to be contracted by a gradual process compensation shall be payable by the employer in whose employment the worker is or who last employed the worker.

Any employers who, during the twelve months preceding a worker’s incapacity, employed him in any employment to the nature of which the disease was due, shall be liable to make to the employer by whom compensation is payable such contributions as, in default of agreement, may be determined by the Court …”

100 Subsection 7(5) provided that:

“for the purposes of subsections (4) and (4A)…the injury shall be deemed to have happened at the time of the worker’s incapacity.”

101 While provisions such as subsection 7(4) may have facilitated a worker’s ability to recover compensation in respect of a disease contracted by a gradual process, employers found liable to pay compensation pursuant to subsection 7(4) encountered difficulties in recovering that compensation from their worker’s compensation insurer.

102 Curtis J traced the history of s 18(6B) of the 1926 Compensation Act and s 151AB in Malathounis v H & J Pappas t/as Pappas Excavations & Ors (1996) 13 NSWCCR 438 at 450ff and Di Cecco v Mercantile Mutual Insurance (Workers Compensation) Limited [2002] NSWDDT 1; (2002) 23 NSWCCR 143 (“Di Cecco”). Di Cecco was recently referred to in Orica Limited v CGU Insurance Ltd [2003] NSWCA 331 at [42] and [177] but not in a manner which was critical of Curtis J’s historical analysis.

103 According to Curtis J two decisions, Fisher v Hebburn Ltd (1960) 105 CLR 188 and State Mines Control Authority v GIO (NSW) (1964) 65 SR (NSW) 258 revealed a flaw in the 1926 Compensation Act and, in particular, in the ability of an employer found liable under a “nature of employment” claim pursuant to s 7(4) to recover from the insurer on risk during the period of employment.

104 In State Mines Control Authority v GIO (NSW) the plaintiff employer was found liable to compensate a former employee who had been incapacitated by a disease of gradual onset many years after leaving its employment. The employer was unsuccessful in claiming on the insurer on risk during the period of employment because no “injury” pursuant to s 7(4) had occurred during the period of indemnity. It was also unsuccessful in its claim against the insurer on risk at the time of “injury” because the statutory form of policy did not cover a liability to a person who was not in the insured’s employ during the currency of the policy. As Curtis J explained in Di Cecco “[t]o remedy this gap in the compulsory insurance scheme Parliament enacted the Workers’ Compensation (Amendment) Act 1964 which inserted s 18(6A) [in the 1926 Compensation Act]”. The view that subsection (6A) was inserted because of the decision in State Mines Control Authority v GIO (NSW) was also expressed by Yeldham J in Wunderlich Ltd v Manufacturers' Mutual Insurance Ltd [1981] 2 NSWLR 678 at 682.

105 Thus, the 1926 Compensation Act was amended first, in 1964, by inserting subsection 18(6A) to facilitate an employer’s ability to recover from an insurer in respect of payments of worker’s compensation in relation to a disease of gradual onset and then, in 1967, by the Workers’ Compensation (Dust Diseases) (Amendment) Act. The latter Act made two significant amendments. It amended s 18(1) of the 1926 Compensation Act to require employers to insure against liability at common law in respect of dust diseases. It also inserted subsection 18(6B) to facilitate an employer’s ability to recover from an insurer in respect of payments of damages in relation to a disease of gradual onset. Subsection 18(6B) was the precursor to s 151AB. Those subsections provided:

106 Subsection 18(6B) defined “occupational disease” to mean a disease which was of such a nature as to be contracted by a gradual process.

107 The Workers’ Compensation (Dust Diseases) (Amendment) Act also amended s 18(1) of the 1926 Compensation Act to require employers to insure against liability at common law in respect of dust diseases.

108 In the Second Reading Speech to the Workers’ Compensation (Dust Diseases) (Amendment) Bill, Mr Willis, the Minister for Labour and Industry, explained the amendments as follows (NSW Parliamentary Debates, (Legislative Assembly), 14 March 1967, Third Series, Vol 66, 4105, 4112):

“Sufferers from dust diseases in many cases only become aware of the exact nature of their ill-health some ten, twenty or thirty years after their last exposure to dust, and the insidious onset of dust diseases demands special treatment by legislation as far as workers’ compensation is concerned….

(4112) At present there is no compulsion upon employers to take out insurance policies against common law liability to workers in respect of silicosis. The bill requires employers to take out such insurance, so that the common law liability of employers against all dust diseases must be covered. On this point the principal Act is amended to increase from $40,000 to $50,000 the minimum indemnity under insurance policies in respect of common law liability for all injuries and diseases.

109 In 1987, the 1926 Compensation Act was repealed by the 1987 Compensation Act which, in Part 5, abolished a worker’s rights to bring common law proceedings against his or her employer where the employer was liable to pay worker’s compensation. The 1987 Compensation Act came into operation on 30 June 1987. The original Part 5 was repealed in 1989 by the Workers Compensation (Benefits) Amendment Act 1989. Although workers’ common law rights to seek damages against their employer were restored, that restoration was subject to limits set out in the new Part 5.

110 Following the restoration of common law rights in 1989, s 151AB was inserted in Division 5 (headed “Miscellaneous Provisions”) of Part 5 of the 1987 Compensation Act by the Workers Compensation (Amendment) Act 1991. In its original form s 151AB (which was closely modelled on subsection 18(6B)) relevantly provided:

(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.”

111 As Gleeson CJ commented in CIC Workers’ Compensation (NSW) Limited v Alcan Australia Limited (1994) 35 NSWLR 169 at 173, the general purpose of the new section was stated within it (ss (2)). It was perhaps for this reason that s 151AB was not referred to in the Second Reading Speech to the 1991 Bill. However the Explanatory Note appended to s 151AB in Schedule 4 of the Workers Compensation (Amendment) Act 1991 explained it in the following terms:

112 The original subsections 151AB(1) and (2) were omitted by the WorkCover Legislation (Amendment) Act 1995 and the current provision, which commenced on 20 December 1995, inserted. Subsection 151AB(2) of the current provision differentiates between liability arising before and after 30 June 1987. The amendment was intended to divide liability equally between the insurer who covered the employer immediately before the commencement of the 1987 Compensation Act and the insurer who covered the employer after that commencement, when the worker was last employed in the relevant employment. The insertion of the new subsection 151AB(2) was at the expense of the statement of the section’s purpose. The amended s 151AB did not reproduce the statement of the purpose which had appeared in subsection (2) of the original s 151AB.

113 Section 151AB of the 1987 Compensation Act in its current form relevantly provides:

(a) Any liability of that employer that arose before the relevant commencement is taken to have arisen when the worker was last employed before that commencement by that employer in an employment to the nature of which the disease was due.

…

(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

(a) except as provided by paragraph (b)—4 pm on 30 June 1987, …”

114 “Dust disease” as defined by the Workers’ Compensation (Dust Diseases) Act 1942 means any disease specified in Schedule 1: s 3 Workers’ Compensation (Dust Diseases) Act 1942. Asbestosis and asbestosis related pleural diseases, two of the conditions from which Mr Brazier suffered, are included in Schedule 1.

Insurers and dust diseases: section 151AC

115 Section 151AC was inserted in the Workers Compensation Act by the Workers Compensation Legislation Amendment (Dust Diseases & Other Matters) Act 1998 (No 130 of 1998) which commenced on 1 December 1998.

116 In the Second Reading Speech the Attorney General, the Honourable J W Shaw QC MLC, stated that the “main purposes of [the Bill] are to increase the fairness of workers’ compensation and common law provisions relating to dust diseases, to make procedural changes to enable more efficient disposal of proceedings in the Dust Diseases Tribunal and facilitate the settlement of claims, and to make other miscellaneous revisions”: see NSW Parliamentary Debates (Legislative Council) Third Series, 17 November 1998, Vol 268 at 9973.

117 The Second Reading Speech dealt with s 151AC in the following manner (NSW Parliamentary Debates (Legislative Council) Third Series, 17 November 1998, Vol 268 at 9974):

“A further provision designed to improve procedures involves situations where the worker’s employer has been covered by two or more insurers over the time when the worker was employed in dust-exposed duties. At present, disputes between those insurers about which of them is liable have the potential to delay 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 initially dealing with the worker’s claim. That will include acting as defendant in the proceedings and, if appropriate, arriving at a compromise or settlement with the claimant. Separate arbitration is to be provided to resolve the insurance issues, following resolution of the worker’s claim.”

118 The Explanatory Notes to the 1998 Bill described the new section in the following terms:

“… section 151AC … is intended to complement section 151AB. Section 151AB provides a scheme for identifying one insurer (or in some cases two insurers) who are to be liable to pay the damages in case of disease contracted by a gradual process, including a dust disease. Proposed section 151AC provides a mechanism in the case of a dust disease to designate one of two or more insurers for this purpose on an interim basis, pending resolution of a dispute as to which of them is liable. The proposed section 151AC will be capable of being disapplied by the Dust Diseases Tribunal in accordance with rules made under the Dust Diseases Tribunal Act 1989.”

119 Section 151AC relevantly provides:

Further special insurance provisions relating to dust diseases

(1) Application of this section

Workers Compensation (Dust Diseases) Act 1942

315 The language of permission is repeated in subsections 232(1) and (2), which provides that the Authority “may pay … an amount equal to the whole or any part of the amount” already paid. An ability to decide whether to provide reimbursement in whole or part does not sit comfortably with the notion of a duty to reimburse.

316 The proposition that the Authority might not provide reimbursement to the full extent of the amount an employer or a liquidator may have paid to satisfy a claim, judgment or award is carried forward into subsection 232(3) deeming the Authority to have satisfied the claim, judgment or award as Agent and Attorney of the employer “to the extent of the payment”.

317 Finally, subsection 232(4) both makes it plain that subsections 232(1) and (2) confer powers, thus invoking the language of s 9 of the Interpretation Act, but also spells out in no uncertain terms that those powers are exercisable “at the absolute discretion of the Authority”.

318 Thus every internal indicium in s 232 dictates the conclusion that the Authority has a discretion whether to make a payment from the Guarantee Fund in respect of a claim, judgment or award which has been satisfied.

319 There is nothing in the statutory context in which s 232 is found which detracts from that conclusion.

320 Section 231, the only other section in Division 7 which, in my view, deals with the question of payment, also uses the language of discretion, providing in subsections (2), (3) and (4) that “the Authority may exercise” the various rights and obligations referred to in those subsections. It does not provide, as does s 232, that the Authority, should it exercise those s 231 rights and/or discharge those obligations, may do so in whole or part. The reason for that is clear. Should the Authority decide pursuant to subsection 231(2) to satisfy any claim against which the employer is indemnified under a policy of insurance, it makes that payment, albeit from the Guarantee Fund, as agent and attorney of the employer. An employer which is obliged to satisfy a claim, judgment or award, is liable at common law for the full amount of such claims, judgments or awards. It cannot satisfy any such claim, judgment or award by paying less than one hundred percent. The Authority stands in the shoes of the employer under s 231 and, should it decide to make a payment, is subject to the same entire obligation.

321 The fact that s 231 does not contain a provision in the terms of s 232(4) expressly confirming that the powers to make payment are exercisable at “the absolute discretion of the Authority”, does not detract from the conclusion that it has a discretion under s 231. As I have already pointed out, the use of the word “may”, absent contrary indication, is sufficient to indicate that the Authority is vested with a discretion as to whether or not to exercise its powers under s 231.

322 I also do not accept ICI’s submission that upon its proper construction s 234 imposed an obligation on the Authority to pay their claim and that to hold otherwise would be to render s 234 otiose. I agree with Rolfe J’s conclusion in Workers’ Compensation Board of Queensland v WorkCover Authority (NSW) above, at 742, that s 234 is a “source of payments, rather than an additional power to make them.” It is true that Rolfe J expressed some bemusement as to why, in his view, both s 227(3) and s 234(1) “should be required to do what seems to me to be essentially the same work.”

323 It was not necessary for Rolfe J to resolve the dilemma he identified concerning subsections 227(3) and 234(1). Further, his Honour’s view was that the two subsections did “essentially the same work”. When closely examined, however, subsections 227(3) and 234(1) can be satisfactorily placed in the statutory scheme.

324 Section 227 establishes the Guarantee Fund (ss (1)), identifies the source of payments into it (ss (2)) - specifying that payments out of the Guarantee Fund includes amounts authorised by Division 7, any other Act or the regulations (ss (3)) - identifies the Authority as Manager of the Fund (ss (4)) and gives the Authority power to invest the Guarantee Fund.

325 The next section which deals with payments out of the Guarantee Fund is s 232. Both subsections 232(1) and 232(2) specify that the Authority “may pay from the Guarantee Fund” in whole or in part, the amounts referred to in those subsections.

326 When one turns to s 234(1)(a) it can be seen that that subsection authorises the Authority to pay out of the Guarantee Fund amounts it proposes to satisfy as agent or attorney of an employer for the purposes of s 231. Section 234(1)(a) was required because s 231 does not specify that payments made under that section are to be made out of the Guarantee Fund. Why the drafter did not adopt the same model as was used in s 232 is not clear, but need not be considered further.

327 There remains for consideration the work the words “any other amounts required by this division to be paid from that fund” in subsection 234(1) perform. The word “required” manifests some notion of obligation.

328 In order to identify any other provision which “requires” the Authority to make a payment, it is necessary to unravel the interstices of s 233. Section 233 operates by various cross-references to other provisions of the 1987 Compensation Act. Its original intention was to assimilate the position of the Authority to that of the insurer which, but for its insolvency, would have been liable to indemnify an employer to whom it had issued a relevant policy. Subsections 233(1) and (4) are no longer relevant as the sections they cross-referenced (ss 93, 124 and 34) were repealed by the Workers Compensation Legislation Amendment Act 1998, No 85 Schedule [163].

329 Subsections 233(2) and (3) were intended to operate to effect an adjustment between the Insurers’ Contribution Fund and the Guarantee Fund.

330 The Insurers’ Contribution Fund was established by Part 7 Division 6 of the 1987 Compensation Act which operated until the Contribution Fund was closed in accordance with s 221A. The Contribution Fund was under the direction, control and management of the Authority: s 218(2). Subsections 221(2) and (4) provided that: “there shall be payable from the Contribution Fund to an insurer” and then detailed amounts to be paid. It suffices for present purposes to say that the amounts to be paid from the Contribution Fund to an insurer relate to the difference between the weekly compensation paid by an insurer in respect of various periods and lump sums paid by an insurer to redeem wholly or in part the liability to pay weekly compensation. Subsection 233(2) ensures that if the Authority has made a payment as agent and attorney of an employer pursuant to a policy of insurance issued by an insolvent insurer, then s 221 is to apply to it as it would have applied to and in respect of the payment had it been made by the Authority as the insurer under the policy.

331 Section 222 operates to ensure that if an insurer has received any payment from the Contribution Fund in respect of any compensation paid by the consumer and then receives from “another person the whole or any part of the compensation the insurer has paid, the insurer shall forthwith repay to the Authority for payment into that Fund” that proportion of the compensation as has been received. Subsection 233(3) provides that s 222 applies to and in respect of any payment the Authority has received in accordance with subsection 221/233(2) as if the Authority were an insurer which had received that payment in respect of compensation paid to it.

332 Section 233(3) would operate, for example, to ensure that if, pursuant to s 235, the Authority exercised the rights and powers of the insolvent insurer to recover from a reinsurer an amount it had paid out of the Guarantee Fund in respect of a claim, judgment or award pursuant to s 234, then, to the extent it had been reimbursed in respect of any such payment out of the Contribution Fund, it was required to make repayment to the Contribution Fund pursuant to s 222/ss 233(3).

333 So understood, it can be seen that the word “required” in s 234 again merely identifies the Guarantee Fund as a source of payment. It does not confer a power. It plays no part in the operation of s 232.

334 Finally I turn to consider ICI’s submission concerning s 236. It is true that subsection 236(2) provides where an insolvent insurer has been dissolved, that “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.”

335 Subsection 236(3) enables a person referred to in subsection (2) to make a claim against the Authority in respect of “an entitlement to payment of an amount under that subsection.” Subsection 236(4) provides that the Authority is “entitled to deal with and finalise a claim made under subsection (3) … to the same extent as it would have been entitled to do so if the insolvent insurer had not been dissolved.”

336 In my view, the use of the language of “entitlement” in subsection 236(2) does not, contrary to ICI’s submission, impose a duty upon the Authority to make payments out of the Guarantee Fund. The effect of subsection 236(4) is that if a claim is made pursuant to s 236(3), then the Authority is to deal with it, if it is an unsatisfied claim, as it may deal with such a claim pursuant to s 231 or, if the claim has been satisfied, by considering whether to reimburse a payer in accordance with s 232.

337 The intention of s 236 was to ensure that claims could still be made and the Authority could still make payments out of the Guarantee Fund even though the insurer had been dissolved. Section 236 was necessary because, once dissolved, a company ceased to exist, as too did its debts and liabilities so far as enforcement against the company was concerned. Section 236 confirmed, in case of doubt, that any liabilities of the insolvent insurer continued notwithstanding its dissolution. It served also to confirm that the Authority had power to make payments out of the Guarantee Fund, notwithstanding that dissolution.

338 This analysis of Division 7 serves to confirm, in my view, the correctness of the Authority’s submission that it has a discretion as to whether or not to make payments out of the Guarantee Fund. The language of the Division dealing with payments is replete with the language of discretion. Nothing in the scheme of Division 7 in my view, indicates that the word “may” in subsections 232(1) and (2), bears any other than a permissive meaning.

339 In addition to its submissions concerning the language of Division 7, ICI’s submission that s 232(1) imposed an obligation on the Authority turned principally upon Armitage J’s judgment in Chubb Australia Limited v MMI (WC) Limited (1999) 17 NSWCCR 537. Chubb concerned a cross-claim by Chubb Australia Limited (“Chubb”) against various insurers claiming indemnity in respect of a judgment it had suffered in an action by an employee, George Vasiliou, arising from his alleged exposure to asbestos dust and fibre leading to mesothelioma. Chubb had been insured by a number of insurers during the period Mr Vasiliou had been in its employ. Armitage J was required to determine, for the purposes of the cross-claim, which of the insurers was the insurer liable to indemnity Chubb in accordance with the nature of the employment test prescribed by s 151AB.

340 Armitage J held that it was “NEM-IGF” (which acronym, although not explained by his Honour, I understand to have been intended to refer to both NEM and the Guarantee Fund). As much is plain from the fact that even though his Honour pointed out that, prima facie, his conclusion meant that Chubb was entitled to a verdict against NEM-IGF (at [49]), he went on to consider whether he could enter such a verdict having regard to the fact that NEM was an insolvent insurer. In order to determine that question, Armitage J considered submissions made on behalf of NEM-IGF based on the proposition that such a verdict could not be entered because of the operation of Part 7, Division 7 of the 1987 Compensation Act.

341 NEM-IGF argued that because the definition of “insurer” in s 225(1) in Division 7 did not include an “insolvent insurer”, NEM could not be an “insurer” for the purposes of s 151AB. Armitage J disposed of that argument (at [54]) by pointing out that s 225(1) was qualified by the words “in this Division” meaning that the s 225 definition of “insurer” did not apply to s 151AB which appears in Part 5, Division 5. Accordingly he held that the expression “insurer” in s 151AB could include an insolvent insurer.

342 He held (at [59]) that, despite the use of the word “may” in s 231(2), the Authority did not have “a discretion whether or not to indemnify an employer covered by a policy of insurance with an insolvent insurer from the Insurers’ Guarantee Fund”.

343 NEM-IGF had argued s 231 conferred a discretion upon it, relying upon Rolfe J’s decision in Workers’ Compensation Board of Queensland v WorkCover Authority (NSW), above, and, in particular, Rolfe J’s statement (at 741F – G) that the Authority’s “power to pay is subject to the absolute discretion conferred on the defendant by subs (4).” In Armitage J’s view (at [63]) the “absolute discretion” to which Rolfe J was referring (at 741F and 742A) was that conferred by s 231(4) providing that:

“The Authority may exercise rights and discharge obligations as agent in the name of the employer or worker concerned, or in its own name.”

344 In fact, in the passages to which Armitage J referred, Rolfe J was referring to the “absolute discretion” conferred by s 232(4).

345 Armitage J held (at [66]) that Chubb was entitled to a verdict against NEM-IGF for indemnity under the policy of insurance issued by the insolvent insurer, NEM. Reading between the lines it appears the Authority treated that conclusion as exposing it to a judgment it was required to satisfy out of the Guarantee Fund.

346 The Authority appealed from Armitage J’s decision. The appellant in those proceedings was named as the “WorkCover Authority of New South Wales”. Elsewhere in this judgment I have dealt with the Court of Appeal’s conclusion that Armitage J had erred in his application of the nature of employment test: WorkCover Authority of NSW v Chubb Australia Limited [2000] NSWCA 221; (2000) 20 NSWCCR 614. As a result of that conclusion it was unnecessary for the Court of Appeal to consider the Authority’s argument about whether it could be exposed to a liability to indemnify Chubb (see Stein JA (at [50]).

347 In my view Armitage J erred in Chubb Australia Limited v MMI (WC) Limited in concluding that s 231 did not confer a discretion upon the Authority.

What is the content of the Authority’s discretion?

348 A finding that the Authority has a discretion as to whether or not to make a payment pursuant to s 232, however, is not the end of the matter.

349 It is important, in considering the nature of the s 232 discretion to bear in mind that it is a remedial section intended to ameliorate the effect of an insurer’s insolvency. It should be construed to give the fullest relief which a fair reading of its language will allow: Bull v Attorney-General (NSW) (1913) 17 CLR 370 at 384.

350 There is no doubt, in my view, that the Authority had a power to reimburse ICI in respect of the satisfaction of Mr Brazier’s judgment. The Authority is a public body vested with a power to be exercised in order to discharge amounts for which an insolvent insurer would otherwise have been liable pursuant to a policy of insurance issued to an employer. The Authority is empowered to require contributions to the Guarantee Fund sufficient to satisfy during any financial year the claims, judgments and awards arising from or relating to the policies of insurance issued by those insolvent insurers.

351 The legislature clearly intended, in my view, that the Authority should have sufficient funds to satisfy all claims, judgments and awards arising from or relating to such policies of insurance.

352 It might, in those circumstances, be regarded as unusual that the Authority has a discretion as to whether to make payments out of the Guarantee Fund in respect of satisfied claims, judgments and awards. Nevertheless, as I have explained, the legislature has made it clear that the Authority has a discretion in that respect.

353 Even though the Authority’s discretion pursuant to s 232 is described as “an absolute discretion”, that does not mean that its discretion is unfettered. The nature or extent of the discretion may be inferred from the legislative scheme within which it operates. It was in those circumstances that ICI submitted, and Curtis J accepted, that the Authority could not act capriciously or without cause in exercising its s 232(1) discretion. The Authority did not challenge the proposition that it could not act capriciously in the exercise of its discretion. Rather, it confined itself to the submission that there was no basis for an assertion that it had actually exercised its discretion.

354 I do not accept the Authority’s submission in this respect. The Authority exercised its discretion under s 232, in my view, when it undertook to Armitage J in the Designated Insurer Proceedings that “if the defendant satisfies any judgment then under s 232 of the 1987 Act the WorkCover Authority will reimburse the employer for the judgment paid.”

355 It now seeks to assert that even though ICI’s liability in respect of Mr Brazier’s judgment has been discharged and, further, even though ICI was insured under a policy of insurance issued by an insolvent insurer, it can decline to meet that undertaking because ICI’s liability in respect of the judgment was paid by a designated insurer.

356 I have already rejected the Authority’s argument that if CGU discharged ICI’s obligation as designated insurer, that meant ICI had not satisfied Mr Brazier’s claim.

357 Mr Little SC next submitted that the Authority was “fettered in its payment to the designated insurer because it was appointed agent of the employer and workers for the purpose of resolving their disputes”. He did not elaborate on that submission which in my view was meaningless.

358 Next, he said the Guarantee Fund was a fund of last resort, intended to deal with employers and workers. As I understand the last submission, it went not to power, but to discretion. In other words the Authority’s position was that if another party, in this case, a designated insurer, discharged the employer’s liability, it would not exercise its s 232 discretion to reimburse the employer. This was because it perceived its role as being to preserve the assets of the Guarantee Fund. If another insurer had discharged the employer’s liability, that, in the Authority’s submission, absolved it from the responsibility for making payment.

359 Mr Little submitted that it was not a capricious exercise of the Authority’s discretion for it to adopt the position that it could decline to indemnify ICI in circumstances where CGU had met ICI’s liability on the basis that the Guarantee Fund was a fund of “last resort”. He submitted that if another insurer was “going to pick up the payment then WorkCover is absolved from the responsibility for doing it”. He submitted that it was the Authority’s view that “if another insurer is going to pick it up [a plaintiff’s judgment] because the Judge has designated somebody else to pay it, WorkCover say well that’s not the purpose of our Fund.”

360 Mr Little SC contended that the undertaking was subject to “the condition … that WorkCover would indemnify if no insurer was designated”.

361 He submitted that by persisting in its application pursuant to s 151AC ICI put itself “out of Court”. He said that if ICI had remained the party conducting the proceedings and NEM had been found to be the insurer liable by a correct application of an employment test, the Authority would have paid.

362 I do not accept that the undertaking was subject to the contingency for which the Authority contends.

363 It is important, in this context, to go beyond the terms of the undertaking as set out in Armitage J’s judgment and, as Curtis J did, examine the transcript of the hearing before Armitage J which the Authority attached to its written submissions.

364 Mr Parker, who appeared for the Authority before Armitage J, opposed ICI’s application that the Authority be appointed a designated insurer on the basis of two undertakings proffered to the Court. He read those matters onto the record in the following terms:

“Mr Parker: ‘The WorkCover Authority consents to the defendant having conduct of the defence’ and secondly, ‘if the defendant satisfies any judgment then under section 232 of the 1987 Act the WorkCover Authority will reimburse the employer for the judgment paid.’ ”

365 As will be apparent from Mr Parker’s statement he did not give an undertaking of payment contingent upon a designated insurer not being appointed. At best, it might be said to be a matter the Authority contends should be read into the undertaking if it is assumed, contrary to my finding, that it was CGU as insurer, rather than ICI as employer, which satisfied Mr Brazier’s judgment.

366 It does not appear that Armitage J understood the undertaking to be subject to the contingency for which Mr Little SC contends. His Honour recorded his understanding of the undertaking as seeming to him “to mean that if findings of fact are made which would, but for the insolvency of [NEM] have resulted in that insurer being liable under s 151AB … then the WorkCover Authority will indemnify the defendant in respect of what otherwise would have been the contractual obligation of [NEM] to meet any judgment against the defendant.”

367 It is clear, in my view, from that statement, that the Authority’s undertaking to reimburse the employer was not contingent upon Armitage J not appointing a designated insurer. Rather, the undertaking appears to have been carefully framed to repeat the language of s 232(1). This was undoubtedly so that if any payment was made by the Authority, it was a payment authorised by the Division: s 227(3).

368 Mr Little sought to add a further gloss to the undertaking, namely that it should be read either as “if the defendant satisfies any judgment out of its own funds” or as “if the defendant itself pays”. As Meagher JA pointed out, however, the undertaking could not have meant that ICI had to pay out of its own funds. Mr Little conceded for example, that if ICI had borrowed the money to pay the judgment, then the undertaking would apply. This makes it plain (if demonstration was necessary) that the Authority accepted ICI did not have to pay the judgment out of its own monies.

369 That the Authority was concerned with the issue of power is clear from Mr Little SC’s statement to Curtis J that “because of the way the trial was conducted there be (sic) no power on us to pay …”. Mr Little SC was repeating to Curtis J the view, which I have held to be erroneous, that the effect of a payment by CGU as designated insurer was that ICI had not satisfied the judgment.

370 It should also be noted that after Mr Parker informed Armitage J of the terms of the Authority’s undertaking, he added “in my submission it resolves the issue under Vasiliou”. That was a reference to Armitage J’s decision in Chubb Australia Limited v MMI (Workers Compensation) Limited to which I have already referred, in which his Honour had held that the Authority was under a statutory obligation to indemnify an insolvent insurer in respect of its liability to an employer. That case was then the subject of an appeal to this Court, the hearing of which was pending at the time of the Designated Insurer Proceedings. Armitage J was concerned that if his conclusion as to the statutory obligation was reversed in this Court, the Authority would not reimburse ICI for the damages it might be found liable to pay to Mr Brazier.

371 My understanding of Mr Parker’s statement that his undertaking resolved the issue under Vasiliou was that he was informing Armitage J that whatever the outcome of the decision on the appeal, the Authority would reimburse ICI pursuant to s 232 if ICI satisfied any judgment.

372 By giving the undertaking, the Authority effectively and, in my view, lawfully, bound itself as to how it would exercise its statutory discretion: see Thorby v Goldberg (1964) 112 CLR 597 at 605 – 606.

373 As I have held the effect of CGU, as designated insurer, satisfying ICI’s liability to Mr Brazier was that ICI had, in fact, satisfied the judgment, the Authority should be required to honour the undertaking it gave to Armitage J in the Designated Insurer Proceedings.

Conclusion

374 In my view, Curtis J was correct to hold that s 232 permitted a payment to be made to ICI even though CGU had satisfied its liability to Mr Brazier. His Honour was also correct to hold that the Authority had a discretion whether to make the payment to ICI. However, in my view, his Honour erred in characterising the undertaking the Authority gave to Armitage J as contingent. However, even if it was in fact contingent, it was subject to a contingency which turned on the Authority’s erroneous views of its powers. The Authority acknowledged in the course of argument that if ICI paid Mr Brazier’s damages and costs, it would reimburse ICI i.e. honour the undertaking.

375 Thus while Curtis J stated the law correctly, he erred in applying it to the facts. That is an error of law: Azzopardi v Tasman UEB Industries (1985) 4 NSWLR 139 at 150C, 157A, F.

Relief

376 In its Notice of Appeal, ICI asked that the verdict for the Authority on its cross-claims be set aside and that instead, the declarations and orders sought by ICI in the Second Further Amended First Cross-Claim be made.

377 Although the claim for those declarations was not repeated in the Third Further Amended Cross-Claim the Authority did not object to the resurrection of the claim for the declaration.

Orders

378 I would make the following orders:

The Appeal

1. Appeal allowed.

2. Declare that the WorkCover Authority of New South Wales is liable to indemnify ICI Australia Operations Pty Limited (now known as Orica Australia Pty Limited) in respect of the damages and costs paid to George Roland Brazier in and arising out of proceedings in the Dust Diseases Tribunal of New South Wales numbered 169 of 1997 between George Roland Brazier and ICI Australia Operations Pty Limited (now known as Orica Australia Pty Limited).

3. Order the WorkCover Authority of New South Wales to pay the costs of and associated with the Appeal and in the Court below.

The Cross-Appeal

1. Cross-Appeal dismissed.

2. Cross-appellant to pay the costs of the Cross-Appeal.

********************

Last Modified: 03/16/2004

Citations

ICI Australia Operations Pty Ltd v Workcover Authority of New South Wales [2004] NSWCA 55

Most Recent Citation

Cases Citing This Decision

54

Dasreef Pty Ltd v Hawchar [2011] HCA 21

Cases Cited

28

Statutory Material Cited

18

Samad v District Court of New South Wales [2002] HCA 24

QBE Insurance Limited v Noel Bull [1999] NSWCA 185

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CITATION:	ICI Australia Operations Pty Limited (now known as Orica Australia Pty Limited) & 1 Ors v The WorkCover Authority of New South Wales [2004] NSWCA 55 revised - 12/03/2004
HEARING DATE(S):	2 May 2003
JUDGMENT DATE:	11 March 2004
JUDGMENT OF:	Mason P at 1; Meagher JA at 2; McColl JA at 4
DECISION:	The Appeal 1. Appeal allowed. 2. Declare that the WorkCover Authority of New South Wales is liable to indemnify ICI Australia Operations Pty Limited (now known as Orica Australia Pty Limited) in respect of the damages and costs paid to George Roland Brazier in and arising out of proceedings in the Dust Diseases Tribunal of New South Wales numbered 169 of 1997 between George Roland Brazier and ICI Australia Operations Pty Limited (now known as Orica Australia Pty Limited). 3. Order the WorkCover Authority of New South Wales to pay the costs of and associated with the Appeal and in the Court below. The Cross-Appeal 1. Cross-Appeal dismissed. 2. Cross-appellant to pay the costs of the Cross-Appeal.
CATCHWORDS:	WORKERS COMPENSATION - DUST DISEASES - INSURANCE - meaning of "employment to the nature of which the disease was due" in s 151AB of the Workers Compensation Act 1987 - whether the Court is required to have regard to the actual occupational disease suffered by the worker - standard of proof required - extent to which Judges of the Dust Diseases Tribunal are entitled to rely upon their knowledge as members of a specialised tribunal - insolvent insurers - whether s 232 of the Workers Compensation Act 1987 confers a discretion on the WorkCover Authority to make payments out of the Insurers' Guarantee Fund - capacity in which an insurer designated pursuant to s 151AC of the Workers Compensation Act 1987 makes a payment to or on behalf of an employer - whether the WorkCover Authority has power to reimburse an employer pursuant to s 232 where the employer's liability has been discharged by the designated insurer - effect of undertaking to the Dust Diseases Tribunal by the WorkCover Authority that it would reimburse employer - D
LEGISLATION CITED:	Commonwealth Employees Compensation Act 1930-1956 s 10(1) Courts Legislation Amendment Act 1998 (NSW) Dust Diseases Tribunal Act 1989 (NSW) s 11A, s 32, s 32(1) Interpretation Act 1987 (NSW) s 5, s 9 WorkCover Legislation (Amendment) Act 1995 (NSW) Workers Compensation (Benefits) Amendment Act 1989 (NSW) Workers' Compensation Act 1912 (NSW) s 12 Workers' Compensation Act 1926 (NSW) s 6, s 7, s 7(4), s 7(5), s 18(1), s 18(6A), s 18(6B), Part IIIB, s 30Q(2) Workers Compensation Act 1987 (NSW) s 3, s 34, s 93, s 124, Part 5 Division 5, s 151AB, s 151AB(1), s 151AB(1)(a), s 151AB(1)(b), s 151AB(2), s 151AB(6), s 151AC, s 151AC(1), s 151AC(2), s 151AC(5), s 151AC(5)(a), s 151AC(6), s 151AC(9), s 151AC(10), s 151AC(10)(a), s 159, s 159(2), s 159(3), s 159(5), Part 7 Division 3, Part 7 Division 6, s 218(2), s 221, s 221(2), s 221(4), s 221A, s 222, Part 7 Division 7, s 225, s 225(1), s 226, s 226(1), s 227, s 227(1), s 227(2), s 227(3), s 227(4), s 228, s 228(1), s 228(2), s 228(2A), s 228(2B), s 228(4), s 229, s 230, s 231, s 231(2), s 231(2)(b), s 231(3), s 231(4), s 231(7), s 232, s 232(1), s 232(2), s 232(3), s 232(4), s 233, s 233(1), s 233(2), s 233(3), s 233(4), s 234, s 234(1), s 234(1)(a), s 235, s 236, s 236(2), s 236(3), s 236(4) Workers Compensation (Amendment) Act 1985 (NSW) Schedule 5 Workers Compensation (Amendment) Act 1991 No 2 (NSW) Schedule 3 [9] Workers' Compensation (Dust Diseases) Act 1942 (NSW) s 3, Schedule 1 Workers' Compensation (Dust Diseases) Amendment Act 1967 (NSW) Workers Compensation Legislation Amendment Act 1998 (NSW) Schedule [163] Workers Compensation Legislation Amendment (Dust Diseases & Other Matters) Act 1998 (NSW) Workmen's Compensation Act 1906 (UK) s 8, s 8(1), s 8(1)(a), s 8(1)(c)(iii) Workmen's Compensation Act 1925 (UK) s 43 Workmen's Compensation Ordinance 1949 (NT) s 9(1)(a)
CASES CITED:	Anderson Stuart v Treleaven (2000) 49 NSWLR 88 Austin v Zurich General Accident & Liability Insurance Company Limited [1945] KB 250 Azzopardi v Tasman UEB Industries (1985) 4 NSWLR 139 Blatchford v Staddon and Founds [1927] AC 461 Brazier v ICI Australia Operations Pty Ltd (2000) 19 NSWCCR 623 Bryer v Metropolitan Water Sewerage & Drainage Board (1939) 39 SR (NSW) 321 Bull v Attorney-General (NSW) (1913) 17 CLR 370 Castellain v Preston (1883) 11 QBD 380 Chubb Australia Limited v Mercantile Mutual Insurance (Workers Compensation) Limited [1999] NSW DDT 7; (1999) 17 NSWCCR 537 CIC Workers' Compensation (NSW) Limited v Alcan Australia Limited (1994) 35 NSWLR 169 CIC Workers' Compensation (NSW) Ltd v Kellogg (Australia) Pty Ltd (1996) 40 NSWLR 422 Commissioner of State Revenue (Victoria) v Royal Insurance Australia Limited (1994) 182 CLR 51 Connair Pty Ltd v Frederiksen (1979) 142 CLR 485 Di Cecco v Mercantile Mutual Insurance (Workers Compensation) Limited [2002] NSWDDT 1; (2002) 23 NSWCCR 143 Ellerbeck Collieries Limited v Cornhill Insurance Co [1932] 1 KB 401 Enterprise Colorvideo Productions Pty Limited v Corporate Affairs Commission (NSW) [1984] 1 NSWLR 223 Fisher v Hebburn Ltd (1960) 105 CLR 188 GIO General Ltd v ABB Installation & Service Pty Ltd [2000] NSWCA 118; (2000) 19 NSWCCR 720 Government Insurance Office of NSW v Colgate Palmolive Pty Ltd (2001) NSWCA 24; (2001) 50 NSWLR 729; (2001) NSWCCR 436 Hopwood v Textile Paper Tube Co Ltd [1946] 1 All ER 618 J & H Timbers Pty Limited v Nelson (1972) 126 CLR 625 Kealley v Jones [1979] 1 NSWLR 723 Kemp v Darling Island Stevedoring & Lighterage Co Limited (1959) 76 WN (NSW) 707 King v Victoria Insurance [1896] AC 250 Malathounis v H & J Pappas t/as Pappas Excavations & Ors (1996) 13 NSWCCR 438 Manufacturers' Mutual Insurance Ltd v Goodyear Australia Ltd (1997) 15 NSWCCR 538 Orica Limited v CGU Insurance Ltd [2003] NSWCA 331 Pavey & Mathews Pty Limited v Paul (1987) 162 CLR 221 QBE Insurance Limited v Bull [1999] NSWCA 185; (1999) 18 NSWCCR 169 R v City of Westminster Assessment Committee [1941] 1 KB 53 R v Norfolk County Council (1891) 60 LJ QB 379 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 Samad v District Court of New South Wales (2002) 209 CLR 140 Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262 Smith v Mann [1932] HCA 30; (1932) 47 CLR 426 State Mines Control Authority v GIO (NSW) (1964) 65 (SR) (NSW) 258 Sydney Turf Club v Crowley [1971] 1 NSWLR 724 Tame v Commonwealth Collieries Pty Limited (1947) 47 SR (NSW) 269 The Commonwealth v Bourne (1960) 104 CLR 32 The Commonwealth v Thompson (1960) 104 CLR 48 Thorby v Goldberg (1964) 112 CLR 597 Transport Accident Commission v C.M.T. Construction of Metropolitan Tunnels and Another (1988) 165 CLR 436 Wallaby Grip (BAE) Pty Limited (in liq) v Macleay Area Health Service (1998); 17 NSWCCR 355 Ward v Williams (1955) 92 CLR 496 Wellcome Australia Ltd v Australian Eagle Insurance Co Ltd (1993) 34 NSWLR 269 WorkCover Authority of NSW v Chubb Australia Ltd [2000] NSWCA 221; (2000) 20 NSWCCR 614 Workers Compensation Board of Queensland v WorkCover Authority of New South Wales (1995) 36 NSWLR 732 Wunderlich Ltd v Manufacturers' Mutual Insurance Ltd [1981] 2 NSWLR 678
PARTIES :	ICI Operations Pty Limited (now known as Orica Australia Pty Limited) (First Appellant/First Cross-Claimant) CGU Insurance Limited (Second Appellant/Second Cross-Claimant) The WorkCover Authority of New South Wales (Respondent/Cross-Defendant) FAI Traders Insurance Company Ltd (Third Respondent/Cross-Appellant) FAI Workers Compensation (NSW) Ltd (Fourth Respondent/Cross-Appellant)
FILE NUMBER(S):	CA 40628/02
COUNSEL:	Mr J D Hislop QC/Mr G P F Rundle (First/Second Appellants) & (First/Second Cross-Respondents) (ICI/CGU) Mr G F Little SC/Mr G J Parker (First Respondent/Cross-Appellant) (Workcover) Mr C R R Hoeben SC/N E Chen (Third Respondent/Third Cross-Respondent) (FAI Traders) Mr G M Watson SC (Fourth Respondent/Fourth Cross-Respondent) (FAI Workers Compensation)
SOLICITORS:	Phillips Fox (First/Second Appellants) & (First/Second Cross-Respondents) (ICI/CGU) Turks Legal (First Respondent/Cross-Appellant) (WorkCover) Sparke Helmore (Third Respondent/Third Cross-Respondent) (FAI Traders) Moray & Agnew (Fourth Respondent/Fourth Cross-Respondent) (FAI Workers Compensation)

LOWER COURTJURISDICTION:	Dust Diseases Tribunal
LOWER COURT FILE NUMBER(S):	DDT 169/97
LOWER COURT JUDICIAL OFFICER :	Curtis J

Para No
Introduction	4
The Issues on Appeal	10
Outline of Statutory Background	15
Statement of the Case
The Pleadings	22
The Designated Insurer Proceedings	35
The Liability Proceedings	39
The Indemnity Proceedings	57
The Liability Cross-Appeal	75
The Authority’s Submissions	76
FAI Traders’ Submissions	88
FAI Workers’ Submissions	93
ICI	96
Industrial Diseases of Gradual Onset: Statutory Background
Nature of Employment Test: s 151AB	97
Insurers and Dust Diseases: s 151AC	115
Judicial Consideration
Nature of Employment Test and Employees	120
Nature of Employment Test and Insurers	144
The Liability Cross-Appeal: Consideration
Nature of Employment Test
Identifying the Disease	192
The level of exposure to risk	208
No Evidence Submission	216
The Liability Cross-Appeal: Conclusion	235
The Indemnity Appeal	237
Statutory Background	241
ICI’s Submissions	258
The Authority’s Submissions	271
The Indemnity Appeal: Consideration
Role of the Designated Insurer	287
Duty or Discretion	308
Content of the Authority’s Discretion	348
The Indemnity Appeal: Conclusion	374
Relief	376
Orders	378