State Government Insurance Commission v National Employers' Mutual General Insurance Association Limited

The applicant, State Government Insurance Commission (SGIC), sought special leave to appeal from a decision of the Full Court of the Supreme Court of South Australia concerning contribution between insurers. The dispute arose from a workers' compensation payment made by SGIC, which the applicant argued should be subject to contribution from the respondent, National Employers' Mutual General Insurance Association Limited (NEM). SGIC contended that the principles established in *Transport Accident Commission v CMT Construction* (CMT case) regarding the extinguishment of an employer's common law liability by a workers' compensation payment were applicable, and that the Full Court had erred in its application of these principles.

The High Court was required to determine three principal legal issues. Firstly, whether the principles in the CMT case extended to actions involving contribution between insurers, an issue left open in the original decision. Secondly, whether those principles applied given the specific South Australian legislation governing motor vehicle insurance. Thirdly, whether the fourth schedule of the *Motor Vehicles Act* (SA) insured the owner of a motor vehicle solely against common law damages for personal injuries, or if it also extended to cover liability for workers' compensation payments.

The Full Court had reached differing conclusions. Justice Jacobs, with whom Justice Prior agreed, held that despite the payment being technically workers' compensation, it discharged a common law liability, thus making it subject to indemnity by both insurers. SGIC argued this was inconsistent with the CMT case, as the court had not considered whether the CMT principles applied to double insurance or were distinguishable due to South Australian legislation. Justice White, also with Justice Prior agreeing, found the CMT case was not strictly in point as it did not involve double insurance and could be distinguished based on differences in the Victorian and South Australian legislation. He concluded that under section 82(1) of the South Australian Act, in the absence of express provisions excluding Act payments from double insurance principles, a liability to contribute half the assessed damages existed. SGIC submitted that the legislative distinctions drawn by Justice White were without substance, as the assessment and deduction processes were functionally the same, leading to the same end result.