Authorised report: 12 ACTLR 80

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY COURT OF APPEAL

Case Title:

Workers Compensation Nominal Insurer v FAW Industries Pty Ltd and Insurance Australia Ltd

Citation: [2017] ACTCA 2

Hearing Date: 27 February 2015

Decision Date: 20 January 2017

Before: Refshauge ACJ, Penfold and Burns JJ

Decision: 1. The appeal be allowed.

2. The orders made by Master Harper on 17 February 2014

be amended by:

(a) omitting “each of the third parties” in order 2 and

substituting “the second third party”; and

(b) omitting order 3.

3. If the parties wish to be heard as to costs, they must file

written submissions within 21 days from the date of

judgment, setting out the basis for any order other than that

proposed in order 4, and, if required, seek an oral hearing.

4. In the event that no submission is received within 21 days

from the date of judgment, the second respondent pay the

appellant’s costs.

Catchwords: WORKERS’ COMPENSATION – APPEAL FROM THE SUPREME COURT – Appeal from a decision of the Master – insurance – common law liability – damages paid for workplace injury – injured worker an employee in the Australian Capital Territory – business entered into insurance policies in both New South and the Australian Capital Territory – limitations imposed on indemnity by legislation – whether the Master erred regarding indemnity liability – appeal upheld – s 155 of the Workers Compensation Act 1987 (NSW)

Legislation Cited: Workers’ Compensation Act, 1926 (NSW), s 7(1A) Workers’ Compensation Act 1928 (Vic), s 5(1) Workers Compensation Act 1951 (ACT), s 33 Workers Compensation Act 1987 (NSW), ss 2A, 3, 9AA, 13, 155, 159, schedule 1 Workers Compensation (General) Regulation 1995 (NSW), reg 52 Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 4

2

Cases Cited: Albion Insurance Co Ltd v Government Insurance Office of New South Wales (1969) 121 CLR 342 Allianz Australia Workers Compensation (NSW) Ltd v PPG Industries Australia Pty Ltd [2004] ACTCA 28 Dillingham Engineering Pty Ltd v National Employers’ Mutual General Insurance Association Ltd [1971] 1 NSWLR 578 Francis v Emijay P/L & Ors [2006] QCA 62; 2 Qd R 5 Mynott v Barnard (1939) 62 CLR 68 RHG Home Loans v Employers Mutual New South Wales Ltd [2011] QSC 28; [2012] 1 Qd R 262 Shephard v FAW Industries Pty Ltd [2014] ACTSC 20 Starr v Douglas (1994) 35 NSWLR 133 Susic v Sunset Pty Ltd & Ors [1998] ACTSC 50; 145 FLR 363

Parties: Workers Compensation Nominal Insurer (Appellant)

FAW Industries Pty Ltd (First Respondent)

Insurance Australia Ltd (formerly known as NRMA Insurance Ltd) (Second Respondent)

Representation: Counsel

Mr R Cavanagh SC (Appellant)

Mr A Black SC and Mr A Muller (Respondents)

Solicitors

Goldbergs (Appellant)

Meyer Vandenberg (First Respondent)

Moray & Agnew (Second Respondent)

File Number: ACTCA 10 of 2014

Decision under appeal:

Court/Tribunal: ACT Supreme Court

Before: Master Harper

Date of Decision: 17 February 2014

Case Title: Shephard v FAW Industries Pty Ltd

Citation: [2014] ACTSC 20

THE COURT:

Introduction

1. Justin Shephard, who had been hired by the first respondent in the ACT, was injured

on 17 September 2002 while working in the ACT. His employer was FAW Industries

Pty Ltd, the first respondent, to whom we shall refer as FAW. On 17 February 2014,

Master Harper found FAW liable to compensate Mr Shephard for the injuries he

suffered in the workplace incident, and awarded him damages of $725,635.60 and

3

costs: Shephard v FAW Industries Pty Ltd [2014] ACTSC 20. These damages have

now been paid.

2. At the time of the workplace injury to Mr Shephard, FAW conducted business in both

Yass and Canberra. It entered into policies of insurance in both New South Wales and

the Australian Capital Territory to indemnify itself from workers compensation and

common law payments it may have to make for workplace injuries suffered by its

employees. The Workers Compensation Nominal Insurer, the appellant, whom we shall

call the NSW insurer, was the body which had issued the NSW policy; Insurance

Australia Ltd, the second respondent, whom we shall call the ACT insurer, was the

insurer which issued the ACT policy. We shall refer to those two policies as the NSW

policy and the ACT policy respectively.

3. In the proceedings before the Master, the NSW insurer and the ACT insurer each

claimed that, were Mr Shephard to succeed in his claim, FAW should be indemnified by

the policy issued by the other insurer. As a result, FAW joined both the NSW insurer

and the ACT insurer to the primary proceedings as third parties.

4. Master Harper found that, under the ACT policy, the ACT insurer was liable to

indemnify FAW for the damages awarded to Mr Shephard.

5. His Honour held, however, that FAW was also entitled to be indemnified by the

NSW insurer under the NSW policy. As his Honour observed in Shephard

v FAW Industries Pty Ltd at [169]:

This should accordingly be seen as an illustration of the operation of the principle of dual insurance. The defendant is covered by two policies against the same risk, and is entitled to be indemnified under both policies. The insurers are liable to contribute equally to the loss suffered by their insured.

6. Accordingly, His Honour ordered:

2. judgment for the defendant against each of the third parties for $725,635.60.

3. liberty be granted to each third party to apply for contribution against the other if so advised.

The NSW insurer appeals against these orders so far as they concern it.

The proceedings

7. The NSW insurer commenced the appeal by filing its Notice of Appeal on 14 March

2014. On 16 April 2014, the ACT insurer filed a Notice of Cross-Appeal. That Notice

of Cross-Appeal challenged the findings of fact made by the Master on which his

Honour based his decision that the ACT insurer was liable to indemnify FAW for the

damages awarded to Mr Shephard.

8. On 4 December 2014, however, the ACT insurer discontinued its Cross-Appeal. Thus,

it was accepted by both the NSW insurer and the ACT insurer that the findings of fact

made by Master Harper were no longer challenged or in issue in the appeal.

9. FAW filed an unconditional Notice of Intention to Respond, but, at the hearing of the

appeal, announced that it submitted to any order that the Court may make save as to

costs.

10. The Notice of Appeal set out the following grounds of appeal:

4

(a) His Honour, having found that the Plaintiff was a worker of the Australian Capital Territory, erred in finding that the New South Wales statutory workers’ compensation policy responded to the Plaintiff’s claim and that the Defendant was entitled to be indemnified by the First Third Party;

(b) His Honour erred in:

(i) distinguishing the authorities set out in paragraph 165 of the judgment; and

(ii) finding that the then section 13 of the Workers Compensation Act 1987 (NSW) had no application to the common law indemnity in the policy;

(c) His Honour erred in finding that the principles of dual insurance applied and that the First Third Party should contribute equally to the judgment sum;

(d) In the alternative, if the New South Wales policy does respond (which is disputed), His Honour erred in finding that it responded to the damages as assessed by him under the law of the Australian Capital Territory rather than Part 5 of Division 3 of the Workers Compensation Act 1987 (NSW).

The facts

11. In the circumstances where the issues on the appeal relate almost entirely to the

interpretation of the NSW policy and the statute under which it was issued and where

the facts as found by Master Harper are not disputed by either party, it is not necessary

to give more than a brief summary of the facts.

12. FAW is a hardware supplier established in about 1987. In mid-2002, Mr Shephard

began work for FAW as a truck driver. Although Mr Shephard was engaged by FAW at

its premises at Mitchell, ACT, he drove what was known as the Yass truck, associated

with a store and yard operated by FAW in Yass. Each day, he would drive the truck

from his house in NSW to Mitchell, and then use it to make deliveries, including to the

Yass store. Accordingly, he usually carried out his duties in both NSW and ACT. His

base was found to be at Mitchell for the purposes of his employment.

13. As a result of these facts found by Master Harper, Mr Shephard was a worker of the

ACT for the purposes of a provision which at the time of his injury was s 33 of the

Workers Compensation Act 1951 (ACT), since repealed.

14. Mr Shephard was injured at Mitchell, ACT, on 17 September 2002 when collecting

large planks of hardwood from racks at the depot to load them onto his truck.

15. In the circumstances under which Mr Shephard was required to collect the hardwood

planks, Master Harper found that the injuries suffered by Mr Shephard were caused by

the unsafe system and unsafe place of work operated by FAW.

16. As a consequence of these findings, his Honour concluded that FAW was entitled to be

indemnified by the ACT insurer for the damages it was liable to pay to Mr Shephard.

17. It is not, however, clear that his Honour made a specific finding to the effect that

workers compensation liabilities to Mr Shephard were insured under the NSW policy,

as distinct from assuming this from the existence of a policy held by FAW with the

NSW insurer.

The issue on the appeal

18. On the appeal, the NSW insurer contended and the ACT insurer denied that

Master Harper erred when he found that FAW was also entitled to be indemnified by

the NSW insurer for the damages it was liable to pay to Mr Shephard.

5

19. The NSW insurer did not challenge the Master’s finding that, if the NSW insurer was

also liable to indemnify FAW, the principles relating to double insurance, including

contribution between insurers, applied. Those principles are explained in Albion

Insurance Co Ltd v Government Insurance Office of New South Wales (1969) 121 CLR

342 at 345, 349-50.

The NSW legislation

The NSW Acts

20. Since the issue in this appeal is the construction of the NSW policy that was issued by

the NSW insurer, and of the NSW legislation, especially as it bears on that policy, it is

appropriate to set out here the relevant provisions as in force at the relevant date,

being 17 September 2002, the day on which Mr Shephard was injured.

21. As at that date, the relevant NSW provisions were found in two Acts, the Workers

Compensation Act 1987 (the 1987 Act) and the Workplace Injury Management and

Workers Compensation Act 1998 (the 1998 Act), together referred to as the

NSW Acts.

22. In general terms, the NSW Acts required employers to obtain and maintain a compliant

insurance policy, the form of which was prescribed in regulations (although there was

scope for such a policy to contain other terms as well). Various relevant expressions,

including “worker”, were defined in the NSW Acts. The NSW Acts made specific

provision in relation to injuries received outside NSW.

23. In submissions made about the interpretation of the relevant provisions, reference was

made to earlier or later forms of some of the provisions in force at the time

Mr Shephard sustained his injuries. These provisions are set out at the relevant places

in these reasons.

24. The relevant provisions of the NSW Acts as in force when Mr Shephard sustained his

injuries were as follows:

Workers Compensation Act 1987

2A Relationship to Workplace Injury Management and Workers Compensation Act 1998

(1) The Workplace Injury Management and Workers Compensation Act 1998 is referred to in this Act as the 1998 Act.

(2) This Act is to be construed with, and as if it formed part of, the 1998 Act. Accordingly, a reference in this Act to this Act includes a reference to the 1998 Act.

(3) In the event of an inconsistency between this Act and the 1998 Act, the 1998 Act prevails to the extent of the inconsistency.

3 Definitions

(1AA) In this Act, words and expressions have the same meanings as they have in the 1998 Act, unless this Act provides otherwise.

...

(1A) A reference to a worker who has been injured includes, if the worker is dead, a reference to the worker’s legal personal representative or the worker’s dependant, or any other person to whom or for whose benefit compensation is payable.

6

13 Injuries received outside New South Wales

(1) If:

(a) an employer has a place of employment in New South Wales, or is for the time being present in New South Wales, and there employs a worker, and

(b) any such worker while outside New South Wales receives an injury under circumstances which, had the injury been received in New South Wales, would entitle the worker to compensation in accordance with this Act,

the injury is an injury to which this Act applies, and compensation is payable accordingly.

(2) Compensation is not payable under this section to the extent to which in respect of any such injury the worker has (and in the case of the death of the worker, his or her dependants have):

(a) received workers compensation under the laws of any country, any State (other than New South Wales), the Commonwealth or any Territory of the Commonwealth, or

(b) obtained judgment against the worker’s employer independently of this Act.

(3) If the worker receives compensation under this section in respect of any such injury and subsequently in respect of the injury receives workers compensation under the laws of any country, any State (other than New South Wales), the Commonwealth or any Territory of the Commonwealth or obtains judgment against the worker’s employer independently of this Act, the employer is entitled to recover from the worker an amount equal to the lesser of the following amounts:

(a) the amount of compensation paid by the employer under this section,

(b) the amount of workers compensation received by the worker or of the judgment obtained by the worker otherwise than under this Act.

155 Compulsory insurance for employers

(1) An employer (other than a self-insurer) shall obtain from a licensed insurer, and maintain in force, a policy of insurance that complies with this Division [Div 1 of Pt 7 of the NSW Act] for the full amount of the employer’s liability under this Act in respect of all workers employed by the employer and for an unlimited amount in respect of the employer’s liability independently of this Act (but not including a liability for compensation in the nature of workers compensation arising under any Act or other law of another State, a Territory or the Commonwealth or a liability arising under the law of another country) for any injury to any such worker.

Maximum penalty: 500 penalty units or imprisonment for 6 months, or both.

159 Provisions of policies of insurance

(1) A policy of insurance shall, in so far as it relates to any liability under this Act, contain only such provisions as are prescribed by the regulations, but (subject to the regulations) may contain such other provisions relating to any liability at common law or under any Act or Commonwealth Act as are appropriate to any particular case.

Workplace Injury Management and Workers Compensation Act 1998

4 Definitions

(1) In this Act:

...

7

worker means a person who has entered into or works under a contract of service or apprenticeship with an employer (whether by way of manual labour, clerical work or otherwise, and whether the contract is expressed or implied, and whether the contract is oral or in writing). However, it does not include:

(a) a member of the Police Service who is a contributor to the Police Superannuation Fund under the Police Regulation (Superannuation) Act 1906, or

(b) a person whose employment is casual (that is for 1 period only of not more than 5 working days) and who is employed otherwise than for the purposes of the employer’s trade or business, or

(c) an officer of a religious or other voluntary association who is employed upon duties for the association outside the officer’s ordinary working hours, so far as the employment on those duties is concerned, if the officer’s remuneration from the association does not exceed $700 per year, or

(d) except as provided by Schedule 1, a registered participant of a sporting organisation (within the meaning of the Sporting Injuries Insurance Act 1978) while:

(i) participating in an authorised activity (within the meaning of that Act) of that organisation, or

(ii) engaged in training or preparing himself or herself with a view to so participating, or

(iii) engaged on any daily or periodic journey or other journey in connection with the registered participant so participating or the registered participant being so engaged,

if, under the contract pursuant to which the registered participant does any of the things referred to above in this paragraph, the registered participant is not entitled to remuneration other than for the doing of those things.

...

Workers Compensation Acts means this Act and the 1987 Act.

...

Note. Section 2A of the 1987 Act provides that the 1987 Act is to be construed with, and as if it

formed part of, this Act. Accordingly, a reference in this Act to this Act generally includes a reference to the 1987 Act.

The NSW policy

25. By reg 52 of the Workers Compensation (General) Regulation 1995 (NSW) (the NSW

Regulation), Form 4 of the NSW Regulation set out the prescribed policy. That policy

included clause 3, which set out the indemnity which the insurer (here, the NSW

insurer) was liable to provide to the insured (here, FAW).

26. Regulation 52 was as follows:

52 Provisions of policies of insurance

(1) For the purposes of section 159 of the Act, a policy of insurance (except one to which subclause (2) applies):

(a) must contain the provisions specified in Form 4, and

(b) may contain any other provisions, but only if those provisions have been agreed on by the insurer and employer concerned and approved by the Authority.

8

27. The following clauses of Form 4 are relevant:

Clause 1 Definitions

...

worker has the same meaning as in the Act (including the extended meaning it has because of Schedule 1 (Deemed employment of workers) to the Act).

Clause 3 What the Insurer is liable for

3. The Insurer will indemnify the Employer against all of the following sums for which the Employer becomes liable during or in respect of the period of insurance:

(a) compensation that the Employer becomes liable to pay under the Act to or in respect of any person who is a worker of the Employer (including any person to whom the Employer is liable under section 20 of the Act);

(b) any other amount that the Employer becomes liable to pay independently of the Act (but not including a liability for compensation in the nature of workers compensation arising under any Act or other law of another State, a Territory or the Commonwealth or a liability arising under the law of another country) for any injury to any such person (not including liability in respect of an injury, suffered by a person other than such a worker, arising out of any rescue or attempted rescue);

(c) costs and expenses incurred with the written consent of the Insurer in connection with the defence of any legal proceeding in which any such liability is alleged.

Clause 24 Act and regulations form part of Policy

24. This Policy is subject to the provisions of the Act and the regulations under the Act and those provisions are taken to form part of this Policy.

The reasons of Master Harper

28. In Shephard v FAW Industries Pty Ltd at [152]-[161], Master Harper set out his reasons

for finding that the ACT insurer was liable to indemnify FAW. It is not necessary to refer

to these reasons further.

29. After making that finding, his Honour turned (at [162]-[168]) to the liability of the

NSW insurer and continued:

162. This leaves open the claim by the defendant for indemnity from the first third party (the NSW insurer). There may have been an assumption by counsel during the hearing that the outcome would be a finding that one insurer was liable and the other was not, but it does not seem to me that my finding against the ACT insurer necessarily means that the claim against the NSW insurer must fail. It is a matter of examining the NSW policy and, where applicable, legislation, before arriving at a conclusion about whether the NSW policy responds to the claim.

163. The policy under the NSW Act is to be found in Form 4 under the Workers Compensation Act 1987 of that State. The policy provides that the insurer will indemnify the employer against, among other things, any amount that the employer becomes liable to pay independently of the Act for any injury to a worker of the employer. That expression (“independently of the Act”) means, for present purposes, damages under the general law, whether or not in a NSW court. There is no question that it is applicable to a judgment against the employer in the present action.

9

164. I was taken by counsel to a number of provisions of the Workers Compensation Act 1987 (NSW) but not to any provisions of that Act which would rule out liability to employees of the insured who were not workers of the State.

165. Counsel for the NSW insurer (the first third party) took me to the decisions of Fox J in this court in Busico v Century Insurance Co Ltd (1969) 14 FLR 189, and of the NSW Court of Appeal in Dillingham Engineering Pty Ltd v National Employers’ Mutual General Insurance Association Ltd (1971) 1 NSWLR 578. However, both of those decisions, it seems to me, turned on the words of the legislation in force at the time the causes of action arose. That wording was quite different to the wording of the legislation and of the policy in the present case and the decisions are accordingly of little assistance.

166. Section 13 of the Workers Compensation Act 1987 (NSW) deals with injuries received outside NSW, but only to the entitlement of the employee to workers’ compensation, not to damages under the general law.

167. I am not persuaded that there is anything in the NSW legislation or in the decided cases which would deprive the defendant of its entitlement to be indemnified in respect of the claim by this plaintiff, who worked for much of his time in NSW, under the NSW policy issued by the first third party.

168. The defendant is accordingly entitled to be indemnified by the first third party under the NSW policy.

The NSW insurer’s submissions

30. The NSW insurer submitted that the Master’s interpretation of the terms of the policy

issued by the NSW insurer, in accordance with Form 4 prescribed in the

NSW Regulation, was incorrect as it did not take into account the restrictions that had

to be read into it from the NSW Acts.

31. Clause 3 of the policy, as set out above (at [27]), was the relevant clause, which

provided for the liability of the insurer to indemnify the insured employer for damages

payable to an employee. In this case, cl 3(a) was not applicable because Mr Shephard

had relevantly recovered common law damages and not compensation payable under

the NSW Acts or under a law of another State or Territory or the Commonwealth.

Clause 3(c) dealt only with costs and expenses.

32. Thus, the appeal was concerned with the operation of cl 3(b), which required indemnity

for any liability of the employer to or in respect of “any such person”, that is, any person

referred to in cl 3(a) who is “a worker” of the employer, being a liability incurred

independently of the NSW Act, that is, common law damages.

33. The question that the NSW insurer said had to be answered, and which it submitted the

Master had answered incorrectly, was what limitations, if any, (other than those

expressed in cl 3(b) itself in the part in brackets) were imposed on this indemnity by the

NSW Acts, as specified in cl 24 of Form 4. It was to this question that the submissions

of the NSW insurer were directed.

The nature of the obligation to insure

34. Section 155 requires an employer to obtain and maintain an insurance policy for:

(a) the full amount of its liability under the NSW legislation for all workers it

employs; and

10

(b) an unlimited amount in respect of its other liability for injuries to “any

such workers” (not including any liability for [workers compensation]

under the law of any other jurisdiction).

35. Clause 3 effectively reflected the requirements of s 155:

(a) Clause 3(a) provided indemnity in respect of liabilities under the

NSW legislation.

(b) Clause 3(b) provided indemnity in respect of liabilities to “any such

person”, being liabilities arising “independently of” the NSW legislation

(but not including any liability for [workers compensation] under the law

of any other jurisdiction).

36. That is, the terms of the policy were almost identical with the terms of the employer’s

obligation to obtain and maintain such a policy.

37. On the face of it, both s 155 and cl 3 related to an employer’s obligation to have

insurance against its liability to pay common law damages to some or all of its workers.

38. The NSW insurer says, however, that, in respect of injuries sustained outside NSW:

(a) s 13 of the 1987 Act affected not only workers compensation

entitlements under NSW law but also any common law entitlements in

respect of the injuries; and

(b) the restriction on the insurer’s indemnity for the employer’s liability

provided by s 13 must also be read into the obligation imposed by s 155,

and into cl 3 of the policy, so as to exclude the insurer’s apparent liability

under the policy to indemnify an employer for any common law

damages, except in a case in which s 13(1)(a) is satisfied.

39. The nature of s 13’s operation in respect of injuries sustained outside NSW was not

clearly expressed; the NSW insurer did not appear to be arguing that s 13 operated to

exclude the insurer’s indemnity for an employer’s liability for common law damages to a

worker whose case did not fall within the description of s 13(1)(a). Instead, the

NSW insurer argued that although the word “compensation” was used both in

s 13(1)(b) and in the conclusion to s 13(1), it meant a different thing at each point.

Specifically, in s 13(1)(b) the reference to “compensation in accordance with this Act”

was a reference to compensation under workers compensation legislation, but in the

conclusion to s 13(1), the reference to “compensation [that] is payable accordingly” was

a reference to any form of compensation for a work-related injury, specifically both

compensation under workers compensation legislation and “compensation” by way of

common law damages.

Consideration

40. In our view, the main issue on this appeal is the operation of s 155, and of the

insurance policy whose terms are specified in Form 4 in the NSW Regulation as a

policy giving effect to the obligations imposed by s 155. The particular question relates

to the nature of the relationship between the two obligations imposed by that section.

11

The proper interpretation of that section, and of the insurance policy, were not the

subject of any detailed submissions about either the words or the structure of s 155.

41. Section 155 has the following structure:

(a) First, it requires employers to obtain and maintain a compliant policy of

insurance “for the full amount of the employer’s liability under [the NSW

Acts] in respect of all workers employed by the employer”.

(b) Next, it requires that the policy also covers the employer for “an

unlimited amount in respect of the employer’s liability independently of

[the NSW Acts]” for “any injury to any such worker”.

(c) Finally, it excludes any obligation for the policy to cover an employer’s

liability for compensation in the nature of workers compensation under

the law of any other jurisdiction.

42. The first requirement establishes the scope of the employer’s obligation under section

155 to obtain and maintain a compliant insurance policy. That is, the employer must

have such a policy in respect of all workers employed by the employer in respect of any

liability to any such worker under the NSW Acts.

43. Next, in respect of “any such worker”, section 155 requires that the policy covers any

liability for any injury to the worker that is owed by the employer otherwise than under

the NSW Acts, except (by operation of the final element of the section) for any liability

to the worker that is owed by the employer under a law of any other jurisdiction relating

to compensation in the nature of workers compensation; it will be convenient in these

reasons to refer to such liability as a common law liability.

44. Provisions determining the scope of an employer’s liability to a worker under the

NSW Acts are accordingly relevant in interpreting the scope of the insurance policy

required, in that they go to identifying the workers to whom an employer may be liable

under the NSW Acts, and therefore the workers in respect of whom an insurance policy

must be held.

45. On the other hand, the scope of the requirement for an employer to obtain such an

insurance policy does not limit the liability that an employer may have to an injured

employee; it may, of course, restrict the indemnity that the employer obtains for the

damages payable for such injury by the insurer.

46. The basis of the appellant’s argument, albeit not clearly spelled out, was that the

obligation to insure against common law liability was a subsidiary obligation, and

related only to a worker and, more importantly, to an injury to such a worker, in respect

of which the employer was subject to the primary obligation to insure against workers

compensation liability.

47. There is an argument based on textual analysis that the two obligations, while

undoubtedly interdependent, are not interdependent in quite that way: s 155 could be

read as requiring that, if an employer must hold an insurance policy under s 155 in

respect of a worker, then the policy must also cover the employer for any common law

liability to that worker in respect of any injury, and not only common law liability in

respect of an injury for which the employer is liable to the worker under the NSW Acts.

48. That argument is based on the fact that the first obligation refers to the employer’s

liability under the NSW Acts to “all workers employed by the employer”, while the

12

second obligation is imposed in respect of “any injury to any such worker” (our

emphasis) for which the employer has a common law liability.

49. On this reading of s 155, if an employer could (having regard to the circumstances of a

worker’s employment) be liable to the worker under the NSW Acts, then insurance

must be held under s 155, which identifies the workers in respect of whom the

obligation applies by reference to the employer’s potential liability to them under the

NSW Acts.

50. The obligation to insure against the employer’s common law liability to a worker who

has been so identified is specified to apply in relation to any injury to such a worker;

that part of s 155 could be read as extending the obligation to insure against common

law liabilities so that it operates not only in relation to such liabilities arising out of

injuries that give rise to liability under the NSW Acts, but in fact to any injuries suffered

by a worker who has been so identified. This was submitted by the ACT insurer to be

the correct interpretation of the section.

51. Although the Master did not identify such a reasoning process, we assume that

reasoning along the lines supported by the ACT insurer was a step in his Honour

coming to the conclusion that he did when he said at [167]:

I am not persuaded that there is anything in the NSW legislation or in the decided cases which would deprive the defendant of its entitlement to be indemnified in respect of the claim by this plaintiff, who worked for much of his time in NSW, under the NSW policy issued by the first third party.

52. As indicated, we consider that the words and structure of s 155 in its current form could

justify a reading such as we have described above. However, we have concluded that

the history of the provisions concerned, and their judicial interpretation over many

years during which the relevant legislation has been repeatedly amended, but without

any attempt to overcome such an interpretation, requires s 155 to be read as creating

only an obligation, on employers any of whose workers may have entitlements under

the NSW Acts, to insure against:

(a) any liability under the NSW Acts to any of their workers; and

(b) any liability at common law for any injury to any of their workers, being

an injury in respect of which a liability under the NSW Acts arises.

53. In reaching that conclusion, we have had regard to the following matters.

54. First, there is the case of Mynott v Barnard (1939) 62 CLR 68. In that case, Latham CJ,

considering s 5(1) of the Workers’ Compensation Act 1928 (Vic), which imposed a

liability to pay compensation on any employer whose employee suffered personal injury

arising out of the employment, being personal injury apparently geographically

unrestricted, said:

It would be unreasonable to read the section as applying to all employers, all workers, and all accidents everywhere. Some territorial limitation must be introduced in the construction of the section. The court has been offered an embarrassing choice of possible limitations.

...

In the first place it may be observed that the question which arises is a question of the construction of a statute. It is not a question whether a statutory provision, the construction of which is clear, is or is not within the territorial competence of the legislature. Parliament might have used language clearly introducing a particular territorial limitation. For example, it might have provided that any person who by a contract made in Victoria employs another

13

person shall be liable to pay compensation in specified cases of accident, wherever the accident may take place. Such legislation would have been valid because it is within the power of the Victorian Parliament to attach legal consequences to the doing of an act (such as the making of a contract) in Victoria. Similarly, the statute might have been applied by its terms to all persons domiciled and resident in Victoria, or to all accidents in Victoria, or to all persons working in Victoria wherever the contract of employment was made, or to all contracts wherever made under which any work was to be done in Victoria where the accident also happened in Victoria, or more generally to any contracts which were in some defined sense Victorian contracts. Any such statute would, I think, have been a law "in and for Victoria" within the meaning of clause 1 of schedule 1 of 18 & 19 Vict. c. 55 (The Constitution Act) and would have been within the territorial competence of the legislature. But the fact that a provision in a particular form would have been within the competence of the legislature does not provide any positive assistance towards the true construction of a provision expressed in perfectly general terms without any territorial restriction. If it could be laid down as a rule that parliament must always be presumed to exercise its powers to the maximum possible extent, then the principles which govern territorial legislative competence would in some cases determine construction. But no such rule can be laid down. Such a rule would not be identical with or equivalent to the rule that a Dominion statute will be construed, if possible, so as not to exceed the proper limits of legislative territorial competence. This rule, as in Macleod v. Attorney-General for New South Wales, assists the interpretation of the statute by limiting it (where the words permit limitation) to matters within the territorial competence of the legislature. But the principle does not help towards the discovery of the appropriate territorial limitation to be applied where some limitation, as in the present case, obviously must be implied, but where various competing limitations are offered as all possibly applicable.

(Citations omitted)

55. In relation to Mynott v Barnard, we note Latham CJ’s important reminder that the

question to be addressed is one of statutory interpretation. Secondly we note that the

need for a territorial limitation to be identified (as was discussed in Mynott v Barnard) is

in s 155 addressed by the pre-requisite that the employer concerned is liable to the

worker under the NSW Acts. That is, if an employer is not obliged to insure against

liability under the NSW Acts in respect of any of the employer’s workers, then s 155

does not impose any obligations on the employer to hold any insurance.

56. The case of Dillingham Engineering Pty Ltd v National Employers’ Mutual General

Insurance Association Ltd [1971] 1 NSWLR 578 (Dillingham) concerned a worker who

was employed in NSW and suffered an injury in Queensland in the course of his

employment. Section 7(1A) of the Workers’ Compensation Act, 1926 (NSW) provided

for workers compensation to be payable under the New South Wales legislation in such

a case if such compensation would have been payable had the injury been suffered in

NSW. The remainder of s 7 contained provisions preventing a worker in such a case

from “double-dipping” by receiving compensation under the laws of both jurisdictions.

That is, the provision in question (s 7(1A)) concerned whether workers compensation

was payable under the NSW legislation.

57. The relevant provisions of the insurance policy in question, although similar in many

respects to the provisions of cl 3 in the current policy, provided for an arguably clearer

link between the employer’s workers compensation liability and the liability to the

worker arising independently of the workers compensation obligation, saying that if,

during the period of insurance:

... the Employer shall be liable to pay compensation under the Act to or in respect of any person who is or is deemed by the Act to be a worker of such Employer, or to pay any other amount not exceeding £20,000 in respect of his liability independently of the Act for any injury to any such person, THEN, and in every such case, the Insurer will indemnify the Employer against all sums for which the Employer shall be so liable.

14

58. Moffitt JA, with whom Holmes JA agreed, concluded (at 585D) that:

At this point of time the employer was liable to pay compensation to a person who was a worker within the meaning of the Act who had sustained an injury within the meaning of the Act. At this point of time there was a liability at common law, and it was to that worker in respect of that injury, so that there were liabilities which answered the descriptions of the policy and were indemnified by it. It was argued that, upon the happening of the injury the obligation to indemnify arose in respect of both liabilities, and that no ground existed to extinguish this indemnity in respect of the common law liability because of some later variation or extinction of the liability to make workers’ compensation payments.

59. The issue dealt with in Dillingham was whether, the worker’s entitlement to workers

compensation under NSW law having been extinguished by the receipt of such

compensation under the law of another jurisdiction, the employer’s liability for common

law damages had also been extinguished, so as to excuse the NSW insurer from

indemnifying the employer against that common law liability.

60. Moffitt JA concluded:

Irrespective of how it may turn out that sub-pars. (a) or (b) operate in the future, the obligation to indemnify attaches upon the injury occurring provided the case falls within the first part of s. 7 (1A). Its existence or continued existence does not depend upon the chance that the worker may receive workers' compensation payments outside the State before common law proceedings are instituted or before a verdict is obtained or after these events or upon no such payments ever being received.

It follows in the present case that, upon the happening of the injury, liability of the appellant to pay workers' compensation and to pay damages at common law arose; that thereupon the respondent became liable to indemnify the appellant in respect of each liability; that the only consequence of the later receipt of workers' compensation payments in Queensland by the worker was that the liability of the appellant for workers' compensation payments under the New South Wales Act ceased, leaving the insurer with no further obligation to indemnify the appellant in respect of workers' compensation payments in New South Wales; and that the appellant's liability at common law continued as did the insurer's obligation to indemnify the appellant in respect of it.

61. Asprey JA also concluded that the injury in question, when suffered, gave rise to

liability in the employer under the workers compensation legislation and at common

law, and agreed that the subsequent receipt of workers compensation payments under

Queensland law did not extinguish the employer’s common law liability or the insurer’s

obligation to indemnify the employer in respect of that liability.

62. That is, the Court in Dillingham read the insurance policy as indemnifying the employer

against two kinds of liability arising out of the same injury, being an injury that rendered

the employer liable to the employee under NSW workers compensation law. It is

correct that, as the Master noted, the wording of the relevant provisions of the

legislation and policy were different “to the wording of the legislation and of the policy in

the present case”, but we are not convinced that the current provisions are different in

such a way as to suggest that the scope of the obligation to insure against common law

liabilities is intended to be different from the scope identified in Dillingham. In particular,

the provision considered in Dillingham contained the same reference to the employer’s

common law liability “for any injury to any such person”.

63. The approach taken in Dillingham was applied by Miles CJ in Susic v Sunset Pty Ltd

[1998] ACTSC 50; 145 FLR 363 at 370 (cited in Austlii as [1998] ACTSC 234).

64. Before 1 September 1995, s 155(1) of the 1987 Act was in the following terms:

15

An employer (other than a self-insurer) shall obtain from a licensed insurer, and maintain in force, a policy of insurance that complies with this Division for the full amount of the employer’s liability under this Act in respect of all workers employed by the employer and for an unlimited amount in respect of the employer’s liability independently of this Act (being a liability under a law of New South Wales) for any injury to any such worker.

65. That is, it restricted the common law liability, upon which the section operated to liability

under a law of NSW. In 1995 that provision was amended by the Workers

Compensation Legislation Amendment Act 1995 (NSW) to the form in which it remains

(at [24] above).

66. The amendment was Item (1) in the amending Act. A note to the amendment

appearing in the amending Act itself explained the amendment as follows:

Item (1) of the proposed amendments extends the insurance cover required to be provided by a workers compensation policy for liability arising independently of the Act by removing the existing restriction which limits cover to a liability arising under a law of New South Wales. Cover will not extend to liability arising under any workers compensation law of another State, a Territory or the Commonwealth or to liability arising under the law of another country. The effect of this will be that cover will extend to any liability that is not a workers compensation type of liability wherever in Australia the liability arises (for example, common law liability arising under a law of another State or Territory).

67. The extension of common law liability explained by the note was achieved by omitting

the words previously limiting such liability to liability under NSW law and replacing them

with words excluding from the thereby expanded liability any liability for payments in

the nature of workers compensation under the law of another jurisdiction. The note

could be read as describing an extension of the common law liability to be covered by

the required insurance so that it applied even where there was no local workers

compensation liability, but such a change to the operation of s 155 is not in any obvious

sense an outcome of the changes actually made to s 155.

68. In his Second Reading Speech delivered on 31 May 1995, the NSW Attorney-General

and Minister for Industrial Relations said:

The purposes of the bill are, first, to rationalise workers compensation arrangements in cross-border situations; second, to provide that workers compensation insurance policies cover all relevant liability of employers at common law ...

A major issue in the bill is the proposed elimination of duplicated insurance requirements where a worker works in two or more States or Territories for the same employer. At present the employer in this situation must obtain workers compensation cover in each jurisdiction. But if injured, the worker is, in effect, only allowed one full claim, so that the extra expense of duplicated coverage is wasted. The draft amendments seek to identify a base State for such workers, with insurance obtained by the employer in that State providing Australiawide cover. The aim is to facilitate clear decisions both by an employer on where cover should be obtained and by an injured worker on where a claim may be made.

69. The Attorney-General’s comments quoted do not refer directly to the amendment of

s 155; rather, they suggest an intention that an employer should, in respect of each

worker, only have to insure against workers compensation liabilities in a single

jurisdiction. This aspiration was to be achieved by attaching to a single jurisdiction the

workers compensation liabilities owed to a worker who works in more than one

jurisdiction. That single jurisdiction was to be identified by reference to specified

criteria, so that the employer would be required to obtain insurance in the identified

“base State” that provides “Australiawide cover”.

16

70. The Attorney-General’s comments do not suggest any intention that s 155 should

operate to render an employer liable to hold a NSW insurance policy that extends

cover to common law liabilities owed to insured workers where the common law

liabilities arise from injuries suffered in circumstances in which there would be no

workers compensation liability under the NSW Acts.

71. The interpretation of s 155 as creating a primary obligation in respect of workers

compensation liabilities under the NSW Acts and a subsidiary obligation in respect of

common law liabilities arising out of an injury to a worker in respect of which the

employer owes a workers compensation liability under the NSW Acts is consistent with

(although not necessarily required by) the approach to that section taken in several

cases decided since the 1995 amendments.

72. In Francis v Emijay Pty Ltd [2006] QCA 62; 2 Qd R 5, the Queensland Supreme Court

considered whether s 155 obliged an employer, a Queensland company, to have

insurance in respect of its liability to a Queensland-based worker who was injured in

NSW in the course of his employment. The argument made on the appeal was that the

claim by the worker against his employer was brought under a contract the proper law

of which was Queensland and, as such, the contract could not give rise to an obligation

under s 155.

73. In dismissing this argument, Keane J noted at [35] that Mr Francis was clearly in NSW

“in accordance with the terms of his employment and his employer’s expectations” and

that “it is sufficient for the purpose of the disposition of this case to conclude that

Emijay’s liability to Mr Francis was clearly a liability against which it was required to

provide by s 155(1) of the NSW Act”.

74. McMurdo J, also dismissing the argument based on the proper law of the contract,

noted at [43] that the argument “appears to accept that this employer was obliged to

insure in New South Wales in respect of its liability in tort for this accident”.

75. At [46], McMurdo J went on:

Section 155 required insurance against two types of liability. One was a liability for workers compensation under that Act. It was the employer’s liability “in respect of all workers employed by the employer”. The second was the employer’s liability independently of the Act “for any injury to any such worker”. The evident intent was that the same worker or workers would be the subject of insurance against each kind of liability. Accordingly, it is relevant to consider the circumstances in which an employer was liable under the Act for workers compensation. A connection with New South Wales which was sufficient to expose the employer to a liability for workers compensation is likely to represent the necessary connection for the obligation to insure against that liability and otherwise pursuant to s 155.

76. At [47], McMurdo J noted that amendments made to the NSW workers compensation

legislation in 2002 were only relevant:

in illustrating the relationship, which already existed, between the operation of the workers compensation scheme and the employer’s obligation to insure under s 155.

77. The comments made by Keane and McMurdo JJ do not explicitly assert that the

insurance that s 155 requires an employer to have need only apply to common law

liabilities in respect of injuries for which the employer has workers compensation

liabilities under the NSW Acts. McMurdo J, however, referred at [46] to the “evident

intent” of s 155 being “that the same worker or workers would be the subject of

insurance against each kind of liability”, and his Honour concluded that:

17

A connection with New South Wales which was sufficient to expose the employer to a liability for workers compensation is likely to represent the necessary connection for the obligation to insure against that liability and otherwise pursuant to s 155.

78. Those comments cannot easily be read as a firm conclusion that any obligation under

s 155 to insure against common law liabilities arises only where there is an obligation

to insure against workers compensation liabilities under the NSW Acts. However, the

comments of Keane and McMurdo JJ do not provide a basis for rejecting such a

conclusion, especially since that issue was not directly raised by the argument in that

case.

79. The NSW insurer relied on s 13 of the 1987 Act, set out at [24] above and in force

when Mr Shephard suffered his injury, as a provision that limited the operation of s 155

in its favour. We agree that s 13 is relevant in interpreting s 155, but not in the way

suggested by the appellant.

80. The effect of s 13(1) was to extend the operation of the NSW Acts so that they

provided an entitlement to compensation under the NSW Acts to certain workers

injured outside NSW. We agree that the extended operation of the NSW Acts effected

by s 13(1) flowed through to the requirement in s 155 for an employer to insure against

liabilities arising under the NSW Acts.

81. However, the remaining provisions of s 13 are in our view irrelevant to the current

question. Those provisions were simply intended to ensure that a worker who, by

reason of s 13(1), may have had an entitlement to payments in the nature of workers

compensation under both the NSW Acts and the law of another jurisdiction (often,

perhaps, the jurisdiction in which the injury was suffered), was not able to “double-dip”

by receiving compensation under the laws of both jurisdictions. We reject the

submission of the NSW insurer that those provisions should be read as if the

references to “workers compensation” included references to common law damages.

See Allianz Australia Workers Compensation (NSW) Ltd v PPG Industries Australia Pty

Ltd [2004] ACTCA 28 at [26]-[28].

82. The fact that Mr Shephard did not fall within the category of workers described in

s 13(1) meant that the provision had nothing directly to say about whether his employer

was obliged under s 155 to insure against any workers compensation liabilities to him.

83. It was assumed, and may well be correct, that FAW’s policy with the NSW insurer

would have had some application to Mr Shephard, perhaps in respect of workers

compensation liabilities arising from injuries suffered during the work he regularly

performed in NSW.

84. Furthermore, if, apart from s 13(1), FAW was obliged by s 155 to insure in respect of its

liability to Mr Shephard in respect of the injury he suffered in the ACT, then such

insurance would also have responded to the employer’s common law liability to

Mr Shephard in respect of that injury.

85. However, if s 13(1) was the only provision that could have rendered his employer liable

to him under the NSW Acts for an injury suffered in the ACT, then there was no such

liability, since it was accepted that s 13 did not apply to Mr Shephard, because he was

not, within the meaning of s 13(1), “employed” in NSW. See Starr v Douglas (1994)

35 NSWLR 133 at 134, where Gleeson CJ pointed out:

It is settled law that the reference in s 13(1) of the Workers Compensation Act 1987 to employing a worker in New South Wales is a reference to the place where the worker is

18

engaged, not to the place where the work is performed: Helmers v Coppins (1961) 106 CLR 156.

86. Accepting that FAW was not liable to Mr Shephard for his ACT injury under the

NSW Acts then, on the construction of s 155 that we feel constrained to adopt, FAW’s

NSW insurance did not apply to any workers compensation liability for that injury and

therefore also did not apply to any common law liability in respect of that injury.

87. Since Mr Shephard’s injury, s 13 has been repealed and new provisions including

s 9AA have been inserted in the 1987 Act with effect from 1 January 2006 (see

Schedule 1 (Cross-border amendments) to the Workers Compensation Legislation

Amendment Act 2002 (NSW)). Section 9AA is in the following terms:

9AA Liability for compensation

(1) Compensation under this Act is only payable in respect of employment that is connected with this State.

(2) The fact that a worker is outside this State when the injury happens does not prevent compensation being payable under this Act in respect of employment that is connected with this State.

(3) A worker’s employment is connected with:

(a) the State in which the worker usually works in that employment, or

(b) if no State or no one State is identified by paragraph (a), the State in which the worker is usually based for the purposes of that employment, or

(c) if no State or no one State is identified by paragraph (a) or (b), the State in which the employer’s principal place of business in Australia is located.

...

(5) If no State is identified by subsection (3) or (if applicable) (4), a worker’s employment is connected with this State if:

(a) the worker is in this State when the injury happens, and

(b) there is no place outside Australia under the legislation of which the worker may be entitled to compensation for the same matter.

88. Section 9AA provides a new test for when compensation under the NSW Acts is

payable to a worker, being that the employment in which the worker was injured is

“connected with” NSW, a concept that is defined in ss 9AA(3) and (4). We note,

incidentally, that under that new test, it seems likely that Mr Shephard would not have

been entitled to workers compensation payments under the NSW Acts.

89. The significance of s 9AA in this case is, however, that its operation was the subject of

consideration in RHG Home Loans Pty Ltd v Employers Mutual New South Wales Ltd

[2011] QSC 28; [2012] 1 Qd R 262 in which Applegarth J examined its effect on s 155.

90. We respectfully consider that Applegarth J was correct in concluding that s 9AA

affected the operation of s 155 by identifying the cases in which workers compensation

was payable under the NSW Acts. For present purposes, however, the significance of

the case is his Honour’s consideration of the relationship between the obligation to

insure against liability for workers compensation payments and the obligation to insure

against common law liabilities. Applegarth J noted McMurdo J’s comment in Francis

19

v Emijay Pty Ltd that the “evident intent” of s 155 was that the same workers would be

the subject of insurance against each kind of liability, and said at [43] and [44]:

[43] ... [Section 9AA] relevantly states that compensation under the NSW Act is only payable “in respect of employment that is connected with this State”, and contains provisions designed to determine when a worker’s employment is connected with New South Wales. Section 9AA relates to the liability to pay compensation. However, it governs the employer’s obligation to insure under s 155. This is because the obligation to insure is cast in terms of the employer’s liability under the Act and the identification of the workers to whom the employer may be liable. The identification of the workers in this regard also serves to identify the workers in respect of whom the employer has a statutory obligation to insure for liability independently of the Act. This arises from the words “to any such worker” at the end of s 155(1).

[44] The interpretation of s 155 for which Employers Mutual contends, which finds support in the judgment of McMurdo J in Francis, does not involve reading into s 155 words that are not there. It involves giving the concluding words of s 155(1) their clear meaning. They refer to workers employed by the employer to whom the employer is liable under the Act. This, in turn, requires reference to s 9AA to determine whether a worker’s employment is connected with New South Wales so that compensation is payable in respect of their employment.

91. We also agree with Applegarth J’s conclusion to the effect that s 155 (which was

relevantly in the same terms at the time of Mr Shephard’s injury as it was when the

employee of RHG Home Loans Pty Ltd was injured) imposes an obligation to have two

different kinds of insurance in respect of the same workers.

92. What was not in issue before his Honour was the specific question raised in this case,

namely, whether the obligation under s 155, although not explicitly limited in this way, is

to have two different kinds of insurance, but only in respect of the same workers and in

respect of the same injuries.

93. That issue arises in this case if it is correct that, at the time of Mr Shephard’s accident,

FAW was required to have insurance under s 155 in respect of Mr Shephard because

of the regular work he performed in NSW (a matter which was not as far as we are

aware the subject of argument before the Master). If that was the case, then the

applicability of FAW’s insurance with the NSW insurer in respect of Mr Shephard’s

injury would depend on whether the obligation imposed on an employer by s 155:

(a) was only to hold the two different kinds of insurance in respect of the

same workers and in respect of the same injuries (being injuries that

would give rise to workers compensation liabilities under the NSW Acts);

or

(b) included an obligation to hold the two different kinds of insurance in

respect of the same workers, but with the insurance against common

law liabilities extending to liability for injuries not giving rise to workers

compensation liabilities under the NSW Acts.

94. The more recent cases we have canvassed, while involving either an assumption or a

finding that s 155 imposes an obligation to hold two different kinds of insurance in

respect of the same workers, have not raised the question whether the section in fact

contains the further, implicit, limitation on the obligation imposed such that it requires

the two kinds of insurance to cover the same workers but also to cover those workers

only for the same injuries. In concluding that the section does contain that further

implicit limitation, we have relied heavily on two matters:

20

(a) the decision in Dillingham, in which it was explicitly stated that a

predecessor of the current form of insurance required by s 155 provided

insurance against common law liabilities that arise when a worker

suffers an injury that entitles him or her to workers compensation under

NSW law (that is, that under the relevant policy, the trigger for the

insurer to indemnify an employer against the employer’s common law

liability in respect of an injury suffered by a worker is that the injury

renders the employer liable for workers compensation payments to the

worker in respect of that injury); and

(b) the fact that, since that decision, the NSW workers compensation

legislation has been regularly amended, and s 155 has been enacted,

and amended at least once, but there has been no attempt to specify, or

clarify, that the required insurance coverage goes beyond the coverage

found to be required in Dillingham and extends to all common law

liabilities of an employer to a worker in respect of whom the employer

holds insurance against workers compensation liabilities under NSW

law, even a common law liability that arises from an injury suffered by

the worker in respect of which there is no workers compensation liability

under NSW law.

95. There are arguments that could be made against our reliance on those two matters.

96. First, it is apparent that the question raised in the current case was not canvassed in

Dillingham, a case in which there was no question that the injury suffered gave rise to

both workers compensation and common law liability: the dispute arose only because

the workers compensation liability fell away when the worker received workers

compensation payments under the law of another jurisdiction.

97. Secondly, there may be reasons why s 155 has not been amended to ensure that it

has the extended operation asserted by the respondent, being reasons which would

not militate against such an interpretation. One such reason is that s 155 could, as we

have already explained, be read as having that extended operation as it stands.

Another reason may simply be that the particular question arising in this case has not

previously arisen so as to come to the notice of the legislators or, perhaps more

relevantly, the insurance companies.

98. However, another reason for not amending s 155 to clarify that it operates as asserted

by the respondent may of course be that, for sound policy reasons, it is not intended to

operate that way. In the end, it may be that our conclusion, that, although on its face

s 155 could so operate, it does not operate as asserted by the respondent, really

reflects a view that such an operation would have no practical utility, and might have an

undesirable operation as a matter of policy. The extended operation on this view of

s 155 would require employers to insure in NSW:

(a) against their workers compensation liability to a worker under NSW law;

(b) against their common law liability to such a worker, under the law of any

jurisdiction, for an injury giving rise to workers compensation liability under

NSW law; and

(c) against their common law liability, under the law of any jurisdiction, for other

injuries:

21

(i) sustained by a worker to whom the employer has potential workers

compensation liabilities under NSW law; and

(ii) being injuries for which the employer has no potential workers

compensation liabilities under NSW law.

99. Noting that, even without genuinely uniform workers compensation legislation applying

across some or all Australian jurisdictions, there has been considerable commonality in

workers compensation legislation among Australian jurisdictions for some time, it

seems to us that adding that third element to the liabilities against which an employer

subject to the NSW Acts must insure would probably require many such employers to

carry insurance against risks for which they must also insure under the laws of one or

more other jurisdictions (thus increasing the costs to employers with no corresponding

benefits to workers or employers), and could lead to further disputes, of the kind arising

in this case, between insurers.

Conclusions

100. For these reasons, we are satisfied:

(a) that the Master was wrong to conclude that the policy held by FAW with the

NSW insurer, which was assumed to cover FAW’s liability to Mr Shephard

under the NSW Acts, also responded to the common law claim made by

Mr Shephard for an injury suffered in the ACT; and

(b) that his Honour’s error was, as a result of misreading s 155, to treat the

insurance that FAW obtained from the NSW insurer, being insurance

against liability under the NSW Acts to workers including Mr Shephard, as if

it also insured FAW against common law liability for any injury to

Mr Shephard that did not give rise to any workers compensation liability

under the NSW Acts.

101. Finally, we note that, if the Master was wrong in assuming that FAW had a potential

liability to Mr Shephard under the NSW Acts so as to require Mr Shephard to be

covered by the insurance policy that s 155 obliged FAW to obtain and maintain, then

there was no basis, even on the respondent’s argument, on which FAW’s NSW policy

could have been found to respond to Mr Shephard’s injury at all.

102. The conclusions set out at [100] above effectively address all the appeal grounds set

out at [10] above. The appeal must accordingly be upheld.

103. On that basis, we consider that the second respondent, the ACT insurer, should pay

the costs of the appellant and the first respondent. However, before making any order

to that effect, we shall allow 21 days for the parties to file and serve any written

submissions they wish to make about the costs of the appeal.

I certify that the preceding one hundred and three [103] numbered paragraphs are a true copy of the Reasons for Judgment of the Court.

Associate:

Date: 20 January 2017