AMP Workers Compensation v QBE: 19 Sep 2001

Austlii (Supreme Court of New South Wales – Court of Appeal) FACTS
The appeal involved a question of double insurance. The employer held a compulsory third party policy with QBE Insurance Limited in respect of a motor vehicle and a current workers’ compensation policy with AMP Workers’ Compensation Services (NSW) Limited. An employee in the course of his employment was injured by another employee negligently driving in the course of his employment with the same employer.
The first employee commenced proceedings against the second employee but did not seek to join the employer although it would have been vicariously liable. Those proceedings were settled. QBE satisfied the judgment debt as the compulsory third party policy covered the employee as the driver of the vehicle. QBE then claimed contribution from AMP. AMP argued that there was no relevant double insurance because its workers’ compensation policy did not cover the negligent employee who was liable and entitled to indemnity from QBE, and the employer it did insure was never liable and never entitled to indemnity under either policy.
The dispute turned on the relevant date for the purposes of determining the question of double insurance. AMP contended that this had to be determined after the event when the claim for contribution was made. QBE contended that the question must be determined at the date of casualty. In the latter case there would clearly be double insurance in this case.
HELD (per Handley JA, Mason P and Beazley JA agreeing)
(i) The right of contribution only exists in respect of insurances which are contracts of indemnity, where two or more insurers are on risk in respect of the same loss or liability. The right arises when and because one of the insurers has paid more than his proper share of the common demand. Where one insurer has paid in full the indemnity is satisfied and the insured has no right of indemnity against any other insurer. The right of contribution therefore cannot depend on the continued existence of coordinate liabilities for the same demand because the very payment by one which calls the right into existence will have put an end to the liability of the other insurance.
(ii) The judgments in Albion Insurance Co Limited v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342 require the question of double insurance to be determined at the time of the casualty. Although the present question did not arise in Albion Insurance, the focus in both judgments was on the contractual position at the time of the casualty when the loss in the one case, or the liability in the other, accrued.
(iii) There is no reason in precedent or principle why the right of contribution should be defeated by the existence of a second layer of choice available to another party. It should not rest with either of the persons who had available choices to exercise those choices in a way which would leave the ultimate burden on one of the insurers without any right of contribution from the other.
Appeal dismissed with costs.


Mason P, Handley, Beazley JJA


[2001] NSWCA 267, (2001) 53 NSWLR 35



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Updated: 18 May 2022; Ref: scu.566218