QBE Insurance Limited v Government Insurance Office of New South Wales [1986] ACTSC 98 (10 October 1986)

SUPREME COURT OF THE ACT

Q.B.E. INSURANCE LIMITED v. GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES
S.C. No. 283 of 1984
Insurance - Words or Phrases

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Davies J.(1)

CATCHWORDS

Insurance - contribution sought by one insurer from another with respect to payments made under workmen's compensation policy - contribution sought by reason of third party motor vehicle policy - employee injured in course of loading truck hired by employer company - whether injury caused by or arose out of the use of the motor vehicle - whether employer company covered by third party motor vehicle policy - whether employer company covered as "driver"

Words or Phrases - "use of the motor vehicle" "driver"

Workmen's Compensation Ordinance 1951 (ACT), Third Schedule

Motor Traffic Ordinance 1936 (ACT), Form A, Second Schedule, ss.4, 54, 71, 78

Government Insurance Office of New South Wales v R.J.

Green & Lloyd Pty Ltd [1966] HCA 6; (1966) 114 CLR 437

Harvey Trinder (NSW) Pty Limited v Government Insurance Office [1966] HCA 25; (1966) 114 CLR 449

Brewer v Incorporated Nominal Defendant (1980) VR 469

North British and Mercantile Insurance Co v London,

Liverpool and Globe Insurance Co (1877) 5 ChD 569

Albion Insurance Company Limited v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342

Riley v Insurance Commissioner (1972) VR 265

Northern Insurance Company Limited v Coal Mines Insurance Pty Limited (1969) 91 WN(NSW) 293

Commercial and General Insurance Company Limited v Government Insurance Office (1973) 47 ALJR 612

HEARING

CANBERRA
10:10:1986

ORDER

There be judgement for the defendant with costs.

DECISION

In this action, the plaintiff, QBE Insurance Limited ("QBE"), seeks contribution from the defendant, the Government Insurance Office of New South Wales ("GIO"), with respect to payments made by QBE under a policy issued under the Workmen's Compensation Ordinance 1951 (ACT) indemnifying Permanent Constructions Pty Limited ("Permanent Constructions"). Contribution was sought by reason of a third-party policy under the Motor Traffic Ordinance 1936 (ACT) issued by GIO with respect to a certain motor truck owned by Mr Ivan Quinton ("Quinton"), an employee of Permanent Constructions.

2. Copies of the relevant policies were not tendered in evidence, but I was asked by Mr T.J. Higgins, of counsel, who appeared for the plaintiff, and Dr A.S. Morrison, of counsel, who appeared for the defendant, to assume that the workers' compensation policy was in the form of the policy set out in the Third Schedule to the Workmen's Compensation Ordinance 1951 (ACT) and that the third-party policy was in the form set out in the Second Schedule to the Motor Vehicle (Third Party Insurance) Regulations. It was not submitted by Dr Morrison that the policies in question were so widely different in their scope that the ordinary rules as to contribution were inapplicable. However, it was submitted by Dr Morrison that the third-party policy did not cover the peril which had occurred and further that, even if it did, the two policies did not have a common insured and Permanent Constructions was not insured by the motor vehicle policy.

3. It was agreed by counsel that, if it were held that there should be contribution, the amount of the contribution should be $17,931.17, being 50% of the payments made by QBE under the workers' compensation policy.

4. Both Quinton and one Henry Lantry ("Lantry") were employees of Permanent Constructions. On 11 September 1979, Permanent Constructions hired Quinton's motor truck for the day and instructed Quinton and Lantry to use the vehicle to pick up and transport a crane. In the course of this operation, Quinton drove the motor truck, but in loading the crane he was assisted by Lantry. It was agreed by counsel that "Lantry was injured when a hoist being loaded on to the back of (the) truck suddenly moved and struck him thereby injuring him". In further explanation, I was informed by Mr Higgins, with the apparent concurrence of Dr Morrison, that after the crane had been placed on the back of the truck, Quinton unbolted a section of the crane permitting the arm of the crane to rear up, thereby injuring Lantry. Because of the way the matter was presented to me by both counsel, I take that explanation to be part of the material before me, though, for my own part, I would have preferred that there be presented to me an agreed statement of the facts that occurred.

5. Subsequent to the accident, Lantry claimed from Permanent Constructions worker's compensation and later, also from Permanent Constructions, damages. Payments were made totalling $35,862.33. QBE indemnified Permanent Constructions with respect to those payments.

6. Section 54(1)(b) of the Motor Traffic Ordinance 1936 (ACT) provides that,

"54.(1) In order to comply with the requirements of

this Part, a third-party policy -
. . . . .
(b) shall, where the policy is issued in
relation to the use of a particular motor
vehicle, insure the owner of the motor
vehicle mentioned in the policy and any
other person who at any time drives the
motor vehicle, whether with or without the
authority of the owner, jointly and each of
them severally, against all liability
incurred by that owner and that person
jointly, or by either of them severally, in
respect of the death of, or bodily injury
to, any person caused by or arising out of
the use of the motor vehicle in any part of
the Commonwealth;
. . . . ."

The prescribed form is Form A of The Second Schedule to the Motor Vehicle (Third Party Insurance) Regulations and provides, inter alia,

". . . the insurer shall insure the owner and any
other person who at any time drives the motor
vehicle, whether with or without the authority of
the owner, jointly and each of them severally,
against all liability . . . incurred by the owner
and that person jointly, or by either of them
severally, in respect of the death of or bodily
injury to any person caused by or arising out of
the use of the motor vehicle in any part of the
Commonwealth of Australia: . . .".

7. Dr Morrison first submitted that the accident to Lantry was not caused by, and did not arise out of the use of, Quinton's motor truck.

8. A similar situation was considered in Government Insurance Office of New South Wales v R.J. Green & Lloyd Pty Limited [1966] HCA 6; (1966) 114 CLR 437. In that case, it was held that a motor truck was being used at a time when it was stationary and a building hoist was being drawn up planks on to the tray of the truck. At p.442, Barwick CJ, with whom McTiernan and Taylor JJ agreed, said,

"I have no difficulty in the present case in
concluding that the insured motor vehicle was
being 'used' during the operation of placing this
hoist upon its table-top. The vehicle had been
brought to the place where the hoist was in order
to transport it thence to another place; the
positioning of the hoist upon the motor vehicle
was an indispensable step in that operation. At
the very lowest, the table-top of the truck was
being used as an integral and significant part of
the truck to receive the load for the purpose of
its conveyance. Indeed, part of the lorry was in
fact being used as a mechanical aid to draw the
hoist on to the table-top, though no part of the
vehicle was moving in the course of that
operation.
I do not think that every act in loading a vehicle
for the conveyance of what is loaded upon it is
necessarily a use or a part of the use of the
motor vehicle. . . ."

Menzies J said at p.445,

"I do not think that the mere fact that the hoist
was being loaded upon the truck when it fell is
enough to warrant the conclusion that Williams'
injury was caused by the use of the truck. The
question which has troubled me is whether the
injury in question arose out of the use of the
truck. The words 'arising out of the use' have no
doubt a wider connotation than the words 'caused
by . . . the use'. To my mind, however, they do
import a relationship between the use of the
vehicle and the injury which has some causal
element in it."

At p.447, Windeyer J said,

". . . The loading of a vehicle designed to be used,
and ordinarily used, for the carriage of goods is
a necessary element in its ordinary use. Loading
it is incidental to the use of it in the normal
way. But that does not mean that whatever is done
that is incidental or ancillary to such loading is
itself a use of the vehicle in the relevant sense.
Therefore, if a person suffers bodily injury when
engaged upon some task connected with loading, the
question whether his injury was caused by or arose
out of the use of the vehicle depends upon whether
it was a consequence, direct and not remote, of
the operation of loading."

9. Dr Morrison submitted that, in the present case, the motor truck played no part in the accident, that it was stationary and static and there was no particular feature of its design or use which contributed to the accident. He relied upon Harvey Trinder (NSW) Pty Limited v Government Insurance Office [1966] HCA 25; (1966) 114 CLR 449 wherein it was held that an accident did not arise out of the use of a motor vehicle when a cable attached to a winch on a stationary motor vehicle, being used for tree felling, snapped.

10. However, to load a motor vehicle, to store goods on or in a motor vehicle for the purpose of their transport, is to use the motor vehicle as a motor vehicle. What occurred, in the present case, was that there was a negligent act in the course of the stowing of the crane on the back of the motor truck and in the securing of it for its transport. The negligence which occurred was, in my opinion, negligence which arose out of the use of the motor vehicle. See Brewer v Incorporated Nominal Defendant (1980) VR 469. It was a direct consequence of the loading and storage of the crane, and an operation in the course of using the vehicle.

11. Dr Morrison secondly submitted that, nevertheless, the question arises as to whether Permanent Constructions was insured by that policy. As is stated in Ivamy's "General Principles of Insurance Law", Fourth Edition, at page 524,

"Where the assured under one policy is a distinct
person from the assured under the other, each
having a separate interest in himself, and neither
policy being intended for the benefit of the
assured under the other, no right of contribution
arises, notwithstanding that the policies all
relate to the same object, and to the same risk
(North British and Mercantile Insurance Co v
London, Liverpool, and Globe Insurance Co (1877) 5
Ch.D.569; Scottish Amicable Heritable Securities
Association Ltd v Northern Assurance Co (1883) 11
R (Ct of Sess) 287; Andrews v Patriotic Assurance
Co (No.2) (1886) 18 LR Ir 355). In such a case,
the insurers under each policy are to be
identified with their respective assured (North
British and Mercantile Insurance Co v London,
Liverpool, and Globe Insurance Co (supra))."

Thus, in North British and Mercantile Insurance Co v London, Liverpool, and Globe Insurance Co (1877) 5 ChD 569, Mellish LJ explained at 583

" . . . I think if the same person in respect of the
same right insures in two offices, there is no
reason why they should not contribute in equal
proportions in respect of a fire policy as they
would in the case of a marine policy. The rule is
perfectly established in the case of a marine
policy that contribution only applies where it is
an insurance by the same person having the same
rights, and does not apply where different persons
insure in respect of different rights. . . . "

His Lordship went on to differentiate such a case from two classes of case, the first being that in which different persons insure in respect of different rights, in which event there is no right to either subrogation or contribution and the other being that in which different persons, such as mortgagees and mortgagors, insure in respect of different rights, nevertheless each recover the whole but there is remedy by way of subrogation, not contribution.

12. See also Albion Insurance Company Limited v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342. At page 345, Barwick CJ, McTiernan and Menzies JJ said,

"There is double insurance when an assured is
insured against the same risk with two independent
insurers. To insure doubly is lawful but the
assured cannot recover more than the loss suffered
and for which there is indemnity under each of the
policies. The insured may claim indemnity from
either insurer. However, as both insurers are
liable, the doctrine of contribution between
insurers has been evolved. . . . "

At p.352, Kitto J, with whom Windeyer J agreed, after examining the authorities, said,

"What attracts the right of contribution between
insurers, then, is not any similarity between the
relevant insurance contracts as regards their
general nature or purpose or the extent of the
rights and obligations they create, but is simply
the fact that each contract is a contract of
indemnity and covers the identical loss that the
identical insured has sustained; for that is the
situation in which 'the insured is to receive but
one satisfaction' (to use Lord Mansfield's
expression) and accordingly all the insurances are
'regarded as truly one insurance': Sickness and
Accident Assurance Association Ltd v General
Accident Assurance Corporation Ltd (1892) 19
Rettie, at p.980; 29 Sc.LR 836, at p.837."

13. Mr Higgins submitted that the motor vehicle policy covered Permanent Constructions as well as Quinton. He conceded that Permanent Constructions was not the owner of the vehicle for the purposes of the Motor Traffic Ordinance 1936 (ACT) or of the policy of insurance, for s.71 of the Ordinance makes it plain that a one day hiring does not effect a change of ownership for this purpose. Section 71(3) provides that a person is deemed not to have ceased to have possession or not to have acquired possession where there has been a change of possession by way of a hiring for a period not exceeding 3 months. However, Mr Higgins submitted that the motor vehicle policy covered Permanent Constructions as the driver. He submitted, without being able to refer to authority to support his submission, that the word "driver", when used in the Ordinance and policy, comprehends both the person who actually drives the motor vehicle and also any other person on whose behalf or in whose employment the actual driver is driving.

14. I do not accept this contention. Section 4(1) defines "driver" as meaning, unless the contrary intention appears, "any person driving a motor vehicle . . . ". The Ordinance provides for the licensing of drivers. Section 54(1) provides that the third-party policy shall insure the owner of the motor vehicle mentioned in the policy and any other person who at any time drives the motor vehicle, with or without authority. It speaks of the liability incurred " . . . by that owner and that person jointly, or by either of them severally, . . . ". Section 71(1) provides that "Every third-party policy in relation to a motor vehicle shall enure in favour of the owner for the time being and the driver, . . . ". And s.78 provides for reduction in the liability of the owner or driver of the motor vehicle in the circumstance that is specified. None of these provisions, which are reflected in the terms of the policy, is apposite to refer to the liability of the person who is not the owner or driver of the vehicle but has a liability arising from the relationship of employer/employee between that person and the actual driver. See Riley v Insurance Commissioner and Price v Insurance Commissioner (1972) VR 265.

15. In the course of his submission, Mr Higgins referred to Northern Insurance Company Limited v Coal Mines Insurance Pty Limited (1969) 91 WN(NSW) 293. However, a principle enunciated in that case that, when a driver is driving on behalf of the owner, the owner may be sued for the driver's negligence, does not seem to touch upon the issue in this case. In other respects the decision is inconsistent with Commercial and General Insurance Company Limited v Government Insurance Office (1973) 47 ALJR 612.

16. For these reasons, I am of the opinion that Permanent Constructions was not indemnified by the third-party insurance policy. Nor was that policy taken out by Quinton on behalf of Permanent Constructions or held by him for the benefit of Permanent Constructions during the period of the hiring. This, therefore, is not a case in which the principles of contribution are applicable.

17. Therefore, there will be judgment for the defendant, with costs.