Di Giovanni v Smorgon Arc Pty Ltd [1992] NSWCC 26; (1992) 8 NSWCCR 582 (18 December 1992)

[1992] NSWCC 26; (1992) 8 NSWCCR 582 (4008-92)

DI GIOVANNI v. SMORGON ARC PTY LTD

Compensation Court of New South Wales: Burke J

18 December 1992

INSURANCE - LIABILITY OF INSURER - AGGRAVATION ACCELERATION OF DISEASE - INDEMNITY BY INSURER AT RISK - APPORTIONMENT BETWEEN SEVERAL INSURERS - LIABILITY OF EMPLOYER ARISING AT DATE OF TERMINATION - LIABILITY OF INSURER IN RESPECT OF THAT COMPENSATION - SCHEME OF STATUTE - WORKERS COMPENSATION ACT 1987, SECTIONS 16, 18, 22

N.M. Thompson, for the applicant

J.W. Catsanos, for Vanguard Insurance

P.M. Kavanagh, for QBE Insurance and Royal Insurance

G.R. Graham, for Switzerland (old Act)

P. Adams, for Switzerland (new Act)

CUR ADV VULT

BURKE J

On 5 November 1992 I delivered judgment on the issues raised as between the worker and the employer. But this is the age of multiple judgments. As often as not one gives a judgment on a worker's claim for weekly payments; some time later there is a judgment on the section 66 and 67 entitlements; then, sometime after, there is a question of apportionment of the several liabilities between various entities indemnifying the employer. There goes another tree in the rainforest.

Concisely, on the occasion of the first judgment, I found that the worker had suffered from degenerative disease of the spine; he had suffered a number of discrete, definite injuries to his back and, additionally, his back had been subjected to the insidious effects of repeated minor unidentifiable traumata in the course of his employment over an extended period; all these matters had served to produce aggravation, acceleration and deterioration of the existing disease and the incapacity resulting from such.

The employer over the period during which such injuries were received had a variety of insurers. Questions arise as to which insurer or insurers provide indemnity to the employer and as to whether the liability may be apportioned between such and any of the other insurers on risk at the time of the several injuries.

The applicant was employed by the respondent from 1958 to 1962 and then spent just short of a year back in Italy. He resumed with the respondent in 1963 and continued to work until 23 November 1990. The period of work relied upon as constituting injury was that on and after 1 January 1975. It was during that period that the worker also suffered the discrete injuries already found.

The worker was found to have suffered particular injuries on 18 August 1977, 12 June 1981 and 13 May 1987. Otherwise the general work that he performed from 1 January 1975 to 23 November 1990 was found to be serial injury contributing to the exacerbation of his back condition.

In respect of the period involved the respondent was indemnified for liability under the Act for the times and by the entities shortly noted hereunder:

1 January 1975 to 30 June 1980 Vanguard Insurance

30 June 1980 to 30 June 1983 QBE Insurance

30 June 1983 to 30 June 1986 Royal Insurance

30 June 1986 to 30 June 1987 Switzerland (Old Act)

30 June 1987 to 14 November 1990 Switzerland (New Act)

The various interests indemnifying the respondent have made written submissions on the questions of indemnity and apportionment. The majority of submissions, not surprisingly, suggests that the last insurer bears the totality of the burden of the award and is not entitled to have that burden apportioned among the others. The last in time, the new Act insurer, Switzerland Insurance Workers Compensation (NSW) Ltd., submits otherwise. That is also not unexpected. The problem of who pays and whether the liability can be apportioned arises from the inter-relation of sections 16,18 and 22. The relevant portions of those provisions are set out hereunder:

" 16 (1) If an injury consists in the aggravation, acceleration, exacerbation or deterioration of a disease -

(a) the injury shall, for the purposes of this Act, be deemed to have happened

(i) at the time of the worker's death or incapacity; or

(ii) ..."

" 18 (1) Where an employer has become liable under this Act to pay compensation to a worker in respect of an injury referred to in section 15 or 16, then, for the purpose of determining whether any insurer or which of 2 or more insurers is liable under a policy of insurance in respect of that compensation, the liability of the employer shall, despite those sections, be deemed to have arisen immediately before the worker ceased to be employed by the employer."

" 22 (1) If:

(a) the death or incapacity of a worker; or

(b) a loss suffered by a worker as referred to in Division 4 of Part 3; or

(c) a liability under Division 3 of Part 3 to a worker, results from more than one injury to the worker, liability to pay compensation under this Act is to be apportioned in such manner as the Compensation Court determines.

(2) Liability to pay compensation under this Act includes:

(a) the liability of an employer (including an employer who is a self-insurer); and

(b) the liability of an insurer under a policy of insurance in respect of the payment of that compensation (including a direct liability to the worker); and

(c) ...

(d) ..."

In approaching the question of the inter-relation of these provisions I have assumed that, as it were, all sections should be accorded full faith and credit. That is that all sections should be assumed to operate in accordance with their tenor and not be over-ridden by another unless the over-riding section expressly provides so or the two provisions cannot rationally function concurrently.

The majority of submissions made find an appealing simplicity in the operation of section 18. They regard it as operating much as section 17 does in regard to deafness cases. Irrespective of the true facts a liability is arbitrarily imposed on the last insurer. This operates to the exclusion of section 22.

In this matter the preconditions to section 18 have apparently been fulfilled. An employer is liable to a worker and such is in respect of injury within section 16. The liability of the employer therefore, if section 18 be applicable, will be taken as arising at the date of termination of employment - 23 November 1990. The purpose for which such is so is to determine which insurer "is liable under a policy of insurance in respect of that compensation". Section 18 applies specifically despite the provision otherwise in section 16. So, it is said, Switzerland Insurance Workers Compensation (NSW) Ltd is liable to meet the award already made.

In the majority of submissions this is regarded as the end of the line. Section 18 is seen as a code applicable to "disease" cases to the exclusion of the other provisions of the statute. But why should it be so?

Section 22(1) provides for the apportionment of liability to pay compensation where the incapacity results from more than one injury. It has be found to be so in this case. Section 22(2)(b) defines as one of the liabilities referred to in section 22(1) the liability of an insurer under a policy of insurance in respect of the payment of that compensation. These are almost the identical words used in section 18 in imposing the supposed liability on Switzerland Insurance Workers Compensation (NSW) Ltd and certainly connote the same substance. Therefore, superficially, it would seem that the latter is entitled to seek apportionment of the liability imposed upon it.

This is conditional upon the fact that the incapacity etc. results from more than one injury. This provides the basic ground of contention between the parties. Mr Adams, for the last insurer, says that I have found a series of distinct injuries and the more generalised so-called "nature and conditions" type injury causing the relevant incapacity. Virtually the totality of those appearing for the other insurers suggest that such may be the reality but the legality is otherwise - section 18 notionally makes them all one injury and that occurring on 23 November 1990. This is contended to be the effect of the "deeming" provision of section 18.

The legislative legerdemain of a "deeming" provision can achieve effects most wondrous and strange as I pointed out in a recent judgment in JACKSON v. MAYNE NICKLESS LTD, [1992] NSWCC 24; (1992) 8 NSWCCR 547. By just such a legislative act Mr Justice Staples aged a decade or so overnight and was precipitated into judicial senility and retirement.

By such a provision the legislature abrogates reality and makes fiction fact. Among my favourite judicial dicta on this subject are the following:

" ... generally speaking, when you talk of a thing being deemed to be something, you do not mean to say it is that which it is to be deemed to be. It is rather an admission that it is not what it is deemed to be, and that, notwithstanding it is not that particular thing, nevertheless, for the purposes of the Act, it is to be deemed to be that thing." (R v. THE COUNTRY COUNCIL OF NORFOLK, (1891) 60 LJQB 379 at 380-381 per Cave J)

Where the word 'deemed' is used one has to create a fictitious state of facts and to treat them as true, when in fact they do not exist and are not true." (EVANS v. BLAENANT COLLIERY CO LTD, (1940) 33 BWCC 298 at 302 per Mackinnon LJ)".

Mr Catsanos (Vanguard); Ms Kavanagh (QBE and Royal) and Mr Graham (Switzerland - old Act) were most attracted, even enchanted, by the concept of ignoring the realities and dealing with the totality of the rights and obligations of the insurers on the basis of the fictitious operation of section 18 to the exclusion of section 22. As a number of them emphasised section 18 was couched in terms of the mandatory "shall" while section 22 used the permissive "may". The only dissentient from the "Disneyland" approach was Mr Adams (Switzerland - new Act) who tended to the view that there was a time and place for everything, including a touch of legislative "deeming", but one should not get carried away with it. It should not necessarily be regarded as of universal application. He found his own judicial dictum:

"When a statute enacts that something should be 'deemed' to have been done which, in fact and in truth, was not done the court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to". (Ex p. Walton 17 Ch D 756 per James LJ).

And he posed his delightful little conundrum:

A worker contracts a "disease" or an "aggravation etc. of a disease" resulting in partial incapacity. While he continues in employment he is only able to work half the hours he did before and he makes a claim for compensation. Does section 18 mean that the employer can't get indemnity unless he terminates the worker's employment or could it mean that the employer at the time of the "injury" is liable while the worker remains employed but that the "liability" could shift to another insurer if the worker's employment ceases at some later time.

The "deeming" provision of section 18 operates, and only operates, where the worker's employment has been terminated. That is so if "ceased to be employed by ..." is regarded as the termination of the contract of service and not a mere cessation of work and the former seems more appropriate. The insurer on risk at the date of that event is liable under the policy of insurance in respect of the compensation. If the worker has not been terminated then section 18 has nothing on which to operate and the provisions of sections 15 and 16 then serve to fix a date of injury as the time of death or incapacity or, should neither yet have occurred, as the date of claim.

Section 18 is the lineal descendant of the former section 18(6A) which was enacted to overcome the effects of STATE MINES CONTROL AUTHORITY v. GIO (NSW), (1964) 65 SR 258. In that case the worker became incapacitated by a relevant disease some considerable time after leaving the employment of the Authority. The Act then, as does the present sections 15 and 16, deemed the injury to have occurred at the time of incapacity. The insurer who indemnified the employer during the period the worker was employed was no longer on risk and therefore not liable to indemnify the employer in respect of an "injury" occurring outside the period of cover. The current insurer was liable only in respect of injuries to "workers" - that is, people employed by the Authority during the currency of the policy - and the worker was not such an employee. So the employer had no indemnity. To meet this contingency the Act was amended by the introduction of section 18(6A) to provide a notional date of injury at the last day of employment. The purpose of the amendment was to provide an indemnity to the employer in a situation where none existed under the then legislation. In this regard the basic framework of the former legislation was perpetuated in the 1987 Act.

From these premisses (a more traditional spelling than the new fangled "premises") Mr Adams constructs his submission that section 18 applies only in the situations which it was designed to meet. That is in a "disease" case where the incapacity arises at a time after cessation of relevant employment. Then section 18 expressly negates the operation of sections 15 and 16 that provide a notional date of injury at the time of incapacity and, in lieu, provides a notional date of injury at the last moment of employment. Unless this approach is adopted it is submitted that you get into this situation of "shifting" injuries. At Law School I had considerable trouble with shifting uses so I could certainly do without shifting injuries.

There is a degree of attractiveness in this submission. The purpose for which section 18 expresses that its deeming provision is to operate is ". . . determining whether any insurer or which of two or more insurers is liable under a policy of insurance in respect of that compensation". The emphasised term patently could refer to the possibility of failure of the employer to effect any insurance at all. This is unlikely. There could be no liability "under any policy of insurance" if there was no policy at all. With the background of the State Mines Control Authority case it seems to recognise that although there have been serial policies none of them may inure to indemnify the employer and that the purpose of the section is to ensure that one does.

To interpret the section as arbitrarily imposing liability in all cases on one insurer when its pre-conditions occur achieves some incongruous results. While the man remains in the employ his injury occurs at the time of incapacity but as soon as his employment ends the same injury occurs at a different time. The man may have been off work incapacitated for the last six months of his employment and in receipt of compensation. The moment he is terminated the date of injury changes and, should there have been a change of insurer during that period, a different insurer becomes liable as from the date of termination in respect of the same incapacity. It is suggested that to interpret the provisions of the statute so as to achieve such haphazard results is, at least, undesirable.

When confronted by problems of construction such as this the solution is usually made apparent, or more or less apparent, by a return to basic principle. In this matter a consideration of the implication of the fundamental concepts of injury and incapacity seems, at least in the first instance, to contribute more confusion than clarity.

Perhaps a deal of the problem has its genesis in the conception of "injury". In colloquial use it can refer to either an event or its consequences. It can be used almost synonymously with "accident". The injury may be the collision with a car or the broken leg that results. The Act defines injury in terms of the results not the event. I guess an event that has no deleterious consequences is in the no never mind class. You must have both for any relevant claim under the Act. Hence the emphasis on the consequence and not the cause. Sometimes it seems that this conceptualisation muddies the appreciation of the Act when dealing with these "disease" cases.

More often than not the reality and the fiction are concurrent. A man falls down some steps and his back hurts and he ceases work. It later transpires that the doctors believe that he has aggravated a degenerative disease of the back. In terms of the definition of injury it falls within the included class of aggravations of a disease. Since he became incapacitated at the time of the fall it matters not what particular concept of injury you adopt. Whether it be regarded as injury simpliciter or the aggravation of a disease is inconsequential. He was actually incapacitated then and, if the disease provisions apply, he is "deemed" to have been injured then. If he works on for the rest of the day but is off the following day one doesn't worry too much about "deeming" his injury to have happened the following day when incapacity occurred. One tends to look to the time of the event rather than the consequential incapacity. So he works on for a month with increasing symptoms before ceasing. Because the injury is an aggravation of a disease does that mean, in law, he wasn't injured when he fell down the steps but rather a month later? And, if there has been a change of insurer in the interim, it is the last insurer who pays? It seems a very incongruous result if it be so.

Because the consequence of a particular event is the causation or aggravation of a disease it seems to me that it is not necessary to resort to the "disease" provisions of the Act to resolve such a case. At least a variety of courts, including the High Court, have so found. In ARMAO v. LADUE HOLDINGS PTY LTD T/AS PIONEER SHIRTS & ANOR, [1992] NSWCC 16; (1992) 8 NSWCCR 440 I touched upon the problem, referring to a variety of authorities where what was, in reality, a disease was, within the Act, injury simpliciter. These included O'NEILL v. LUMBEY, (1987) 11 NSWLR 640 (spontaneous rupture of a cerebral aneurism); WILLIS v. MOULDED PRODUCTS (AUSTRALIA) LTD, [1951] VLR 58 (cerebral aneurism); DARLING ISLAND STEVEDORING & LIGHTERAGE CO LTD v. HANKINSON, [1967] HCA 10; (1967) 117 CLR 19 (collapse of infected spine); FAVELL MORT LTD v. MURRAY, [1976] HCA 13; (1976) 8 ALR 649 (viral encephalitis); JAMES PATRICK & CO PTY LTD v. SHARPE, [1997] UKHL 17; [1955] AC 1 (auricular fibrillation) and AMERICAN HOME ASSURANCE CO v. SAUNDERS, (1987) 11 NSWLR 363 (mesothelioma). It seems to me that the rationale of such cases is that if a particular event can be isolated as the cause of the incapacity, whether such arises from frank injury or aggravation of existing disease, then that event determines the nature of the injury within the definition. It is injury simpliciter. The disease provisions are designed to deal with the insidious effects of a general environment, without particular identifiable incident, which produces the incapacity by way of cause or aggravation of a disease.

I note the curt comment in the CCH Australian Workers Compensation Guide (at paragraph 3-320):

"The manner in which a disease and the aggravation (etc.) of such is to be distinguished from an injury has not yet emerged with clarity from the decided cases."

Frankly, having regard to the precise terms of the Act, any consideration of linguistics, semantics, grammar or syntax gives little confidence in the sort of conclusion that I have suggested above. But there again, these days, it is not Parliament's postulation but its purpose which prevails.

And "incapacity" leads into another maze. As has been pointed out by Mr Adams, Mr Di Giovanni had been incapacitated in varying degree at various times over a lengthy period prior to his termination and cessation of work on 23 November 1990. The apparent implicit suggestion is that on all occasions it was the same incapacity, though, from time to time, varying in degree.

The incapacity that the Act is concerned with is incapacity to work. It connotes a physical problem producing a loss of earning power, though not necessarily a loss of earnings. There has been no discernible change since the dictum of Lord Loreburn LC in BALL v. WILLIAM HUNT & SONS LTD, [1912] AC 496:

"... there is incapacity for work when a man has a physical defect which makes his labour unsaleable in any market reasonably accessible to him, and there is partial incapacity for work when such a defect makes his labour saleable for less than it would otherwise fetch."

If by injury a man's capacity to work is reduced by $50 per week and a further injury reduces his capacity to work by a further $50 per week how do we categorise those separate effects. Do we say that the first reduction is a measure of the degree of incapacity and the second decrement suggests a greater measure of the same incapacity or do we say he had a $50 a week incapacity after the first injury and a different $100 a week incapacity after the second. In other words is his incapacity after the second injury of a different nature to that after the first and not a mere change in degree of the one incapacity of the same nature.

Usually it makes no practical difference whichever way it is viewed. However, once one comes to apply "deeming" provisions complications arise depending on the view one takes of the nature of these incapacities. If it is the one incapacity different in degree from incident to incident then, in an appropriate case, the totality of incapacity is deemed to have occurred at a particular time. If the incapacities are conceived as several distinct elements then it is probably only the ultimate one which is affected by a deeming provision and the balance have effect according to the appropriate provisions of the Act.

In this particular case, as in many, it would be fairly clear that Mr Di Giovanni has a single indivisible incapacity. It might have been otherwise if he had hurt his back on one occasion, his neck on another and his leg on a third but all his injuries were to his back and it would be extremely artificial to regard him as ultimately exhibiting the accumulation of discrete incapacities. But from what "injury" does such result? Is it from a combination of the several distinct injuries found or from the "notional" injury, in accordance with section 18, which occurred on 23 November 1990?

In MILNE v. INTERNATIONAL COMBUSTION AUSTRALIA LTD, [1953] WCR (NSW) 80 Rainbow J found that a condition of boilermaker's deafness was not a disease but rather the cumulative effect of an indeterminate number of discrete minor aural traumata. The reasoning was clear. Hearing depends upon the operation of the cilia in the ear. A sufficient degree of noise can render one or more permanently inoperative. Given exposure to adequate quanta of noise over an adequate period so many cilia will be rendered inoperative as to perceptibly affect hearing and the result will be a deafness. His Honour decided that such a process was more consonant with serial injury in the primary sense than with the development of a disease. It was not a particularly compelling conclusion. Indeed, Windeyer J in COMMISSIONER FOR RAILWAYS v. BAIN, [1965] ALR 880 thought the conclusion erroneous. The general view of Windeyer J is summarised by C.P. Mills (Workers Compensation NSW 2070.7 at page 1401.5):

"Windeyer J was prepared to recognise that 'disease' would include the abnormal physical condition which results from a succession of traumas, each one of which causes damage so minute that it would go unnoticed and undetected."

However, the reasoning in Milne suggesting distinct injury is much more compelling where the result of a particular trauma is virtually immediately perceptible. If a particular event has the consequence of rendering previously asymptomatic degenerative changes symptomatic then there has been some physiological or biochemical change induced. Sensory nerves previously quiescent now transmit impulses registered as pain - something has obviously changed. It is no different if an event renders degenerative changes already symptomatic even more so. Such events, it seems to me, connote injury in the primary sense.

The disease provisions of the Act encompass the indeterminate effects of stresses and strains which are not individually identifiable but which have an impact on the underlying condition. That effect may be to entrench the existing situation in the sense of render a condition which may have been reversible if not subjected to additional minor insult in fact irreversible or it may be the augmentation of the symptoms and disabilities. The combined effects of these minor traumata are the aggravation etc. of the disease even though each such trauma may have had some minuscule pathological result.

This dichotomy is not the sole determinant of the difference between injury and disease. In some cases such as MURRAY and SAUNDERS cited above where injury was found there was clearly no appreciation by the worker of any effect immediately following the injury. However, clearly, in the context of the evidence in the particular matters, the entry of the virus in the former and the particle of asbestos in the latter set in train the inevitable sequence of events that led to the overt manifestation of the "disease".

Against the background of that type of analysis it seems to me that Mr Di Giovanni has suffered four injuries in the general sense. Three were injury simpliciter, though operating in the diathesis of disease, and one was the aggravation of a disease within the extended definition of injury. This, effectively, is what was found in the primary judgment in this matter. His present state is the combined result of all those injuries. Collectively they have resulted in the present degree of incapacity.

It is only the latter of these four injuries which falls within section 16. It is only in respect of that injury that section 18 operates. Does section 18 then apply in this matter? This poses a logical conundrum. If the worker has a single indivisible incapacity, though resulting from the combination of injuries, and the liability to pay compensation is in respect to that incapacity, is that a liability "in respect of an injury referred to in section 16"? It is probably unnecessary to resolve that question. In this matter the last injury in sequence is that which falls within section 16 - the so-called "nature and conditions" injury. It either contributed an element to the incapacity or it didn't. If it didn't it is irrelevant to any liability since, ex hypothesi, it resulted in no incapacity. If it did then the nature of the incapacity is different after that injury.

This seems compatible with the decision in NATIONAL & GENERAL INSURANCE CO LTD v. SOUTH BRITISH INSURANCE CO LTD, [1982] HCA 62; (1982) 149 CLR 327. The issue there involved which insurer was liable for an award under the former section 11(2) where the incapacity was the result of multiple injuries. It was held that the insurer at the time of the last relevant injury was liable for the compensation. This would suggest that the incapacity at the time of the failure to provide had changed as a result of the last injury and the last insurer being on risk at the time that the particular incapacity arose was thereby liable.

Similarly in this matter, the quality of the incapacity has been changed by the last sequential injury and the liability already found is in respect of that incapacity. So, section 18 would therefore operate. But for what purpose?

Section 18 operates "for the purpose of determining whether any insurer or which of two or more insurers is liable under a policy of insurance in respect of that compensation". This is a quite limited purpose. Compare, for instance, sections 15, 16 and 17 which also operate to provide deemed dates of injury. Each is expressed to do so "for the purposes of this Act". That is all purposes of this Act. That emphasises the limited ambit of section 18. It is certainly not effective for all purposes of the Act. It determines who is liable to pay the compensation, that is, who must indemnify the employer. That liability being established section 18 has exhausted its full function. For any other purpose section 16 would operate in accordance with its terms. The liability as so imposed is a liability within section 22(2)(b) i.e. "the liability of an insurer under a policy of insurance in respect of the payment of that compensation" and, as such, falls to be apportioned in accordance with section 22.

Having now arrived at this rather simple conclusion it occurs to me that much that preceded in this James Joyce stream-of-consciousness style of judgment as it was tapped intermittently into the computer is probably unnecessary. However I will forgo any attempt to separate the sheep from the goats. I think that I nearly conceived the solution about page three but it just eluded me.

Distilling the essentials from the preceding somewhat verbose discussion suggests simply this. Whether the three discrete incidents be conceived, within the statutory definition of "injury", as falling within the ambit of injury in the primary sense or within the extension of that concept as a disease, is immaterial. For the purposes of the Act, other than the special purpose of section 18, since they resulted in incapacity at the time, there is no dichotomy between reality and the deemed date of injury within section 16. Thereafter the general effects of work persisted up to 23 November 1990. This also was an injury. It too falls within section 16. That provision effectively deems that injury to have occurred on 23 November 1990. This must logically be so. The general work added an increment to the incapacity and it is for the ultimate incapacity as so affected that the employer has been found liable to compensate the worker. For the purpose of determining which of the several insurers is liable to indemnify the employer, and no other, section 18 operates to impose that liability upon Switzerland Insurance Workers' Compensation (NSW) Ltd, the insurer on risk at the date of termination of employment. In my view this would have been so irrespective of section 18 in the circumstances of this case. This was the insurer on risk at the date of the last deemed injury within section 16 and that date, fortuitously, coincides with the date of termination. The liability to indemnify the employer, whether arising under section 16 or section 18, is a relevant liability within section 22 and as such may be apportioned in accordance with that provision.

It is therefore my view that the liability is imposed by the Act on Switzerland Insurance Workers Compensation (NSW) Ltd and that such may be apportioned between it and the other relevant insurers. Such would be proportioned according to the relative degrees of contribution of injuries during the various periods of indemnity to the incapacity and loss already found. The degree of contribution of a particular injury to incapacity may not be co-extensive with the degree of contribution to an ultimate loss. In UREMOVIC v. WORLDS FINEST CHOCOLATES AUSTRALIA PTY LTD, No. 4175/91, 14 September 1992, unreported, I found an initial injury a major contributor to the section 66 loss but a minor contributor to the incapacity. In so doing I think I may have aggrieved most of the parties.

To evaluate the relative contributions of the various injuries it is necessary to recapitulate tersely the sequence of events recited in the original judgment.

The applicant worked for the respondent without any discernible problem from 1958 to 1977. On 18 August 1977 assisting to turn a large sheet of ARC mesh to place it in a guillotine the worker had an onset of back pain. He was off work for few weeks, resumed briefly on light duties and thereafter resumed full work which included the manipulation of this heavy mesh. He experienced some minor, intermittent back discomfort which the worker classed as "no worry".

On 12 June 1981 the worker was performing a similar manoeuvre when he slipped on an off-cut, became unbalanced and experienced similar back pain to previously and some transient right leg symptoms. Again he was off work for a few weeks and resumed. His job was then changed. He no longer handled the mesh. He was essentially doing supervisory type work, for a period on cranes and later in the store. He had a lot of pain for a long time though it gradually tended to ease but was provoked by heavy lifting from time to time.

The ultimate incident occurred on 13 May 1987. The applicant was descending a ladder and slipped down the last few rungs producing marked back pain and considerably increased right leg pain which was thereafter fairly continuous. Again the applicant was off for a few weeks and then resumed though his ambient pain was at a higher level than previously and exacerbations were more readily provoked.

Around November 1990, the applicant having declined an offer of voluntary redundancy, the respondent, regarding him as being unrestrictedly fit, returned him to his former work manipulating the ARC mesh. After a short essay of this work the applicant found the renewed offer of voluntary redundancy more attractive than the first, accepted it and his formal last day of service was 23 November 1990.

The medical evidence revealed that the applicant had spondylolitheses at L4-5 and L5-S1, spinal instability, spondylosis, facet joint arthritis and degenerative disc disease. I have held that these conditions were aggravated by the several incidents and the general work; that his back is permanently impaired and this, in degree, is of the order of one-third of a most extreme case; that he is partially incapacitated as the result of his injuries. The liability generated by those findings is to be apportioned between the relevant insurers. Basically that would be on the basis of the degree of responsibility of the injuries in the respective periods of indemnity for the ultimate results found.

As to the three distinct incidents. In the primary judgment I suggested that the first event of 18 August 1977 was of minimal, if any, impact on the basic condition of the applicant's back. He performed his full duty in fairly arduous work for going on three years before the next event in the sequence. Over that period he had a minor degree of back pain and that on a very intermittent basis. The applicant himself regarded it as of little, if any, consequence.

The incident of 12 June 1981 was of greater consequence. There was a brief period of leg pain which resolved. The applicant deposes to a considerable degree of back pain persisting over a lengthy period though, tending to ease with the passage of time, though provoked by heavy lifting or stress of that nature. The applicant was doing work of much less strenuous character over this time.

The third incident of 13 May 1987 was also quite significant. After the initial period back pain remained in enhanced degree, leg pain was much worse and virtually continuous and exacerbations were more readily induced. The applicant was persisting in this lighter form of employment.

The general work was quite heavy from the inception of the claim, which dates from 1 January 1975, until after the incident of 12 June 1981. During that period the worker was asymptomatic until he had the incident on 18 August 1977, which itself had fairly transient effects, and thereafter did the work with little by way of symptoms. Whatever effects the work and the strain and stress involved in it were having on his back was not overt though I believe the covert effects were not entirely insignificant.

From the time he resumed after the 1981 incident the worker did much less stressful work. There were elements of stress but of a considerably reduced frequency. By and large the applicant was able to depute others to do the physically hard work. Certainly the applicant was more susceptible to any such stress but that was more from the effects of the prior heavy work and the incident of 12 June 1981 than from the consequences of the work he was doing at the time. The enhanced symptoms after the 13 May 1987 event are explainable by the consequences of that event. One would get the impression that the general work was more revelation of the state of his back in consequence of what had transpired before than the genesis of additional problems produced by the doing of the work though the latter could not be entirely discounted. From mid 1981 to the conclusion of employment in November 1990 there is no fundamental change in the nature of the general work as far as back stress is concerned with the exception of the brief period in November when he was returned to the type of duty he performed before mid 1981.

This belated return to unrestricted work was unkind of the employer and discomforting to the worker but in the overall situation of the worker's back was so brief as to be of but minor effect. It was more likely to have been productive of a period of some major symptoms (as well as acceptance of voluntary redundancy - which was its likely purpose) than of any substantial deterioration in the state of his back.

For what effects are the various insurers liable?

Vanguard About four and a half years of general work, all quite heavy, and the incident of 18 August 1977 which is of minor importance.

QBE About three years of general work, one year of which was heavy and the balance reasonably light together with the incident of 12 June 1981 after which there are continuous symptoms.

Royal About three years of general work all relatively light.

Switzerland About one year of general work, all light, and the incident of 13 May 1987 after which the worker is markedly worse as far as back pain is concerned and also has significantly right leg pain.

Switzerland About three and a half years of general work, all light except the brief final period.

In UREMOVIC v. WORLDS FINEST CHOCOLATES (supra) I was of the view that there was a marked distinction between the effects of serial injuries as far as incapacity was concerned compared to the relative effects in generating the impairment. The final injury there I regarded as the major contributor to incapacity while the impairment I thought more likely the result of the effects of the initial injury. In this matter I do not see such a distinction. Overall it seems to me that the several events and the general work had much the same contributions to incapacity as to impairment.

In assessing the relative contributions I am impressed by the incident of 12 June 1981. It was the beginning of continuous symptoms and marked the change from the applicant doing arduous work to performing work of a much more restricted physical character. Those symptoms were enhanced and extended by the incident of 13 May 1987 and the worker was more limited thereafter and it seems to me a major factor in bringing him to his present state. While he still remained on the same restricted form of work he was less able to cope and exacerbations were more readily induced. The general work, particularly over the early years relied upon, was effective in setting the scene and increasing the degenerative diathesis in which the subsequent injuries could have effect. The earlier incident of 18 July 1977 I regard as of but minor importance.

In descending order of importance I would rank the various elements as contributing to the incapacity and loss:

* Incident of 12 June 198l

* Incident of 13 May 1987

* General work

* Incident of 18 August 1977

Vanguard's proportion would appear reasonably small. The incident in that period of indemnity doesn't appear of much more consequence than the four and a half years of heavy work. That seems to me to account for 10 per cent of the responsibility for the liability. QBE appears to bear the major burden - some heavy work, some lighter work and the major incident. That attracts 45 per cent of the liability. Royal carries the burden of a few years of relatively light work. It borders on the de minimis situation but played a part in the ultimate outcome. I apportion 5 per cent of the liability accordingly. Switzerland bears responsibility for the other major incident and a short period of lighter work. In my view that attracts 35 per cent of the responsibility. Switzerland as new Act insurer is in much the same position as Royal and attracts a similar apportionment of 5 per cent.

The first four of the above-mentioned insurers submit that they cannot be liable to contribute to the liability arising as it does under the 1987 Act and they being insurers in respect of periods antecedent thereto and under the former Act. The transitional provisions of the 1987 Act seem to adequately deal with that problem. Some of the bases therefore have been dealt within the principal judgment. The legislative intent that "old" Act insurers could be liable to indemnify an employer in respect of liability arising under the "new" Act is made perhaps clearer by Schedule 6, Part 15, clause 15 in providing:

" (1) This clause applies to policies of insurance issued or renewed before 4 p.m. on 30 June 1987 by insurers licensed under section 27 of the former Act.

(2) A policy of insurance to which this clause applies extends (and is to be taken to have always extended) to any liability under this Act including liability for injuries received before, at or after 4 p.m. on 30 June 1987.

(3) This clause applies despite the fact that the policy of insurance refers to liability under the Workers Compensation Act 1926."

It seems abundantly clear that the Legislature envisaged that an insurer indemnifying under the old Act could and would be liable, in the appropriate case, to indemnify the employer in respect of liability arising under the new Act. That appears to encompass liability as apportioned in this case.

For those reasons I order that the liability to meet the payments pursuant to the award herein made on 5 November 1992 be apportioned in the following proportions:

World Marine & General Insurance Ltd

(formerly Vanguard Insurance Ltd) 10 per cent

QBE Workers Compensation (NSW) Ltd 45 per cent

Royal Insurance Australia Pty Ltd 5 per cent

Switzerland General Insurance Ltd 35 per cent

Switzerland Insurance Workers'

Compensation (NSW) Ltd 5 per cent

Solicitors for applicant: McClellands

Solicitors for Vanguard Insurance: Pieterse & Pieterse

Solicitors for QBE Insurance and Royal Insurance: Moray & Agnew

Solicitors for Switzerland: Leitch Hasson & Dent