The Wood family ran two bus companies, Caringbah Bus Service (Caringbah) and Tiger Tours (Tiger). The buses used by both companies were registered in Caringbah's name. When an employee of Tiger was injured lifting a bus door in the course of his employment, he obtained a judgment against Caringbah as the owner of the bus.

Zurich was the CPT insurer of the 'owner ' of the bus while GIO insured Tiger for workers' compensation and its common law liability for personal injuries as an employer. Having indemnified Caringbah as owner of the bus for the amount payable to the employee, Zurich sought a contribution from GIO on the basis that there was double insurance.

Ordinarily, contribution on the basis of double insurance may be claimed when an insured is entitled to indemnity from two different insurers in respect of the same liability. In this case, Zurich argued there was double insurance because two different insureds (Caringbah and Tiger) were entitled to indemnity from two different insurers (Zurich and GIO) in respect of separate liabilities for the same injury.

The trial Judge thought that double insurance could only exist where there was a 'crystallised' liability, and that the only crystallised liability in this case was that of Caringbah to the employee (as there was a judgment). His Honour found that GIO had no existing liability to indemnify Tiger and there was therefore no double insurance.

Zurich appealed. It argued that its claim for contribution was not defeated by the fact that there had been no 'crystallised' liability against Tiger. Had the employee sued Tiger it would have been liable and Zurich argued that this was enough for double insurance to exist.

The New South Wales Court of Appeal agreed. It was held that the date for determining double insurance was the date of the injury, at which time the relevant liabilities arose, not the date when contribution was claimed. It was noted that contribution is founded on concepts of fairness and justice. It would have been unfair and unjust for Zurich to carry the whole burden of the loss simply by virtue of the injured party's choice to sue Caringbah rather than Tiger. These principles dictated that GIO should contribute to the payment made by Zurich.

Zurich Australia Insurance Ltd v GIO General Ltd [2011] NSWCA47

A claim for contribution by an insurer on the basis of double insurance is not defeated by there being no 'crystallised' liability of the kind covered by the other policy.  The decision is also a reminder that contribution based on double insurance is founded on concepts of fairness and justice.​