Abstract

Article

Section 4(1) of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) sets out the foundation upon which an application for leave may be brought, so it may be brought only if it is validated by s. 4. pursuant to s 5(4), “leave must be refused if the insurer can establish that it is entitled to disclaim liability under the contract of insurance or under any Act or law”.The foundation for this refusal includes identification of the insurer and the terms of “the contract of insurance”. The disclaimer issue does not depend on onus, which lies on the insurer. Zaki v Better Buildings Constructions Pty Limited [2017] NSWSC 1522, but it would fall to the applicant to demonstrate the requisite facts for s 4(1) establish the jurisdictional foundation for the order, and any deficiency in evidence on the issue would defeat the application. Mrdajl v Southern Cross Constructions (NSW) Pty Ltd (In Liq) [2018] NSWSC 161.

Section 6(1) of the Act does not alter the general law so that the the insurer bears the onus of proof that a claim against an insured person is out of time under Limitation Act 1969 (NSW) bu the issue need not be determined before leave may be granted.: Zaki v Better Buildings Constructions Pty Limited [2017] NSWSC 1522. All evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted: Blatch v Archer [1774] EngR 2; (1774) 98 ER 969 at 970. This basic principle of adversarial litigation is not a matter of esoteric legal knowledge, but accords with common sense in ordinary human experience: Swain v Waverley Municipal Council (2005) 220 CLR 517.

The onus of establishing a limitation defence rests on the defendant: Pullen and Anor v Gutteridge Haskins and Davey Pty Ltd [1993] 1 VR 27 at 72 – 74; Hawkins v Clayton t/as Clayton Utz and Co. (1986) 5 NSWLR 109 at 142; Baker-Morrison v State of New South Wales (2009) 74 NSWLR; [2009] NSWCA 35 at [14]; State of New South Wales v Gillett [2012] NSWCA 83 at [26]. This has application to proceedings under the legislation because by s 4(3) the parties have the same rights and liabilities as if the proceedings were brought against the insured.

 A statutory bar, at least in the case of the traditional statute of limitations, does not go to the jurisdiction of the court to entertain the claim but to the remedy, and hence to the defence plea, and if that is not taken the bar does not arise. The cause of action is not extinguished. plea, the matter of the statutory bar does not arise for the consideration of the court. It is otherwise if the limitation period is annexed by statute to a right which it creates so as to be of the essence of that right: The Commonwealth v Mewett (1997) 195 CLR 471; Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32; Zaki v Better Buildings Constructions Pty Limited [2017] NSWSC 1522.

 Section 5(4) provides that If the entitlement to deny or to disclaim liability under the contract of insurance is beyond argument, leave must be refused. The same reasoning applies if it is beyond argument that the underlying claim is statute barred. Section 7 contemplates that contested issues about the insured’s recovery right and defences to the underlying claim will be determined at the hearing of the recovery proceedings under s 4, rather than on the application for leave, which may now be granted nunc pro tunc. If s 4 proceedings are brought within time, the issue of leave can be dealt with after time has expired: Zaki v Better Buildings (supra).

Section 12 of the Act is to preserve the operation of s 6 of the Law Reform (Miscellaneous Provisions) Act when an action is commenced against the insurer prior to the commencement of the replacement Act. The definitions of “action” and “proceeding” are broad and inclusive and in this context include a notice of motion. Moore v McKiernan [2017] NSWSC 1520.

For leave to be granted pursuant to s 6(4) of the Law Reform (Miscellaneous Provisions Act, the plaintiff must show an arguable case against the liability of the insured, an arguable case supported by evidence that the policy responds, and a real possibility that if judgment were obtained, the insured would not be able to meet it Its purpose is as a filter to prevent unnecessary, inappropriate or unwarranted claims: Energize Fitness; AFG Insurances Ltd v Andjelkovic (1981) 54 FLR 398; Oswald v Bailey (1987) 11 NSWLR 715 at 717F-G; Guild Insurance Ltd v Hepburn [2014] NSWCA 400; Eastern Creek Holdings Pty Limited v Axis Specialty Europe Limited [2010] NSWSC 840.Tzaidas v Child [2004] NSWCA 252; (2014) 61 NSWLR 18; Energize Fitness at [59]. Leave will not be granted if the insurer proves that it is entitled to disclaim liability: s 6(4) of the Law Reform (Miscellaneous Provisions) Act and s 5(4) of the Civil Liability (Third Party Claims against Insurers) Act.

In AFG Insurances Ltd v Andjelkovic [1981] FCA 104; (1981) 54 FLR 398, the Full Federal Court (Franki, McGregor and Kelly JJ) said, at 400, that the ACT analogue of s 6(4):

The provision prohibits a grant of leave in certain circumstances beyond which the court has a general power in all other cases in which there is persuasive evidence of an arguable case of liability against the insured who is indemnified by a contract of insurance. Then the onus shifts to the insurer to satisfy the higher burden that it is entitled to disclaim the policy: Moore v McKiernan [2017] NSWSC 1520.

 

Section 12 of the Act is to preserve the operation of s 6 of the Law Reform (Miscellaneous Provisions) Act when an action is commenced against the insurer prior to the commencement of the replacement Act. The definitions of “action” and “proceeding” are broad and inclusive and in this context include a notice of motion. Moore v McKiernan [2017] NSWSC 1520.

For leave to be granted pursuant to s 6(4) of the Law Reform (Miscellaneous Provisions Act, the plaintiff must show an arguable case against the liability of the insured, an arguable case supported by evidence that the policy responds, and a real possibility that if judgment were obtained, the insured would not be able to meet it Its purpose is as a filter to prevent unnecessary, inappropriate or unwarranted claims: Energize Fitness; AFG Insurances Ltd v Andjelkovic (1981) 54 FLR 398; Oswald v Bailey (1987) 11 NSWLR 715 at 717F-G; Guild Insurance Ltd v Hepburn [2014] NSWCA 400; Eastern Creek Holdings Pty Limited v Axis Specialty Europe Limited [2010] NSWSC 840.Tzaidas v Child [2004] NSWCA 252; (2014) 61 NSWLR 18; Energize Fitness at [59]. Leave will not be granted if the insurer proves that it is entitled to disclaim liability: s 6(4) of the Law Reform (Miscellaneous Provisions) Act and s 5(4) of the Civil Liability (Third Party Claims against Insurers) Act.

In AFG Insurances Ltd v Andjelkovic [1981] FCA 104; (1981) 54 FLR 398, the Full Federal Court (Franki, McGregor and Kelly JJ) said, at 400, that the ACT analogue of s 6(4):

The provision prohibits a grant of leave in certain circumstances beyond which the court has a general power in all other cases in which there is persuasive evidence of an arguable case of liability against the insured who is indemnified by a contract of insurance. Then the onus shifts to the insurer to satisfy the higher burden that it is entitled to disclaim the policy: Moore v McKiernan [2017] NSWSC 1520.