Almario v Allianz Australia Workers Compensation (NSW) Insurance Limited; Almario v Allianz Australia Workers Compensation (NSW) Insurance Limited [2005] NSWCA 19 (24 February 2005)

CITATION: Almario v Allianz Australia Workers Compensation (NSW) Insurance Limited; Almario v Allianz Australia Workers Compensation (NSW) Insurance Limited [2005] NSWCA 19

FILE NUMBER(S):

41159/02

40211/04

HEARING DATE(S): 14/02/04

JUDGMENT DATE: 24/02/2005

PARTIES:

CA 41159/02; CA 40211/04

Luis Ernest Almario (Appellant)

Allianz Australia Workers Compensation (NSW) Insurance Limited (Respondent)

JUDGMENT OF: Hodgson JA Ipp JA Hunt AJA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 466/02, DC 6368/01

LOWER COURT JUDICIAL OFFICER: Balla DCJ (CA 41159/02); Walmsley DCJ (CA 40211/04)

COUNSEL:

E Romanuik (Appellant)

P Blacket SC/P Cahill (Respondent)

SOLICITORS:

Keddies (Appellant)

Dexter Healey (Respondent)

CATCHWORDS:

LIMITATION OF ACTIONS - Statutes of limitation - Barring a cause of action or a remedy - When cause of action exists independently of statute, only remedy is barred - STATUTES - Construction - Purposive approach versus textual approach - Purposive approach preferred when it avoids anomalies and gives rise to equitable relief - WORKERS COMPENSATION - Deregistered company - Action brought against insurer under s 601AG of the Corporations Act 2001 (Cth) - Insurer can raise defences that would have been open to the deregistered company (subject to the qualifications attaching to those defences) - Section 151D(2) of the Workers Compensation Act 1987 (NSW). D

LEGISLATION CITED:

Workers Compensation Act 1987 (NSW), s 151D(2)

Corporations Act 2001 (Cth), s 601AG

Law Reform (Miscellaneous Provisions) Act 1946 (NSW), ss 5, 6(4)

Limitation Act 1969 (NSW), s 63

Acts Interpretation Act 1901 (Cth), s 15AA

DECISION:

(1) The applications for leave to appeal against the judgments of Balla DCJ and Walmsley DCJ are granted (2) The appeals against the judgment of Balla DCJ and Walmsley DCJ are upheld with costs (3) The orders made by Balla DCJ are set aside; Allianz to pay the costs of the application before her Honour (4) Mr Almario's notice of motion claiming an extension of time in terms of s 151D(2) of the Workers Compensation Act is remitted to the District Court for rehearing (5) The orders made by Walmsley DCJ are set aside and in lieu thereof an order is made dismissing Allianz's application to strike out Mr Almario's statement of claim with costs (6) In respect of both applications for leave to appeal and appeals, Allianz to have certificates under the Suitors' Fund Act 1951 (NSW) if otherwise entitled.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 41159/02

CA 40211/04

DC 466/02

DC 6368/01

HODGSON JA

IPP JA

HUNT AJA

Thursday, 24 February 2005

LUIS ALMARIO v ALLIANZ AUSTRALIA WORKERS COMPENSATION (NSW) INSURANCE LTD

LUIS ALMARIO v ALLIANZ AUSTRALIA WORKERS COMPENSATION (NSW) INSURANCE LTD

FACTS

Mr Almario alleges that, while working for Carrington between February 1998 and December 1992, Carrington negligently caused him to be exposed to toxic substances from which he sustained serious injuries.

S 151D(2) of the Workers Compensation Act 1987 (NSW) provides a three year time limit for the commencement of court proceedings against an employer for damages at common law. That three year time limit expired in December 1995.

It was not until June 2001 that Mr Almario commenced proceedings (relying upon s 601AG of the Corporations Act 2001 (Cth)) against Allianz, Carrington’s workers compensation insurer.

In November 2002 Mr Almario applied to Balla DCJ for an order, pursuant to s 151D(2) of the Workers Compensation Act, extending the time limit for the commencement of the proceedings he had brought against Allianz. Balla DCJ refused to make such an order on the ground that a person can, under s 151D(2), only obtain a time extension as against his/her employer and not as against the employer’s insurer.

Carrington was wound up in December 1992 and was deregistered in April 1999. Section 601AG of the Corporations Act provides that a person may recover from the insurer of a company that is deregistered. The two preconditions to this are that the company “had a liability” to the person and the insurance contract covered that liability.

In February 2004 Allianz applied to strike out Mr Almario’s statement of claim. Allianz argued that Carrington did not, immediately before its deregistration, have a liability to Mr Almario (as required by s 601AG). Walmsley DCJ agreed. His Honour found that with the three year time limit during which Mr Almario should have brought proceedings (provided in s 151D(2) of the Workers Compensation Act) having expired in December 1995, Carrington did not, immediately before its deregistration, have a liability to Mr Almario.

Mr Almario now appeals against the decisions of Balla DCJ and Walmsley DCJ.

HELD per Ipp JA (Hodgson JA and Hunt AJA agreeing):

1. The time for determining the existence of the two preconditions in s 610AG of the Corporations Act, namely, whether the deregistered company had a liability to the person claiming and whether the insurance contract covered that liability, is immediately before deregistration.

2. Ordinarily, where a section in an Act imposes a time limit for the commencement of proceedings for a cause of action that exists independently of that Act, the section does not bar that cause of action. The section, instead, bars the availability of the remedy to a person pursuing the cause of action.

3. Section 151D(2) of the Workers Compensation Act imposes a time limit for the commencement of proceedings for common law damages for personal injury. The time limit does, therefore, qualify the enforcement of rights of action that exist independently of the Workers Compensation Act. This means that s 151D(2) bars only the remedy and not the cause of action.

4. When interpreting a section in a statute, a purposive construction is to be preferred to a textual construction if that would avoid anomalies and give rise to an equitable result.

5. Section 601AG of the Corporations Act provides, once it is constructed in a purposive manner, that an insurer can raise against a claimant whatever defences would have been open to the company (subject, of course, to any qualification that attaches to those defences). It is, therefore, open to the insurer (Allianz), in a claim against it under s 601AG, to raise the defence that the three year time limit under s 151D(2) of the Workers Compensation Act had expired. Since that defence is subject to the right of the person claiming damages (Mr Almario) to seek the court’s leave to extend the three year time limit, he/she does have the right to apply to the court for leave to extend the time limit as against the insurer.

6. The following are the orders of the Court:

(a) The applications for leave to appeal against the judgments of Balla DCJ and Walmsley DCJ are granted.

(b) The appeals against the judgment of Balla DCJ and Walmsley DCJ are upheld with costs.

(c) The orders made by Balla DCJ are set aside; Allianz to pay the costs of the application before her Honour.

(d) Mr Almario’s notice of motion claiming an extension of time in terms of s 151D(2) of the Workers Compensation Act is remitted to the District Court for rehearing.

(e) The orders made by Walmsley DCJ are set aside and in lieu thereof an order is made dismissing Allianz’s application to strike out Mr Almario’s statement of claim with costs.

(f) In respect of both applications for leave to appeal and appeals, Allianz to have certificates under the Suitors’ Fund Act 1951 (NSW) if otherwise entitled.

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 41159/02

CA 40211/04

DC 466/02

DC 6368/01

HODGSON JA

IPP JA

HUNT AJA

Thursday, 24 February 2005

LUIS ALMARIO v ALLIANZ AUSTRALIA WORKERS COMPENSATION (NSW) INSURANCE LTD

LUIS ALMARIO v ALLIANZ AUSTRALIA WORKERS COMPENSATION (NSW) INSURANCE LTD

Judgment

1 HODGSON JA: I agree with the orders proposed by Ipp JA and his reasons.

2 I would add that, in my opinion, under the purposive construction proposed by Ipp JA, s.601AG of the Corporations Act in effect deems the insurer to be the employer for the purposes of s.151D(2) of the Workers Compensation Act. I am inclined to think also that, in the event that there is recovery from the insurer under s.601AG on the basis that money was payable to the company because the company was liable as a tortfeasor in respect of damage, s.601AG would in effect deem the insurer to be a tortfeasor liable in respect of damage within the meaning of s.5 of the Law Reform (Miscellaneous Provisions) Act 1946, so as to enable it to recover contribution in an appropriate case.

3 IPP JA: These reasons concern two applications for leave to appeal and appeals that were heard together. Both appeals arise out of an action brought by the claimant (“Mr Almario”) against the opponent (“Allianz”) for “damages” for personal injury.

4 The issues concern the interaction between s 151D of the Workers Compensation Act 1987 (NSW) and s 601AG of the Corporations Act 2001 (Cth). They involve important and difficult questions of statutory construction and, for that reason, I would uphold the applications for leave.

5 Mr Almario’s claim is in respect of injuries he alleges he suffered whilst employed as a labourer by Carrington Construction Pty Limited (“Carrington”). Carrington is now a deregistered corporation. At the relevant time, Allianz was Carrington’s workers’ compensation and common law extension insurer.

6 Carrington undertook demolition and decontamination work on a site that had been used for chemical manufacturing. Mr Almario alleges that, while working for Carrington on this job during the period from February 1988 to December 1992, Carrington negligently caused him to be exposed to toxic substances which he inhaled and absorbed. These substances, he asserts, caused him to sustain serious injuries.

7 Mr Almario first experienced symptoms in April 1991. On 13 October 1992, by reason of his illness and disabilities, he ceased work. In December 1992 Carrington was wound up and in April 1999 it was de-registered. It has not been reinstated on the register.

8 Mr Almario commenced proceedings for damages against Carrington in February 1999, without the necessary leave to commence proceedings against a company in liquidation. Application for leave was made in 2002, but later dismissed by consent. He took no further steps to recover damages from Carrington.

9 The time limits for commencement of court proceedings against an employer for damages at common law are governed by s 151D of the Workers Compensation Act. This section provides relevantly:

“(2) A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation more than 3 years after the date on which the injury was received, except with the leave of the court in which the proceedings are to be taken.

(3) The Limitation Act 1969 does not apply to or in respect of court proceedings to which this section applies.”

10 At the latest, the three-year period under s 151D(2) expired in December 1995. On 26 June 2001 Mr Almario commenced proceedings for “damages” (relying on s 601AG of the Corporations Act) against Carrington’s insurer but erroneously identified the insurer in his statement of claim. On 25 June 2002 Mr Almario amended the statement of claim by correctly citing Allianz as Carrington’s insurer and the defendant.

11 In November 2002 Mr Almario applied to Balla DCJ for an order, pursuant to s 151D(2) of the Workers Compensation Act, extending time for the commencement of the proceedings he had brought against Allianz. Balla DCJ noted that it was common ground that the three year period under s 151D(2) had expired by the time Mr Almario had commenced his action against Allianz.

12 Before her Honour, counsel for Allianz contended that:

“[S]ection 151D only applies if the plaintiff’s claim is made against the employer and does not apply to the plaintiff’s claim against the employer’s insurer.”

Counsel for Mr Almario submitted, on the other hand, that:

“[T]he term ‘employer’ should be construed to include the employer’s insurer.”

13 Balla DCJ dismissed Mr Almario’s application. Her Honour said:

“In my view the wording of the section is clear and unambiguous and refers only to the employer.”

The judge said that she was not persuaded that the Act, as a whole, used the terms “employer” and “insurer” interchangeably.

14 In February 2004 Allianz applied to strike out Mr Almario’s statement of claim on the ground that the cause of action pleaded could not succeed. The application came before Walmsley DCJ who described the argument of Allianz as follows:

“[Mr Almario’s] claim against his employer is barred by statute by effluxion of time. No extension of time has been ordered. Though he now sues his employer’s insurer, his case against the insurer cannot be stronger than his case against his employer would have been.”

15 Walmsley DCJ, relying on Pagnon v WorkCover Queensland [2001] 2 Qd R 492, held that the limitation period for s 601AG actions begins to run on deregistration of the company. This finding has not been challenged. His Honour proceeded to express the view that:

“[T]he insurer may rely in these proceedings on defences, including a limitation defence, which, had it been sued, Carrington could have relied on.”

His Honour based his reasoning on an analogy he drew between s 601AG and s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). In particular, he said, it was necessary to look to see whether, on deregistration, Carrington “had a liability” as required by s 601AG. His Honour said:

“There is of course no provision equivalent to s 6(4) of the Law Reform (Miscellaneous Provisions) Act qualifying s 601AG. But s 601AG has been dealt with in Victoria as though such a qualification were present: Hutchinson v ASIC [2001] VSC 465 (30 November 2001) at [25].”

In Hutchinson, Senior Master Mahony said at [25]:

“In resisting the proceeding brought under s 601AG, however, the insurer of the deregistered company would be entitled to rely on any defence on which the deregistered company might have relied.”

His Honour agreed with this proposition and said:

“The insurer here proposes to rely on such a defence, viz the limitation defence which could have been relied on by Carrington, had it been sued. Absent an extension of the time to sue Carrington, that defence will be fatal to the claim’s prospects. It would be an abuse of process to permit the claim to proceed to trial if it cannot succeed.”

16 Thus, on the findings of Balla DCJ and Walmsley DCJ, Mr Almario fell between two stools. His claim that he was entitled to apply for an order under s 151D(2) extending the three year time period was dismissed on the basis that he could only obtain an extension as against the deregistered company but not the company’s insurer. Then, his claim against Allianz, as the insurer, was dismissed on the ground that Allianz was entitled to rely on the time bar under s 151D(2) (even though Mr Almario was held not to be entitled to seek an extension of time under that section). The anomaly of this situation is obvious.

17 Section 601AG provides:

“A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if:

(a) the company had a liability to the person; and

(b) the insurance contract covered that liability immediately before deregistration.”

18 The Explanatory Memorandum accompanying the Company Law Review Bill 1997 states:

“15.22 At present, a person wishing to make a claim against a deregistered company may need to apply to a court for the reinstatement of the company in order to bring an action against it. The Bill enables a person to proceed directly against the insurer of a company that is deregistered, without seeking the company’s reinstatement (Bill s 601AG). Comparable rights have previously been provided in other legislation, for example, s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).

15.23 The Bill enables a third party to recover directly from the insurer of the deregistered company an amount payable under their contract of insurance if two pre-conditions are met:

(a) the deregistered company had a liability to the third party;

(b) the insurance contract covered that liability (Bill s 601AG).”

19 Section 601AG creates a new cause of action. The action is not a claim for damages. It is for an amount that was payable to the deregistered company under the relevant insurance contract. A claim in terms of s 601AG is subject to two conditions, namely, proof that the deregistered company “had a liability” to the person claiming and that the insurance contract covered that liability immediately before deregistration.

20 The two conditions are expressed in the past tense. The inference is that the time for determining whether the deregistered company had a liability to the person claiming, and whether the insurance contract covered that liability, is “immediately before deregistration” (being the phrase qualifying condition (b)). This was not disputed.

21 Allianz did not challenge the proposition that, if - immediately before the deregistration of Carrington - Carrington had a liability to Mr Almario, the insurance contract it had entered into with Carrington covered that liability.

22 Allianz focused on the phrase “had a liability” in paragraph (a) of s 601AG. It submitted that, by reason of the expiry of the time period laid down by s 151D(2) of the Workers Compensation Act, immediately before its deregistration Carrington had no liability to Mr Almario.

23 The word “liability”, however, is capable of ambiguity stemming from the distinction between statutory time limitations that bar the remedy for an existing cause of action and those that extinguish the cause of action.

24 In Australian Iron and Steel Limited v Hoogland [1962] HCA 13; (1962) 108 CLR 471 Windeyer J said (at 488):

“It may be that there is a distinction between statutes of limitation, properly so called, which operate to prevent the enforcement of rights of action independently existing, and limitation provisions annexed by a statute to a right newly created by it. In the latter case the limitation does not bar an existing cause of action. It imposes a condition which is of the essence of a new right ...

It seems that, under the common law system of pleading, when a limitation is annexed by a particular statute to a right it creates, the plaintiff should allege in his declaration that the action was brought within time. On the other hand it is for the defendant to plead the Statute of Limitations as a defence to an action on a common law cause of action, as if he does not it is assumed that he intends to waive it: ...”

25 In McKain v R W Miller & Company (SA) Pty Limited [1991] HCA 56; (1991) 174 CLR 1 Mason CJ after referring to the remarks of Windeyer J in Australian Iron and Steel, said (at 18 to 19):

“A distinction is generally drawn between those statutes which are said to take away the remedy available to a party without touching that party’s underlying right and those statutes or limitation provisions which expressly or impliedly extinguish an underlying right. ...

Statutes of limitation which operate to prevent the enforcement of independently existing rights of action, whether known at common law or, in some circumstances, created by statute, are typically described as denying a remedy while not destroying or extinguishing an underlying right.”

See also The Commonwealth of Australia v Verwayen [1990] HCA 39; (1990) 170 CLR 394 (at 405).

26 Section 151D(2) imposes a time limit for commencement of court proceedings at common law for damages for personal injuries. Those time limits qualify the enforcement of rights of action that exist independently of the Workers Compensation Act. Accordingly, s 151D(2) bars an existing cause of action (that is, a cause of action not created by the statute itself). Hence, on a strictly textual construction, it affects the remedy available to a person to whom it applies.

27 Section 151D(2) is to be contrasted with s 63 of the Limitation Act 1969 (NSW) which provides expressly for the extinguishment of the cause of action. It is noteworthy that s 151D(3) provides that the Limitation Act does not apply to or in respect of court proceedings to which s 151D applies.

28 If s 151D(2) bars only the remedy and not the cause of action, a party may waive its right to rely on s 151D(2) or may be estopped from doing so: cf The Commonwealth of Australia v Verwayen. There is also some authority to the effect that a claim, not enforceable by a time bar, gives rise to a substantive defence of equitable set-off: Sidney Raper Pty Ltd v Commonwealth Trading Bank of Australia Ltd [1975] 2 NSWLR 227 at 237 per Moffitt P, Australian Mutual Provident Society v Specialist Funding Consultants Pty Ltd (1991) 24 NSWLR 326 per Rogers CJ Comm D, see also The Law of Set-Off, 3rd ed, Derham at para 4.39.

29 It follows that, on a strictly textual construction, the expiry of the three-year period in s 151D(2) did not extinguish whatever liability Carrington might have had to Mr Almario for damages for his injuries caused by its negligence. On this basis, the expiry of the three-year period would not prevent Mr Almario from establishing that, at the date of Carrington’s deregistration, it had a liability to him within the meaning of paragraph (a) of s 601AG of the Corporations Act. “Liability” would then include a time barred cause of action.

30 On the other hand, applying the construction advanced by Allianz to s 601AG, another anomaly would arise. In the case of Mr Almario, for example, were “liability” to exclude a liability in respect of which the remedy was time barred, he would only be able to prosecute his claim by having Carrington reinstated on the register and then applying under s 151D(2) for an extension of time within which to bring proceedings against it. This would defeat the legislative policy underlying s 601AG. That being, as McPherson JA noted in Pagnon v WorkCover Queensland (at 500):

“... to ‘shortcut’ the need to reinstate the company, and to do so by enabling the ultimate recipient of the insurance proceeds to sue the insurer direct where the company has been dissolved, without imposing the additional trouble and expense of first applying to have it reinstated.”

31 The effect of the judgment of Balla DCJ is that s 151D(2) has no application to an action for relief in terms of s 601AG. If that were to be correct and if “liability” were to be textually construed (that is, including a liability in respect of which the remedy is time barred), a further anomaly would arise – this time to the disadvantage of the insurer of the deregistered company. The insurer would then lose the protection presently afforded to employers under s 151D(2).

32 Take the notional case where a worker is injured through the negligence of his employer but takes no legal proceedings to recover damages. Assume that, say, 20 years later, the employer company is deregistered and the worker then sues the deregistered company’s insurer. It would give rise to a serious inequity if, in those circumstances, the insurer would be fixed with liability and not be afforded the protection given to employers by s 151D(2).

33 Another potential anomaly concerns the question whether an insurer (not being a joint tortfeasor) is entitled to claim a contribution to whatever amount it may be liable under s 601AG. This is an issue that could well arise should Mr Almario’s action proceed.

34 In my view, the purpose of the legislature in inserting s 601AG in the Corporations Act is to require the insurer of a deregistered company to stand in the shoes of the company to the extent necessary to allow creditors of the company to recover from the insurer whatever amounts they were entitled, by force of law, to recover from the company had it not been deregistered. This purpose is discernible from the section as a whole and the Explanatory Memorandum. The notion that a person may “recover” from the insurer of a deregistered company “an amount that was payable” supports this inference. These words convey the idea of a creditor being entitled to recover that which was payable to him or her. Paragraph (a) of s 601AG is not inconsistent with this idea.

35 In accord with such a purpose, an insurer would be able to raise against a claimant under s 601AG whatever defences would have been open to the company – subject to any qualification that might, in law, attach to those defences. So that if a statute caused a creditor’s remedy to be time barred, but nevertheless provided that the bar could be relaxed by affording the creditor the opportunity of applying for the time to be extended, any right the insurer would have to rely on the time bar would be subject to the creditor being able to apply (as against the insurer) for an extension of the time period.

36 On this basis, it would be open to the insurer, in a claim against it under s 601AG, to raise the defence that the three-year period under s 151D(2) of the Workers Compensation Act had expired. But, as that defence is subject to the right of the person claiming to seek the Court’s leave to extend the three-year period, that person would have the right to apply to the Court for leave to extend the time as against the insurer, as if the insurer was the employer of the person concerned.

37 In this sense, s 601AG would be construed as operating in a way akin to s 6 of the Law Reform (Miscellaneous Provisions) Act. Section 6(1) of that Act imposes a charge on all insurance monies that may become payable in respect of a liability that arises from a contract of insurance indemnifying a person against liability to pay any damages or compensation. Section 6(4) provides:

“Every such charge as aforesaid shall be enforceable by way of an action against the insurer in the same way and in the same court as if the action were an action to recover damages or compensation from the insured; and in respect of any such action and of the judgment given therein the party shall, to the extent of the charge, have the same rights and liabilities, and the court shall have the same powers, as if the action were against the insured: ...”

38 Spigelman CJ observed in Kinzett v McCourt [1999] NSWCA 7; (1999) 46 NSWLR 32 (at 49 [88]):

“... the statutory objective [of s 6] is to assimilate proceedings against the insurer to those against the insured.”

In Ratcliffe v V S & B Border Homes Limited (1987) 9 NSWLR 390 Hunt J said (at 397):

“It is made clear [by s 6] that the insurer is put into the shoes of its insured by the terms of s 6(4), which equate the action to enforce the charge with an action to recover damages from the insured and in respect of which the parties are given the same rights and liabilities as if the action were against the insured.”

Sheller JA referred to this analysis with approval in New South Wales Medical Defence Union Limited v Crawford (1993) 31 NSWLR 469 (at 529 to 530) and Spigelman CJ in Kinzett v McCourt (at 48) agreed with his Honour’s observations in this respect.

39 Paragraph 15.22 of the Explanatory Memorandum accompanying the Company Law Review Bill 1997 (quoted above) described the rights conferred by s 601AG as “[c]omparable” to the rights provided by s 6.

40 I accept that the wording of s 601AG differs in significant respects from s 6. In particular, the phrase “as if”, in s 6(4) is not used in s 601AG. Nevertheless, the basic concept underlying the two different statutory provisions is the same, as the Explanatory Memorandum correctly recognises.

41 In my view, s 601AG should not be textually construed. Rather, it should be construed so that the opening words read:

“A person may recover from the insurer of a company that is de-registered (as if the insurer was the deregistered company) an amount that was payable to the company under the insurance contract ... .”

42 On such a construction, it would be open to the insurer to rely on the three year limit in s 151D(2). It would also be open to a person claiming under s 601AG to seek from the court (as against the insured), in an application under s 151D(2), an extension of the three-year period referred to in the latter section.

43 Construing s 601AG in this way accords with a purposive construction of the statute. Such a construction avoids the anomalies to which I have referred and gives rise to an equitable result. A textual construction of s 601AG, not encompassing the assimilation of other legislation that provides for the time barring of remedies together with a means of extending the time limits in question, would result in the anomalies I have described and the concomitant inequities.

44 In Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14; (2004) 205 ALR 1 McHugh ACJ, Gummow and Hayne JJ at 4 [11], when restating “several of the relevant principles or precepts of statutory interpretation”, said:

“In Newcastle City Council v GIO General Limited [1997] HCA 53; (1997) 191 CLR 85 at 112, McHugh J observed:

‘[A] court is permitted to have regard to the words used by the legislature in their legal and historical context and, in appropriate cases, to give them a meaning that will give effect to any purpose of the legislation that can be deduced from that context.”

45 Their Honours then repeated what Brennan CJ, Dawson, Toohey and Gummow JJ had said in the joint judgment in CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 (at 408), namely:

“Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses ‘context’ in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Limited (1986) 6 NSWLR 363 at 388, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent.”

In Network Ten Pty Ltd at 24 [87] Kirby J, in dissent, said:

“I accept wholeheartedly that the contemporary approach of this court to the interpretation of contested statutory language is the purposive approach. However, adopting that approach does not justify judicial neglect of the language of the statute, whether in preference for historical or other materials, perceived legal policy or any other reason. A purposive construction is supported by s 15AA of the Acts Interpretation Act 1901 (Cth). But that section also does not permit a court to ignore the words of the Act. Ultimately, in every case, statutory construction is a text based activity. It cannot be otherwise.”

46 In my opinion, a purposive construction of s 601AG, whereby the section is construed to mean that the insurer stands in the shoes of the de-registered company to the extent I have suggested, does not amount to a “judicial neglect of the language of the statute”. Such a construction would not ignore the words of the section. It does involve attributing to the words of the section a meaning that accords with the purpose of the legislation and removes anomalies and inequities.

47 Accordingly, in my view, both appeals should succeed. I propose the following orders:

(a) The applications for leave to appeal against the judgments of Balla DCJ and Walmsley DCJ are granted.

(b) The appeals against the judgment of Balla DCJ and Walmsley DCJ are upheld with costs.

(c) The orders made by Balla DCJ are set aside; Allianz to pay the costs of the application before her Honour.

(d) Mr Almario’s notice of motion claiming an extension of time in terms of s 151D(2) of the Workers Compensation Act is remitted to the District Court for rehearing.

(e) The orders made by Walmsley DCJ are set aside and in lieu thereof an order is made dismissing Allianz’s application to strike out Mr Almario’s statement of claim with costs.

(f) In respect of both applications for leave to appeal and appeals, Allianz to have certificates under the Suitors’ Fund Act 1951 (NSW) if otherwise entitled.

48 HUNT AJA: I agree with the orders proposed by Ipp JA, for the reasons he has given.

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LAST UPDATED: 25/02/2005