CIVIL LAW (WRONGS) ACT 2002 - SECT 206 Amount of liability charge on insurance money payable against

CIVIL LAW (WRONGS) ACT 2002 - SECT 206

    (1)     This section applies if—

        (a)     a person (the insured ) has entered into a contract of insurance by which the insured is indemnified against liability to pay damages or compensation; and

        (b)     an event happens that gives rise to a claim against the insured for damages or compensation

    (2)     On the happening of the event, the amount of the insured's liability in relation to the event becomes a charge on all insurance money that is or may become payable in relation to the liability.

    (3)     If, when the event happens, the insured is a corporation that is being wound up, or if any subsequent winding-up of the insured is taken to have begun on or before the happening of the event, subsection (2) applies despite the winding-up.

    (4)     A charge under this section has priority over all other charges affecting the insurance money.

    (5)     However, if the insurance money is subject to 2 or more charges under this section—

        (a)     the charges have priority between themselves in the order of the happening of the events out of which the liabilities arose; and

        (b)     charges that arise out of events happening on the same day rank equally between themselves.