Reported Decision : 46 NSWLR 32 New South Wales Court of Appeal CITATION : KINZETT v McCOURT & ORS [1999] NSWCA 7 FILE NUMBER(S) : CA 40773/96 HEARING DATE(S) : 17 November; 1998 18 November; 1998 JUDGMENT DATE : 9 February 1999 KARLO KINZETT LAURENCE VINCENT McCOURT ROBERT FRANCIS SLAVIN PARTIES : RICHARD BRADSHAW FIBESE PTY LTD (ACN 003 332 456) OFFSHORE BOAT SALES PTY LTD (IN LIQUIDATION) (formerly known as Zixisha Pty Ltd) ZURICH AUSTRALIA INSURANCE LTD JUDGMENT OF : Spigelman CJ at 1; Mason P at 115; Priestley JA at 121; Meagher JA at 124; Handley JA at 128 LOWER COURT JURISDICTION : Supreme Court LOWER COURT FILE NUMBER(S) : CL 10785/91 LOWER COURT JUDICIAL OFFICER : Hulme J P Mahoney / K Poulos (Appellant) COUNSEL : Submitting (Respondent 1) P Gray / A Pearman (Respondent 2) T Clarke (Respondent 3) Shaw McDonald (Appellant) Coyne & Whittemore ( Respondent 1) SOLICITORS : Uther Webster & Evans (Respondent 2) GIO Australia (Respondents 3 & 4) Vardenega Roberts (Respondents 5 & 6) CATCHWORDS : LIMITATION OF ACTIONS; the period of limitation; extension of s60G and s60I Limitation Act 1969; awareness of connection between personal injury and defendant's act or omission; when proceedings might reasonably have been instituted; plaintiff unaware of the identity of the party; exercise of disrection, s60F Limitation Act 1969; not unreasonable or dilatory conduct on part of plaintiff; INSURANCE; liability insurance; statutory charge on insurance money; s6 Law Reform (Miscellaneous Provisions) Act 1946; construction of; "same rights and liabilities" as against insured; leave to join insurer; whether s14(1)(a) and s14(1)(b) of the Limitation Act 1969 apply; when does time commence to run in favour of insurer; when does time cease to run against insurer; whether leave to proceed condition precedent to commencement of action ACTS CITED : Law Reform (Miscellaneous Provisions) Act 1946 (NSW) Limitation Act 1969 (NSW) DECISION : Appeal allowed THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40773/96 SPIGELMAN CJ MASON P PRIESTLEY JA MEAGHER JA HANDLEY JA Tuesday 9 February 1999 KINZETT v McCOURT & ORS On 3 March 1989, the Plaintiff suffered injuries as a result of a boat explosion. The Plaintiff instituted proceedings on 19 February 1991, alleging that the suppliers of the boat acted negligently, or alternatively, in breach of contract. The Plaintiff sought an order extending the limitation period, which expired on 3 March 1995, for the bringing of proceedings against the Fifth Defendant, the supplier of the boat. The Plaintiff also sought leave to join Zurich Australia Insurance Limited, asserted to be the insurer, as a defendant to the proceedings pursuant to s6(1) of the Law Reform (Miscellaneous Provisions) Act 1946. Leave was denied in both instances. Held, allowing the appeal: (Per curiam) Extension of limitation period 1. The requirement in s60I(1)(a)(iii) that the plaintiff be "unaware of the connection between the personal injury and the defendant's act or omission" encompasses a lack of awareness of the identity of the relevant defendants: Hyde v Agar NSWCA 19 October 1998, applied. 2. In the absence of any evidence suggesting any unreasonable delay or dilatory conduct on the part of the Plaintiff, or on the part of his legal advisers, which was in any way responsible for the delay of six months before the issue of joinder was resolved, the Plaintiff should not be denied an order under s60G of the Limitation Act 1969 extending the period of limitation. Furthermore, it is "just and reasonable" to exercise the discretion in s60G(2) in a case where the principal delay was occasioned by the failure of persons to ensure that the change of ownership of the business was properly registered. Leave to join the insurer 3. Subsection 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 is intended to be the exclusive method of enforcing the obligation created by the statutory charge under subsection 6(1): Bailey v New South Wales Medical Defence Union Ltd (1994) 184 CLR 399, 415, 446. In the case of liability insurance, s14(1)(a) and s14(1)(b) are the material provisions of the Limitation Act. 4. (Per Spigelman CJ; Mason P, Priestley and Handley JJA concurring; Meagher JA dissenting) The reference to "same rights and liabilities" in s6(4) is a reference to the actual rights and liabilities of the particular insured as at the time the application of the subsection arises. Section 6(4) assimilates the position of proceedings against the insurer with proceedings against the insured whether actual or in prospect: Grimson v Aviation & General (Underwriting) Agents Pty Ltd (1991) 25 NSWLR 422 overruled. The Sixth Respondent has no separate limitation defence, unaffected by the extension of time to proceed against the Fifth Respondent. 5. Leave under s6(4) is a condition of enforcement of the cause of action created by the first sentence of s6(4). It is not an essential element in the statutory cause of action: New South Wales Medical Defence Union Ltd v Crawford (1993) 31 NSWLR 469, 488-489 per Kirby P and 503-505 per Mahoney JA, disapproved. The Appellant would not have been entitled to proceed against the Sixth Defendant, in the absence of the order extending the period to commence against the Fifth Respondent. 6. The statutory cause of action under s6(4) is assimilated to a cause of action against an insured so that: (a) Sections 14(1)(a) and 14(1)(b) of the Limitation Act apply. (b) Time commences to run at the same time as the cause of action accrues to the claimant against the insured. (c) (Meagher JA dissenting) Time ceases to run once an action has been commenced against the insured or the insurer, whichever comes first: FAI (NZ) General Insurance v Blundell & Brown Ltd [1994] 1 NZLR 11, 20 per Hardie Boys J; see New South Wales Medical Defence Union Ltd v Crawford (1993) 31 NSWLR 469, 530-531, per Sheller JA. ORDERS 1. Appeal allowed. 2. The period for the commencement of proceedings against the Fifth Respondent is extended until 1 June 1995. 3. Grant the Appellant leave to join Zurich Australia Insurance Limited as the Sixth Defendant in the proceedings. 4. The Fifth and Sixth Respondents to pay the costs of the Appellant. 5. Liberty reserved to the Appellant to approach the Court to vary the date in Order 2. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40773/96 SPIGELMAN CJ MASON P PRIESTLEY JA MEAGHER JA HANDLEY JA Tuesday 9 February 1999 KINZETT v McCOURT & ORS JUDGMENT 1 SPIGELMAN CJ: On or about 25 January 1989 the Plaintiff, Mr Karlo Kinzett, acquired a 5.6 metre half cabin motor boat. A few weeks later he took the boat for a trial run on Lake Illawarra and noticed that there was a hole in the rear portion of the boat. The next day he took the boat to a marine repair yard in Wollongong. He was observing the process of repair by welding, when an explosion occurred which injured him. Petrol had leaked from the petrol tank. The welding triggered the explosion. This occurred on 3 March 1989. 2 By proceedings instituted on 19 February 1991, Mr Kinzett alleged that the suppliers of the boat - a partnership of two individuals - acted negligently, or alternatively, in breach of contract. In the further alternative, he asserted misleading or deceptive conduct and/or false representations in contravention of s42 and s44 of the Fair Trading Act 1987. 3 On 26 March 1992 the Statement of Claim was amended to add as the Third and Fourth Defendants, the persons responsible for the repair process during the course of which the explosion occurred. A number of acts of negligence were alleged against them, relating to their failure to take certain procedures to avoid the explosion. In the alternative, breach of contract and breaches of s52 and s53 of the Trade Practices Act 1974 were also asserted. 4 The invoice of sale of the boat was issued under a registered business name "Offshore Boat Sales". The First and Second Defendants had at one time been the proprietors of that business name, under which they conducted the business as a partnership. It now appears that the business was sold prior to the date of the delivery of the boat to the Plaintiff. No change was registered with respect to the ownership of the business name. Accordingly, on 16 March 1994 when the Plaintiff's solicitor caused to be conducted a search, at the Department of Consumer Affairs, of the business name "Offshore Boat Sales" as at 3 March 1989, the proprietors of the name were shown to be the First and Second Defendants. 5 The Second Defendant applied to strike out the case as against him, on the basis that he was not involved in the business at the relevant time. By reason of the facts discovered during the course of this application, the Plaintiff decided to join the company which did conduct the business at that time: Offshore Boat Sales Pty Ltd (formerly known as Zixisha Pty Ltd). 6 At all material times there was in existence a policy of insurance issued by Zurich Australia Insurance Limited ("Zurich"). Until 14 February 1989, the insured was identified as R F Slavin and his wife Mrs C Slavin. In a way, not made entirely clear on the evidence, they had acquired the business from the original partnership. With effect from 15 February 1989 the insured was altered to Zixisha Pty Limited trading as "Offshore Boat Sales". There has been no determination of the factual issue of who actually supplied the boat. Mrs Slavin has never been joined and the proceedings against Mr Slavin, have been dismissed. 7 One of the issues before the first instance Judge in this case was whether or not the policy responded to the incident. His Honour found it was reasonably arguable that it did so and that finding is not contested before this Court. The Sixth Respondent reserves its position in this respect. 8 His Honour found that, but for a defence under the Limitation Act 1969, he would have acceded to the Plaintiff's claim to join Zurich pursuant to the provisions of s6 of the Law Reform (Miscellaneous Provisions) Act 1946 ("the Law Reform Act"). 9 The Plaintiff's cause of action arose on 3 March 1989. Accordingly, the six year limitation period pursuant to s14 of the Limitation Act expired on 3 March 1995. 10 By Notice of Motion of 20 July 1994 the Appellant sought leave to join the Fifth and Sixth Respondents as Defendants to the proceedings. Leave was required to proceed against the Fifth Defendant because it was in liquidation. In the case of the Sixth Respondent, leave was required under s6(1) of the Law Reform Act. 11 It appears that no application was made to the Court on the basis of the imminent expiration of a period of limitation. The matter was adjourned on a number of occasions. On 18 May 1995 Bruce J, by consent, granted leave to the Plaintiff to proceed against the Fifth Defendant and to join it in the proceedings. 12 The Further Amended Statement of Claim was filed on 29 May 1995. The claim against the Fifth Defendant asserted that it supplied the boat and alleged negligence in various respects with respect to the breach of a duty to exercise reasonable care in and about the sale and supply of the boat. 13 By Notice of Motion, as eventually amended on 13 June 1995, the Plaintiff sought an order extending the limitation period for the bringing of proceedings against the Fifth Defendant to 1 June 1995. No such order was sought against the Sixth Defendant. 14 The two relevant matters which were heard by Hulme J on 22 August 1995 were: 15 The Notice of Motion seeking an order extending the limitation period to bring proceedings against the Fifth Defendant. 16 The Notice of Motion dated 15 July 1994 for leave to join Zurich Australia Insurance Limited as the Sixth Defendant. Extension of Limitation Period Against Fifth Respondent 17 Before Hulme J, the Appellant relied on both s58 and s60G of the Limitation Act to support an order for the extension of the limitation period. In this Court, he relied only on s60G, together with the gateway to that section found in s60I. 18 By force of cl 4(1) of Schedule 5 of the Limitation Act, s60G applies to the present case. The relevant provisions are: "60G(2) If an application for an order under this section is made to a court by a person claiming to have a cause of action to which this section applies, the court, after hearing such of the persons likely to be affected by the application as it sees fit, may, if it decides that it is just and reasonable to do so, order that the limitation period for the cause of action be extended for such period as it determines." "60I(1) A court may not make an order under s60G … unless it is satisfied that: (a) the plaintiff: ………… (iii) was unaware of the connection between the personal injury and the defendant's act or omission, at the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted; and the application is made within 3 years after the plaintiff becomes aware (or ought to have become aware) for three matters listed in paragraph (a) (i)-(iii)." 19 Sections 60G and 60I are found in Subdivision 3 of Division 3 in Part 3 of the Act. Section 60F states, with respect to Subdivision 3: "The purpose of this subdivision is to provide a procedure for a further discretionary extension of limitation periods where the plaintiff was unaware of the fact, nature, extent or cause of the injury, disease or impairment at the relevant time. This procedure is available for causes of action accruing on or after 1 September 1990, and also (by the operation of Schedule 5) for causes of action that accrued before that date." 20 The effect of s60F on the construction of ss60G and 60I was determined by the High Court in Dedousis v The Water Board (1993-94) 181 CLR 171. 21 Two issues were argued before this Court with respect to this aspect of the appeal: 22 First, does s60I(1)(a)(iii) apply to a situation where the fact of which the Plaintiff was unaware was the identity of the party, rather than any characteristic of the act or omission. 23 Second, in the circumstances of this case did the Plaintiff lack the relevant awareness "at a time before" the expiration of the relevant limitation period, "when proceedings might reasonably have been instituted". 24 With respect to the first issue, the reasoning of Hulme J in his judgment of 29 November 1996 was as follows: "The matter of which the Plaintiff, and one might infer, his solicitors, was then unaware was that one or some of these acts or omissions were those of the Fifth Defendant. The question which arises is whether those circumstances come within s60I(iii). In my view they do not. In context it seems to me that what that paragraph is concerned with is the connection between the injury and the acts or omissions said to have caused it, and not with the identity of the perpetrator of those acts or omissions. Reference to 'Defendants' is directed to identifying the acts and omissions to which attention is to be directed, not to the issue of whose acts they may be. Although the remarks of the High Court in Dedousis v Water Board (1994) 181 CLR 171 at 181 were directed at a different issue, the observation that 's60I(1)(iii) is concerned with ignorance of acts and omissions rather than legal conclusions' might be thought to provide some support for the view I have expressed. See also Drayton Cole Pty Limited v Drain (Unreported, Court of Appeal, 22/8/95 at p5-6)." 25 In submissions to this Court, counsel for the Fifth Defendant sought to support his Honour's reasoning by reference to the matters listed in s60F, which sets out the purpose of the subdivision in which s60G and s60I appear. Section 60F refers to a lack of awareness of "the fact, nature, extent or cause of the injury, disease or impairment at the relevant time". Counsel submitted that there was no reference to the identity of the Defendants. However, as the High Court said in Dedousis supra, s60F is "no more than an introductory provision" and the primary substantive provision" is s60G (177). 26 In my opinion this submission should be rejected. The word "defendant's" in s60I(1)(a)(iii) does not merely serve to identify the relevant acts or omissions to which attention is directed. There is no reason to give the word so restrictive a meaning. The contention of the Respondents as accepted by his Honour means that s60I(1)(a)(iii) should be construed as if it said: "The plaintiff was unaware of the connection between the personal injury and the relevant act or omission". In my view this is not the meaning. The inclusion of the word "defendant's" is deliberate and encompasses a lack of awareness of the connection between an act or omission and the injury and also of the identity of the relevant Defendants. 27 The focus of s60I(1)(a) is on a lack of knowledge on the part of the Plaintiff. It encompasses lack of knowledge of the fact that the Plaintiff had suffered an injury at all, sub-para (i); the nature and extent of the injury that had been suffered, sub-para (ii) and the connection between the injury and an act or omission, sub-para (iii). The plain policy of this section is, in the case of explicable delay, to ameliorate the harshness of the operation of limitation periods for which the Act otherwise provides. Lack of knowledge of the identity of the relevant Defendants falls within this policy purpose. 28 In the recent decision of Hyde v Agar NSWCA 19 October 1998, in a joint judgment of myself, Mason P and Stein JA, s60G(2) was applied expressly to a situation in which the relevant lack of awareness concerned the identity of the appropriate defendants. Those proceedings involved an allegation that the persons responsible for setting the rules of the sport of Rugby Union had negligently failed to provide for rules which would have avoided injuries suffered by the two Plaintiffs during the course of two separate games of Rugby Union. The joint judgment of the Court said: "It is likely that both Mr Hyde and Mr Worsley were aware by mid 1991 of the connection between their personal injury and the alleged acts of the rule makers of the game. However, without precise knowledge of the identity of the actual rule makers, the Appellants were not in a position to proceed against them. Notwithstanding continued attempts, the Appellants lacked personal knowledge of the specific identities of those who had power to make and amend the laws of the game until August 1993 at the earliest." 29 In that case the limitation period was extended. In my view the reasoning in Hyde v Agar is applicable to the present case. 30 The second issue arising on this aspect of the case is the submission, made on behalf of the Fifth Respondent, that the Plaintiff cannot be said to have been unaware of the relevant connection "at a time before" the expiration of the relevant limitation period "when proceedings might reasonably have been instituted". Although his Honour did not have to deal with the application of this test to the facts of the case, all parties indicated that this Court should do so, rather than remit the matter for further consideration. 31 Counsel for the Fifth Respondent submitted that the Plaintiff was aware of his client's identity not later than 19 May 1994. This is a reference to a letter from the Plaintiff's solicitor to the Sixth Respondent, Zurich, of that day. The letter made reference to Zixisha Pty Limited (in liquidation) trading as Offshore Boat Sales as the relevant insured and stated: "State Bank records recently discovered finally appear to substantiate Mr Robert Slavin's often repeated claim that the above company traded as Offshore Boat Sales at the relevant time." 32 The letter went on to indicate the Plaintiff's intention to institute proceedings under s6 of the Law Reform Act against Zurich. 33 On 20 July 1994, the Plaintiff filed his Notice of Motion seeking leave to join the Fifth Respondent as a Defendant in the proceedings. Leave was required because the company was in liquidation. No submission was or could be made to the Court that such a Notice of Motion had the effect of stopping time running in the case of a company in liquidation. (SCR Pt 8 r11(3)). 34 It could not be suggested that the delay between 19 May 1994 and 20 July 1994 was such as would be found to be unreasonable for the purposes of the last clause in s60I(1)(a). This Notice of Motion was disposed of by a consent order made by Bruce J on 18 May 1995. 35 For the purposes of s60G, the relevant period of limitation expired on 3 March 1995. 36 There was evidence before his Honour as to the course of events between 19 May 1994 and 3 March 1995 with respect to the progress of the Notice of Motion to join the Fifth Respondent. Counsel appearing for the Fifth Respondent did not identify any conduct of the Plaintiff, or of his legal advisers, which suggested in any way that the period of delay of some six months, between the institution of the relevant proceedings by way of the Notice of Motion of 20 July 1994 and the expiry of the period of limitation, was in any way attributable to unreasonable conduct on the part of the Plaintiff. 37 It is to be regretted that demands on the Court's time are such that even comparatively simple matters are not necessarily able to be dealt with within a short period of time. It is plain that the parties engaged in a course of negotiation so that the liquidator would agree to the joinder without the necessity for the issue to be fully litigated. A letter of 18 May 1995 in which the liquidator did so agree was handed to this Court without objection. It does not appear that this document was before Hulme J. 38 The day on which the liquidator agreed to consent to the joinder was the very day on which Bruce J ordered the joinder. The Court was not apprised of any details concerning the prior negotiations leading to the settlement of this aspect of the proceedings. Plainly the Court wishes to encourage resolution of such issues to the maximum degree that it can. 39 In the absence of any evidence suggesting any unreasonable or dilatory conduct on the part of the Plaintiff, or on the part of his legal advisers, which was in any way responsible for the delay of six months before the issue of joinder was resolved, the Plaintiff should not be denied an order under s60G with respect to the matter raised by Notice of Motion filed eleven days after leave to join the Fifth Defendant was granted by the order of Bruce J. Notwithstanding the knowledge the Plaintiff acquired by 19 May 1994, I am satisfied that, between that date and the expiration of the period of limitation in March 1995, it was not the case that "proceedings might reasonably have been instituted" within the meaning of s60I(1)(a). 40 The Respondent made no submission that, if the s60I gateway was established, the discretion in s60G(2) should not be exercised. I find that it is "just and reasonable" to exercise the discretion in a case where the principal delay was occasioned by the failure of persons, including the Fifth Respondent, to ensure that the change of ownership of the business was properly registered. 41 Accordingly, in my opinion the appeal should be allowed on this ground. The order sought in the Amended Notice of Appeal in this regard was: "An order that the time for commencement of proceedings against the Fifth Respondent be extended until 1 June 1996 alternatively to a date 14 days from the judgment of the Court." 42 It is not clear to me why an order is sought in this form. The proceedings were in fact instituted on 29 May 1995 when the Further Amended Statement of Claim was filed joining the Fifth Defendant. Subject to any further submission the Appellant may wish to make in this regard, I propose that an order be made extending the period for the commencement of proceedings against the Fifth Respondent until 1 June 1995. Leave to Join the Insurer 43 The second matter before the Court concerns the application for leave to join Zurich. This application is made pursuant to the provisions of s6 of the Law Reform Act. His Honour dealt with this part of the application in his judgment briefly. Immediately after dismissing the Plaintiff's claim for an extension of time under s60G against the Fifth Respondent, his Honour said: "It follows that the joinder of Zurich would be pointless and the application to which I have referred as the First Claim must also be refused." 44 It is plain that what his Honour believed himself to be dealing with was an application to join Zurich that was entirely derivative from the proceedings proposed against the Fifth Respondent. On this basis, the Appellant's success against the Fifth Respondent in this Court would lead to automatic success against the Sixth Respondent also. In any event, counsel for the Appellant argued that on one view expressed in the authorities to which I will refer below, the Sixth Respondent could be joined irrespective of the success of the appeal with respect to the Fifth Respondent. 45 In this Court, counsel appearing for the Sixth Respondent sought to rely on a direct Limitation Act defence on behalf of Zurich, i.e. a defence not in any way derivative from the Limitation Act defence available to the Fifth Respondent. Counsel conceded that this was an issue that should have been raised by means of Notice of Contention and sought leave to do so. Counsel for the Appellant formally opposed any grant of leave, but did not make submissions in this regard. 46 Counsel for the Sixth Respondent suggested, but could not show this Court anything which established, that the point had been taken before his Honour. As I have indicated, the hearing before Hulme J was on 22 August 1995. Since that time an important event has occurred for purposes of dealing with the Sixth Respondent's application for leave to raise a new point on appeal by way of Notice of Contention. 47 The Plaintiff has made no application to the Court for an order under s60G extending the limitation period for its cause of action against the proposed Sixth Respondent. It cannot now do so because an additional three year period has expired since the hearing before Hulme J. Section 60I(1)(b) imposes as a gateway requirement that any application for extension must be made "within three years after the Plaintiff became aware (or ought to have become aware) of …", relevantly, "the connection between the personal injury and the defendant's act or omission". 48 If the action on the statutory charge can be characterised in this way (to which I will return below), then the Appellant has been significantly disadvantaged by the Sixth Respondent's conduct of the case and leave to raise the point for the first time should be refused. Nevertheless, in view of the significance of the issue raised, the substantive question should be determined. 49 Section 6 of the Law Reform Act constitutes Part 4 of that Act: "Attachment of Insurance Moneys". The section states: "(1) If any person (hereinafter in this Part referred to as the insured) has, whether before or after the commencement of this Act, entered into a contract of insurance by which he is indemnified against liability to pay any damages or compensation, the amount of his liability shall on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of such liability may not then have been determined, be a charge on all insurance moneys that are or may become payable in respect of that liability. (2) If, on the happening of the event giving rise to any claim for damages or compensation as aforesaid, the insured (being a corporation) is being wound up, or if any subsequent winding-up of the insured (being a corporation) is deemed to have commenced not later than the happening of that event, the provisions of subsection (1) shall apply notwithstanding the winding-up. (3) Every charge created by this section shall have priority over all other charges affecting the said insurance moneys, and where the same insurance moneys are subject to two or more charges by virtue of the Part those charges shall have priority between themselves in the order of the dates of the events out of which the liability arose, or, if such charges arise out of events happening on the same date, they shall rank equally between themselves. (4) 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 parties 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: Provided that, except where the provisions of subsection (2) apply, no such action shall be commenced in any court except with the leave of that court. Leave shall not be granted in any case where the court is satisfied that the insurer is entitled under the terms of the contract of insurance to disclaim liability, and that any proceedings, including arbitration proceedings, necessary to establish that the insurer is so entitled to disclaim, have been taken. (5) Such an action may be brought although judgment has been already recovered against the insured for damages or compensation in respect of the same matter. (6) Any payment made by the insurer under the contract of insurance without actual notice of the existence of any such charge shall to the extent of that payment be a valid discharge to the insurer, notwithstanding anything in this Part contained. (7) No insurer shall be liable under this Part for any greater sum than that fixed by the contract of insurance between himself and the insured. (8) Nothing in this section shall affect the operation of any of the provisions of the Workers Compensation Act 1987 or the Motor Vehicles (Third Party Insurance) Act 1942 ..." 50 This Court has sat a bench of five on this occasion, by reason of the differences of opinion that have been expressed in this, and other, courts with respect to the proper construction of s6 of the Law Reform Act. Because of the submissions made on behalf of Zurich that it has a Limitation Act defence unrelated to the success of the appeal vis a vis the Fifth Respondent, it is necessary to consider some aspects of this conflict. It is not strictly necessary to decide the issue raised by the Appellant that it can join the insurer irrespective of its success against the Fifth Respondent. Nevertheless, the issue overlaps with that raised by the submission of Zurich. It is appropriate that it should be dealt with by a bench of five, even on an obiter basis. 51 The starting point for any consideration of the relationship between s6 and the Limitation Act is a recognition that s6(4) is intended to be the exclusive method of enforcing the obligation created by the statutory charge. In Bailey v New South Wales Medical Defence Union Ltd (1994) 184 CLR 399, 446, McHugh and Gummow JJ (with whose analysis in this respect Brennan CJ, Deane and Dawson JJ agreed, 415) said: "What s6 achieves is the creation of a new right with an associated remedy to enforce it." 52 Their Honours gave, as the first of three authorities for this proposition, the case of Pasmore v Oswaldtwistle Urban District Council [1898] AC 387. In that case the Earl of Halsbury LC said: "The principle that where a specific remedy is given by statute, it thereby deprives the person who insists upon a remedy of any other form of remedy than that given by the statute, is one which is very familiar and which runs through the law … The obligation which is created by this statute is an obligation which is created by the statute and by the statute alone … You must take your stand upon the statute in question, and the statute which creates the obligation is the statute to which one must look to see if there is a specified remedy contained in it." (394) 53 The full passage, from which this is an extract, was quoted with approval in Josephson v Walker (1914) 18 CLR 691, 695-696, and see 697, 701. 54 The common law presumption that a remedy specified in a statute is intended to be exclusive was expressly applied to s6 of the Law Reform Act in Bailey v New South Wales Medical Defence Union Ltd supra 446, 415. Accordingly a claimant on an insured must pursue an action against the insurer "as if" it were a claim in contract or tort, as the case requires. 55 For this reason, the twelve year limitation period under s42(4) of the Limitation Act, applicable to enforcement of a mortgage (defined in s7 of that Act to include a charge), does not apply to the enforcement of a statutory charge under s6 of the Law Reform Act. 56 For the same reason, s14(1)(d) which relates to "money recoverable by virtue of an enactment" is not material. (See FAI (NZ) General Insurance v Blundell & Brown Ltd [1994] 1 NZLR 11, 17 line 50 and 19 line 48). 57 In the case of liability insurance, to which s6(1) refers, s14(1)(a) and s14(1)(b) are the material provisions of the Limitation Act. 58 The previous case law appears to have proceeded on the unexpressed assumption that the effect of s14(1)(a) or s14(1)(b) (that an "action is not maintainable"), and the effect of s63 (which extinguishes "the right and title of the person formerly having the cause of action to the … damages or other money") fall within the respects in which an action for enforcement of the statutory charge under s6(1) of the Law Reform Act is assimilated to proceedings between the person claiming on an insured and the insured. This case has proceeded on the same basis. 59 In my opinion this approach is correct. The statutory assimilation by s6(4) of proceedings to enforce the charge with proceedings against an insured is such as to apply both the general law and statute law relevant to proceedings against the insured in contract or tort or under a statute such as the Trade Practices Act, to the proceedings against the insurer. The Limitation Act is a statute so made applicable. 60 The two issues which must be addressed in order to determine the interrelationship between s6(4) of the Law Reform Act and s14(1) and s63 of the Limitation Act are: When does time commence to run in favour of the insurer? When does time cease to run in favour of the insurer? A Conflict of Authorities 61 Two views have been taken as to when time commences to run in favour of the insurer: (i) From the date of the event which gives rise to the claim on the insured: Grimson v Aviation & General (Underwriting) Agents Pty Ltd (1991) 25 NSWLR 422, 428-429 per Meagher JA with whom Hope AJA agreed; Ceric v C E Heath Underwriting & Insurance (Australia) Pty Ltd (1994) 99 NTLR 1, 11 per Angel J (dissenting); Cambridge Credit Corporation Ltd v Lissenden (1982) 8 NSWLR 411, 421 per Clarke J; Ratcliffe v VS & B Border Homes Ltd (1987) 9 NSWLR 390, 397 per Hunt J; FAI (NZ) General Insurance v Blundell & Brown Ltd supra 17 per Richardson J, 19-20 per Hardie Boys J. (ii) From the date of the grant of leave to proceed against the insurer New South Wales Medical Defence Union Ltd v Crawford (1993) 31 NSWLR 469, 488-489 per Kirby P; 503-505 per Mahoney JA; Ceric supra 2-8 per Gallop ACJ and Morling J. 62 In New Zealand the choice is still regarded as open. See UEB Packaging v QBE Insurance (International) Ltd [1998] 2 NZLR 64, 70-71 per Thomas J. Compare his Honour's earlier expressed view in Independent Wool Dumpers Pty Ltd v American International Underwriters (NZ) Ltd (1993) 7 ANZ Ins Cas 61-152, 77,804. 63 As to (i), in Grimson the majority judgment was delivered by Meagher JA, with whom Hope AJA agreed. His Honour said: "Newman J refused leave because to grant it would be a futility, since an action commenced by leave would be doomed to failure by reason of the expiration of the time limit of six years provided for in s14(1)(b) of the Limitation Act 1969, at which time the cause of action would also be extinguished by s63 of the Limitation Act. … The basic reason why the plaintiff must fail is that s6(4) expressly provides that the plaintiff in a statutory action 'shall … have the same rights and liabilities … as if the action were against the insured'. That necessarily involves, so it seems to me, the proposition that any defence which would be available in the primary action is a good defence in a statutory action. In other words the judge asked to grant leave to initiate the statutory action must ask himself: What would be the plaintiff's position if he or she began proceedings against the defendant in the primary action at this moment? In the present case, the only possible answer is the melancholy one that if the plaintiff commenced a claim against Venture in June 1988 for its negligence in 1977 the claim would be defeated by a defence raising the Limitation Act. This is nonetheless true in circumstances where, like the present, the plaintiff actually has on foot proceedings which are not statute barred. (For the sake of completeness I should add that the only respect in which the statutory action is not equated with the primary action is that referred to in subsection (5). Prior judgment would constitute a liability, by way of a defence of estoppel by record, in a primary action, but Parliament has excluded it from being an impediment to the bringing of a statutory action.)" (428-429) 64 The submission made for Zurich, that it has a separate limitation defence, unaffected by any extension of time to the Fifth Respondent, is based on the authority of Grimson. 65 As to (ii), in Crawford supra Mahoney JA said: "… the creation of the charge, as such, does not give rise to a cause of action in respect of which there is a right to sue at the time when a charge is imposed. It is not necessary to consider the effect of the law of limitations in respect of a charge as such. But in relation to the charge created by s6, the statutory intention is, in my opinion, that the method of enforcement of the charge is by the action referred to in s6(4). The charge if otherwise enforceable, is not enforceable until the time when proceedings under s6(4) may be brought. I come therefore to the effect of the limitation law upon the cause of action given by s6(4) … For the purposes of the law of limitations, it is necessary to determine when, within the terms of the Limitation Act, the cause of action could first be sued upon. In this regard two things at least are relevant: the time when the injured person is first entitled to sue as such on the cause of action; and the significance of the requirement that, before he sues, he have leave of the court under s6(4). In general terms, the injured person may not sue on this cause of action unless and until the insured would be entitled to claim payment from the insurer pursuant to the indemnity granted by the insurance policy. The cause of action gives to the insured person 'the same rights and liabilities and the court shall have the same powers, as if the action were against the insured' (s6(4)). It is given to enforce a charge on 'all insurance moneys that are or may become payable in respect of' the liability (s6(11)). But the moneys secured by the charge are not payable immediately the charge arises. It follows that the moneys are not, as such, payable immediately the injured person is injured. Accordingly, I think, it is not, in general, enforceable until those moneys become payable. (I put aside special cases, for example, where the insured cannot or will not claim or sue). A declaration of right may, of course, be given before that time. Ordinarily the moneys are not recoverable by the injured person before they would be payable to the insured under the terms of the policy. It is not necessary to consider precisely when, under an insurance policy, an insurer may sue an insurer. … I do not mean by this that in every case the liability of an insured to pay money in satisfaction of an indemnity may be delayed until determination of contested issues of liability. However, in this case, as the estate contested liability to Mr Crawford, the time for payment by the NSW Medical Defence Union Limited had not arrived. In addition the injured person before being entitled to sue the insurer, must have the leave of the court to bring a proceeding (s6(4)). … My opinion, in summary, is that leave is a necessary part of the cause of action. The cause of action is one created by statute and the provision by which it is created incorporates that leave as a precedent step to the commencement of it. Therefore, unless and until the court's consent be given the cause of action has not arisen and for limitation purposes, the time does not commence to run." (503-504) 66 Kirby P agreed with Mahoney JA's reasoning in this regard (488G) and concluded that the cause of action is not complete until leave is given (489-490). 67 The submission of the Appellant that it can now proceed against the Sixth Defendant, irrespective of whether or not time is extended to proceed against the Fifth Respondent, is based on this reasoning in Crawford. Should Grimson Be Followed? 68 Grimson was referred to with approval in McMillan v Mannix (1993) 31 NSWLR 538 by Meagher JA, with whom Cripps JA agreed. His Honour did not refer to the decision in Crawford, which had been handed down two weeks before. Kirby P dissented. He referred to both Grimson and Crawford and added: "From these cases two differing interpretations of principle emerge. Neither case can be viewed as providing a ratio decidendi binding on this Court." (McMillan v Mannix 542C). 69 In McMillan v Mannix Meagher JA described the "main purpose" of s6 in the following terms: "That purpose is to enable the plaintiff to have recourse to funds paid or payable by the defendant's insurer to the defendant in respect of the injury of which the plaintiff complained. It does so by granting the plaintiff, on application, a charge over the monies paid or payable. In this manner it prevents the defendant from either disbursing the moneys amongst its creditors or frittering it on its own purposes; it also prevents the defendants and insurer making a corrupt bargain. All this is apparent from reading the section. Whether one considers the purpose of the section, or whether one considers the words used, one arrives at the same result. Moneys payable by the insurer shall be made available to the plaintiff. If one undertakes the superogatory task of reading the relevant Second Reading speeches, one comes to the same conclusion. But the converse is also true. If there are, absent a corrupt bargain, no moneys payable to the insured, there is no right for the plaintiff to have a charge over anything or an action against the insurer. This flows implicitly from a consideration of the purposes of the section; it is also made explicit in the provisions of subsection (7). It has been recognised by a decision of this Court: Grimson v Aviation & General (Underwriting) Agency Pty Limited (1991) 25 NSWLR 422. It was not the purpose of the section to increase the liability of insurers." (547) 70 Special leave was sought and refused (Mannix v McMillan HCA 13 May 1994). The matter was heard by Mason CJ, Deane and McHugh JJ. In delivering the judgment of the Court, Mason CJ said: "Notwithstanding the difficulties and capricious results which may flow from the interpretation of the relevant provisions by the majority in the Court of Appeal, we are of opinion that the interpretation which they favour is the correct interpretation of the words which the legislature has chosen to use in these provisions. For that reason the application is refused." 71 The "interpretation" to which Mason CJ was referring was that set out in the extract from Meagher JA above, this was directed to the circumstance that there were no moneys payable to the insured. The subsequent approval of McMillan v Mannix by the High Court in Bailey supra 448-449, was also directed to the phrase "insurance moneys that are or may become payable" within s6(1). The approval by the High Court of McMillan v Mannix has no bearing on that aspect of Grimson which concerns the Limitation Act. (See also New South Wales Medical Defence Union Ltd v Crawford (No 2) NSWCA 30 June 1994, per Kirby P, 7-15). 72 This Court is faced with a clear conflict between two previous decisions. The most recent in point of time considered the earlier case. In Crawford Kirby P, the dissentient in Grimson, reiterated his opinion that that case was wrong. Sheller JA, for different reasons, would have overruled Grimson. Mahoney JA did not expressly refer to Grimson. 73 Each of the decisions has implications which are so inconvenient that this Court should be slow to find that Parliament, when enacting s6, was using the words it used in either sense. 74 In Crawford supra, Sheller JA expressed his agreement with the comments in the unreported judgment of Badgery-Parker J in Lawler v NSW Medical Defence Union Ltd NSWSC 9 October 1992, in which his Honour said: "The decision (in Grimson) has an unfortunate and somewhat extraordinary consequence, namely that the action to enforce the statutory charge might become statute barred at a time when either the intending plaintiff was entirely unaware (and had no means of knowledge because of the lack of a means of compelling the provision of information) that the tortfeaser was insured or, assuming that the tortfeaser was insured, of the identity of the insurer; or because an application for leave to sue the insurer could not be made at any time during the limitation period applicable in respect of the tortfeaser, because throughout the whole of that period the tortfeaser was 'a good common law defendant' Andjelkovic v AFG Insurance Limited (1980) 47 FLR 348." 75 To similar effect, in FAI (NZ) General Insurance v Blundell & Brown Ltd supra, Hardie Boys J identified the critical difficulty: "The claim against the insured may have been brought expeditiously, but by the time the need to pursue the insurer becomes apparent the limitation period may have expired." (20) 76 The practice under s6(4) is to refuse leave to proceed against an insurer, wherever the insured is a viable defendant. Andjelkovic v AFG Insurance Ltd (1980) 47 FLR 348, 355-356; Cambridge Credit Corporation v Lissenden supra 422; Dixon v Royal Insurance (1991-92) 105 ALR 1, 8; Crawford supra 489-490 per Kirby P; FAI General Insurance Co Ltd v McSweeney (1997) 73 FCR 379, 418-419. 77 The viability of the insured is a fact that can change at the end of, or even after, the expiration of the original limitation period. It would be most extraordinary if Parliament intended so capricious a result. Only the plainest of statutory language would lead to a construction which permitted such a consequence. 78 In Crawford, Sheller JA quoted with approval the statement by Moffitt P in National Mutual Fire Insurance Co Ltd v Commonwealth (1981) 1 NSWLR 400, 403: "… The legislative purpose of s6 is to provide for the person to whom the insured is liable direct access to the insurance fund, in those cases where enforcement might be frustrated unless such direct access were available." 79 Sheller JA added: "To my mind it is extraordinary that the action against the insurer treated notionally as one by the injured person against the insured should proceed on the footing, contrary to the fact, that the injured person's right against the insured has been extinguished … If the injured person's action … has not been barred by extinguishment by the Limitation Act of the injured person's right to recover, I cannot understand why, consistent with the evident legislative purpose described by Moffitt P, an action by the injured person to enforce the right to direct recourse against the insurance moneys should depend on whether or not it was commenced within that limitation period." (528) 80 In Ratcliffe supra, Hunt J said: "The injured party to whom damages may become payable by the insured and who makes a claim to enforce the charge created by s6 is not put into the shoes of the insured for the purposes of enforcing the insured's indemnity. What s6 does is to put the insurer into the shoes of its insured who may become liable to pay damages to the injured party for the purposes of the claim by that injured party to receive those damages. That is fundamental to the whole framework of s6. It is made clear that the insurer is put into the shoes of its insured by the terms of s6(4), which equate the action to enforce the charge with an action to recover damages from the insurer and in respect of which the parties are given the same rights and liabilities as if the action were against the insured." (397) 81 Sheller JA referred to this analysis with approval in Crawford supra 529-530 and concluded: "If the injured party's right against the insured has not been extinguished by time 'the insurance moneys are or may become payable' and the charge is affixed. In that situation I see no reason why the injured party should not enforce that charge as the statute envisages. On the other hand if the right or title of the injured party against the insured has been extinguished there are no insurance moneys which are or may become payable and no charge. This framework seems to me logical and to accord with the purpose of the legislation. For present purposes it may be accepted that the action founded in s6(4) by Mr Crawford against the NSW Medical Defence Union Limited accrued more than six years before it was brought. But s6(4) to my mind makes plain that that is irrelevant. The action is to be treated as one to recover damages from the insured. That being so, to say that the Limitation Act provides the insurer with a defence is to ignore the reality that Mr Crawford's right against the insured has not been extinguished and to proceed on the false assumption that it has been. Any separate defence based upon delay or limitation which the insurer may have to a claim by its insured is protected by the preservation of its right to disclaim liability." (530-531) 82 I respectfully agree. 83 The reasoning of Meagher JA in Grimson was that the reference to "the same rights and liabilities" meant that a Limitation Act defence available to the insured was necessarily available to the insurer, even in circumstances where the insured was sued, either within time (as in Grimson), or pursuant to an extension of time (as in this case). 84 Subsection 6(4) is a threefold provision: (i) The statutory "charge" is "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". (ii) The parties to any such action, i.e. the claimant on the insured and the insurer, shall "have the same rights and liabilities"… "in respect of any such action and of the judgment given therein … as if the action were against the insured". (iii) The Court shall have "the same powers" in respect of "any such action and of the judgment" given therein "as if the action were against the insured". 85 The decision of Meagher JA in Grimson referred only to (ii): ("have the same rights and liabilities"). There is a tension between those words and the words referred to in (i) above, which indicates that the charge is enforceable "in the same way … as if the action were an action to recover damages or compensation from the insured". These are not words which Meagher JA quoted in Grimson. 86 In circumstances where proceedings have in fact been commenced against the insured within time (either within the original period or as extended), then to permit the insurer to set up a limitation defence not in fact available to the insured is to fail to permit the charge to be enforced "in the same way … as if the action were an action to recover damages or compensation from the insured". 87 These two parts of subsection (4) must be read together. They can both be given effect if the reference to "the same rights and liabilities" is construed to mean the actual "rights and liabilities" of the particular insured as at the time the application of the subsection arises. It should be so construed. This conclusion is, in my opinion, reinforced by subsection (5) which permits proceedings against the insurer, even if proceedings against the insured have concluded. This express provision would not have been necessary if "the same rights and liabilities" was intended to refer to purely hypothetical rights and liabilities. 88 The point in Meagher JA's reasoning in Grimson with which I disagree is to be found in the last few words of his Honour's postulation of the relevant question as: "What would be the plaintiff's position if he or she began proceedings against the defendant in the primary action at this moment?" (428-429). In my opinion, s6(4) is not confined to a consideration of the institution of proceedings "at this moment", namely, hypothetical proceedings by a claimant on the insured at the time of the institution of proceedings against the insurer, oblivious to the actual state of affairs. Rather it is concerned to assimilate the position of proceedings against the insurer with proceedings against the insured whether actual, or in prospect. This is subject, as Meagher JA pointed out in Grimson, to the express exception in s6(5) which contemplates proceedings against the insurer even when the insured could plead res judicata. 89 There is, in my opinion, no material difference between the words "as if the action were an action to recover damages or compensation from the insured" and the latter formula "as if the action were against the insured". In both formulations the statutory objective is to assimilate proceedings against the insurer to those against the insured. The words "as if the action were against the insured" encompass existing proceedings against the insured as well as potential proceedings. The use of the indefinite article "an" before "action" is intended to have both an indefinite and definite reference. No article appears in the second formulation, where the force of the definite article before the word "insured" directs attention to the facts of the particular case. Where a claimant on the insured has in fact taken proceedings, then subsequent proceedings against the insurer are enforceable "as if" the second action "were" the first action, not only "as if" it "were" a hypothetical fresh proceedings against the insured, ignoring any actual proceedings. 90 For these reasons, it is my opinion that Grimson was wrongly decided and should be overruled. Should Crawford Be Followed? 91 The analysis I have set out above is also inconsistent with the reasoning of Kirby P and Mahoney JA in Crawford, to the effect that no cause of action against the insurer exists at all until leave is granted and that, accordingly, time against the insurer does not commence to run until leave is granted. In my opinion, time in favour of the insurer runs on the same basis as it runs in favour of the insured. In this regard I believe my views are closest to those expressed by Sheller JA in Crawford. 92 It is relevant to note that neither Kirby P nor Mahoney JA considered the second question I have posed above: When does time stop running in favour of the insurer? If, as I believe, time stops running when proceedings are in fact taken against the insured, the construction of s6(4) is put in a different light than that which their Honours considered in Crawford and Crawford (No 2). 93 I agree with the "tentative view" expressed by Hardie Boys J in FAI (NZ) General Insurance v Blundell & Brown Ltd supra: "… because the section puts the insurer in the place of the insured, there is much to be said for the view that time ceases to run once an action has been commenced in respect of the happening from which the liability of them both arises. For what then follows under the section is enforcement of the charge that the happening has brought into being …It is only a tentative view, for the point does not need to be decided in this case …". (20) 94 The reasoning of Sheller JA in Crawford, 530-531 is consistent with this approach. 95 If Kirby P and Mahoney JA are right, there is no limitation provision of any practical significance in respect of the direct claim against a liability insurer under s6. It is not, in my opinion, a likely intention, even of the reforming purpose of s6, for it to have a consequence of this character. As Giles JA noted, writing extra-judicially: "The need for leave was no doubt intended to protect insurers against excessive direct action, but, … as the law presently stands it operates to give insurers an open ended exposure to action by the third parties. In a real way it does not protect them, but increases their exposure, at least theoretically beyond their exposure to their insured." (Giles "Reflections on Section 6" (1996) 7 Ins LJ 152, 155) 96 The implication of the majority reasoning in Crawford is that no statute of limitations is effective with respect to any aspect of intercourse covered by policies of liability insurance. The only effective control is the exercise of an unconfined discretion by the Courts to refuse leave. Even in 1946 when the Law Reform Act was passed, this was an extraordinary consequence. At that time the Statute of Limitations of 1623 (Imp) was still in force in New South Wales. The practical implications of effectively excluding liability insurance from all statutory limitations is of even greater significance today. But the Act must be construed in accordance with the intention of Parliament in 1946. 97 The judiciary cannot be indifferent to the economic consequences of its decisions. Insurance premiums for liability policies are, in substance, a form of taxation (sometimes compulsory but ubiquitous even when voluntary) imposed by the judiciary as an arm of the state. For many decades, there has been a seemingly inexorable increase in that form of taxation by a series of judicial decisions, on substantive and procedural law. I do not believe that this process should be given the further impetus implicit in the replacement, of precise statutory periods of limitation, by an unconfined discretion, in every area of intercourse, both personal and commercial, in which liability insurance exists. The language which Parliament chose in 1946 would have to be extraordinarily compelling to conclude that it intended to replace longstanding statutory provisions, which implement a public policy of great significance, with an unconfined judicial discretion in a significant field of insurance. 98 As McHugh J said in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541: "For nearly 400 years, the policy of the law has been to fix definite time limits … for presenting civil claims." (551) 99 His Honour's illuminating exposition in that case of the policy behind such definite time limits, assists in the construction of legislation which is said to replace such limits with an unconfined judicial discretion in a significant field of social intercourse: "Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even 'cruel', to a defendant to allow an action to be brought long after the circumstances which give rise to it has passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period … The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible." (552-553, references omitted). 100 Nothing in the scope and purpose of the Law Reform Act 1946 suggests that it was intended to substantially disrupt the public policy behind statutory periods of limitation. Nor do the words employed require such a construction. The terminology of the proviso requiring leave to "commence", does not necessarily imply that such leave is an essential element in the statutory cause of action. 101 The words of the proviso are "shall not be commenced". Parliament did not use the same words as it used in the first sentence of s6(4) which created the cause of action. Adapting those words, the proviso would have stated: "No charge shall be enforceable by way of an action except with the leave of the Court." 102 The use of the words "no action shall be commenced" is suggestive of a procedural requirement rather than an essential precondition. If Parliament had said "no charge shall be enforceable" the formulation may have suggested the latter. 103 A further textual indication arises from the fact that charges are ranked in priority by subsection (3) in accordance with the dates of the events, not the dates of leave. If leave is an essential condition, the date of leave could be expected to have some effect on priorities. 104 Coburn v Colledge [1897] 1 QB 702 concerned a statute which provided that no solicitor "shall commence or maintain any action or suit for the recovery of fees" until one month after delivering a bill. Lord Esher said of that section: "It does not provide that no solicitor shall have any cause of action in respect of his costs or any right to be paid till the expiration of a month from his delivering a signed bill of costs, but merely that he shall not commence or maintain any action for the recovery of fees, charges, or disbursements until them. It assumes that he has a right to be paid the fees, charges, and disbursements, but provides that he shall not bring an action to enforce that rights until certain preliminary requirements have been satisfied." (706) 105 The High Court considered a similar statutory requirement of notice before suit in Harding v Lithgow Corporation (1937) 57 CLR 186. Dixon J said that this requirement: "… does no more than impose a condition upon the assertion of enforcement of the right by judicial process." (194) 106 In my opinion, leave under s6(4) is also a preliminary requirement to, or condition of, enforcement of the cause of action created by the first sentence of s6(4). It is not an essential element of the existence of the cause of action. The reasoning in Crawford should not be followed. Conclusion 107 This Court should now decide that the statutory remedy under s6(4) is, subject only to other subsections, assimilated to a cause of action against an insured, so that: 108 Section 14(1)(a) and (b) of the Limitation Act applies to the proceedings. 109 Time commences to run at the same time as the cause of action in tort or contract accrues to the claimant against the insured. 110 Time ceases to run under s14(1)(a) or (b) when proceedings are brought against the insured or the insurer, whichever comes first. 111 The consequence in the present case is that there is no separate Limitation Act defence available to the Sixth Respondent. Such would only have been available if Grimson remained good law. Accordingly, the extension of time in respect to the institution of proceedings against the Fifth Respondent is determinative of proceedings against the Sixth Respondent also. 112 The Appellant's submission that it could proceed against the Sixth Respondent even if its proceedings against the Fifth Respondent had been statute barred, was based on Crawford. Although it is not strictly necessary to decide this point, because of the extension of time against the Fifth Respondent, the submission should be rejected. 113 Order 2 below is in slightly different form to that requested by counsel for the Appellant. The Court should reserve liberty to apply to vary the date if required. 114 The orders of the Court should be: 1 Appeal allowed. 2 Order that the period for the commencement of the proceedings against the Fifth Respondent is extended until 1 June 1995. 3 Grant the Appellant leave to join Zurich Australia Insurance Limited as the Sixth Defendant in the proceedings. 4 The Fifth and Sixth Respondents should pay the costs of the Appellant. 5 Liberty reserved to the Appellant to approach the Court to vary the date in Order 2. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40773/96 SPIGELMAN CJ MASON P PRIESTLEY JA MEAGHER JA HANDLEY JA Tuesday 9 February 1999 KINZETT v McCOURT & ORS JUDGMENT 115 MASON P: I agree with the orders proposed by Spigelman CJ. 116 I also agree with the Chief Justice's reasons, with a minor qualification. The Chief Justice describes insurance premiums for liability policies as, in substance, a form of taxation imposed by the (unelected) judiciary. Without wanting to diminish the force of the point he is making (with which I agree) I cannot agree to join a general confession of the high sin that lost Britain the American colonies. 117 A person embarking upon an activity that provides exposure to (claims of) tortious liability will often be compelled to insure against the risk. Judges cannot ignore this reality. Sometimes the duty to insure is itself a legal obligation. 118 Unfortunately a novel statement of claim is not accompanied by an economic impact statement. And there are theoretical and empirical difficulties with assuming that the cost of insurance will or will not be passed on to a third party (see WD & HO Wills (Australia) Ltd v State Rail Authority of New South Wales (1998) 43 NSWLR 338 at 352-3). But these factors offer no excuse for indifference by the guardians of the common law for the economic consequences of their decisions. 119 Tort liability remains much more than an unintended burden upon an activity superimposed upon an order for compensation. It may be appropriate for types of risk-taking (like speeding on the roads) to be discouraged. Tort law plays its part, along with ethical, criminal and commercial sanctions. Of course, many risky ventures have social utility, and we judges need to remind ourselves of this when pressed by plaintiffs to expand existing bounds of liability, eg in the field of professional malpractice and in relation to novel duties to control the conduct of others. Cf Hyde v Agar, Court of Appeal, unreported, 19 October 1998. 120 But as long as judges keep their eyes open, and exercise appropriate restraint, they may exercise discretions conferred by statute and nurture and develop the corpus of common law without stepping outside constitutional bounds. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40773/96 SPIGELMAN CJ MASON P PRIESTLEY JA MEAGHER JA HANDLEY JA Tuesday 9 February 1999 KINZETT v McCOURT & ORS JUDGMENT 121 PRIESTLEY JA: The two central issues in this appeal are those identified in the two notices of motion mentioned by Spigelman CJ in pars 15 and 16 of his reasons. 122 As to the first, for the reasons stated by the Chief Justice I agree that the period for the commencement of the proceedings against the Fifth Respondent should be extended until 1 June 1995. 123 As to the second, I agree with the construction of s 6 of the Law Reform Miscellaneous Provisions Act 1946 which the Chief Justice proposes should be adopted. In my opinion the language of the section justifies that construction. Further, the construction seems to me to produce a rule which is (i) workable, and (ii) likely to bring about results in accord with the purpose of the section clearly evident from its own terms. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40773/96 SPIGELMAN CJ MASON P PRIESTLEY JA MEAGHER JA HANDLEY JA Tuesday 9 February 1999 KINZETT v McCOURT & ORS JUDGMENT 124 MEAGHER JA: I have had the privilege of reading the draft judgment of the Chief Justice in this matter. 125 With respect, I agree with His Honour's view on the extension of the limitation period. 126 However I do not agree with him on the issue concerning s6 of the 1946 Law Reform Act. In my view Grimson v Aviation & General (Underwriting) agents Pty Ltd (1991) 25 NSWLR 422 is still good law , and the passage of time has not diminished the cogency of its reasoning. It has been followed both inside and outside New South Wales, and has been approved by the High Court of Australia. 127 It follows that I cannot agree with Order 3 as proposed. As far as Order 4 is concerned, I would simply order the fifth respondent to pay the appellant's costs. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40773/96 SPIGELMAN CJ MASON P PRIESTLEY JA MEAGHER JA HANDLEY JA Tuesday 9 February 1999 KINZETT v McCOURT & ORS JUDGMENT 128 HANDLEY JA: I agree with Spigelman CJ. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.