See also The Commonwealth of Australia v Verwayen (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) 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."