(1) If a person (in this Part referred to as 'the insured') has, whether before or after the commencement of this Ordinance, entered into a contract of insurance by which he is indemnified against liability to pay any damages or compensation, the amount of his liability is, on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of the liability may not then have been determined, 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 the claim for damages or compensation, 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) apply notwithstanding the winding-up. (3) Every charge created by this section has priority over all other charges affecting the insurance moneys, and where the same insurance moneys are subject to 2 or more charges by virtue of this section those charges have priority between themselves in the order of the dates of the events out of which the liability arose, or, if the charges arise out of events happening on the same date, they rank equally between themselves. 27. ENFORCEMENT OF CHARGE (1) Subject to subsection (2), a charge created by this Part 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. (2) In respect of any such action and of the judgment given in any such action the parties have, to the extent of the charge, the same rights and liabilities, and the court has the same powers, as if the action were against the insured. (3) Except where the provisions of subsection (2) of section 26 apply, no such action shall be commenced in any court except with the leave of that court, and leave shall not be granted 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. (4) an action may be brought although judgment has been already recovered against the insured for damages or compensation in respect of the same matter. 28. PROTECTION OF INSURER (1) Notwithstanding anything in this Part, a payment made by an insurer under the contract of insurance without actual notice of the existence of a charge under this Part is, to the extent of that payment, a valid discharge to the insurer. (2) An insurer is not liable under this Part for any greater sum than that fixed by the contract of insurance between himself and the insured. 29. CERTAIN OTHER PROVISIONS NOT AFFECTED Nothing in this Part affects the operation of any of the provisions of the Workmen's Compensation Ordinance or Part V of the Motor Vehicles Ordinance." 6. There are legislative provisions, in para materia, in other Australian jurisdictions, viz, in New South Wales and in the Australian Capital Territory. 7. The defendant has pleaded in the 1992 action that the plaintiff's action is barred by the Limitation Act. The defendant relies on decisions of the Supreme Court of New South Wales to the effect that time begins to run against a plaintiff who has a statutory charge, at the time when the plaintiff's cause of action against the tortfeasor begins to run and that the period of limitation is the same as in the action against the tortfeasor: see Cambridge Credit Corporation Ltd (Receivers Appointed) v Lissenden (1987) 8 NSWLR 411 per Clarke J; Grimson v Aviation and General (Underwriting) Agents Pty Ltd (1991) 25 NSWLR 422 per Meagher JA and Hope A-JA (Kirby J dissenting). Thus, in New South Wales, where the relevant time limit is six years, a plaintiff must obtain the leave of the court within six years, and this is so, even if the plaintiff has already sued the tortfeasor to judgment: see Grimson, supra, at 429. In the Northern Territory, if that case were to be followed, the relevant limitation period is three years. Alternatively, the defendant says the relevant limitation period is three years from the time when the statutory charge first arose, i.e. from the happening of the event giving rise to the claim for damages or compensation. In support of this contention, the defendant relies upon the true construction of Part VIII of the Act in combination with s12(1)(d) of the Limitation Act. If either of those submissions are correct, the plaintiff cannot succeed in this application for leave to commence fresh proceedings (unless the plaintiff is arguably entitled to an extension of time under the Limitation Act) and leave must be refused. 8. The purpose of the legislation, and the leave requirement, has been discussed in a number of cases. In Andjelkovic, supra, Blackburn CJ said (at 355-6): "I may sum up my decision as follows. The main purpose of the provision requiring leave to commence the statutory action is to prevent the substitution of a statutory claim for a claim against the insured where the latter is available and will apparently be effective. Leave may also be refused where the applicant's claim is unarguable, that is, where the applicant's contention that the statutory conditions for the vesting in him of a right of action have been fulfilled could not possibly succeed. But if on such an issue there is an argument in the applicant's favour which could be seriously put, then in my opinion, on the proper construction of the Ordinance, leave should be granted and the issue should be determined in the action in any available way." 9. On appeal to the Federal Court, no criticism was made of that passage in Blackburn CJ's judgment. The Full Federal Court said (at 400): "Section 26(3) commands the court not to grant leave in certain circumstances. It is not easy to decide precisely what is embraced in the words which describe the circumstances where the court is not to grant leave. In our opinion the court has a general power to grant leave in all cases which do not fall within the provision that it shall not grant leave and in which it is made to appear by evidence available in the application that there is an arguable case of liability against the insured, being a

liability against which the insured is indemnified by a contract of insurance in force at the time of the happening of the event said to give rise to the claim. We accept the relevant test proposed by the respondent which is really the test formulated by the primary judge, namely, has the respondent presented a case which is at least arguable?" 10. On further appeal to the High Court it was held that the Full Federal Court was correct in rescinding leave and in concluding that the plaintiff's case was not arguable: see (1984) 58 ALJR 52 at 53. 11. Useful guidance as to the purposes of the provisions is also to be found in the judgment of Moffit P in National Mutual Fire Insurance Co Ltd v Commonwealth of Australia (1981) 1 NSWLR 400, especially at 401-4. Moffit P said (at 401-2): "The essential function and purpose of s6 of the Law Reform (Miscellaneous Provisions) Act, 1946, is to create and define a charge over insurance moneys in favour of a person having an appropriate right to recover moneys from an insured person and to provide a procedure to enforce that charge. The section recognizes that the need for enforcement of the charge may arise after a judgment has been obtained against the insured (s6(5)) or may arise although there is no such judgment (s6(4)). Situations which the section is designed to remedy include those which may be produced where an insured being a company is being wound up. Subsections (2) and (3) of s6 operating with s6(1) are specifically designed to meet that situation. To effectively meet it, the person entitled to sue the insured can by s6(4) proceed directly against the insurer in 'the same way as if the action were an action to recover (the moneys) from the insured.' In such a case no leave is required. Where the insured is in liquidation s6(1) having created the charge which attached at the same time when the liability of the insured arose, s6(2),(3) accept that to enable the enforcement of the charge to be effective in the face of the liquidation, the liability of the insured should be determined in and enforced by one action directly against the insurer. In other cases leave is required. A proper exercise of a judicial discretion conferred by statute will need to be for reasons which in a general sense further the policy of the legislation to be derived from its terms but so that a particular reason is not foreign to or in conflict with that policy. Such is the case with the exercise of the discretion conferred by s6(4) to grant leave. As earlier stated the legislative purpose of s6 is to create the charge and provide for its enforcement. Its subject matter is not to provide some optional alternative to the ordinary method of establishing liability by proceeding against the tortfeasor. Indeed the policy is to preserve that method except where some reason related to the enforcement of the statutory charge dictates otherwise. Other than where the insured is in liquidation, s6(4) does not spell out the cases where the charge should be allowed to be enforced to the extent of allowing action being taken directly against the insurer to the extent that liability of the tortfeasor and liability of the insurer will be determined in the one action, ie by proceedings directly against the insurer. Cases other than where the insured is in liquidation can be envisaged where to enforce the charge it may be necessary or desirable that the action be brought directly against the insurer, but in the case of s6(4) have not been defined but are left to be determined by the exercise of the discretion to grant leave." 12. At 403, Moffit P said: "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. Section 6 does not ... provide an optional alternative procedure enabling a plaintiff to sue the insurer rather than the insured tortfeasor, for example on some basis of convenience to the plaintiff." 13. These observations are consistent with the notion that leave will not ordinarily be given unless direct access to the funds, the subject of the charge, is necessary to ensure that the plaintiff's rights to recovery against the tortfeasor is not frustrated. An example of such a case which comes to mind is where the tortfeasor goes bankrupt, or being a company, goes into liquidation, after, for example, the commencement of proceedings, in circumstances where s26(2) does not apply. In Grimson, supra, Meagher AJ referred to "the historical fact that the original object of the legislation ... was to prevent a plaintiff being damnified by a defendant entering into a corrupt bargain with his insurer in fraud of the plaintiff's rights ..." (at 429). Nevertheless, according to the reported cases on the topic, the most common situation in practice occurs when the defendant has become insolvent. It will be seen that there is tension between the object of the leave provisions as discussed in the authorities, if the action to enforce the charge must be brought within three years from the date of the accident. If it is necessary, in order to avoid the consequence that the right of action to enforce the charge has become statute barred, that leave be sought and obtained within three years, and at the same time to demonstrate that unless leave is granted, the plaintiff's rights of recovery against the tortfeasor might be frustrated, rights could become lost. The insolvency of the defendant might not occur within the three year time limit; indeed, the insolvency might not occur until after judgment. There is power to enlarge time limits conferred by s44 of the Limitation Act, but it is a moot point whether the fact of the defendant's insolvency would be regarded as "a fact material to the plaintiff's case" within the meaning of s44(2)(b) of the Limitation Act. It is not uncommon for the situation to occur where the insurer denies liability to the insured, but that information may not become known to the plaintiff until after the three year limitation has expired. It is similarly questionable as to whether or not that is a "material fact." As Kirby P observed in Grimson's case (at 425): "Clearly, the section contemplates the supervening winding up of an insured corporation or the death or disappearance of an individual who was insured before the plaintiff has recovered. Such events are the very circumstances which attract the application of the section and demonstrate its utility. But if the construction urged by the respondents and accepted by Newman J is correct, no relief would be available under the section to a plaintiff who commenced proceedings within time, discovered the need for resort to the section outside the limitation period otherwise protecting the insured, and thus, at the gateway of leave, faces the impenetrable barrier of a limitation defence invoked by the insurer." 14. The first question, therefore, is what, if any, limitation period applies. I have had some difficulty accepting what appears to have been the view of the majority in Grimson's case that the relevant limitation period is that limitation period which applied to the plaintiff's action against the tortfeasor. Following the logic of that argument, the defendant insurer would be entitled to rely upon a plea that no action was brought against the tortfeasor within three years. The defendant insurer is taken to be in the position of the insured by s27(2) as if the insurer is the insured; therefore the insurer could plead that the action to enforce the statutory charge was statute-barred, notwithstanding that an action was in fact commenced against the insured within the limitation period. This may appear to be logically sound, but, with respect, somewhat Kafkaesque. Further, it is difficult to see how it can be said that the action, which is to enforce a statutory charge, is an action founded on tort. In my view, the action is a statutory one, sui generis and not derivative, in much the same way as are actions under the Compensation (Fatal Injuries) Act: cf Haber v Walker [1963] VicRp 51; (1963) VR 339. In my view, the relevant limitation period is s12(d) of the Limitation Act. Section 12 of the Limitation Act is in the following terms: "12. ACTIONS IN CONTRACT AND TORT, andc. (1) Subject to sub-section (2), the following actions are not maintainable after the expiration of a limitation period of 3 years from the date on which the cause of action first

accrues to the plaintiff or to a person through whom he claims - (a) an action founded on contract (including quasi-contract) not being a cause of action which is evidenced by a deed; (b) an action founded on tort including a cause of action founded on a breach of statutory duty; (c) an action to enforce a recognisance; and (d) an action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture. (2) Sub-section (1) does not apply to a cause of action- (a) to which section 17 applies; or (b) for contribution to which section 24 applies. (3) For the purposes of sub-section (1)(d), 'enactment' includes a statute of the legislature of the Commonwealth or a State or another Territory of the Commonwealth, or any country or part of a country." 15. I am aware that in Grimson, supra, Meagher JA observed (at 429) that unless the limitation prescribed by s14(1)(b) of the Limitation Act 1969 (NSW) applied in the manner he discussed, "it is difficult to see what (if any) limitation period would be available as a defence." I note that s14 of the New South Wales Act is in para materia to s12 of the Northern Territory provision. However there is no mention by the court of the New South Wales equivalent to s12(1)(d); yet what could be more clear than that the action conferred by s27(1) of the Act is "an action to recover money recoverable by virtue of an enactment"? As a single judge I am very reluctant to disagree with the decision of the Court of Appeal of a State court, and fully conscious of the dangers of doing so; but I feel that in conscience I must in this case prefer my own view. In any event, the ultimate conclusion which I have reached is the same as that of the Court of Appeal for all practical purposes. 16. If I am right so far, the next question is when does the cause of action conferred by s27(1) of the Act accrue? Mr Waters submitted that the cause of action does not accrue until leave to institute the proceedings was obtained, because until then, no money was 'recoverable.' Mr Riley submitted that the cause of action accrued from the moment the charge was created, and relied principally upon the reasoning of Clarke J in Cambridge Credit Corporation Ltd (Receivers Appointed) v Lissenden (1987) 8 NSWLR 411, but also upon Ratcliffe and Anor v VS and B Border Homes Ltd and Ors (1987) 9 NSWLR 390 per Hunt J. The reasoning in both cases is similar. In the Border Homes case, Hunt J's approach was similar to that in Grimson, supra, which I have already discussed. In Lissenden's case Clarke J did not specifically identify which provision of the Limitation Act 1969 (NSW) was involved, but it is likely that the provision relied upon was probably s14(1)(b) rather than s14(1)(d) (the equivalent of s12(1)(d) of the Limitation Act (NT)). Be that as it may, Clarke J (at 420-1) did consider specifically the argument that, the requirement for leave meant that time did not begin to run. I consider, with respect, that Clarke J's approach to this question and the result he reached, namely that the cause of action arose at the time the charge was created, and that the requirement for leave does not delay the running of time, is correct, and is both supported by the authorities he cited, as well as by the provisions of the Act. In Harris v Gas and Fuel Corporation of Victoria [1975] VicRp 60; (1975) VR 619 at 623, Gillard, Menhennett and Norris JJ said: "The locus classicus on the subject is a statement by Lord Esher MR (with whom the two other members of the Court of Appeal concurred) in Read v Brown (1888) 22 QBD 128 at 131 where he said a 'cause of action' was 'Every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every bit of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.' The warning set out in the last sentence must be borne in mind in considering the submissions for the applicant. The Master of the Rolls was merely repeating what he had said earlier in Cooke v Gill (1873) LR 8 CP 107 at 116. Although these two cases were concerned with the phrase in relation to jurisdiction, nevertheless the definition was a short time later accepted by the Court of Appeal (also presided over by Lord Esher) in an action by a solicitor for his costs, and in those proceedings, the question arose, in relation to barring the solicitor's remedy by effluxion of time, as to when the solicitor's cause of action accrued; was it when he did the work or at the expiration of one month after he delivered

his bill? Adopting the test laid down in Read v Brown, supra, the Court of Appeal held that the solicitor's cause of action accrued when he did the work (see Coburn v Colledge (1897) 1 QB 702 at 706,709-10. See also Trower and Sons Ltd v Ripstein (1944) AC 254 at 263; (1944) 2 All ER 274; O'Connor v Isaacs (1956) 2 QB 288; (1956) 2 All ER 417; Central Electricity Generating Board v Halifax Corporation (1963) AC at 800; (1962) 3 All ER at 919 per Lord Reid cf. Ward v Lewis (1896) 22 VLR 410). It may therefore be accepted that a cause of action accrues when there have occurred all the facts which are material to be proved to entitle the plaintiff to succeed. Some positive act is frequently needed to be proved to complete the cause of

action. (Halsbury's Laws of England 3rd ed, Vol 24 at 194 (note(s))). At the point thus ascertained the period of limitation to bar a claimant's remedy commences." 17. In Sevcon Ltd v Lucas CAV Ltd (1986) 2 All ER 104 at 106 Lord MacKay, in whose opinion the other members of the House of Lords concurred, adopted the same test. In that case, the House was called upon to consider when a cause of action accrued for the purposes of the Statute of Limitations in circumstances where an action was brought in respect of infringements of patents which at the time of the infringements had been applied for, but not yet granted. Section 13(4) of the Patents Act 1949 (UK) created rights in respect of pending applications, but precluded any action to enforce those rights until the patent had been sealed. By the time the patent had been sealed and the plaintiff had issued his writ more than six years had passed from the date of the infringement. The plaintiff contended that the statutory bar to action prevented time from running. Lord MacKay said (at 108): "However, s13(4) in terms deals with the situation in the period after the date of the publication of a complete specification and until the sealing of a patent in respect thereof, and provides for the applicant having rights and privileges in this period. In his opening counsel for the appellants very fairly recognised that the provisions to which I have already referred in s65(2) might well produce results in favour of the applicant before any patent was sealed. Indeed, it is very difficult to see what effect can be given to the principal provisions of s13(4) unless they have the meaning contended for by the respondents. So far as infringement is concerned everything which the submission of counsel for the appellants would accord to a patentee would be provided by s22(1) alone. I conclude therefore that s13(4) does provide rights to an applicant for letters patent immediately after the publication of the complete specification and that, if he is in a position to allege that acts have been committed by a defendant which constitute infringement of any claim of the complete specification as published, he has a cause of action from the date of these acts although he may subsequently lose that cause of action by failing to obtain a patent or by the complete specification being amended with retrospective

effect in such a way that these acts no longer constitute infringement of any of its claims. I consider that the proviso does not make it necessary for the applicant to allege as part of his cause of action that he is the grantee of letters patent. Indeed, the proviso itself in describing his entitlement refers to him as 'an applicant.' As an applicant whose complete specification has been published he has the necessary foundation in the shape of the privileges and rights that he would have had if a patent for the invention had been sealed on the date of that publication to constitute the necessary monopoly and allegations of acts of infringement after that date would complete all that is required for a cause of action. If he were to institute proceedings for infringement before the patent for the invention was sealed, the procedural requirement of the proviso would not be satisfied but a statement of claim could not be struck out as disclosing no cause of action although it might be liable to be struck out as an abuse of the process of the court. The appellants contend that the conclusion which, for the reasons which I have set out, appears to be the correct one would lead to results which offend the policy of Parliament as manifested in the Limitation Act 1980 as a whole. They submit that the exceptions, for example, for those under disability, show that Parliament did not intend time to run where a person was not in a position to pursue his claim. However, the true principle as illustrated in the cases to which I have referred is that time runs generally when a cause of action accrues and that bars to enforcement of accrued causes of action which are merely procedural do not prevent the running of time unless they are covered by one

of the exceptions provided in the 1980 Act itself. The appellants submit further that it is possible having regard to what may be required to happen between publication of a complete specification and the sealing of the patent that rights of action may be lost before they may be enforced. If this were bound to happen Parliament might well have dealt with it expressly but it has not done so. However, the period of six years from the date of publication of the complete specification appears amply sufficient in the light of the provisions of the relevant rules for all that Parliament might have anticipated as taking place between the publication of the complete specification and the sealing of the letters patent." 18. In my opinion, s26(1) created rights immediately upon "the happening of the event giving rise to the claim for damages or compensation." It is unnecessary to decide in this case whether the "happening of the event" means, in negligence cases, the time when the breach of duty occurred, or whether it means the time when the cause of action is completed by the suffering of damage. In this case, both the breach of duty and the damage occurred simultaneously on 28 September 1982. The right created was a charge over "monies that are or may become payable" in respect of the liability of the insurer under its policy. Section 26(3) deals with priorities as between those entitled to a charge and in cases which fall within s26(2) no leave is necessary to enforce the charge immediately. If the insurer has notice of the charge, a payment before leave to sue is granted by the insurer other than to the injured party does not act as a valid discharge of the insurer's liability under the policy (s28(1)). Further, there is no requirement for the plaintiff to plead or prove as part of the cause of action that leave has been granted: see O13.05 of the Supreme Court Rules. There is no doubt that the requirement for leave under s27(3) is procedural, and not a condition precedent to the acquisition to the right to a charge, because, as I have explained, the right to the charge arises immediately upon the happening of the event. In this respect I agree with the view of Clarke J in Lissenden's case and with Higgins J in Dixon v Royal Insurance Australia Ltd and Ors (1991) 105 ACTR 1 at 6. It may be, as I have already said, that because the period of the limitation is only three years, the limitation period is unreasonably short. But, there is nothing in the decided cases that would prevent a court, in the proper exercise of its discretion, to grant leave if application were made to it, in order to prevent the charge from becoming unenforceable if action were not brought in time. This would be consistent with the policy of the legislation, ie to provide direct access to a source of funds in those cases where direct access is necessary if enforcement proceedings against the tortfeasor might otherwise be frustrated. Even if the only basis for the leave sought was to prevent the charge from becoming unenforceable, I do not see how that would be a wrong exercise of discretion, given the effect of s28(1) of the Act. Further, I note that in the Northern Territory, there is a power to extend the time limits conferred by s44 of the Limitation Act which would seem to give some added protection in appropriate cases, e.g. in those cases where the identity of the insurer was not known. The conclusion I have reached, therefore, is that the plaintiff's cause of action to enforce the statutory charge became statute barred on 29 September 1985. 19. The plaintiff next contends that facts material to his case to enforce the charge were first ascertained by him on 26 May 1992 when he learned, for the first time, that the liability of the insurer under the policy to the tortfeasor was unlimited, rather than limited in amount, as he had first thought. Section 44(2)(b) of the Limitation Act requires, inter alia, an action which is statute barred to be commenced within twelve months after the alleged material facts were first ascertained. Mr Riley QC objected to the reception of the plaintiff's affidavit averring to these matters. Mr Waters conceded that this material was not properly before me but asked that I rule on the question of law involved and, if those rulings favoured the plaintiff he would then seek to put that material before me in an admissible manner. I have decided to adopt that course. 20. Mr Riley QC submitted that as it was now over twelve months since the alleged material facts became known leave could not now be granted to enable fresh proceedings to be issued, because no extension would be possible even if those facts (a) were true and (b) were 'material facts' within the meaning of the section. Mr Waters submitted that the court could, however, grant leave nunc pro tunc to the 1992 action, and if this were to be done, the twelve month limitation provided by s44(2) would not be fatal, relying on the decision of the Court of Appeal in Ward v Walton (1989) 66 NTR 20. There is no doubt that Mr Riley QC is correct so far as the granting of leave to issue fresh proceedings is concerned. That cannot now be done. This leaves only the possibility that an order could be made nunc pro tunc in respect of the 1992 action, and it is to that question which I now turn. 21. Mr Riley QC submitted that leave cannot be granted nunc pro tunc. If leave is to be granted at all, it can only be in respect of fresh proceedings. Mr Riley QC relied upon authorities from the Supreme Court of New South Wales. Mr Waters on the other hand, relied upon authorities from the Supreme Court of the Australian Capital Territory. These authorities conflict. It is therefore necessary for this Court to resolve this question for itself. 22. The position in New South Wales is clear. The court has no power to make an order granting leave nunc pro tunc under the equivalent provision in that State, s6(4) of the Law Reform (Miscellaneous Provisions) Act: National Mutual Fire Insurance Co Ltd v Commonwealth of Australia, supra; Ratcliffe and Anor v VS and B Border Homes Ltd and Ors (1987) 9 NSWLR 390 (Hunt J). The reasoning of the Court of Appeal is to be found in the judgment of Glass JA (with whom Moffitt P and Samuels JA agreed) at 408: "The next question with which his Honour dealt was whether it was open to him to give the leave required by s6(4) after the action had been commenced. He decided that 'the legislative intention thus perceived will be given sufficient effect by a requirement that the plaintiff be required at an early stage in the proceedings to seek such leave, the absence of which would of course constitute a complete defence if pleaded' ((1980) 2 NSWLR 719 at 725). This conclusion was based in part upon the belief that guidance could be obtained from the approach adopted in

Rendall v Blair (1890) 45 Ch D 139, where a procedural requirement was held to be directory only. The problem which arises when the act of a litigant is subjected by statute to the prior performance of conditions has been recently discussed in this Court: Attorney-General (NSW) ex rel Franklins Stores Pty Ltd v Lizelle Pty Ltd (1977) 2 NSWLR 955; Hatton v Beaumont (1977) 2 NSWLR 211; Tasker v Fullwood (1978) 1 NSWLR 20, especially at 23-4. It is there pointed out that it is an encouragement to error to investigate whether the statute is mandatory or directory in its terms by assimilating it to other statutory requirements of like kind and then noting whether these have been held to be mandatory or directory by nature. In the plethora of reported decisions, it will be found that directory has been used in two contradictory senses, viz, to describe a statute which renders the act invalid in the absence of substantial compliance as well as one which preserves the validity of the act notwithstanding total non-observance of the condition. The inquiry properly to be made eschews the tripartite classification of mandatory and directory in both senses, disregards other statutes and concentrates on the terms of the statute in question. By having regard to the nature of the precondition, its place in the legislative scheme and the extent of the failure to observe the requirement, the question is posed as a matter of construction whether there was a legislative intention that such a failure should nullify the act in question. When the requirement of subs(4) is examined from this standpoint, unencumbered by reference to other and different procedural requirements, the question is not difficult to answer. There is no question of strict or substantial compliance. The action is commenced with leave or it is not. If it is commenced without leave, the proceeding is either a complete nullity or else it remains valid irrespective of whether or not leave is subsequently granted or else it continues in a state of suspended validity which will come to an end if leave is not obtained within an unspecified time. I can see nothing to support the attribution of a legislative intention of the two last-mentioned kinds. In my view the legislative intention properly to be garnered from the terms of subs(4) and its place in the framework of s6 is that a failure to obtain the leave of the Court in advance invalidates the action and renders it incapable of being revived by leave retrospectively given. It follows that the order granting leave to the Commonwealth to commence its proceedings against the insurer cannot be supported." 23. The position in the Australian Capital Territory is also clear. The court may make an order nunc pro tunc: Andjelkovic v AFG Insurances Ltd (1980) 47 FLR 348; 31 ACTR 17; Dixon v Royal Insurance Australia Ltd and Ors (Higgins J) (1991) 105 ACTR 1. Andjelkovic was reversed on appeal by the Federal Court of Australia [1981] FCA 104; (1981) 54 FLR 398, but on other grounds the Federal Court making no comment on this point. On further appeal to the High Court of Australia (1982) 49 ALR 245; 58 ALJR 52, the appeal was dismissed. Again, there was no comment by the High Court on this issue. In Dixon's case, Higgins J said (at 6-7): "A provision requiring leave before an action can be commence or pursued would usually be construed as procedural: see Maxwell v Murphy [1957] HCA 7; (1957) 96 CLR 261; Yrttiaho v Public Curator (Qld) [1971] HCA 29; (1971) 125 CLR 228; Cambridge Credit Corporation Ltd (receivers apptd) v Lissenden (1987) 8 NSWLR 411 at 420. This is confirmed by the fact that leave may be granted nunc pro tunc: Andjelkovic v AFG Insurances, supra; Cambridge Credit Corp Ltd v Lissenden. It was asserted in argument that National Mutual Fire Insurance Co Ltd v Commonwealth (1981) 1 NSWLR 400 was authority for the proposition that leave could not be granted under s26(3) nun pro tunc. It is true that Glass JA, with whom Moffitt P and Samuels JA agreed, decided that a proceeding commenced without leave is a nullity. However, given that Moffitt P had already decided that leave should have been refused in any event as a matter of discretion, a conclusion with which Glass JA agreed, the decision, in so far as it so held, may be viewed as obiter dicta. Neither Cambridge Credit Corp Ltd v Lissenden nor Andjelkovic v AFG Insurances was cited on the point. It is noteworthy, also, that neither the Federal Court nor the

High Court in the latter case expressed any disagreement with the view of Blackburn CJ that leave could be granted nunc pro tunc. With all due respect to their Honours in the National Mutual case, I cannot see why the legislature should be taken to have adopted a different approach to leave applications under this legislation to that taken under the various limitations Acts. I see nothing strange in the view that lack of leave may be pleaded as a defence in the same way as the expiry of a limitation period may be so pleaded. The decision in National Mutual Fire Insurance Co Ltd v Commonwealth, of course, has been followed in New South Wales: see Ratcliffe v VS and B Border Homes Ltd (1987) 9 NSWLR 390 at 393; Spautz v Kirby (1989) 21 NSWLR 27 at 30. However, the manifest injustice of the conclusion to which the court came in the National Mutual case on this point leads me to conclude that, unless persuaded by compelling reasons or higher authority, I would not be disposed to regard it as applicable to the legislation of this Territory. It needs only to be pointed out that proceedings for leave can (as here) be protracted so that a relevant limitation period, perhaps not an extendable one, could well expire before leave to commence the substantive proceedings can be given notwithstanding that the application for leave was commenced before that expiry. It may be the case that the drafting of the relevant provisions (creation of the charge and the procedure for enforcement) in two separate sections was intended, in the Australian Capital Territory, to emphasise that there should be a distinction observed between them. One provision may, as a result, be regarded as substantive and the other as a procedural provision. That distinction has not been accepted in New South Wales in respect of the New South Wales Act. Whatever may be the situation in New South Wales, it should not, in my opinion, entail in this jurisdiction any departure from the course endorsed by Blackburn CJ in Andjelkovic v AFG Insurances, supra." 24. So far as I am aware, the question has not previously been raised in this jurisdiction. 25. There is considerable force in the view of Higgins J that there is nothing strange in the view that lack of leave does not result in the proceedings being a nullity. As his Honour observes, leave provisions under certain of the limitations Acts have been so treated: see, for example, Carden v Allen Insulations Pty Ltd [1987] VicRp 3; (1987) VR 29 at 35-7. Similarly, the requirement for leave before bringing an action against a company in liquidation under the various companies Acts has for well over a century been held to be a provision which did not impose a condition precedent to the jurisdiction of the court, and which could be cured by an order nunc pro tunc: see Re Testro Bros Consolidated Ltd [1965] VicRp 4; (1965) VR 18 at 32-5; Re Sydney Formworks Ltd (1965) 83 WN (Pt 1) NSW 558 at 560-4. 26. But I am constrained by authority binding on me from approaching the problem in this way. In Hatton v Beaumont and Ors (1978) 52 ALJR 589, the High Court of Australia was unanimous in its approach to problems of this kind. Where the statutory requirement was clearly a condition precedent to the taking of proceedings, there is nothing that can be done. If the legislative intent is not clear, the primary necessity is to examine the framework and language of the Act to see if the position is otherwise. This was the approach of the Court of Appeal in National Mutual Fire Insurance Co Ltd v Commonwealth, supra. Although that decision is not binding upon me, I consider, reluctantly, that sitting as a judge at nisi prius, I ought to follow it. I am unable to distinguish it, as the legislation is in para materia; I do not think there is any distinction to be made upon the basis that the relevant provision in New South Wales was expressed as a proviso to the statutory right to enforce the charge, whilst the provision in the Northern Territory Act is a separate subsection. I note also that Rogers J at first instance was referred to the cases under the companies Acts, but did not find them illuminating: see (1980) 2 NSWLR 719 at 724. I have considered also the approach of Higgins J in Dixon's case. I do not agree with his Honour that the decision of the Full Court was obiter dicta. It is true, as his Honour says, that neither Cambridge Credit Corp Ltd v Lissenden nor Andjelkovic v AFG Insurances were cited; but the former case had not then been decided, and the latter was referred to Rogers J at first instance, and I cannot think that the Full Court's decision can be treated as if it were per incuriam. Whilst the manifest injustice of the result of the Full Court's decision may be recognised (and see also Kirby P in Grimson at 427 where his Honour expresses the view that there is a strong need for reform of those provisions a view with which I respectfully concur) I am unable to find any convincing reason which would permit me to decline to follow the reasoning of the unanimous decision of the Full Court. I have considered also whether s81 of the Supreme Court Act might assist the plaintiff, even though Mr Waters did not rely on this section, but I am persuaded by the approach of Sholl J in Re Testro Bros Consolidated Ltd, supra, at 35, that this section does not apply to irregularities of this kind. 27. I concur, with respect, in the observation of Mahoney JA in Hatton v Beaumont, (1977) 2 NSWLR 211 at 225, that: "The function of the Court in such a case as this is to give effect to the intention of the legislature. This it may do without difficulty where it appears from the terms of the legislation that the legislature directed its attention to the question and expressed an intention upon the effect to be given to the particular provision. But in most cases, of

which the present is one, such an intention is not expressed and the Court's task is, by the application of the appropriate principles, to divine or impute that intention: see Black-Clawson International Ltd v Papierwerke Waldhoff-Aschaffenberg AG [1975] UKHL 2; (1975) AC 591; Farrell v Alexander [1976] UKHL 5; (1977) AC 59; and this frequently leads, not merely to litigation, but also to uncertainty in the day-to-day operation of the legislation. The administration of the law would be facilitated if, in the formulating of legislation, attention was given as a matter of routine to this question. If this were done by a specific indication in the particular enactment of the effect of non-compliance with its provisions: cf. the Supreme Court Act 1970, s81; or by a general enactment which provided for relief against the consequences of non-compliance with a mandatory statute, the cases of the present kind would be, if not avoided, at least greatly reduced in number." 28. I conclude therefore that there is no power for me to make an order nunc pro tunc. 29. The conclusions I have so far reached would ordinarily result in the motion and the summons in the action being dismissed, and with consequential orders dismissing the 1992 action with costs, but Mr Waters has asked that I give to him an opportunity to persuade me, by the calling of further evidence, that there is a fact material to the plaintiff's case which, even now, would enable the court to grant leave to issue fresh proceedings. However, the only evidence foreshadowed was that in May 1992 the plaintiff learned for the first time that the policy in question had unlimited cover. For the reasons I have already given, this evidence would not assist the plaintiff. 30. Finally, I should mention that Mr Riley QC submitted there was no arguable case that the defendant was required to indemnify Formstruct in any event as (a) the plaintiff was an independent contractor and not a worker, and therefore the claim did not fall within the terms of the indemnity granted by the policy and (b) Formstruct was in any event in breach of a condition of the policy the performance of which by Formstruct was a condition precedent to the defendant's liability under the policy. As to these arguments, it is unnecessary for me to consider them; but for what it is worth, had the result of this application depended solely upon the outcome of those submissions, I would have found that there was an arguable case to the contrary and granted the plaintiff leave. 31. I will hear counsel as to the appropriate orders that should now be made.