Guild Insurance Ltd v Hepburn

HEADNOTE [This headnote is not to be read as part of the judgment] By statement of claim filed in the District Court on 22 April 2013 Ms Mary Hepburn, the present respondent, claimed damages for trespass, assault and negligence from Dr Jasmin White, formerly a practising dentist. Ms Hepburn alleged that she suffered injury as a result of wrongful dental advice and treatment given to her by Dr White between March 2008 and about September 2009. On 26 September 2013 Ms Hepburn sought leave under s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ("Law Reform Act") to join Guild Insurance Ltd, the present applicant, as a second defendant to the District Court proceedings. She alleged that Guild Insurance had agreed to insure Dr White against the professional liability which Ms Hepburn sought to prove in the subject proceedings. By judgment of 13 December 2013, Norton DCJ granted Ms Hepburn leave to join Guild Insurance to the proceedings. The latter's application for leave to appeal against that decision was heard concurrently with the appeal that would lie if leave were granted. Held, dismissing the appeal: (1) The Court will not ordinarily grant leave under s 6 of the Law Reform Act unless the plaintiff demonstrates that he or she has an arguable case against the insured, that there is a real possibility that the insured will not be able to satisfy any judgment against it and that there is an arguable case that the insurer has issued a policy under which the insured is entitled to indemnity in respect of the liability alleged by the plaintiff ([3]). Oswald v Bailey (1987) 11 NSWLR 715, applied. (2) The primary judge erred in relying upon the Retired Dentist provision in the policy of insurance in force from 30 June 2010 to 15 September 2010 because the allegedly wrongful acts of Dr White occurred prior to that period and s 6 of the Law Reform Act does not operate in such circumstances ([26], [49]). Registrar-General of New South Wales v LawCover Insurance Pty Ltd [2014] NSWCA 241; 17 BPR 33,235 at [35]-[37], [62], followed. (3) There is an arguable case that the insurer is liable to indemnify Dr White under the insurance policies in force when Dr White's allegedly wrongful acts occurred. There is no reason in principle why wrongdoers' knowledge of their wrongful acts cannot constitute awareness by them of circumstances that might give rise to claims against them, thus enlivening notification provisions in insurance policies in the nature of "discovery policies" ([33]). The "excruciating" pain which Ms Hepburn would have suffered as a result of the relevant procedures being performed without anaesthetic could constitute a basis for inferring that Dr White was aware that her conduct might give rise to a claim ([33], [56]). (4) There being no evidence to suggest that the insurer was prejudiced by Dr White's failure to notify the potential liability of which she was arguably aware, it is at least arguable that Ms Hepburn can rely upon s 54 of the Insurance Contracts Act 1984 (Cth) to avoid the consequences, in whole or in part, of the absence of notification ([37], [54]). The potential operation of s 54 may be taken into account in the exercise of the discretion under s 6 of the Law Reform Act to grant leave to join an insurer to proceedings ([36]). (5) It is arguable that Dr White may not be able to meet a judgment obtained by Ms Hepburn against her ([40], [57]). Further, it is not suggested that Ms Hepburn does not have an arguable claim for damages against Dr White ([41], [57]).

Judgment 1MACFARLAN JA: By statement of claim filed in the District Court on 22 April 2013 Ms Mary Hepburn, the respondent in this Court, claimed damages for trespass, assault and negligence from Dr Jasmin White, formerly a practising dentist. Ms Hepburn alleged that she suffered injury as a result of wrongful dental advice and treatment given to her by Dr White between March 2008 and about September 2009. 2By notice of motion filed in the District Court proceedings on 26 September 2013, Ms Hepburn sought the Court's leave under s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (the "Law Reform Act") to join Guild Insurance Ltd, the applicant in this Court, as a second defendant to the proceedings. Section 6 provides for the creation of a charge on insurance monies in favour of an injured person where the person at fault has entered into a contract of insurance by which he or she is indemnified against liability to pay damages or compensation. Ms Hepburn alleges that Guild Insurance had agreed to insure Dr White against the professional liability which Ms Hepburn sought to prove in the District Court proceedings. 3Section 6(4) allows a plaintiff to take court proceedings directly against such an insurer but only with the leave of the court. The court will not ordinarily grant such leave unless the plaintiff demonstrates that he or she has an arguable case against the insured, that there is a real possibility that the insured will not be able to satisfy any judgment against it and that there is an arguable case that the insurer sought to be joined has issued a policy under which the insured is entitled to indemnity in respect of the liability alleged by the plaintiff (see Oswald v Bailey (1987) 11 NSWLR 715 at 734, 742; as to the third matter, see Registrar-General of New South Wales v LawCover Insurance Pty Ltd [2014] NSWCA 241; 17 BPR 33,235 at [62]). In this way, the section's objective of protecting insurers from unwarranted direct actions by people who claim against their insureds (as to which see Tzaidas v Child [2004] NSWCA 252; 61 NSWLR 18 at [17]) may be achieved. As stated in Energize Fitness Pty Ltd v Vero Insurance Limited [2012] NSWCA 213 at [59], the section provides "a filter against insurers being unjustifiably made parties in litigation that, apart from the grant of leave, they would be free to stay out of". 4By judgment of 13 December 2013 Norton DCJ granted Ms Hepburn leave to join Guild Insurance, which now seeks to appeal against that decision. Its application for leave to appeal was heard concurrently with the appeal that would lie if leave were granted.

THE EVIDENCE AT FIRST INSTANCE 5The evidence concerning Dr White's ability to meet a judgment against her was as follows: (1) A letter dated 14 August 2013 from Dr White to the Registrar of the District Court enclosing documents for lodgment and stating that due to her "sever[e] financial hardship" she was representing herself in the proceedings was in evidence. Ms Hepburn tendered the letter as relevant to the present issue. The insurer objected to the tender but the letter was admitted into evidence and the insurer does not seek to challenge that ruling on appeal; (2) At least four other persons have commenced proceedings against Dr White claiming damages in respect of negligent or otherwise wrongful dental treatment; (3) Dr White ceased to practice as a dentist in about December 2010 and there is no evidence that she has resumed remunerative employment; (4) A property ownership search suggests that Dr White probably owns properties situated at Lightning Ridge, Batehaven and Stuarts Point, although there is no evidence of those properties' values or their encumbrances, if any. 6The evidence concerning the insurer's liability was limited to a letter dated 21 May 2013 sent by the insurer to Dr White declining requests for indemnity in relation to five of her patients, including Ms Hepburn. The letter referred to policies of insurance current from December 2007 to 15 September 2010. 7The letter included the following in relation to the claim brought by Ms Hepburn: "17 We confirm your instructions that prior to service of the Statement of Claim in late April or early May 2013, you received no oral or written complaint from or on behalf of Mrs Hepburn in connection with the advice and treatment provided during the period March 2008 to September 2009. We also confirm that Guild has no record of receiving any notification of circumstances concerning Mrs Hepburn prior to your notification on or around 8 May 2013. 18. You did have a policy of insurance in place with Guild during the time that you treated Mrs Hepburn. However, no claim was made against you by Mrs Hepburn during the currency of those policies. Further, no circumstances occurred during that period that could have been notified to Guild at the time. Accordingly, the policies in place during the time you provided treatment to Mrs Hepburn do not respond to the current claim." 8The letter then stated that Dr White's last policy of insurance with Guild Insurance was current from 30 June 2010 until it was cancelled on 15 September 2010. It also confirmed Dr White's instructions that she did not arrange any other professional indemnity insurance after that date, although she continued to practice until about December 2010. 9By the letter, the insurer declined indemnity on the basis that, first, no claim had been made by Ms Hepburn against Dr White whilst any of the policies were current, nor had Dr White become aware of any circumstances that might give rise to a claim during that period and, secondly, that Dr White was not entitled to an extension of cover applicable to retired dentists because, contrary to the terms of the policy, Dr White was not covered by any of Guild Insurance's policies immediately prior to her ceasing to practice as a dentist. 10Surprisingly, and unsatisfactorily, the proceedings at first instance were conducted without copies of the relevant insurance policies being before the Court. A copy of the relevant policy wording was said to be attached to the insurer's letter of 21 May 2013 to Dr White but the copy of the letter in evidence did not have that attachment. Ms Hepburn's counsel on the appeal said that no inference could be drawn that a copy of the policy wording was in Ms Hepburn's possession. However, if it was not, it follows that her representatives cannot have made any satisfactory effort to obtain it, as it would have been readily available by way of subpoena. 11In this context I should also refer to the terms of Ms Hepburn's proposed Amended Statement of Claim. That pleading includes the following: "3. While present at the surgery the first defendant [Dr White] advised the plaintiff that her teeth were in very bad shape and needed extensive long term treatment (the advice). 4. The advice was false. 5. The advice was given to induce the plaintiff to undergo unnecessary dental treatment at the first defendant's hands in respect of which she intended claiming a fee. 6. In reliance on the advice, the plaintiff engaged the first defendant to undertake extensive and long term treatment of her. 7. In accordance with her engagement by the plaintiff, the first defendant, over a prolonged period, repeatedly cleaned the plaintiff's teeth, drilled her teeth, extracted teeth, cemented teeth together, glued teeth to other teeth, incompletely removed caries, filled drilled holes in teeth and took moulds for dentures (the procedure). 8. The procedure was undertaken for the purpose of and with the intention of the first defendant claiming a fee. 9. The procedure was not undertaken for the purpose of or with the intention of rendering competent dental treatment to the plaintiff. 10. The plaintiff's consent to the procedure was uninformed and the first defendant had no permission from the plaintiff to undertake the procedure. 11. The procedure was unnecessary and ineffective and known to be so by the first defendant such that it was a trespass and an assault on the plaintiff. 12. The procedure caused the plaintiff pain, discomfort and injury and was carried out with contumelious disregard for the plaintiff's right to proper dental treatment from her. 13. To the extent to which the first defendant held herself out to be a registered dentist, she owed the plaintiff a duty to take reasonable care and to exercise due care, skill and diligence and bring to the task required to be performed the competence and skill that was at the time usual among practising dentists. 14. In addition, the first defendant presented to the plaintiff upper and lower dentures which were not designed to fit her mouth, the attempted use of which caused the plaintiff further pain, discomfort and injury with the result that the plaintiff was left without functioning dentures. 15. Further, the procedure was carried out negligently ... " 12The particulars of negligence include allegations of extracting teeth and removing and replacing fillings without anaesthetic.

THE JUDGMENT AT FIRST INSTANCE 13Although she noted that the evidence was very slim, the primary judge found that there was a real possibility that Dr White would not be able to satisfy any judgment obtained against her by Ms Hepburn. Her Honour had regard to the evidence to which I have referred in [5] above and noted (as was the case with the other properties) that there was no evidence of the value of the Lightning Ridge property or whether it was encumbered. 14On the basis of an expert medical report of Dr Vertoudakis tendered by Ms Hepburn, her Honour found that Ms Hepburn had demonstrated that there was an arguable case that Dr White was liable to her for damages. 15Her Honour also found that Ms Hepburn had made out an arguable case that the insurer was liable to indemnify Dr White. The basis for this finding appears to have been that the insurer's rejection of cover under the retired dentist provision in the last of the policies "would seem ... to give rise to a question of fact as to whether [Dr White] did continue to practice" (Judgment p 6).

THE ISSUES ON APPEAL 16By a submission apparently not put to the primary judge, the insurer contended on appeal that her Honour's apparent reliance upon the policy of insurance in force from 30 June 2010 to 15 September 2010 was erroneous because the allegedly wrongful acts of Dr White had occurred prior to that period and s 6 of the Law Reform Act could not operate in such circumstances. As Meagher JA (with the concurrence of Bathurst CJ and Basten JA) said in Registrar-General of New South Wales v LawCover Insurance at [62]: "It is not sufficient that there be an arguable case that the policy responds if, as is the position in this case, the policy was not in existence at the time of the happening of the event giving rise to the claim for damages within s 6(1)". 17Her Honour's reliance upon the policy operative in this period (being the last policy issued by the insurer to Dr White) is evident from her reliance upon the retired dentist provision as the basis for her conclusion as to the insurer's arguable liability: according to its terms, the retired dentist provision could only be operative as an extension of the last policy of insurance issued by the insurer to the insured. 18On appeal, Ms Hepburn did not seek to support the primary judge's decision on the basis of the retired dentist clause. Instead, she contended that the insurer was arguably liable to indemnify Dr White under the earlier policies of insurance which were current when Dr White committed the allegedly wrongful acts. She contended that, whilst she did not make a claim on Dr White during the term of those policies, Dr White became aware, whilst those policies were current, of circumstances that might have given rise to a claim by Ms Hepburn against her (as in fact occurred). Ms Hepburn contended that s 54 of the Insurance Contracts Act 1984 (Cth) would operate to preclude the insurer from relying upon the absence of any notification to it by Dr White of those circumstances. 19To address this submission, it is necessary to consider such evidence as there was regarding the terms of the policies and to consider the operation of s 54. 20On appeal, there is also an issue as to whether the primary judge erred in concluding that Ms Hepburn had shown an arguable case that Dr White might be unable to meet a judgment obtained against her.

RESOLUTION OF THE APPEAL 21As I have already noted, neither party put the relevant insurance policies into evidence. Nevertheless, the insurer's letter of 21 May 2013 enables the conclusion to be drawn that at relevant times professional indemnity policies issued by Guild Insurance to Dr White were on foot, and that they were each in the nature of a "discovery policy" in that "the critical facts under the contract [were] the insured's discovery of the making of a claim on it or its discovery (its 'becom[ing] aware') of an occurrence which may give rise to a claim" (FAI General Insurance Co Limited v Australian Hospital Care Pty Limited [2001] HCA 38; 204 CLR 641 at [23]). 22In this regard, it is evident from paragraph [18] of the letter (see [7] above) that, subject to any question of notification by Dr White of the insurer, the insurer's liability under the policies would have been triggered by Ms Hepburn making a claim against Dr White during their currency. It should also be inferred from that paragraph that the policies contained a further trigger, that is, Dr White's awareness during their currency of circumstances that might have given rise to liability to Ms Hepburn, such provision corresponding in general terms to that considered in FAI General Insurance Co Limited v Australian Hospital Care (see [14]). Again, this is subject to any question relating to notification of the insurer by Dr White. 23The insurer argued at the appeal hearing that this inference should not be drawn because the reference in the third sentence of paragraph [18] of the letter to the notification of circumstances might well have been an allusion not to contractual provisions, but to the terms of s 40(3) of the Insurance Contracts Act. The distinction is of significance because the relieving provision of s 54(1) of that Act (as to which see [54] below) is not available to overcome the consequence of the absence of notice in accordance with s 40(3) being given by the insured to the insurer (Gosford City Council v GIO General Ltd [2003] NSWCA 34; 56 NSWLR 542 at [37]). 24I reject the insurer's submission that the relevant inference should not be drawn as the whole of the paragraph in which the relevant sentence appears is, to my mind, concerned with the policies of insurance that Guild Insurance issued, rather than any statutory provisions that might have impacted on them. I am fortified in that conclusion by the lack of correspondence between the language in the sentence and that of s 40(3), and by the fact that the insurer, although undoubtedly in possession of copies of the policies, did not tender them in evidence to demonstrate that the inference I have drawn was ill-founded. 25As noted above, the primary judge based her conclusion as to the arguable liability of the insurer on the retired dentist provision (as set out verbatim in the insurer's letter of 21 May 2013). Of necessity, this conclusion concerned liability under the last of the policies referred to in the letter because the retired dentist provision could, by reason of its terms, extend the operation of only the last policy issued by the insurer to a dentist who had subsequently retired. That policy (operative from 30 June 2010 to 15 September 2010) was not current when the allegedly wrongful acts of Dr White occurred (between March 2008 and September 2009). 26As also noted above (in [16]), the insurer argued before this Court that the charge to which s 6 of the Law Reform Act refers could not operate in such circumstances (see Chubb Insurance Company of Australia Ltd v Moore [2013] NSWCA 212; 302 ALR 101 at [88]-[104]; Registrar-General of New South Wales v LawCover Insurance Pty Ltd at [20]), with the result that s 6 did not permit the Court to grant leave to Ms Hepburn to join the insurer as a party to her proceedings. Ms Hepburn's counsel did not attempt to contradict this submission, and therefore accepted that the primary judge's decision could not be sustained on the basis upon which her Honour relied. 27As further noted, Ms Hepburn, through her counsel, nevertheless sought to support the decision at first instance on a different basis, namely, that there was an arguable case that the insurer is liable to indemnify Dr White under the two earlier insurance policies, those policies being current when Dr White's allegedly wrongful acts occurred. The insurer did not object to this argument being put for the first time on appeal. 28Ms Hepburn submitted that the nature of Dr White's allegedly wrongful acts was such as to render it arguable that Dr White knew at the time of her acts that they might give rise to liability on her part to Ms Hepburn. 29Counsel for Ms Hepburn relied in this respect on the expert evidence of Dr A Vertoudakis whose report dated 12 July 2013 was in evidence before the primary judge. 30In his report, Dr Vertoudakis referred to a Medicare History Statement recording some 22 items of work performed by Dr White on Ms Hepburn. He also referred to records of the Brewarrina Dental Clinic which Ms Hepburn consulted after the termination of her treatment by Dr White. Those documents recorded findings that included the following: "1. Severe periodontal disease. 2. Multiple overhanging restorations (fillings not flush with the tooth surface) leading to plaque retention and increasing periodontal disease. 3. Multiple teeth had a poor prognosis. 4. The treatment proposed was an upper full clearance (all upper teeth to be extracted and an upper full denture constructed.)" 31Dr Vertoudakis had earlier recorded the following as part of the history given to him by Ms Hepburn, which he implicitly accepted as consistent with his observations of the state of Ms Hepburn's teeth: "[Ms] Hepburn states that at no time was she given any anaesthesia (including local anaesthesia) and that she was in constant pain during these procedures. She specifically remembers the intense pain of the removal of a tooth that Dr White had splinted to the adjoining teeth because it was loose and then was extracted by Dr White in the upper right premolar region with no anaesthetic. She had bled profusely into the next day". 32Dr Vertoudakis referred in particular to Dr White's extraction of a tooth or tooth fragment in relation to which Dr White, as on all other occasions, did not provide any anaesthetic pain relief as requested by Ms Hepburn. Dr Vertoudakis implicitly accepted Ms Hepburn's description of the pain as "excruciating" and said that extraction without any form of anaesthesia would be intolerable for most patients. 33There is no reason in principle why wrongdoers' knowledge of their wrongful acts cannot constitute awareness by them of circumstances that might give rise to claims against them, thus enlivening insurance policy notification provisions such as that to which I have referred in [22] above. It will frequently not do so, as in many cases it could not be inferred that insured who were (for example) negligent appreciated the fact of their negligence and the possibility of it giving rise to a claim against them. However in my view an inference is arguably available in the present case that Dr White was aware that her conduct might give rise to a claim. In particular, the "excruciating" pain which Ms Hepburn would have suffered as a result of procedures, including the extraction of a tooth, being undertaken without anaesthetic must have been obvious to Dr White and could thus constitute a basis for drawing that inference. 34Whilst the allegations in a statement of claim are unlikely, by themselves, to be sufficient to found a successful s 6(4) application (see Energize Fitness Pty Ltd v Vero Insurance Limited at [66]), the pleaded allegations here (see [11] above) are, when taken with Dr Vertoudakis' report, in my view of some assistance to Ms Hepburn in demonstrating the extreme, and therefore obviously wrongful, nature of Dr White's alleged conduct. 35The next question is whether it is arguable that Ms Hepburn is entitled to rely upon s 54 of the Insurance Contracts Act to relieve her of the consequences of Dr White not having notified the insurer of her awareness of circumstances that might give rise to a claim. The existence of the insurer's contractual right to complain of that lack of notification can be inferred from the insurer's letter of 21 May 2013. 36Section 54 of the Insurance Contracts Act precludes insurers from refusing to pay claims in certain circumstances. In particular, s 54 prevents an insurer from refusing to pay a claim by reason of certain acts of the insured occurring after the date that the contract of insurance was entered into. In such a case, the insurer is not relieved of liability altogether. Rather, its liability is reduced by the amount that fairly represents the extent to which its interests were prejudiced. An example of the operation of s 54 in relation to a notification of circumstances provision such as that presently under consideration is to be found in FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd, and examples of its operation in relation to different types of provisions are to be found in the High Court's decisions in Antico v Heath Fielding Australia Pty Limited [1997] HCA 35; 188 CLR 652 and Maxwell v Highway Hauliers Pty Ltd [2014] HCA 33; 88 ALJR 841. The potential operation of s 54 may be taken into account in the exercise of the discretion under s 6 of the Law Reform Act to grant leave to join an insurer to proceedings (Tzaidas v Child [2004] NSWCA 252; 61 NSWLR 18). 37There being no evidence to suggest that the insurer was prejudiced by Dr White's failure to notify the potential liability of which she was arguably aware, I conclude that it is at least arguable that Ms Hepburn can rely upon s 54 to avoid the consequences, in whole or in part, of the absence of notification. 38For these reasons, I find that Ms Hepburn has established an arguable case that Dr White is entitled to indemnity from the insurer in respect of her alleged liability to Ms Hepburn. 39As the basis upon which the primary judge reached the same conclusion concerning the insurer's possible liability was not sought to be supported on appeal, it follows that error has been established in the exercise of her Honour's discretion. Nevertheless, in re-exercising the discretion, I would reach the same conclusion that the primary judge reached, albeit on the different basis that I have identified. 40Furthermore, I conclude, as did the primary judge, that Ms Hepburn has shown that it is arguable that Dr White may not be able to meet a judgment obtained by Ms Hepburn against her. Although the evidence is limited, I consider that it is sufficient to satisfy the low standard of arguability that is applicable here. In particular, the letter from Dr White of 14 August 2013 stating that she was experiencing severe financial hardship (see [5] above) was tendered on this issue and its admission into evidence is not now contested. That letter provides some evidence of her financial position and I do not consider that the evidence regarding the property ownership search is of sufficient significance to counteract it, there being no evidence of the value of the relevant properties or the extent to which they are encumbered. 41Finally I note that, as was the case at first instance, it is not suggested that Ms Hepburn does not have an arguable claim for damages against Dr White. 42In light of these circumstances, I would re-exercise the s 6 discretion as to joinder of the insurer to reach the same conclusion as that reached by the primary judge. As the insurer has established error in the reasoning of the primary judge, I would grant leave to appeal but dismiss the appeal with costs. 43MEAGHER JA: I agree with Macfarlan JA that the applicant insurer should have leave to appeal and that its appeal should be dismissed with costs. 44For the respondent to succeed on her application for leave to proceed against the insurer under s 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), it was necessary for her to establish, among other things, an arguable case that there was a policy which responded to indemnify the insured dentist (Dr White) in respect of her alleged liability to the respondent and an arguable case that there was a statutory charge under s 6(1): Energize Fitness Pty Ltd v Vero Insurance Limited [2012] NSWCA 213 at [48], [49], [52] - [56] (Campbell JA, Allsop P and Meagher JA agreeing) and Registrar-General of NSW v LawCover Insurance Pty Ltd [2014] NSWCA 241; 17 BPR 33,235 at [62] (Meagher JA, Bathurst CJ and Basten JA agreeing). 45In Owners-Strata Plan 50530 v Walter Construction Group Ltd (in Liq) [2007] NSWCA 124; 14 ANZ Ins Cas 61-734, this Court (Hodgson JA, Giles and Tobias JJA agreeing) held that a charge under s 6 does not arise in relation to insurance monies payable under a contract of insurance that was not in existence at the time of the happening of the "event giving rise to the claim for damages or compensation", being the event on the happening of which the alleged cause of action against the insured arose. That decision was followed in Chubb Insurance Company of Australia Limited v Moore [2013] NSWCA 212; 302 ALR 101 at [57] (Emmett JA and Ball J, Bathurst CJ, Beazley P and Macfarlan JA agreeing) and applied in Registrar-General of NSW v LawCover Insurance Pty Ltd at [35] - [37]. 46The evidence established that the respondent was insured by the applicant against professional negligence as a dentist under policies that were in force between December 2007 and 15 September 2010. However, before the primary judge, no attention was directed to identifying the basis upon which the applicant might have been entitled to an indemnity under a policy which was in force at the time of the treatment giving rise to the respondent's claim in negligence. Instead, as Macfarlan JA notes, the parties focussed on the last policy in time which commenced on 30 June 2010 and was cancelled with effect on 15 September 2010 and the primary judge relied upon the extended cover provided under that policy as justifying the grant of leave under s 6(4). 47No criticism could be levelled at the primary judge for not addressing the question whether a charge could arise under that policy in respect of the claimed liability because that subject was not addressed by either of the parties. Indeed, neither party tendered the, or a, policy wording before the primary judge. The only evidence of the terms of the insurance was contained in correspondence between the insurer's solicitors and the insured which set out some, but not all, of the relevant provisions. The extracted provisions, and the other content of the letter containing them (being the letter dated 21 May 2013 from Meridian Lawyers, to the insured) established the following on an arguable basis. First, there were probably four consecutive policies issued between December 2007 and 15 September 2010. Secondly, there was no substantial difference, if any, between the terms of those policies. Thirdly, the policies indemnified against liability for claims made against the insured during the period of cover provided by each policy. Fourthly, there were probably three policies in force between March 2008 and September 2009, the period during which the alleged negligent treatment occurred. Finally, the policy in force for the period ending 15 September 2010 also provided an indemnity against liability for claims made against the insured after she had ceased to practise but only if she was insured under that policy at the time immediately prior to her having done so. That extension of cover to claims made after this last policy was terminated was provided in a section of the wording headed "Retired Dentist". 48The other evidence before the primary judge established that no written or oral complaint or claim was made to or on the insured by the respondent before late April 2013 when Dr White was served with the initiating process in the District Court proceedings commenced by the respondent. In those proceedings the respondent alleged negligence in relation to dental work undertaken in the period referred to above. The evidence also established that no circumstances likely to give rise to a claim were notified by the insured to the applicant insurer before May 2013. It showed that although the last policy was terminated with effect on 15 September 2010, the respondent continued to practise as a dentist until at least December 2010. Therefore the condition on which the extended cover was provided was not satisfied. 49Before this Court it was accepted by the respondent that the events giving rise to her claim were the provision of the alleged negligent treatment between March 2008 and September 2009. It followed, and was rightly conceded by the respondent, that it was not reasonably arguable that there could be a statutory charge under s 6(1) in relation to any monies that were or might become payable under the last policy issued to Dr White. That concession makes it unnecessary to consider whether it is arguable that the insurer is liable to indemnify the insured under the Retired Dentist provisions of that policy. 50The only insurance monies that are or may become payable to Dr White that could be the subject of a charge under s 6(1) are those payable under one or more of the policies in force during the period of treatment. As no claims were made against her during any part of that period, the only basis upon which the insurer might be liable under those policies is if the wording includes a provision that entitles the insured to notify circumstances likely to give rise to a claim and deems any claims subsequently made arising out of those circumstances to have been made at the time of notification. 51If the policy contains such a provision, s 54 of the Insurance Contracts Act 1984 (Cth) might be available to the insured if she was aware of such circumstances and did not notify them during the applicable policy period. Adopting the language of the plurality (McHugh, Gummow and Hayne JJ) in FAI General Insurance Co Limited v Australian Hospital Care [2001] HCA 38; 204 CLR 641 at [46], in that event the effect of the contract of insurance, but for s 54, would be that the insurer may refuse to pay the insured's claim by reason only of her omission to notify circumstances which, at the time, were likely to give rise to a claim by the respondent. 52As Macfarlan JA records, in this Court counsel for the respondent sought to support the grant of leave under s 6(4) on the basis that it was arguable that a charge arose under one or more of the policies in force at the time of treatment. Whether that is so depends upon it being arguable that s 54 applies in this case in the manner described above. In response to that contention, the insurer raised three matters. 53The first is whether it might be inferred from paragraph 18 of the letter of 21 May 2013 that the policy contained a provision allowing for the notification of circumstances and deeming claims made arising out of those circumstances to have been made at the time of notification. That paragraph stated: "You did have a policy of insurance in place with Guild during the time that you treated Mrs Hepburn. However, no claim was made against you by Mrs Hepburn during the currency of those policies. Further, no circumstances occurred during that period that could have been notified to Guild at the time. Accordingly, the policies in place during the time you provided treatment to Mrs Hepburn do not respond to the current claim." 54The insurer submits that the reference to there being no circumstances that "could have been notified" is explained by the terms and possible application of s 40(3) of the Insurance Contracts Act. The difficulty with that submission is that s 40(3) only applies where the circumstances were notified before the insurance cover provided by the relevant contract ended. If the writer of the letter was concerned only with the possible application of s 40(3), it would have been sufficient to record that no such circumstances had been notified under any of the earlier policies. The language - "no circumstances occurred during that period that could have been notified" (emphasis added) - is concerned with whether it was possible to notify such circumstances and as such must be understood as directed to the possible operation of s 54(1) in the way explained in FAI v Hospital Care. It follows that it is arguable that the relevant policies contained a deeming provision which might attract the operation of s 54. 55The second matter raised by the insurer is that the evidence does not establish what objective characterisation the circumstances were required to bear before they might attract the operation of that deeming provision. Were they "circumstances that might give rise to a claim" or circumstances which "might result in someone making an allegation" against the insured or circumstances bearing some other similar characteristic? In the absence of any evidence as to the express terms of the policy, it is reasonable to infer that the reference to notifiable "circumstances" in paragraph 18 of the letter is to be understood as being to circumstances that might or are likely to give rise to a claim to which the policy responds. It is to circumstances of that kind that s 40(3) is directed. That provision was included in the Act to make mandatory the type of cover provided by express deeming provisions in similar terms: see Australian Law Reform Commission Report No 20, Insurance Contracts (1982), Summary of Recommendations, para 48; and Newcastle City Council v GIO General Ltd [1997] HCA 53; 191 CLR 85 at 99-102. 56The third matter is whether it is arguable on the evidence that the insured was aware of circumstances answering that description. I agree for the reasons given by Macfarlan JA that such an inference is available, in particular, from the evidence of Dr Vertoudakis, the dental surgeon whose report concerning the insured's treatment was before the primary judge. That report records that the insured saw the respondent on 16 separate occasions and that on none of those occasions was the respondent given any anaesthesia for pain relief notwithstanding that the procedures included the surgical extraction of a tooth or tooth fragment and the carrying out of 13 fillings. In Dr Vertoudakis' opinion in not doing so the insured did not act in accordance with peer professional standards. In relation to that aspect of the respondent's treatment, the insured knew that no form of anaesthesia had been provided and, it might be inferred, also knew that the absence of her doing so was at least questionable and resulted in the respondent experiencing significant discomfort and pain. That evidence, in my view, provides a sufficient basis for a conclusion that it was arguable that the insured was aware that those circumstances were likely to give rise to a claim against her. 57It was not contested that the respondent does have an arguable case in negligence against Dr White. For the reasons given by Macfarlan JA, it is arguable that Dr White may not be able to meet any judgment obtained against her. That being the position, the basis upon which the respondent seeks to uphold the primary judge's order granting leave under s 6(4) should be accepted. 58GLEESON JA: I agree with the orders proposed by Macfarlan JA and with his Honour's reasons. I also agree with the reasons of Meagher JA.

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