53 The claimant submitted that the words "the insured" where appearing in s51 should be given the same or similar meaning to the words "a person who has entered a contract of insurance" in s6 LRA. In other words the words "the insured" mean a party to the policy of insurance. On that approach s51 ICA would be no more applicable to the actions against the estate of the pilot than was s6 LRA.
54 In support of that submission the claimant relied upon Ripper & Ors v Gatenby [2002] 10 Tas R 435 and Aspioti v Leigh & Ors [2003] NSWSC 1224 as follows:
Ripper & Ors v Gatenby:
"In my view, the plaintiffs' claim fell outside the scope of the Insurance Contracts Act , s51, because the pilot was not "the insured" within the meaning of that section. The policy was issued to the Tasmanian Aero Club. The pilot, although not a party to the contract of insurance (ie, the policy), may have had a right to recover any loss from the insurer in accordance with that contract pursuant to the Insurance Contracts Act , s48. However, s48(2)(a), s48(2)(b), and s48(3) each refer to the person with whom the insurer has contracted, as distinct from a person to whom the insurance cover extends who is not a party to the contract of insurance, as "the insured". The meaning of s51 is not affected by the non-exhaustive definition of the noun "insured" in s11 ("insured and insurer include a proposed insured and a proposed insurer, respectively"). The noun "insured" does not ordinarily refer to a person who is covered by someone else's insurance policy. There is nothing in the Insurance Contracts Act , nor in the report of the Australian Law Reform Commission that gave rise to it, to suggest that a wider meaning of the word was intended in s51. I therefore conclude that the noun "insured" in s51 refers only to a party to a contract of insurance, and does not include another person to whom the insurance cover provided by the contract extends. Thus, the plaintiffs had no right to proceed directly against the insurer under s51." (para 22 Blow J)
Aspioti v Leigh:
"In light of the distinction made in section 48 between the "insured" and a third party entitled to cover under a policy, and against the background of the existing legislation in section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and similar legislation in the Australian Capital Territory, it is not possible to regard the references to "insured" in s 51 as intended to encompass third parties to whom cover is expressed to extend. The authors of Australian Insurance Law by Tarr, Liew and Holligan, 2nd ed , at page 66 take a similar view.
In reaching this conclusion I acknowledge that it is liable to create or amount to an impediment to actual recovery by someone in the Plaintiffs' position of any verdict against such third party beneficiaries of a policy. Should the third party not be in a position to meet the verdict, but not disposed himself to sue the insurer, and an insurer be recalcitrant, a plaintiff will presumably be obliged to bankrupt the third party's estate and then induce the trustee of that estate to sue the insurer. Such a result is less than ideal but short of giving to s51 of the Insurance Contracts Act or s6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), an operation which the language does not bear is, in my view, inevitable. Whether there are any other methods by which rights against the insurer may be pursued it is unnecessary for me to consider." (paras 35-36 Hulme J)
55 On behalf of the opponents it was submitted:
(i) Section 51 is remedial legislation and accordingly should be given a liberal construction.
(ii) The ordinary meaning of the word "insured" includes a person who under the express terms of the policy is to be treated or deemed to be an insured.
(iii) A construction that would promote the purpose or object of the Act is to be preferred ( Acts Interpretation Act 1901 (Cth) s15AA).
(iv) A court may have regard to extrinsic material within the meaning of s151AB of the Acts Interpretation Act 1901 (Cth) in the event of ambiguity. The explanatory memorandum to the Insurance Contracts Bill is such material. Paras 169-170 of the explanatory memorandum emphasise the remedial nature of s51 and support a purposive interpetation of the word "insured".
(v) The wording of s48 ICA supports such an interpretation in that it is a stand alone section dealing with a specific problem and that is why the meaning of the word "insured" was deliberately limited.