Associated Forest Holdings Pty Ltd v Gordian Runoff Ltd - [2015] TASFC 6

[2015] TASFC 6

COURT: SUPREME COURT OF TASMANIA (FULL COURT)

CITATION: Associated Forest Holdings Pty Ltd v Gordian Runoff Limited [2015] TASFC 6

PARTIES:  ASSOCIATED FOREST HOLDINGS PTY LTD
  NORTH LIMITED
  LOWRIE, Stephen John (by his administrator, the Public              Trustee)
  v
  GORDIAN RUNOFF LIMITED

FILE NO: FCA 109/2014
JUDGMENT

APPEALED FROM: Associated Forest Holdings Pty Ltd v Gordian Runoff Limited [2014] TASSC 3

DELIVERED ON:  9 June 2015
DELIVERED AT:  Hobart
HEARING DATES:  28, 29 August 2014
JUDGMENT OF:  Blow CJ, Porter and Wood JJ

CATCHWORDS:

Insurance – Employer's liability insurance – Employer exempted from obligation to maintain workers compensation policy – Policy of indemnity in respect of losses exceeding $1 million per accident – Scope of cover – Expenditure not covered by workers compensation legislation.
Aust Dig Insurance [1117]
Limitation of Actions – Limitation of particular actions – Simple contracts, quasi-contracts and torts – Accrual of cause of action and when time begins to run – Simple contracts – Other matters – Insurance contract requiring payments from time to time – Whether cause of action accrues before demand and refusal to pay.
Limitation Act 1974 (Tas), s 4(1).
Cigna Insurance Asia Pacific Ltd v Packer (2000) 23 WAR 159, considered.
Aust Dig Limitation of Actions [1026]
Workers' Compensation – Assessment and amount of compensation – Special payments – Nursing and constant attendance services – Attendant care services – Whether "medical services".
Workers' Compensation Act 1927 (Tas), s 8A(1)(a).
Aust Dig Workers' Compensation [407]

REPRESENTATION:

Counsel:
             Appellants:  J J Gleeson SC, G Gray
             Respondent:  J Ruskin QC, K E Read SC, P Thiagarajan
Solicitors:
             Appellants:  Wallace Wilkinson & Webster
             Respondent:  HWL Ebsworth Lawyers

Judgment Number: [2015] TASFC 6
Number of paragraphs: 102

Serial No 6/2015
File No FCA 109/2014

ASSOCIATED FOREST HOLDINGS PTY LTD, NORTH LIMITED
AND STEPHEN JOHN LOWRIE (by his administrator, the Public Trustee)
v GORDIAN RUNOFF LIMITED

REASONS FOR JUDGMENT FULL COURT

BLOW CJ
PORTER J
WOOD J
9 June 2015

Order of the Court

Appeal dismissed.

Serial No 6/2015
File No FCA 109/2014

ASSOCIATED FOREST HOLDINGS PTY LTD, NORTH LIMITED
AND STEPHEN JOHN LOWRIE (by his administrator, the Public Trustee)
v GORDIAN RUNOFF LIMITED

REASONS FOR JUDGMENT FULL COURT

BLOW CJ

9 June 2015

This appeal concerns the scope of the cover provided by an insurer to an employer pursuant to a policy of insurance against losses sustained as a result of workplace accidents. It also concerns a question whether an employer was obliged by the Workers' Compensation Act 1927 ("the Act"), which was repealed long ago, to pay the costs of expenditure incurred in providing an injured worker with full-time attendant care.
On 28 May 1987 a tree feller named Stephen John Lowrie was catastrophically injured by accident in the course of his employment. His employer was Associated Forest Holdings Pty Ltd ("AFH"). That company was a subsidiary of North Limited. On the day of the accident the 1927 Act was still in force. Under s 34 of that Act, employers were required to maintain policies of insurance that indemnified them in respect of workers compensation and common law liabilities in respect of personal injuries. Under s 34(4) an exemption from that requirement could be granted to an adequately resourced employer. North Limited (then named North Broken Hill Holdings Limited) and AFH each had such an exemption. They and some other companies had entered into an agreement, inaccurately described as a "Reinsurance Agreement", with the Government Insurance Office of New South Wales ("the GIO") which provided cover for losses in excess of $1,000,000 per accident. The respondent, Gordian Runoff Limited, is responsible for the liabilities of the GIO pursuant to an order made under the Government Insurance Office (Privatisation) Act 1991 (NSW).
AFH, North and Mr Lowrie brought an action against Gordian, contending that the threshold of $1,000,000 had been passed, and claiming damages for breach of contract on the basis that Gordian had refused to pay monies that were due to them pursuant to the policy by way of indemnity in respect of sums paid to Mr Lowrie and for his benefit. That action failed. It was tried and dismissed by Tennent J: Associated Forest Holdings Pty Ltd v Gordian Runoff Limited [2014] TASSC 3. This is an appeal by AFH, North and Mr Lowrie from that judgment.
At the time of the trial Mr Lowrie was living in his own home, and payments were being made for him to be looked after by carers there 24 hours per day, seven days per week. Substantial amounts had been paid for the provision of such attendant care. At trial the appellants contended that those expenses were required to be paid pursuant to s 8A of the 1927 Act, and that they constituted part of the loss in respect of which an indemnity was available under the policy. Gordian contended that the 1927 Act did not impose an obligation to pay such expenses, and that the policy provided no cover in respect of them.
Another of the appellants' contentions at the trial was based on s 13 of the 1927 Act. That section permitted claims for compensation "and questions arising in connection therewith, or incidental thereto" to be settled by agreement. The appellants contended that there had been a settlement agreement within the scope of s 13 in relation to the expenses for Mr Lowrie's care, and that all sums paid and payable pursuant to that agreement constituted part of the loss in respect of which an indemnity was available under the policy. Gordian contended that there had been no such agreement.
It was common ground that, if the policy provided no cover in respect of the expenses for Mr Lowrie's attendant care, then the $1,000,000 threshold, which was subject to an indexation clause based on increases in average weekly earnings, had not been reached and that the action therefore would have to fail.
The learned trial judge reached conclusions to the following effect, each of which is challenged in this appeal:
·That the costs of Mr Lowrie's attendant care were not the costs of "medical services" for the purposes of the 1927 Act, and were therefore to be ignored when calculating the loss resulting from his accident for the purposes of the policy.
·That the costs of Mr Lowrie's attendant care were not costs payable pursuant to an agreement within the meaning of s 13 of the 1927 Act.
·That the indemnity under the policy was confined to payments required to be made under the 1927 Act and to common law liabilities.
·That the costs of Mr Lowrie's attendant care were not to be taken into account when calculating the loss covered by the policy on the basis that they were costs reasonably incurred to minimise loss.
Gordian contends that, even if the learned trial judge erred in reaching any of those four conclusions, this appeal should still fail, for two reasons:
· It contends that AFH stopped making payments in respect of Mr Lowrie in 1999, before the indexed threshold figure was reached; that all payments thereafter were made by other entities; and that the terms of the policy require those payments by other entities to be disregarded when determining whether the threshold figure has been reached, or when it was reached.
· It contends that the action brought by the appellants was not commenced until after the expiry of the applicable limitation period.
These two contentions were not addressed by the learned trial judge. It was agreed by the parties at the hearing of the appeal that, in the event that any of the appellants' grounds of appeal were successful, this Court would determine those matters on the material that was before her Honour. After the hearing of the appeal, counsel provided the Court with substantial written submissions as to those contentions.

Attendant care expenses and the 1927 Act

The 1927 Act was repealed in 1988, but it remains in force in relation to injuries that occurred before the repeal: Workers Rehabilitation and Compensation Act 1988, s 163 and Sch 7; Acts Interpretation Act 1931, s 16. Under the 1927 Act, the scope of an employer's liability to pay for expenses incurred by reason of a worker's injury was governed by s 8A(1). The first two subsections of s 8A read as follows:
"8A—(1) In any case where a worker suffers injury by accident, or is disabled or dies as the result of any disease, arising out of and in the course of his employment, and the worker or his dependants is or are entitled to compensation under section 5 in respect of such injury or disease, the employer shall, subject to this section, be liable to pay, in addition to the compensation, if any, otherwise payable by the employer in accordance with this Act —
(a)the reasonable costs of any medical, hospital, nursing, and ambulance services reasonably incurred by the worker by reason of the injury or, in the case of disablement caused by disease, by reason of the disease, on and after the date of disablement; and
(b)where death results from the injury or disease, the reasonable costs of burial or cremation.
(1A) For the purposes of subsection (1), 'medical services' include the repair or replacement of crutches, artificial members, eyes, or teeth, spectacles, or hearing aids destroyed or damaged in the accident giving rise to the claim, but no sum in excess of $300 shall be payable in respect of the repair or replacement."
Section 3(1) of the 1927 Act included the following definition:
"'medical service' includes —
(a)   attendance, examination, or treatment of any kind by a medical practitioner, dentist, optician, masseur, or chiropodist;
(b)   the provision of skiagrams or crutches, or of artificial members, eyes, or teeth, or of spectacles or hearing aids;
(c)   the provision to or for a worker, otherwise than as a patient in a hospital, of medical or surgical aids to rehabilitation, or of curative or apparatus;
(d)   the provision by a pharmaceutical chemist of medicines or curative apparatus, appliances, or materials; and
(e)   the cost to a worker of any fares, travelling expenses, and maintenance necessarily and reasonably incurred by him in obtaining any medical service."
The appellants did not seek to argue that Mr Lowrie's attendant care services amounted to "nursing services", probably because, by reason of a definition in s 3 of the 1927 Act, that term related only to services rendered by registered nurses.
The learned trial judge concluded that the attendant care provided to Mr Lowrie did not amount to "medical services" for the purposes of the 1927 Act, and that the attendant care expenses did not fall within the scope of s 8A. The appellants contend that those conclusions were wrong, on two bases:
·They contend that Mr Lowrie's attendant care expenses were for "maintenance necessarily and reasonably incurred by him in obtaining ... medical service(s)" within the meaning of par (e) of the definition of "medical service".
·They contend that the definition of "medical service" is a non-exhaustive definition, and that attendant care services constitute medical services in accordance with the ordinary meaning of those words.

The cost of maintenance incurred in obtaining medical services

There was evidence at the trial as follows. Mr Lowrie takes prescribed medication three times per day to control his behaviour and to prevent epileptic seizures. The medicine is delivered to his home from a pharmacy every Wednesday, accepted by the carer on duty, and given to him by carers. He is incapable of taking that medication without assistance. His carers also arrange appointments and take him to see his general practitioner and treating specialists. They change his incontinence pads, change his clothing, attend to his toilet needs, wash him, treat his skin, prepare his food, and supervise his eating so that he does not choke.
On the basis of those facts, the appellants contend that the care provided to Mr Lowrie amounts to "maintenance", and that that maintenance is necessary and reasonable for him to obtain medical services.
As a general rule, because workers compensation legislation is beneficial legislation, any doubt as to its meaning ought to be resolved by adopting an interpretation that is favourable to the class of persons intended to be benefited by the legislation, namely workers: McDermott v Owners of SS Tintoretto [1911] AC 35 at 46; Wilson v Wilson's Tile Works Pty Ltd (1960) 104 CLR 328 at 335; Bird v Commonwealth (1988) 165 CLR 1 at 9. The appellants rely on that proposition, and contend that par (e) of the definition of "medical service" ought to be given a wide interpretation, favourable to workers. However that proposition applies only when there is some doubt as to the meaning of a legislative provision, and cannot be relied upon to give a provision an overly strained meaning that is inconsistent with the text of the provision.
The text of par (e) strongly suggests that the word "maintenance" refers to meals and other means of subsistence. If a worker has to travel some distance to see a medical practitioner, he or she might have to spend money on fares, petrol, accommodation, food and drink. The mention of maintenance in the context of "the cost to a worker of any fares, travelling expenses, and maintenance necessarily and reasonably incurred by him in obtaining any medical service" strongly suggests that a wider interpretation of the word, extending to cover assistance with daily living, would be inappropriate.
When it was first enacted, the 1927 Act did not include s 8A or the definition of "medical service". Clause 5(1) of the Schedule to the Act originally provided:
"In addition to the compensation payable to a worker as provided by this schedule, an employer shall also pay all reasonable hospital expenses, medical charges, and charges for medicines and appliances, not exceeding in all the sum of twenty-five pounds incurred by such worker as a result of the injury in respect of which the compensation is payable."
The Workers' Compensation Act 1942 extended that provision to cover certain ambulance charges, to a maximum of £2. Section 8A and a definition of "medical service" were introduced by the Workers' Compensation Act 1947, but that original definition of "medical service" did not include par (e). That paragraph was added by the Workers' Compensation Act 1966, s 2(e). By s 2(d) of the same Act, the definition of "hospital service" was expanded by adding the words "and also includes the cost to a worker of any fares, travelling expenses, and maintenance necessarily and reasonably incurred by him in obtaining any hospital service".
Clearly the provisions as to "maintenance" introduced in 1966 were concerned with expenditure on such things as meals on a journey to a hospital to have an operation, and meals when a worker from the country came to Hobart to see a specialist. There is no reason to interpret par (e) as extending to cover the cost of full-time carers for a worker whose injuries happened to necessitate taking medicine and visiting doctors.
For these reasons, I conclude that Mr Lowrie's attendant care expenses do not fall within the scope of par (e) of the definition of "medical service".

Meaning of "medical services"

The appellants contend that the definition of "medical service" is a non-exhaustive definition, and that the services provided by Mr Lowrie's carers amount to medical services within the meaning of s 8A(1)(a). They contend that a wide interpretation of that provision ought to be adopted because of the nature of workers compensation legislation as beneficial legislation. The respondent contends that the definition of "medical service" is an exhaustive definition and that, in any event, s 8A(1)(a) cannot properly be interpreted so widely as to cover the attendant care services provided to Mr Lowrie.
A very similar definition of "medical treatment" in a New South Wales workers compensation statute was held to be an exhaustive definition, both by the Full Court of the Supreme Court of New South Wales and by that State's Court of Appeal: Lamont v Commissioner for Railways (1963) 80 WN (NSW) 1242; Thomas v Ferguson Transformers Pty Ltd [1979] 1 NSWLR 216. In Cox v Attorney-General for the State of Tasmania A66/1986; [1986] TASSC 66, at 4, Neasey J expressed doubt as to whether the 1927 Act's definition of "medical service" should be given a similar interpretation.
In my view it does not matter whether the definition is exhaustive or non-exhaustive because Mr Lowrie's attendant care services could not properly be regarded as medical services in any ordinary sense of those words. In substance, his carers provide assistance with daily living. He needs assistance because of medical problems, but the services provided to him have only a remote connection with the practice of medicine.
The Macquarie Dictionary defines "medical", when used as an adjective, as follows:
"Relating to, involving, or used in medicine or treatment given by doctors".
There is no ambiguity about the words "medical services". There is no reason to give them a meaning other than their ordinary meaning. The services provided by Mr Lowrie's carers are not "medical services" in the ordinary sense of those words.

Conclusion as to s 8A

For these reasons, I conclude that the attendant care services provided to Mr Lowrie did not amount to medical services for the purposes of the 1927 Act, and that the cost of them was not payable by his employer pursuant to s 8A.

A settlement by agreement?

Section 13 of the 1927 Act read as follows:
"13—(1) Subject to subsection (1A), claims for compensation under this Act and questions arising in connection therewith, or incidental thereto, may be settled by agreement or by proceedings before a judge as provided by this Part.
(1A) An agreement for the payment of a lump sum in settlement of a claim for compensation under this Act has no force or effect unless and until it has been registered as prescribed with the Secretary.
(2) Every such agreement as aforesaid shall be subject to review by a judge upon application by any party interested therein, made either before the agreement is registered under subsection (1A) or within 3 months after it was so registered."
The appellants contend that an agreement within the scope of s 13(1) was made on or about 23 May 1997 between Mr Lowrie's mother and a representative of AFH named Bob MacAulay to the effect that, if Mr Lowrie went to live in a unit in Wynyard, AFH would pay for attendant care to be provided to him in that unit, and would do so in consideration of him paying for the unit.
The learned trial judge took the view that s 13(1) applied only to agreements for the settlement of claims for compensation, and not to agreements solely for the settlement of questions arising in connection with, or incidental to, claims for compensation. Since any agreement between the mother and Mr MacAulay did not relate to the entirety of Mr Lowrie's claim for compensation under the 1927 Act, her Honour held that there could not have been an agreement to which s 13(1) applied. Gordian contends that there was no error in that reasoning.
When the 1927 Act was in force, there were various sorts of disputes that could arise in relation to claims for compensation. There were disputes as to whether claimants were entitled to compensation at all. Such disputes sometimes involved questions as to whether claimants were employees or independent contractors, or whether injuries arose out of and in the course of their employment, or whether the claimants had been injured at all. There were also situations in which there was no dispute as to the existence of an entitlement to compensation, but the amount of compensation was disputed. And there were also disputes as to questions arising in connection with claims for compensation, or incidental to claims for compensation. For example, there could be a dispute as to what weekly amount a worker was entitled to receive by way of compensation. A resolution of that question would not entirely dispose of a worker's claim because questions might remain unresolved as to how long weekly payments were to continue, or what was payable by way of medical expenses. An interpretation of s 13(1) permitting connected and incidental questions to be settled by agreement, without there being a total and final settlement of every aspect of a worker's claim, would have a number of advantages. It would promote the purpose or object of the legislation, namely the provision of compensation for the benefit of injured workers. It would be consistent with the authorities as to workers compensation legislation being beneficial legislation, and the adoption of an interpretation favourable to the class of persons intended to be benefited thereby. It would facilitate settlements as an alternative to litigation. It would be consistent with the notion of freedom of contract.

Counsel for the appellants argued that the word "and" in its ordinary and natural meaning is not a disjunctive conjunction. That is to say, they argued to the effect that the words "claims for compensation … and questions arising in connection therewith, or incidental thereto" referred to "claims including questions arising in connection therewith, or incidental thereto", not "claims and/or questions arising in connection therewith, or incidental thereto". I disagree. There is no reason for "and" not to be read as "and/or" in the context of s 13(1).
Counsel for the appellants relied on the judgment of Morris CJ in Hudson v Nuroo (1940) 35 Tas LR 120 as supporting the interpretation adopted by the learned trial judge, but the remarks of Morris CJ in that case were plainly inconsistent with such an interpretation. Those remarks were obiter. His Honour was asked to review an agreement whereby a worker's claims for weekly compensation and medical expenses were settled for £5. The worker wanted more money. She applied for the review of the agreement by which her whole claim was settled. At 122, Morris CJ made the following comments in relation to s 13:
"The power to make agreements given by this section is much wider than that under consideration in Russell v Rudd (supra). It is not limited to questions relating to liability, or the amount, or duration of compensation, but extends to every question arising in connection with or incidental to a claim for compensation, but that is not all, not only is there power given to settle these questions by agreement, but the claim itself may be settled by agreement."
It is clear from the words, "not only is there power given to settle these questions by agreement", that his Honour took the view that questions could be settled by agreement without the whole claim being settled by agreement.
In the light of those comments, and having regard to the matters weighing in favour of the interpretation contended for by the appellants, I think it is clear that s 13(1) authorised stand-alone settlements of individual disputed questions. The learned trial judge erred in taking the opposite view.
I think it is also clear that a s 13(1) settlement could result in an employer promising to pay expenses of a kind that were not payable under the 1927 Act. As Morris CJ said in Hudson v Nuroo at 122:
"… you can settle the claim by agreement with an entirely different result from that which you would obtain if you settled it by proceedings. There is nothing to regulate what the agreement shall contain; an agreement of whatever nature which settles the claim is permissible subject, of course, to the power of review given to a judge."
However, on the facts of this case, I am not satisfied that, in the course of conversations between Mr Lowrie's mother and Mr MacAulay, any agreement came into existence settling anything. Mr Lowrie suffered an intellectual disability as a result of his accident. He did not have the capacity to enter into a contract or to authorise an agent to do so on his behalf. There was no evidence that his mother had any authority to enter into an agreement on his behalf. Mr MacAulay, on behalf of AFH, appears to have made a unilateral decision that AFH would pay for attendant care expenses in the event that Mr Lowrie moved into the unit in Wynyard. He told Mr Lowrie's mother of that decision. It could be said that he promised her that such expenses would be paid by AFH. But there is no basis for concluding that any such promise was a contractual promise. There is no basis for concluding that AFH thereby entered into a contract with Mr Lowrie. It follows that the attendant care expenses were not payable pursuant to s 13(1).

The extent of the indemnity

The wording of the policy is appalling, as will be seen. The policy is headed "WCA EXCESS OF LOSS COVER". I infer from the contents of the document that "WCA" stands for Workers Compensation Act.
The text of the policy begins as follows:
"This Reinsurance Agreement, which shall include the Schedule attached hereto (hereinafter called the Schedule), is made between North Broken Hill Holdings Ltd and Subsidiary and Associated Companies and Sub-contractors and Employees of their Contractors and Sub-contractors (hereinafter called the Reinsured) of the one part and the Reinsurer named in the individual signing Schedule attached (hereinafter called the Reinsurer) of the other part …".
The GIO was specified in the signing schedule against the words "Name of Reinsurers (Preamble)".
As I have explained, the document is not a reinsurance agreement at all. The companies in question were otherwise uninsured, though companies in that situation are sometimes said to be "self-insured". Gordian contends that the wording of the policy as if it were a policy of reinsurance is a strong indication that the parties intended that the cover provided was to extend only in relation to liabilities that would have been the subject of a compulsory insurance policy under s 34 of the 1927 Act. The extent of such liabilities was spelled out in s 34(1), which read as follows:
"34—(1) Subject to this section, an employer shall maintain in force with an insurer approved by the Governor a policy of insurance —
(a)that indemnifies him in respect of his liabilities to pay compensation under this Act;
(b)that indemnifies him in respect of any other liabilities incurred by him in respect of personal injury by accident, or disease, suffered by any worker that arises out of, and in the course of, the employment of that worker with him; and
(c)that indemnifies each person employed by him in respect of the liabilities incurred by that person in respect of any such injury or disease as is referred to in paragraph (b)."
Clearly attendant care expenses did not have to be covered by a s 34(1) policy.
Article III of the policy read as follows:
"CLASSES OF BUSINESS AND/OR PERILS COVERED
This Agreement shall apply to the business specified in item 3 of the Schedule."
Item 3 of the schedule (as distinct from the signing schedule) read as follows:

"3 Classes of Business Covered

(Article III)

:: The Reinsured's self insurance fund in respect of Workers Compensation including employers [sic] common law liability."

Although item 3 referred to "The Reinsured's self insurance fund", none of the companies referred to in the agreement as the "Reinsured" had self-insurance funds, though they were, loosely speaking, self-insurers. Although item 3 referred to "Classes of Business Covered", self-insurance is not a business. However it is clear enough that the policy was intended to apply in relation to the activity commonly referred to as "self-insurance".
The cover provided by the policy was described in Article V thereof, the relevant part of which read as follows:
"INDEMNITY
The Reinsurer hereby agrees to indemnify the Reinsured for that part of its ultimate net loss which exceeds the amount stated in item 4 of the Schedule on account of each and every loss, accident/event. …
The underlying loss stated in item 4 of the Schedule shall be retained net by the Reinsured and not reinsured in any way …".
The "amount stated in item 4 of the Schedule" was specified as, "The first $1,000,000 of any one claim or series of claims arising out of any one accident/event." As I have said, there was another provision in the agreement whereby the sum of $1,000,000 was to increase in accordance with increases in average weekly earnings.
The expression "ultimate net loss", which was used in Article V, was defined by Article VII. The relevant part of that article read as follows:
"ULTIMATE NET LOSS
1The term 'ultimate net loss' shall mean the sum actually paid by the Reinsured in respect of any loss occurrence, including expenses of litigation if any, and all other expenses of the Reinsured (excluding, however, office expenses and salaries of officials of the Reinsured) but recoveries, including recoveries from all other reinsurances other than underlying reinsurances provided for herein, shall be first deducted from such loss to arrive at the amount of liability, if any, attaching hereunder."
The appellants contend that the words "ultimate net loss" cover not only compensation paid under the 1927 Act and common law liabilities to employees. They contend that other expenditure paid in consequence of an employee's accident constitutes part of the ultimate net loss.
The term "loss occurrence", which is used early in Article VII, is defined in Article VI. One might expect a definition of "loss occurrence" to refer to an accident or event that gives rise to expenditure or loss. But the definition does not read that way. Surprisingly, the term "loss occurrence" is defined in terms of losses. Article VI read as follows:
"DEFINITION OF LOSS OCCURRENCE
The words 'loss occurrence' shall mean all individual losses arising out of and directly occasioned by any accident or occurrence or series of accidents or occurrences arising out of one and the same event: Insofar as liability is incurred by the Reinsured in respect of legal liability for Occupational Disease or Physical Impairment attributable to a gradually operating cause which does not arise from a sudden and identifiable accident or event, this Agreement shall provide cover on the basis that any one claim in respect of any one employee shall be considered individually as one event for the purpose of recovery hereunder."
If one were to ignore Article III and item 3 of the schedule, and to read Articles V, VI and VII together, one would have to conclude that the ultimate net loss, for the purpose of the indemnity under Article V, included all sums actually paid by the so-called Reinsured in respect of an employee's accident. But Article III and item 3 of the schedule seem to say that the classes of business and/or perils covered were limited to "self insurance … in respect of Workers Compensation including employers [sic] common law liability". Does it follow that the loss covered by the indemnity clause, Article V, was limited to liabilities under the 1927 Act and at common law? Or did the indemnity cover all payments, or perhaps all payments reasonably made, in respect of an accident that gave rise to liabilities to pay compensation under the 1927 Act or to pay common law damages to an employee?
In my view, these questions can be resolved very simply by considering the words used by the parties. In the relevant provisions of the policy, the parties used the words "the sum actually paid", "loss" and "losses", but not "liability" or "liabilities". In the context of employers' liability insurance, "loss" is a wider term than "liability". An employer at the relevant time could have no liabilities in relation to a workplace accident other than a liability to pay compensation pursuant to the 1927 Act, a common law liability to pay damages, and a liability to pay costs if a court so ordered. However an employer could suffer financial losses in consequence of a workplace injury in other ways. For example, an employer could incur expense in investigating claims, assessing them, negotiating with a view to settling them, and defending court proceedings. Those sorts of expenses were recognised by the parties and expressly included in the definition of "ultimate net loss" in Article VII, where they used the words "… including expenses of litigation if any, and all other expenses of the Reinsured (excluding, however, office expenses and salaries of officials of the Reinsured)". But the definition is wider than that. It provides that "The term 'ultimate net loss' shall mean the sum actually paid by the Reinsured in respect of any loss occurrence …".
Sometimes it makes sense to spend some money in order to avoid having to spend a great deal more money. If, for example, an injured worker needed nursing services, and the required services could be adequately provided by a trained auxiliary nurse more cheaply than if they were provided by a registered nurse, then it would make sense to adopt the cheaper alternative. Under the 1927 Act, as I have observed, compensation was payable for services rendered by registered nurses. However no compensation was payable for nursing services provided, otherwise than in a hospital, by unregistered nurses. If an employer, acting reasonably, economised by spending money on the services of a nurse who was not a registered nurse, that expenditure could properly be regarded as a loss for the purposes of this policy.
The evidence at the trial established that the expenditure on attendant care services for Mr Lowrie was in a similar situation. But for the provision of attendant care services at the expense of his employer, it would have been necessary for him to be cared for in a hospital. The cost of the hospital services provided for his benefit would have exceeded the costs of attendant care. His employer would have been liable under the 1927 Act to pay the cost of his hospital services but, for the reasons stated above, there was and is no such liability in relation to the cost of attendant care. It must follow, for the purposes of the policy, that the money paid for his attendant care is to be regarded as part of the ultimate net loss suffered by the employer.
Counsel for Gordian presented a number of arguments against this interpretation of the provisions of the policy. First of all it was submitted that, because the policy used words appropriate to a policy of reinsurance, it followed that the GIO was not intended to have any greater liabilities than it would have had under a similarly worded policy of reinsurance, and that such liabilities would have been limited to liabilities to pay compensation under the 1927 Act and/or common law damages. I reject that submission. A policy of reinsurance could well provide cover in respect of losses and expenses other than the liabilities which s 34(1) of the 1927 Act required compulsory workers compensation insurance policies to cover.
It was argued that the description of the "Classes of Business Covered" in the policy schedule as "The Reinsured's self insurance fund in respect of Workers Compensation including employers [sic] common law liability" provided support for Gordian's suggested interpretation of the policy provisions. I reject that proposition. Although it may be inferred that the parties intended the policy to provide cover similar to that provided by a policy of reinsurance, there is no reason to infer that a policy of reinsurance would not have provided cover in respect of expenditure, reasonably incurred, for the purpose of avoiding a statutory liability for greater expenditure. The reference to the self-insurance fund was a reference to the activity in respect of which cover was provided, not to the perils or classes of expenditure in respect of which cover was provided.
Counsel for Gordian relied on the initials "WCA" in the heading of the policy document. In my view the heading of the policy adds no strength to Gordian's arguments. Plainly the policy was intended to provide cover, subject to a large excess, in respect of accidents to which workers compensation legislation applied. It does not follow that it was not intended to provide cover in respect of a particular class of expenditure in connection with such accidents.
Counsel for Gordian relied on Article I of the policy, which related to the period during which cover was provided. It applied for a period of 12 months commencing at 4pm on 31 March 1987. The Article included this provision:
"The intention of this Agreement is that it shall apply to all claims arising under which the Employee's first entitlement to benefit applies from a date during the period hereof."
Clearly Article I adds nothing to Gordian's arguments as to the scope of the cover provided by the policy. The effect of this provision was that its applicability or inapplicability depended upon the date when an employee first became entitled to a benefit. Thus, for example, if an employee suffered an injury while the policy was in force, but did not become incapacitated or incur any expense in relation to that injury until after the 12 months expired, but later became entitled to compensation under the 1927 Act, then the policy would not apply in respect of that injury. In this case, the policy did apply because Mr Lowrie became entitled to compensation whilst the policy was in force. But that fact is irrelevant to the question whether the policy provided cover in respect of expenditure on services outside the scope of the 1927 Act.
Counsel for Gordian also relied on Article II of the policy, which related to the places covered by the policy. That Article said that it applied to "losses occurring in respect of cover issued by the Reinsured in the Territories stated in item 2 of the Schedule". That item read, "In accordance with the New South Wales & Tasmanian Workers Compensation Act [sic]". Mr Lowrie was injured in Tasmania. But that makes no difference to the question whether expenses outside the scope of the 1927 Act were covered by the policy.
Counsel for Gordian relied on Article XI of the policy. That Article specified circumstances in which the insured were required to notify the GIO of claims, and to the course to be taken in connection with the defence or settlement of large claims. It contains nothing of relevance to the question whether the policy covered expenditure outside the scope of the 1927 Act.
Counsel for Gordian relied on the words "in respect of" in the definition of "ultimate net loss" in Article VII. They relied on the High Court's decision in Workers' Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642 as authority for the proposition that those words gather meaning from their context. I am sure they do. This Court needs to consider the meaning of the words, "the sum actually paid by the Reinsured in respect of any loss occurrence, including expenses of litigation if any, and all other expenses of the Reinsured …". The amounts paid by AFH for Mr Lowrie's attendant care must surely form part of the sum actually paid by AFH in respect of Mr Lowrie's accident. There is no basis for concluding that that expenditure by AFH did not form part of "the sum actually paid by the Reinsured [AFH] in respect of any loss occurrence".
Gordian pleaded that Article XII of the policy restricted the cover granted by the policy to the 1927 Act; that any benefits outside the Act were to be covered at terms to be agreed; and that there was no agreement as to benefits outside that Act. The article in question read as follows:
"ACTS IN FORCE
The cover granted by this Agreement relates to the various Acts, etc, which are in force at inception hereof and any Acts or amendments coming into force after the inception date of this Agreement granting increased benefits shall be held covered at terms to be agreed by the Reinsurer on receipt of full details of the change, which shall be advised by the Reinsured as promptly as possible."
Clearly Article XII was concerned with possible changes to workers compensation legislation, not with expenditure outside the scope of the existing legislation. Certainly the 1927 Act was an Act that was in force at the inception of the policy. It is true that Article XII provided that the cover granted by the policy related to the various Acts that were in force at the inception thereof. But it does not follow that the losses in respect of which the GIO agreed to provide an indemnity were confined to its statutory liabilities under such legislation. The policy provided cover in respect of losses relating to injuries that were compensable under the 1927 Act. It was in that sense that, in the words of Article XII, the cover granted by the agreement related to the 1927 Act. But it does not follow that the policy was not intended to provide cover in respect of any particular class of expenditure in connection with an accident that was compensable under the 1927 Act.

For these reasons, I reject all of Gordian's arguments as to this question of interpretation. I conclude that the payments made for Mr Lowrie's attendant care were payments reasonably made in respect of an accident that gave rise to liability to pay compensation under the 1927 Act, and that, as such, they formed part of the ultimate net loss for which the policy provided cover.
The learned trial judge erred by reaching the opposite conclusion. It follows that this appeal must succeed unless Gordian is successful in relation to its contentions as to payments by entities other than AFH and/or the expiry of a limitation period.

Costs reasonably incurred to minimise loss

In case my conclusion as to the interpretation of Articles V and VII of the policy is incorrect, I will address the appellants' next argument. They contend that the policy contained implied terms as follows:
·     That each party would act towards the other in respect of any matter arising under or in relation to the policy with the utmost good faith.
·     That the insured would act reasonably to minimise any loss for which it would or might claim indemnity from the insurer.
·     That such costs of minimising loss were covered by the policy.
Counsel for the appellants relied on Guardian Insurance Co Limited v Underwood Constructions Pty Ltd (1974) 48 ALJR 307 and E J Hampson & Ors Syndicate 1204 v Mining Technologies Australia Pty Ltd (1997) 10 ANZ Ins Cas ¶61-389.
Counsel for Gordian referred us to a number of cases which tend to suggest that there might not be an implied duty to minimise loss: AFG Insurances Limited v City of Brighton (1972) 126 CLR 655 at 661-662; Newnham v Baker [1989] 1 Qd R 393; Yorkshire Water Services Limited v Sun Alliance & London Insurance Plc [1997] 2 Lloyd's Rep 31.
I need not analyse those authorities because I think it is clear that, even if there was an implied term requiring the minimisation of loss, there could not have been an implied term that any expenditure on the minimisation of loss would be covered by the policy. The prerequisites for the existence of an implied term are as summarised by the Privy Council in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283, as follows:
"… for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract."
In my view the second, third and fifth of these prerequisites are not satisfied. In cases concerning policies containing express terms requiring the minimisation of loss, courts have held that such an obligation is not sufficient for the implication of a term obliging the insurer to provide reimbursement: Netherlands Insurance Co est 1845 Limited v Karl Ljumgberg & Co AB [1986] 3 All ER 767; Yorkshire Water (above) at 31. The suggested implied term is not necessary to give business efficacy to the contract, nor is it so obvious that it goes without saying.
I have already reached a conclusion to the effect that the express terms of the policy should be construed as imposing an obligation on the insurer to provide cover in respect of expenditure incurred for the minimisation of loss as such expenditure forms part of the "ultimate net loss" covered by the policy. If I am wrong about that, and the policy covers only workers compensation and common law liabilities, as Gordian contends, then there can be no implied term extending cover to expenditure for the minimisation of loss because such an implied term would be inconsistent with the express terms as to the scope of the cover provided by the policy.

Payments by entities other than AFH

The parties have agreed that payments were made for Mr Lowrie's care as follows:
·     AFH made payments totalling $1,308,037.16 for the period from 3 June 1987 to 31 December 1999.
·     North Forest Products Limited (renamed Gunns Forest Products Limited from 30 May 2001) made payments totalling $249,845.44 for the period from 1 January 2000 to 1 May 2002.
·     Gunns Limited made payments totalling $2,566,165.61 for the period from 1 May 2002 to 30 November 2012.
·     Rio Tinto Services Ltd made payments totalling $41,030.01 for the period from 1 December 2012 to 19 February 2013.
The appellants contend that all of the payments made after 1999 by entities other than AFH were made on behalf of AFH, and that they therefore must be treated, for the purposes of the policy, as payments made by AFH. However Gordian contends that the payments made after 1999 were not made on behalf of AFH, and that for the purposes of the policy they must be treated as not having been made by AFH.

The "sum actually paid"

As I have said, in Article VII of the policy, the term "ultimate net loss" was defined to mean "the sum actually paid by the Reinsured in respect of any loss occurrence …". Counsel for Gordian submitted that none of the sums paid after 1999 by AFH were sums "actually paid" by AFH for the purposes of that definition, even if the entity making a payment did so as the agent of AFH, or was entitled to reimbursement from AFH. Counsel for the appellants argued that payments made in such circumstances would constitute sums "actually paid" by AFH for the purposes of Article VII.
In Charter Reinsurance Co Ltd v Fagan [1997] AC 313, the House of Lords considered the meaning of the words "actually paid" in three contracts of reinsurance. Their Lordships held unanimously that, in the policies to which that case related, an exposure to a liability to pay was all that was required, as distinct from payment in the strict sense, since the words in question were there "for the purpose of measurement": per Lord Mustill at 386.
However that case concerned transactions in the London reinsurance market, and this case does not. It is necessary to consider the text of the policy, and also "the surrounding circumstances known to the parties, and the purposes and object of the transaction": Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2014) 219 CLR 165 at [40]. When this policy was taken out in 1987, there was no reason for the GIO to be concerned about the mechanism by which the "Reinsured" arranged for payments to be made. If, as now suggested by counsel for Gordian, the policy applied only to payments made by an injured worker's employer, and not to payments made by a related entity which the employer was obliged to reimburse, then appropriate arrangements could very easily have been made so that the benefits conferred by the policy were not lost. Such a restriction on the availability of cover under the policy would therefore have been pointless. In contrast, the GIO might have had good reasons only to pay money out by way of reimbursement of past payments. Such an arrangement could have had advantages in relation to cash flow and interest charges. There might also have been advantages in the GIO not getting involved in the making of payments to their ultimate recipients. Rather than making multiple small payments to workers, doctors, hospitals and so forth, it could simply reimburse employers for payments already made. Such an arrangement is consistent with the ordinary meaning of the words "actually paid". In my view those words should be interpreted as referring to sums that have been paid, as distinct from sums that an insured entity has a liability to pay, or is proposing to pay. And they should be interpreted as including sums paid by an agent of a "Reinsured". Any other interpretation would be inconsistent with commercial common sense.

The payments after 1999

As at 1 January 2000, all the shares in AFH were owned by a company then named North Forest Products Limited. Its shares were in turn owned by North Limited and NBH Limited. The ultimate holding company of all those entities was Rio Tinto Limited. It had another subsidiary named Rio Tinto Services Limited which provided financial services to companies in the Rio Tinto group.
There was uncontroversial evidence at trial that AFH's bank account was closed in late 1999 or early 2000. I infer that it was because of that closure that North Forest Products Limited started to make the payments relating to Mr Lowrie on 1 January 2000 in place of AFH.
Evidence was given at the trial by a Mr Butt, who was employed as an accountant during the relevant years, first by North Forest Products Limited and subsequently by Gunns Limited. He gave uncontroversial evidence to the effect that payments made in respect of the liabilities of AFH were initially the subject of inter-company loan account transactions, but that a decision was made to replace that arrangement by a series of management charges, whereby AFH would make "all encompassing" payments to its parent company. There was no evidence as to precisely when the system of management charges was introduced. I infer from Mr Butt's evidence that it was some time between 1 January 2000, when North Forest Products Limited commenced making payments, and 19 March 2001, that being the date of an agreement by which Gunns Limited agreed to purchase from North Limited and NBH Limited all the shares in North Forest Products Limited.
The share sale agreement contained clauses relating to liabilities arising from Mr Lowrie's injury, but treated such liabilities as liabilities of North Forest Products Limited, not AFH. By cl 15.1, North Limited agreed to indemnify North Forest Products Limited against any liability incurred or sustained by Gunns arising from Mr Lowrie's injury. The existence of the GIO policy was acknowledged. The parties to the agreement envisaged that North Limited could require the GIO to make payments pursuant to the policy. Gunns agreed that North Forest Products Limited would take action in good faith and with due diligence at the direction and expense of North Limited in relation to Mr Lowrie's workers compensation matter. The vendor companies agreed to indemnify Gunns against liability in respect of such action. Neither the GIO, nor Gordian, nor any other entity replacing the GIO, was a party to that agreement.
The provisions relating to Mr Lowrie's expenses appear to have been affected by a misconception. AFH was Mr Lowrie's employer. North Limited was not. The learned trial judge made a finding that, while North Limited was a "Reinsured" under the policy, it had no claim arising against Gordian under the policy, either in its own right or pursuant to the share sale agreement. That finding has not been challenged in the grounds of appeal.
It appears from exhibits tendered at the trial that the share sale transaction was completed on or about 29 May 2001. As from 30 May 2001, North Forest Products Limited was renamed Gunns Forest Products Limited, and was controlled by Gunns Limited, its sole shareholder.
There was uncontroversial evidence at the trial that after the sale to Gunns, and until 30 April 2002, the following arrangements were in place in relation to expenditure for the benefit of Mr Lowrie:
·     Gunns Forest Products Limited would make the payments.
·     That company would then send an invoice to Rio Tinto Services Limited, which would reimburse it.
·     Rio Tinto Services Limited would then invoice North Limited, which would reimburse it.
·     Management charges continued to be paid by AFH to Gunns Forest Products Limited. There is no evidence as to whether or not those management charges continued to contain any component relating to expenditure for the benefit of Mr Lowrie. There is no reason why they should have contained any such component, since Gunns Forest Products Limited was being fully reimbursed by Rio Tinto Services Limited in respect of that expenditure.
The evidence establishes that Gunns Forest Products Limited ceased to operate a bank account. That appears to explain why Gunns Limited started to make the payments for the benefit of Mr Lowrie as from 1 May 2002. In other respects, the financial arrangements did not change at that time. After making payments, Gunns Limited invoiced Rio Tinto Services Limited, which reimbursed it, invoiced North Limited, and obtained reimbursement from North Limited.
On 30 November 2012, a new arrangement was agreed to. By then receivers, managers and administrators had been appointed in relation to Gunns Limited, Gunns Forest Products Limited, and AFH. It was agreed that North Limited would fund Mr Lowrie's future care costs and conduct the action against Gordian. The agreement provided for payments to be made to AFH if the action was successful, but AFH did not promise to bear any expenses in relation to Mr Lowrie after the making of that agreement.
With effect from the next day, 1 December 2012, Rio Tinto Services Limited commenced paying Mr Lowrie's expenses. I infer that it did so on behalf of North Limited, not AFH.
Prior to the introduction of the payment of all encompassing management charges by AFH, it is clear that the payments by North Forest Products Limited were made by it as an agent of AFH, and that it was reimbursed, or entitled to be reimbursed, by AFH. It follows that the payments made at that stage were, for the purposes of the policy, sums "actually paid" by AFH.
The evidence as to the arrangement that existed after AFH commenced paying management charges is very vague. At its strongest, that evidence might be taken to establish that the management charges contained identifiable components relating to Mr Lowrie's expenses, but there was no evidence as to whether the management charges exceeded, did not exceed, or bore any relationship at all to Mr Lowrie's expenses. However I infer that, whether AFH was getting a good deal, a fair deal, or a bad deal, North Forest Products Limited was still paying Mr Lowrie's expenses as its agent until the completion of the sale of shares to Gunns. It follows that, from the commencement of the management charge arrangement until the completion of the share sale, the sums paid by North Forest Products Limited for the benefit of Mr Lowrie were, for the purposes of the policy, sums "actually paid" by AFH.
However I think the position became entirely different once the share sale was completed at the end of May 2002. Thereafter the burden of the expenditure for Mr Lowrie's benefit was ultimately borne by North Limited, a member of the Rio Tinto group of companies, not AFH, which had become a member of the Gunns group of companies. See [83] above. It seems surprising that such an arrangement was made.
The arrangement made on 30 November 2012 did not significantly change the situation. The burden of the expenditure for the benefit of Mr Lowrie was thereafter ultimately borne by a member of the Rio Tinto group of companies, not AFH. It follows that, since the completion of the share sale on or about 29 May 2001, none of the payments relating to Mr Lowrie have constituted sums "actually paid" by AFH for the purposes of the policy.

The limitation defence

As I have said, no money was payable pursuant to the policy until the sums paid by the so-called reinsured exceeded a threshold of $1,000,000, that figure being subject to indexation. Actuarial evidence at the trial established that, if the attendant care expenses were within the scope of the policy, the indexed threshold figure was exceeded in or about May 2000. The limitation period for an action founded on a contract is six years from the date on which the cause of action accrued: Limitation Act 1974, s 4(1)(a). AFH did not commence its action against Gordian until 18 August 2010. North and Mr Lowrie were added as plaintiffs on 30 January 2013. Gordian contends that, if any of the appellants has a cause of action in contract, then that cause of action accrued in 2000 and became statute barred in 2006, before the writ was issued.
The appellants contend that no cause of action arose until Gordian denied liability, and that it first denied liability on 24 March 2005. They contend that any causes of action were merely contingent until that time.
Counsel for the appellants relied on the High Court's decision in Wardley Australia Limited v Western Australia (1992) 175 CLR 514, particularly on comments made by Mason CJ, Dawson, Gaudron and McHugh JJ at 530-531. However that case was concerned with a cause of action for damages in respect of misleading and deceptive conduct under the provisions of the Trade Practices Act 1974 (Cth). Such a cause of action was not complete until damage was suffered. The High Court held that when a person enters into a contract as a result of misleading and deceptive conduct, and the suffering of damage is no more than a possibility at the time of the making of the contract, then no cause of action accrues until damage is actually suffered. The passage relied on at 530-531 involved a review of English decisions about contracts entered into when plaintiffs are induced to do so by negligent misrepresentations. Wardley is plainly distinguishable because it did not concern an action for damages for breach of contract. The suffering of damage is not a prerequisite to the accrual of a cause of action for breach of contract: Luna Park (NSW) Limited v Tramways Advertising Pty Ltd (1938) 61 CLR 286.
The fundamental question raised by the appellants' contentions in relation to the limitation issue is whether a demand for payment or a refusal to pay was a prerequisite to the accrual of a cause of action based on this particular insurance contract. We were referred to the decision of Giles J in Penrith City Council v Government Insurance Office of New South Wales (1991) 24 NSWLR 564, but that case is also distinguishable because it concerned a different factual situation. A claim against the Penrith City Council was made in court proceedings by a party who sought damages for the wrongful lodgement of a caveat and for negligent misrepresentation. The council was insured by the GIO. In 1983 it gave the GIO notice of the claim, but the GIO advised that it would not provide indemnity. The claim was settled by the claimant and the council in 1990. Giles J held that no breach of contract occurred until the insurer failed to do what was required of it, and that it was not required to do anything prior to the settlement of the claim. This case is different because, if Gordian had an enforceable obligation to pay money by way of indemnity as alleged, any such obligation arose in or about May 2000, more than six years before the issue of the first writ.
In Cigna Insurance Asia Pacific Ltd v Packer (2000) 23 WAR 159, the Full Court of the Supreme Court of Western Australia considered whether a cause of action against an insurer accrued at the time when it became liable to pay money pursuant to a policy, or whether no such cause of action accrued until a demand for payment was made. That case concerned a policy of personal accident insurance. The insured was entitled to a lump sum payment upon becoming totally and permanently disabled. That occurred no later than 30 August 1988. He did not commence proceedings until 27 August 1998. He contended that his cause of action did not accrue until the insurer rejected his claim by a letter dated 30 April 1993. The Full Court held that, on a proper construction of the policy, liability was not dependent on the insured making a claim, and that the insured's cause of action therefore accrued at the time when he suffered total permanent disablement. For present purposes, the critical point is that liability was not dependent upon making a claim. Pidgeon J reviewed the relevant authorities at [79]-[93] and concluded at [94]:
"The words of the policy state that the money is payable on the happening of the event. The happening of the event is the only fact to be proved. It would not matter if the insurer was not aware of the happening of that event and that is consistent if the claim is seen as unliquidated or liquidated. I do not consider that the position changes by reason of the fact that the insurer is not aware of which amount the insurer [sic] is claiming until the issue of the writ. It has been held that business efficacy does not require the implication of the term to submit a claim. The position would not change to require the assured to state the type of claim being made. It would be open to the insurer, if the assured issues a writ in these circumstances, to claim it had no opportunity to make a tender and it should consequently receive a remedy in costs."
Malcolm CJ and Kennedy J agreed with his Honour's conclusion as to that point. There is no reason to doubt the correctness of that conclusion.

The policy considered by the Full Court in that case required the insured to give notice of any event in respect of which a claim was to be made, but did not say that the giving of that notice was a condition precedent to the bringing of an action. Similarly, the policy with which we are concerned required the "Reinsured" to give notice of any claim or claims likely to exceed the $1,000,000 threshold, and to advise the GIO of all claims involving brain damage, spinal injury or paraplegia, and of accidents resulting or likely to result in the death of two or more persons. Like the policy considered by the Full Court in Cigna, it did not make the giving of notice a condition precedent to the bringing of an action. In the light of the Full Court's decision in Cigna, it is clear that a cause of action in contract accrued to AFH as soon as the payments made in respect of Mr Lowrie's accident passed the indexed threshold figure in or about May 2000.
Gordian therefore has a good limitation defence, but it is not as simple as that. The policy in this case required payments to be made from time to time, perhaps for the rest of Mr Lowrie's life. A new payment was required every time money was paid out in circumstances entitling AFH to an indemnity. In my view a new cause of action arose every time the GIO or its successors became liable to pay an additional sum by way of indemnity. For limitation purposes, the situation is akin to that which exists when a lease requires periodical payments of rent. A new cause of action arises every time a periodical payment becomes payable and is not paid: Archbold v Scully (1861) 9 HL Cas 360; 11 ER 769.
It follows that Gordian has a good limitation defence against AFH's claim, but only in respect of payments made by AFH prior to 18 August 2004 – six years before the issue of AFH's writ. Since I have concluded that AFH was entitled to be indemnified pursuant to the policy only in respect of payments from about May 2000, when the threshold figure was reached, until about 29 May 2001, when the share transfer transaction was completed, it follows that all of AFH's causes of action are statute barred.

Conclusion

Neither of the other appellants has ever had a cause of action against Gordian. As I have said, the learned trial judge made a finding which the appellants have not challenged to the effect that North Limited had no claim against Gordian under the policy. Mr Lowrie was not a party to the policy. It made no provision for any payments to be made to him, but provided only for the reimbursement of sums paid by others.
It follows that none of the appellants were entitled to recover any sums from Gordian in the action. The learned trial judge was right to give judgment for Gordian, though she erred in her reasoning. For these reasons, I would dismiss the appeal.
File No FCA 109/2014

ASSOCIATED FOREST HOLDINGS PTY LTD, NORTH LIMITED
AND STEPHEN JOHN LOWRIE (by his administrator, the Public Trustee)
v GORDIAN RUNOFF LIMITED

REASONS FOR JUDGMENT FULL COURT

PORTER J
9 June 2015

I agree with Blow CJ.
File No FCA 109/2014

ASSOCIATED FOREST HOLDINGS PTY LTD, NORTH LIMITED
AND STEPHEN JOHN LOWRIE (by his administrator, the Public Trustee)
v GORDIAN RUNOFF LIMITED

REASONS FOR JUDGMENT FULL COURT

WOOD J
9 June 2015

I agree with the reasons for judgment of Blow CJ, and would also dismiss the appeal.