In the Matter of Richards Contracting Co Management Pty Ltd

[2021] NSWCA 34

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

In the Matter of Richards Contracting Co Management Pty Ltd [2021] NSWCA 34

Hearing dates:

12 November 2020

Decision date:

19 March 2021

Before:

Bathurst CJ at [1];
Bell P at [122];
Meagher JA at [123];
Payne JA at [124];
Emmett AJA at [125]

Decision:

(1)   Order pursuant to s 539(4)(d) of the Code that the time for the plaintiff to make an application under s 459(6) of the Code for the reinstatement of Richards Contracting Co Management Pty Ltd be extended up to and including 5 May 2020.

(2)   Order pursuant to s 459(6) of the Code that the registration of Richards Contracting Co Management Pty Ltd be reinstated.

(3) Order that Richards Contracting Co Management Pty Ltd be wound-up pursuant to the provisions of s 461(1)(k) of the Corporations Act and that Mr Christopher Darin be appointed liquidator.

(4)   Orders (2) and (3) are to be taken to have been made nunc pro tunc and be effective from 18 December 2014.

Catchwords:

CIVIL PROCEDURE – parties – proper party – whether the Authority of the Insurers’ Guarantee Fund a proper party to the proceedings

STATUTORY INTERPRETATION – amendment and repeal – references to repealed statute – deregistered company – where legislation providing power to reinstate company repealed – Companies (New South Wales) Code (NSW), s 459(6) – whether court has power to reinstate company

STATUTORY INTERPRETATION – amendment and repeal – references to repealed statute – Corporations (New South Wales) Act 1990 (NSW), s 85 – whether section of its own force can render applicable repealed co-operative scheme law – where section is not a deeming provision

STATUTORY INTERPRETATION – amendment and repeal – references to repealed statute – accrued statutory rights – Interpretation Act 1987 (NSW), s 30(1)(c) – nature of the rights – Companies (New South Wales) Code 1981 (NSW), s 459(6) – right to seek reinstatement – more than mere locus standi – where person aggrieved – where interests affected by the exercise of the right

STATUTORY INTERPRETATION – literal meaning – natural and ordinary meaning – Workers Compensation Act 1987 (NSW), s 236 – entitlement to payment

WORKERS COMPENSATION – insurance – Insurers’ Guarantee Fund – liability – Workers Compensation Act 1987 (NSW), s 236(2) – whether plaintiff entitled to proceed directly against the Authority – Workers’ Compensation Act 1926 (NSW), s 18(3) – precondition to liability

Legislation Cited:

Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW)

Companies Act 1961 (NSW)

Companies (Application of Laws) Act 1981 (Cth)

Companies (Application of Laws) Act 1981 (NSW)

Companies (New South Wales) Code 1981 (NSW)

Companies (South Australia) Code 1981 (SA)

Company Law Review Act 1998 (Cth)

Corporations Act 1989 (Cth)

Corporations Act 2001 (Cth)

Corporations (New South Wales) Act 1990 (NSW)

Interpretation Act 1987 (NSW)

Local Government Act 1936 (Qld)

Managed Investments Act 1998 (Cth)

Patents Act 1949 (UK)

Patents Act 1977 (UK)

Statute Law (Miscellaneous Provisions) Act 2008 (NSW)

Workers Compensation Act 1987 (NSW)

Workers’ Compensation Act 1926 (NSW)

Workers’ Compensation (Amendment) Act 1985 (NSW)

Workers’ Compensation and Rehabilitation Act 1981 (WA)

Workers’ Compensation and Rehabilitation Amendment Act 1999 (WA)

Workers’ Compensation (Dust Diseases) Act 1942 (NSW)

Workers’ Compensation Regulations 1926 (NSW)

Cases Cited:

Abbott v Minister for Lands [1895] AC 425

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41

AMP General Insurance Ltd v Victoria WorkCover Authority (2006) 15 VR 175; [2006] VSCA 236

Australand Corporation(Qld) Pty Ltd v Johnson [2008] 1 Qd R 203; [2007] QCA 302

Australian Competition and Consumer Commission v Australian Securities and Investments Commission [2000] NSWSC 316; (2000) 174 ALR 688

Baird v WJT Howes Investments Pty Ltd [2008] NSWSC 1232; (2008) 68 ACSR 485

Barminco Investments Pty Ltd v O’Brien [2006] WASCA 88

Boyce v Hughes (1970) 72 SR (NSW) 54; [1970] 1 NSWR 75

Bradley v Eagle Star Insurance Co Ltd [1989] AC 957

Brakespeare v The Northern Assurance Co Ltd (1959) 101 CLR 661; [1959] HCA 31

CGU Insurance Ltd v Blakeley (2016) 259 CLR 339; [2016] HCA 2

Chief Adjudication Officer v Maguire [1999] 1 WLR 1778

City West Water Ltd v Mr D Investments Pty Ltd [2002] VSC 553; (2002) 43 ACSR 622

Colley v Futurebrand FHA Pty Ltd (2005) 63 NSWLR 291; [2005] NSWCA 223

Commissioner of State Revenue v Bulzomi (2009) 24 VR 643; [2009] VSCA 99

Devine v Devine (1928) 28 SR (NSW) 503

Esber v Commonwealth (1992) 174 CLR 430; [1992] HCA 20

Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55

ICI Australia Operations Pty Ltd (now known as Orica Australia Pty Ltd) v WorkCover Authority of New South Wales (2004) 60 NSWLR 18; [2004] NSWCA 55

ICI Australia Operations Pty Ltd v Workcover Authority of New South Wales [2002] NSWDDT 9

In the matter of Austral Bronze Pty Ltd; In the matter of John Darlington Pty Ltd; In the matter of John Darlington Pty Ltd (No 2) [2020] NSWSC 1633

In the matter of Convex Ltd’s Patent [1980] RPC 423

In the matter of Jury & Spiers Pty Ltd [2016] NSWSC 900; (2016) 114 ACSR 336

In the matter of Likehart Pty Ltd [2017] NSWSC 884

In the matter of Rocha Pty Ltd [2016] NSWSC 899; (2016) 114 ACSR 89

In the matter of Rocha Pty Ltd (No 2) [2016] NSWSC 1172; (2016) 312 FLR 309

Kraljevich v Lake View and Star Limited (1945) 70 CLR 647; [1945] HCA 29

Lunn v Cardiff Coal Co (No 3) [2003] NSWSC 789; (2003) 47 ACSR 79

Mathieson v Burton (1971) 124 CLR 1; [1971] HCA 4

Maxwell v Murphy (1957) 96 CLR 261; [1957] HCA 7

McNellee v Co-operative Insurance Co of Australia Ltd (1964) 64 SR (NSW) 295

National Australia Bank Ltd v Australian Securities Commission (1991) 9 ACLC 1093

Orica Ltd v CGU Insurance Ltd (2003) 59 NSWLR 14; [2003] NSWCA 331

Parker v Australian Asbestos Pty Ltd [2002] NSWSC 520; (2000) 42 ACSR 138

Resort Management Services Ltd v Noosa Shire Council [1997] 2 Qd R 291

Shaw v Goodsmith Industries Pty Ltd [2002] NSWSC 406; (2002) 41 ACSR 556

Spain v Metropolitan Meat Industry Board [1971] 1 NSWLR 91

Sutton v Bradshaw [1988] VR 920

SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34

Tan v Australian Securities and Investments Commission [2011] NSWSC 58

Teal Assurance Co Ltd v WR Berkley Insurance (Europe) Ltd [2013] UKSC 57

Thiess v Collector of Customer (2014) 250 CLR 664; [2014] HCA 12

University of New South Wales v AAI Ltd (2014) 87 NSWLR 214; [2014] NSWCA 153

WorkCover Authority of New South Wales v Picton Truck and Trailer Repairs Pty Ltd [2004] NSWCA 371; (2004) 51 ACSR 102

Texts Cited:

Explanatory Note, Workers’ Compensation (Amendment) Bill 1985 (NSW)

New South Wales, Parliamentary Debates, Legislative Assembly, 23 April 1985, 6769 (Patrick Hills, Minister for Industrial Relations)

Category:

Principal judgment

Parties:

Petar Zeko (Plaintiff)
Richards Contracting Co Management Pty Ltd (First Defendant)
Australian Securities and Investments Commission (Second Defendant)
State Insurance Regulatory Authority (Third Defendant)

Representation:

Counsel:
M Condon SC with C Rogers (Plaintiff)
No Appearance (First Defendant)
No Appearance (Second Defendant)
D Toomey SC (Third Defendant)
J Redwood SC with R Jameson (Amicus Curiae)

Solicitors:
Taylor & Scott Lawyers (Plaintiff)
William Roberts Lawyers (Third Defendant)

File Number(s):

2020/133642

Publication restriction:

Nil

HEADNOTE

[This headnote is not to be read as part of the judgment]

An application was made to the Court of Appeal to enable the plaintiff, Mr Petar Zeko, to prosecute proceedings in the Dust Diseases Tribunal of New South Wales against the first defendant, Richards Contracting Co Management Pty Ltd (the Company), for damages arising from negligence and breach of statutory duty by the Company and various other employers. The Australian Securities and Investments Commission (ASIC) was joined as a second defendant to the application. The plaintiff sought an order pursuant to s 459(6) of the Companies (New South Wales) Code 1981 (NSW) (the Code) that the Company be reinstated. As a preliminary step towards the making of that order, the plaintiff sought an order under s 539(4)(d) of the Code extending the time for the making of an application. Because of the judicial uncertainty surrounding the question of the power to make these orders, the proceedings were referred to this Court and a bench of five was constituted.

The plaintiff alleged that, whilst in the employ of the Company and various other employers, he was exposed to and inhaled silica dust which, among other things, caused injury to both his lungs and silicosis. In 2005, the Medical Authority appointed under the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) certified that the plaintiff had contracted silicosis, a “dust disease” within the meaning of that Act. The plaintiff alleged that these injuries, and the loss and damage he suffered as a result, were caused by the negligence and breach of statutory duty by the Company and the various other employers by whom he was employed between March 1975 and February 1993. The plaintiff alleged that he was employed by the Company between March 1974 and April 1976, and between August 1979 and February 1981.

The Company was deregistered pursuant to the provisions of s 459 of the Code on 29 May 1984. In 1975 and 1976, an insurance policy existed between the Company and the licensed workers’ compensation insurer Associated General Contractors Insurance and Co Ltd (AGCI), which indemnified the Company against liability for damages in respect of any claims arising independently of the Workers’ Compensation Act 1926 (NSW). AGCI became insolvent sometime in the 1980s and has since been dissolved. Section 236 of the Workers Compensation Act 1987 (NSW) makes provision for an Insurers’ Guarantee Fund (IGF), administered by the State Insurance Regulatory Authority (SIRA), to deal with claims for indemnity against insolvent insurers, including those insurers which have been dissolved.

With no prospect of obtaining the proceeds of any verdict from the Company or AGCI, the object of the plaintiff seeking reinstatement of the Company was to obtain judgment against it, and then seek to recover the proceeds from the IGF. In that context, the plaintiff joined SIRA in the Dust Diseases Tribunal proceedings. SIRA denied that the plaintiff was entitled to sue it directly. SIRA was joined as a party to the application before this Court and written submissions directed to this issue were filed.

The Code came into force by virtue of the provisions of the Companies (Application of Laws) Act 1981 (Cth), as applicable as a law of New South Wales by the operation of the Companies (Application of Laws) Act 1981 (NSW). On 1 January 1991, the Corporations (New South Wales) Act 1990 (NSW) came into force. Section 85 of that Act provides that national scheme laws prevail over co-operative scheme laws, including the Companies (Application of Laws) Act (NSW) and the Code, but that co-operative scheme laws continue to operate of their own force in relation to certain matters, including matters arising before the commencement of the section. While section 85 remains in force, the Companies (Application of Laws) Act (NSW), which established the Code in New South Wales, was repealed by the Statute Law (Miscellaneous Provisions) Act 2008 (NSW) as redundant on 1 July 2008.

The plaintiff placed particular reliance on s 30(1)(c) of the Interpretation Act 1987 (NSW), contending that he had an accrued right to have the Company reinstated at the time of the repeal of the co-operative scheme laws, and that that right was preserved by s 30(1)(c).

The Court made orders in favour of the plaintiff, including an order pursuant to s 539(4)(d) of the Code extending the time for the plaintiff to make an application under s 459(6) of the Code, and an order that the Company be reinstated pursuant to s 459(6) of the Code.

Is the plaintiff entitled to proceed directly against SIRA?

1. Whilst the provisions of Div 7 of Pt 7 of the Workers Compensation Act1987 (NSW) do not permit a claim to be made against SIRA in the absence of a finding of liability against the employer, SIRA remains a proper party in the Dust Diseases Tribunal proceedings: [17] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

2. Section 236 of the Workers Compensation Act 1987 (NSW), like any piece of legislation, is to be construed having regard to its text, context and purpose: [42] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55; Thiess v Collector of Customer (2014) 250 CLR 664; [2014] HCA 12; SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34, referred to.

1. The purpose of s 236 of the Workers Compensation Act 1987 (NSW), which includes the protection of workers against the loss of their entitlement under a statutory policy due to the dissolution of the insurer, is best achieved by giving effect to the words of the section, as distinct from construing it as limited to a discretionary payment: [43]-[45] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

ICI Australia Operations Pty Ltd (now known as Orica Australia Pty Ltd) v WorkCover Authority of New South Wales (2004) 60 NSWLR 18; [2004] NSWCA 55, considered.

1. To establish an entitlement for the purpose of s 236(2) of the Workers Compensation Act 1987 (NSW), it is first necessary to establish the liability of the insured employer. This is because that liability is a precondition to the liability of the insurer, and hence the entitlement to make a claim under s 236(2): [49] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

2. Nevertheless, SIRA is a proper party to the proceedings. If the plaintiff makes good his claim against the Company and the insurer, he has a right under s 236 of the Workers Compensation Act 1987 (NSW). It is appropriate that these rights be established in proceedings where SIRA is a party and thus, to the extent possible, the plaintiff’s rights against the IGF be established in those proceedings: [52] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

CGU Insurance Ltd v Blakely (2016) 259 CLR 339; [2016] HCA 2, referred to.

Does the Court have power to reinstate the Company?

1. At the time of the repeal of the Companies (Application of Laws) Act (NSW) on 1 July 2008, and by virtue of s 30(1)(c) of the Interpretation Act, the plaintiff had an accrued right as a person aggrieved to seek reinstatement of the Company in aid of his common law claim: [109] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA); [134] (Emmett AJA).

2. Because the plaintiff had an accrued right to seek reinstatement of the Company at the time of the repeal of the Code, the Court retains the power to order the Company’s reinstatement: [17] (Bathurst CJ); [109] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA); [134] (Emmett AJA).

3. Section 85 of the Corporations (New South Wales) Act cannot, of its own force, render the repealed co-operative scheme laws applicable: [78], [79] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

Kraljevich v Lake View and Star Limited (1945) 70 CLR 647; [1945] HCA 29, considered. Maxwell v Murphy (1957) 96 CLR 261; [1957] HCA 7, referred to.

1. The plaintiff’s right to reinstatement arose immediately on deregistration or at the latest, when the plaintiff’s claim against the Company had crystallised, which occurred prior to the repeal of the legislation. While there is no correlative liability, the interests of the Company are affected by the exercise of the right as it becomes subject to pre-existing liabilities: [102] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

Australand Corporation(Qld) Pty Ltd v Johnson [2008] 1 Qd R 203; [2007] QCA 302, distinguished.

1. The right asserted by the plaintiff is more than a right to approach the Court for the exercise of a discretion in his favour: [104] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA); [134] (Emmett AJA).

Abbott v Minister for Lands [1895] AC 425; Australand Corporation(Qld) Pty Ltd v Johnson [2008] 1 Qd R 203; [2007] QCA 302, distinguished.

1. No substantial injustice is likely to be caused by the making of an order, and it seems in the public interest that an order which gives effect to a worker’s statutory rights is made: [116], [117] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

2. The possibility that the Court retains some residual discretion to refuse the order, notwithstanding that the plaintiff is a person aggrieved and it is just to make the order, does not affect the position: [107] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

3. Section 459(6) of the Code is not purely procedural. The effect of the order is to reinstate the Company, which then assumes its pre-existing rights and liabilities: [108] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

4. The plaintiff has more than mere locus standi as a person interested in the application: [111] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA).

In the matter of Rocha Pty Ltd (No 2) [2016] NSWSC 1172; (2016) 312 FLR 309, distinguished.

Does the Court have power to extend the period of 15 years prescribed under s 459(6) of the Code to enable the application to be brought?

1. Once it is established that the plaintiff had the accrued right to seek reinstatement, the means of enforcing that right, including the making of an application to extend the time, is also saved: [114] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA); [135] (Emmett AJA).

2. The procedure to extend the time under s 539(4)(d) of the Code is sufficiently directly connected with the accrued right to be saved by necessary implication, if that result is not in fact achieved by the closing words of s 30(1) of the Interpretation Act: [114] (Bathurst CJ); [122] (Bell P); [123] (Meagher JA); [124] (Payne JA); [135] (Emmett AJA).

Sutton v Bradshaw [1988] VR 920, followed. Commissioner of State Revenue v Bulzomi (2009) 24 VR 643; [2009] VSCA 99, referred to.

Judgment

1. BATHURST CJ: By an amended originating process the plaintiff, Petar Zeko (the plaintiff), sought an order pursuant to s 459(6) of the Companies (New South Wales) Code 1981 (NSW) (the Code) that Richards Contracting Co (Management) Pty Ltd (the Company) be reinstated. In addition, or perhaps more accurately as a preliminary step towards the making of that order, an order was sought under s 539(4)(d) of the Code extending the time for the making of the application. Ancillary orders were also sought for the winding-up of the Company and the appointment of a Mr Christopher Darin as liquidator.

2. Because of the judicial uncertainty which currently surrounds the question of the power to make the orders sought by the plaintiff, the proceedings were referred to the Court of Appeal and a bench of five was constituted.

Background

3. In summary, the application was made to enable the plaintiff to prosecute proceedings in the Dust Diseases Tribunal of New South Wales (the Dust Diseases Tribunal) against the Company alleging that, whilst in the employ of the Company and in the employ of various other employers, he was exposed to and inhaled silica dust which, among other things, caused injury to both his lungs and silicosis. The plaintiff alleges that these injuries, and the loss and damage he has suffered as a result, were caused by the negligence and breach of statutory duty by the Company and the various other employers by whom he was employed between March 1975 and February 1993. The plaintiff alleges that he was employed by the Company between March 1975 and April 1976, and between August 1979 and February 1981.

3. The Company was deregistered pursuant to the provisions of s 459 of the Code on 29 May 1984. In an affidavit filed on 4 May 2020, the solicitor for the plaintiff deposed that in 1975 and 1976 an insurance contract existed between the Company and a licensed workers’ compensation insurer, namely, Associated General Contractors Insurance and Co Ltd (AGCI), which indemnified the Company against liability for damages in respect of any claim for damages arising independently of the Workers’ Compensation Act 1926 (NSW) (the 1926 Act).

4. The policy was not in evidence, but it was not in issue that any such policy would have been issued in accordance with the terms of s 18(3) of the 1926 Act and the Workers’ Compensation Regulations 1926 (NSW), and would have contained the following provisions:

“WORKERS’ COMPENSATION ACT 1926, AS AMENDED

EMPLOYER’S INDEMNITY POLICY

…

NOW THIS POLICY WITNESSETH that in consideration of the payment by the Employer to the Insurer of the abovementioned Premium (which Premium is subject to adjustment as hereinafter provided) IF, between the ________ day of ______, 19____ and four o’clock in the afternoon of the ________ day of ________, 19 ________ and thereafter to four o’clock in the afternoon of the last day of any subsequent period in respect of which the Premium shall have been paid to and accepted by the Insurer, the Employer shall be liable to pay compensation under the Act to or in respect of any person who is or is deemed by the Act to be a worker of such Employer or to pay any other amount not exceeding one hundred thousand dollars in respect of any person who is or is deemed by the Act to be a worker of such Employer or to pay any other amount not exceeding one hundred thousand dollars in respect of his liability independently of the Act for any injury to any such person.

THEN, and in every such case the Insurer will indemnify the Employer against all such sums for which the Employer shall be so liable; the Insurer will also pay all costs and expenses incurred with the written consent of the Insurer in connection with the defence of any legal proceedings in which such liability is alleged.

PROVIDED that this Policy shall not extend to any business or occupation other than that described herein, unless and until particulars thereof shall have been supplied to and accepted by the Insurer and the acceptance of such extension endorsed hereon by the Insurer. AND it is hereby further agreed that the above indemnity is made subject to the due and proper observance and fulfilment by the Employer of the conditions hereunder, and the Insurer shall be (a) directly liable to any worker and in the event of his death, to his dependants, to pay the compensation or other amount for which the Employer is liable and in respect of which the Employer is indemnified under this Policy; and (b) bound by and subject to any judgment, order, decision, or award given or made against the Employer under the provisions of the Act or in respect of his liability independently of the Act and in respect of which the Employer is indemnified under this Policy. Provided lastly that this Policy shall be subject to the Act and the Rules and Regulations made thereunder, all of which shall be deemed to be incorporated in and form part of this Policy.”

6. It was also common ground that AGCI became insolvent and has been dissolved. The plaintiff’s solicitor deposes that AGCI was insolvent since the 1980’s.

7. Division 7 of Pt 7 of the Workers Compensation Act 1987 (NSW) (the 1987 Act) makes provision for an Insurers’ Guarantee Fund (IGF) to deal with claims for indemnity against insolvent insurers, including those insurers which have been dissolved. It was also common ground that the relevant provisions are those which are currently contained in the 1987 Act. The IGF is currently administered by the State Insurance Regulatory Authority (SIRA).

8. The plaintiff accepted that he has no prospect of obtaining the proceeds of any verdict from the Company or AGCI. His object in reinstating the Company is to obtain a judgment against it, and then seek to recover the proceeds from the IGF. In that context, the plaintiff has joined SIRA in the proceedings in the Dust Diseases Tribunal.

9. SIRA has denied that the plaintiff is entitled to sue it directly. Its position was summarised in a letter from its solicitors to the plaintiff’s solicitors dated 24 October 2019. That letter, so far as relevant, contained the following comments:

“5   William Roberts Lawyers was appointed by SIRA, as manager of the IGF, as the service provider for the provision of workers compensation claims management services for the IGF, which includes claims with respect to workers compensation policies previously issued by AGCI.

6   Based on the information presently available, the IGF, in the interests of the AGCI, does hold a policy for Richards Contracting for the year 1976.

7   At this stage, the IGF, in the interests of AGCI, specifically reserves its rights in relation to indemnity pending the outcome of enquiries and receipt of further information.

…

10   Further, if a claim is to be pursued with respect to the Plaintiff’s alleged employment with Richards Contracting, SIRA is incorrectly named as a defendant in the proceedings and SIRA ought not to be named as the Second Defendant in the Statement of Claim. The allegations pleaded in paragraph 13 of the Statement of Claim are not wholly correct. SIRA is the manager of the IGF. SIRA is not an insurer per se. SIRA is not ‘liable to discharge the obligations of Richards Contracting Co Pty Ltd’.

…

13 In circumstances where the Plaintiff pursues his claim with respect to his alleged employment with Richards Contracting, we request that the Plaintiff proceed to make an application to the Supreme Court of NSW for ASIC to re-instate the registration of the Richards Contracting company pursuant to section 601AH of the Corporations Act 2001 (Cth) and then the Plaintiff proceed against the Richards Contracting company as the named Second Defendant in lieu of SIRA.

14 Where a successful application is made to the Supreme Court of New South Wales for ASIC to reinstate the registration of Richards Contracting (deregistered) pursuant to section 601AH of the Corporations Act 2001 (Cth) and if the Plaintiff succeeds in a claim for damages for silicosis as against Richards Contracting in the Dust Diseases Tribunal of New South Wales, based on the alleged facts and circumstances known to date, the IGF, in the interests of AGCI, will pay the amount of any judgment or award with respect to such a claim made against Richards Contracting at least in relation to the Plaintiff’s alleged employment between March 1975 and April 1976.”

10. In bringing the present proceedings the plaintiff effectively accepted SIRA’s position, the approach of SIRA forming the basis for the application. However, during the course of the proceedings, the question of whether SIRA could be sued directly by the plaintiff was raised. As a result, SIRA was joined as a party to the application and written submissions directed to this issue were filed.

11. There are three other matters which should be raised by way of background. The first is that the plaintiff has sworn an affidavit in effect verifying the allegations made in the Statement of Claim in the Dust Diseases Tribunal. The evidence was not challenged and, if ultimately made out in the Dust Diseases Tribunal proceedings, would show that the plaintiff has at least significant prospects of success in those proceedings.

12. The second matter is that on 17 October 2005 the Dust Diseases Tribunal Medical Authority certified that the plaintiff was 20 per cent disabled due to silicosis. Thus, at least by that date the injury and loss and damage as a consequence of the alleged negligence and breach of statutory duty had emerged.

13. The third matter is that in written submissions filed on behalf of SIRA it was accepted that AGCI insured the Company in respect of the first alleged period of employment, but it was submitted that it was not in a position to make such an admission in respect of the second period.

The Australian Securities and Investments Commission (ASIC)

14. ASIC was correctly joined as a second defendant to the application. ASIC has not appeared in the proceedings but on 7 May 2020 it indicated that it did not oppose reinstatement if the following conditions were satisfied:

“1.   The orders sought for reinstatement are sought under the appropriate legislation requiring ASIC to reinstate the registration of the company;

2.   The company (if ordered to be reinstated) be wound up and placed in liquidation (subject to any order made by the Court in this regard) and the Court appoints a Liquidator;

3.   The Court order is lodged with ASIC (see notes below) so that the company may be reinstated;

4.   The Liquidator notifies ASIC upon conclusion of the winding up.”

15. I am satisfied that the evidence indicates these conditions can be complied with.

The amicus curiae (The Amicus)

16. Because of the absence of a contradictor, the Court appointed an amicus curiae to assist it in what is undoubtedly a complex matter. On behalf of all members of the bench, can I convey the Court’s appreciation for the considerable assistance provided both in writing and orally.

Summary of conclusions

17. Whilst I have concluded that the provisions of Div 7 of Pt 7 of the 1987 Act do not permit a claim to be made against SIRA in the absence of a finding of liability against the employer, SIRA remains a proper party in the Dust Diseases Tribunal proceedings.

18. I have also concluded that as the plaintiff had an accrued right to seek reinstatement of the Company at the time of the repeal of the Code by virtue of s 30(1)(c) of the Interpretation Act 1987 (NSW), the Court retains the power to order the Company’s reinstatement.

Is the plaintiff entitled to proceed directly against SIRA?

19. It is convenient to deal with this issue at the outset because if the plaintiff is entitled to proceed directly against SIRA in proceedings to which the Company is not a party, there would be no need for the Company to be reinstated in order for the claim to be maintained.

20. SIRA contends that any liability it may have under Div 7 of Pt 7 of the 1987 Act only arises once the plaintiff has established a claim against the Company to which the policy issued by AGCI would have responded.

21. By contrast, the plaintiff supported by the Amicus contends that in the present case the provisions of Div 7 of Pt 7 of the 1987 Act, in particular s 236(2), enables the plaintiff to have direct recourse against SIRA as manager of the IGF.

22. Prior to dealing with Div 7 of Pt 7 of the 1987 Act, it is convenient first to deal with the legislation and authorities relied on by SIRA in support of its contention.

23. As SIRA points out, the policy in question was issued pursuant to the provisions of s 18 of the 1926 Act. Section 18(1) of the 1926 Act obliged an employer to obtain from an insurer licensed under the Act a policy of insurance or indemnity for the full amount of his liability under the Act to all workers employed by him. Section 18(3)(a), so far as relevant, was in the following terms:

“18(3)(a)   Every such policy shall provide that the insurer shall as well as the employer be directly liable to any worker and in the event of his death, to his dependants, to pay the compensation or other amount for which the Employer is liable and in respect of which the Employer is indemnified under this Policy.”

24. Similar provisions are contained in Div 1 of Pt 7 of the 1987 Act (see in particular s 155 and s 159 of the 1987 Act).

25. Notwithstanding the provision in the policy that the insurer is directly liable to the worker to pay compensation for which the insured employer is liable and indemnified under the policy, it has been consistently held that such liability would only arise once the liability of the insured employer had been established. Thus, in Devine v Devine (1928) 28 SR (NSW) 503, Ferguson J delivering the judgment of the Court described the operation of a similarly worded policy in the following terms (at 508-509):

“In an ordinary case such a term in a policy between the insurer and the employer would be inoperative so far as the worker was concerned, upon the principle that a contract cannot be enforced by a person who is not a party to it, even if it is made for his benefit and purports to give him the right to sue upon it. But we cannot assume that the Legislature intended to compel the insertion in the policy of a nugatory provision. I think, therefore, that the section must be interpreted as enacting, not only that the policy should contain the provision in question, but that the provision should be effective so as to confer upon the worker a right to enforce the contract. In other words, the effect is the same as if the policy contained a covenant by the insurer, not only with the employer, but with the worker and his dependants, to pay the compensation for which the employer is liable.

The discussion before us has turned chiefly on the interpretation to be put on the words ‘the compensation for which an employer is liable.’ There are two senses in which the expression might be used. The moment the worker meets with an injury under the conditions specified in s. 7, the employer is liable to him for compensation, but the amount of compensation is still a matter for assessment and award under the Act. When the amount has been assessed and awarded, the employer's liability is converted into a liability to pay that amount. The question is which of these two forms of liability is contemplated by the section when it says that the insurer as well as the employer shall be liable. Does it mean that the insurer shall be liable to have the compensation in the first place assessed as against him, or does it mean that when it is assessed and awarded he, as well as the employer, shall be liable to pay it ?

I have come to the conclusion that the second is the sense in which the Legislature used the words in question, and that the original proceedings for the establishment of liability must be between the worker or his dependants on the one side and the employer on the other. Looking at the Act as a whole, I see nothing to suggest any intention that the insurer should be a party. Part VII., for example, which regulates the proceedings for the recovery of compensation, contains various provisions which seem to be inconsistent with any such intention. The fact that the employer has now the duty of compulsory insurance imposed upon him would not of itself make the insurer a party to the proceedings, or give him the right or impose on him the liability to become a party. He might for his own protection contract with the employer, as he habitually did before the Act, for the right to conduct the proceedings in the employer's name; but primarily the policy continues to be now, as it was then, a contract of indemnity between himself and the employer. I think the provision in s. 18 that he is to be directly liable to pay the compensation simply means that when the time for payment comes, he is liable to pay the worker directly, instead of paying him indirectly by recouping the amount that the employer is called upon to pay.”

The references in this passage to ss 7 and 18 are to ss 7 and 18 of the 1926 Act.

26. A similar conclusion was reached by the Full Court in McNellee v Co-operative Insurance Co of Australia Ltd (1964) 64 SR (NSW) 295. In that case Herron CJ made the following remarks (at 299):

“It is with regret that I find myself compelled to uphold this appeal. For, in my opinion, the requisite criteria which s. 18(3) lays down as necessary to found liability in the appellant are not established. The critical words of the subsection are, ‘the insurer shall be liable ... to pay the compensation ... for which the employer is liable, and that the insurer shall be bound by ... any judgment, order, decision, or award given or made against the employer ... in respect of the injury ...". The subsection has been interpreted as imposing a liability directly to the worker upon the insurer and that it necessarily imported an intention to give to the worker direct recourse to the insurer although the liability of the employer must first be established: Brakespeare v. The Northern Assurance Co. Ltd. where the High Court applied decisions of this Court in Devine v. Devine and Queensland Insurance Co. Ltd.; Devine v. Queensland Insurance Co. Ltd.; cf. Coleman v. Mercantile Mutual Insurance Co. Ltd. But all the authorities in which the subsection has been interpreted insist that there must be established a primary liability in the employer and that the recourse by the worker to the insurer is a secondary not a primary claim. In the two cases of Devine it was held that if, and only if, the worker had obtained an award against the employer he was entitled to recover the amount directly from the insurer. In Slender v. Slender Perdriau J., whose interpretation of the Act has been widely adopted and whose decision on this point has stood for thirty years, held that a worker's claim is primarily against his employer and that proceedings cannot be taken against the insurer before the amount of compensation has been determined by the commission against the employer and that the award in such case must be served on the insurer prior to proceedings being instituted under s. 18. The learned commissioner referred to Arfi v Community General Assurance Co. Ltd. which is to the same effect.

…

I regret the decision to which I am compelled to come for the clear policy of the Act is to make it certain that an injured worker shall receive compensation whatever may be the financial position of the employer. The Act would have been more workable if it had provided that the worker should in cases, for example where the employer was no longer in existence or was dead or insolvent or could not be found, be entitled primarily to proceed directly against the insurer. But the duty of the court is to interpret the language of the Act and not to legislate.”

See also Maguire J at pp 304-305, Nagle J at pp 306-307. See also Spain v Metropolitan Meat Industry Board [1971] 1 NSWLR 91 at 104; Brakespeare v The Northern Assurance Co Ltd (1959) 101 CLR 661; [1959] HCA 31 at 665.

27. The cases are consistent with the construction that has been consistently given to the language of liability insurance policies, namely that no money becomes payable by a liability insurer to an insured unless and until the insured’s liability to a third party is ascertained or determined by a judgment, award or settlement: Teal Assurance Co Ltd v WR Berkley Insurance (Europe) Ltd [2013] UKSC 57 at [2]; Bradley v Eagle Star Insurance Co Ltd [1989] AC 957 at 966; Orica Ltd v CGU Insurance Ltd (2003) 59 NSWLR 14; [2003] NSWCA 331 at [15].

28. However, the cases referred to in [25]-[26] above were decided prior to the introduction into the 1926 Act of equivalent provisions to Div 7 of Pt 7 of the 1987 Act. These provisions were introduced into the 1926 Act by the Workers’ Compensation (Amendment) Act 1985 (NSW), Sch 5. For present purposes there is no material difference between the provisions so introduced (ss 30O-30ZC) and the provisions of Div 7 of Pt 7 of the 1987 Act.

Division 7 of Part 7 of the 1987 Act

29. The predecessor to Div 7 of Pt 7 was introduced into the 1926 Act in 1985 as part of a suite of amendments to that Act. The Explanatory Note to the Bill which introduced the amendment described the object of the introduction of the provisions in the following terms:

“(m)   to insert a new Part IIIB into the Act-

(i) enabling the Minister, by order published in the Gazette, to declare an insurer licensed under the Act which is in liquidation to be an insolvent insurer for the purposes of the proposed Part, thereby enabling the workers' compensation liabilities of the insurer to be satisfied in accordance with the proposed Part (Schedule 5–proposed section 30P);

(ii)   establishing the Insurers' Guarantee Fund (‘the Guarantee Fund’) which is to be applied for satisfying the workers' compensation liabilities of insolvent insurers (Schedule 5–proposed section 30Q);

(iii)   requiring insurers licensed under the Act to contribute to the Guarantee Fund the amounts necessary to satisfy the workers' compensation liabilities of insolvent insurers (Schedule 5–proposed section 30R); and

(iv)   appointing the Government Insurance Office the agent and attorney of an employer insured under a workers' compensation policy issued by an insolvent insurer so as to enable that Office, as manager of the Guarantee Fund, to deal with and satisfy claims, judgments and awards arising under the policy (Schedule 5–proposed section 30u);”

30. There was no discussion of the purpose of these amendments in the Second Reading Speech.

31. So far as the particular provisions of Div 7 of Pt 7 are concerned, s 226 of the 1987 Act empowers the Minister to declare an insurer to which a liquidator or provisional liquidator has been appointed, or which has been dissolved, an insolvent insurer for the purpose of the Division. It is not in dispute that a declaration under the section has been made in respect of AGCI.

32. Section 227 provided for the establishment of the IGF, whilst s 228 provides for the manner of its funding by licensed insurers. Sections 229 and 230 oblige the liquidator of an insolvent insurer to notify the Authority (presently SIRA) of any claims and, upon request, to supply all documents relevant to such claim.

33. Section 231 is a complex provision apparently designed to effectively empower the Authority to finalise on behalf of both the worker and the employer any claims either of them may have against an insolvent insurer. It is in the following terms:

“231   Appointment of Authority as agent and attorney of employer and worker (cf former s 30U)

(1)   The Authority is by this section appointed the agent and attorney of an employer and a worker insured under a policy of insurance issued by an insolvent insurer.

(2)   As agent and attorney of such an employer, the Authority may exercise the rights and discharge the obligations of the employer—

(a)   for the purpose of dealing with and finalising any claim against which the employer is indemnified under the policy of insurance,

(b)   for the purpose of satisfying any such claim or any judgment or award against which the employer is indemnified under the policy of insurance, and

(c)   for any other purpose prescribed by the regulations.

(3)   As agent and attorney of such an employer or a worker, the Authority may exercise the rights of the employer or worker in connection with the policy of insurance—

(a)   for the purpose of proving in the winding up of the insolvent insurer and receiving any dividends or other money payable to the employer or worker in the winding up,

(b)   for the purpose of recovering any money which the employer or worker is entitled to recover under section 151Z of this Act or section 64 of the former Act,

(c)   for the purpose of recovering any money which the employer or worker is entitled under the policy of insurance to recover from the person who issued the policy, being a policy referred to in paragraph (b) of the definition of policy of insurance issued by an insolvent insurer in section 225, and

(d)   for any other purpose prescribed by the regulations.

(4)   The Authority may exercise rights and discharge obligations as agent in the name of the employer or worker concerned, or in its own name.

(5)   All rights vested in an insurer or insolvent insurer and all obligations imposed on an insurer or insolvent insurer, being rights or obligations—

(a)   arising from or relating to a policy of insurance issued by an insolvent insurer to an employer, and

(b)   which may or shall be exercised or discharged for the purpose of—

(i)   dealing with and finalising any claim against which the employer is indemnified under the policy, or

(ii)   satisfying any claim, judgment or award, against which the employer is indemnified under the policy,

are vested in or imposed on the employer.

(6)   Subsection (5) shall not be construed so as to vest in or impose on an employer, or to affect in any other way—

(a)   a right of an insurer or insolvent insurer to be indemnified by a reinsurer or an obligation of an insurer or insolvent insurer to indemnify an employer, or

(b)any other prescribed right or obligation.

(7)   If the Authority is, under this section, empowered to exercise any rights, or to discharge any obligations, of an employer or a worker as agent and attorney, the employer or worker is not entitled, without the consent of the Authority, to exercise those rights or discharge those obligations.

(8)   The appointment effected by this section may be revoked only by an Act.”

34. It is to be noted that s 231 does not vest any right or obligation of the insolvent insurer in the Authority. Rather, such rights and obligations are vested in the employer (s 231(5)). However, s 231(1) appoints the Authority agent of the employer under a policy issued by an insolvent insurer, whilst s 231(7) prevents the worker or employer from exercising any right vested in them without the consent of the Authority. What is of some importance is that the section does not provide for the Authority to stand in the shoes of the insolvent insurer or directly assume the rights or obligations of the insurer.

35. Section 232 deals with payment out of the IGF to the employer or liquidator of an insolvent insurer if either of them have met their obligation under a policy. It is in the following terms:

“232   Payments to employer or liquidator (cf former s 30V)

(1)   Where an employer insured under a policy of insurance issued by an insolvent insurer has satisfied (whether before or after the insurer became an insolvent insurer for the purposes of this Division or before or after the commencement of this Division) any claim, judgment or award in respect of which the employer has not been indemnified under that policy, the Authority, as manager of the Guarantee Fund, may pay from the Guarantee Fund to the employer an amount equal to the whole or any part of the amount paid by the employer in satisfaction of the claim, judgment or award.

(2)   Where the liquidator of an insolvent insurer has satisfied (whether before or after the insurer became an insolvent insurer for the purposes of this Division or before or after the commencement of this Division) any claim, judgment or award in respect of which an employer is entitled to be indemnified under a policy of insurance issued by the insolvent insurer, the Authority, as manager of the Guarantee Fund, may pay from the Guarantee Fund to the liquidator an amount equal to the whole or any part of the amount paid by the liquidator in satisfaction of the claim, judgment or award.

(3)   Where—

(a)   a payment is made under subsection (1) to an employer in respect of a claim, judgment or award, the Authority shall be deemed, to the extent of the payment, to have satisfied the claim, judgment or award as agent and attorney of the employer, or

(b)   a payment is made under subsection (2) to the liquidator of an insolvent insurer in respect of a claim by or on behalf of any person or a judgment or award for the benefit of any person, the Authority shall be deemed, to the extent of the payment, to have satisfied the claim, judgment or award as agent and attorney of the employer of the person in respect of whom the payment is made.

(4)   The powers conferred by subsections (1) and (2) are exercisable at the absolute discretion of the Authority and neither those subsections operate nor the exercise of any of those powers operates so as to confer, directly or indirectly, any right on any person to whom a payment is or may be made under those subsections or on any other person.”

36. In ICI Australia Operations Pty Ltd (now known as Orica Australia Pty Ltd) v WorkCover Authority of New South Wales (2004) 60 NSWLR 18; [2004] NSWCA 55 (“ICI”) McColl JA explained the interaction between s 231 and s 232 in the following terms (Mason P and Meagher JA agreeing):

“[310]   Section 231 is clearly intended to empower the Authority to make payments in respect of claims which have not been satisfied by the employer. Section 232 empowers the Authority to make reimbursement in respect of the prior satisfaction of claims either by the employer or the liquidator of the insolvent insurer: see Workers’ Compensation Board of Queensland v WorkCover Authority (NSW), per Rolfe (at 739 and 741).

[311] Thus, if there is a provision in Div 7 which authorises the Authority to reimburse ICI, s 232 is the most probable source of that power. In my view both the language and purpose of s 232 demonstrate that the Authority has discretion whether to make payments to employers pursuant to that section.

[312]   The fact that s 232 confers a discretion rather than a duty is manifested in a number of ways. First, both s 232(1) and s 232(2) use the language of discretion in providing that ‘the Authority as manager of the Guarantee Fund, may pay from the Guarantee Fund … to the employer or liquidator respectively’.

[313] Section 9 of the Interpretation Act 1987 [(NSW)], which applies save insofar as a contrary intention appears in an Act or instrument (s 5), provides ‘the word ‘may’, if used to confer a power, indicates that the power may be exercised or not, at discretion’. Section 9 is the current expression of legislative intervention in New South Wales ‘to restrain the development of the notion that permissive words may have a compulsive effect’: Samad v District Court of New South Wales (2002) 209 CLR 140 at 152 [33], per Gleeson CJ and McHugh J referring to Ward v Williams (1955) 92 CLR 496 at 506.

[314] Section 9 is, therefore, a powerful starting point to consideration of the proper construction of s 232. Nevertheless, before s 9 can operate according to its terms, it is necessary to consider whether a contrary intention appears in the Act.

[315]   The language of permission is repeated in s 232(1) and [s 232](2), which provides that the Authority ‘may pay … an amount equal to the whole or any part of the amount’ already paid. An ability to decide whether to provide reimbursement in whole or part does not sit comfortably with the notion of a duty to reimburse.

[316]   The proposition that the Authority might not provide reimbursement to the full extent of the amount an employer or a liquidator may have paid to satisfy a claim, judgment or award is carried forward into s 232(3) deeming the Authority to have satisfied the claim, judgment or award as Agent and Attorney of the employer ‘to the extent of the payment’.

[317] Finally, subsection 232(4) both makes it plain that s 232(1) and [s 232](2) confer powers, thus invoking the language of s 9 of the Interpretation Act, but also spells out in no uncertain terms that those powers are exercisable ‘at the absolute discretion of the Authority’.

[318]   Thus every internal indicium in s 232 dictates the conclusion that the Authority has a discretion whether to make a payment from the Guarantee Fund in respect of a claim, judgment or award which has been satisfied.

[319]   There is nothing in the statutory context in which s 232 is found which detracts from that conclusion.

[320] Section 231, the only other section in Div 7 which, in my view, deals with the question of payment, also uses the language of discretion, providing in subs (2), (3) and (4) that ‘the Authority may exercise’ the various rights and obligations referred to in those subsections. It does not provide, as does s 232, that the Authority, should it exercise those s 231 rights and/or discharge those obligations, may do so in whole or part. The reason for that is clear. Should the Authority decide pursuant to s 231(2) to satisfy any claim against which the employer is indemnified under a policy of insurance, it makes that payment, albeit from the Guarantee Fund, as agent and attorney of the employer. An employer which is obliged to satisfy a claim, judgment or award, is liable at common law for the full amount of such claims, judgments or awards. It cannot satisfy any such claim, judgment or award by paying less than one hundred percent. The Authority stands in the shoes of the employer under s 231 and, should it decide to make a payment, is subject to the same entire obligation.

[321]   The fact that s 231 does not contain a provision in the terms of s 232(4) expressly confirming that the powers to make payment are exercisable at ‘the absolute discretion of the Authority’, does not detract from the conclusion that it has a discretion under s 231. As I have already pointed out, the use of the word ‘may’, absent contrary indication, is sufficient to indicate that the Authority is vested with a discretion as to whether or not to exercise its powers under s 231.”

37. It is to be noted that notwithstanding McColl JA considered that the Authority had a discretion whether to make a payment under s 231 and s 232, her Honour stated at [320] that if the Authority determined pursuant to s 231(2) to satisfy any claim against which the employer was indemnified, it could not satisfy the claim by paying less than 100 per cent of it.

38. Section 236 is the critical section. It provides as follows:

“236   Payments of workers compensation when insolvent insurer dissolved (cf former s 30Z)

(1)   When an insolvent insurer has been dissolved, the payments of compensation under judgments or awards relating to policies of insurance issued by the insolvent insurer which would, but for the dissolution taking place, be payable by the insolvent insurer shall continue and be paid out of the Guarantee Fund by the Authority.

(2)   When an insolvent insurer has been dissolved, a person who would have had, but for the dissolution of the insolvent insurer, an entitlement to payment of any amount arising from or relating to any policy of insurance issued by the insolvent insurer (being a policy in respect of which the insolvent insurer is the insurer) shall be entitled to payment of that amount out of the Guarantee Fund.

(3)   A person referred to in subsection (2) may make a claim against the Authority, as manager of the Guarantee Fund, in respect of an entitlement to payment of an amount under that subsection.

(4)   The Authority, as manager of the Guarantee Fund, is entitled to deal with and finalise a claim made under subsection (3) in relation to a policy of insurance issued by an insolvent insurer to the same extent as it would have been entitled to do so if the insolvent insurer had not been dissolved.”

39. On one view the section is relatively straightforward. Section 236(1) preserves the right to compensation in respect of policies issued by an insolvent insurer and provides that such payments shall continue to be made out of the IGF. Section 236(2) grants an entitlement to payment out of the IGF of any amount a person would have been entitled to in respect to the policy but for the dissolution of the insurer, whilst s 236(3) entitles such a person to make a claim against the Authority as manager of the IGF in respect of such entitlement.

40. However, in ICI, McColl JA rejected the proposition that s 236(2) imposed an obligation on the Authority to make a payment out of the IGF. Her Honour’s reasoning was to the following effect:

[334] Finally I turn to consider ICI’s submission concerning s 236. It is true that s 236(2) provides where an insolvent insurer has been dissolved, that ‘a person who would have had, but for the dissolution of the insolvent insurer, an entitlement to payment of any amount arising from or relating to any policy of insurance issued by the insolvent insurer … shall be entitled to payment of that amount out of the Guarantee Fund’.

[335] Section 236(3) enables a person referred to in subs (2) to make a claim against the Authority in respect of ‘an entitlement to payment of an amount under that subsection’. Section 236(4) provides that the Authority is ‘entitled to deal with and finalise a claim made under subsection (3) … to the same extent as it would have been entitled to do so if the insolvent insurer had not been dissolved’.

[336] In my view, the use of the language of ‘entitlement’ in s 236(2) does not, contrary to ICI’s submission, impose a duty upon the Authority to make payments out of the Guarantee Fund. The effect of subsection 236(4) is that if a claim is made pursuant to s 236(3), then the Authority is to deal with it, if it is an unsatisfied claim, as it may deal with such a claim pursuant to s 231 or, if the claim has been satisfied, by considering whether to reimburse a payer in accordance with s 232.

[337] The intention of s 236 was to ensure that claims could still be made and the Authority could still make payments out of the Guarantee Fund even though the insurer had been dissolved. Section 236 was necessary because, once dissolved, a company ceased to exist, as too did its debts and liabilities so far as enforcement against the company was concerned. Section 236 confirmed, in case of doubt, that any liabilities of the insolvent insurer continued notwithstanding its dissolution. It served also to confirm that the Authority had power to make payments out of the Guarantee Fund, notwithstanding that dissolution.

[338] This analysis of Div 7 serves to confirm, in my view, the correctness of the Authority’s submission that it has a discretion as to whether or not to make payments out of the Guarantee Fund. The language of the Division dealing with payments is replete with the language of discretion. Nothing in the scheme of Div 7 in my view, indicates that the word ‘may’ in s 232(1) and s 232(2), bears any other than a permissive meaning.”

41. Uninstructed by authority there is force in the argument that s 236 imposes an obligation on the Authority to pay to a person who had a claim against a dissolved insurer under a policy issued pursuant to the Workers Compensation Act the amount to which he or she would be entitled, as distinct from conferring on the Authority a discretion to make such a payment.

42. The section, like any piece of legislation, is to be construed having regard to its text, context and purpose: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41 at 47; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 at [39]; Thiess v Collector of Customs (2014) 250 CLR 664; [2014] HCA 12 at [22]-[23]; SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 at [14].

43. The words of s 236(1) and s 236(2) are relatively plain. In particular, s 236(2) confers an entitlement to payment. Unlike s 231 and s 232, the text does not envisage the Authority having a discretion to make the payment. In context, it is also necessary to read s 236(1) and s 236(2) harmoniously. Each confer an entitlement to payment. It would be unusual to construe s 236(1) as conferring an entitlement by providing that the amount payable by the insurer in respect of workers compensation should continue to be paid out of the IGF, whilst construing s 236(2) as conferring only a right to a discretionary payment.

44. Further, unlike s 231 and s 232, there is nothing in the words of s 236 to indicate the entitlement is in any way discretionary.

45. Finally, the purpose of s 236 self-evidently includes the protection of workers against the loss of their entitlement under a statutory insurance policy due to the dissolution of the insurer. That purpose is best achieved by giving effect to the words of the section, as distinct from construing it as limited to a discretionary payment.

46. The most powerful support for the conclusion reached in ICI is the provision in s 236(4) enabling the Authority to finalise the claim in the same fashion as a claim against an insolvent insurer which had not been dissolved. However, irrespective of whether s 231 confers a discretion in respect to the claims of a worker against an insolvent insurer, in the context of s 236, s 236(4) can be seen as the mechanism for satisfying a claim under s 236(2) without importing a discretion to meet such an entitlement under that subsection.

41. Finally I should indicate that, contrary to the view of Curtis DCJ in ICI at first instance (ICI Australia Operations Pty Ltd v Workcover Authority of New South Wales [2002] NSWDDT 9) that s 236 only applied to statutory compensation, I am of the view that it extends to an entitlement under the statutory policy. The wording of s 236(2) is not limited in the manner suggested by Curtis DCJ, and if his conclusion was correct s 236(2) would be rendered largely otiose having regard to the provisions of s 236(1). This approach is consistent with what was said by Basten JA in University of New South Wales v AAI Ltd (2014) 87 NSWLR 214; [2014] NSWCA 153 at [20].

42. The argument in these proceedings did not deal with ICI and in those circumstances, it would not be appropriate to reconsider the decision. However, the construction placed on s 236(2) and s 236(3) in ICI, suggesting that payments are discretionary, is of relevance in considering whether SIRA can be sued directly.

43. In the present case, the policy, the relevant portions of which I have set out at [5] above, provides that the insurer is directly liable to the worker for compensation or any amount for which the employer was liable and in respect to which the employer was indemnified under the policy. It also provides that the insurer is bound by any judgment against the employer in respect of his liability. It seems to me that to establish an entitlement for the purpose of s 236(2), it is first necessary to establish the liability of the insured employer. This is because that liability is a precondition to the liability of the insurer, and hence the entitlement to make a claim under s 236(2).

44. I do not think the provisions of s 236(3) affect the position. This is because a precondition to the making of a claim under s 236(3) is an entitlement under s 236(2). Such an entitlement does not arise until the liability of the insurer has been established. This approach is consistent with the authorities to which I have referred at [25]-[27] above.

45. I would have come to that conclusion irrespective of whether s 236(2) imposed a liability on the Authority to meet the liability of the dissolved insurer, or whether, as seems to have been decided in ICI, the Authority has a discretion to make such a payment. However, if the Authority has a discretionary power to make the payment as distinct from an obligation to do so, that lends further support to the proposition that an entitlement against the insurer must be established before a claim to such a discretionary entitlement can be made. It follows that it is necessary to establish liability against the employer as a precondition to making a claim under s 236.

46. However, that does not mean that SIRA is not a proper party to the proceedings. If the plaintiff makes good his claim against the Company and the insurer, he has a right under s 236. It is appropriate that this right be established in proceedings where SIRA is a party and thus, to the extent possible, the plaintiff’s right against the IGF be established in those proceedings: CGU Insurance Ltd v Blakeley (2016) 259 CLR 339; [2016] HCA 2 at [65]-[67].

47. It was also suggested by the Amicus that SIRA may be joined pursuant to s 4 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW). That provision is in the following terms:

“4   Claimant may recover from insurer in certain circumstances

(1)   If an insured person has an insured liability to a person (the claimant), the claimant may, subject to this Act, recover the amount of the insured liability from the insurer in proceedings before a court.

(2)   The amount of the insured liability is the amount of indemnity (if any) payable pursuant to the terms of the contract of insurance in respect of the insured person’s liability to the claimant.

(3)   In proceedings brought by a claimant against an insurer under this section, the insurer stands in the place of the insured person as if the proceedings were proceedings to recover damages, compensation or costs from the insured person. Accordingly (but subject to this Act), the parties have the same rights and liabilities, and the court has the same powers, as if the proceedings were proceedings brought against the insured person.

(4)   This section does not entitle a claimant to recover any amount from a re-insurer under a contract or arrangement for re-insurance.

54. Whilst I agree with the Amicus that it could apply to a worker’s compensation policy, the difficulty is that for the reason which I have given SIRA cannot properly be described as an insurer. SIRA’s liability does not arise pursuant to the contract of insurance, but rather from the terms of s 236.

55. In these circumstances, it is necessary to consider whether the Court has power to reinstate the Company.

Does the Court have power to reinstate the Company

a   Legislative history

56. The Company was deregistered under the provisions of s 459 of the Code, which gave the Commission the power to deregister defunct companies. It is unnecessary to set out the means by which deregistration occurs, but it should be noted that s 459(2) of the Code provided that the effect of deregistration is that the company was dissolved.

57. Section 459(6) empowered the Court to order reinstatement. It is in the following terms:

“459(6)      [Court may order reinstatement] If a person is aggrieved by the cancellation of the registration of a company, the Court, on an application made by the person at any time within 15 years after the cancellation, may, if satisfied that the company was, at the time of the cancellation, carrying on business or in operation or otherwise satisfied that it is just that the registration of the company be reinstated, order the reinstatement of the registration of the company and, upon an office copy of the order being lodged with the Commission, the company shall be deemed to have continued in existence as if its registration had not been cancelled, and the Court may by the order give such directions and make such provisions (including directions and provisions relating to the re-transfer of property vested in the Commission under section 461) as seem just for placing the company and all other persons in the same position as nearly as may be as if the registration of the company had not been cancelled.”

58. It is to be noted that the effect of reinstatement is to deem the Company to continue in existence as if the registration had not been cancelled.

59. The Code came into force by virtue of the provisions of the Companies (Application of Laws) Act 1981 (Cth) as applicable as a law of New South Wales by the operation of the Companies (Application of Laws) Act 1981 (NSW) (Companies (Application of Laws) Act).

60. On 1 January 1991, the Corporations (New South Wales) Act 1990 (NSW) came into force. Section 7 of that Act provides that the Corporations Law set out in s 82 of the Corporations Act 1989 (Cth) applies as a law of New South Wales and, so applying, be referred to as the Corporations Law of New South Wales (the Corporations Law). Section 85 of that Act contains the following provision:

“85   National scheme laws prevail over co-operative scheme laws

(1)   This section provides for the national scheme laws of this jurisdiction to supersede the co-operative scheme laws, which are to continue to operate of their own force only in relation to:

(a)   matters arising before the commencement of this section, and

(b)   matters arising, directly or indirectly, out of such matters,

in so far as the national scheme laws do not deal with those matters.

(2)   Where a co-operative scheme law is inconsistent with a national scheme law of this jurisdiction, the national scheme law prevails and, to the extent of the inconsistency, the co-operative scheme law does not operate.

(3) For the purposes of subsection (2), a co-operative scheme law is inconsistent with a national scheme law if it would be inconsistent within the meaning of section 109 of the Constitution of the Commonwealth of Australia if the national scheme law were an Act of the Commonwealth.”

61. Co-operative scheme laws are defined in s 84 to include the Companies (Application of Laws) Act and the Code.

62. Section 574(3) of the Corporations Law as originally enacted contained the following provision:

“(3)   If a person is aggrieved by the cancellation of the registration of a company, the Court, on an application made by the person at any time within 15 years after the cancellation, may, if satisfied that the company was, at the time of the cancellation, carrying on business or in operation or otherwise satisfied that it is just the registration of the company be reinstated, order the reinstatement of the registration of the company.

63. It can be seen that that section was limited to the reinstatement of a company. As McLelland J explained in National Australia Bank Ltd v Australian Securities Commission (1991) 9 ACLC 1093, a company dissolved before the commencement of the operation of the Corporations Law was not a company falling within the definition of “company” in the Corporations Law because it was not incorporated under that law. Nor could the company be taken to be incorporated by the operation of s 150 of the Corporations Law, since it was not immediately before the commencement of Div 2 of Pt 2.2 of the Corporations Law, incorporated, or taken to be incorporated, under a previous law within the meaning of s 126 of the Corporations Law: see also City West Water Ltd v Mr D Investments Pty Ltd [2002] VSC 553; (2002) 43 ACSR 622 (“City West Water”) at [4]-[5]. It was not disputed at the hearing that these cases were correctly decided.

64. Section 574 of the Corporations Law was repealed and replaced by s 601AH by the Company Law Review Act 1998 (Cth). That section, so far as relevant, was in the following terms:

“601AH   Reinstatement

Reinstatement by ASC

(1)   The ASC may reinstate the registration of a company if the ASC is satisfied that the company should not have been deregistered.

Reinstatement by Court

(2)   The Court may make an order that the ASC reinstate the registration of a company if:

(a)   an application for reinstatement is made to the Court by:

(i)   a person aggrieved by the deregistration; or

(ii)   a former liquidator of the company; and

(b)   the Court is satisfied that it is just that the company’s registration be reinstated.”

65. A relevantly identical provision now appears in the Corporations Act 2001 (Cth) (Corporations Act) (that is, s 601AH of the Corporations Act – ASIC being substituted for ASC).

66. The Company Law Review Act 1998 (Cth) also inserted Ch 11 into the Corporations Law, entitled “Application and transitional provisions”. Of relevance are the following sections:

“1362CA   Existing company

This Part applies to a body corporate that was incorporated, immediately before Division 2 of Part 2.2 commenced (1 January 1991), under a previous law of this jurisdiction that corresponded to Chapter 2 (as in force immediately after that Division commenced).

…

1362CH   Reinstatement of companies deregistered before commencement

The ASC’s powers under section 601AH extend to the reinstatement of the registration of a body corporate that:

(a)   was at some time before commencement incorporated or taken to be incorporated under a previous law of this jurisdiction corresponding to Chapter 2 of the old law; and

(b)   was deregistered before commencement.

Section 601AH applies to the reinstatement with any modifications that the circumstances require.”

67. In considering the issues raised in the present proceedings, courts in earlier cases have considered the following transitional provisions in the Corporations Act:

“1378   Existing registered companies continue to be registered

(1)   If:

(a) before the commencement, a company was registered under Part 2A.2 of the old Corporations Law of a State or Territory in this jurisdiction; and

(b)   that registration was still in force immediately before the commencement;

the registration of the company has effect (and may be dealt with) after the commencement as if it were a registration of the company under Part 2A.2 of this Act as a company of whichever of the company types listed in subsection (2) corresponds to its previous class and type.

…

1400   Creation of equivalent rights and liabilities to those that existed before the commencement under the carried over provisions of the old corporations legislation

(1)   Subject to subsection (4), this section applies in relation to a right or liability (the pre-commencement right or liability), whether civil or criminal, that:

(a)   was:

(i)   acquired, accrued or incurred under a carried over provision of the old corporations legislation of a State or Territory in this jurisdiction; and

(ii)   in existence immediately before the commencement; or

(b)   would have been:

(i)   acquired, accrued or incurred under such a provision; and

(ii)   in existence immediately before the commencement;

if every agreement that was valid only because of section 249 of the ASIC Act had been a valid agreement without the application of that section.

…

1400(2)   On the commencement, the person acquires, accrues or incurs a right or liability (the substituted right or liability), equivalent to the pre-commencement right or liability, under the corresponding provision of the new corporations legislation (as if that provision applied to the conduct or circumstances that gave rise to the pre-commencement right or liability).

Note: If a time limit applies in relation to the pre-commencement right or liability under the old corporations legislation, that same time limit (calculated from the same starting point) will apply under the new corporations legislation to the substituted right or liability -- see subsection 1402(3).

…

1408   Old transitional provisions continue to have their effect

(1)   Subject to subsection (3), this Act has the same effect, after the commencement, as it would have if:

(a)   the transitional provisions (see subsections (6) and (7)) of the old Corporations Laws of the States and Territories in this jurisdiction (as in force from time to time before the commencement) had been part of this Act; and

(b)   those transitional provisions produced the same results or effects (to the greatest extent possible) for the purposes of this Act as they produced for the purposes of those old Corporations Laws.”

68. Finally, it should be noted that although s 85 of the Corporations (New South Wales) Act has not been repealed, the Companies (Application of Laws) Act which established the Code in New South Wales was repealed by the Statute Law (Miscellaneous Provisions) Act 2008 (NSW) as redundant on 1 July 2008 (s 4 and Sch 4 of that Act). The Statute Law (Miscellaneous Provisions) Act also repealed the Companies Act 1961 (NSW).

Judicial consideration of the power to reinstate companies deregistered under the Code or its predecessor, the Companies Act

69. In two early decisions on this issue, two judges of this Court held that the provisions of s 601AH of the Corporations Act empowered them to reinstate companies deregistered under either the Code or the Companies Act.

70. In Shaw v Goodsmith Industries Pty Ltd [2002] NSWSC 406; (2002) 41 ACSR 556 (“Shaw”), the plaintiffs sought reinstatement of the defendant which had been deregistered under s 459 of the Code. Barrett J (as his Honour then was) concluded that he had power to order reinstatement. His Honour concluded that the effect of s 1408(1) of the Corporations Act was to preserve the operation of s 1362CH of the Corporations Law which he stated provided not only ASIC with power to reinstate, but gave the Court power to do so under s 601AH of the Corporations Act. His Honour concluded in those circumstances that he had power to reinstate the company by virtue of the provisions of s 601AH of the Corporations Act in combination with s 1362CH of the Corporations Law.

71. Austin J in Parker v Australian Asbestos Pty Ltd [2002] NSWSC 520; (2000) 42 ACSR 138 reached a similar conclusion, although his Honour relied on s 1400 of the Corporations Act rather than s 1408.

72. However, in City West Water, Senior Master Mahoney declined to follow these cases. His Honour concluded, contrary to Barrett J’s view in Shaw, that s 1362CH of the Corporations Law only applied to the power of ASIC to reinstate companies, and (with respect, correctly) that the effect of s 1362CA of the Corporations Law was that s 1362CH only applied to companies incorporated before 1 January 1991 and in existence immediately prior to that date. However, Senior Master Mahoney concluded that the Court had power to reinstate such companies under s 459(6) of the Code by virtue of the provisions of the Victorian equivalent of s 85 of the Corporations (New South Wales) Act.

73. The conclusions reached by Senior Master Mahoney were accepted as correct in subsequent decisions of this Court (see, eg, Lunn v Cardiff Coal Co (No 3) [2003] NSWSC 789; (2003) 47 ACSR 79 at [41]; Baird v WJT Howes Investments Pty Ltd [2008] NSWSC 1232; (2008) 68 ACSR 485 at [8]-[11]). However, doubts as to whether the Court had power to reinstate such companies under s 459(6) of the Code after the repeal of the Companies (Application of Laws) Act in 2008 (see [68] above) were raised by Barrett J in Tan v Australian Securities and Investments Commission [2011] NSWSC 58 at [6].

74. In In the matter of Rocha Pty Ltd [2016] NSWSC 899; (2016) 114 ACSR 89 (“Re Rocha”), an order was sought declaring that the dissolution of the company under s 308(4) of the Companies Act was void. The application was made under s 307 of the Companies Act. It had been held that the Court had power to make such an order. The basis on which the power had been held to exist was summarised by Brereton J (as his Honour then was) in the following terms:

“[33]   Thus:

(1) Section 85 of the 1990 Corporations Act (which remains in force) provides for the national scheme laws to supersede the co-operative scheme laws, except in relation to matters arising before the commencement of the 1990 Act and matters arising, directly or indirectly, out of such matters, in respect of which the co-operative scheme laws continued to operate of their own force. The relevant co-operative scheme laws included ss 18 and 20 of the 1981 Application of Laws Act;

(2)   In turn, those sections provided for the co-operative scheme laws to apply to the exclusion of the 1961 Act in relation to matters to which the co-operative scheme laws applied, but not so as to affect any right or privilege acquired or penalty or forfeiture incurred under the 1961 Act, or any legal proceeding or remedy in respect of any such right, privilege, liability or forfeiture;

(3)   An application for reinstatement of a company struck off under the 1961 Act is a matter arising out of a matter arising before the commencement of the national scheme laws (namely, the striking off of the company); and

(4)   The co-operative scheme laws made no provision for reinstatement of a company dissolved under the 1961 Act.

[34]   Accordingly, at least so long as it remained in force, application for reinstatement of a company dissolved under the 1961 Act could still be made under that Act.”

75. However, Brereton J held that the approach was not available following the repeal of the co-operative scheme laws. His Honour’s reasoning was to the following effect.

“[35]   However, the co-operative scheme laws and the national scheme laws did not repeal their predecessors, but superceded [sic, superseded] them – except in relation to certain matters – leaving the earlier legislation to operate, in respect of those matters, of its own force. The later legislation did not give any additional effect to the earlier legislation, nor contain any relevant ‘deeming’ provision, by which their operation or effect was preserved, other than of their own force. When Re Wangi Wangi was decided, the 1961 Act was still in force, as it was when City West Water and Baird were decided. However, the 1961 Act – and the 1981 Code – were repealed on 1 July 2008 by the Statute Law (Miscellaneous Provisions) Act 2008 (NSW). This was not adverted to in Armitage. So far as I can tell, neither the 1961 Act nor the 1981 Application of Laws Act has any continuing operation of their own force, and while the 1990 Act remains in force, it does not give them any additional operation beyond their own force.”

[78]   In addition, I consider that the entitlement conferred under the 1999 legislation to apply for leave was also a right accrued. This seems to have been the view of McHugh J in Dossett's case. See [11] and [17].

…

[81]   The requirement for a grant of leave under the 1999 Act has been characterised as procedural. See Re Monger; Ex parte Cross [2004] WASCA 176 per Malcolm CJ at [76]–[77] and per EM Heenan J at [165]. However, to characterise such a provision as procedural is not the end of the matter. Merely because the provision has been characterised in the Cross case as procedural, does not necessarily mean that it will be retrospective. A statutory provision may be characterised as procedural, but also have substantive operation. See McKain v RW Miller & Co (SA) Pty Ltd (1991) 174 CLR 1 at 42 per Brennan, Dawson, Toohey and McHugh JJ and Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 at 336 per Moffitt P, Reynolds JA agreeing.”

99. However, in Australand, Keane JA (as his Honour then was) took what on one view was a somewhat narrower approach to the question. The respondent in that case sought to avoid contracts pursuant to s 1073(2) of the Corporations Law (Cth) on the basis that the contracts concerned the issue of prescribed interests in contravention of the legislation. Section 1073(2) provided that such contracts were voidable by notice in writing by the person who accepted the offer. The Act conferring the right was repealed prior to the notice being given, and its replacement Act, the Managed Investments Act 1998 (Cth), contained certain limitations on the right of avoidance. The Court held that the power conferred on the appellants by the old law did not survive the repeal. The Court held that the right of avoidance did not accrue when the contract for subscription was made in contravention of the old law, but only upon the giving of notice, which did not occur until after the repeal. In the course of his judgment, Keane JA made the following remarks:

“[109]   The point of departure for any discussion of the effect of the repeal of a statute upon legal rights and duties is that explained by Dixon C.J. in Maxwell v. Murphy where his Honour said:

‘In the first place it must be borne in mind that at common law the repeal of a statute or statutory provision means that the law must be applied as if the provision had never existed. This is subject to an exception, variously expressed, as to past matters. Lord Tenterden C.J. used the expression 'transactions past and closed': Surtees v. Ellison [29] at p. 279. Lord Campbell C.J. said: '... all matters that have taken place under it before its repeal are valid and cannot be called in question': Reg. v. Inhabitants of Denton [30] at p. 614. The phrase of Blackburn J. was 'transactions already completed under it' - Butcher v. Henderson [31] at p. 338.

The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events.’

[110]If the relevant right is no more than a right or power adversely to affect the legal position of another, then the right or power to affect the rights or liabilities of others disappears when the statute conferring the right or power is repealed. Section 8(c) of the Acts Interpretation Act, in speaking of a ‘right accrued’ under an Act, is not speaking of a mere right conferred by an Act of which a person may take advantage should he or she choose to do so, but of a right which may be enforced by the person who propounds the right against a person said to be under a liability which corresponds to the right. The concern of s. 8(c) is that, in the absence of a contrary intention, the legislature is not to be taken to intend to deprive those with a complete and enforceable right of the benefit of that right simply because the law's mechanisms of enforcement have not finally vindicated the accrued entitlement at the time of repeal.

[111]Generalising from the decided cases cited by the parties, and the observations of Hayne, Heydon and Crennan JJ. in the recent decision of the High Court in Chang v. Laidley Shire Council, the most important point to emerge is the proposition that the operation of s. 8(c) and its analogues cannot be understood without a clear understanding of the nature of the right said to have accrued under a particular statute. The idea that the extent of a party's right or interest is commensurate with the nature of the orders which a court may make to protect or enforce the right or interest is one which has long been familiar to lawyers. In considering the operation of s. 8(c) of the Acts Interpretation Act, one may test the suggestion that a party has an accrued right by asking what order could be made by a court in favour of that party had the court come to pronounce on the liability of the other party prior to the repeal of the statute which conferred the right.

…

[117]   It is, I think, manifest from the text of s. 8(c) itself that the accrued or acquired right which it postulates is a right in one person in respect of which a correlative liability has been incurred by another person. Within the text of s. 8(c), the concept of ‘a right … acquired or accrued’ is matched by an ‘obligation or liability … incurred’; the collocation of ‘right … acquired or accrued’ with ‘obligation or liability … incurred’ is a contextual indication that a ‘right’ within s. 8(c) presupposes a correlative liability. That relationship, and its implications for a correct understanding of what is involved in an accrued or acquired right, have been recognised at least since the decision of the Privy Council in Abbott's Case. For the learned trial judge to recognise, and give effect to, that relationship was not to engage in an inappropriate exercise in analytical jurisprudence; it was simply to acknowledge that s. 8(c) is not intended wholly to reverse the principle referred to in the first paragraph of the citation from the reasons of Dixon C.J. in Maxwell v. Murphy at para. [109] above but is intended to ensure that substantive rights which are enforceable by a court do not cease to be enforceable as an unintended consequence of the repeal of a statute.”

100. Justice of Appeal Keane made the following comments at [119] in respect of that portion of the judgment of Pullin JA in Barminco to which I have referred at [86] above:

“[119] In my respectful opinion, it is abundantly clear that his Honour was not engaged in Hohfeldian analysis. His Honour was not saying that s. 1073(2) could not be said to be a ‘right’ because it exhibited character istics [sic, characteristics] which would cause it to be more appropriately classified under some other rubric by Professor Hohfeld. Rather, his Honour was engaged in the interpretation of the expression ‘right acquired or accrued’ in a statutory context which collocates an ‘accrued right’ with an ‘obligation or liability incurred’. His Honour was reasoning in a way which has been orthodox since at least 1895 when the Privy Council in Abbott's Case took the same approach. Neither Pullin J.A. nor Windeyer J. in Mathieson v. Burton was urging a departure from this approach. Each was concerned to say no more than that ‘an accrued right’ was nonetheless a right even though it might equally, or perhaps more aptly, be described in some other way, as, for example, in Mathieson v. Burton, an ‘immunity’.”

101. What was said by Keane JA in the passage which I have cited at [99] and [100] above, particularly at [110], would tend to suggest that a “right” of the nature of that under consideration in the present case where there is no correlative liability is not an accrued right within the meaning of s 30(1)(c) of the Interpretation Act and did not survive the repeal of the statute. However, as his Honour emphasised, it is necessary to clearly understand the rights which are said to have had accrued. Further, his Honour to some extent qualified his earlier remarks in the following passage (at [122]):

“[122]   It may be accepted that statements of high authority support the proposition that s. 8(c) of the Acts Interpretation Act operates to preserve an accrued right even if it be ‘inchoate’ or ‘conditional’ or ‘contingent’, but where the creation of any right at all to be restored to one's pre-contractual position means choosing to give up an existing and inconsistent right, it is, I think, a misuse of language to say that a right to be restored has accrued to a claimant who has not made the choice. The appellants' rights to be restored to their pre-contractual position were not contingent in the sense that they were dependent merely upon proof to a court of the factual basis for the claim; rather, until the choice was made to avoid the contracts, the respondent's liability to restore the purchase price to each appellant was not contingent or conditional but prospective only. It might never be incurred.”

102. Thus, in the present case, in contrast to the position in Australand, the right to seek reinstatement arose immediately on deregistration or at the latest, when the plaintiff’s claim against the Company had crystallised, which occurred prior to the repeal of the legislation. Whilst there is no correlative liability, the interests of the Company are affected by the exercise of the right as it becomes subject to pre-existing liabilities of the nature of that alleged by the plaintiff.

103. It seems to me in the present case that the right asserted by the plaintiff is more than a right to approach the Court for the exercise of a discretion in his favour.

104. In the present case, the effect of the repeal of the Companies (Application of Laws) Act on 1 July 2008 was to deprive the plaintiff of an accrued cause of action against the Company. The plaintiff had suffered damage by at least 2005 because, by October 2005, he had been certified by the Medical Authority appointed under the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) as having contracted silicosis and as having a “dust disease” within the meaning of that Act: see [12] above. The position may be contrasted with cases such as Abbott where the asserted right to take advantage of an enactment was available to all members of the community or a class, nor is it a case such as Australand where the precondition to the accrual of the right was the giving of a notice.

105. Nor do I think the fact that the Court has to conclude that it is just to order reinstatement alters the position. The determination of whether or not the reinstatement is just requires an evaluative consideration, taking into account matters including the circumstance in which the Company was deregistered, the purpose of the reinstatement, the Company’s solvency, whether any person is likely to be prejudiced, and the public interest generally: see Australian Competition and Consumer Commission v Australian Securities and Investments Commission [2000] NSWSC 316; (2000) 174 ALR 688 at [27]; WorkCover Authority of New South Wales v Picton Truck and Trailer Repairs Pty Ltd [2004] NSWCA 371; (2004) 51 ACSR 102 (“WorkCover Authority (NSW)”) at [25]; In the matter of Likehart Pty Ltd [2017] NSWSC 884 at [21].

106. Notwithstanding the breadth of the matters which can be taken into account in determining whether the reinstatement is just, it does not seem to me that the case falls in the same class of case as the rights asserted in Colley where the relevant provision conferred no right to a quantifiable order: see Colley at [30]. In the present case, the order is clearly quantifiable, namely, an order reinstating the Company. It should also be noted in Colley that although Giles JA agreed with Handley JA, Mason P at [3] stated that, in his view, discussion of the nature of the power exercised under the relevant provision was inconclusive on the retrospectivity issue.

107. I do not think the possibility that the Court retains some residual discretion to refuse an order, notwithstanding that the applicant is a person aggrieved and it is just to make the order, affects the position. It is difficult to see how such a discretion could properly be exercised once it was concluded that the applicant was a person aggrieved and it was just to order reinstatement. In WorkCover Authority (NSW), Sheller JA, with whom the other members of the Court agreed, stated that once the circumstances referred to in the later equivalent of s 459(6) of the Code were shown to exist, there was no room for the Court to further exercise a discretion: at [21]-[25]; cf AMP General Insurance Ltd v Victoria WorkCover Authority (2006) 15 VR 175; [2006] VSCA 236 at [19]-[22]. Although it is unnecessary to decide the question, I incline to the view expressed by Sheller JA in WorkCover Authority (NSW), at least in circumstances where reliance is placed solely on the ground that it is just to order reinstatement, as distinct from the ground that the Company was engaging in a business at the time of dissolution.

108. Nor do I think that s 459(6) of the Code can properly be described as purely procedural. The effect of the order is to reinstate the Company, which then assumes its pre-existing rights and liabilities. That does not seem to me to fall within the rubric of a procedural provision.

109. In these circumstances, I am of the view that at the time of the repeal of the Companies (Application of Laws) Act on 1 July 2008, the plaintiff had an accrued right as a person aggrieved to seek reinstatement of the Company in aid of his common law claim.

110. The conclusion which I have reached may be seen to conflict with the decision of Brereton J in Re Rocha (No 2). However, there are important differences in the legislation. In Re Rocha (No 2), Rocha Pty Ltd was dissolved under the provisions of s 307 of the Companies Act. That section empowered the Court in respect of a company which had been dissolved to order the dissolution be declared void on an application made within two years following dissolution by a liquidator or any person who appears to the Court to be interested. That section, unlike s 459(6) of the Code, was not dealing with the reinstatement of companies removed from the register for not carrying on a business or not being in operation. That was dealt with in the Companies Act by s 308(6). Section 308(6) of that Act gave the right to a person who feels aggrieved to apply for reinstatement within 15 years. Section 459(6) of the Code, by contrast, uses the expression a person “aggrieved” as distinct from a person who “feels aggrieved” (see Companies Act s 308(5).

111. It is not necessary to decide whether a person aggrieved constitutes a narrower class than a person who feels aggrieved. What is clear is that s 459(6) of the Code, in contrast to s 307 in the CompaniesAct, limits the class of applicants to those whose legal rights and interests have been affected, rather than to a person who appears to the Court to be interested. Unlike the plaintiff in Re Rocha (No 2), the plaintiff in the present case has more than mere locus standi as a person interested to make the application: see Re Rocha (No 2) at [25].

112. There remains the question of whether the Court has power to extend the period of 15 years prescribed by s 459(6) of the Code to enable the application to be brought. The plaintiff relies on s 539(4)(d) of the Code to extend the 15 year period. Section 539(4)(d) is in the following terms:

“539(4)      [Court’s powers] Subject to the following provisions of this section and without limiting the generality of any other provision of this Code, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:

…

(d)   an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Code or in relation to a corporation (including an order extending a period where the period concerned expired before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding,

and may make such consequential or ancillary orders as the Court thinks fit.”

113. Up to the time the co-operative scheme laws were repealed, the plaintiff would have had the right to apply for an extension of time to make the application. The question is whether the Court has power to make such an order in aid of the plaintiff’s accrued right under s 459(6) of the Code following the repeal of this section.

114. It seems to me that once it is established that the plaintiff had the accrued right to seek reinstatement, the means of enforcing that right, including the making of an application to extend the time, is also saved. Thus, s 539(4)(d) of the Code falls within the framework of the right to be enforced and is saved at least to the extent it is necessary for that purpose. The procedure is sufficiently directly connected with the accrued right to be saved by necessary implication, if that result is not in fact achieved by the closing words of s 30(1) of the Interpretation Act. This approach is consistent with what was said by Kaye J in Sutton v Bradshaw [1988] VR 920. In dealing with the question of whether evidentiary and procedural provisions were saved to enforce an accrued right in that case, his Honour made the following remarks at 925 (Gray J agreeing):

“No doubt this rule is based upon the principle that the Court will construe a statute so as to give effect to the intention of the legislature, where that intention is clear or is derived by necessary implication. Furthermore, no reason comes to mind for confining the operation of the principle to procedures for enforcing rights repealed or substituted by subsequent legislation. It would seem to be equally applicable to evidentiary or procedural enactments enabling proof of both breach of obligation as well as enforcement of a right repealed.”

See also Commissioner of State Revenue v Bulzomi (2009) 24 VR 643; [2009] VSCA 99 at [118].

Should an order be made in the present case

115. In my opinion, an order should be made pursuant to s 539(4)(d) of the Code extending the time for making an application under s 459(6) of the Code for the reinstatement of the Company up to and including 5 May 2020, and an order that the Company be reinstated pursuant to the provisions of s 459(6) of the Code.

116. As indicated, the plaintiff has established that he is a person aggrieved. Further, I am satisfied that no substantial injustice is likely to be caused by the making of an order for the purpose of s 539(6) of the Code and it is just to make it.

117. In that regard, it is to be noted that the evidence established that neither ASIC nor the previous directors of the Company opposed the making of the order. Nor is it opposed by SIRA, which has encouraged the making of the application (see the letter from its solicitors of 24 October 2019 to which I have referred at [9] above). Further, it seems to me in the public interest that an order which gives effect to a worker’s statutory rights is made.

118. It is also appropriate that an order be made for the winding-up of the Company and that Mr Christopher Darin be appointed liquidator. It seems to me that the appropriate source of the power to wind-up the Company is not to be found in s 459(6) of the Code, but rather in s 461(1)(k) of the Corporations Act as the effect of reinstatement is that the Company is deemed to have continued in existence, and the provisions of the Corporations Act in those circumstances would apply to it.

119. In an affidavit filed in support of the application, it was sought that the order be made nunc pro tunc from 19 December 2014, the date of the commencement of the Dust Diseases Tribunal proceedings, to ensure the proceedings were effectively commenced against the Company. No argument was addressed as to the power to make such an order. Such orders are commonly made (see, eg, In the matter of Austral Bronze Pty Ltd; In the matter of John Darlington Pty Ltd; In the matter of John Darlington Pty Ltd (No 2) [2020] NSWSC 1633), and there is no apparent reason why such an order should not be made in the present case.

115. No party has sought any order for costs.

Conclusion

121. In the result, I would make the following orders:

1. Order pursuant to s 539(4)(d) of the Code that the time for the plaintiff to make an application under s 459(6) of the Code for the reinstatement of Richards Contracting Co Management Pty Ltd be extended up to and including 5 May 2020.

2. Order pursuant to s 459(6) of the Code that the registration of Richards Contracting Co Management Pty Ltd be reinstated.

3. Order that Richards Contracting Co Management Pty Ltd be wound-up pursuant to the provisions of s 461(1)(k) of the Corporations Act and that Mr Christopher Darin be appointed liquidator.

4. Orders (2) and (3) are to be taken to have been made nunc pro tunc and be effective from 18 December 2014.

122. BELL P: I agree with the reasons of the Chief Justice.

123. MEAGHER JA: I agree with Bathurst CJ.

124. PAYNE JA: I agree with Bathurst CJ.

125. EMMETT AJA: These proceedings are concerned with the reinstatement of the registration of Richards Contracting Co (Management) Pty Ltd (the Company). The registration of the Company was cancelled under s 459(6) of the Companies (New South Wales) Code 1981 (NSW) (the Code) on 29 May 1984. The plaintiff, Mr Petar Zeko, seeks reinstatement of the registration in order to pursue proceedings (the Proceedings) that he has commenced in the Dust Diseases Tribunal of New South Wales (the Tribunal) for recovery of damages from the Company. He claims that he suffered by being exposed to and inhaling silica dust while being employed by the Company between March 1975 and April 1976 and between August 1979 and February 1981.

126. By statement of claim filed in the Tribunal on 30 September 2019, Mr Zeko commenced the Proceedings against the Company and four other defendants. However, since the registration of the Company has been cancelled, the Company has been dissolved by the operation of s 459(4) of the Code. Accordingly, he cannot proceed against the Company for recovery of damages.

127. While the Company had no assets at the time of the cancellation of its registration, it had the benefit of a policy of insurance that indemnified it in respect of a claim such as that now being made by Mr Zeko. However, the insurer has itself been dissolved. Nevertheless, there is a mechanism for any entitlement of Mr Zeko to damages to be paid by the State Insurance Regulatory Authority (SIRA), which administers the “Insurers’ Guarantee Fund”, established under s 227 of the Workers Compensation Act 1987 (NSW) (the Compensation Act). The SIRA cannot be sued in its own right but will be liable to pay any damages awarded against the Company, assuming the registration of the Company is reinstated.

128. Section 459(1) of the Code provided, relevantly, that, where the Corporate Affairs Commission (the Commission) had reasonable cause to believe that a company was not carrying on business or was not in operation, the Commission could send to the company a letter to that effect and stating that, if an answer showing cause to the contrary was not received within one month, a notice would be published in the Gazette with a view to cancelling the registration of the company. Under s 459(2), unless the Commission received an answer within one month, it may publish in the Gazette and send to the company a notice that, at the expiration of three months from the date of that notice, the registration of the company would, unless cause was shown to the contrary, be cancelled and the company would be dissolved. Under s 459(4), at the time of the expiration mentioned in the notice sent under s 459(2), the Commission may, unless cause to the contrary was previously shown, cancel the registration of the company by notice in writing published in the Gazette and, on the publication of that notice, the company was dissolved. The Company was dissolved pursuant to those provisions.

129. Section 459(6) relevantly provided that, if a person was aggrieved by the cancellation of the registration of a company, the Court, on an application made by that person, at any time within 15 years after the cancellation, could, if otherwise satisfied that it was just that the registration of the company be reinstated, order the reinstatement of the registration of the company. Upon an office copy of that order being lodged with the Commission, the company would be deemed to have been continued in existence as if its registration had not been cancelled.

130. However, the Companies (Application of Laws) Act 1981 (NSW), which applied the Code in New South Wales, was repealed by the operation of s 4 and Sch 4 of the Statute Law (Miscellaneous Provisions) Act 2008 (NSW) (the 2008 Repealing Act). The question raised in the proceedings is whether s 459(6) of the Code has been impliedly saved, notwithstanding its repeal by the 2008 Repealing Act. Alternatively, Mr Zeko contends, his entitlement as an aggrieved person under s 459(6) of the Code was a right or privilege acquired, accrued or incurred under the Code, such that, by the operation of s 30(1)(c) of the Interpretation Act 1987 (NSW) (the Interpretation Act), the repeal of the Code did not affect that right or privilege. The question is whether there is an implied saving or whether s 30(1)(c) of the Interpretation Act operates.

131. The course of the replacement of the Code by the Corporations (New South Wales) Act 1990 (NSW) (which applied s 82 of the Corporations Act 1989 (Cth)) (the Corporations Law) and the replacement of the Corporations Law by the Corporations Act 2001 (Cth) (the Corporations Act) and the transitional provisions in relation to those replacements are complex. The registration of a company registered or deemed to be registered under the Code was continued following the enactment of the Corporations Law. Similarly, the registration of a company registered or deemed to be registered under the Corporations Law was deemed to be continued under the Corporations Act. That may have a bearing on the question of whether the repeal of the Code, and, in particular, the repeal of s 459, extinguished any entitlement of Mr Zeko to seek the reinstatement of the registration of the Company.

132. There is no dispute that Mr Zeko is aggrieved by the cancellation of the registration of the Company. The question is whether, in relation to the Interpretation Act, he had a right or privilege that he had acquired or accrued under the Code. His right to sue the Company was not something that he acquired or accrued under the Code. That right arose under the general law if, as he alleges, the Company was in breach of a duty of care owed to him, the breach of which caused the injury from which he now suffers. Mr Zeko contends, nevertheless, that his entitlement under s 459 to apply for reinstatement of registration is a right or privilege that accrued to him under the Code and that was not affected by the repeal of the Code.

133. The transitional provisions relating to the replacement of the Code by the Corporations Law are similar to those relating to the replacement of the Corporations Law by the Corporations Act (Div 2 of Pt 10.1), the Corporations Law continued the registration of a company registered or deemed to be registered under the Code. It would be curious that an entitlement to apply for reinstatement of, say, the registration of a company, the registration of which had been cancelled only days before the commencement of the Corporations Law, would be abruptly terminated. In so far as neither the Corporations Law nor the Corporations Act conferred an entitlement to apply for the reinstatement of the registration of the Company, the registration of which had been cancelled under the Code, there is every reason to conclude that the ultimate repeal of the Code was not intended to extinguish that right conferred by the Code.

134. I have had the advantage of reading in draft form the reasons of the Chief Justice. I agree with his Honour for the reasons given, that, at the time of the repeal of the Code, Mr Zeko was a person aggrieved in so far as he had an accrued right to seek reinstatement of the registration of the Company in aid of his claim for damages at common law. The effect of the cancellation was to deprive Mr Zeko of his accrued cause of action against the Company. Up to the time of the repeal of the Code, Mr Zeko would have had the right to apply for an extension of time to make an application for reinstatement. That right is more than a mere right to approach the Court for the exercise of a discretion in his favour.

135. I also agree with the Chief Justice that, once it is established Mr Zeko had the accrued right to seek reinstatement of the registration of the Company, the means of enforcing that right, including the making of an application to extend the period of 15 years prescribed by s 459(6), was also saved. Section 539(4)(b) of the Code relevantly provided that the Court may, on application by any interested person, make an order extending the period for instituting or taking any proceeding under the Code (including an order extending a period where the period concerned expired before the application for the order was made) and may make such consequential or ancillary orders as the Court thinks fit. Section 539(4)(d) falls within the framework of the right to apply under s 459(6) and was saved at least to the extent that is necessary for that purpose. The procedure is sufficiently directly connected with the accrued right to be saved by necessary implication if not by s 30(1) of the Interpretation Act.

136. I agree with the Chief Justice that an order should be made pursuant to s 539(4)(d) extending, up to and including 5 May 2020, the time for making an application, under s 459(6) of the Code, for the reinstatement of the registration of the Company and that an order should be made that the Company be reinstated pursuant to s 459(6). It is also appropriate that an order be made for the winding-up of the Company and that a liquidator be appointed.

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Decision last updated: 19 March 2021