Whether the onus is on the claimant or the insurer to prove that a proposed claim is within time or out of time for leave to bring proceedings under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW).

In Issue

  • Who bears the onus of proof on the application of the limitation period under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW).

The Background

On 23 November 2013, the plaintiff was injured during the course of his employment and commenced proceedings on 30 June 2016 against Better Buildings Construction Pty Ltd. The plaintiff alleged, amongst other things, that he was working under the control and direction of an employee of Ofform Pty Ltd (Ofform), which subsequently entered liquidation.

On 19 September 2017, the plaintiff sought leave to join Ofform’s insurer (the Insurer) pursuant to the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW)(the Act). The Insurer opposed the application on the basis that proceedings may have been brought out of time, and because the plaintiff had not adduced any evidence to demonstrate that the claim was brought within time.

The Decision

The court noted that in order for leave to be granted, section 6(1) of the Act provides that proceedings to recover an amount from an insurer must be commenced within the same limitation period that applies under the Limitation Act 1969 or other Act to the claimant’s cause of action against the insured person in respect of the insured liability.

The crux of the matter turned on whether section 6 of the Act required:

  • the Plaintiff to prove the claim was brought within time; or
  • the Insurer to prove the claim was brought out of time.

The court found against the Insurer. The enactment of the new legislation did not alter settled law that a defendant pleading a statutory limitation defence carries the legal onus of proof. After considering the language of section 6 in the context of the Act as a whole, the court formed the view that there was no requirement for any limitation issue to be determined one way or another before an application for leave was considered. Section 6 refers to the time within which the proceedings must be brought and says nothing about the time within which the leave application must be brought.

Implications for you

While the position adopted by the court may seem harsh, especially for an insurer who simply stands in the shoes of its insured (often faced with little or no information on the claim), it is important to remember that the Act does not preclude an insurer from raising limitation arguments in the substantive matter when further information becomes available. Nor does it disentitle an insurer from raising any defence which would have been available to it in an action for indemnity brought by its insured.