Statute Of Limitations
Under the Limitation Act, there are specific time-limits prescribed within which a plaintiff must commence proceedings for their claims. In general, under Section 14 of the Act, claims including those against insurers for home and contents coverage, must be made within six (6) years from the date on which the cause of action “accrues”.
Ali v Insurance Australia Limited
In the recent case of Ali v Insurance Australia Limited, the District Court was asked to determine when this six-year period commenced. In the matter, the plaintiff suffered a break-in to their property on the 9th of October, 2013, suffering damage to the house and its contents, as well as, theft of property. After making a claim to their insurer, they were denied coverage on the 20th of May, 2014.
With the plaintiff commencing action against the defendant insurer on the 16th of October, 2019, the defendant argued that the claim was made out-of-time under the Limitation Act. In the decision handed down this year, the District Court determined that the claim was made out-of-time, with the limitation period commencing on the date of the break-in.
District Court Decision
The Court’s reasoning was based on the matter of Globe Church Incorporated v Allianz Australia Insurance Ltd. In this matter, the Court of Appeal found that without a specific provision in the insurer’s indemnification insurance policy making the plaintiff’s claim a precedent to their own liability, such liability arose when the insurance of property damage indemnified against, arose.
The Plaintiff’s arguments in Ali v Insurance Australia Limited attempted to differentiate the matter from this precedent and were ultimately unsuccessful, with the plain English drafting of the insurance policy establishing the policy as one of indemnification.
Holding with this line of precedent, the Court found that there was no such provision in the indemnity policy of the plaintiff making the plaintiff’s claim a precedent for the insurer’s liability. As such, the 6-year limitation period for the plaintiff’s claim was found to have commenced on the 9th of October, 2013, and ended on the 9th of October, 2019, meaning their claim was made out-of-time and barred under statute.
Implications For Policy Holders
Following this line of precedent, policy holders who may seek to make claims against the insurance provider in relation to an instance of loss for residential home and contents policies, must be wary of the limitation period and the assumption that it commences on the date that loss is occasioned.
Whether the Court will interpret a given indemnity policy in such a way as to permit the limitation period to flow from the date of their determination of coverage, will depend upon the circumstances of the matter. Further this matter is precedent only for NSW, and circumstances may differ in other States.
For such potential claimants, it may be wise to be very wary of approaching such a line of argument, and for greater security should commence proceedings within the limitation period arising from the date of loss, to avoid having to raise such arguments with the Courts. This is especially important for matters of property insurance, as the Courts have been substantially less lenient in permitting out-of-time claims when compared to matters of personal injury.
Should you have a potential claim against an insurer for a property or personal injury matter, contact Longton Legal on 1300 599 999 today for an initial consultation to discuss your options.
*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*
 Limitation Act 1969 (NSW).
 Ibid s 14.
 Ali v Insurance Australia Limited  NSWDC 369.
 Globe Church Incorporated v Allianz Australia Insurance Ltd (2019) 99 NSWLR 470.
 Ali v Insurance Australia Limited  NSWDC 369.
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