Bevillesta Pty Ltd v Liberty International Insurance Co

Bevillesta Pty Ltd v Liberty International Insurance Co - [2009] NSWCA 16 - NSWCA 2008 case summary — Zoe

[39]

but the Contractor's liability to Indemnify Grosvenor Top Ryde Pty Ltd and IFP (NSW) Pty Ltd shall be reduced proportionately to the extent that any act or omission of Grosvenor Top Ryde Pty Ltd and IFP (NSW) Pty Ltd or employees of Grosvenor Top Ryde Pty Ltd and IFP (NSW) Pty Ltd may have contributed to the loss, damage, death or injury. 19 It referred to a coverage route map "with coverage not less than 15 minute intervals on plans attached". 20 It included a staff roster showing four cleaners on duty between 4pm and 6pm on Mondays. 21 Exhibit 5 was a letter bearing date 29 September 1998 from Executive to Byvan (apparently a company acting on behalf of the previous owner) which clearly must have accompanied its tender. This letter included the following paragraph: We have included all company information and documentation and completed all schedules as requested. The labour levels reflect the requirement for constant 15 minute coverage during trading periods. We have previously provided a route map to Centre Management. These routes remain unchanged, however the coverage is increased as per our schedules. 22 Included in exhibit 8 was a document entitled "Contract Signature", signed on behalf of Executive under date 25 May 1999 and on behalf of the previous owner under the date 10 August 1999, stating a commencement date for the contract of 1 June 1999 and an expiry date of 31 May 2002. 23 Exhibit 9 is a letter or copy letter bearing date 18 October 1999 from Byvan (NSW) Pty Limited addressed to "Mr Steve Kidd, Ellem's Cleaning Service" accepting "your offer of Thirty-Nine Thousand Six Hundred and Ninety-Five Dollars and Twenty-Eight Cents ($39,695.28) per month" subject to terms and conditions, which included a term that the letter superseded all previous correspondence and communications, and contained the whole of the agreement between the parties. One term contained in this letter was that the contractor: 10.5 fully indemnifies Byvan and the owner and will keep Byvan and the owner indemnified from and against all present and future claims, actions, demands, proceedings, threats, losses, costs (including solicitors' costs on a solicitor and own client basis), expenses, penalties and liabilities, however, and whenever incurred, which any person may have or bring against Byvan and the owner in relation to any failure of any of the services provided in respect of the property by the Contractor including without limitation the failure of any equipment, technology or machinery provided by the Contractor in carrying out its services, to be Year 2000 Compliant. 24 This letter made provision for acknowledgement of acceptance of the terms of the letter by its recipient, but the copy of the letter in evidence does not contain any indication of such acceptance. Indeed, the only evidence that such a document was ever sent was that the document put into evidence was found among the papers of the previous owner. 25 Exhibit 7 was the front page of a contract for the purchase of the shopping centre by Bevillesta from the previous owner. This page bore the date 17 October 2000. 26 There are in evidence (exhibits G and 12) two copies of a letter, on the letterhead of Services and signed by Steve Kidd, originally bearing date 21 May 2001 and addressed to "Top Ryde Shopping Centre". The letter is headed "Re: Reassignment of Cleaning Contract to Kidds Services", and the body of the letter is as follows: We hereby provide the Contract Document for execution. Terms and Conditions remain as per the original Top Ryde Contract, which commenced 01.06.1999.

[60]

Terms of the contract 38 It is clear that initially, there was a contract between the previous owner and Executive, on the basis of the September 1998 tender documents. In my opinion, no doubt is thrown on this by the "contract signature" document of 1999. This contract provided relevantly for 15 minute coverage, to be provided by four cleaners. 39 I am not satisfied, on the balance of probabilities, that this contract was displaced by the letter of 18 October 1999. If the only question had been whether that letter had been sent, I am inclined to think that such an inference could be drawn from the presence of the letter among the business records of the previous owner. However, there is also a question of whether, if it had been sent and received, its terms were accepted. There is no written or oral evidence directly supporting such an acceptance. 40 Mr Rewell SC for Bevillesta submitted that an inference should be drawn that the terms were accepted, particularly because of Liberty's failure to call Mr Kidd. 41 This submission would have had force if Executive itself was the relevant defendant, with Liberty conducting the case on behalf of its insured. However, in my opinion it has little if any force in circumstances where Liberty has been sued direct pursuant to s 6 of the Law Reform (Miscellaneous Provisions) Act 1946. In my opinion, it cannot be said that Mr Kidd is in Liberty's "camp", or that Liberty has any particular reason to have confidence in his evidence. If it can be said that Mr Kidd would be expected to be called by Liberty rather than by Bevillesta, that expectation could not be considered a strong one. Accordingly, in my opinion, if it is a case in which an inference can be drawn in accordance with the principle in Jones v Dunkell (1959) 101 CLR 298, the inference could not be considered a strong one. Accordingly, I would not be prepared to infer that the terms of the letter of 18 October 1999 were accepted. 42 In circumstances where Executive continued to provide cleaning services to Bevillesta, after it acquired the shopping centre, I would infer that there was a contract between Executive and Bevillesta on the same terms as the contract that existed before Bevillesta's purchase with the previous owner. 43 It is clear that the contractual terms changed in May 2001. As a result of the new cleaning schedule, the cleaner was obliged to provide only two cleaners on Mondays between 4pm and 5pm, three cleaners between 5pm and 5.30pm and two cleaners between 5.30pm and 6pm. In those circumstances, in my opinion it was no longer an obligation of Executive to provide 15 minute coverage of relevant areas at these times. The question then is, what were the relevant obligations of Executive. 44 Mr Rewell submitted that the primary judge had erred in finding that the obligation was to provide only two cleaners at the relevant times, and did not further consider what the obligation of the cleaner was. Mr Rewell submitted that the ongoing obligation of the cleaner must have been to provide coverage commensurate with the continuing personnel, that is at 30 minute intervals in those periods when there were two cleaners and 20 minute intervals in those periods when there were three cleaners. At the very least, he submitted, there must have been a requirement for coverage within the period of 40 minutes during which the squashed orange was shown to be present. 45 In my opinion, it is significant, as submitted by Mr Polin for Liberty, that Mr Savill gave no evidence of any instructions given to the cleaners or to the security guard as to responsibility for detection of spillages and, apart from the evidence referred to above about 15 minute coverage at lunchtime, no evidence as to what the practice was after May 2001. 46 As submitted by Mr Polin, the obligations of the cleaning contractor went far beyond the detection and cleaning of spillages and other hazards (see Blue 79-85); so particularly in circumstances where some responsibility for detection of spillages was accorded to the security company, it would not be appropriate to infer that there should be simply a proportionate adjustment of the coverage, as submitted by Mr Rewell. 47 Accordingly, in my opinion, while the cleaning contract did undoubtedly still include an implied obligation to exercise reasonable skill and care, it did not in my opinion include any obligation as to any particular frequency of inspection for spillages. 48 Turning to the question of assignment, in my opinion very little weight can be given to the letter, originally bearing date 21 May 2001, which purported to emanate from Services and referred to an assignment to Services. I would infer that the correct date of the letter is 1 May 2001, and that the letter of 3 May 2001 was a response to it. The letter of 3 May 2001 was directed to Executive, and made no reference to any assignment. 49 Further, in my opinion, the oral evidence of Mr Savill carries very little weight. An assignment would have to be by words and/or writing and/or conduct. The evidence of Mr Savill was thus of a conclusion of mixed fact and law, without identifying or giving evidence of relevant facts. If it had been objected to, it would have been rejected as inadmissible. 50 In my opinion, the invoices and cheques have far greater weight, in suggesting that Executive continued to be the cleaner. It is not to the point that the invoices were addressed to a company providing management services to Bevillesta rather than Bevillesta itself. 51 Accordingly, in my opinion, the presumption of continuance was not displaced, and the relevant contract was between Bevillesta and Executive.

[61]

Breach of duty? 52 There is no doubt that Bevillesta as owner and occupier of the shopping centre owed a duty of care to the plaintiff. 53 There is no doubt also that this occupier's duty of care is "delegable", in the sense that it may be discharged in whole or in part by the occupier's exercise of reasonable skill and care in engaging someone else to take steps to keep the property safe either generally or in particular respects. Discharge of the duty in this way requires reasonable skill and care in the selection of the other person, in arranging the terms of engagement of that person, and in confirming that the person does take appropriate steps. If it is reasonable for an occupier to seek to discharge or partly discharge the occupier's duty in this way, and the occupier does exercise reasonable skill and care in all these respects, then if a person coming on to the property is injured due to the failure of the other person engaged to exercise reasonable skill and care to keep the property safe, the occupier may escape liability. 54 In my opinion, a corollary of this is that a person engaged in this way may come under a duty of care to persons coming on to the property. If that person knows or reasonably should know that he or she has been engaged to keep the property safe for persons coming on to it (and the exercise of reasonable skill and care by the occupier would require that this be conveyed to that person), then in my opinion the person so engaged would appreciate that if he or she does not exercise reasonable skill and care, there is a risk of injury to persons coming on to the property; and the person's understanding of that engagement and risk gives rise to a relationship with persons coming on to the property sufficient to support a duty of care. 55 This accords with what Hayne J (Crennan J concurring) said in Leichhardt Municipal Council v Montgomery [2007] HCA 6, (2007) 81 ALJR 686 at [157]: [157] There is no reason for adding the liability of a highway authority to road users to an otherwise limited number of cases where a non-delegable duty has been held to be owed. If a highway authority acts without reasonable care, absent particular statutory provision to the contrary, it will be liable to the road user who is injured as a result. If the highway authority acts with reasonable care in appointing and supervising the work of an independent contractor, but that contractor is negligent, the contractor will ordinarily be liable (as Roan was here) to the road user who suffers injury in consequence.

[62]

See also Prestige Property Services Pty Limited v Choi [2007] NSWCA 363 at [37]-[43]. 56 This approach applies with particular force when the person engaged has specialist skill, as in the case of the tree contractor in Prestige. However, it has also been applied to cleaners engaged by occupiers to clean premises. Certainly a cleaner would be liable if it creates a hazard, for example by leaving a floor wet and unguarded: see Woolworths (WA) Pty Limited v Berkeley Challenge Pty Limited [2004] WASCA 196, (2004) 28 WAR 540 at [56]-[57]. 57 Even when a hazard is created by someone else, and the cleaner fails to deal with it, it seems clear that the cleaner can be liable for breaching a duty of care to persons coming on to the property. This was assumed, without being discussed, in cases such as Allcorp Cleaning Services Pty Limited v Fairweather (New South Wales Court of Appeal, 29 June 1998, unreported) and P & H Property Service Pty Limited v Branigan [2008] NSWCA 195. See also Cairns v Woolworths Limited [2005] ACTSC 95 at [135]. 58 In the present case, the lack of precision as to the terms of the contract makes the application of this approach difficult. 59 I would infer that Executive did appreciate, at least under the original contract and schedules, that it had been engaged to keep the property safe for persons coming on to it, and that one of its responsibilities to this end was to maintain 15 minute coverage at times and places that included 4pm to 6pm on Mondays at the location of this accident. 60 However, when the schedules were changed, so far as the evidence goes, it is unclear precisely what was the responsibility of Executive at the relevant time and place. As mentioned before, since its obligations went well beyond that of checking for spillages and other hazards and cleaning them up, I do not think it would be appropriate to apply an automatic proportionate reduction of the coverage. In the absence of evidence as to instructions given to cleaners and security personnel and absence of evidence as to actual practice, the Court is left in a position where it just does not know what was the role of the cleaner and what was the role of the security guard and perhaps others in relation to the detection of spillages; or how the reduction in personnel impacted on the question of detection of spillages as opposed to other services provided by the cleaner. 61 In those circumstances, I would not find on the balance of probabilities that Executive has breached a duty of care owed to persons coming on to the premises, including the plaintiff. 62 On the same basis, I would not be prepared to find that Executive had breached its contract with Bevillesta to exercise reasonable skill and care in carrying out its cleaning contract. For reasons already given, cl 10.5 of the letter of October 1999 was not shown to be part of the relevant contract.

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Judgment (66 paragraphs)

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