Harm v Winter Kerr & Ors [2004] QSC 10

[3] The first plaintiff was injured on 20th May 1997 when one of the supports of the plank on which he was standing whilst carrying out the painting on the vessel collapsed.

[4] The second defendants seek in the third party proceedings to be indemnified by the third party insurers.

[5] The issue is whether it is clear that such a claim must fail having regard to the terms of the policy.

[6] An application of this kind will succeed only where it is clear that the claim is doomed to failure or as was said in McPhee v Zarb (2002) QSC 004 by Wilson J, "The prospects of --- succeeding on (the claim) are so slim as to be fanciful." A case involving a question of law which is arguable will not be an appropriate case for summary judgment.

[7] The relevant policy is what is known as a commercial hull policy. It was not in dispute that it is subject to certain institute protection and indemnity clauses. The relevant clauses in this case are the "institute protection and indemnity clauses hulls - time."

[8] Clause 1.1 under the heading "protection and indemnity" provides as follows:

"The underwriters agree to indemnify the assured for any sum or sums paid by the assured to any other person or persons by reasons of the assured becoming legally liable, as owner of the vessel, for any claim, demand, damages and/or expenses where such liability is in consequence of any of the following matters or things and arises from an accident occurrence during the period oft his insurance:..."

[9] The short question to be answered is whether, having regard to the terms of clause 1.1, the liability of the assured is one which must arise qua owner in the sense that the ownership of the vessel is a necessary component of the legal liability of the assured and that the liability could not exist otherwise. It is contended that the liability alleged against the second defendant is not one which requires proof of ownership as an element.

[10] The latter proposition I think can be accepted. Whilst it is plain that the second defendants were the owners of the vessel, the cause of action is dependent upon establishing that the second defendants were the occupiers of or had such a degree of control over the vessel to be able to carry out the painting of the vessel and that they entered into a contract with the first plaintiff to do so and were in breach of it. Whilst in this case it is by virtue of the ownership of the vessel that such right of occupation or control existed, ownership is not a necessary element of the cause of action. The necessary occupation or control could have arisen in a number of other ways.

[11] Reliance is placed upon a number of cases, such as Sturge v Hackett (1962) 1LlLR117 and Rigby v Sun Alliance & London Insurance (1980) 1LlLR359.

[12] In the latter case the court was concerned with a policy which indemnified for liabilities for damages "arising out of the insured's liability at law attaching solely as owner, not occupier, of the house".

"The liability must attach to the insured 'owner'. These words are apt to describe not the capacity of the insured or the history of the liability, but the character of the liability itself. To my mind they denote that the status of the insured as owners is an integral part of the cause of action against him, and not merely that in practice he would never have found himself in the position of receiving a claim and being held liable if he had not been the owner of the premises."

This view corresponds with the opinions expressed on a very similar point by Mr Justice McNair and Lord Justice Diplock delivering the judgment of the court of appeal in Sturge v Hackett (1962) 1LlLR117 at page 124.

[14] He went on to say a little later at page 365:

"I therefore read the Sun Alliance policy as covering only those claims in which the status of the insured as owner of the property is an essential, although not the only essential element in establishing as the person liable in respect of the claim."

[15] Sturge v Hackett (supra) was concerned with a policy which indemnified against liability for all sums which the insured was liable "as occupier of the said private dwelling house".

[16] Mr Justice McNair expressed the view that the words "the occupier" carried with it that occupation was an essential ingredient of the liability and not merely descriptive of the identity or status of the person to whom liability attaches.

[17] In Christmas v Taylor Woodrow (1997) 1QB 407 Kershaw J approved these authorities to which I have referred and applied them. The policy under consideration there involved the institute time clauses hulls - port risks. The language of the relevant clause is somewhat similar to that under consideration here.

[18] See also Turner v Manx Line (1989) 2 LR213.

[19] There are two Australian cases to the same effect, namely Rabbit v Roberts (1996) 67ASAR and Tannaus v American Mercantile Mutual Insurance (1978) 2 NSWLR 331. The latter case is a judgment of the Court of Appeal and the former of the Full Court of the State.

[20] In neither case was the policy sued upon the same as that here. The policy in one case was one indemnifying an insured against liability arising (Rabbit's case) as owner or occupier and in the other (Tannaus's case) "as occupier".

[21] In each case a similar approach was adopted. In Tannuas's case Mahoney JA said:

"I do not think the words 'as owner or occupier of the buildings' are merely descriptive. I think that the approach to the construction of similar words in Sturge v Hackett adopted by Diplock LJ is the correct approach to be adopted in the present case. On this basis, the question is whether a claim against the plaintiffs could succeed which had as a relevant ingredient of it the allegation that the plaintiff's... were owners of the building in question."

[22] Ownership of the vessel in the present case is not a necessary element of the cause of action alleged nor would such an allegation be sufficient.

[23] None of the authorities are binding upon me and none are concerned with precisely the same clause.

[24] However in my view they reflect a principle of long standing which is applicable to the construction of the policy. No authority to the contrary effect was cited nor, in my view, can the cases to which I was referred be distinguished in principle.

[25] In my opinion the second defendants are not entitled in the state of the authorities to an indemnity and have no prospects of succeeding on the claim for an indemnity.

[26] I should add that the third party also sought to advance an argument that the claim for an indemnity must fail because of an exclusion clause, namely clause 1.31. It does not seem to me that this is an issue upon which the third party must necessarily succeed. There are plainly, as I indicated to counsel for the third party, arguable prospects of success on the part of the second defendants in relation to this. The matter was not ultimately pursued.

[27] I give judgment for the third party against the second defendants on the third party proceedings with costs to be assessed.