Player v Australian Technology Park Sydney Limited

The contractual provisions

1. The cleaning contract is a formal instrument of agreement dated 1 July 2007 between Australian Technology Park Precinct Management Limited, as principal, and Arcadia Pacific Group Pty Limited, as contractor. The general conditions of the agreement relevantly provide: "31. INDEMNITY 31.1 Subject to clause 31.2, the Contractor indemnifies the Principal against all loss or damage to the Principal's Property and from and against any claim, demand, action, suit or proceeding that may be made or brought by any person against the Principal, the Principals, Representative or any employee, contractor or agent of the Principal in respect of personal injury to or death of any person or loss of or damage to any property (including, without limitation, any suit for an injunction in respect of any loss, apprehended loss or interference with enjoyment of any property) whatsoever arising out of or as a consequence of the performance of the Services by the Contractor, its employees, agents or subcontractors and also from any costs or expenses that may be incurred in connection thereto. 31.2 Clause 31.1 does not apply to the extent that the loss, damage, injury death, costs or expense is caused by any breach by the Principal of any provision or the Contract or any negligent act or omission of the Principal, the Principal's Representative or employee, contractor, or agent of the Principal. 32 INSURANCE 32.1 The Contractor must, prior to the commencement of the Services and at all times during the Period, have in place the following policies of insurance with an insurance company acceptable to the Principal: (a) public liability insurance to the limit of cover of at least $20 million for any one occurrence; (b) insurance which covers the risk for which the Contractor is responsible under clause 31 to the limit of cover of at least $20 million for any one occurrence; (c) insurance for the Services to the limit of cover for any one occurrence identified in Schedule 1 which covers damage to the work performed by the Contractor as part of the Services. … 32.3 The policies of insurance required to be taken out under clause 32.1(a) and (b), must: (a) name the Principal and the subcontractors of the Contractor as additional insured; … 32.4 The principal may require the Contractor, at any time, to produce evidence to it that the insurance required under this clause 32 is in place. If the Contractor fails to produce such evidence then the Principal may do one or more of the following: (a) refuse the Contractor access to the Principal's Property for the performance of the Services; (b) direct the Contractor to cease performing the Services until such time as the insurance policies are put in place; and (c) take out the insurance and pay the premium itself in which case the amount expended by the Principal plus an amount of $250 to cover the Principal's costs in effecting the insurance will be a debt due by the Contractor to the Principal." (My emphasis added)

The insurance policy

1. Arcadia procured an insurance policy with GIO ("the insurance policy"). It is described as "AMP Trade Insurance". The insurance policy for the calendar year 2010 has been supplied to Australian Technology.
2. The policy schedule as at 25 May 2010 (the date of the accident), records that the public and products liability are insured. The schedule also records that Australian Technology is an interested party and that the limit of the policy is $20,000,000. The expression "interested party" is not defined in the policy. Australian Technology submitted that it is not clear whether or not it is an insured under the policy and if it is an insured, whether it is an insured as required by clause 32 of the cleaning contract.
3. Clauses 32(1)(a) and (b) of the cleaning contract provide that the policies of insurance required to be taken out must name Australian Technology as additional insured, whereas, the schedule attached to the insurance policy identifies Australian Technology as an interested party. There is an ambiguity in the references to the use of the terms "additional insured" and "interested party" in the insurance policy. (My emphasis added).

Correspondence

1. On 28 April 2014, Australian Technology's solicitors wrote to GIO stating: "We act on behalf of the Australian Technology Park Sydney Limited in respect of a claim brought against it in the NSW Supreme Court by Pamela Player. Attached for your insurer's review is a copy of the plaintiff's Statement of Claim filed on 6 September 2013. In summary, the plaintiff asserts that she slipped and fell upon tiles which had become contaminated with moss and/or algae. Australian Technology Park Sydney Limited entered into a contract with Arcadia Pacific Group Pty Ltd (Arcadia), for the provision of cleaning services at its premises. In accordance with Arcadia's obligations under this contract, Arcadia obtained a policy of insurance, being Trade Insurance policy number AP8AJ00023 (the policy), which named Australian Technology Park Limited as an interested party. …"
2. On 18 June 2014, the liability claims advisor at Resilium replied: "… Does our insured's policy cover this claim? We have considered the claim made by your client Australian Technology Park Sydney Limited ("your client") under the Public and Products Liability section of the AMP Trade Insurance Policy AP8AJ00023 ("the Policy") taken out by our insured, Arcadia Pacific Group Pty Ltd ("Arcadia"). In our opinion the Policy does not respond and your client's claim for indemnity is denied. Our reason for coming to the view that the Policy does not respond to your client's claim is that the plaintiff's alleged loss, that is the subject of this claim, does not arise out of the performance by Arcadia of any contract or agreement for the performance of work for your client. Accordingly, the Policy does not extend to cover your client for claims arising from its own negligence and/or arising from circumstances outside Arcadia's contracted services pursuant to the cleaning contract dated 1 July 2007. …"
3. This letter identifies a reason for denying indemnity as being on the basis that the policy does not extend to cover Australian Technology for claims arising from its own negligence and/or arising from circumstances outside Arcadia's contracted services pursuant to the cleaning contract.

The subpoena to produce

1. On 11 December 2014, Australian Technology issued a subpoena to produce to GIO. Counsel for Australian Technology has now reframed paragraph (2) it relevantly reads: "The documents or things you must produce are as follows: … 2. A complete copy of the entire underwriting files, including but not limited to: policy wordings, endorsements, schedules of insurance, proposals, proposal forms, application forms, correspondence to and from brokers, for policy number AP8AJ00023 arranged for and on behalf of Arcadia Pacific Group Pty Ltd for the following periods including: (a) 1 January 2008 - 31 December 2008; (b) 1 January 2009 - 31 December 2009; (c) 1 January 2010 - 31 December 2010."

UCPR 33.4 - set aside subpoena

1. UCPR 33.4 relevantly reads: "33.4 Setting aside or other relief (1) The court may, on the application of a party or any person having a sufficient interest, set aside a subpoena in whole or in part, or grant other relief in respect of it. …"
2. The test for determining whether a party is required to produce documents pursuant to a subpoena are set out in The City of Sydney v Streetscape Projects (Australia) Pty Ltd [2011] NSWSC 364, where Einstein J followed Beazley JA's statement in Attorney-General (NSW) v Dylan Chidgey (2008) 182 A Crim R 536; [2008] NSWCCA 65 and held that documents must be sought for a legitimate forensic purpose. Einstein J stated at [8]: "[8] … 'The test for determining whether a party is required to produce documents pursuant to a subpoena was stated by Simpson J (Spigelman CJ and Studdert J agreeing) in R v Saleam [1999] NSWCCA 86 at [11], in the following terms: The principles governing applications [for an order that documents not be produced] are no different from those governing applications for access to documents produced in answer to a subpoena. Before access is granted (or an order to produce made) the applicant must (i) identify a legitimate forensic purpose for which access is sought; and (ii) establish that it is 'on the cards' that the documents will materially assist his case…'"

Should the subpoena be set aside?

1. Counsel for GIO submitted that the extent of the actual cover provided by the policy is irrelevant, provided that the cover is of sufficient breadth to comply with the contractual requirement. Counsel for GIO also submitted that issues as to the actual cover may have to be determined by a court in subsequent proceedings between Australian Technology and GIO. While I agree that the actual cover may have to be determined by the Court, I disagree that there will need to be subsequent proceedings. The current practice is that claims against an insurer (this I accept has not yet occurred here) are usually heard at the same time because they involve the same facts and circumstances. Ultimately, the hearing of these matters together reduces court time and saves costs.
2. Counsel for GIO also submitted that for it to produce the documents sought in the schedule is oppressive. On 27 July 2015, Mr Aaron Taleb, of Hunt & Hunt solicitors, emailed GIO claims advisor Vicky Teichman enquiring as to the time and costs associated with GIO obtaining the underwriting file relevant to GIO's policy. On 29 July 2015, Ms Teichman replied that "an approximate estimate of this cost to retrieve the documents if they are still in existence would run to hundreds of dollars and the time would run to months rather than weeks." Although Ms Teichman was asked to provide a breakdown of hours and costs, she responded with an overall broadbrush approach. Since Ms Teichman made those statements, and after counsel for GIO prepared his submissions, counsel for Australian Technology narrowed the types of documents sought in paragraph (2) of the subpoena. Hence, I regard the statements of Mr Taleb as having little evidentiary weight.
3. At this hearing, the parties were given an opportunity to discuss what documents should be produced in answer to the subpoena with a view to further reducing the number of documents being sought. The discussions were not fruitful.
4. Counsel for Australian Technology submitted that it is not plain from the policy and the schedule whether or not Arcadia is an insured under the policy and if so, in what circumstances. The expression "interested party" is not defined. It, he says, is not a term of art and is open to interpretation.
5. Counsel for GIO submitted that the meaning of "interested persons", as referred to in the insurance policy, is one for legal argument, not for the production of further documents. According to GIO, whether or not the appropriate policy has been obtained is determined by looking at the policy and the schedule, not by how the insurer interprets the policy.
6. It is common ground that Australian Technology has made a claim on the insurance policy which had been declined. Counsel for GIO submitted that the opinion of the insurer that the claims of Australian Technology fall outside the cover required by the contract, is irrelevant. GIO submitted that whether the insurer has declined and whether the declinature is proper, cannot affect whether or not Arcadia complied, at the time, with its contractual obligation to obtain the appropriate policy. In any event, according to counsel for GIO, it appears the declinature has been made on the basis that the claim is outside the contractual obligations of Arcadia to provide insurance. I agree.
7. I also agree that the interpretation of the insurance contract is to be determined by the Court examining the contract and schedule after hearing legal argument as to its proper construction. However, as previously stated, there is an ambiguity between the use of the terms "additional insured" and "interested parties". Neither of those terms are defined in the insurance policy itself.
8. Counsel for Australian Technology argued that it is trite that an insurer is under an obligation to issue a policy on the express terms of the parties' contract: see Shepherd v National Mutual Life Association of Australasia Ltd & Bob Broadley Pty Ltd (1994) 8 ANZ Ins Cas 61-233 at 75-615 and Marsh & McLennan Pty Ltd v Stanyers Transport Pty Ltd [1994] 2 VR 232; (1993) 7 ANZ Ins Cas 61-203. Counsel for Australian Technology says that likewise, it is trite that the purpose of an insurance policy document is to assemble, set out and record the intentions of the parties. Australian Technology says that there will be instances where some matters have been expressed orally and/or in writing during negotiations between the parties; and that some of the terms of the insurance policy may be, through the incorporation of other documents by reference to those other documents, in the insurance policy.
9. Australian Technology referred to Electricity Generation Corp v Woodside Energy Ltd; Woodside Energy Ltd v Electricity Generation Corp (2014) 251 CLR 640; [2014] HCA 7 where French CJ, Hayne, Crennan, Kiefel and Gageler JJ said at [35]: "[35] …The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating. …"
10. According to counsel for Australian Technology, the documents sought by the subpoena may shed light on whether or not Arcadia arranged for Australian Technology to be an insured under the policy (and if so on what terms). Therefore, he submitted that the documents are relevant to determining whether or not Arcadia breached the indemnity clause (32) of the cleaning contract.
11. It is my view that the documents sought are relevant because they may objectively explain what was intended by the use of the terms "additional insured" and "interested party". For example, there may have been discussion about the use of the terms in correspondence and proposal forms.
12. The subpoena is not seriously and unfairly burdensome or prejudicial. The cost of producing the documents was originally expected to run into several hundreds of dollars. This amount will now be less as the categories of documents sought have been narrowed. It is my view that producing the documents that are sought is not oppressive.
13. The documents sought, however, must be limited to those that came into existence before 25 May 2010, as post contractual conduct cannot be relevant to the interpretation of a contract: Agricultural and Rural Finance Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57.
14. The documents referred to in paragraph (2) of the schedule of the subpoena issued by Australian Technology addressed to AAI Ltd t/as GIO should be produced to the Court (except for those that came into existence post 25 May 2010). GIO's notice of motion filed 20 July 2015 is dismissed.
15. Costs are discretionary. Costs normally follow the event. The respondent is to pay the first defendant's costs on an ordinary basis as agreed or assessed. The Court orders that: (1) The respondent's notice of motion filed 20 July 2015 is dismissed. (2) The respondent is to pay the first defendant's costs on an ordinary basis as agreed or assessed. (3) This matter is stood over to 22 October 2015 at 9.00 am for directions before the Registrar.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 October 2015