QBE Insurance v SLE Worldwide

CATCHWORDS : INSURANCE - Contribution - Whether defendant's policy covered claim paid by plaintiff - Whether insured's liability arose from and was in relation to activities of the NRL - claim dismissed.

Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500 Government Insurance Office (NSW) v RJ Green & Lloyd Pty Limited (1966) 114 CLR 437 CASES CITED : Australian Paper Plantations Pty Ltd v Venturoni [2000] VSCA 71 State of New South Wales v Tempo Services Ltd [2004] NSWCA 4 Kelly & Ball, Principles of Insurance Law

QBE Insurance (Australia) Ltd PARTIES : v SLE Worldwide Australia Pty Ltd

Plaintiff: M McCulloch SC COUNSEL : Defendant: R Cavanagh

Plaintiff: Ebsworth & Ebsworth SOLICITORS : Defendant: Moray & Agnew

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3979/03 QBE INSURANCE (AUSTRALIA) PTY LIMITED v SLE WORLDWIDE AUSTRALIA PTY LIMITED JUDGMENT 1 HIS HONOUR: This is a claim for contribution between insurers arising from what the plaintiff claims is double or dual insurance. 2 On 30 September 2001, a Ms Claire Henderson was injured when she slipped on some steps at Stadium Australia whilst attending a rugby league grand final organised and promoted by National Rugby League Limited ("NRL"). She sued the operator of the stadium, Stadium Australia Management Pty Ltd ("SAM") and its agent, Ogden International Facilities Corporation (Sydney) Pty Limited ("Ogden"). 3 She alleged, and it was admitted, that SAM had the care and control of Stadium Australia, and that Ogden managed the premises by agreement with SAM. 4 She alleged that her injuries were caused by the negligence of SAM and Ogden, or their servants or agents. The particulars of the alleged negligence were: " (a) Failing to take any or any adequate precautions for the safety of the Plaintiff. (b) Exposing the Plaintiff to risk of injury that could have been avoided by reasonable care on its part. (c) Providing unsafe stairs for use by the public. (d) Painting the steps with a yellow paint which was slippery and hazardous. (e) Failing to warn patrons including the Plaintiff of the risk of injury by way of signage or verbal warning. (f) Failing to provide a hand rail or other adequate means of reducing the risk of injury or falling. (g) Providing stairs too steep for their purpose. (h) Allowing patrons to carry and consume liquid refreshments on and near the stairs, thereby exposing members of the public including the Plaintiff to risk of injury from slipping on such stairs, due in part or whole to the presence of such liquid. "

5 On 11 March 2003, an arbitrator made an award in her favour for $16,006.90 plus costs. He found that patrons had spilt beer on the metal stairs with a painted edge over some time, which clearly constituted a slippery surface. Judgment was entered in accordance with the award. 6 There is no dispute that the judgment determines that SAM and Ogden were liable to Ms Henderson for the amount found by the arbitrator, plus costs. SAM and Ogden were insured with the plaintiff against this liability. 7 On 6 May 2003 and 15 July 2003, the solicitors for SAM and Ogden, who appear to have been instructed by the plaintiff, paid the balance of the judgment sum then outstanding, and $28,000 for her costs. These moneys were provided by the plaintiff. 8 The plaintiff also incurred and paid legal costs of $33,378.45 in defending the claim. I infer that these costs were incurred by the plaintiff, it having elected to take over the conduct of the defence of the claim pursuant to its right to do so under general condition 11.3 of its policy with the insured, SAM and Ogden. 9 In total, the amount outlaid by the plaintiff was $77,385.35. It seeks contribution from the defendant for half of that sum. 10 It is not apparent to me why the proceedings had to be commenced in this court. The plaintiff seek declarations that the defendant's insurance policy responds to the loss and damage in respect of which it indemnified SAM and Ogden and a declaration that the plaintiff is entitled to equitable contribution from the defendant. Whilst the Local Court could not make such declarations, the declarations appear only to be a prelude to the claim for a monetary sum by way of contribution. That is a claim for an equitable debt. As presently advised, I do not see why the Local Court would lack jurisdiction to entertain the claim for the debt. Nonetheless, as the claim has been brought in this court it is necessary that it be determined. 11 The defendant was NRL's insurer. Its policy provided: " In consideration of the payment of the premium stated in the Schedule and subject to the terms, conditions, provisions, exclusions, and limits of liability incorporated in this policy, the COMPANY NAMED IN THE SCHEDULE...agrees to indemnify the Insured for all amounts which the Insured becomes legally inclined to pay as compensation for personal injury, property damage, and/or advertising liability, happening during the period of insurance caused by an occurrence in connection with the Insured's premises or business ". 12 The "Insured" was relevantly described as "the named Insured in the Schedule". The document answering the description "Schedule" is a certificate of insurance issued by the defendant and dated 1 June 2001. 13 It included the following provisions: " Insured National Rugby League Ltd and the following only for their respective rights and interests for Liability arising from and in relation to the activities of the NRL at Stadium Australia:- Stadium Australia Management Ltd, MTM Funds Management Ltd as Responsible Entity for the Stadium Australia Trust and Ogden International Facilities Corporation (Sydney) Pty Ltd The Business Administration, promotion and development of the National Rugby League. Activities covered whilst at Stadium Australia include: Match and Practice, cheerleaders, relay races, mini-mod football, lap of honour by retired players, presentations, video interviews and give away promotions. The following activities must carry their own liability insurance: singers, performing, dancers, bird release people, bands, choirs, balloon release people, face painters or any other mobile busker contracted by the NRL or its member clubs. Exclusions Fireworks operators, skydiving and F18 Flyovers Scope of Cover Legal liability to third parties in respect of bodily injury or property damage arising from the business of the Insured " 14 "Liability" was not a defined term. Under this policy SAM and Ogden were insured for their respective rights and interests for liability arising from, and in relation to, the activities of the NRL at Stadium Australia in respect of personal injury caused by an occurrence in connection with NRL's or SAM and Ogden's premises or business. 15 The key words are that the insurance was for "liability arising from and in relation to the activities of the NRL at Stadium Australia". 16 The plaintiff submits that SAM and Ogden's liability to Ms Henderson arose from and was in relation to the activities of the NRL at Stadium Australia, because she was injured whilst attending a rugby league game which was organised, staged, and promoted by the NRL. 17 It is necessary to look a little more carefully at the relationship between the NRL and SAM and Ogden. They entered into a hiring agreement for the stadium on 9 June 1999. Under that agreement, SAM agreed to hire the stadium to the NRL or to Australian Rugby Football League Limited for "League Events". In relation to the game in question, the hirer was the NRL. 18 Clause 1.2 b provided that the stadium was made available to the NRL as a fully serviced venue which included suitable ticketing, catering, cleaning and security services, ground maintenance, and other goods, services and facilities relating to the conduct of sporting events at the Stadium. 19 Although the whole of the stadium was made available to the NRL for its game, so that the NRL might be said to have been the occupier of it, at least as between the NRL and SAM and Ogden, the responsibility for the catering, and the condition of the steps lay with SAM and Ogden. 20 When Ms Henderson fell on the slippery steps, it was not due to anything done, or omitted to be done, by the NRL except that had the NRL not organised and promoted the game, Miss Henderson would not have been at the stadium and exposed to the risk of the slippery steps. It is in this context that the question must be answered whether SAM and Ogden's liability to Miss Henderson arose from and was in relation to NRL's activities. The expression "arising from" or "arising out of" has been considered on a number of occasions in a context similar to the present. The expression involves the notion of at least some causal or consequential relationship, although that may be indirect rather than proximate (Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500 at 505.) 21 In Government Insurance Office (NSW) v RJ Green & Lloyd Pty Limited (1966) 114 CLR 437, Windeyer J said at 447: " The words ' injury caused by or arising out of the use of the vehicle ' postulate a causal relationship between the use of the vehicle and the injury. ' Caused by' connotes a 'direct' or 'proximate' relationship of cause and effect. ' Arising out of ' extends this to a result that is less immediate; but it still carries a sense of consequence. "

22 Counsel for the defendant rightly pointed out that the causal relationship that must exist is between the liability of SAM and Ogden and the activities of the NRL, not between an activity of Ms Henderson and the activities of the NRL. 23 Counsel submitted that it is not enough for the plaintiff to show a temporal context between the injury to Ms Henderson and the activities of the NRL. Nor is it enough, he submitted, to show that the activities of the NRL were the occasion for Ms Henderson being at the stadium, or that but for, NRL's staging of the game, the liability of SAM and Ogden to Ms Henderson would not have arisen. 24 Counsel referred to the decision of the Court of Appeal of Victoria in Australian Paper Plantations Pty Ltd v Venturoni [2000] VSCA 71. There the appellant sought indemnity from the respondents in respect of sums paid to a person who was injured by a falling tree. The appellant had engaged the respondents to fell timber, and the respondents, in their turn, engaged the injured person to fell timber. The contract between the appellant and the respondents included an indemnity from the respondents, in favour of the appellant against all costs, damages et cetera "arising out of or in respect of" the carrying out of the agreement. 25 Buchanan JA, with whom Ormiston JA agreed, held that the contract between the appellant and the respondent: "… provided no more than the occasion for the claim brought by Mr Mikulich. Mr Mikulich was beneath the falling tree because he had been engaged to perform work required to fulfil the respondents' contract, but that was not a sufficient connection, and no other connection was established by the appellant ... The only connection between the respondents and the injury sustained by Mr Mikulich was that he was under a falling tree because he had been engaged to perform the work required of the respondents required by their contract with the appellant. … that circumstance provided no more than a temporal connection between Mr Mikulich's claim and the carrying out of the contract by the respondents."

26 Ultimately, each case turns on the construction of the particular instrument. The indemnity in Australian Paper Plantations Pty Limited v Venturoni was an indemnity in respect of costs, damages et cetera either arising out of the carrying out of the agreement, or in respect of the carrying out of the agreement. Thus the need to demonstrate more than a temporal connection between the injured person's claim and the carrying out of the agreement, was applied to each limb of the indemnity clause. 27 The decision in Australian Paper Plantations Pty Limited v Venturoni has not met with universal approval (see Meagher JA in State of New South Wales v Tempo Services Ltd [2004] NSWCA 4 at [8]), but, in my view, the notion it expresses is applicable to the words of the indemnity in this case. Here the expression is "arising from and in relation to". A mere relation between the liability and the activities of the NRL is insufficient. In my view, the words "arising from" denote the need for, at least, an indirect causal relationship, which is not satisfied merely by the fact that, but for the NRL's staging of the game, the liability of SAM and Ogden would not have arisen. 28 The plaintiff referred to clause 22.1 of the Hiring Agreement. That clause obliged the NRL to effect and maintain product and public liability insurance covering claims in respect of, inter alia, injury to persons "arising out of or in connection with" its use of the stadium or the conduct of a League Event. 29 I think the claim of Ms Henderson was one in respect of injury to her "in connection with" the conduct of a League Event. However, the insurance was in different terms. The use of the conjunctive required a causal connection between the insured's liability and the activities of the NRL, which I do not think is satisfied. 30 The policy cannot be construed by reference to the NRL's obligations under its Hiring Agreement with SAM and Ogden. The evidence did not show that the extent of NRL's contractual obligation was a mutually known fact, against which the policy of insurance could be construed. Accordingly, the plaintiff's claim for contribution in respect of the moneys paid to Ms Henderson fails. 31 It follows also, that the defendant cannot be required to contribute a share of the plaintiff's costs of defending the proceedings. It is therefore unnecessary to consider the question of whether an insurer is entitled to contribution from an insurer who was also on risk, for its own costs, where it has elected to take over the conduct of the defence. (See Kelly & Ball, Principles of Insurance Law, para 10.0040). 32 For these reasons, there will be judgment for the defendant. I order the plaintiff pay the defendant's costs. Exhibits may be returned after 28 days. 33 The defendant has foreshadowed making a claim for indemnity costs on the basis of a Calderbank offer. If any such claim is to be made, it should be made within the next 3 weeks and I give the parties liberty to apply on 7 days' notice accordingly.

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