Colliers Jardine Pty Ltd v Castle Mall Properties Pte Ltd

Colliers Jardine Pty Ltd (the appellant) sought to appeal a decision concerning an indemnity clause in an agreement with Castle Mall Properties Pte Ltd (the respondent), the owner of a shopping centre. The dispute arose after the respondent, as manager of the shopping centre, successfully defended a negligence claim brought against it. The core of the dispute was whether the appellant, the owner, was obliged to indemnify the respondent for the costs it incurred in defending that claim, despite the general rule that each party bears its own costs in such circumstances.

The primary legal issue before the court was the proper construction of the indemnity clause within the management agreement. Specifically, the court had to determine whether the indemnity extended to the legal costs incurred by the respondent in successfully defending the negligence claim. This involved considering whether the phrase "in the course of properly performing its duties" confined the indemnity to non-negligent performance, and the relevance of a provision requiring the owner to maintain a public liability insurance policy for the manager. The court also had to interpret the effect of a proviso that excluded wilful acts or omissions of the manager from the indemnity.

The court construed the indemnity clause as requiring the owner to indemnify the manager for liabilities arising from the manager's performance of its duties, provided those duties were performed properly. The court found that the indemnity was not confined to claims arising from non-negligent performance, but rather covered liabilities incurred in the course of performing duties properly, even if those duties were alleged to have been performed negligently. The existence of the insurance requirement was considered a factor supporting a broad construction of the indemnity. The court ultimately held that the indemnity clause did not extend to the legal costs incurred by the respondent in defending the negligence claim, as the claim itself was not a liability for which the respondent was found liable.

Leave to appeal was granted, but the appeal was dismissed. The appellant was ordered to pay the respondent's costs of the notice of motion, the summons for leave to appeal, and the appeal.