GIO General Ltd v Centennial Newstan Pty Ltd

Case [2014] NSWCA 13


Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: GIO General Limited v Centennial Newstan Pty Ltd [2014] NSWCA 13
Hearing dates:4 December 2013
Decision date: 12 February 2014
Before: Meagher JA at [1];
Hoeben JA at [19];
Gleeson JA at [20]
Decision:

1. Appeal dismissed.

2. The appellant to pay the respondent's costs of the appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords: CONTRACTS - general contractual principles - construction and interpretation of contracts - Indemnity clause - Obligation to indemnify - Obligation on Contractor to indemnify Principal - Insurance clause - Contractor's obligation to insure Principal and the Contractor's Subcontractors against the respective liabilities of each of those parties to each other and to third parties; GUARANTEE AND INDEMNITY - indemnities - construction of contract - Obligation to indemnify - Obligation on Contractor to indemnify Principal for failure to insure the Principal - Obligation imposed in respect of all liabilities of the Contractor and Principal and Contractor's Subcontractors to each other and to third parties; INSURANCE - Third-party liability insurance - In general
Cases Cited: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Chapmans Ltd v Australian Stock Exchange Ltd [1996] FCA 474; 67 FCR 402
Erect Safe Scaffolding (Australia) Pty Ltd v Sutton [2008] NSWCA 114; 72 NSWLR 1
Fitzgerald v Masters (1956) 95 CLR 420
Pritchard v Trius Constructions Pty Ltd [2011] NSWSC 749
Sigiriya Capital Pty Ltd v Scanlon [2013] NSWCA 401
Water Board v Moustakas [1988] HCA 12; 180 CLR 491
Wilkie v Gordian Runoff Ltd [2005] HCA 17; 221 CLR 522
Texts Cited: Derrington and Ashton, The Law of Liability Insurance, (3rd ed 2013, Lexis Nexis Australia)
Category:Principal judgment
Parties: GIO General Limited (Appellant)
Centennial Newstan Pty Ltd (Respondent)
Representation: Counsel:
L V Gyles SC with P M Knowles (Appellant)
J Simpkins SC (Respondent)
Solicitors:
Kennedys (Appellant)
Winter Hilditch & Fotheringham (Respondent)
File Number(s):2012/384153
 Decision under appeal 
Jurisdiction:
9101
Citation:
Andrew William McDonald v Centennial Newstan Pty Ltd [2012] NSWDC 218
Date of Decision:
2012-11-29 00:00:00
Before:
Marks ADJC
File Number(s):
2011/42451

Judgment

  1. MEAGHER JA: This is an appeal from the judgment of F Marks ADCJ in McDonald v Centennial Newstan Pty Ltd [2012] NSWDC 218. I have had the benefit of reading in draft the reasons for judgment of Gleeson JA. I agree with his Honour that the appeal should be dismissed with costs. I propose to state briefly my reasons for doing so. Generally, they accord with those of his Honour. I have adopted in these reasons the same abbreviations as are used…

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AGLC
GIO General Ltd v Centennial Newstan Pty Ltd [2014] NSWCA 13
Case
[2014] NSWCA 13
Decision Date

CaseChat Overview and Summary

In *GIO General Ltd v Centennial Newstan Pty Ltd*, the New South Wales Court of Appeal considered a dispute arising from a construction contract. GIO General Ltd, as the insurer of Centennial Newstan Pty Ltd (the Principal), sought to recover from Centennial Newstan Pty Ltd (the Contractor) under an indemnity clause in their contract. The core of the dispute concerned the Contractor's obligation to indemnify the Principal for liabilities arising from the Contractor's failure to maintain adequate insurance as required by the contract.

The Court of Appeal was required to determine the proper construction of the indemnity and insurance clauses within the contract. Specifically, the court had to ascertain whether the Contractor was obligated to indemnify the Principal for liabilities that arose due to the Contractor's breach of its contractual duty to insure the Principal and the Contractor's subcontractors against their respective liabilities to each other and to third parties.

The Court of Appeal reasoned that the indemnity clause imposed a direct obligation on the Contractor to indemnify the Principal for liabilities arising from the Contractor's failure to insure. The judges interpreted the contract as requiring the Contractor to bear the risk of loss resulting from its own non-compliance with the insurance provisions. This interpretation was based on the plain language of the indemnity clause, which was broad in scope and intended to cover liabilities arising from the Contractor's default. The Court found that the Contractor's failure to procure the specified insurance constituted a breach of contract, triggering the indemnity.

The appeal was dismissed, and GIO General Ltd was ordered to pay the respondent's costs of the appeal.

Orders

Orders of the court

1. Appeal dismissed.

2. The appellant to pay the respondent's costs of the appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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