Hazanee P/L v Elders Ltd & Ors - [2006] NTSC 26

Hazanee Pty Ltd v Elders Ltd & Ors [2006] NTSC 26
PARTIES:HAZANEE PTY LTD

v
ELDERS LTD
and
CGU INSURANCE
and
BLACK, Gregory Robert

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:  SUPREME COURT OF THE NORTHERN TERRITORY exercising Territory jurisdiction
FILE NO:SC 87/00 (20010131)
DELIVERED:  30 March 2006
HEARING DATES:  24 March 2006
JUDGMENT OF:  OLSSON AJ
CATCHWORDS:

CONTRACTS -- CONSTRUCTION AND INTERPRETATION OF CONTRACTS
Cross claims on contribution notices exchanged by co-defendants - contract of agency whereby first defendant appointed agent of second defendant to solicit and/or write insurance business on behalf of latter as underwriter - general business policy written in respect of plaintiff's business on proposal secured by first defendant through its sub-agent - claim by plaintiff pursuant to policy in respect of flood damage rejected by second defendant - present proceedings initiated by plaintiff against both defendants - assertion by plaintiff of negligence and misleading and deceptive conduct against first defendant - claim by plaintiff under policy and assertion of estoppel as against second defendant - all claims by plaintiff dismissed after trial - plaintiff deregistered and without assets with which to satisfy costs - discussion of principles relating to interpretation of commercial documents - whether contract of agency negated implied term that principal would indemnify agent - discussion of application of contra proferentem principle - whether first defendant contractually bound to indemnify second defendant as to costs - held, contract did not exclude implied right of first defendant to be indemnified by second defendant.

REPRESENTATION:
Counsel:
Plaintiff:
1^st Defendant:  J Kelly
2^nd Defendant:  S Owers
3^rd Party  Not Joined
Solicitors:
Plaintiff:
1^st Defendant:  Clayton Utz
2^nd Defendant:  Hunt & Hunt
3^rd Party  Not Joined
Judgment category classification:        C
Judgment ID Number:  ols0605
Number of pages:  16

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Hazanee Pty Ltd v Elders Ltd & Ors [2006] NTSC 26
No. SC 87/00 (20010131)

BETWEEN:
HAZANEE PTY LTD

Plaintiff
AND:
ELDERS LTD

First Defendant
CGU INSURANCE

Second Defendant
GREGORY ROBERT BLACK

Third Party

CORAM: OLSSON A/J
REASONS FOR JUDGMENT
(Delivered 30 March 2006)
Preliminary

The present reasons relate to issues raised by contribution notices exchanged between the two defendants in these proceedings. They should be read against the background of reasons published by me on 8 July 2005 in relation to the primary issues that arose between the plaintiff and other parties to the action ("my primary reasons") and subsequent reasons published on 10 February 2006 as to the costs of the third-party ("the third-party costs reasons").
As appears from my primary reasons, the plaintiff failed in its claim. A judgment of dismissal was entered. Following a later hearing as to the costs of the third-party, I published the third-party costs reasons. At that time I formally dismissed the third-party notice issued by the first defendant ("Elders") and ordered that Elders pay to the third-party his costs of, and incidental to,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hazanee P/L v Elders Ltd & Ors

Details

AGLC: Hazanee P/L v Elders Ltd [2006] NTSC 26
Case: [2006] NTSC 26
Decision Date: 30 March 2006

CaseChat Overview and Summary

The case of Hazanee P/L v Elders Ltd & Ors involved a dispute between the plaintiff, Hazanee P/L, and two defendants, Elders Ltd and another party, regarding claims related to an insurance policy and an agency contract. The plaintiff alleged that the defendants were liable for flood damage to their business, which was covered by a general business policy. The plaintiff initiated proceedings against both defendants, asserting claims of negligence, misleading and deceptive conduct, and estoppel. The trial court dismissed all claims made by the plaintiff.

The primary legal issues the court needed to decide were whether the agency contract negated an implied term that the principal would indemnify the agent, and whether the first defendant was contractually bound to indemnify the second defendant regarding the costs incurred in the litigation. The court also had to consider the application of the contra proferentem principle in interpreting the commercial documents.

In its decision, the court thoroughly examined the principles of interpreting commercial contracts, particularly focusing on the relationship between the agency contract and the implied right of indemnity. The court found that the agency contract did not exclude the implied right of the first defendant to be indemnified by the second defendant. Applying the contra proferentem principle, the court concluded that the language of the contract did not clearly exclude the general right of indemnity. Consequently, the court held that Elders Ltd was entitled to be indemnified by CGU for all legal costs properly and reasonably incurred in relation to the proceedings, including costs for which it may be liable to a third party and costs incidental to the issues. The court dismissed the contribution notice served by CGU on Elders Ltd and noted that either party had the liberty to apply regarding any ancillary or consequential aspects.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Costs of that type are in no sense expenses "in transacting insurance business". That phrase is clearly intended to apply to the costs of securing the business and writing the insurance cover in the first instance and otherwise discharging the Agent’s ancillary duties prescribed by the contract of agency. At the very best, it must be said that Article 12 does not, on a fair reading of it, clearly exclude the implied general right of indemnity that Elders would normally have against CGU.Conclusion Having regard to the views to which I have come, I find that Elders is entitled to an order that CGU indemnify it against all legal costs properly and reasonably incurred by it in relation to these proceedings, including all costs for which it may be liable to the third-party and the costs of and incidental to the issues to which these reasons relate and any GST that may properly be payable in respect of them. Such costs are to be taxed if not otherwise agreed. I dismiss the contribution notice served by CGU on Elders. There will be liberty to either party to apply as to any ancillary or consequential aspect.

Ratio Decidendi

Legal Principle Established

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