Hyde v Cottam & Ors
[2001] QSC 471
•12 December 2001
SUPREME COURT OF QUEENSLAND
[2001] QSC 471
File No S 5925 of 1997
BETWEEN:
DIANNA JEAN HYDE
Applicant
AND:
KEVIN JOHN COTTAM and SANDRA MARY COTTAM
trading as MITCHELTON POST OFFICE
First Respondent
AND:
THE AUSTRALIAN POSTAL CORPORATION
(AUSTRALIA POST)
Second Respondent
AND:
STEVEN BRIAN PAGE
Third Respondent
MOYNIHAN J – REASONS FOR JUDGMENT
DELIVERED ON: | 12 December 2001 |
HEARING DATE: | 25 October 2001 |
ORDER: | Question 1(a) is answered in the affirmative. Question 1(b) is answered in the negative. |
CATCHWORDS: | TORT – THE LAW OF TORTS GENERALLY – JOINT OR SEVERAL TORTFEASORS – WHO ARE JOINT TORTFEASORS – Where there was a license agreement between the first and second respondents – where first respondent liable for claim by employee – whether under license agreement the second respondent is indemnified in respect of the claim – whether first respondent entitled to contribution from second respondent under Law Reform Act. Heyman v Darwins Ltd [1942] AC 356 Law Reform Act, s.6 |
COUNSEL: | J A Griffin QC with A M Curtin for the First Respondents. P A Keane QC with H P Bowskill for the Second Respondent. |
SOLICITORS: | Mullins & Mullins Lawyers for the First Respondents. Clarke & Kann Solicitors for the Second Respondent. |
Australia Post seeks to have two questions separately determined against the Cottams. First, whether on the true construction of a Licensed Post Office Agreement (“the agreement”) the Cottams are obliged to indemnify it in respect of a claim made by Diana Jean Hyde. Secondly, whether the Cottams could be entitled to a contribution from Australia Post pursuant to s 6 of the Law Reform Act 1995 in the event of a finding of liability being made against them.
The Cottams conducted a post office at Mitchelton under the terms of the agreement. They employed Diana Jean Hyde, who was working in the post office when it was robbed on two separate occasions. She sued the Cottams for breach of the duty they owed her as an employee and Australia Post for the breach of duty it owed her to exercise reasonable care:
(a) For her health and safety.
(b) To ensure that the Cottams complied with their duty of care towards her.
(c) To ensure that proper and adequate safety measures were implemented at the post office.
The Cottams defended the action and cross-claimed against Australia Post relying on Hyde’s allegations of breach of duty against it and making independent allegations. They alleged that Hyde’s injuries were caused or contributed to by Australia Post’s breaches of duty and claimed contribution under s 6 of the Law Reform Act 1955. Australia Post claimed against the Cottams for declarations that under the agreement they were bound to indemnify it in respect of any liability to Hyde. The proceedings were conducted on the basis that Australia Post arguably had a non-delegable duty to the plaintiff.
Hyde compromised the action accepting a payment by WorkCover on its and Cottams’ behalf and signed a discharge releasing WorkCover, the Cottams and Australia Post from any liability arising out of the events founding the action. The discharge was expressed to be reached without admission of liability, solely for the purpose of avoiding litigation. It provided that it could be pleaded in bar to any action, claim or demand arising from those events.
Clause 6 of the License Agreement deals with the relationship between the Cottams and Australia Post in these terms:
“a)Australia Post appoints and authorises the Licensee to act as an independent distributor of the Products.
b)Australia Post appoints and the Licensee accepts appointment as an agent of Australia Post for the purposes of providing the Services. Notwithstanding the appointment of the Licensee as Australia Post’s agent the Licensee shall be an independent contractor in the conduct and operation of the Licensee’s business at the Premises.
c)The relationship of the parties is as provided in Clause 6(a) and (b) and no relationship of employment or partnership is intended or created.
d)The Licensee shall not as agent have any right or authority to bind Australia Post in any way except in the provision of Services in accordance with the terms of this agreement or by written authority of Australia Post.”
The agreement appointed and authorised the Cottams to act as independent distributors of the products identified within the agreement and as an agent for the purposes of providing the services. It provided that the Cottams were independent contractors in the conduct of the business.
The agreement made provision in clause 11 for the obligations of Australia Post and in clause 12 for the obligations of the Cottams:
“11. OBLIGATIONS – AUSTRALIA POST
During the term of this agreement, Australia Post shall:
a)furnish the Licensee with the Act, the Post Office Rules and the Licensed Post Office Manual as in force from time to time.
b)ensure that suitable product and service information is provided to enable the Licensee to properly and amply inform Customers of the nature and availability of the Products and Services.
c)provide initial and on-going training to the Licensee or his nominated representative. The training will cover the postal system generally, postal services and operating procedures of the Licensed Post Office. Australia Post has no responsibility to pay the Licensee or his employees any remuneration in respect of the period of training.
d)use its best efforts to maximise sales of Products and Services to the mutual benefit of the Licensee and Australia Post.
e)make available to the Licensee for purchase all shelving, signage, fixtures and fittings required by the Licensee at cost price, or make available the specifications of such shelving, signage, fixtures and fittings.
f)provide a range of specialised accounting and business reporting forms at no costs to the Licensee to be used by the Licensee in the operation of a Licensed Post Office.
g)maintain the integrity of the post office network by protecting the Marks and maintaining the standards of the Postal Business System.
h)from time to time make available to the Licensee a list of suppliers of Complementary Products.
12. OBLIGATIONS - LICENSEE
During the term of this agreement that Licensee shall:
a)provide to Customers in accordance with this agreement those Products and Services (including Third Party Agency Services) which are designed as mandatory in Annexure A and such other Products and Services as determined by Australia Post from time to time.
b)adopt the Image, comply with the Postal Business System and generally provide prompt, efficient, quality customer service.
c)use its best efforts to maximise sales of Products and Services from the Licensed Post Office to the mutual benefit of the Licensee and Australia Post;
d)not sell or provide at or from the Premises, without the written consent of Australia Post, any products or services which compete with or perform similar functions to the Products or Services listing in Annexure B;
e)keep confidential and ensure that employees keep confidential any information gained as a result of the operation of the Licensed Post Office, and not disclose such information to any person outside Australia Post or use such information for any purpose not authorised by Australia Post;
f)properly supervise and be responsible for all the Licensee’s employees and ensure that the Licensed Post Office is at all times staffed with sufficient competent trained personnel to ensure quality, prompt, efficient customer service;
g)comply with all applicable federal, State and municipal laws, statutes, regulations and by-laws, in the conduct and operation of the Licensed Post Office;
h)maintain security over mail, postal articles, money and the Licensed Post Office generally;
i)be liable for operational, managerial and financial obligations relating to the operation of the Licensed Post Office. These obligations cannot be sub-contracted by the Licensee to a third party;
j)maintain true and accurate accounting records and report to Australia Post in the manner and frequency prescribed in the Licensed Post Office Manual; and
k)provide and maintain in the Licensed Post Office:
i)such fit out as necessary for the operation of a Licensed Post Office;
ii)a weighing instrument for the purpose of assessing postage, such weighing instrument having been approved by Australia Post.”
Clause 17 of the agreement relevantly provides:
“17: LOSSES, LIABILITIES AND INDEMNITIES
a)Except where Australia Post is responsible pursuant to this Clause 17, the Licensee shall at all times be solely responsible for:
i)any and all debts, deficiencies, losses, damages, risks and liabilities incurred by the Licensee in the conduct of the Licensed Post Office including any loss or liability resulting from any clerical or transaction error made by the Licensee or his employees, contractors or agents;
ii)all losses damages, risks and liabilities arising out of the acts or omissions of the Licensee or any of its employees, agents or contractors in connection with the sale of Products or the provision of Services and for all claims for financial loss, damage to property or for injury or death of any persons directly or indirectly resulting therefrom.
b)Australia Post shall at all times be solely responsible for all debts, deficiencies, losses, damages and liabilities incurred or arising out of any case where the Licensee acts as an agent of Australia Post for the purpose of providing the services except:
i)where the Licensee has not acted in accordance with the Licensed Post Office Manual or Post Office Rules and such breach has resulted in the debt, deficiency, loss, damage or liability;
ii)any clerical or transaction error made by the Licensee or his employees, contractors and agents.
c)Australia Post shall bear all losses and deficiencies as a result of any break-in and hold up for Third Party agency money or monies collected by the Licensee as an agent of Australia Post, except where the Licensee has not acted in accordance with the Licensed Post Office Manual, Post Office Rules or any security requirements as agreed between the parties, and such breach has resulted in the loss or deficiency, in which case the loss or deficiency shall be the responsibility of the Licensee.
d)If at any time, there is any discrepancy in the amount of a cash remittance between Australia Post and the Licensee, the parties agree to implement the procedures as set out in the Licensed Post Office Manual. Where the amount has not been recovered or found after observance of the procedures specified in the Licensed Post Office Manual, the parties agree that each party will respectively bear the loss in the circumstances specified in the Licensed Post Office Manual.
e)The Licensee agrees to indemnify and keep indemnified Australia Post against all claims, costs, losses and liabilities (including legal costs) which are the responsibility of the Licensee pursuant to this clause.
f)Australia Post agrees to indemnity and keep indemnified the Licensee against all claims, costs, losses and liabilities (including legal costs) which are the responsibility of Australia Post pursuant to this cause.”
The agreement obliged the Cottams to obtain and maintain specified insurance policies including a public liability insurance policy (clause 18(a) and item 9 of the schedule to the agreement) and “workers’ compensation to cover claims by emloyees injured in the course of employment”; clause 18(d). It also provided that they satisfy specified security requirements. The Cottams were obliged to maintain security over mail, postal articles, money and the premises; cl 12(h).
It may be accepted that the Cottams collected and held money in the course of their operation of the business under the terms of the agreement; see the definitions of “customer”, “products” and “third party agency services” annexure A and the special condition in the agreement. The robberies were of money collected in the course of the Cottams conduct of the Post Office under the terms of the agreement.
The phrase “arising out of” in clause 17(a)(ii) has a wide connation; cf Heyman v Darwins Ltd [1942] AC 356; IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466 at 475; Samick Lines Co Ltd v The Owners of the Antonis P Lemos [1985] 2 WLR 468 at 474. In this case Hyde’s injury resulted from acts or omissions in connection with the provision of services under the agreement. Irrespective of any causal relationship between the injury and a breach by Australia Post, the Cottam’s breach caused or contributed to it.
The scheme of cl 17 is to allocate responsibility for particular categories of loss (where both the first defendants and the second defendant might otherwise be directly liable to a third party) to either the first defendant (clauses 17(a)(i) and (ii)) or to the second defendants (clauses 17(b) and (c)).
Clause 17(a)(ii) is designed to allocate to the Cottams liability in circumstances where both defendants might have been liable. That is in the context of the overall effect of the agreement, to ensure that the business was the responsibility of the Cottams and carried on by them.
The contract effects that allocation of responsibility because the possibility that liability might arise in either the Cottams, in respect of matters referred to in clauses 17(b) and (c), or in the second defendant, in respect of matters referred to in clause 17(a), is expressly contemplated and dealt with by clauses 17(e) and (f).
In my view the effect of clause 17 is that the Cottams are to indemnify Australia Post against the consequences of direct liability where clause 17 allocates responsibility for that class of liability to them. Clause 17(a)(ii) allocates liability as between the Cottams and Australia Post, where both might otherwise be liable, solely to the Cottams.
It follows that the answer to the first question “…are the First Defendants obliged to indemnify the Second Defendant in respect of the Plaintiff’s claim against the Second Defendant?” is yes. The answer to the second question “Could the First Defendants be entitled to contribution from the Second Defendant pursuant to section 6 of the Law Reform Act 1995?” is then no. That is because s 6(c) of the Law Reform Act provides:
“6.Where damage is suffered by any person as a result of a tort (whether a crime or not)-
. . .
(c) any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by the person in respect of the liability in respect of which the contribution is sought.”
The effect is to deny an entitlement to contribution from anyone entitled to be indemnified by the person in respect of the liability in respect of which the contribution is sought.
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