ISS Property Services Pty Ltd v The Underwriter Insurance Company Ltd - [2013] SASC 53

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
ISS PROPERTY SERVICES PTY LTD v THE UNDERWRITER INSURANCE COMPANY LTD
[2013] SASC 53
Judgment of The Honourable Justice Vanstone
12 April 2013
INSURANCE - THE POLICY - PRINCIPLES OF CONSTRUCTION
Plaintiff liable for injuries caused to employees working at premises cleaned by plaintiff - WorkCover paid compensation to employees - WorkCover recovered compensation paid to the employees from plaintiff under s 54(5) Workers Rehabilitation and Compensation Act 1986.
Plaintiff held broadform liability insurance policy with defendant - covered "all sums ... which the Insured shall become legally liable to pay as compensation for ... Personal Injury" - excluded cover for "liability imposed by the provisions of any workers compensation legislation". Plaintiff sought recovery of sums paid to Workcover - claim denied by defendant on basis that amounts paid by plaintiff were not sums the plaintiff had become legally liable to pay as compensation "for" personal injury - alternatively, defendant could avoid liability by operation of the exclusion clause.
Held: policy covers plaintiff's claim - placed in its commercial context, insuring clause covers such liability as was incurred by the plaintiff in the present case.
Section 54(5) Workers Rehabilitation and Compensation Act 1986 does not create any new rights - s 54(5) is a codification of pre-existing common law right for a party that has paid compensation to a worker to recover from a liable third party - s 54(5) bestows upon WorkCover the right to enforce the pre-existing common law right of recovery against liable third parties - plaintiff's liability to WorkCover therefore not "imposed" by the Workers Rehabilitation ad Compensation Act - exclusion clause does not apply.
Plaintiff's costs of defending WorkCover's recovery action recoverable against the defendant on an indemnity basis.
Supreme Court (Civil) Rules 2006 r 211; Workers Rehabilitation and Compensation Act 1986 s 54; Workers Compensation Act 1906 (UK); Public Authorities Protection Act 1896 (UK); Workmen's Compensation Act 1932 s 71(2); Workmen's Compensation Act 1971 s 84(d); Workers Compensation Act 1958 (Vic) s 62(1)(b); Sale of Goods Act 1923 (NSW) s 19, referred to.
McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; Monarch Insurance Co Ltd v Steel Mains Pty Ltd [1986] VR 831; Zurich Australian Insurance Ltd v Regal Pearl Pty Ltd (2007) 14 ANZ Ins Cas 61-715, [2006] NSWCA 328, applied.
Tuckwood v Rotherham Corporation [1921] 1 KB 526; Unsworth v Commissioner for Railways (1958) 101 CLR 73; State Government Insurance Office v Cittenden (1966) 117 CLR 412; Genders v Government Insurance Office of NSW (1959) 102 CLR 363; Club Motor Insurance Agency Pty Ltd v Sargent (1969) 118 CLR 658; National Vulcan Engineering Insurance Group Ltd v Pentax Pty Ltd t/a Lif-Rig & Anor (2004) 20 BCL 398, [2004] NSWCA 218; Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522, considered.

ISS PROPERTY SERVICES PTY LTD v THE UNDERWRITER INSURANCE COMPANY LTD
[2013] SASC 53
Civil

VANSTONE J: In this action the plaintiff sues the defendant insurer on two policies claiming that the defendant has wrongly refused indemnity in respect of two claims.
Three questions for determination have been ordered to be separately tried pursuant to r 211 Supreme Court (Civil) Rules 2006.
The answers to the questions will, in one instance, determine the claim entirely and in the other will remove the main area of dispute.
The questions concern the interpretation of certain clauses, or at least expressions, in the policy.
Background
It is not necessary to go into detail about the plaintiff’s case. In short form, the plaintiff, a corporation in the business of providing cleaning services, was insured under two broad form liability insurance policies. (I shall generally refer to these as “the policy” as there is no material difference for the purposes of this trial.) In the first claim the plaintiff was engaged by Motorola to provide cleaning services at Motorola’s premises. Ms Mustac was employed by a catering company to provide catering services at the premises of Motorola. In 2002 she injured herself in a cool room on those premises. It was alleged that the plaintiff was negligent in having failed to strip and reseal an area of floor where Ms Mustac worked. Ms Mustac could have, but did not, sue the plaintiff for damages at common law. Instead, she made her claim against WorkCover. WorkCover paid amounts to her and subsequently sought to recover those amounts from the plaintiff. Eventually the plaintiff settled the claim. The plaintiff paid the sum of $20,000 to WorkCover and also incurred costs in its defence of the claim.
In relation to the second claim the plaintiff provided cleaning services at the OneSteel plant at Whyalla. Ms Lynch was there employed by a catering company. In 2003 she slipped and fell inside the cool room of the premises and sustained injury. WorkCover paid amounts to Ms Lynch and sought to recover those amounts from the plaintiff. The claim was eventually settled, the plaintiff paying WorkCover the sum of $67,500 and incurring costs in its defence of the claim.
WorkCover’s claims against the plaintiff proceeded pursuant to s 54(5) of the Workers Rehabilitation and Compensation Act 1986 (the WC Act). Relevant parts of s 54 provide:
54—Limitation of employer's liability
(1)     Subject to subsection (2), no liability attaches to an employer in respect of a compensable injury arising from employment by that employer except—
(a)a liability under this Act.
…
(4b)   Where—
(a)a worker suffers a compensable injury (not being an injury that arises out of the use of a motor vehicle and gives rise to a liability of a kind referred to in subsection (2)); and
(b)action is taken against a person other than the employer for damages in respect of the injury,
the other person has no right to recover contribution from the employer.
(5)     Where--
(a)compensation is paid or payable under this Act in respect of a compensable injury;
(b)a right of action exists against a person other than the employer for damages in respect of the injury,
the person by whom the compensation is paid or payable is entitled to recover from that other person the amount of the compensation in accordance with subsection (7).
Section 54 (7) creates certain restrictions on WorkCover’s ability to recover such sums which are not relevant in this case.
The plaintiff informed the defendant of the claims being made against it. The defendant denied liability and declined to conduct the respective defences.
Questions for Determination
The questions put to me for determination are as follows:
1.Do the claims made by WorkCover against the plaintiff in respect of the amounts paid by WorkCover consequent upon injuries suffered by Mustac and Lynch fall within the operative clause of the policies issued by the defendant?
2.If the operative clause of the policies applies, are the claims otherwise excluded by the operation of Exclusion Clause 1(f) of the policies?
3.If the plaintiff is entitled to indemnity under the policy, are the plaintiff’s costs of defending the claims recoverable on an indemnity basis and, if not, on what basis?
The answer to Question 3 is not now contentious as a consequence of Mr H Abbott SC, for the defendant, conceding that if the plaintiff is entitled to indemnity under the policies, costs incurred by the plaintiff should be recoverable on an indemnity basis, so long as the costs incurred are reasonable.
The policies
The two insurance policies under consideration are identical in content, but are nevertheless separate policies covering the periods 1 January 2002 to 1 January 2003 and 1 January 2003 to 1 January 2004, respectively. The insuring or operative clause in both policies is the first clause and appears under a heading as follows:
Broadform Liability Insurance
The Insured named in the Schedule having made to the Company a written proposal which is deemed to be incorporated herein and having paid the premium stated in the Schedule then subject to the terms, conditions and exclusions contained in or endorsed on this Policy the Company will pay to or on behalf of the Insured all sums provided by the Policy which the Insured shall become legally liable to pay as compensation for:
1.     Personal Injury or
2.     Property Damage or
3.     Advertising Liability
caused by an Occurrence within the Territorial Limits as stated herein in connection with the Insured’s Business. (underlining added)
The exclusion clauses under consideration each relevantly provide:
Exclusions
The Company shall not be liable to indemnify the Insured in respect of:
1.     Employer’s Liability
(a)liability for Personal Injury to any person arising out of, or sustained in the course of, the employment of such person in the Insured’s service, or through the breach of any duty owed to that person, where the Insured:
(1)is indemnified or entitled to be indemnified (either in whole or in part) in respect for claims for damages under a policy of insurance (which expression includes arrangements made by the Insured to provide accident insurance for the Insured’s workers under a licence to self insure) arranged (whether required by law or not) in accordance with any workers’ compensation legislation or accident compensation legislation; or
(2)would have been indemnified or entitled to be indemnified had the Insured arranged a policy of insurance as required by such legislation
(b)liability for Personal Injury to any person arising out of, or sustained in the course of, the employment of such person in the Insured’s service
(c)liability for mental anguish suffered by any person arising out of, or in the course of, that person’s employment by or service to the Insured
(d)liability for Personal Injury arising out of the harassment, libel, slander, defamation or humiliation of, or discrimination against, any person while in the Insured’s service or while employed by the Insured
(e)liability of a type in respect of which indemnity previously would have been provided under a policy of insurance arranged in accordance with any workers’ compensation legislation or accident compensation legislation, but in respect of which indemnity has been withdrawn or reduced as a consequence of a change to the scope, terms, provisions, or requirements of such legislation made after the commencement of the current Policy Period; and
(f)any other liability imposed by the provisions of any workers compensation legislation or accident compensation legislation or industrial award, agreement or determination. (emphasis in original)
The policy also excluded liability for, inter alia, any personal injury or property damage arising out of the use of a motor vehicle (save for motor vehicles used as a “tool of trade” on a contract site), aircraft or watercraft, property damage to property owned, leased, rented or otherwise in the control of the Insured (save for premises leased by the Insured for business purposes and vehicles belonging to third parties stored in car parks owned or operated by the Insured), faulty workmanship done by the Insured, damage to or loss of products manufactured by the Insured, liabilities incurred by the Insured in recalling its products, and liabilities incurred by the Insured arising from the Insured’s provision of professional advice.
Arguments on the policy
Mr Abbott SC argued that the insuring clause did not cover the plaintiff’s obligation to pay the amounts sought by WorkCover, because the amounts sought by WorkCover were not “compensation for personal injury” as required in the policy. Rather, they were payable to WorkCover in accordance with its enforcement of a statutory benefit due to it. Mr Abbott argued that the word “for” in the insuring clause limited the defendant’s liability to compensation paid by the plaintiff to instances where that liability arose as a direct consequence of the plaintiff’s breach of duty. According to Mr Abbott, the amounts paid by the plaintiff to WorkCover amounted to WorkCover’s enforcement of a statutory right of recovery created by s 54(5) of the WC Act and were thus not directly borne of any obligation on the part of the plaintiff to compensate for a liability created by its negligence.
Mr Abbott drew support from Tuckwood v Rotherham Corporation [1921] 1 KB 526. This case turned on whether the defendant council was immune from a statutory claim for contribution by the plaintiff, a party who had paid workers’ compensation to an employee for personal injury caused by the negligence of the council. The claim was made under the Workers Compensation Act 1906 (UK). The immunity was said to arise from a six-month limitation period in the Public Authorities Protection Act 1896 (UK) on any action commenced “in respect of any alleged neglect or default in the execution of any such Act, duty or authority” (underlining added). The Court held that the plaintiff employer’s claim for indemnity under the Workers Compensation Act was not a claim “in respect of” the negligence of the defendant council, but an action to enforce a statutory right to indemnity, that right created by and not existing outside the statutory framework. Tuckwood was applied by the High Court in Unsworth v Commissioner for Railways (1958) 101 CLR 73.
Mr Abbott referred to a number of authorities which considered similar wording in statutes and insurance contracts, defining the scope of coverage in particular circumstances. These authorities tended to deal with clauses indemnifying for liability “in respect of” a particular event, rather than “for” that event. Mr Abbott argued that the expression “in respect of” captured a wider range of events than the more direct relationship contemplated by use of the word “for”: Unsworth at 87-88 per Fullagar J and State Government Insurance Office v Crittenden (1966) 117 CLR 412 at 415-416 per Taylor J.
Mr Abbott conceded that, had the insuring clause instead used the more expansive wording “in respect of”, the defendant would have been liable to indemnify the plaintiff. The correctness of this concession is supported by a number of decisions including Genders v Government Insurance Office of NSW (1959) 102 CLR 363 per Menzies J at 387 and Club Motor Insurance Agency Pty Ltd v Sargent (1969) 118 CLR 658 per Owen J at 664.
Mr Abbott also drew the Court’s attention to National Vulcan Engineering Insurance Group Ltd v Pentax Pty Ltd T/A Lif-Rig & Anor (2004) 20 BCL 398; [2004] NSWCA 218 in support of his submission distinguishing “for” from “in respect of”. In Pentax however, Campbell AJA noted that “the authorities to which we have been referred provide little or no guidance to the resolution of this matter ... [t]hey concern different expressions in different insurance policies (or in statutory contexts) and arise out of different factual circumstances”. The same difficulty faces Mr Abbott in his attempt to apply the reasoning in Crittenden, Genders and Sargent to narrowly interpret “for” in the present case. These decisions all concerned compulsory third party insurance policies in relation to motor vehicle accidents, and addressed policy factors unique to that area. These cases have limited, if any, application to the private, commercial relationship under consideration. Similarly, Tuckwood and Unsworth concerned the interpretation of limitation statutes being relied upon by government bodies to avoid liability for personal injuries suffered by a member of the public – a particular set of circumstances for which analogies to the present commercial context are difficult to draw.
Mr Abbott put, as an alternative submission, that even if the insuring clause were wide enough to cover liability imposed by s 54(5) WC Act, liability was excluded by the exclusion clause 1(f). He put that 1(f) captured and excluded exactly the type of liability as that imposed by s 54(5). Mr Abbott further argued that even though exclusion clause 1 carried the heading “Employers Liability”, the Court could not use this heading to conclude that the exclusions were to be confined to the plaintiff’s liability as an employer. He pointed to clause 12 of the policy which directed that headings were not to be “deemed any part of the context or to affect the interpretation of this Policy”.
Mr R Harms, appearing for the plaintiff, responded to Mr Abbott’s arguments in two parts. First, he contended that at the same time as removing to WorkCover the obligation of an employer to pay damages for personal injury as a consequence of negligence, s 54(5) of the WC Act bestows upon WorkCover the pre-existing common law right of the injured employee to recover such damages from the third party responsible for those injuries. Therefore, an obligation to pay compensation to WorkCover is encompassed by the expression a “sum … which the Insured [became] legally liable to pay as compensation for … Personal Injury” and is not a new liability created by Parliament.
In support of his interpretation of s 54(5), Mr Harms helpfully provided a background as to the development of the South Australian workers’ compensation legislative framework, explaining how and why the legislature was moved to bestow the right of recovery from negligent third parties upon WorkCover in situations such as the present one. Before the 1986 Act and the creation of the WorkCover entity, employers were required to compensate workers for injuries suffered during their employment. Under s 71(2) of the Workmen’s Compensation Act 1932, where an employer had paid compensation to an employee for injuries suffered as a consequence of a third party’s liability, the Act gave the employer the right to seek indemnification from that third party. This right in the employer was preserved in s 84(d) of the Workmen’s Compensation Act 1971.
Both s 71 and s 84 codified the worker’s right to recover both from the employer and the negligent (or otherwise liable) third party. Section 54(1) of the WC Act removes any liability that would have been borne by the employer under the previous schemes since WorkCover took the place of the employer as the primary compensating body after 1986. Despite this change in the workers’ compensation framework it is clear from the 1932 and 1971 Acts that, where the legislature gave the employer the right to recover from liable third parties compensation that it had paid to workers, it was not creating any new rights. Instead, the Act merely gave standing to the employer to enforce a right residing in its compensated employee, in appropriate circumstances.
Next Mr Harms argued that, giving appropriate consideration to context, the word “for” in the policy should be read as bearing the same meaning as “in respect of”. Mr Harms referred to the pivotal role of context in interpreting insuring clauses in commercial contracts, referring to the reasons of Gleeson CJ in McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 at [22]:
A policy of insurance, even one required by statute, is a commercial contract and should be given a businesslike interpretation. Interpreting a commercial document requires attention to the language used by the parties, the commercial circumstances which the document addresses, and the objects which it is intended to secure.[1]
Mr Harms submitted that it would be “an extraordinary result” if the policy did not respond to the plaintiff’s claim where injured workers sought redress only through the WC Act as opposed to at common law. Such a result would create an untenable uncertainty in the policyholder, who would have no control over the choice made by the injured worker as to who to pursue. In Mr Harms’ submission, the defendant’s interpretation would undermine the very purpose of taking the insurance, creating an uncertainty not commercially acceptable to the policyholder.
[1] This passage was subsequently adopted by the High Court in Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522.

Mr Harms submitted that his arguments on the insuring and exclusion clauses rose or fell together. That is, if the Court were persuaded by his argument that the plaintiff’s obligation to reimburse WorkCover did not amount to a new liability imposed by the WC Act, then the liability, so characterised, could not fall within the clause 1(f) exclusion as a matter of definition. Further, Mr Harms contended that since clause 1(f) fell under the subheading “Employers Liability”, it would not apply to a situation where the plaintiff is, as here, liable as a non-employer.
Both parties referred to Monarch Insurance Co Ltd v Steel Mains Pty Ltd [1986] VR 831, a decision of the Full Court of the Supreme Court of Victoria. An employee of a company called “Deer Park” was hired to the respondent, Steel Mains. While working for Steel Mains, the employee suffered personal injury and was awarded both damages at common law against Steel Mains and worker’s compensation from Deer Park under the Workers Compensation Act 1958 (Vic). At trial, Deer Park was granted indemnity against Steel Mains for the amounts paid under the statute, and a question arose as to whether contract of insurance between Steel Mains and the insurer would cover Steel Mains’ liability to indemnify Deer Park for the workers’ compensation payments made to the worker. The relevant insuring clause indemnified Steel Mains for “all amounts which [Steel Mains] shall become legally liable to pay as compensation in respect of personal injury…caused by an occurrence in connection with the business of [Steel Mains]”.
Kaye J (McGarvie and Phillips JJ concurring) decided that both Steel Mains’ direct liability to pay damages for the worker’s injuries and its liability to indemnify Deer Park were directly within the terms of the policy (at 843). This reasoning, according to Mr Harms, was applicable to the present case. Just as Deer Park was entitled to indemnity for workers’ compensation it had paid as a consequence of its statutory liability as an employer, so WorkCover was entitled to reimbursement from the plaintiff for the sums it had paid to Ms Mustac and Ms Lynch. Steel Mains’ liability to reimburse Deer Park arose under circumstances comparable to the present ones; the plaintiff, like Steel Mains, was liable in negligence for the worker’s injury. Such a reimbursement or indemnification fell within an insuring clause of the type now under consideration.
Mr Abbott sought to distinguish Monarch on factual grounds. He attributed to Mr Harms an attempt to place WorkCover in the position of Steel Mains in Monarch. This, he argued, failed to recognise that the liabilities in Monarch were different in that Steel Mains’ liability to the injured worker in negligence compared with WorkCover’s purely statutory liability to compensate Ms Mustac and Ms Lynch. On my understanding, this misapprehends the argument. I agree with Mr Harms’ approach to Monarch and find that the case assists his argument.
Both parties also referred to and sought to rely on Zurich Australian Insurance Ltd v Regal Pearl Pty Ltd (2007) 14 ANZ Ins Cas 61-715; [2006] NSWCA 328. This case concerned an insurance policy taken out between the appellant, Zurich, and a seafood wholesaler called Tai Kwan. Tai Kwan had provided the respondent restaurant with some prawns. The respondent served the prawns to customers who fell ill and recovered compensation from the restaurant, which in turn sought to recover from Tai Kwan.
The insuring clause covered Tai Kwan for “all amounts…that [Tai Kwan] becomes legally liable to pay in compensation for … Personal Injury or Property Damage that results … from an event … which causes Personal Injury … that happens in connection with … Products … that have been ... sold, supplied, [or] distributed … by [Tai Kwan]”. Zurich refused to indemnify Tai Kwan. Tai Kwan was ultimately found liable to the restaurant for breaching the implied contractual conditions of merchantable quality and fitness for purpose as contained in s 19 of the Sale of Goods Act 1923 (NSW). A question arose as to whether such liability in contract fell within the insuring clause as a liability upon Tai Kwan to pay an amount “in compensation for … Personal Injury” to the ill customers.
Spigelman CJ wrote the lead judgment (with which Beazley and Hodgson JJA concurred). Spigelman CJ gave the word “for” a broad interpretation, having the same meaning as “in respect of” in this context. Emphasis was placed on the broad, general nature of the policy, which was interpreted as reflecting a commercial intent to cover for a wide range of occurrences, including claims founded in contract (under the Sale of Goods Act) or in tort.
Mr Abbott SC argued that the decision of Spigelman CJ to equate “for” with “in respect of” should be read in light of the widely drawn policy there at issue.
Analysis
As seen, in interpreting the clauses under consideration, regard must be had to the whole of the contract. I agree with Mr Harms’ submission that to interpret the policy so as to exclude liability runs contrary to the commercial intent of the parties in entering into a broadform liability insurance policy of this type. It could not have been intended that the defendant would only indemnify the plaintiff where the claim was brought at common law and not via the workers’ compensation scheme, a matter out of the plaintiff’s control. This would leave the plaintiff exposed in a way which would be untenable.
As did Spigelman CJ in Zurich, I would interpret the conjunction “for” to mean the same as “in respect of” in the policy currently under consideration. There are a number of parallels to be drawn between the Zurich policy and the present policy which lead me to the conclusion that the same reasoning is applicable. The Zurich policy insured Tai Kwan for products liability and property damage as well as personal injury. The policy included wide definitions of loss occasioned by products liability and property damage. The present policy similarly insures the plaintiff against “Property Damage” with similarly wide definitions. The present policy also guards against “Advertising Liability” which is similarly broadly defined, extending beyond advertising liability incurred by the advertising activities of the policyholder itself to “any advertising activities conducted on behalf of the Insured in the course of advertising the Products, goods or services”. As was the case in Zurich, here the wide definitions given to other heads of liability provide a textual indication of the breadth of the scope of the commercial arrangement.
Like the Zurich policy, the present policy insures the plaintiff for “Personal Injury … caused … in connection with the Insured’s Business”. The language used in the policy anticipates and encapsulates a broad range of events that could give rise to liability in the plaintiff. It thus provides a textual indication of an intention between the parties for the policy to have a broad scope. Overall the Zurich policy was of substantially similar form and structure to the present policy.
For these reasons I would not be inclined to find that the word “for” in the insuring clause should be read more narrowly than the expression “in respect of” would have been. As a consequence of the interpretation given to “in respect of” to include claims made by parties other than the directly injured victim of the plaintiff’s negligence (Unsworth at 88-89 per Fullagar J; National Vulcan at [4] per Hodgson JA; Zurich at [44] per Spigelman CJ) and Mr Abbott’s concession that the policy would answer the claim had the words “in respect of” taken the place of “for”, I find the defendant liable to indemnify the plaintiff for WorkCover’s s 54(5) claims.
I also find the conclusions of the Victorian Court of Appeal in Monarch helpful. WorkCover’s right to recover sums paid to Ms Mustac and Ms Lynch under s 54(5) is not a stand-alone statutory right, but a codification of a pre-existing right in WorkCover to recover compensation that it had paid for injury from the party ultimately at fault. WorkCover’s liability to compensate Ms Mustac and Ms Lynch did not arise out of its own negligence. Therefore, WorkCover’s claim for indemnity by the plaintiff is, in this context, directly akin to Deer Park’s claim for contribution by Steel Mains of workers’ compensation that Deer Park paid to the injured employee under the Victorian workers’ compensation legislation, and not as a consequence of any liability in negligence on the part of Deer Park. The mechanism under s 62(1)(b) Workers Compensation Act 1959 (Vic) allowing the employer to recover, from the wrongdoer, workers’ compensation paid by it but ultimately due by that wrongdoer did not create a unique statutory cause of action.
I agree with Mr Harms’ submission that s 54(5), despite being redrafted to adhere to the new 1986 workers’ compensation framework involving WorkCover, does not create any new or unique right of recovery on WorkCover, but instead extends to WorkCover an injured worker’s pre-existing common law right of recovery against the third party ultimately liable for the injury. It is clear from an examination of the 1932 and 1971 Workmen’s Compensation Acts that s 54(5) merely re-creates the same right of recovery in WorkCover that was previously held by employers under the 1932 and 1971 Acts.
In light of my conclusion on the interpretation of the insuring clause and my interpretation of s 54(5), the question of whether the exclusion clause applies must be answered in the negative. As WorkCover’s claim against the plaintiff under s 54(5) does not arise from a right created by that section, the plaintiff’s liability to compensate WorkCover could not be considered to be a “liability imposed by the provisions of any workers compensation legislation” (exclusion clause 1(f)).
Further, I agree with Mr Harms’ argument that the exclusion clauses 1(a) to 1(f) all relate to liabilities incurred by the insured in its position only as an employer. I reach this conclusion by examining the context in which the 1(a) to 1(f) exclusion clauses apply. All of the other exclusion sub-clauses explicitly relate to any liability that may be incurred by the insured as a consequence of hiring a contractor or employee to render services directly for the insured. Reading the exclusion clause as a whole, it is apparent that clause 1(f) only excludes liabilities incurred by the plaintiff in its capacity as an employer. As a consequence, this exclusion clause does not apply. I do not reach this conclusion on the basis of any ‘headings’ or ‘subheadings’ in the policy.
Conclusion
I answer the questions posed as follows:
1.the claims made by WorkCover against the plaintiff in respect of the amounts paid by WorkCover consequent upon injuries suffered by Ms Mustac and Ms Lynch fall within the operative clause of the policies issued by the defendant;
2.the claims are not otherwise excluded by the operation of Exclusion Clause 1(f) of the policies;
3.the plaintiff’s costs of defending the claims are recoverable on an indemnity basis.