Mesiti v CPT Custodian Limited
[2013] NSWDC 122
•28 March 2013
District Court
New South Wales
Medium Neutral Citation: Mesiti v CPT Custodian Limited [2013] NSWDC 122 Hearing dates: 27 March 2013 Decision date: 28 March 2013 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: 1. Leave to the first defendant to file a third cross-claim against Calliden Insurance Limited pleading the matters raised in the application, subject to orders 2 and 3.
2. The first defendant not file the third cross-claim until two weeks have elapsed after service of the proposed third cross-claim by the first defendant upon Calliden Insurance Limited.
3. If Calliden Insurance Limited makes an application to revoke the leave granted in order 1, by reason of the contents of the proposed third cross-claim, no such third cross-claim be filed until the application by Calliden Insurance Limited is determined.
4. No order as to the costs of the amended notice of motion filed 13 March 2013.
5. Note that the first defendant by its solicitor has given an undertaking to present the lease for stamping.
6. Direct that any proposed cross-claim by the first defendant against Calliden Insurance Limited should be served on Calliden Insurance Limited and the parties by 5pm on 5 May 2013.
7. Stand over for directions on 22 April 2013 at 9.30am before the Judicial Registrar.
Catchwords: PROCEDURE - joinder - insurer - need for pleadings - statutory charge - reasonable concern of ability of insured to meet judgment - obligation on insured to take reasonable care - construction - named insured - interested party - contractual obligation to indemnify - contractual obligation to obtain insurance Legislation Cited: Civil Procedure Act 2005, s 56
Duties Act 1997, s 304
Insurance Contracts Act 1984 (Cth), s48, s 54
Law Reform (Miscellaneous Provisions) Act 1946, s 6
Uniform Civil Procedure Rules 2005, r 6.19, r 6.24Cases Cited: Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399
Campbell v Mutual Life and Citizens Fire and General Insurance Company (New Zealand) Limited [1971] NZLR 240
Legal & General Insurance Australia Ltd v Eather (1986) 6 NSWLR 390
Schipp v Cameron (Supreme Court of New South Wales, Young J, 4 May 1995, unreported)
Tzaidas v Child (2004) 61 NSWLR 18
Vero Insurance Ltd v Power Technologies Pty Ltd [2007] NSWCA 226Category: Interlocutory applications Parties: Julie Ann Mesiti (plaintiff)
CPT Custodian Limited (first defendant/applicant on notice of motion)
Glad Cleaning Service Pty Limited (second defendant)
Jun Ku (third defendant)
Sushi Nara Australia Pty Limited (fourth defendant)
Top Green Management Pty Limited (fifth defendant)
Calliden Insurance Limited (respondent on notice of motion)Representation: Mr S Walsh (first defendant/applicant on notice of motion)
Ms Bassi (second defendant)
Mr J Duncan (respondent on notice of motion)
Thompson Cooper Lawyers Pty Ltd (first defendant/applicant on notice of motion)
McCabes (second defendant)
Hunt & Hunt (third defendant), (fourth defendant) and (respondent on notice of motion)
File Number(s): 2011/179950 Publication restriction: No
EX TEMPORE Judgment
Julie Mesiti slipped and fell in a shopping centre and commenced proceedings against five parties, the owner of the shopping centre, CPT Custodian Pty Limited ("Centro"), the contracted cleaner, Glad Cleaning Service Pty Limited ("Glad Cleaning"), and three other parties. Those three other parties were connected to the Japanese food takeaway store located near to where the plaintiff fell. There was evidence which indicated that the fourth defendant, Sushi Nara Australia Pty Limited ("Sushi Nara"), was the franchisor of a Japanese food franchise, that the third defendant, Jun Ku, was a director of Sushi Nara and that the fifth defendant, Top Green Management Pty Limited ("Top Green"), was the franchisee, lessee and operator of the store.
The application before me (on the amended notice of motion dated 13 March 2013) was by the shopping centre owner, Centro, to join as a cross-defendant, Calliden Insurance Limited ("Calliden"). The matter was called three times and there was no appearance from any party except for Centro. During the course of the application, a representative for Glad Cleaning arrived and announced their appearance but took no part in the application and declined either to support or oppose the application. In these circumstances, I infer that the plaintiff and all defendants, apart from Centro, have no particular interest in the outcome of the application.
Calliden appeared by counsel to oppose the application. Centro did not oppose Calliden being treated as a party on the application, tendering evidence, reading affidavits and making submissions. For that reason, I made no order granting leave at the time and the matter proceeded as a contested application between Centro and Calliden.
At the time of Ms Mesiti's fall, Calliden was the relevant insurer of Sushi Nara, Top Green and possibly Mr Ku. On the insurance schedule, Centro was listed as an "interested party". Centro claims to be entitled to join Calliden as a party, a cross-defendant, to the proceedings on two independent bases: first, as the relevant insurer of Top Green and secondly, as the (or a) relevant insurer of Centro.
Joining Calliden as an insurer of Top Green
Centro relies upon s 6 of the Law Reform (Miscellaneous Provisions) Act1946 ("the 1946 Act"). That section provides:
"6 Amount of liability to be charge on insurance moneys payable against that liability
(1) If any person (hereinafter in this Part referred to as the insured) has, whether before or after the commencement of this Act, entered into a contract of insurance by which the person is indemnified against liability to pay any damages or compensation, the amount of the person's liability shall on the happening of the event giving rise to the claim for damages or compensation, and notwithstanding that the amount of such liability may not then have been determined, be a charge on all insurance moneys that are or may become payable in respect of that liability.
...
(4) Every such charge as aforesaid shall be enforceable by way of an action against the insurer in the same way and in the same court as if the action were an action to recover damages or compensation from the insured; and in respect of any such action and of the judgment given therein the parties shall, to the extent of the charge, have the same rights and liabilities, and the court shall have the same powers, as if the action were against the insured:
Provided that, except where the provisions of subsection (2) apply, no such action shall be commenced in any court except with the leave of that court. Leave shall not be granted in any case where the court is satisfied that the insurer is entitled under the terms of the contract of insurance to disclaim liability, and that any proceedings, including arbitration proceedings, necessary to establish that the insurer is so entitled to disclaim, have been taken".
Centro has filed a cross-claim in the proceedings against the other defendants. The relevant claim for the purposes of this argument is the cross-claim against Top Green. In substance, Centro asserts the following propositions:
(a) Top Green entered into a contract of insurance with Calliden.
(b) Pursuant to that insurance, Top Green is entitled to be indemnified against liability to pay damages to the plaintiff.
(c) The fall of Ms Mesiti is the event giving rise to the claim for damages.
(d) Accordingly, even though the liability has not yet been determined, the liability of Top Green is a charge on the insurance monies.
(e) Centro is entitled to enforce that charge by an action against Calliden as if the action were for recovery of damages from Top Green, with all the same rights and liabilities.
(f) Although leave of the Court is required under subs (4), it should be granted because there is evidence that Top Green will not be able to meet any judgment.
(g) The final sentence in s 6(4), which precludes leave being granted in a particular circumstance, has no application to the present case. No proceedings to establish a right to disclaim liability have been taken.
Subject to one matter of concern, I am persuaded that each of these propositions are arguable. Propositions (a), (b), (c) and (d) do not seem to be contested by Calliden.
Calliden raised a submission at the outset about the absence of a claim by Top Green, but I did not understand that fact to be pressed as a matter determinative of whether joinder should occur. In any event, Calliden did not identify any provision of the policy entitling Calliden to disclaim liability because of the absence of a claim by Top Green.
Section 54 of the Insurance Contracts Act 1984 (Cth), in any event, may constitute a barrier to such an argument. Further, as was stated by their Honours McHugh and Gummow JJ in Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399 at p 450:
"...once the charge has descended on the happening of the event giving rise to the claim for damages or compensation, no mutual or unilateral action of insurer or insured which is taken otherwise than under or pursuant to the contract of insurance or the general law as it operates upon the contract may vary, discharge or otherwise qualify or abrogate the contract of insurance so as to deny to the claimant what otherwise would be the fruits of enforcement of the charge by action taken under s 6(4) against the insurer. The contract of insurance is that as it stood when the charge descended. Nor, after the charge has descended, is it open to the insurer to rely upon a payment made under the contract to the insured, unless the payment was made without actual notice of the existence of the claimant's charge (s 6(6)). In these ways the position of the claimant is protected".
See also Brennan CJ, Dean and Dawson JJ at p 415.
Calliden however did raise other matters. One issue arising is whether under s 6(4), the charge is limited to the amount of the liability for "damages or compensation" or is only limited by the liability that arises out of "the happening of the event".
The first construction might mean that liability is limited to the amount payable to the plaintiff, but the second might extend that liability to include claims for contribution or indemnity, such as that made by Centro against Top Green in this case.
At p 47 of the policy wording (p 64 of the exhibit), indemnity is extended to "expenses and legal costs...awarded against you". In these circumstances, it seems at least arguable that indemnity for Top Green's liability to pay compensation includes indemnity for Top Green's liability to meet Centro's claim for contribution. Thus, if the cross-claim by Centro against Top Green is successful, it may be that any amount payable by Top Green to Centro might include both compensation to Centro for damages paid (by Centro) to the plaintiff, and compensation to Centro for costs in the proceedings.
Calliden raised five arguments against its joinder as insurer of Top Green.
First, Calliden says that it has not been served with any draft pleading. Thus, the precise claim against Calliden has not yet been specified in any filed document, but only in written submissions in this application. I think there is some force in this point, to which I will return later in these reasons.
Secondly, Calliden says that evidence of the inability of Top Green to meet a judgment is limited.
Top Green has, in recent times, updated its registration details with the Australian Securities and Investments Commission ("ASIC"), including a change of address and a change of directorship. Also, Top Green has not made a claim upon the policy.
I think the absence of a claim tends to support, perhaps only slightly, a submission that Top Green may have difficulty in meeting a judgment. In addition, it appears no notice of appearance has been filed for Top Green.
Further, the evidence in the application included an email received by the solicitors for Centro, purportedly from the director of Top Green. It says (errors in original):
"My name is Hyun Kim and I am the director of Top Green Management Pty Ltd.
Currently I am staying in South Korea and I got email notice from the previous shop staff we provided the management service before.
Our company is no longer doing any management services or retail business to any other shop due to lots of trading loss during last a few years.
Regarding Sushiya Bankstown Centro, I already provided some copy I have on my computer files when Sushi Nara Australia Pty Ltd asked me to provide.
When we vacated our office in Australia because of the non payment of office rent when I was in Australia, we lost all documents including sushiya related because building owner just throw that away. Current registered office is just address only.
I have some scanned copy of that and that is the all information I am holding now.
As a director of Top Green Management Pty Ltd, I can confirm below details regarding Sushiya Bankstown Centro shop.
1. Originally Rockin Rolls shop was designed but we have changed the name to Sushiya when we take over the lease and shop. Sushiya is our Top Green Management Pty Ltd trading name.
2. From year 2007, our company managed and operated that Sushiya shop. It was not the management service contract. We own the shop and operate the Sushiya shop. Sushiya is the only shop we own and operate as corporate store.
3. We sent many times request to center to change all relevant documents to Top Green Management because we signed lease contract under our company name. Center kept on sending the wrong detailed documents such as Rent Invoice, Mails etc
4. We always pay the rent by bank cheque as we do not have right Tax Invoice under our company. Even we corrected the wrongly delivered Tax Invoice and give bakc to centrer with bank cheque.
5. Always rent paid by bank cheque except a few times by other company cheque borrowed by us.
6. We managed and operated that Sushiya store by the middle of year
2010. And we handed over the shop to current owner Mr Hur and ownership handed over to him as well. From July 2010, we do not related to that Sushiya shop in terms of management and operation including ownership and rent payment obligation.
Feel free to email back to me if you have any other enquiry.
Yours sincerely,
Hyun Kim"
Further, an ASIC search reveals that Top Green has a share capital of one thousand dollars and its current director is Roy Kim. It is unclear whether Roy is an anglicised version of "Hyun" or whether Roy Kim is the same person as Hyun Kim, the author of the email received by Centro's solicitors.
In these circumstances, I am satisfied that there is a reasonable concern about the ability of Top Green to meet any judgment.
The purpose of the leave requirement in s 6(4) is: "to protect insurers from unwarranted direct actions by claimants upon their insureds", see Tzaidas v Child (2004) 61 NSWLR 18 at p 24 [17] per Giles JA.
If the insured has the capacity to meet a claim for damages and costs, proceedings against the insurer would serve no useful purpose. In respect of a similar provision in the decision of Campbell v Mutual Life and Citizens Fire and General Insurance Company (New Zealand) Limited [1971] NZLR 240 at p 243, Roper J stated:
"I have no doubt that the real purpose of the proviso to subs (4) is to insure that a plaintiff does not take direct action against an insurer when there is a perfectly good common law defendant available."
And in Schipp v Cameron (Supreme Court of New South Wales, Young J, 4 May 1995, unreported at 8), Young J said about this provision:
"If there is some doubt as to there being a perfectly good common law defendant available, then it seems to me that leave ought ordinarily to be given."
In my view, there is not a "perfectly good common law defendant available" in circumstances where there is a reasonable concern about the ability of Top Green to meet any judgment.
A third issue raised by Calliden is that Calliden is entitled to deny indemnity by reason of the reasonable care condition in the policy. If Calliden was entitled to disclaim liability, whether under the term of the policy or otherwise, leave should ordinarily be refused: see Bailey at pp 448-450 and Tzaidas at p 25 [23].
The reasonable care provision of the policy is as follows:
"Reasonable Care
You must take reasonable precautions to prevent personal injury or property damage as if You were not covered by this Policy, such as:
1) If You discover Your products may be defective and the defect may cause a claim under the Public and Products Liability cover section, at Your expense You must take reasonable steps to restrict, trace, recall, modify, replace or repair the products
2) maintain and look after other person's or organisation's property and buildings used or occupied by You, in accordance with Your agreement with them
3) If Your occupation includes digging below ground at sites away from Your Business Premises, You must obtain the location of underground services from the owners of the services
4) use and store all hazardous materials as required by law.
If You do not take reasonable precautions We may refuse to pay part or all of Your claim."
I was referred to the decision of Legal & General Insurance Australia Ltd v Eather (1986) 6 NSWLR 390.
It seems to me that there are two answers to this assertion.
First, the Court is in no position to determine whether these matters have been satisfied. Calliden submitted:
"A person from inside the shop pushed a trolley containing rubbish, and left it sitting for an extended period in a comparatively narrow public thoroughfare. Patently, any spillage from the trolley would have been directly on to the public thoroughfare, resulting in a greatly heightened risk of a slip and fall injury to members of the public walking through the spillage.
This highly foreseeable risk of loss occurring called for the need on the part of Top Green to take precautions to prevent spillage. No such precautions were taken."
This submission leaves uncertain whether the person who pushed the trolley had any connection with Top Green. If that person were merely a customer rather than an employee, it might lessen the likelihood that Top Green failed to take reasonable precautions.
Also, Calliden's submissions leave open the question of whether there was spillage from the trolley and whether Top Green knew of any substance leaking from the trolley. These are matters presumably to be determined at a trial.
The second reason why I am not persuaded that the reasonable care provision gives an entitlement to Calliden to disclaim liability is that it seems unlikely that this clause would be given a wide construction. The authorities support a conclusion that with clauses such as this, "actual knowledge of the danger is fundamental" for the clause to operate: see Vero Insurance Ltd v Power Technologies Pty Ltd [2007] NSWCA 226 at [21], and recklessness, at least, is required (see Vero at [44]).
Accordingly, I do not regard the reasonable precautions clause as establishing, at this stage of the proceedings, a right in Calliden to disclaim liability.
Calliden also submitted that the cross-claim by Centro against Top Green pleads a claim for contribution between tortfeasors and also a claim for breach of the lease. It was said that the policy does not respond to the contractual claim.
This argument was not developed orally. Of course, in the absence of a pleading by Centro against Calliden, it is unclear whether a contract claim against Top Green is maintained against Calliden. But there is no basis to refuse leave under s 6 merely because one claim is maintainable against Calliden but another is not.
The final submission by Calliden on this aspect of the motion is that only Centro, of all the parties, has sought to join Calliden. I do not see this as a factor militating against joinder.
Moreover, the solitary contribution made by Glad Cleaning to the motion was to indicate that, depending upon the result of the motion, they might also seek to join Calliden.
I turn to the second reason for the application for joinder.
Joining Calliden as insurer of Centro
This claim against Calliden depends in the first place upon Centro having a right against Calliden under the policy. Section 48 of the Insurance Contracts Act 1984 (Cth) provides:
"Entitlement of named persons to claim
(1) Where a person who is not a party to a contract of general insurance is specified or referred to in the contract, whether by name or otherwise, as a person to whom the insurance cover provided by the contract extends, that person has a right to recover the amount of the person's loss from the insurer in accordance with the contract notwithstanding that the person is not a party to the contract.
(2) Subject to the contract, a person who has such a right:
(a) has, in relation to the person's claim, the same obligations to the insurer as the person would have if the person were the insured; and
(b) may discharge the insured's obligations in relation to the loss.
(3) The insurer has the same defences to an action under this section as the insurer would have in an action by the insured."
Whether s 48 assists Centro depends upon the terms of the policy. The relevant insuring clause of the policy applicable to public liability provides:
"What You are covered for
We agree (subject to the terms, Claims conditions, General Policy conditions, Exclusions, definitions, Limits of liability incorporated herein) to pay to You or on Your behalf all amounts which You shall become legally liable to pay as Compensation in respect of:
1) Personal Injury and/or
2) Property Damage and/or
3) Advertising Injury
happening during the Period of Cover within the Geographical Limits and caused by or arising out of an Occurrence in connection with Your Business."
Cover is also extended on p 47 of the policy to the legal expenses incurred by or ordered to be paid by the insured.
The issues raised by the insuring clause include the ambit of the terms "You, Your, Insured" and "Your Business".
The definitions in this section of the policy include the following (on p 46 of the policy):
"You, Your, Insured (where used in this cover section): the person(s), companies or firms named on the current Policy Schedule as the 'Insured'. Each of the following is an Insured to the extent name specified below:
a) the Named Insured
...
e) every person, corporation, organisation, trustee or estate to whom or to which the Named Insured is obligated by reason of law, (whether written or implied) to provide insurance such as is afforded by this Policy, but only to the extent required by such law, and in any event only for such coverage and limits of liability as are provided by this Policy
...
i) every party including joint venture companies and partnerships to whom the Named Insured is obligated by virtue of any contract or agreement to provide insurance such as is afforded by this Policy; but only to the extent required by such contract or agreement and in any event only for such coverage and limits of liability as are provided in this Policy.
Your Business: the business as described in the Policy Schedule (and, where applicable, as further described in any more specific underwriting information provided to Us at the time when this insurance was negotiated) and shall include:
a) the ownership of premises and/or the tenancy thereof by You;
b) the provision of any sponsorships, charities, galas, first aid, medical, ambulance or fire fighting service by You or on Your behalf;
c) private work undertaken by Your Employees for any of Your directors, partners, proprietors, officers or executives
d) the provision of any canteen, social and/or sporting clubs or welfare and/or child care facilities by You or on Your behalf, which are primarily for the benefit of Your Employees."
There is also a definition of "Named Insured" which includes: "the person(s), corporations and/or other organisations specified in the Policy Schedule".
It seems clear enough that "Your Business" refers to the Japanese food takeaway retail shop at T-256 Bankstown Centro Shopping Centre, as is recorded on the policy schedule. However, the Named Insured is unclear. Although both Sushi Nara and Top Green are specified on the schedule, so also is Centro.
The difference is that Sushi Nara and Top Green are described as "insured" whereas Centro is described as "interested party". The definition of "Named Insured" refers only to "persons...specified on the policy schedule", not, for example, the persons specified as an insured on the policy schedule.
There is also no definition of "interested party" in the policy.
In these circumstances, I think it is arguable that Centro is a "Named Insured". In any event, clauses (e) and (i) of the definition of "You, Your, Insured" quoted above, may have application to Centro. Whether they do depends upon the provisions of the lease.
A lease document was tendered by Centro in the application and was not the subject of objection and was admitted into evidence. However, during the course of the application, counsel for Centro frankly disclosed that the lease was not stamped. It appeared at least possible that it was a document that was required to be stamped.
Section 304 of the Duties Act 1997 provides in subs (2):
"(2) A court or tribunal may admit in evidence an instrument that effects a dutiable transaction, or is chargeable with duty in accordance with the provisions of this Act, and that does not comply with subsection (1) [that is, is not duly stamped]:
(a) if the instrument is after its admission transmitted to the Chief Commissioner in accordance with arrangements approved by the court or tribunal, or
(b) if (where the person who produces the instrument is not the person liable to pay the duty) the name and address of the person so liable is forwarded, together with the instrument, to the Chief Commissioner in accordance with arrangements approved by the court or tribunal."
In the course of this judgment Centro by its counsel undertook to present the lease for stamping.
The lease document was referred to by Calliden. Relevant provisions include the following:
"15.2 Occupy at Risk of Lessee
The Lessee will occupy use and keep the Premises at the risk of the Lessee and the Lessor will not be liable for any damage the Lessee or any person or any property may suffer by reason in whole or in part of anything occurring within the Premises or in the Centre."
"15.4 Indemnity
The Lessee agrees to keep the Lessor its agents and managers indemnified against all or any losses, damages, claims, actions, suits, proceedings, demands, costs and expenses for which the Lessor is or may be or become liable arising out of all or any of the matters referred to in clauses 15.2 and 15.3. However, the Lessee's indemnity will exclude any liability resulting from the negligence of the Lessor."
"16. Insurances
16.1 Lessee to Take Out Insurances
The Lessee will, at the Lessee's expense, effect and keep current, with a reputable insurance company the following insurances in relation to the Premises.
16.2 Public Risk
A policy covering public risk which will:
(a) be in the name of the Lessee, the Lessor and such other persons that the Lessor may require and provide for a minimum cover of twenty million dollars ($20,000,000.00) for each accident, claim or event or such higher amount as the Lessor specifies;
(b) extend to cover any liability for the death of, or injury to, any person or damage to any person's property sustained when such person is using or entering or near any entrance, passage, stairway display or display window to into or of the premises, or sustains the injury or damage as a result of an act or omission of the Lessee, its agent, licensee, employee or representative operating a business on or from the Premises or sustains the injury or damage as a result of consuming food or drink supplied on or from the Premises or as a result of goods sold on or from the Premises;
(c) contain a clause which provides that any claims made by any of the insured parties against any other will be treated as though the claimant were not an insured party and in such instances provide that the insurance company waives its right of subrogation; and
(d) provide cover which stands alone, is not subservient upon or affected by any policies affected by the Lessor, the Lessor's managers, agents, employees, representatives or contractors."
Calliden first submitted that the final sentence of cl 15.4 meant that the insurance policy to be taken out by Top Green need not and would not protect Centro against negligence. I do not accept this submission.
Clause 15.4 limits Centro's ability to recover against Top Green. Top Green's obligation to indemnify Centro does not cover liability resulting from Centro's negligence. That limitation may impact on Centro's right under s 6 of the 1946 Act. But of itself it says nothing of Centro's entitlements under the policy. Centro's rights against its own insurer, Calliden, are not (necessarily) coextensive with Centro's rights against Top Green.
Clause 16 deals with the matter of insurance. It obliges Top Green to take out insurance that covers Centro. The provisions of cl 16 enliven cl (e) and (i) of the definition of "You, Your, Insured" on p 46 of the policy. Calliden submitted:
"34. Read together, these clauses of the lease relevantly required Top Green to take out public risk insurance: firstly, covering Top Green for any liability of Top Green for personal injury that might arise as a result of the actions or omissions of Top Green in conducting its business within the shopping centre; and, second, covering [Centro] for any liability of [Centro] for personal injury that might arise as a result of the actions or omissions of Top Green in conducting its business within the shopping centre. Moreover, expressly, such insurance was not to cover any liability of [Centro] arising out of its own negligence.
35. This represents the extent of Top Green's obligation 'by reason of law' to provide insurance for the benefit of [Centro].
36. The Top Green policy meets each of the two requirements (referred to above) stemming from the terms of the lease. In the circumstances, as a named party, [Centro] would have a right pursuant to s.48 of the Insurance Contracts Act to enforce its entitlement to cover under the Top Green policy, but only to the extent to which that cover properly extends."
Apart from the final sentence in [34] of this quotation, I accept these submissions. As to that sentence, there is no provision that excludes Centro's negligence from the cover to be provided pursuant to cl 16. Clause 16 of the lease draws no distinction between the lessor and the lessee, and makes no express reference to matters involving the negligence of the lessor.
Accordingly, Centro appears to fall within cl (i) of the definition on p 46 of the policy, as well as potentially within cl (a) and (e). The extent of cover is the extent required by the lease. The lease does not contain any limitation on the insurance required to be obtained by Top Green. In particular there was no provision in the lease providing that the insurance required to be obtained by Top Green should exclude claims arising from Centro's negligence.
The provision in cl 15.4 is a limitation on Top Green's obligation to indemnify Centro. It is not a limitation on the nature of the insurance policy Top Green is obliged to obtain.
It follows that it is arguable that Centro is a person specified in the contract of insurance, to whom cover extends, and that Centro has a right to recover its loss from Calliden in accordance with the contract, under s 48 of the Insurance Contracts Act 1984 (Cth).
Of course final determination of Centro's entitlements and Calliden's obligations must await a trial. If Centro has a separate policy of public liability insurance questions of contribution between insurers will arise.
Accordingly, Centro has established an arguable claim against Calliden, both under s 6 of the 1946 Act and under the contract of insurance.
Centro seeks to join Calliden under Uniform Civil Procedure Rules 2005 6.19 and 6.24. Those provisions state:
"6.19 Proceedings involving common questions of law or fact
(cf SCR Part 8, rule 2; DCR Part 7, rule 2; LCR Part 6, rule 2)
(1) Two or more persons may be joined as plaintiffs or defendants in any originating process if:
(a) separate proceedings by or against each of them would give rise to a common question of law or fact, and
(b) all rights of relief claimed in the originating process are in respect of, or arise out of, the same transaction or series of transactions,
or if the court gives leave for them to be joined.
(2) Leave under subrule (1) may be granted before or after the originating process is filed."
"6.24 Court may join party if joinder proper or necessary
(cf SCR Part 8, rule 8 (1); DCR Part 7, rule 8 (1); LCR Part 6, rule 8 (1))
(1) If the court considers that a person ought to have been joined as a party, or is a person whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings, the court may order that the person be joined as a party.
(2) Without limiting subrule (1), in proceedings for the possession of land, the court may order that a person (not being a party to the proceedings) who is in possession of the whole or any part of the land (whether in person or by a tenant) be added as a defendant."
I am enjoined by s 56 of the Civil Procedure Act 2005 to conduct proceedings in a way that brings about a quick, just and cheap resolution of the dispute. Generally that would require avoiding multiple proceedings involving common issues.
Joinder will avoid a separate set of proceedings. Whilst any cross-claim against Calliden may lengthen the current proceedings, no current party to the proceedings opposes the application on that basis. Generally speaking, it seems to me that resolution of all the issues involved, whether before or at trial, will occur more expeditiously if all interested parties are joined.
Further, it seems that the insurance claim and the s 6 claim by Centro will likely involve some common questions of fact, since both arise out of the occasion of Ms Mesiti slipping and falling at the shopping centre.
For these reasons, I am disposed to grant leave to join Calliden, but on some conditions. I propose to grant leave to Calliden to be joined as a party by the filing of a third cross-claim, pleading the matters raised in this application.
I also order that no third cross-claim be filed until two weeks have elapsed after service upon Calliden Insurance of the proposed third cross-claim.
If Calliden makes any further application to revoke the leave within that two-week period, then no third cross-claim by Centro against Calliden should be filed until that application is determined.
These orders recognise the importance and utility of a clearly pleaded claim against Calliden, which has not yet occurred. It seems to me that when the claim is pleaded, there is at least potential for other issues to arise, which could impact upon leave being granted. Counsel for Centro did not oppose a necessity for pleading the claim against Calliden.
Finally in respect of costs, I note that Calliden is currently not a party. It did not seek leave to argue the matter expressly, although as I have mentioned there was no opposition to Calliden's presence, and it might be inferred that there was an implied grant of leave.
However, in circumstances where on the one hand Centro has achieved some success on the motion in terms of getting leave, but on the other hand Calliden raised as a primary ground of opposition the absence of a pleading on which I have found to be a matter of some importance, I propose to order that there be no order as to the costs of the application. In making that order I also take into account that Calliden is not currently a party to the proceedings.
Accordingly, I make the following orders:
1. Leave to the first defendant to file a third cross-claim against Calliden Insurance Limited pleading the matters raised in the application, subject to orders 2 and 3.
2. The first defendant not file the third cross-claim until two weeks have elapsed after service of the proposed third cross-claim by the first defendant upon Calliden Insurance Limited.
3. If Calliden Insurance Limited makes an application to revoke the leave granted in order 1, by reason of the contents of the proposed third cross-claim, no such third cross-claim be filed until the application by Calliden Insurance Limited is determined.
4. No order as to the costs of the amended notice of motion filed 13 March 2013.
5. Note that the first defendant by its solicitor has given an undertaking to present the lease for stamping.
6. Direct that any proposed cross-claim by the first defendant against Calliden Insurance Limited should be served on Calliden Insurance Limited and the parties by 5pm on 5 May 2013.
7. Stand over for directions on 22 April 2013 at 9.30am before the Judicial Registrar.
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Decision last updated: 01 August 2013
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