Tempo Services Limited v State of New South Wales
[2005] HCATrans 39
[2005] HCATrans 039
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S64 of 2004
No S65 of 2004
B e t w e e n -
TEMPO SERVICES LIMITED
Applicant
and
STATE OF NEW SOUTH WALES
Respondent
Application for special leave to appeal
GLEESON CJ
HEYDON J
TRANSCRIPT OF PROCEEDINGS
AT SYDNEY ON FRIDAY, 11 FEBRUARY 2005, AT 10.27 AM
Copyright in the High Court of Australia
MR D.L. WILLIAMS, SC: May it please the Court, I appear with my learned friend, MR I.L. GRISCTI, on behalf of the applicant. (instructed by Ebsworth & Ebsworth)
MR B.W. WALKER, SC: May it please your Honours, I appear with my learned friend, MS S.E. PRITCHARD, for the respondent. (instructed by Hicksons)
GLEESON CJ: Yes, Mr Williams. I am just trying to bring back to mind why there are two matters here.
MR WILLIAMS: Yes, your Honour, there are two injuries, there are two separate plaintiffs.
GLEESON CJ: Two cleaners?
MR WILLIAMS: Two cleaners, different injuries. There are different circumstances surrounding their injuries, but the same indemnity provision applicable in respect of both matters.
GLEESON CJ: In both cases, the cleaners sued on a breach of occupier’s duty by the State?
MR WILLIAMS: Yes. Your Honours, the construction which the Court of Appeal gave to the relevant indemnity clause, and that contended for by the respondents, effectively shifts to the contractor the risk of State liabilities such as arise from occupier’s liability ‑ ‑ ‑
GLEESON CJ: Where do we most conveniently find the contractual provision?
MR WILLIAMS: Your Honours will find it in the judgment in the Coleiro matter, which is at page 68 of the application book. Your Honours will find it set out in paragraph 1 of Justice Meagher’s judgment, page 70. Your Honours will see that the relevant indemnity clause provides for an indemnity:
“against any liability, loss –
et cetera –
in respect of personal injury . . . arising out of or in connection with or caused by the performance of the Services.”
The first question of construction which arises, and the area in which we would respectfully submit the Court of Appeal erred, is in this respect, that the Court of Appeal’s focus was on the connection between the injury and the performance of the services, rather than the connection between the State’s liability for the injury and the performance of the services.
GLEESON CJ: Just a moment, I will take that on board. Whether it is right or wrong, the argument against you amounts to the proposition, does it not, that if the performance of the services is the occasion on which the liability arises, that attracts the indemnity?
MR WILLIAMS: Yes.
GLEESON CJ: So that if, for example, a cleaner cleaning part of the school premises was run over by a motor vehicle negligently driven by a teacher or someone for whom the government was vicariously liable, then the contractor which is the cleaner’s employer would indemnify the government?
MR WILLIAMS: That is the case put against us, yes.
GLEESON CJ: It is all a question of who takes out the relevant insurance cover, I presume?
MR WILLIAMS: That plays a part, yes, your Honour. Another example used at trial is where a cleaner is assaulted by somebody in the playground. He is there because of his duties as a cleaner ‑ ‑ ‑
GLEESON CJ: Somebody for whom the government is liable?
MR WILLIAMS: Yes, a teacher perhaps. Your Honour, we respectfully submit that when one comes to look at contracts of indemnity such as this, it is now necessary to bear in mind the way in which such contracts have been held to be capable of being construed pursuant to the principles in Andar Transport Pty Limited v Brambles Limited (2004) 78 ALJR 907.
GLEESON CJ: How do you read this down?
MR WILLIAMS: There are two ways in which it can be read down, your Honour. The first is that the indemnity is designed to apply to liabilities to persons other than those performing the cleaning services, but occasioned in some way by something that the cleaner has done or omitted to do pursuant to the provision of those services. For instance, it could be a vicarious liability if a member of the school or somebody for whom the State is responsible directs the cleaner to do something, the cleaner does something and an injury occurs to a student or a teacher or some member of the public, so vicarious liability – an argument somewhat similar to that raised in Andar.
Really, we would respectfully submit that the type of person contemplated by the clause is a person other than that carrying out the cleaning services. Some support for that contention arises from the insurance provisions in the contract – that is in clause 19. They are set out in the judgment of Acting Judge Chesterman at application book page 60. Your Honours see in clauses 19.1 and 19.2 is the insurance regime. What happens is that the contractor under 19.1 takes out public liability insurance, covering:
liability to the public in respect of personal injury to . . . any person (not being –
the worker, and that is taken out in the joint names of the contractor and the State. That is to be compared with the insurance obligation in respect of workers themselves under 19.2(a), and that obligation to take out insurance is for the contractor to take out the insurance policy to cover itself for that liability for injury to persons employed.
One sees a relationship between the way in which the insurance is structured and the construction which we contend for in relation to 20(c). It is not the position that the contract requires the cleaner or the cleaning company contractor to take out insurance so as to cover a State’s occupier’s liability. Indeed, that is the sort of liability that a State would be normally inclined to insure itself.
Your Honour, the error we submit that arises in the Court of Appeal’s judgment is, as I have said, by the focus of the Court of Appeal on the connection between the injury and the performance of the services, rather than the liability. That error, we submit, is manifested in the judgment of Justice Hodgson at page 77 of the application book, lines 11 to 21, where his Honour is focusing on the injury having sufficient connection with the provision of the services.
To like effect is the judgment of Justice Meagher, application book page 72, lines 23 to 30. There is an additional problem in that sentence, that is the sentence that commences, “But, with respect”. This is in response to a submission of no blame on the part of the cleaning company:
But, with respect, that factor (true though it be) can have no relevance to the question of whether the accident (and therefore Tempo Services Limited’s liability in costs) arose “in connection with the performance of services”.
First of all, it should not be Tempo’s liability in costs, which was being considered. Rather, it should be the State’s liability in cost, that being the relevant indemnity that is being sought. Secondly, the connecting factor spoken of there is the connecting factor between the injury or the accident and the performance of the services. That theme is continued in that judgment of Justice Meagher at application book 72, lines 55 through to 58:
The question then becomes: does Mrs Coleiro’s injury have any causal or consequential relationship to the performance of the services contracted for? It must.
And again at application book page 73, lines 12 to 16:
These factors must compel a finding that the injury arose “in connection with” the performance of the services.
Justices Giles agreed with the reasoning of Justice Hodgson.
Your Honour, we would firstly submit that the clause contemplates an indemnity in respect of injuries to persons other than those performing the contractual services. We rely on principles of construction in Andar to get us there. An example might be the vicarious liability of the cleaner who carries out some instruction on the part of the State.
We would respectfully submit that even if that is wrong, and even if the relevant person may include a worker, there must still be a discernible and rational link between the basis of the legal liability of the State and the performance of the services. We obtain that phrase, “the discernible and rational link”, from the High Court’s decision in Technical Products, which we have set out in some detail in the written submissions.
GLEESON CJ: You do not argue, do you, that fault on the part of the State destroys the link?
MR WILLIAMS: In most cases, it will, your Honour.
GLEESON CJ: Well, it is an indemnity against liability.
MR WILLIAMS: Yes.
GLEESON CJ: And liability commonly arises out of fault.
MR WILLIAMS: That is true. If the fault arises in a vicarious manner, then that is somewhat different, we would respectfully submit, to a fault that arises by some negligent act or omission of the State itself.
GLEESON CJ: You read “liability” as meaning, in effect, any liability other than liability in respect of fault or liability arising out of fault on the part of the government?
MR WILLIAMS: Yes. Now, reading the clause in that way is not essential to our argument. There is an alternative way of putting it, though, your Honour, and that is that even if fault on the part of the government may be a part of the equation, as it probably would be, then there still must be a rational and discernible link between that fault and the provision of the cleaning services. It is that fault that one has to look at, rather than the connection between the injury and the services.
Take, for example, on this line of argument, a situation where a cleaner polishes the floor, leaves the floor in a slippery condition. The State tells a teacher or somebody from the school that it is all very slippery, nobody should go on the floor for awhile, “I am going to come back later and do something else to it, scrub it”. The State then does nothing about that ‑ ‑ ‑
GLEESON CJ: Or when the cleaner just does not do the cleaning properly and leaves the surfaces in a dangerous condition, that would clearly fall within the clause. The question is why the present situation does not additionally fall within it?
MR WILLIAMS: In the present situation, all that has happened, so far as the cleaner is concerned, is that he is walking across the courtyard and trips on some metal cover over a pit in the courtyard. Now, the legal liability that the State may be subjected to is an occupier’s liability or leaving the condition of the playground in an unsafe state, and that is a liability that does not arise out of or in connection with the performance of the cleaning services.
GLEESON CJ: That is the question of whether or not the fact that the performance of the cleaning services is simply the occasion for the liability of the government is within this clause.
MR WILLIAMS: That is so, your Honour, and we would respectfully submit, consistent with the way in which the High Court has determined matters such as this should be approached in Andar, that if that is an available construction, it is the construction that should be preferred. True it is there are differences of fact that may impact upon the question in various factual circumstances, but the two that we have here throw up quite starkly for the Court’s consideration the types of connecting factors that might be seen to be necessary or sufficient for the indemnity to apply.
In relation to the leave matter, your Honour, the clause itself has wide ramifications over and above those in these two cases. There are nine matters of which my instructing solicitors are aware which are pending in the courts at the moment. There was an earlier affidavit filed – that is part of the application books – that sets these out. Since that time, some of them have been settled, and could I seek leave to file in Court an updating schedule that is attached to an affidavit of Mr Andrew Saxton, sworn 11 February 2005. There is one in each matter that are in the same terms. I do not need to take your Honours to the detail of them, save to say that they provide evidence of the fact that there are nine unresolved matters at various states of progression through the courts that await the determination of what happens today.
At present, your Honour, if we do not get leave, then there will be binding Court of Appeal authority to the effect that the relevant inquiry is whether the injury itself was connected with the services and, if so, that is sufficient for the indemnity to apply, and all these cases, one would presume, would be decided adversely to the cleaning contractor. Your Honour, that is one of the ‑ ‑ ‑
GLEESON CJ: Was there some suggestion that there is an element of inconsistency between the decision of the New South Wales Court of Appeal in this case and a Victorian decision?
MR WILLIAMS: There is. That is the decision in Australian Paper Plantations v Venturoni. I am sorry we did not include it in our book. May I hand up two copies of that? That was a case where the relevant injury occurred where the plaintiff was struck by a falling tree. It was only the falling tree – he was a timber cutter – it was only his occasion of being in the forest as part of those duties that was connected with the accident. In paragraph [7], there was an acceptance by the appellant that the clause:
would not apply if the connection between a liability and the carrying out of the contract was merely temporal. It was not sufficient that a person to whom liability was owed was present and exposed to injury because he was performing work required by the contract –
and the Victorian Full Court had regard to the principles of construction in Canada Steamship and Darlington Futures in paragraphs [16] and [17] and followed Darlington Futures that on the facts still found there was more than a temporal requirement.
GLEESON CJ: It is really the concluding words in paragraph [18], is not it?
MR WILLIAMS: Yes, that is what we mean by the temporal connection between the injury and the liability. Your Honour, in that case, the Canada Steamship line of authority was dealt with, and that may have some implications for the way in which one goes about construing contracts of indemnity such as this. The one thing that was not considered in Andar was the interrelationship between that case and a principle such as those set out in Darlington Futures, which is the case most often cited in these authorities and, indeed, relied upon in the Court of Appeal.
Professors Harland and Carter in their text, which is behind tab 5 of the bundle of authorities, refer to the status of the Canada Steamship rules in paragraph [764]. After setting out those rules and the status of their authority in Australia, at page 278, the last page of the extract, they say this:
in Australia there is authority for the proposition that the Canada SS rules do not apply to indemnity clauses –
making reference to a Full Court of the Victorian Supreme Court decision in Schenker and a single judge decision in New South Wales in Pendal Nominees, and then go on to say this:
Fourth, there is dicta in recent Australian cases that the Canada SS rules are no longer valid –
making reference to Schenker –
It is, however, doubtful whether this is true. Negligence was not at issue in Delco. There is, moreover, abundant Australian authority for the proposition that an intention to exclude liability for negligence must be clearly expressed. Since this is all that the Canada SS rules actually require, the matter must await a decision by the High Court.
GLEESON CJ: Yes, thank you, Mr Williams. Yes, Mr Walker.
MR WALKER: Your Honours, as to that last point, in Carter and Harland’s Fourth Edition, published in 2002, those statements do appear. Andar, in our submission, handed down not only after that textbook was published, but also after the submissions were first exchanged in this Court on the special leave applications, really means that there is no longer what might be called a gap or omission in the jurisprudence of this Court on a point which bears obviously close relation to what had already been dealt with not for the first time in Darlington; see the two Davis cases as well, which the parties have cited.
Your Honours, in relation to special leave, before coming to the question of prospects of success, the first thing to be said is that, of course, this concerns the interpretation of a contract. It needs to be emphasised, as the applicants have properly done, that it is not a one‑off contract with consequences only for the particular parties before this Court. It would be disingenuous not to accept that it is a contract which covers a deal of work and a deal of premises, but that does not elevate it into something which might be said to have public law consequences.
All that can be said, as can be said in many contractual cases that come before this Court, is that the terms are terms which are not unique or novel, and that the draftsmen have, not surprisingly, decided to use similar terms for a number of recurring occasions, namely, the cleaning of schools. Who knows how long the terms will stay in this form.
So that, in our submission, there is really nothing in the schedule of nine cases or any other suggestion of a bank of controversies requiring this Court to intervene for two reasons. First, in those nine cases itself, there is in fact no example in those nine cases of the State solely being liable in negligence, that is to say, State solely as occupier as opposed to the employer also being liable.
Indeed, in one of the two cases before the Court this morning, Chew, the result was that the occupier, the State, was liable, and the employer, my friend’s client, was liable, with 75/25 apportionment between them. So that it is not a case of somebody wholly innocent, and the rhetorical question as to whether one can bear the surprise involved in such an innocent person having undertaken an indemnity in favour of a tortfeasor.
As to the Coleiro Case, it is even less an appropriate vehicle to test any such proposition, if the facts of the particular case or claim mattered, and that, of course, is doubtful. The interpretation of a term is not going to depend upon the particular facts that arise for putative application of the wording. The meaning of the words will be fixed not by the accidents that occur in future and the claims in relation to those accidents, but by the ordinary objective intention test starting with ordinary English and observing the plain words where they appear.
Now, your Honours, in Coleiro, in fact, the State got a verdict for the defendant by agreement, after what sounds to have been a fairly disastrous start to a trial by the plaintiff. Thereafter, the cross‑claim, which was in relation to the costs of the State, was between the occupier, exculpated by the agreed verdict, and the employer never sued. So, in our submission, there is no occasion for – when I say never sued, never sued by the plaintiff, so there was no occasion for the surprise upon which so much of my learned friend’s argument turns.
The next point, in relation to the actual argument, and thus prospects, is to have regard to the way in which my friend structures his identification of error around the identification by Justices Hodgson and Meagher of the accident or injury as that with which there needs to be the requisite connection. Of course, in both cases, and in all nine in the schedule, they are called, in ordinary parlance, personal injuries claims.
GLEESON CJ: Your opponent fastens on the word “liability”, but it is liability in respect of personal injury.
MR WALKER: Yes. Furthermore, may I perhaps, your Honours, for convenience if I may hand up an actual print from the contract which contains a clause perhaps more legibly? On the fourth of those pages, page 28 of the conditions, you see the indemnity clause as 20(c), which is at the heart of the matter. The word “liability” appears as merely the first in a list:
liability, loss, expense, damages, claims –
and your Honours will recall that Justice Hodgson’s reasoning, agreed in by Justice Giles, turns on the word “claims” as well –
suits, actions, demands or proceedings –
So that the word “liability” is not the only pivot, and, of course, why would it be, because why would one not have an indemnity against the costs of successfully defending proceedings, that is, in proceedings when you do not have a liability – when it has been adjudicated you do not have a liability?
Justice Meagher’s reference to the liability and costs of Tempo was not inapposite. That picks up the word “liable” in the first line of 20(c):
The Contractor shall be liable for –
three justices having held that the costs of successfully defending will be included within an indemnity:
against any liability, loss, expense, damages, claims, suits, actions, demands or proceedings –
et cetera, et cetera –
in respect of personal injury –
and that is what the plaintiff’s claim was, “personal injury”. That is an essential pivot. Unless that is satisfied, nothing can be done. Then comes the connective words:
arising out of or in connection with or caused by –
a plainer way of ensuring that that familiar phrase “in connection with” is not narrowed to what I will call “a tight causation”. It cannot be imagined, but, in any event, “caused by” is clearly satisfied in this case.
GLEESON CJ: There seems to be a suggestion in the argument against you that there is something about the insurance regime provided for that is inconsistent with a broad reading of ‑ ‑ ‑
MR WALKER: Yes, the first thing to say about that, I regret it is not in our written submission, is to lift your Honour’s eyes an inch up to 19.8, “Except whether otherwise stated, the effect of any or all insurance as required” – and we stress the word “required”, in fact it was stressed in my friend’s argument this morning – “by the contract shall not in any way limit the liabilities or obligations of the contractor under other provisions of the contract”. And clause 20(c) is, of course, an immediately good example of that. So are 20(a) and (b). When one looks at those terms, it is clear that the notion of somebody in the applicant’s office pre‑tender being surprised at the notion of the width of the indemnity now sought to be enforced and upheld by the Court of Appeal sits rather oddly with how they must have understood the risks imposed by 20(a) and (b). They are very broad indemnities, indeed.
We then turn back to the first page of the terms we have extracted because our argument, upheld by the Court of Appeal, was that the immediate context of 20(c) was all the other terms of the contract. Under the warranties in 4.1, which I need not read in detail, your Honours will see that there is an emphatic attempt – whether it is successful or not would depend on argument and particular circumstances – an emphatic attempt to pass the risk of these multifarious premises and these no doubt thousands of employees working in the dark on some occasions, certainly turning up in night time hours and the like, having to perform the huge variety of tasks, not all of them pleasant, some of them not straightforward, of cleaning school premises. That risk had been, in our submission, by a combination of 4.1 and 4.2, very clearly signalled in a way that provides a context to the interpretation of succeeding specific provisions of risk allocation, including 20(c).
We then have also on page 25 of the extract clause 18.1, which is another emphatic passing of risk of a financial kind, so that by the time one comes, via clause 19, the required insurance – because we are not in the business of advising Tempo of what other insurance they may have against all the other risks they may have of doing business, including the risk under a contract – one notices 19.8, to which I have drawn attention, and then comes to 20. Now, your Honours, that then means that in terms of what my friend says is a special leave question, the inquiry ought to be whether there is any real prospect of this Court saying anything different to any material degree from what one sees in not just recent cases, but go back to Davis, Darlington, more recently, very recently, Andar, whether there will be any material departure in prospect from the notion that you first ask what the words mean.
GLEESON CJ: I suppose if it is accepted that “any person” includes the cleaner, then one of the most obvious forms of liability in respect of personal injury to the cleaner ‑ ‑ ‑
MR WALKER: Is tripping.
GLEESON CJ: Yes, hurting himself or herself on the premises.
MR WALKER: These are tripping cases and risk in relation to the site has been passed, under the other provisions to which I have drawn attention, to the contractor. This is a contracting out of something which no doubt was once performed by State employees, and the contracting out has, in a commercial arrangement for which there has been the most deliberate and exhaustive passing of contractual risk adverted to in the terms to which I have drawn attention, included such matters as ordinary as a tripping cleaner.
One does not test the interpretation of this clause by presupposing such maverick outcomes as a cleaner being punched by a teacher in a playground. That is an entirely different matter and it may well, of course, fall for lively dispute in such a case as to whether the State would be liable at all, but that is a matter for which one ought to await the occasion. That is no test of the interpretation of this clause, which obviously was designed to cover comprehensively a number of matters, many of which, as to their details, could only be imagined, and even then imagination would fail as to some things that will assuredly happen.
Still, the meaning of the words has to be determined and none of the authorities in this Court, especially including Andar, suggests that you dispense first with the notion, “In this character of contract, what do these words mean?” Now, we accept entirely that there are differences, pointed up by the discussion in this Court, particularly in relation to the United States position, which was not accepted in this Court in Andar, but there are differences to be observed or, at least, to be regarded between indemnities, on the one hand, which may involve tripartite relations – as, on one view, these cases do – and exclusion or limitation clauses, which will usually only be a bipartite analysis, and the notion that there is something favoured in the eyes of the law for those who are either sureties or giving indemnities, we accept, is something that needs to be borne in mind.
But, having borne it in mind, the test still remains, and the question is, is there any prospect this Court would alter this in any degree? First, ask what these parties have bargained as the words which will manifest and embody their bargain, then ask what do they mean, particularly in the context not only of matters known to the parties, but also the context which is textual, the words they have chosen.
Then one may be left, in some cases, with what is sometimes called, not always straightforwardly, “ambiguity”, but none has been proposed in this case. Query then, leaving aside the special bargain these parties made about interpretive canons that they would call upon in court – query then whether there would ever have been room for something like contra proferentum or anything like the notion that one favours the party who does not get the benefit of this clause. “Any person” is plain English, which is not made plainer, nor is legal drafting made any more meritorious, by a court decision which, in effect, would require that it be spelled out thus, “Any, meaning any, person”.
In our submission, at the end of the day, that is the kind of interpolation for which the other side seeks in the cases for which they seek special leave. Nothing, in our submission, in the absence of a statute requiring certain matters to be the subject of what I will call ritual or mantra-esque utterance in a contract, in the absence of any such statute there will be no need for the Court to qualify in any way the principles it has, for a long time and recently, pronounced in consistent terms in relation to the role of an ordinary meaning test in the construction of commercial contracts between parties very well capable of looking after themselves.
It is for those reasons, in our submission, that there is neither a special leave question in terms of any particular general importance, nor any prospect of this Court repronouncing the law in contract as to the meaning of contractual documents, which is a self‑evidently enormously important area, so as to require this Court to take the case on. Nor, ultimately, in the circumstances of either of these two particular matters, is there any prospect of a different result being reached. For those reasons, in our submission, there is no cause for special leave to be granted.
That leaves only the question as to whether what might be called an American‑style ground for special leave, as less frequently reflected in this country, arises, namely, competing claims between intermediate courts of appeal in exactly the same area in such a way as to give rise to what might be called a clash. The first thing to be said, of course, is that we have only one common law, so diversity of decision has a somewhat different effect in this country and does, indeed, require this Court’s final word. But there is no suggestion that the Victorian Court of Appeal could, should, or has in any way affected the authority of this Court’s decisions in Davis, Darlington or Andar.
Venturoni, after all, as observed by everybody, is a decision attempting to apply exactly the same principles as were applied in the Court of Appeal in these cases to rather different wording. We had the expression “in connection with” and it will not have escaped your Honours that that is where the applicants chose to run their case in the Court of Appeal, but there was not a connection. Leaving, in Venturoni, the point drawn to attention by the Chief Justice this morning, namely, it would appear that that which found favour in that court can be encapsulated in the quotation from the trial judge in paragraph [18], namely:
“where what was alleged involved no more than an allegation that the performance of the contract provided the occasion from which the claim arose.”
We had much more than that, and your Honours have seen that on page 77 of the application book, paragraph 20 in Justice Hodgson’s reasons:
The injury occurred at a work place, during working hours, when the plaintiff was there for the purpose of performing services, had signed on –
She was actually “going”, that is walking, “about the performance of services”. It is difficult to understand, given that she was there in order that the applicant might discharge its obligations under its contract with my client, how, she having been assigned to do what she was doing, proceeding and doing it and – in both applicants this is the case – tripped on the playground because she was not looking, tripped on the staircase because of allegedly inadequate lighting – in our submission, it is difficult to see that that is no more than an occasion.
It is precisely, in our submission, a satisfactory and clear fulfilment of the requirement of there being a connection between the liability, loss, claim, cost, expense, et cetera, that we see and the action, the claim, et cetera, in respect of the personal injury arising out of, in connection with, or
caused by performance of the services. So for all those reasons, in our submission, these are not cases suitable for grants of special leave.
GLEESON CJ: Thank you, Mr Walker. Yes, Mr Williams.
MR WILLIAMS: Your Honour, the first matter is this, that none of the other provisions in the contract to which my learned friend adverted formed the basis of the Court of Appeal’s decision in the matter. The rationale for the decision was as I have stated in my submissions in‑chief.
Secondly, one searches in vain for any express provision in the contract by which the State would contract out of any occupier’s liability, a fortiori, the position of it passing on its liability in any express terms for its own liability as an occupier. Of course, one comes to that question with the knowledge that it is within the State’s purview as to what it does in terms of complying with its obligations as an occupier. I put that poorly. What I mean to say is that it is within the State’s power to comply with those obligations and not the cleaning contractor’s powers.
The question then becomes whether the indemnity clause arrives at that implicit outcome, that there is an indemnity for the occupier’s liability. My learned friend made reference to testing the matter by reason of “maverick” outcomes. That is often the way one comes to a proper understanding of what it is that the parties may or may not have intended. We respectfully submit that when one looks at the types of liabilities, on the present state of the Court of Appeal authorities, for which the cleaning contractor would be liable, one sees that would potentially, at least, and probably give rise to many maverick outcomes.
Your Honours, there is nothing remarkable about reading down the expression “any person” in a contract of indemnity. That is exactly what happened in Andar.
GLEESON CJ: In this case, reading it down to exclude what? To exclude the cleaner?
MR WILLIAMS: Yes. Similarly, in Andar, reading it down so as to exclude the driver. So far as this submission concerns questions of principle concerning contractual construction, may I just refer your Honours to paragraph [23] of Andar. It is in the bundle that has been provided, behind tab 4. The principles of construction are set out in the joint judgment at page 911. The concluding paragraph is paragraph [18] at the foot of the page:
It may be noted that the conclusions reached in Ankar and Chan as to
the principles to be applied to the construction of contracts of guarantee are binding, but did not enjoy unanimous support in the early case law.
I am sorry, I should have taken your Honours to paragraph [23], which is at 913 –
However, notwithstanding the differences in the operation of guarantees and indemnities, both are designed to satisfy a liability owed by someone other than the guarantor or indemnifier to a third person. The principles adopted in Ankar, and applied in Chan, are therefore relevant to the construction of the indemnity clauses.
And then there is a reference to footnote 29:
See Davis v Commissioner of Main Roads (1968) 117 CLR 529 at 534, 537; Smith v South Wales Switchgear Co Ltd –
which is, of course, the Canada Steamships line of authority, and reference to another case as well.
The interrelationship between those well‑known cases concerning constructions, exclusion clauses, indemnities and limitation clauses and the High Court’s pronouncements in Andar – the High Court in Andar did not focus on the interrelationship between the principles there set out in Darlington Futures, and it is that matter which gives rise to, we would say, an additional matter of general principle.
GLEESON CJ: Thank you, Mr Williams.
The Court is of the view that in this matter there are insufficient prospects of success of an appeal to warrant a grant of special leave and the application is dismissed with costs.
AT 11.13 AM THE MATTERS WERE CONCLUDED
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