Windsurf Pty Ltd v B M Culley and Associates Pty Ltd

[1997] QCA 343

COURT OF APPEAL  [1997]QCA 343

DAVIES JA
PINCUS JA
de JERSEY J

Appeal No 5918 of 1997

WINDSURF PTY LTD  Appellant

and

B M CULLEY AND ASSOCIATES PTY LTD                Respondent

BRISBANE

..DATE 25/08/97

JUDGMENT

PINCUS JA:  This is an application for a stay of a judgment initially given in the Magistrates Court and upheld on appeal to District Court.  There was an action in the Magistrates Court for damages for personal injuries by a plaintiff, a
Mrs Colston, who suffered injury when she slipped on a carpet.

The relationship between the then four defendants was as follows.  The first defendant, Windsurf Pty Ltd, which is the present applicant, was described in a document which became the subject of the litigation as the principal.  The second defendant, Ashmore Carpets Pty Ltd supplied the carpet, the third defendant, the present respondent, the name of which is B M Culley and Associates Pty Ltd was the construction manager named in the document I shall shortly discuss and the fourth defendant, Mr Sykes, laid the carpet.

The Magistrate held that all the defendants were liable and that the applicant was liable to indemnify the third defendant, now respondent, under a contract which was dealt with by the Magistrate and in the District Court.  The applicant appealed unsuccessfully to the learned District Court Judge, Judge Hall, holding that the view of the Magistrate, that there was an obligation on the applicant to indemnify, was correct. 

The applicant now seeks a stay with a view to pursuing an appeal further to this Court challenging the decision of the District Court and Mr Harrison QC who appears for the applicant has informed us that the only point sought to be taken on the appeal is that, so it is said, the District Court Judge was in error in his construction of the relevant clauses of the contract.  The clauses are set out in the judgment of the District Court and are as follows.  Clause 2 says:

"The Principal [that is, the applicant] hereby appoints the Construction Manager [the respondent] the agent of the Principal for the purpose of providing construction management services for the completion of the works.  The construction management services are as stated in this contract."

Clause 12 reads as follows:

(a)The Principal shall be solely liable and shall indemnify the Construction Manager in respect of and shall (in the joint names of the Principal and the Construction Manager so that each are deemed to be separately insured) insure against legal liability, loss, claim or proceedings whatsoever arising under any statute (other than as provided in the next sub-clause or at common law in respect of -

(i)Personal injury to or death of, any person whomsoever; and

(ii)Any injury or damage whatsoever to any person real or personal including the works and any material or other property delivered to the site,

insofar as the injury, damage or death arises out of, of in the course of, or by reason of, the execution of the works.

(b)(i)  The Principal shall insure against any legal liability, loss, claim or proceedings whatsoever, whether arising at common law or by virtue of any statute relating to Workers Compensation or employer's liability, by any person employed in or about the execution of the works.

(ii)The Construction Manager shall insure against any legal liability, loss, claim or proceedings whatsoever, whether arising at common law or by virtue of any statute relating to Workers Compensation or employer's liability, by any person in the direct employment of the Construction Manager and employed in or about the execution of the works."

It is unnecessary to set out the terms of the rest of the clause.  The general intention of clause 12 seems plainly to be to oblige the principal to insure and to indemnify the construction manager in respect of accidents on the site.

Mr Harrison QC has argued today that the decision of the House of Lords in Smith v. South Wales Switchgear Co. Ltd. [1978]
1 W.L.R. 165, obliged the District Court, and would oblige this Court, to hold that clause 12(a) covers only a limited category of cases and he instanced, perhaps not comprehensively, claims under the doctrine of Rylands v. Fletcher and also claims in respect of which the source of the liability is a non-delegable duty.

It appears to me, reading clause 12 as a whole, clear enough that the parties had in mind what might be described as all the sorts of claims one would expect to arise out of the works which were contemplated.  I note in particular clause (b), which deals with insurance, could not make any commercial sense unless it covered claims for negligence of every kind.
I would be surprised if the proper construction of clause 12 were as narrow as Mr Harrison QC suggests and I have therefore formed the conclusion that the only point sought to be taken is one which does not have considerable chance of success.

The claim for a stay is based on the proposition that the applicant cannot now, but may well in the future, be able to discharge the judgment which is given against it requiring it to indemnify the respondent.  Accepting that this is so, it must, in my opinion, be an unusual case in which on a second appeal, a first appeal to the District Court having failed, a money judgment will be stayed.  I do not say this could never happen, but there would ordinarily have to be a case in which at least the applicant can show that there is something prima facie dubious about the decision the subject of the appeal.  Here, the decision seems to me to be on the face of it correct and I would not be inclined to exercise this Court's discretion to grant a stay, in such a case. 

It is my opinion that the stay should be refused for two reasons, keeping in mind that it is a stay sought in respect of a money judgment;  firstly, that this is the second appeal and secondly, that the judgment of the District Court appears on the face of it to be correct.  I would therefore refuse the application.

DAVIES JA:  I agree.

de JERSEY J:  I agree.

DAVIES JA:  The application is refused.

...

DAVIES JA:  With costs.

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