FEDERAL COURT OF AUSTRALIA 470 St Kilda Road v Robinson [2013] FCA 1420 Citation: 470 St Kilda Road v Robinson [2013] FCA 1420 Parties: 470 ST KILDA ROAD PTY LIMITED (ACN 006 075 341) v GLENN ROY ROBINSON; GLENN ROY ROBINSON; CHUBB INSURANCE COMPANY OF AUSTRALIA LIMITED (ACN 003 710 647) File number: VID 284 of 2012 Judge: KENNY J Date of judgment: 20 December 2013 Catchwords: INSURANCE - Directors' and Officers' liability insurance contract - Whether exclusion clause for acts or omissions "in the rendering of, or actual or alleged failure to render any professional services to a third party" applied – Whether "project management" is a profession within the meaning of that word in the contract – Principles relating to construction of exclusion clauses in contracts of insurance – Meaning of "service", "profession" and "professional service" - Whether cross-claimant's conduct was done in the "rendering of a service" – Whether conduct done in the rendering of a "professional service" – Exclusion clause held not to apply – Separate Question answered "no". EVIDENCE – Objection to admissibility of expert report on basis that expert opinion intruded impermissibly on the judicial function of the Court – Opinions provided included construction of contract clauses in contest - Objection upheld - Application by cross-respondent under s 144(1)(b) of the Evidence Act 1995 (Cth) to tender bundle of documents – Documents admitted into evidence. Legislation: Building and Construction Industry Security of Payments Act 2002 (Vic) Competition and Consumer Act 2010 (Cth) Evidence Act 1995 (Cth) Cases cited: Chemetics International Ltd v Commercial Union Assurance Company of Canada (1984) 11 DLR (4th) 754 Vero Insurance Ltd v Power Technologies Pty Ltd (2007) 14 ANZ Insurance Cases 61-745 Transfield Services (Australia) Pty Ltd v Hall (2008) 75 NSWLR 12 Major Engineering Pty Ltd v CGU Insurance Ltd (2011) 282 ALR 363 The Life Insurance Company of Australia Ltd v Phillips (1925) 36 CLR 60 Toomey v Scolaro's Concrete Constructions Pty Ltd (in liq) (No 5) (2002) 12 ANZ Insurance Cases 61-519 Eastern Creek Holdings Pty Ltd v Axis Specialty Europe Ltd (2010) 16 ANZ Insurance Cases 61-854 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 Royal Brompton Hospital NHS Trust v Hammond (No 9) [2002] EWHC 2037 Trustees of Ampleforth Abbey Trust v Turner & Townsend Management Ltd [2012] EWHC 2137 Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79 Australian Securities and Investments Commission v Vines (2003) 48 ACSR 291 Prentice v Cummins (2002) 124 FCR 67 McCann v Switzerland Insurance Australia Limited (2000) 203 CLR 579 CGU Insurance Limited v Porthouse (2008) 235 CLR 103 Darlington Futures Limited v Delco Australia Pty Ltd (1986) 161 CLR 500 Selected Seeds Pty Ltd v QBEMM Pty Ltd (2010) 242 CLR 336 North v Marina (2003) 11 BPR 21 Fitzpatrick v Job (2007) 14 ANZ Insurance Cases 61-731 Trickett v Queensland Insurance Co Ltd [1936] AC 159 Bashtannyk v New India Assurance Co Ltd [1968] VR 573 Haileybury College v Emanuelli [1983] 1 VR 323 GIO General Ltd v Newcastle City Council (1996) 38 NSWLR 558 FAI General Insurance Co Ltd v Gold Coast City Council (1995) 2 Qd R 341 GIO of NSW v City of Penrith (1999) 102 LGERA 102 Suncorp Metway Insurance Ltd v Landridge Pty Ltd (2005) 12 VR 290 GIO General Ltd v Newcastle City Council (1996) 38 NSWLR 558 Limit (No 3) Ltd v ACE Insurance Ltd [2009] NSWSC 514 Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 Books cited: Shorter Oxford English Dictionary (6th edition) Macquarie Dictionary (5th edition) Date of hearing: 29 and 30 April 2013 Date of last submissions: 29 April 2013 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 118 Counsel for the Cross-Claimant: A C Harding Solicitor for the Cross-Claimant: Pikes & Verekers Counsel for the Cross-Respondent: N Young QC with P Herzfeld Solicitor for the Cross-Respondent: Clyde & Co IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 284 of 2012 BETWEEN: 470 ST KILDA ROAD PTY LIMITED (ACN 006 075 341) Applicant AND: GLENN ROY ROBINSON Respondent GLENN ROY ROBINSON Cross-Claimant CHUBB INSURANCE COMPANY OF AUSTRALIA LIMITED (ACN 003 710 647) Cross-Respondent JUDGE: KENNY J DATE OF ORDER: 20 DECEMBER 2013 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The question ordered to be separately answered be determined as follows: Question: Whether the cross-claimant's statutory declaration made on 12 December 2011 was an actual or alleged act or omission "in the rendering of, or actual or alleged failure to render any professional services to a third party", within the meaning of exclusion IV(A)(v) of the Directors' and Officers' Liability Coverage Section of the Policy of Insurance referred to in the statement of cross-claim as policy of insurance number 93301062. Answer: No. 2. On or before 17 January 2014, the parties file an agreed minute of order as to costs or, failing agreement, file and serve submissions as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 284 of 2012 BETWEEN: 470 ST KILDA ROAD PTY LIMITED (ACN 006 075 341) Applicant AND: GLENN ROY ROBINSON Respondent GLENN ROY ROBINSON Cross-Claimant CHUBB INSURANCE COMPANY OF AUSTRALIA LIMITED (ACN 003 710 647) Cross-Respondent JUDGE: KENNY J DATE: 20 DECEMBER 2013 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 By his cross-claim, the cross-claimant, Glenn Roy Robinson, seeks a declaration that Chubb Insurance Company of Australia Limited ("Chubb") stands liable to indemnify him under a contract of insurance for any liability he may have to 470 St Kilda Road Pty Ltd (to be determined in the principal proceeding) and defence costs incurred. 2 On 8 February 2013, the Court ordered that one question be tried separately from the other issues arising in the proceeding. This was the question to which the cross-claim in this proceeding gives rise: [W]hether the cross-claimant's statutory declaration made on 12 December 2011 was an actual or alleged act or omission "in the rendering of, or actual or alleged failure to render any professional services to a third party", within the meaning of exclusion IV(A)(v) of the Directors' and Officers' Liability Coverage Section of the Policy of Insurance referred to in the statement of cross-claim as policy of insurance number 93301062. 3 The parties were agreed that this was the only question arising for determination with respect to the relevant insurance policy. For the reasons set out below, this separate question should be answered "no". 4 For the purpose of determining the cross-claim, Mr Robinson, and the cross-respondent, Chubb, agreed on certain facts. These facts are referred to in the following paragraphs. 5 There was also a bundle of agreed documents. These were all the documents in volumes 1 and 2 of the folder "Tender Bundle", other than the "Report in relation to Progress Claim 15 Statutory Declaration" prepared by Geoffrey Bell and dated 1 March 2013 exhibited to Mr Bell's affidavit of 1 March 2013. Save for Mr Bell's affidavit, with his report and its annexures, all these documents were admitted into evidence. Mr Bell's affidavit, with his report and its annexures, was provisionally admitted subject to the cross-claimant's objections, which are discussed below. Mr Bell was cross-examined on this basis. 6 Included in volume 2 of the Tender Bundle was Mr Robinson's affidavit, sworn on 6 July 2012. BACKGROUND 7 The following facts were agreed between the parties. 8 At the relevant time, Mr Robinson was employed by Reed Constructions Australia Pty Ltd ("Reed") – a company now in liquidation – as its Chief Operating Officer ("COO"). Reed Construction was in the business of constructing medium to large buildings and other construction projects. Mr Robinson became Reed's COO in April 2011. Before that date he had been Reed's National Operations Director. Mr Robinson had commenced working with the Reed Group companies in 1987 as a Site Foreman. He re-joined the Reed Group in 1993 as a Project Supervisor, after spending three years with Baulderstone Hornibrook as a Site Manager. Mr Robinson was not at any time a director of Reed or any other company in the Reed Group. 9 In or about October 2010, the applicant in the principal proceeding, 470 St Kilda Road Pty Ltd, and Reed entered into a written design and construct contract ("the D&C Contract") relating to a construction project known as the 'Leopold Project' situated at 470 St Kilda Road in Melbourne. 470 St Kilda Road Pty Ltd was the 'Principal' and Reed was the 'Contractor' under the D&C Contract. Reshape Development Pty Ltd ("Reshape") was appointed as the Principal's Representative under the D&C Contract. The Building and Construction Industry Security of Payments Act 2002 (Vic) ("the SOP Act") applied to the D&C Contract. 10 The terms of the D&C Contract were contained in a formal instrument of agreement with annexures titled 'Design and Construction Contract for Major Domestic Building Projects in Victoria AS4902-2000 As Amended' and dated 25 October 2010. Under the terms of the D&C Contract: (a) Reed was required to claim payments for work performed under the D&C Contract on a progressive basis ("progress claims"); and (b) 470 St Kilda Road Pty Ltd could request that Reed provide documentary evidence in support of progress claims. From time to time, Mr Robinson made statutory declarations in support of progress claims that included details of payments made to subcontractors. 11 470 St Kilda Road Pty Ltd requested that Reed provide documentary evidence in support of Progress Claim No 15. In December 2011, Aaron Tranter, who was at that time employed by Reed as the Contracts Manager for the Leopold Project, requested that Mr Robinson execute a statutory declaration in support of Progress Claim No 15. Mr Robinson made a statutory declaration on 12 December 2011 in support of Progress Claim No 15 ("the Statutory Declaration"). Reed submitted the Statutory Declaration to Reshape on 12 December 2011. Reshape issued a Certificate of Payment for Progress Claim No 15 in the amount of $1,426,641.70 (inclusive of GST) to 470 St Kilda Road Pty Ltd on 21 December 2011. 12 Chubb issued a directors and officers liability insurance policy to Reed Building Group Pty Ltd and its subsidiaries (which included Reed) for the policy period 25 July 2011 at 4 pm to 25 July 2012 at 4 pm ("the D&O Policy"). Mr Robinson falls within the definition of an 'Insured Person' under the D&O Policy. 13 The principal proceeding was commenced by 470 St Kilda Road Pty Ltd against Mr Robinson on 3 April 2012. 470 St Kilda Road Pty Ltd claimed that: (1) Mr Robinson did not have a reasonable basis for making the Statutory Declaration submitted in support of Progress Claim No 15; and that he had thereby engaged in conduct that was likely to mislead or deceive and acted negligently in breach of his duty of care. St Kilda Road Pty Ltd further alleged that it had relied on the Statutory Declaration when it issued a Payment Schedule and certificate of payment on 21 December 2011 for $1,426,641.70 in relation to Progress Claim No 15, as a result of which 470 St Kilda Road Pty Ltd had suffered loss and damage. Mr Robinson denied the claims. 14 No party challenged the Court's jurisdiction. Jurisdiction with respect to the principal proceeding was said to arise under s 6(3) of the Competition and Consumer Act 2010 (Cth), because the Statutory Declaration was emailed to 470 St Kilda Road Pty Ltd. 15 Mr Robinson made a claim for indemnity under the D&O Policy in respect of losses that have been or will or may be incurred by him as a consequence of the principal proceeding. Chubb denied liability under the D&O Policy on the ground that exclusion IV(A)(v) of the policy applied. 16 As a consequence, Mr Robinson instituted the cross-claim against Chubb, in which he claimed an indemnity under the D&O Policy. Chubb denied its liability under the policy, relying on exclusion IV(A)(v). The only outstanding question in the cross-claim was whether Chubb was entitled to refuse to indemnify Mr Robinson by reason of exclusion IV(A)(v) to the D&O Policy. This is the question for determination. THE PARTIES' SUBMISSIONS 17 Chubb argued that the exclusion in clause IV(A)(v) applied because the making of the Statutory Declaration by Mr Robinson was in the rendering of professional services by Reed to 470 St Kilda Road Pty Ltd. Mr Robinson argued that, on the contrary, the making of the Statutory Declaration was not an act that occurred "in the rendering of … services" to 470 St Kilda Road Pty Ltd or anyone else and, in any event, there were no "professional services" involved. 18 The case made for Mr Robinson began with the proposition that the making of a payment claim was not an act that occurred "in the rendering of … services" to a third party, because: (a) The statutory declaration was made in order to secure a commercial benefit for Reed …, namely, payment. If it had not been given, 470 St Kilda Pty Ltd would have been entitled to withhold payment. Whilst the provision of the statutory declaration may have given comfort to 470 St Kilda Pty Ltd that Reed … had met its obligations to workers and subcontractors, it did not constitute the 'rendering of services' to 470 St Kilda [Pty Ltd]. (b) The outcomes which Reed … contracted to deliver under the [D&C Contract] were the delivery of the "design documents" and the "WUC" referred to above. The provision of documentary evidence in support of payment claims was neither of these things; it was merely part of the machinery by which Reed … would be paid, progressively, upon progressively achieving the contracted outcomes. (c) The provision of documentary evidence in support of payment claims did not entitle Reed … to remuneration under the [D&C Contract]; it was not something that Reed … could include in a payment claim as something which had been achieved and which attracted payment. 19 At the hearing, counsel for Mr Robinson emphasised that Reed made the statutory declaration in order to be paid for the work it had done and that, by the time it had submitted a progress claim, the contractual work to which it related had been performed. Perhaps following on the court's discussion with senior counsel for Chubb, counsel for Mr Robinson submitted that: The submission of the payment claim, does not involve the rendering of a service. It is, in a sense [an] "accountability mechanism" … because it identifies, as required by the contract, the work that has been done that entitles, or is said to entitle, the contractor to payment. … The statutory declaration was in truth, a risk allocation device or an accountability mechanism … by which 470 [St Kilda Road Pty Ltd] was assured … that Reed's liability for payment of subcontractors and employees remained with Reed … and that no risk for those liabilities could pass to 470 [St Kilda Road Pty Ltd]. … [I]t's purpose was to minimise the risk of 470 [St Kilda Road Pty Ltd] being called on to pay twice for the same labour. … Merely because there's a benefit being conferred … doesn't mean that it's a benefit in the nature of a service. 20 Counsel for Mr Robinson added that the fact that Reed put into place "the systems and processes and techniques" necessary for the delivery by Reed of that which the D&C Contract required of it, including the provision of the documentary evidence sought by 470 St Kilda Road Pty Ltd (under cl 38 of the contract) did not mean that those systems, processes and techniques were "services delivered under the contract". Mr Robinson argued that Reed "collected the information underlying the statutory declaration for its own purposes at head office". 21 As already indicated, Mr Robinson also argued that the making of the statutory declaration in support of a payment claim was not an act that occurred "in the rendering of … professional services" to a third party. In support of this proposition, reference was made to numerous decisions, including Chemetics International Ltd v Commercial Union Assurance Company of Canada (1984) 11 DLR (4th) 754 ("Chemetics"); Vero Insurance Ltd v Power Technologies Pty Ltd (2007) 14 ANZ Insurance Cases 61-745 ("Vero Insurance"); Transfield Services (Australia) Pty Ltd v Hall (2008) 75 NSWLR 12 ("Transfield"); and Major Engineering Pty Ltd v CGU Insurance Ltd (2011) 282 ALR 363 ("Major Engineering"). 22 In oral submissions, counsel for Mr Robinson submitted that the authorities supported the following propositions: (1) the courts have interpreted the term "professional services" differently, depending on whether the term is in an insuring clause or an exclusion clause; (2) whether in an insuring clause or an exclusion clause, the courts have construed the term "professional services" by reference to the purpose for which the insurance was taken out and have avoided any construction that would have the effect of inappropriately circumscribing the scope of the cover; (3) a narrow meaning has been given to "professional services" particularly where appearing in an exclusion clause; (4) where the term "professional services" has been used in an exclusion clause, the principle of contra proferentum has been almost routinely applied; and (5) even where the term "professional services" has been used in an insuring clause, the courts have held that the mere provision of information and record-keeping are administrative tasks that have no professional content. 23 Mr Robinson contended that the nature of Reed's business and the purpose of the D&O policy were to be borne in mind; and that the construction advocated by Chubb "would have the practical effect of making the exclusion apply whenever officers or employees are engaged in any work arising out of or in connection with the performance of building contracts such as the [D&C Contract]" and that this "would have the effect of circumscribing entirely the cover provided by the Policy". Further, citing certain observations of Isaacs J in The Life Insurance Company of Australia Ltd v Phillips (1925) 36 CLR 60 ("Phillips") at 78, counsel for Mr Robinson submitted that there was sufficient ambiguity in the meaning of "in the rendering of professional services" to attract the contra proferentum principle. Accordingly, Mr Robinson maintained that the separate question should be answered in the negative. 24 At the hearing, senior counsel for Chubb submitted that the D&C Contract required Reed to render "a range of services" to 470 St Kilda Road Pty Ltd; that these services were project management services; and that project management services were "of a skilful character falling within an established discipline which is known and taught as project management". Chubb submitted that the evidence adduced should lead the court to find that project management was a profession, within the general community's understanding. This was denied by Mr Robinson, who did not accept that project management was a profession "either generally or in the circumstances of this policy"; and "not at the level of generality" put by senior counsel for Chubb. 25 Chubb argued that there was no requirement in exclusion IV(A)(v) that the person making the claim: … be the sole person providing the professional services or, indeed, that he be any more than involved in some way in the rendering of professional services. The rendering of professional services can, indeed, be by the corporation of which he is an officer or director. 26 In support of the proposition that project management was a "professional" service, senior counsel for Chubb relied on Toomey v Scolaro's Concrete Constructions Pty Ltd (in liq) (No 5) (2002) 12 ANZ Insurance Cases 61-519 ("Toomey") at [70]; Eastern Creek Holdings Pty Ltd v Axis Specialty Europe Ltd (2010) 16 ANZ Insurance Cases 61-854 ("Eastern Creek") at [27]-[31]; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 ("Baulderstone Hornibrook") at [33]; Royal Brompton Hospital NHS Trust v Hammond (No 9) [2002] EWHC 2037 ("Royal Brompton Hospital") at [23]; and Trustees of Ampleforth Abbey Trust v Turner & Townsend Management Ltd [2012] EWHC 2137 ("Ampleforth Abbey Trust") at [76]. 27 In summarising its argument about the D&C Contract, senior counsel for Chubb contended that: [T]he institution … of all the necessary systems relating to quality, health, safety, completion of work, quality of work, payment of subcontractors, all the necessary systems, are integral parts of the project management system that has to be put in place by the contractor. The provision of the statutory declaration that was the method of supplying the evidence under clause 38 is an aspect of that overall system of project management that the contractor is obliged to put in place and pursuant to those systems the contractor delivers a range of services to the building owner, not least of which is a project efficiently and safely completed on time with no outstanding claims from subcontractors or others. 28 Senior counsel for Chubb argued: [T]he effect of Mr Robinson's affidavit and his questions and answers is that a large part of the contractual task was the project management of this project which required the establishment of systems for a whole range of matters including payment claims and payments to subcontractors. Those systems included insuring, so far as possible, that contracts were back to back so you had similar obligations cast on the subcontractor as the principal contractor had and Mr Robinson says that he relied on the company's systems and project managers individually for the information that underpinned the statutory declaration that he deposed to. He is at the very apex of a large pyramid and there are a lot of work and systems that the statutory declaration was founded upon and they had to be good because of the liability that he was exposing both himself and the company to by making a statutory declaration. (Included in volume 1 of the Tender Bundle was a document setting out questions apparently addressed to Mr Robinson and answers). 29 Chubb submitted that, in the present case, it was important to recognise that the question posed by the exclusion clause was not whether the act or omission is the rendering of a professional service but whether the act or omission is in the rendering of, or failure to render, any professional services. Chubb contended that "it may give rise to error to focus too narrowly upon the act or omission in question and to consider only whether, of itself and in isolation, it bears a professional character". Rather, so Chubb said, the act or omission must be characterised by reference to the overall context in which it occurred. Viewed in this way, Chubb submitted that the provision by Reed of documentary evidence in accordance with cl 38.1 of the D&C Contract was a step in the rendering of project management services, and therefore professional services, by Reed to 470 St Kilda Road Pty Ltd. 30 At the hearing, senior counsel for Chubb submitted that: The act [of providing the Statutory Declaration] can't be divorced from what it's supported by because the phrase is whether that action was committed in the course of rendering, and so if it is simply the product of all of the detailed analyses and collations that underpin it, it's not distinct. It's not separate from. It's the final product that arose in the course of rendering those professional services, and they are being rendered to the third party because in a condensed short form, as required by the banks and the contractor – and the owner, the contractor is providing effectively a certificate in the form of the statutory declaration that this is the financial position. 31 Chubb's senior counsel said further: [F]or the man at the apex of the pyramid it is wrong in our submission to label that as merely an administrative step simply because it's the making of a statutory declaration. One needs to take into account the information that is being provided as a service and how that's being compiled and collated. 32 Chubb argued that its construction did not unduly limit the indemnity clause, on that basis that it: doesn't have the effect of denuding this policy of an intended field of operation. It was always intended that professional services broadly defined, delivered by any officer, employee, etcetera should be excluded from this policy, the reason being that if you want such cover you go and get that cover explicitly, and that was the option and that's what they did but that's not something that's peculiar to this case. 33 Chubb repudiated the proposition that its favoured construction of the exclusion clause would inappropriately circumscribe the cover. It contended that: The situation is quite different from that which might arise where there is an exclusion in a general liability policy. As a matter of ordinary experience, a general liability policy might be expected to respond to the claim at issue here, whereas a directors' and officers' insurance policy serves a much narrower purpose and professional services are normally covered only by a professional indemnity policy. THE CHUBB POLICY 34 Before examining the parties' submissions more carefully, it is convenient to refer briefly to the insurance policy, the D&C Contract and the evidence generally. 35 The insurance policy issued by Chubb was specifically "a directors' and officers' liability insurance policy" ("the D&O Policy"). 36 In argument at the hearing, Chubb emphasised that it did not cover Reed under its 'Miscellaneous Professional Liability' policy. Rather, companies in the Reed Group, including Reed, obtained cover "in respect of a Claim arising from the performance of Professional Services" from Liberty International Underwriters ("Liberty"): see clause 1.1 of the Liberty policy. Chubb emphasised that both the Chubb policy and the Liberty policy were for the period 25 July 2011 at 4 pm to 25 July 2012 at 4 pm; and that provision was made in the D&O Policy for adjustment where loss was insured under another policy such as the Liberty policy: see General Terms and Conditions Section, clause XXIII. Whilst perhaps part of the commercial context, I do not consider that these circumstances have much, if any, bearing on the construction of the exclusion clause in the D&O Policy. 37 Broadly speaking, the D&O Policy indemnified directors, officers and employees of Reed for acts and omissions (actual or alleged) which occurred while those persons were acting in their capacity as such. So much appears from the terms of insuring clause 1(A) and the definitions of "Wrongful Act", "Insured Capacity" and "Insured Person" set out below. 38 Clause I(A) of the D&O Policy, which was the relevant insuring clause, stated: Executive Liability Coverage The Company shall pay, on behalf of each Insured Person, Loss for which the Insured Person is not indemnified by an Organisation on account of any Executive Claim first made during the Policy Period or, if exercised, during the Extended Reporting Period, for a Wrongful Act occurring before or during the Policy Period. 39 Clause III, which provided some definitions, stated that: Definitions When used in bold type in this Coverage Section: … Executive means any natural person who was, now is or shall be a company director, including for the avoidance of doubt, a de facto director or shadow director; company secretary; officer or the holder of an equivalent position in any jurisdiction. Executive Claim means: (a) With respect to Clauses (A) and (B) only: (i) a written demand for monetary damages or non-pecuniary relief; (ii) civil proceeding; … against any Insured Person, individually or otherwise, for a Wrongful Act, including any appeal therefrom. … Insured Capacity means the position or capacity designated in the definition of Insured Person held by any Insured Person … Insured Person means any natural person who was, now is or shall be an Executive or employee of an Organisation … Wrongful Act means any act or omission, including but not limited to any error, misstatement, misleading statement, neglect, breach of trust or breach of duty committed, attempted, or allegedly committed or attempted by: (a) for purposes of coverage under Insuring Clauses (A) and (B): an Insured Person, individually or otherwise, in his Insured Capacity, or any matter claimed against such Insured Person solely by reason of serving in such Insured Capacity; or 40 Mr Robinson, as the COO, was an officer of Reed. He was also an employee of Reed. It was, therefore, not in issue that he was an "Insured Person" for the purposes of the D&O Policy. Furthermore, it is not in dispute that Mr Robinson made an "Executive Claim" within the meaning of that policy, since such a claim included a civil proceeding in respect of a "Wrongful Act", defined, relevantly, as "any act or omission, including … a misleading statement, … allegedly committed or attempted by … an Insured Person, individually or otherwise, in his Insured Capacity". The claim made by 470 St Kilda Road Pty Ltd against Mr Robinson, in his capacity as Reed's COO, fell within the definition of "Wrongful Act" set out above. It is not in issue that Mr Robinson made a claim on the D&O Policy within time. 41 The exclusions to cover under the D&O Policy are set out in clause IV. Under "(A) Exclusions Applicable to All Insuring Claims", the following is stated: The Company [Chubb] shall not be liable for Loss in respect of any Claim: … Professional Services (v) for any actual or alleged act or omission, including but not limited to any error, misstatement misleading statement, neglect, or breach of duty committed, attempted or allegedly committed or attempted in the rendering of, or actual or alleged failure to render any professional services to a third party; (Emphasis added) THE D&C CONTRACT 42 Much of Chubb's argument centred on the D&C Contract and the nature of the services that it said that Reed agreed to provide pursuant to that contract, although both parties referred to the nature of the contract and, in this regard, drew attention to the recitals to the D&C Contract. The recitals to the D&C Contract relevantly provided that: A. The Principal is seeking a builder to undertake the redevelopment of the existing 7 storey office building on the Site into a 14 storey residential apartment building … B. The Contractor has agreed to enter into this Contract with the Principal whereby the Contractor is agreeing to accept full responsibility for the design documents and undertake the performance of the WUC in accordance with the Contract. C. The Contractor represents to the Principal that it is experienced in the performance of works similar to the WUC and that it will provide the necessary resources, personnel, skill and expertise required in order to comply with all its obligations in accordance with the Contract. … "WUC" signified the work that Reed was required to carry out under the contract. 43 Broadly speaking, as the recitals indicated, under the D&C Contract, Reed agreed to "accept full responsibility" for certain design documents and to perform "WUC" relating to the development of a seven-storey office building at 470 St Kilda Road, Melbourne. Under the D&C Contract, the "design documents" were various drawings, specifications and other information, samples, models, patterns and the like for the construction of the Works: see D&C Contract, Schedule 3 (General conditions), cl 1. The "Contract Sum" payable to Reed under the D&C Contract was $39,210,587 (excluding GST): see cl 4. 44 Chubb submitted that the warranties in clause 2.2 of the D&C Contract provided greater understanding of what was required of Reed. Thus, for example, Chubb referred to clause 2.2(a), which provided that: Without limiting the generality of clause 2.1, the Contractor acknowledges and warrants to the Principal that: (a) the Contractor: (i) at all times shall be suitably qualified and experienced in the design and construction of the type and scale of the Works contemplated by this Contract, and shall exercise due skill, care and diligence in the carrying out and completion of WUC; … (iii) shall carry out and complete WUC in accordance with the design documents so that the Works, when completed, shall: (A) be fit for their stated purpose and will be suitable for occupation; and (B) comply with all of the requirements of the Contract, all legislative requirements (Including pursuant to the Building Act 1993 (Vic)) and all relevant Australian Standards applicable to the Works. … (xi) will co-ordinate the WUC with the work and activities of the Principal and others (including the Principal's other contractors); (xii) will at all times be responsible for the correction of any errors or omissions in the Works either caused by the Contractor or its subcontractors; … 45 Chubb noted that there were contractual requirements that Reed obtain a range of insurances, including public liability insurance: see clauses 16A, 16B, 16D, 16E, 17, 18, and 19. 46 Chubb relied specifically on clause 23A of the D&C Contract, headed "Key Personnel". As its senior counsel observed, one may infer that clause 23A was designed to ensure the timely and efficient management of the project. This clause relevantly provided that: The Contractor acknowledges and agrees that: (a) it is obliged to use its best endeavours to procure that the key personnel stated in Item 25A (or alternates reasonably approved by the Principal's Representative …), carry out the duties stated in Item 25A for the duration of the Contract; (b) it shall not commit or otherwise agree to the key personnel stated in Item 25A performing services in relation to other projects or otherwise within the Contractor's business which may compromise that person's ability or availability to carry out the duties stated in Item 25A for the duration of the Contract; (c) as soon as practicable after it becomes aware that a person in the key personnel list in Item 25A is or will be unable to carry out the duties stated in Item 25A for the duration of the Contract, the Contractor must nominate for the Principal's Representative's consideration and approval (acting reasonably), a replacement person employed by the Contractor of equivalent skill, qualification, experience and competency to that person that is being replaced and who will be available to carry out and complete the duties of the person being replaced for the remainder of the Contract term with a minimum amount of disruption to WUC … 47 In this context, Chubb submitted that it was "significant that the D&C Contract identified individuals in the roles of 'Project Director', 'Senior Project Manager', 'Project Manager' and 'Contracts Administrator' as 'key personnel' for the purposes of clause 23A of the D&C Contract". That is, Item 25A of Part A of the annexure to the D&C Contract nominated "Key Personnel" as follows: Name Duties to be carried out Nicholas Bufe Project Director Christopher Andrews Senior Project Manager Joanne Potts Project Manager Aaron Tranter Contracts Administrator Peter Small Services Engineer Barry Murphy Design Manager 48 As senior counsel for Chubb said, the D&C Contract made provision for quality control (cl 29) and for project programming (cl 32), both of which it may be accepted are aspects of project management. Clause 34, headed "Time and Progress", made detailed provision for the "WUC" [to] reach Practical Completion by the Date for Practical Completion" and required that Reed "proceed with the WUC regularly and diligently and with due expedition and without delay". It may also be accepted that, as Mr Bell said in evidence, this necessitated the co-ordination of many elements of the project. 49 Broadly speaking, clause 37 of the D & C Contract provided that Reed would make claims for payments progressively in accordance with the specified contractual regime. Under clause 38, 470 St Kilda Road Pty Ltd could request Reed to provide "documentary evidence" that its subcontractors and all workers had been paid. 470 St Kilda Road Pty Ltd was required to pay the amount specified in the payment schedule to Reed within a specified period. If a request for documentary evidence was made but not met, 470 St Kilda Road Pty Ltd could withhold payment of the relevant payment claim: see cl 38.2. 50 As senior counsel for Chubb noted, the payment process was complicated and dependent on subsidiary work to provide the details and assurances required by the principal (470 St Kilda Road Pty Ltd). Clause 37 set out the procedure for payment claims to be lodged by Reed. Among other things, cl 37.1 required Reed to prepare and give written payment claims to the Principal's Representative on the twenty-eighth day of each month (Item 33) detailing the value of the work done under the D&C Contract in the previous month. Reed was required to detail these claims with some specificity – a process necessarily dependent on its record-keeping and on relevant staff: see, for example, cl 38.1(b). The Principal's Representative was obliged to respond by issuing a payment schedule to Reed setting out those payment claims that it considered to be due and payable and those which were not accepted. Chubb submitted that this process too was "integral to the project management function assumed by the contractor" under the D&O Contract. I return to this submission below. 51 Clause 38.1 of the D&C Contract provided the contractual basis for the Statutory Declaration. This clause stated: If requested by the Principal or the Principal's Representative, the Contractor shall give in respect of a payment claim, documentary evidence of the payment of moneys due and payable to: (a) workers of the Contractor and of the subcontractors; and (b) subcontractors, in respect of WUC the subject of that payment claim …] 52 Clause 39.2 of the D&C Contract further provided: If the Contractor commits a substantial breach of the Contract, the Principal may, by hand or by registered post, give the Contractor a written notice to show cause. Substantial breaches included, but are not limited to: … (e) in respect of clause 38, knowingly providing documentary evidence containing an untrue statement. 470 St Kilda Road Pty Ltd had the right, under cl 39.4, to terminate the D&C Contract in the event that Reed failed to show reasonable cause. MR ROBINSON'S EVIDENCE 53 As already noted, at the relevant time, Mr Robinson was Reed's COO. In this capacity, he supervised a number of reporting lines, including the National Operations Manager who in turn supervised projects managers (with contract administrators and site managers reporting to them). Mr Robinson did not have day-to-day responsibility for the Leopold Project, but he attended monthly meetings at which the Leopold Project was discussed. 54 In describing Reed's accounting system, Mr Robinson said in his affidavit that: [Reed] had a system and process for the processing of invoices, the approval for payment and the issue of cheques to subcontractors and suppliers. Those systems were part of a larger cost reporting system used to monitor the cost of projects and project future costs and income. 55 In relation to the Statutory Declaration at issue in the principal proceeding, Mr Robinson deposed: On or about 12 December 2011, I was requested by Aaron Tranter, [Reed's] then Contracts Manager for the Leopold Project, who was based in Melbourne, to execute a statutory declaration … to be submitted to [Reshape], which was the principal's Representative appointed under the [D&C Contract]. Mr Robinson went on to say that, in making a statutory declaration of this kind, his practice was to speak with the Project Manager, although in the case of the Statutory Declaration in issue in the principal proceeding, he spoke with the State Manager, Nick Bufe, as well as Reed's CEO, Garth Graydon. Mr Robinson also reviewed certain accounting information. As to this, he said: Approximately once a week the accounting staff at [Reed's] head office in Sydney provided me with a standard form of print out available from [Reed's] accounting system known as a "Cheques Drawn" list (CDL). Each CDL dealt with every project then being undertaken by [Reed], divided by project but often running to up to 150 pages and sometimes 1500 plus entries. A CDL provided me with the following information: a. a list of cheques physically drawn by [Reed's] accounting staff in respect of every project but not yet signed and provided to each subcontractor or supplier for payment; b. the name of the payee, the cheque number, the date it was drawn and the value for each such cheque; c. a column containing information about the age of the invoices (by month); d. a comments column which occasionally had a comment from a member of staff about a particular invoice or supplier such as "insurances expired". (I note that Mr Robinson was not cross-examined; and that Chubb did not propose that I not accept his evidence as given in his affidavit.) 56 The Statutory Declaration in issue in the principal proceeding was included in the documents annexed to Mr Robinson's affidavit. In this document, Mr Robinson had declared that: I am the contractor or authorized employee of the contractor entitled to make the claim for progress payment as detailed above. That to the best of my knowledge and belief having made all reasonable enquiries, at this date – all workmen who are or at any time have been engaged on the work under the Contract have paid in full amounts which have become due to them by virtue of their employment on the work under the Contract as wages and allowances of every kind required to be paid … and to the latest date at which such wages and allowances are payable. all sub-contractors or suppliers of materials who are or at any time have been engaged on the work under the Contract have been paid in full all monies which have become payable to the sub-contractor under terms of the sub-contract or to the supplier of materials under the terms of agreement for supply. no disputes exist with workmen, sub-contractors or suppliers all insurances required under the Contract are current and all premiums have been paid. … MR BELL'S EVIDENCE 57 Geoffrey Bell was an engineer and a director of a construction and engineering consulting firm, who prepared a report at Chubb's request. It may be accepted that Mr Bell was relevantly qualified as an engineer and in the provision of project management. In brief, in his report, he stated that it was his opinion that "Reed was required to render project management services under the [D&C] Contract" to the Principal and that the provision of documentary evidence pursuant to cl 38.1 falls within the scope of these services. 58 Mr Robinson objected to the admissibility of Mr Bell's report on the grounds that: (a) the report purported to construe the terms of the D&C Contract and thus: (1) the questions on which Mr Bell purports to opine are outside his expertise; and (2) Mr Bell's report intrudes impermissibly upon the judicial function of the Court; (b) the report ought to be excluded on discretionary grounds under s 135 of the Evidence Act 1995 (Cth). 59 In so far as Mr Bell's report stated his opinion about the law or its application to the facts of the case, it was inadmissible for the reasons set out in Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79 at 83 and in Australian Securities and Investments Commission v Vines (2003) 48 ACSR 291 at 297-300 [20]-[30]. I would thus regard Mr Bell's statements about the effect or construction of contractual terms as inadmissible. The substance of Mr Bell's report consisted of statements of this kind. The result is to render much of Mr Bell's report inadmissible. That which might remain as admissible was the subject of Mr Bell's oral evidence in chief. 60 In his evidence in chief, Mr Bell, who was subject to some cross-examination, gave evidence that project management involved organising a project so that it was delivered "on time, on budget and in accordance with the specification". I accept that he was qualified to give expert evidence on this and associated matters. Mr Bell gave evidence that the Project Management Institute, which was based in the United States, had chapters all over the world. His evidence was to the effect that project management related to matters such as time, costs, safety, quality and personnel. His evidence was that a project manager "bring[s] together a range of other people who have responsibility for particular elements of the job [and has] ultimate responsibility for delivery of a project". It is usual, he said, for project managers to be technically qualified and common for them to seek post-graduate project management qualifications through institutions of higher learning. In re-examination, Mr Bell said that a project manager had usually worked up from "a task like a project engineer" and might have spent "time working in programming or contract administration". 61 I generally accept the evidence of Mr Bell as set out above. ANOTHER EVIDENTIARY ISSUE 62 In the course of the hearing, senior counsel for Chubb sought to tender a bundle of documents, which were marked "CR-1" and provisionally admitted, subject to Mr Robinson's objection. The authenticity of the documents was not contested: it was accepted by Mr Robinson that they were what they purported to be. The documents consisted of an extract from the "Project Management Professional (PMP) Handbook" published by the Project Management Institute (see above); documents concerning professional competency standards for Project Management published by the Australian Institute of Project Management (AIPM); a handbook excerpt for a Masters of Engineering and Project Management published online by the University of Melbourne, an excerpt from an online information page for a Project Management Certification Program run by the AIPM; a "2013 Postgraduate Property, Construction and Project Management web edition prospectus updated 7 February 2013" published by RMIT University; and a "Postgraduate Guide 2013 for Property Management and Project Leadership" published by the University of Sydney. 63 Chubb contended that the documents should be admitted under s 144 of the Evidence Act "as proof that the organisations from which they emanate undertake the activities which they disclose" and that they assist in showing "that project management is a recognised discipline that should properly be characterised as professional". Chubb noted that s 144(1)(b) is an alternative to s 144(1)(a). In so far as Chubb may be taken to submit that s 144(1)(a) has some application to this evidence, I reject it. I am not satisfied that there is any relevant common knowledge. 64 Section 144(1)(b) provides that "[p]roof is not required about knowledge that is not reasonably open to question and is … capable of verification by reference to a document the authority of which cannot reasonably be questioned". Having regard to the nature of the documents and the organisations that published them, I accept that proof is not required about knowledge that in 2013 the relevant institutions of higher learning offered courses of the kind described in them and that the Project Management Institute maintained requirements about the professional competency of its members, and advertised through their website a certification program. There is no unfair prejudice to Mr Robinson caused by accepting the document bundle in this way. He did not submit that there was: cf Prentice v Cummins (2002) 124 FCR 67 at 87 [85]. For the reasons explained below, I also accept that these documents have some relevance. RELEVANT LEGAL PRINCIPLES Construction of insurance contracts 65 In assessing the parties' submissions, it is necessary to bear in mind the principles governing the construction of insurance contracts. Gleeson CJ stated the overarching principle relevant to the interpretation of commercial contracts, including insurance contracts, in McCann v Switzerland Insurance Australia Limited (2000) 203 CLR 579 at 589 [22] in a passage approved by the High Court in CGU Insurance Limited v Porthouse (2008) 235 CLR 103 at 116 [43]: A policy of insurance … 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. (Citations omitted) 66 The correct approach to construing an exclusion clause, such as exclusion clause IV(A)(v), was outlined in Darlington Futures Limited v Delco Australia Pty Ltd (1986) 161 CLR 500, in which the High Court said (at 510-511): [T]he interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in case of ambiguity. … [T]he principle, in the form in which we have expressed it, does no more than express the general approach to the interpretation of contracts and it is of sufficient generality to accommodate the different considerations that may arise in the interpretation of a wide variety of exclusion and limitation clauses in formal commercial contracts between business people where no question of the reasonableness or fairness of the clause arises. 67 In keeping with this approach, in Selected Seeds Pty Ltd v QBEMM Pty Ltd (2010) 242 CLR 336 at 344 [29], the High Court stated: According to the general rules of construction, whilst regard must be had to the language used in an exclusion clause, such a clause must be read in light of the contract of insurance as a whole, "thereby giving due weight to the context in which the clause appears". (Citation omitted) Plainly enough, in applying these principles, one must "identify the risks covered by the policy and therefore the purpose of the policy": see Major Engineering at 373 [45] (Bongiorno JA, Hansen JA and Kyrou AJA agreeing). 68 In the interpretation of an exclusion clause in an insurance contract, the contra proferentem rule operates only where the words in the clause are ambiguous. According to many authorities, the rule is one "of last resort", in the sense that there remains ambiguity after the application of the other relevant principles of construction. 69 In North v Marina (2003) 11 BPR 21,359, Campbell J explained the operation of the rule in the following passages (at 21,377 [75]-[77]): The role of the maxim is to enable the court to choose between alternative meanings of the document or clause in question, being meanings which are fairly open. It is not a legitimate use of the maxim to say that two meanings of a particular contractual provision are possible, and that the meaning unfavourable to the proferens should be chosen, if one of those alternative meanings is an unrealistic or unlikely construction of the contract. …. It is well-established that the contra proferentum rule is only to be used where the document is otherwise ambiguous. … As the statements of law set out in the previous paragraph show, in deciding whether the document is ambiguous, no stretched or artificial notion of ambiguity should be used. Further the contra proferentum rule is a principle of last resort. … 70 Counsel for Chubb submitted that the question whether, in providing the Statutory Declaration, Mr Robinson was doing an act "in the rendering of … professional services to a third party" did not turn on an ambiguity but, rather, the question required the court to give content to the expression "in the rendering of … professional services to a third party". As already mentioned, counsel for Mr Robinson referred to a passage in Phillips at 78, in which Isaacs J said: [T]he term "ambiguity" is itself not inflexible. It may arise from doubt as to the construction in their totality of the ordinary and in themselves well-understood English words the parties have employed. That is true construction. Or it may arise from the diversity of subjects to which those words in the circumstances may be applied. That is rather interpretation of terms. Mr Robinson submitted that the question in this case turned on an ambiguity in the latter interpretative sense and that, in the last resort, the contra proferentum principle could be applied. I return to these two submissions below. 71 There is also a related principle of construction, which, as will be seen, assists in the present case. This principle arises as a consequence of reading an exclusion clause in the context of the policy as a whole and in light of the object of the policy. Thus, if an exclusion clause is open to two constructions, one of which would inappropriately circumscribe the cover provided by the insuring clause and one of which would not, the latter is to be preferred: see Fitzpatrick v Job (2007) 14 ANZ Insurance Cases 61-731 ("Fitzpatrick v Job") at [268]-[270] (Buss JA, Steytler P agreeing); Vero Insurance at [147]-[148] (Beazley JA, Campbell JA and Harrison J agreeing); and Major Engineering at 375-376 [58]. Thus, for example, in Fitzpatrick v Job Buss JA observed (at [268]) that: If any and all negligent acts and omissions of Jobs Engineering … were to be characterised as breaches of duty owed by it in a professional capacity, within exclusion 10(a), the cover under the indemnity clause of the products liability insurance would be severely circumscribed. The indemnity clause would not respond unless Jobs Engineering's legal liability to pay was not attributable to its negligence or other breach of duty owed by it in a professional capacity, but arose on some other legal basis. The parties cannot have intended such an uncommercial and unreasonable result, and it is not a construction which the language of the policy unequivocally requires. 72 Also, it is sometimes said that "the onus of proof or the risk of non-persuasion with respect to an exclusion clause rests on the insurer": see Major Engineering at 374 [47], citing Trickett v Queensland Insurance Co Ltd [1936] AC 159 at 164, Bashtannyk v New India Assurance Co Ltd [1968] VR 573 at 575 and Haileybury College v Emanuelli [1983] 1 VR 323 at 336. Construing exclusion clause IV(A)(v):"in the rendering of … any professional services to a third party" "Services" 73 As noted above, Mr Robinson argued that the making of the Statutory Declaration was not an act that occurred "in the rendering of … services" to a third party within the meaning of exclusion IV(A)(v) of the D&O Policy. I reject this submission for the following reasons. 74 In the context of this exclusion clause, the term "services" means the provision of something (such as work, help, advice or information) for the benefit of another person (generally, who has requested it). This is consistent with a definition of "service" in the Shorter Oxford English Dictionary (6th edition) as "an act of helping or benefitting another" and in the Macquarie Dictionary (5th edition), as "(often plural) the performance of any duties or work for another; helpful activity". In determining whether services were rendered within the exclusion clause, it is important to consider the commercial context in which Reed discharged its obligation under cl 38.1 of the D&C Contract by providing the Statutory Declaration. Whilst, as Mr Robinson maintained, the Statutory Declaration was made by Reed to secure payment by 470 St Kilda Road Pty Ltd, the Statutory Declaration was also given for the benefit of 470 St Kilda Road Pty Ltd, because the Declaration provided the information that would minimise the risk that 470 St Kilda Road Pty Ltd would pay twice for the same labour in the event that Reed failed to meet its own obligations in this regard: see generally the SOP Act, Part 3, Division 4. Another purpose was to confirm that the Leopold Project would not be adversely affected by a failure on Reed's part to pay its workers and subcontractors: see, for example, the SOP Act, s 29. A third purpose was to ensure that all insurances were in place. A fourth purpose was to satisfy the requirements of the financier to 470 St Kilda Road Pty Ltd. 75 In light of the above, I accept that the provision of the Statutory Declaration was an act in the rendering of "services" to St Kilda Road Pty Ltd. Professional services 76 The key question, however, was whether the provision of the Statutory Declaration was an act in the rendering of professional services. Project management as generally recognised profession 77 As already noted, Chubb submitted that it was apparent from the way in which the courts have defined the idea of a profession that project management fell within that notion; and that the provision of the Statutory Declaration was in the rendering of (professional) project management services. 78 Chubb submitted that the evidence of Mr Bell alone or as fortified by the various university publications (described above as "CR-1") established that project management was an established and well recognised discipline. I reject this submission. I have already described Mr Bell's evidence. I accept that there was a Project Management Institute ("PMI"), which set certain competency standards for its members. There was no evidence about the significance of membership for obtaining project management work. Mr Bell's evidence (which I accept) also indicated that project management had accepted concerns and aims and that project management was often pursued by people who had an engineering qualification. It was also apparent that, depending on the project and relevant contractual responsibilities, a project manager might have "large responsibilities", as senior counsel called them. There was, however, no specific reference in the evidence to organisational principles, although their existence might perhaps be inferred from the fact that some institutions of higher education offered post-graduate courses in project management. 79 At most, considered in its entirety, the evidence showed that, in some circumstances, project management might be seen as a profession. So far as an insurance contract is concerned, however, whether or not project management falls within the meaning of "profession" or involves "professional services" would depend on the commercial context in which the policy is made, its objects and its terms. 80 Also, as already noted, Chubb relied on a number of authorities, which, so it said, recognised project management as a profession. None of these authorities in fact went so far. 81 Toomey, which is relevant to this point and to the broader discussion of what is meant by "professional services" (see below), concerned a public liability insurance policy. The policy indemnified the insured against legal liability to pay compensation for personal injury and property damage but excluded liability for claims arising out of "any breach of duty owed in a professional capacity". For reasons of no present relevance, Eames J of the Victorian Supreme Court held that the policy covered only the ownership and occupation of premises and did not extend to management or project management services. Accordingly, the insurance policy did not indemnify the claimant. His Honour went on, however, to make two further observations, obiter dictum, which were relied on by Mr Robinson on the one hand and Chubb on the other. 82 The first matter – relied on by Mr Robinson – was that the relevant conduct (namely, that a site representative, upon being told a balustrade was too low to comply with a building code, instructed the builder to leave it as it was) did not amount to action in "a breach of a duty owed in a professional capacity", with the result that the exclusion clause did not apply. In reaching this conclusion, Eames J noted (at [59]): There was disagreement between counsel as to whether the focus in determining whether liability arose from a duty owed in a "professional capacity" should be placed on the role of [the company] as a Project Manager, or on the specific activities of [the site representative] – both his actions and omissions – which made [the company] vicariously liable. In my view, determination of this question will involve both the narrow and the broader focus, but primarily the specific actions which gave rise to the liability will require the keenest attention. 83 After referring to various authorities, including GIO General Ltd v Newcastle City Council (1996) 38 NSWLR 558 at 568 ("GIO"), FAI General Insurance Co Ltd v Gold Coast City Council (1995) 2 Qd R 341 at 344 ("FAI General"), Chemetics and GIO of NSW v City of Penrith (1999) 102 LGERA 102 ("GIO v Penrith"), Eames J concluded (at [65]) that: Each of those decisions demonstrates that the question must be resolved by an examination of the totality of the circumstances, but with a focus on the actual conduct, by action or omission, of the negligent individual performing the services. 84 The second of his Honour's observations (in Toomey at [70]) was relied on by Chubb in support of its contention that project management was a profession. In this observation, Eames J said: [T]he role of Project Manager, although one of fairly recent origin, may well require the application of skills over a range of disciplines. Although not a traditional profession, it is one which, in my view, could very well be regarded as being professional for the purpose of a professional indemnity policy, and had there been such a policy in existence may well have provided coverage to [the company] for the actions or inaction of [the site representative]. The categories of "professions" should not be regarded as being closed, and confined to traditional learned professions. Whether at any moment the actual conduct giving rise to liability would be covered by such a policy would be a matter to be considered on a case by case basis, having regard to the wording and nature of the policy which was under consideration. (Citation omitted) 85 Plainly enough, this observation did not express a concluded opinion. As Eames J noted, much would depend on the policy in question and the commercial context in which the policy was made. Furthermore, the observation was apparently directed to an insuring clause; and his Honour indicated that the meaning of "professional" might vary depending on whether the word was used in an insuring clause or an exclusion clause: see Toomey at [66]. In Toomey itself, in relation to the operation of the exclusion clause, Eames J stated (at [68]) that "[i]f one focussed attention exclusively on [the site representative], his conduct would not amount to action in a 'professional capacity' for the purposes of the exclusion clause". His Honour also noted (at [68]): [The site representative] had trade skills and experience in the building industry but he was not a qualified surveyor or building inspector. In responding to the knowledge of the low balustrade I do not accept that he was performing professional functions, even employing the broad terms adopted by Kirby P [in GIO]. 86 Toomey does not therefore advance Chubb's argument very far. Indeed, it offers greater support to Mr Robinson's contention that, in so far as his conduct gave rise to a relevant liability under the D&O policy, it did not do so "in the rendering of… any professional services …" (emphasis added). This is discussed further below. 87 As Mr Robinson noted, in two other cases to which Chubb referred in this context – Baulderstone Hornibrook and Eastern Creek – the terms of the relevant policies expressly included 'project management' in the scope of professional activities which were covered by the policy: see Baulderstone Hornibrook at [33] and Eastern Creek at [27]-[31]. This relevantly distinguishes both these case from the present policy, which makes no such provision. 88 Lastly, in this connection, Chubb also mentioned Royal Brompton Hospital and Ampleforth Abbey Trust. Apart from the fact that both were the decisions of English courts, it is also apparent that the matters in issue were entirely different from the present case. Neither involved the construction of an insurance contract. Royal Brompton Hospital involved liability for damages under a building contract and in negligence. Ampleforth Abbey Trust similarly concerned a claim for damages arising from the alleged negligence of a corporate project manager undertaking a building project under a letter of intent rather than a concluded contract. In Royal Brompton Hospital the judge did not "accept" project management as a professional discipline. Rather, in the context of considering the expert evidence adduced in that case, the judge referred to the evidence of one such witness that, even at the time of trial, project management was "an emergent professional discipline": Royal Brompton Hospital at [23]. To the extent the judge accepted this evidence, he accepted this proposition, but only on the basis that this was the effect of the evidence adduced for the purposes of, and in, that case. For present purposes, the reference to this evidence in Ampleforth Abbey Trust cannot take the issue further: see Ampleforth Abbey Trust at [76]. 89 I would not, therefore, accept Chubb's basic submission that it was generally accepted that project management services fell within an established professional discipline. Rather, as already indicated, in the context of an insurance contract, whether or not project management falls within the terms "profession" or "professional" depends on that contract of insurance, its terms, objects and commercial context. The meaning of "profession" and "professional" 90 The term "professional services" is not defined in the D&O Policy. The expression must therefore be construed in accordance with the rules of interpretation referred to earlier. Thus, the natural and ordinary meaning of the expression must be considered in light of the specific facts of the case, the language used in the policy and the particular purpose considered in its commercial context. 91 Both parties referred to the discussion in the authorities of the meaning to be given the word "professional" in a policy of liability insurance. Chubb relied particularly on Suncorp Metway Insurance Ltd v Landridge Pty Ltd (2005) 12 VR 290 ("Suncorp") and GIO General Ltd v Newcastle City Council (1996) 38 NSWLR 558 at 568 ("GIO"). I do not derive much assistance from either case here. 92 In GIO, Kirby P held that, in the context of a policy written for a local government authority, a professional indemnity policy covered the authority in respect of its advice and services "of a skilful character according to an established discipline": GIO at 568. It must be borne in mind, however, that the relevant context was very different from the current case. Kirby P was concerned with the scope of an indemnity under a professional indemnity policy, where the risks insured against were those of a local government authority. Here the Court is concerned with an exclusion clause in a D&O policy, where the insured is a construction company. In this circumstance, GIO provides little guidance in the present case: see also Limit (No 3) Ltd v ACE Insurance Ltd [2009] NSWSC 514 at [183]-[184]. (I note too that the judgment of the Court of Appeal in GIO was reversed in the High Court, but not on this point: Newcastle City Council v GIO General Ltd (1997) 191 CLR 85.) 93 In Suncorp the Victorian Court of Appeal considered whether a claim under a professional indemnity policy brought by a tenant against a real estate agent (who was acting for the landlord) was "for breach of a professional duty by reason of any act, error or omission committed or alleged to have been committed by the Insured in the conduct of Business". The tenant was injured when she tripped and fell in the garage of a residence that she leased through the real estate agent. Buchanan JA (with whom Nettle JA and Hollingworth AJA agreed) observed (at 294 [16]): The question whether a breach of duty answers the description of a breach of professional duty depends upon the characterisation of the overall activity in the context of which the breach occurs, and is not answered by concentrating on the specific task which has not been performed or badly performed so as to give rise to liability. … The breaches by the [respondent] agent's employees in the present case … occurred in the course of carrying out the activity of property management, which in my opinion is to be regarded as a professional activity for the purposes of the policy of insurance. 94 Buchanan JA rejected the appellant's argument that the liability for breach of a professional duty covered by the indemnity clause in the policy was limited to the duty that the real estate owed to its client, the landlord. His Honour said (at 295 [20]): The insurer's argument would limit the policy to one providing indemnity against claims by those whose contractual relationship with the agent create and define the agent's professional duty. In my view, such a limitation is neither expressly nor impliedly present in the insuring clause of the policy. I think it is sufficient that the claim for compensation against which the insurer promised indemnity was for acts or omissions which constituted breaches of a professional duty 95 I do not consider that Suncorp provides much assistance in this case, because the court was concerned with an insuring clause in a policy directed to a different kind of risk from that in this case. One may accept that, in determining whether a breach of a duty was a "breach of a professional duty" for the purposes of an insuring clause, the court should consider the character of "the overall activity in the context of which the breach occurs": see Suncorp at 294 [16]. At the same time, as Buchanan JA makes clear, the policy in question must be construed "in the context of the circumstances in which it was formed, so as to give effect to the intention of the parties": see Suncorp at 293 [11]. The relevant context in Suncorp was entirely different to this case. Furthermore, as Mr Robinson noted, the relevant insuring clause was contained in a professional indemnity policy taken out by a real estate agent and expressly included the business carried on by the real estate agent (including property management) in the scope of the cover. 96 In the earlier decision of FAI General, the Queensland Court of Appeal, in considering the scope of a professional indemnity policy in relation to a local government authority, focussed on the conduct that gave rise to the claim when considering whether it fell within the description of "professional". The Court held that, whilst the meaning of "professional" varied according to the context in which it was used, generally the word "professional" connoted "pertaining or appropriate to a profession", "engaged in one of the learned professions": see FAI General 344. In that case, the Court held that merely giving factual information about the location of a water main did not fall within this description and the conduct of the council employee who gave the information did not have a "professional" component. Whilst FAI General was concerned with the scope of an insuring clause, the Court's focus on the particular conduct in question provides some guidance as to the correct approach in this case. 97 Of greater assistance in relation to the present question are Chemetics and Fitzpatrick v Job. Both these cases concerned the construction and application of exclusion clauses. The approach of the court in each case is instructive. 98 Although the decision of a Canadian court, Chemetics has been relied on in Australian courts as providing useful guidance. The facts were as follows. Chemetics International Ltd ("Chemetics") was insured under a liability policy, which excluded liability for "damage to or destruction of, or loss of use of property caused directly or indirectly by … error or omission in the rendering of professional services". Chemetics contracted with a customer for the engineering, design and supply of equipment and material for a pulp mill. The contract further provided that Chemetics would provide "the onsite services of … a competent supervisory operating engineer at such time as the Plant is substantially completed, for the training of the owners/operators in the operation of the Plant and for supervising the performance test run for the acceptance of the Plant by the owner …". It was not disputed that Chemetics had failed to give adequate operating instructions and, in particular, had failed to warn about the particular risk that caused the damage. This was the risk that overfilling the plant's tower could cause damage to or rupture the owner's roof. The services that Chemetics were required to provide by way of a competent supervisory operating engineer was the basis of the liability imposed on Chemetics in a claim brought by the customer. In this context, the question arose as to whether these services were "professional services" within the relevant exclusion clause. Even though the employee charged with provision of the relevant services was a professional engineer, the Court of Appeal of British Columbia held that the failure to give proper instructions to the customer in the operation of the equipment was not an error or an omission in the rendering of professional services within the meaning of the exclusion clause. Esson JA, delivering the judgment of the court, said (at 757): [T]he insurer has not shown that the training of operators called for by cl 1.3 was the provision of professional services. In the words of the contract, it was the provision of services of a competent supervisory operating engineer. That requirement could have been satisfied by providing a person experienced in the operation of plants and knowledgeable as to the operating characteristics of this particular plant. That person would more appropriately be described as a technician. No doubt he would have to be a professional as distinguished from an amateur. But that is not the meaning of "professional" as used in the exclusion. In that context, it is intended to refer to the kind of services, such as design of the plant, which could normally be expected to be provided only by a professional engineer. 99 The Canadian court did not doubt that the engineering and design of a pulp bleach plant constituted professional services. The outcome in that case, which was adverse to the insurer, turned on the conclusion that acts or omissions concerning the provision of an operating manual and onsite operations training after substantial completion of the design and construction of the plant were not steps taken in the rendering of professional services. Whilst the facts of that case are different from those in this case, as Mr Robinson maintained, in determining whether or not the conduct in question fell within the exclusion clause as constituting an act in the rendering of professional services, the Canadian court also focussed on the nature of the specific conduct that was said to attract the exclusion clause. 100 Australian courts have adopted the same approach when construing and applying similar exclusion clauses. 101 Fitzpatrick v Job (already discussed above in another context) also involved an exclusion clause in a public liability policy for claims arising out of "a breach of duty owed in a professional capacity". The insured's business involved the design, manufacture and supply of machinery and equipment. In the insured's application for a declaration as to its entitlement to an indemnity from GIO General Ltd ("GIO"), GIO relied on the exclusion clause. As Buss JA emphasised (at 260]) "[a]n insurance policy is a commercial document and should be given a businesslike interpretation"; and, as his Honour noted (at [264]) "[t]he term "professional" in an indemnity clause of a professional indemnity policy does not necessarily bear an identical meaning in an exclusion clause of a public liability or products liability policy". In that case, to construe the exclusion clause as applying to claims by all third parties arising from the design of machinery would have severely limited the scope of the cover. Bearing the commercial realities in mind, the Court construed the exclusion clause to apply only to claims arising out of breaches of duty owed by the insured to persons who had retained it to perform work or services in the course of its business: see Fitzpatrick v Job [270]. As Buss JA said (at [270]): My construction of exclusion 10(a) is consistent with the evident object of the products liability cover, namely, to provide indemnity … in respect of claims for personal injury and property damage caused by defective goods and property designed and manufactured by Jobs Engineering, and put into circulation in Australia. Accordingly, the Court reached a decision adverse to the insurer. 102 Mr Robinson also referred the Court to Vero Insurance, Transfield and Major Engineering. 103 Vero Insurance adopted much the same approach as Chemetics and Fitzpatrick v Job. In Vero Insurance the appellant insurer had refused to indemnify the respondent – a designer and manufacturer of power station equipment – under a public liability insurance policy. The respondent had claimed indemnity for monies that it was held liable to pay (by way of contribution) in a damages claim in respect of the plaintiff's exposure to asbestos. The insurer maintained that the claim fell within an exclusion clause, which excluded liability for claims arising out of a breach of the duty owed in a professional capacity by the respondent. The New South Wales Court of Appeal held that, although the insured had installed the asbestos material in an engineering capacity and owed a duty of care to the plaintiff, it did not owe a professional duty to the injured plaintiff employee and therefore the exclusion clause did not apply. In so concluding the Court followed the earlier decisions in Chemetics and Fitzpatrick v Job. Beazley JA, with whom Campbell JA and Harrison J agreed, said that this construction "enables the policy to provide the indemnity which the parties undoubtedly intended the policy to have" and that "a different construction would have significantly undermined the commercial purpose of the policy": Vero Insurance at [148]. 104 Mr Robinson also cited Transfield at [191], as indicative of a like approach, although the circumstances under consideration in that case were plainly quite different from those in the present case. 105 Further, I do not consider that Major Engineering greatly assists in this case. Major Engineering concerned the scope of an exclusion clause in an insurance policy designed to indemnify the appellant in respect of any legal liability to third parties arising out of its business. Relying on exclusion clauses, the respondent insurer had declined to indemnify the appellant in respect of a third party's claim arising out of the failure of two hydraulic cylinders supplied by the appellant and fitted to the keel of the third party's yacht. The Court of Appeal of the Supreme Court of Victoria allowed the appeal on the basis that the exclusion clauses had no application in the circumstances of the case. Relevantly, one of these exclusion clauses excluded indemnity where an insured's liability "which would otherwise be covered by the policy … was caused by or arose out of its performance [of] … the rendering of professional services": see Major Engineering at 374 [49]. Bongiorno JA, with whom Hansen JA and Kyrou AJA agreed, held that this exclusion clause did not apply because the company performed no "service" other than that of the supply of the cylinders and that such supply "could not be sensibly characterised as "professional" or as a service – even applying the wide definition favoured by Kirby P in GIO": see 375-376 [57]-[58]. 106 Although concerned with an exclusion clause cast in similar terms to the one with which the Court is currently concerned, the nature of the insurance policy, and the business of the insured in relation to which the cover and the exclusion were to be commercially assessed, were entirely different from the situation in the current case. It is for this reason that I do not consider Major Engineering assists greatly in resolving the current question. Answering the Separate Question 107 This review of the authorities provides a principled framework for considering and resolving the separate question. These authorities show that it is important, first, to consider the insurance contract in question in its commercial context and to give it a business-like interpretation. In this regard it is necessary to bear in mind the nature of Reed's business when the policy was issued. 108 When the policy was issued, Reed was, to the knowledge of Chubb, engaged in the business of building and construction. This business was carried on by the directors, officers and employees of Reed. When the insuring clause of the D&O Policy insured "Insured Persons" acting in their capacity as directors, officers or employees of Reed, the D&O Policy was necessarily referring to directors, officers or employees engaged in activities comprising or supporting the delivery of building and construction services by Reed. The D&O Policy was therefore intended to insure against the risks associated with the performance of those activities. 109 It is important to bear in mind that the court is concerned with an exclusion clause. Unless the exclusions in the D&O Policy, including exclusion IV(A)(v), are inappropriately to deprive the insured of the insurance sought, they must relate to a narrower band of activity than the work that generally comprises or supports the delivery of building and construction activities. Further, in considering the authorities, the court takes into account that the term "professional" in an insuring clause does not necessarily have the same meaning in an exclusion clause; and much depends on the nature of the liability assumed under the particular policy of insurance. 110 Furthermore, although the court must consider all the relevant circumstances in determining whether the provision of the Statutory Declaration by Mr Robinson to 470 St Kilda Road Pty Ltd was an act or omission in the rendering of professional services, the central focus is his actual conduct, or the act or omission of the individual that is said to give rise to liability. This is the approach taken in such cases as Toomey, Fitzpatrick v Jobs, Vero Insurances and Chemetics, which involved exclusion clauses in similar, if not relevantly identical, terms. 111 With this in mind, I accept that, as Chubb argued, Reed had obligations under the D&C Contract that might be described as project management obligations. Further, I accept that project management was highly significant for the successful completion of the Leopold Project, as reflected in the identification of the Project Manager as one of the key personal under the D&C Contract. Perhaps an act or omission of the Project Manager in project management might fall within exclusion clause IV(A)(v). That is not this case; and it is unnecessary to determine this question: see [89] above. 112 In this case, the provision of the Statutory Declaration pursuant to cl 38.1 was not an act or omission in the rendering of professional services within the meaning of exclusion clause IV(A)(v). Considered in the broader scope of the D&C Contract, the Statutory Declaration was the means by which Reed met its obligation to provide documentary evidence of the payment of moneys due and payable to subcontractors, its own workers and the workers of subcontractors. The Statutory Declaration given by Mr Robinson provided evidence and information as to these matters and as to relevant insurances. On the one hand, Reed, through Mr Robinson, supplied the Statutory Declaration in order that it might be paid. On the other, 470 St Kilda Road Pty Ltd was given some assurance that it would not be called upon to pay twice for the same labour; that the Project would not be delayed on account of a non-payment on Reed's part; and that insurances were in place. The provision of evidence of this kind tends to confirm that cl 38.2 was primarily a means of holding Reed accountable for the fact that these things had been done before it was paid. At most the provision of this evidence was some ancillary confirmation that the Project was being appropriately managed; but this confirmation was not "project management" itself. This is consistent with Mr Bell's oral evidence in chief: see [60] above. Mr Robinson's act in providing a statutory declaration to 470 St Kilda Road Pty Ltd did not involve him in the rendering of project management services and, even if project management comprised professional services, his act was not of this kind. 113 In any event, whether or not this analysis is accepted, the insurer, Chubb, has not shown that the conduct of Mr Robinson in providing the Statutory Declaration amounts to an act in the rendering of professional services. Rather, it is established that his conduct was an act in the provision of information as a prerequisite to payment of Reed under cl 37 of the D&O Contract. The requirement in cl 38.1 of the D&O Contract was only for evidence or information if requested. There was no requirement that such evidence be the outcome of a professional assessment or prepared by a professional person. Rather, the Statutory Declaration provided information of a quintessentially factual kind derived from speaking with Reed's responsible officers and from reviewing accounting records kept by Reed's staff at the head office of the company. These accounting records were of a kind that would have been maintained by Reed in administering its own payroll and paying trade creditors. The compilation of these records was essentially a routine task necessary for the conduct of Reed's own business. The act of providing this factual information was not an act in the rendering of professional services; instead it was an act that supported the delivery of building and construction services at the Leopold Project by Reed. 114 Although each case must be considered by reference to its own facts, including the particular terms of the relevant insurance policy, I am fortified in this conclusion by the fact that, generally speaking, courts have regarded the mere provision of information as an administrative activity rather than a professional one, even in the context of insuring clauses: see, for example, FAI General (discussed above) and GIO v Penrith at 105 [9] (Mason P), 107 [19] (Powell JA). 115 Naturally, as Chubb submitted, in construing an exclusion clause, it must also be borne in mind that such a clause will, of its nature, circumscribe the cover to some extent. Whether or not a particular construction can be said to circumscribe the cover under an insurance policy unduly or inappropriately will depend on the ordinary meaning of the exclusion clause, read in the light of the whole policy, including its nature and purpose. The construction that Chubb would place upon "professional services" in the exclusion clause in this case would have the practical effect of making the exclusion apply whenever officers or employees undertake a great many acts in aid or support of Reed's business activities, including services in connection with the routine administration of a building contract such as the D&C Contract. As a result, on Chubb's construction, a great many activities undertaken by employees, officers and directors would necessarily be excluded from cover. Given the nature and purpose of the D&O Policy, such an interpretation would have the effect of circumscribing inappropriately the cover provided by the Policy. The obvious purpose of the professional services exclusion in exclusion clause IV(A)(v) is to exclude activities that are truly professional in nature, such as architectural design, engineering, surveying and quantity surveying. The clause was not intended to apply to the routine activities of Reed or its officers or employees, including in the provision of information in support of its payment claims under the D&C Contract. 116 I do not consider that the construction of exclusion clause IV(A)(v) admits of ambiguity. Instead, for the reasons stated, the exclusion clause does not apply to the Statutory Declaration. If, however, I am wrong about this, then I would regard the expression "in the rendering of profession services" as exhibiting ambiguity of the second kind identified by Isaacs J in Phillips in the passage set out at [70] above. This would be sufficient ambiguity to attract the contra proferentum principle, with the result that the insurer's construction would fail on this basis too. disposition 117 Accordingly, for the reasons stated, I would answer the separate question "no". 118 I would direct that, on or before 17 January 2014, the parties file an agreed minute of order as to the disposition of costs. If they are unable to agree, they may file short written submissions as to costs on or before that date. I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 20 December 2013