KD Morris & Sons Pty Ltd v GJ Coles & Co Ltd [1972] HCA 37

High Court of Australia Barwick C.J. Gibbs and Stephen JJ. KD Morris & Sons Pty Ltd v GJ Coles & Co Ltd [1972] HCA 37

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

July 28 Barwick C.J.

The appellant in the action in the Supreme Court of Queensland out of which this appeal arises was held liable to the extent of $22,500 for the damage resulting to the premises of G. E. Cominos & Co. ("Cominos"), a co-plaintiff with the respondent in the action, from a fire of which the appellant's negligence was a cause. The appellant, by a counterclaim in the action, sought to recover that amount from the respondent under a promise of indemnity claimed by the appellant to have been given to it by the respondent by a clause in a building agreement between them. By that agreement the appellant promised the respondent to effect alterations to shop premises part of which were on land belonging to the respondent and part upon land belonging to Cominos. The latter were leased to the respondent.

The claimed indemnity was not express but is said to arise by inference from the express terms of cl. 15 (b) of the building agreement, which is in the following terms:

(b) The existing structures and the Works and unfixed materials (except plant, tools and equipment) shall be at the sole risk of the Proprietor as regards loss and damage by fire and/or explosion and/or earthquake and/or lightning and/or civil commotion and the Proprietor shall maintain a proper policy of insurance against such risks, which policy and the receipt for the last paid premium for its renewal he shall upon request produce for inspection by the Builder and, if any loss or damage affecting the Works is so occasioned by fire and/or explosion and/or earthquake and/or lightning and/or civil commotion, the Proprietor shall pay to the Builder the full value of all work and materials then executed and delivered calculated as provided in clause 9 of these Conditions, and this contract as to subsequent work may at the option of either party be determined by notice by registered post from either party to the other, provided that on receipt of such a notice the other party may himself give notice in pursuance of clause 26 of these Conditions that a dispute or difference has arisen on the question whether such determination will be just and equitable. If the Proprietor shall have failed upon request to produce any receipt showing the policy to be effective the Builder shall be entitled to insure the said structures and Works against the said risks and upon production of the receipts for any premiums to add their amount to the Contract Sum.