Vendiovski v Renisso P/L [2002] NSWSC 685

New South Wales Supreme Court

CITATION : Vendiovski v Renisso P/L [2002] NSWSC 685 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 20860/97 HEARING DATE(S) : 1 August 2002 JUDGMENT DATE : 7 August 2002

Meriton Apartments Pty Limited (Cross Claimant to first cross claim) PARTIES : GIO General Limited (Cross Defendant) JUDGMENT OF : Master Harrison

Mr D F Villa (Meriton) COUNSEL : Mr M S White (GIO) Ms Susan Brent of Minter Ellison (Meriton) SOLICITORS : Mr Gerard Fisher of Phillips Fox (GIO) CATCHWORDS : Leave to file cross claim LEGISLATION CITED : Law Reform (Miscellaneous Provisions) Act 1946 - s 5 Insurance Contracts Act 1984 - s 48 Barclay's Bank v Tom [1923] 1 KB 221 Martin v Cassidy; Federal Insurance (Ltd) (third party) (1969) 90 WN (Pt 1) (NSW) 433 CASES CITED : Water v Smith & Anor [1969] 1 NSWR 151 Tepko Pty Ltd v Water Board [2001] HCA 19; 75 ALJR 775 Nominal Defendant v Niko Cencic [2001] NSWCA 69 DECISION : (1) Meriton is to file a cross claim against GIO within 14 days; (2) Costs are costs in the cause

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IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

MASTER HARRISON

WEDNESDAY, 7 AUGUST 2002

20860/97 - BLAGOJ VENDIOVSKI v RENISSO PTY LTD & ORS

JUDGMENT (Leave to file cross claim) 1 MASTER: By notice of motion filed 30 January 2002 the applicant Meriton Apartments Pty Limited (Meriton) seeks an order that leave be granted to file a cross claim against GIO General Limited (GIO). Renisso Pty Limited is the defendant/cross claimant to the first cross claim and first cross defendant to the third cross claim (Renisso). Meriton is the cross defendant to the first cross claim, cross claimant to the second cross claim, second cross defendant to the third cross claim and cross claimant to the fourth cross claim. Dynamic Formwork Pty Limited is cross defendant to the second cross claim and cross claimant to the third cross claim (Dynamic). On 30 January 2002 Simpson J made an order separating the cross claims from the substantive issues between the plaintiff and defendant. The claim between the plaintiff and defendant has been settled. The cross claims have yet to be resolved. 2 Meriton now seeks to file a cross claim against GIO. There is a contract of insurance between Dynamic and GIO. It is alleged that in September 1996 Meriton contracted with Dynamic for the construction and erection of formwork. Dynamic in turn sub-contracted the whole of these works to Renisso. The plaintiff was employed by Renisso. The plaintiff's claim arose as a result of a personal injury sustained during the course of his employment, on a construction site, with Renisso. Both Dynamic and Renisso have been placed in liquidation. On 9 November 2001 leave was granted for Meriton to proceed against Dynamic in liquidation. GIO has not refused to indemnify Dynamic. 3 At the time of the accident Meriton had public liability insurance with the HIH group, which is now in liquidation. Meriton does not qualify for assistance under the Federal government scheme. As a result of the failure of Meriton's insurance with HIH in 2001, subsequent inquiries were made by Meriton to determine whether any other insurances might assist it. 4 GIO submitted that leave should not be granted to file the cross claim against it because Meriton does not have an arguable case; secondly, it will suffer prejudice; and thirdly, separate proceedings should be commenced once these proceedings are concluded or alternatively that this insurance issue raised in this cross claim should be determined separately, and after liability under the cross claims have been heard in these proceedings. 5 On 27 November 1998 Renisso filed a cross claim against Meriton seeking contribution and indemnity pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946. On 13 May 1999 Meriton filed a statement of defence to the cross claim. On 6 September 1999 Meriton filed a second cross claim against Dynamic seeking contribution and indemnity. On 25 June 2001 Dynamic filed a statement of defence to the second cross claim. On 10 August 2001 Dynamic filed a third cross claim against Meriton. 6 On 19 September 2001 Meriton's solicitor wrote to Dynamic's solicitors asking that they confirm details of the applicable insurance effected by Dynamic. On 4 October 2001 Meriton's solicitor wrote to Dynamic noting that they were instructed to seek leave to proceed directly against their insurer GIO. On 2 November 2001 Dynamic's solicitors wrote to Meriton confirming that Dynamic was insured by GIO for the period 30 September 1996 to 30 June 1997. On 30 January 2002 this notice of motion was filed. 7 On 25 February 2002 the solicitors received a copy of the insurance policy. Paragraph 4 defines the insured as "every Principal of the Named Insured or of a Company designated in item 2 above in respect of the liability of such principal arising out of the performance by the Named Insured or by a company designated in item 2 above of any contract or agreement for the performance of work for such principal, to the extent required by such contract or agreement". 8 Meriton asserts that upon the proper construction of paragraph 4, it falls within the definition of "principal" and is entitled to be indemnified by that policy. 9 Section 48 of the Insurance Contracts Act 1984 overcomes the privity of contract issue. 10 Section 48 states: "Entitlement of named persons to claim (1) Where a person who is not a party to a contract of general insurance is specified or referred to in the contract, whether by name or otherwise, as a person to whom the insurance cover provided by the contract extends, that person has a right to recover the amount of the person's loss from the insurer in accordance with the contract notwithstanding that the person is not a party to the contract. (2) Subject to the contract, a person who has such a right: (a) has, in relation to the person's claim, the same obligation to the insurer as the person would have if he were the insured; and (b) may discharge the insured's obligations in relation to the loss. (3) The insurer has the same defences to an action under this section as the insurer would have in an action by the insured." 11 Dynamic's defence to Meriton's cross claim does not admit that there was a contract or agreements in existence. In a letter (Ex B) by Dynamic to Meriton dated 27 June 1996 it states: " Attention: Ernest PROPOSED RESIDENTIAL DEVELOPMENT Pitt Street Sydney Quotation for formwork as per plans:- TOTAL CONTRACT PRICE $2,159,556 The above contract price does not include the construction of retaining walls nor stormwater retention tanks. 1,954,000 " 12 This is the only document that Meriton has been able to provide to show that a contract existed. From the pleadings, it is not disputed that Dynamic carried out some work on the construction site. In Dynamic's defence to Meriton's cross claim it alleges that it was Meriton (not Dynamic) who was responsible for inserting the wire mesh in the penetrations. Although the documentation to prove that a contract or agreement existed is scant it is my view that Meriton has an arguable case that it is entitled to be indemnified under the contract of insurance issued by GIO in favour of Dynamic. Thus, this issue should be permitted to be argued at trial.