New South Wales Court of Appeal CITATION: NSW Arabian Horse Association Inc v Olympic Co-ordination Authority [2005] NSWCA 210 HEARING DATE(S): 10 May 2005 JUDGMENT DATE: 23 June 2005 JUDGMENT OF: Beazley JA at 1; Santow JA at 2; Bryson JA at 50 DECISION: In respect of each application, being CA 40265/04 and CA 40266/04: ; (1) Grant leave to appeal and direct that the Notice of Appeal be filed within seven days. ; (2) Appeal dismissed, with the claimant to pay the opponent's costs of the Summons for Leave to Appeal and the Appeal, on an indemnity basis. CATCHWORDS: CONTRACT - proper interpretation of contract between the Association and the Authority - Whether breach of obligation to take out public liability insurance - Whether any direct and proximate relationship between the accident and "the Event" to enable public liability insurance "for the Event" (as the contract provided) to cover two individuals attending "the Event" when they fell into a culvert (not on the car park nor on the path to the car park) en route to their car, parked in an adjoining car park under control of the Authority. Insurance Contracts Act 1984 (Cth) s48 LEGISLATION CITED: Law Reform (Miscellaneous Provisions) Act 1946 s5 Supreme Court Act 1970 s101(2)(r) Buller Ski Lifts Ltd v Mt Buller Alpine Resort Management Board [2000] VSCA 31 CASES CITED: State Government Insurance Office (Queensland) v Crittenden [1966] 117 CLR 412 Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 NSW ARABIAN HORSE ASSOCIATION INC (Claimant/ Appellant) PARTIES: OLYMPIC CO-ORDINATION AUTHORITY (Opponent/ Respondent) FILE NUMBER(S): CA 40265/04; 40266/04 M R LAWSON (Claimant/Appellant) COUNSEL: D L DAVIES, SC/ G GEMMELL (Opponent/Respondent) Gadens Lawyers (Claimant/Appellant) SOLICITORS: Frances Allpress (Opponent/Respondent) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 1185/01; DC 1186/01 LOWER COURT JUDICIAL OFFICER: Delaney DCJ IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40265/04 CA 40266/04 DC 1185/01 DC 1186/01 BEAZLEY JA SANTOW JA BRYSON JA 23 JUNE 2005 NSW ARABIAN HORSE ASSOCIATION INC v OLYMPIC CO-ORDINATION AUTHORITY Judgment 1 BEAZLEY JA: I agree with Santow JA. 2 SANTOW JA: INTRODUCTION This leave to appeal and concurrent hearing concerns the proper interpretation of a contract pertaining to the use of an equestrian centre ("the Centre"). It arises in relation to two applications being CA 40265/04 and CA 40266/04 as I explain under "Leave to Appeal" below. The contract is between the claimant, NSW Arabian Horse Association Inc ("the Association"), and the opponent, Olympic Co-Ordination Authority ("the Authority"). , 3 The proceedings for which leave to appeal is sought are in relation to a cross-claim successfully brought by the Authority against the Association. The trial judge determined that, according to the proper construction of the contract, the Association was in breach of its obligation to take out public liability insurance. According to clause 6 of the contract, the Authority "is to be named on this policy as an interested party". 4 Damages for that breach were quantified as the total of the amount successfully claimed against the Authority by two individuals who were injured when attending the event. This was on the basis that their claim against the Authority should have been covered by the public liability insurance, had it been taken out. Their respective claims were $70,000 and $39,500, thus totalling just over $100,000, but brought under separate actions in the District Court and never consolidated. Their injury occurred when they fell into a culvert en route to their car that had been parked in the adjoining car-park under the control of the Authority. The fall did not take place in the car-park itself nor on the path to the car-park. However, I infer from the Statement of Agreed Facts that the fall occurred when the two individuals fell from the path into the culvert; see paragraphs 10 and 11 thereof quoted below. 5 Essentially the appeal is brought on three bases: (a) that the relevant clause 6 providing for the insurance (" Public liability insurance for no less than ten million dollars … is required to be held by the Event Organiser [the Association] … ") must be read with, and confined in scope by, clause 22, dealing with indemnity of the Authority by the Association; that indemnity clause would not allow extension to the particular liability of the authority to the two individuals for two reasons: (i) because the indemnity clause contains an exception where the liability is caused by the negligence of the Authority, and (ii) the Authority settled both claims with the two individuals and did not press any claim against the Association under clause 22. (b) the second basis for the appeal is based on the proposition that clause 6, in providing for public liability insurance " for the Event ", did not therefore extend to public liability arising from a fall in the culvert as there was no direct and proximate relationship between that accident and " the Event " which the word " for " was said to necessarily require. (c) the third basis for the appeal was put in various ways, but essentially depended upon the proposition that the two individuals did not meet with their accident as the result of use of the parking area but as a result of use of an adjacent area (not the arena); so that even if the parking area were embraced by the expression "for the Event", it could not encompass this particular accident which should be taken to have occurred by reason of some detour or deviation from both the path from the arena to the car-park and from the car-park itself. SALIENT FACTS 6 The original proceedings and the appeal before this Court proceeded on agreed facts. What I set out below includes those agreed facts, with some supplementation of an uncontroversial character. 7 The Authority was a duly incorporated statutory authority with the management, care and control of the Sydney International Equestrian Centre ('SIEC') and car-park located at Wallgrove Rd, Horsley Park, NSW. 8 On 23 January 2001, the Authority entered into a written agreement with the Association, whereby the Association, styled as "the Event Organiser" acquired rights to use the SIEC for the purpose of staging an "Event". That Event, managed by the Association, was the East Coast Arabian Championships 2001, which hosted equestrian activities including dressage and horse-riding from 20-25 February 2001. 9 The agreement was made after submission of an "Event Application Form" with annexed "Terms and Conditions for Events", in which the applicant among other things actually indicated the facilities it required. Those facilities included "Parking Requirements". 10 The event application form stated at para 8: 8. Public Liability Insurance Please attach a copy of your Public Liability Insurance policy as required in accordance with the Terms and Conditions for the Event. 11 Among the provisions set out in its attached Terms and Conditions for Events, was cl. 6 requiring public liability insurance to be taken out by the Association: Cl 6. Public Liability Public liability insurance for no less than ten million dollars ($10,000,000) is required to be held by the Event Organiser for the Event. The Authority is to be named on this policy as an interested party. A true copy of this policy of insurance must be provided to the Authority with the Event Application Form. 12 Further provision in the contract was made for the Association to indemnify the Authority: Cl 22. Indemnity (a) The Event Organiser indemnifies and keeps indemnified the Authority, its officers, employees, agents and contractors against all liability for death of or injury to persons or loss of or damage to property and all actions, claims, demands, losses, damages, costs and expenses whatsoever arising in respect of the use of the SIEC, the use of the venue equipment and other items provided by the Authority, the Event Organiser not proceeding with the Event or any breach of these Terms and Conditions for Events by the Event Organiser, except to the extent that such liability is caused by the negligence of the Authority. (b) The Event Organiser releases the Authority from and agrees that the Authority is not liable for any loss or damage to person or property suffered or incurred (including loss of profits or loss or damage to the Event Organiser's reputation) in connection with the use of the SIEC or the venue equipment provided by the Authority unless such loss or damage is caused by the negligence of the Authority. (c) The indemnity and release in this paragraph apply whether or not the loss or damage arose as a result of anything the Event Organiser is authorised or obliged to doe under these Terms and Conditions for Events or anything the Authority has consented to or approved. 13 The Association's Treasurer, Ms Donna Taff executed the Application Form under para 10 of that form which stated: 10. Conditions for Events I/We acknowledge that I/we read and accept this Application and the Terms and Conditions for Event, which are attached to this application form and do agree to comply with them. I/We agree to comply with the Event Application Form and those Terms and Conditions for the Event. Signature of Events Organiser ………………………………… ………………………………… (PRINT NAME) Position in Organisation ……………………. Date ………….... (Must be an authorised officer of the Event Organiser) 14 The certificate of insurance of the Association (apparently dated April 2001) noted that: (a) The insured is the Arabian Horse Society of Australia Limited; (b) The co-insured is the "New South Wales Arabian Horse Association Inc and Sydney International Equestrian Park" (handwritten and clearly not the correct name of the Authority). 15 On 24 February 2001, Mr Alan Scholes and Mrs Dorothy Scholes arrived at the SIEC and were directed by the Authority's employees (wearing the Authority's livery) to park their vehicle in a particular area, and upon entering the car park another employee of the Authority collected a parking fee. The Schedule of activities at which the public attended the Event for Friday 24 February 2001 continued up until 10pm. Mr and Mrs Scholes parked their car near a lamppost, and were directed to the main auditorium by one of the Authority's marshals. 16 After assisting their son with his coffee wagon, at approximately 9.30pm, Mr and Mrs Scholes returned to their car via a lit pathway, and before they reached it fell into a drainage culvert adjacent to the car-park, thereby sustaining injury. 17 Mr Scholes (DC 1185/01) and Mrs Scholes (DC 1186/01) both commenced proceedings in the District Court against the Authority for personal injuries. 18 The Authority commenced a cross-claim against the Association for: (a) Indemnity and/or damages for breach of contract, relying on the provisions of the contract particularly cl 6 and cl 22; and (b) Indemnity or contribution pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act 1946. 19 The Authority settled both claims on terms filed in Court on 26 August 2003, in the case of Mr Scholes for $70,000, and in the case of Mrs Scholes for $39,500. The Association admitted that the settlements were fair and reasonable. 20 Nevertheless, the cross-claim by the Authority against the Association proceeded to hearing before Delaney DCJ on 26 November 2003. Delaney DCJ noted that the Authority abandoned its claim for indemnity pursuant to cl 22 of the contract, and its entitlement to indemnity and/or contribution pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act. That left the claim under cl 6 for breach of contract. 21 On 12 March 2004, Delaney DCJ found for the Authority on the claim for damages for breach of contract, and made an award in favour of the Authority. DISPOSITION 22 For reasons elaborated below I would grant leave to appeal and dismiss it. Leave to Appeal 23 It is clear that the claim of Mr Scholes for $70,000 and the claim of Mrs Scholes for $39,500, though the subject of separate proceedings, gave rise to a cross-claim where the amount at issue exceeded $100,000. Section 101(2)(r) of the Supreme Court Act 1970 restricts an appeal as of right "(i) that involves a matter at issue amounting to or of the value of $100,000 or more, or (ii) that involves (directly or indirectly) any claim, demand or question to or respecting any property or civil right amounting to or of the value of $100,000 or more." 24 Were it necessary, it would be open to this Court to make an order consolidating the two actions brought respectively by Mr Scholes for $70,000 and Mrs Scholes for $39,500. The white book contains a certified copy of the judgment for $39,500. It can be reasonably assumed that there is a second certified copy of judgment for $70,000. The Authority's Amended Notice of Cross-Claim, filed in relating to Dorothy Scholes (DC 1186/01) by the Authority against the Association, claimed $750,000. As already noted, terms of settlement were entered into by the Authority settling both claims for the respective amounts of $39,500 and $70,000. 25 In these circumstances, I would grant leave to appeal to the extent leave were required. HEARING CONCURRENT APPEAL The Third Basis 26 I should as a preliminary matter dispose of the third proposition put by the claimant for the first time in this Court. It is that the relevant accident which gave rise to the public liability on the part of the Authority, occurred not in the arena nor car-park nor indeed on the path itself to the car-park but in a culvert, leading to the inference, or consistent with the inference, that the falls occurred when Mr and Mrs Scholes were on a deviation from the car-park and the route thereto. 27 I should here quote from the relevant Agreed Facts which bear upon that matter: "10. After assisting their son with his coffee wagon, at approximately 9.30pm, the plaintiff returned to their car via a lit pathway. 11. When returning to their vehicle at approximately 9.30pm on the evening of 24 February 2001 the plaintiff fell into a culvert adjacent to the car-park at SIEC." 28 It was then said by the claimant that the trial judge impermissibly defined an extension of "the Event" in these terms (at [18]): "the event extended to the events for which the cross-defendants required use of the area, namely for all of the aspects of conducting the specified event, which included the use of the parking area ." [emphasis added] 29 It is then contended that, since the fall occurred outside of any use of the parking area, then even if use of the parking area were encompassed by the "Event", a proposition denied by the claimant, the fall which gave rise to the liability did not occur in the parking area, or on the route to it, or in "the use of the parking area". 30 The Agreed Facts from which I have quoted clearly indicate that the fall was into a culvert "adjacent to" the car-park of the Sydney International Equestrian Centre or SIEC (para 11). The preceding para 10 makes it clear that the plaintiff was returning to their car via a lit pathway. Para 10 makes no mention of a detour nor is that to be found in any other part of the agreed facts. The obvious inference from the Agreed Facts is that the relevant plaintiff fell from the lit pathway into the culvert. But even if those Agreed Facts were open to a wider interpretation, it is quite clear from the way the claimant conducted its case below that no submission was put of any detour or deviation in the route from the pathway to the car-park. 31 It is particularly important when cases proceed on agreed facts that there is no attempt on appeal to extend the scope of those agreed facts by reference to possibilities that were never put in argument. The unfairness to the other party of doing so is self-evident. The argument as it was put orally is to be found in the transcript of 26 November 2003. Correcting an obvious typographical error ("typology" for "topology"), the submission treats the culvert as part of the surrounding area. There is no suggested in the submission whatsoever of a deviation in order to reach the car-park; see transcript at 8.17 and earlier at 6.47. The claimant agreed that its written submissions did not take the matter any further. 32 Indeed even absent agreed facts, the observations of Gleeson CJ, McHugh and Gummow JJ remain apposite, in Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at 461: "It would be inimical to the due administration of justice if, on appeal, a party could raise a point that was not taken at the trial unless it could not possibly have been met by further evidence at the trial. Nothing is more likely to give rise to a sense of injustice in a litigant than to have a verdict taken away on a point that was not taken at the trial and could or might possibly have been met by rebutting evidence or cross-examination. Even when no question of further evidence is admissible, it may not be in the interests of justice to allow a new point to be raised on appeal, particularly if it will require a further trial of the action. Not only is the successful party put to expense that may not be recoverable on a party and party taxation but a new trial inevitably inflicts on the parties worry, inconvenience and an interference with their personal and business affairs." [omitting footnotes] 33 In those circumstances, I would not accept that the Agreed Facts, coupled with the way the matter was argued below, allow of any suggestion of a detour or deviation from the lit pathway to the car-park. I would not accept that any inference could be drawn that the fall occurred in course of any deviation. The most likely inference is that the fall occurred from the pathway into the culvert. But if any imprecision in the Agreed Facts were relied upon, it should have been put at trial so that any relevant matters of evidentiary character could then have been investigated. The First Basis 34 That disposes of the third basis relied upon by the claimant so that I need now consider the first basis on the premise that the relevant fall occurred en route to the car-park without there being any detour. That basis seeks to read clause 6 with clause 22 so as to confine clause 6 to insurance in respect of those liabilities that arise out of the indemnity in clause 22 and not otherwise. 35 In support of that proposition, the claimant relied upon the judgment of the Victorian Court of Appeal in Buller Ski Lifts Ltd v Mt Buller Alpine Resort Management Board [2000] VSCA 31 (unreported) and in particular the principal judgment of Phillips JA. 36 The claimant acknowledged an obvious difficulty in that reliance and sought to escape its consequences. The obvious difficulty is that clause in Buller Ski Lifts Ltd (supra) which required the taking out of an insurance policy (cl 7.1) expressly provided that the obligation to take out public liability insurance related to an accident whereby the Lessor was to be indemnified pursuant to the indemnity clause in the contract, namely clause 8. There is in the present case no such express confinement of the obligation in cl 6 to enter into public liability insurance to accidents the subject of indemnity under cl 22. That fact, coupled with the obvious self-standing character of cl 6 make it improbable in the extreme that such confinement should nonetheless be implied. Not only is this not required to give business efficacy to cl 6; there is at least one powerful consideration which explains why any such confinement would itself create anomaly. I refer here to the exclusion from cl 22 indemnity of liability for negligence. Why would an indemnity for so obvious a source of liability be voluntarily foregone, if insurance were not required by cl 6 to cover that important gap? 37 The claimant attempted to escape from that prima facie clinching distinction by drawing upon the term "interested" in the expression "an interested party" in clause 6. It was put by the claimant that what makes the Authority an "interested" party is to be found exclusively in clause 22, namely the Authority's interest in the Association's capacity to pay under the cl 22 indemnity, underpinned by public liability insurance; likewise in Buller Ski Lifts Ltd insurance had that purpose. 38 Such an argument proceeds by assuming that which it has to prove. The assumption is that "interest" in the expression "interested party" is coterminous with a financial interest in assuring that any indemnity under cl 22 were backed by insurance. But the untenability of that proposition becomes clear when one appreciates that cl 22 indemnity does not apply at all where the liability is caused by the negligence of the Authority. That as I have said is the very circumstance where one would expect liability to arise for which the Authority would want public liability insurance in order to protect itself. Moreover, the scope of indemnity under cl 22 is also much wider than for public liability, yet cl 6 only covers public liability insurance. Conclusion 39 Accordingly, I would not accept that clause 6 is to be read as confined by clause 22. Such a construction is simply untenable. The Second Basis 40 The second basis upon which the claimant seeks to rely is a narrow construction of the expression "for the Event" in clause 6. I have already indicated that this argument cannot call in aid any intention that the relevant accidents occurred on some detour from the arena to the car-park. 41 The claimant contends that in that expression, "Event" is to be confined to the actual event being the equestrian activities including dressage and horse-riding at Horsely Park. Then it is submitted that the preposition "for" is to be taken to be the equivalent of the expression "with reference to", or "in respect of". It is contended that, taking the accident as the source of the liability, there must in consequence be a direct and proximate relationship between that source of the liability and the narrow notion of equestrian activities as I have just described them. 42 An immediate difficulty with that argument is that the word "for", accepting that it may be treated as equivalent to the expression "in respect of", is well capable in an appropriate context, as having the widest possible meaning. This was explained by Taylor J in State Government Insurance Office (Queensland) v Crittenden [1966] 117 CLR 412 at 416, itself a case concerning the extent of an insurance cover: "The Act, itself, is expressed to be an Act to require the owners of motor vehicles to insure against their liability to pay compensation on account of injuries to persons caused by, through, or in connexion with such motor vehicles and the provisions of ss 4A, 4B and 4F, to which I shall refer later, use the expression in respect of accidental bodily injury as if it were interchangeable with the expression used in the policy and I think that it is impossible to give to the word "for" any narrower meaning than would be indicated by the expression "in respect of". That expression was thought by Fullagar J in a somewhat similar context to be wider than the preposition "for" when considered alone and was thought to be "capable of referring to cases where the cause of action arises out of personal injury but the plaintiff is someone other than the person injured": Unsworth v Commissioner for Railways (1958) 101 CLR 73, at pp 87, 88. According to Mann CJ in Trustees Executors & Agency Co Ltd v Reilly (1941) VLR 110, "The words 'in respect of' are difficult of definition, but they have the widest possible meaning of any expression intended to convey some connexion or relation between the two subject-matters to which the words refer" (1941) VLR, at p 111" 43 Considering the context here, not only does clause 6 operate without confinement to clause 22 indemnity situations. It operates in circumstances where the event clearly contemplated parking requirements, as the event application form makes clear. Thus not only was "parking requirement" circled, but there was even, as I earlier explained, provision for the event organiser, namely the Association, to receive 40% of the parking revenue. One could not have a clearer indication that parking was therefore an integral part of "the Event". 44 It would be artificial in the extreme to differentiate an accident occurring in the car-park from an accident occurring en route to the car-park, where that route necessarily involved walking along a pathway under the control of the Authority. Parking must necessarily include the means of reaching it and each in turn are subsumed in the Event. 45 This conclusion does not depend on the certificate of insurance. I note a document so described was attached to a Notice to admit Facts, apparently bearing the date April 2001, in circumstances where the relevant agreement was entered into on 23 January 2001 some three months' earlier. 46 More relevant, there are a number of contextual indications in the agreement itself to indicate that "the Event" would not be limited to the actual equestrian performance in the arena; for example the provision dealing with public safety in clause 26 encompassing "any equipment, chattels or goods at any time at the SIEC". 47 There is one final matter and that is what is meant by providing that the Authority "is to be named on this policy as an interested party" in clause 6. Neither counsel was able to find an authority directly in point. While the wording is not expressed with any great precision, I would take it to draw upon s48 of the Insurance Contracts Act 1984 (Cth), so requiring the Authority to be named in the policy "as a person to whom the insurance cover provided by the contract extends". Clearly the expression connotes the person so named as having an insurable interest, here in relation to public liability claims against it. OVERALL CONCLUSION 48 I would in each of the two applications make the same orders, granting leave to appeal and, noting that the opponent does not oppose the extension of time for leave to appeal, grant the necessary extension for that purpose. I would, however, dismiss the appeals, concluding as I do that the intended grounds had little substance. I would in the circumstances, given the terms of clause 22(a) of the contract, order costs against the claimants on an indemnity basis. 49 I would accordingly propose orders as follows in respect of each application, being CA 40265/04 and CA 40266/04: (1) Grant leave to appeal and direct that the Notice of Appeal be filed within seven days. (2) Appeal dismissed, with the claimant to pay the opponent's costs of the Summons for Leave to Appeal and the Appeal, on an indemnity basis. 50 BRYSON JA: I agree with Santow JA ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.