Court of Appeal Supreme Court New South Wales Medium Neutral Citation: GIO General Limited v Centennial Newstan Pty Ltd [2014] NSWCA 13 Hearing dates: 4 December 2013 Decision date: 12 February 2014 Before: Meagher JA at [1]; Hoeben JA at [19]; Gleeson JA at [20] Decision: 1. Appeal dismissed. 2. The appellant to pay the respondent's costs of the appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: CONTRACTS - general contractual principles - construction and interpretation of contracts - Indemnity clause - Obligation to indemnify - Obligation on Contractor to indemnify Principal - Insurance clause - Contractor's obligation to insure Principal and the Contractor's Subcontractors against the respective liabilities of each of those parties to each other and to third parties; GUARANTEE AND INDEMNITY - indemnities - construction of contract - Obligation to indemnify - Obligation on Contractor to indemnify Principal for failure to insure the Principal - Obligation imposed in respect of all liabilities of the Contractor and Principal and Contractor's Subcontractors to each other and to third parties; INSURANCE - Third-party liability insurance - In general Cases Cited: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Chapmans Ltd v Australian Stock Exchange Ltd [1996] FCA 474; 67 FCR 402 Erect Safe Scaffolding (Australia) Pty Ltd v Sutton [2008] NSWCA 114; 72 NSWLR 1 Fitzgerald v Masters (1956) 95 CLR 420 Pritchard v Trius Constructions Pty Ltd [2011] NSWSC 749 Sigiriya Capital Pty Ltd v Scanlon [2013] NSWCA 401 Water Board v Moustakas [1988] HCA 12; 180 CLR 491 Wilkie v Gordian Runoff Ltd [2005] HCA 17; 221 CLR 522 Texts Cited: Derrington and Ashton, The Law of Liability Insurance, (3rd ed 2013, Lexis Nexis Australia) Category: Principal judgment Parties: GIO General Limited (Appellant) Centennial Newstan Pty Ltd (Respondent) Representation: Counsel: L V Gyles SC with P M Knowles (Appellant) J Simpkins SC (Respondent) Solicitors: Kennedys (Appellant) Winter Hilditch & Fotheringham (Respondent) File Number(s): 2012/384153 Decision under appeal Jurisdiction: 9101 Citation: Andrew William McDonald v Centennial Newstan Pty Ltd [2012] NSWDC 218 Date of Decision: 2012-11-29 00:00:00 Before: Marks ADJC File Number(s): 2011/42451 Judgment 1MEAGHER JA: This is an appeal from the judgment of F Marks ADCJ in McDonald v Centennial Newstan Pty Ltd [2012] NSWDC 218. I have had the benefit of reading in draft the reasons for judgment of Gleeson JA. I agree with his Honour that the appeal should be dismissed with costs. I propose to state briefly my reasons for doing so. Generally, they accord with those of his Honour. I have adopted in these reasons the same abbreviations as are used by Gleeson JA. 2On 10 September 2008 Mr McDonald was injured whilst working as a fitter and turner at Centennial's coal mine at Fassifern. Mr McDonald was employed by Labourforce and his labour was supplied to Centennial by Advantage, a related company of Labourforce, under a contract for the supply of labour services. The scope of those services was described in Part C of the Agreement as "Labour for Longwall maintenance" and "Labour on maintenance days for servicing of Shuttle Cars and Feeders". 3Mr McDonald brought proceedings against Centennial, Labourforce and Advantage claiming damages in respect of those injuries. Various cross-claims were made. Advantage sought an indemnity from GIO under a Combined Business Insurance Policy issued by GIO to it. Centennial sought contribution or an indemnity from Advantage and Labourforce. Centennial also sought an indemnity from GIO under the policy issued to Advantage. It did so on the basis that it was within the defined term "You/Your Insured" in the Public and Products Liability cover section of the Policy because it was a person to whom Advantage was "obligated by virtue of any contract or agreement to provide insurance such as is afforded by this Policy ... but only to the extent required by such contract or agreement". 4GIO did not argue before the primary judge that Centennial was not, to some extent, insured under that Public and Products Liability section as a person to whom Advantage was obligated to provide public liability insurance. It accepted that the Site Regulations formed part of its Agreement with Centennial and that by cl 43.2.2 Advantage was obliged to arrange that the public liability insurance, which cl 8.3 of the Standard Conditions required it to maintain, also noted the interests of Centennial, as Principal, "and all subcontractors" so as to cover "the respective liabilities of each of those parties to each other and to third parties". The "interests" referred to were their interests in the performance, either as parties or subcontractors, of the Agreement between Centennial and Advantage. 5GIO argued that the insurance cover "required" to be provided for Centennial by cl 43.2.2 did not include insurance of Centennial's liability for its own negligence; so that Centennial was not to that extent insured under the policy issued to Advantage. 6The primary judge rejected that argument: esp at [84]-[88]. GIO did not argue that if Advantage was required to arrange insurance of Centennial's liability for its own negligence, Centennial was nevertheless not covered in respect of Mr McDonald's claim because it was outside the terms of the insuring clause or within the operation of a particular exclusion. 7On appeal GIO seeks to argue that cl 43.2.2 of the Site Regulations did not form part of the Agreement and, for that reason, that Advantage was not obligated to provide any public liability insurance of Centennial's interest in the performance of it. For the reasons given by Gleeson JA at [65] to [101] that argument should be rejected - both as a matter of substance and on the basis that it could possibly have been met by the calling of further evidence before the trial judge and should not be permitted to be raised for the first time on appeal. 8The remaining question in the appeal is whether the public liability insurance which Advantage was obligated to arrange under cl 43.2.2 included insurance of Centennial's liability for its own negligence. 9That obligation applies to public liability insurance which Advantage as Contractor was required to maintain under cll 8.3 and 8.4 of the Standard Conditions and cl 43.1 of the Site Regulations. Public liability insurance is ordinarily taken out to cover liabilities arising in connection with defined activities of the insured. Here those activities were described in cl 8.4 as providing "Physical labour, contract labour, machinery assembly and maintenance, underground duties, secondary roof support" to Centennial. Such insurance usually indemnifies against liabilities arising in connection with the defined activities, other than liabilities that are expressly excluded. As such it would ordinarily indemnify against the insured's own negligence. It is not suggested by GIO that its policy would not cover Advantage against liabilities arising from its own negligence; or that, apart from cl 43.2.2, there is any other provision in the Standard Conditions or Site Regulations which in terms qualifies Advantage's obligation to arrange public liability insurance of Centennial under the Policy on the same terms as Advantage. 10GIO's arguments in support of the proposition that cl 43.2.2 of the Site Regulations did not require that Advantage arrange public liability insurance of Centennial's liabilities arising from its own negligence are set out and addressed by Gleeson JA at [102] to [151]. I agree for the reasons that his Honour gives that those arguments must be rejected. 11The liability policy which is the subject of the obligation in cl 43.2.2 is one which indemnifies Advantage against liabilities ordinarily covered under a public liability policy. The consequence of the noting of the interest of Centennial as "covered" by that policy is that it is indemnified on the terms of the policy to the extent of its interest in the contractual activity or venture covered by that insurance. The closing words of cl 43.2.2 require that Centennial, as an "indemnified" party, be entitled to an indemnity as if it had a separate policy of insurance, albeit on the same terms as that issued to Advantage. What must be covered are the "respective liabilities of each [indemnified party] to each other and to third parties". Clause 43.2.2 in its terms does not limit the liabilities which are to be covered, either in relation to Centennial or any of the other "interested parties". 12Clause 43.2.2 draws a distinction between "interested parties", whose liabilities are to be indemnified, and "third parties", which is to be understood as referring to parties other than those who are "interested" and indemnified. In the language of that clause, the "interested" and "indemnified" parties are Advantage, Centennial and Labourforce as a subcontractor of Advantage in relation to its contract with Centennial. The "third parties" therefore include employees, agents and other contractors of Centennial, employees or agents of Advantage and employees or agents of Labourforce. Mr McDonald is within that description as an agent of Advantage and employee of Labourforce, a subcontractor of Advantage. 13As Gleeson JA observes (at [118]), it is not uncommon for a building contract between a principal and head contractor to provide that one of them will take out a policy of insurance indemnifying all parties who may be involved in the works, including subcontractors, against liabilities to each other or to third parties arising out of those activities. The same observation is made by the authors in Derrington and Ashton, The Law of Liability Insurance, 3rd ed, 2013, Lexis Nexis Australia at para 11-123. 14Finally, the provisions of cll 8.1 and 8.2 do not require that the words "the respective liabilities of each of those parties to each other and to third parties" in cl 43.2.2 be read down so as to exclude liabilities of Centennial arising from its negligence. GIO argued, relying on a statement of McClellan CJ in CL in Erect Safe Scaffolding (Australia) Pty Ltd v Sutton [2008] NSWCA 114; 72 NSWLR 1 at [166], that the purpose of cl 43.2.2 was to support the indemnity given by cl 8.1; and that it should not be read as requiring that insurance be arranged which provides an indemnity to Centennial beyond the indemnity given by cl 8.1. 15Broadly speaking, cl 8.1 by its various provisions requires that Advantage indemnify Centennial against liability arising in two situations. The first is where there has been injury to or death of any of Advantage's Personnel or damage to or destruction of any property belonging to Advantage or in its possession which is not, in either case, the result of Centennial's negligence or breach of contract. The second is where there has been injury to or death of any person or damage to or destruction of any property caused by the negligence of Advantage or its Personnel or a breach of contract by Advantage. 16Those indemnities leave Centennial exposed to claims in respect of injury or death or damage to or destruction of property occurring in relation to the performance of the Agreement in circumstances where it has been negligent or in breach of contract. It is also exposed to claims by persons who are not employees or agents or subcontractors of Advantage or in respect of property which is destroyed or damaged which is not property of Advantage or in its possession or under its control, where the death or injury or damage or destruction is not the result of the negligence of Advantage or its Personnel or a breach of contract by Advantage. Each of those situations is one which Centennial might reasonably be expected to have sought to cover by insurance of the parties interested in the performance of the contract with Advantage. 17There are two respects in which cl 43.2.2 goes further than it would need to go if its purpose was only to provide an indemnity to Centennial in circumstances where it also would be entitled to an indemnity under cl 8.1. Clause 43.2.2 extends to liabilities of subcontractors of Advantage and in its terms is not restricted to liabilities of Centennial to Advantage, or to subcontractors of Advantage, which arise in negligence. The former liabilities are not the subject of the indemnity under cl 8.1. The latter may or may not be the subject of that indemnity. 18The appeal should be dismissed with costs. 19HOEBEN JA: I agree with Meagher JA and Gleeson JA and the orders which they propose. 20GLEESON JA: This appeal concerns the obligations of a contractor to effect and maintain policies of insurance in respect of itself, its employees, agents, and subcontractors, and to extend such cover to, amongst others, its principal. The issue is one of construction of a contract: whether the liabilities intended to be covered by the required insurance policies included liabilities caused by the principal's negligence. The primary judge held that the contractor was obliged to obtain such cover for its principal, who is the respondent to this appeal: McDonald v Centennial Newstand Pty Ltd [2012] NSWDC 218. The appellant insurer appeals against that decision. No issue otherwise arises as to the scope of the indemnity or any exclusions in the public liability policy which was effected by the contractor with the appellant. Background facts 21The respondent, Centennial Newstan Pty Ltd (Centennial) operated a coal mine at Fassifern, near Newcastle. In about mid 2008, Centennial entered into an agreement with Longwall Advantage Pty Ltd (Advantage) for the supply of labour by Advantage to Centennial to perform work at Centennial's coal mine (the Agreement). One such person supplied by Advantage was Mr McDonald, who performed work as a fitter and turner at the Fassifern coal mine. Advantage had an agreement with another company, Longwall Labourforce Pty Ltd (Labourforce), the employer of Mr McDonald, that Labourforce would make available to Centennial the services of certain persons, including Mr McDonald. 22Advantage maintained a policy of insurance with the appellant (GIO) described as a "Combined Business Policy" (the Policy). The Policy provided a number of sections of cover, including public liability for $20,000,000. The period of cover was 13 February 2008 to 13 February 2009 at 4.00pm. 23On 10 September 2008, Mr McDonald was injured when his leg was crushed while working on the longwall installation at the Fassifern coal mine. He brought proceedings in the District Court against Centennial, Labourforce, and Advantage for negligence. In turn, those parties brought various claims against each other for contribution and indemnity. Centennial also sought indemnity from GIO, claiming that it had the benefit of the Policy. 24The primary judge found that Centennial, Labourforce, and Advantage were each liable to Mr McDonald, and that for the purposes of contribution Centennial should bear 100 per cent of the liability of $550,000 less a deduction from that amount of $137,622.44 pursuant to s 151Z of the Workers Compensation Act 1987. 25The sole issue raised by GIO's defence to Centennial's claim for indemnity, was whether Advantage was required under the terms of the Agreement to obtain insurance cover that would, among other risks, cover Centennial for any liability of Centennial to Mr McDonald: see Judgment at [90]. 26His Honour found that GIO should indemnify Centennial in respect of its liability to Mr McDonald. Judgment was entered for Centennial against GIO in respect of the amount of Centennial's liability to Mr McDonald, including costs, and GIO was ordered to pay to Centennial its costs of investigating and defending the proceedings, including the costs of Centennial's cross-claim against GIO. 27GIO accepted on appeal that if Advantage was contractually obliged to obtain insurance cover for Centennial's own liability to Mr McDonald, then Centennial is an insured within the meaning of the Policy and entitled to indemnity in respect of its liability to Mr McDonald, including Centennial's liability for Mr McDonald's costs and its own costs of the proceedings. Thus, no issues arise on this appeal concerning the ambit of the public liability cover provided by the Policy, nor whether any exclusions from such cover might have been otherwise applicable. 28The material terms of the Policy and the Agreement with which this appeal is concerned, are set out below. The GIO Policy 29The Policy was comprised of the Policy wording, any Endorsements, and the Policy Schedule. The Policy wording was contained in Part 4 of a product disclosure statement issued by Steadfast Group Limited, an insurance broker. 30Under the heading "Our Agreement with You" the Policy provided: "We agreed to provide You with the insurance cover set out in each of the Policy cover sections that You select and that are listed in the Policy Schedule." 31The expression "You or Your" was given the following meaning: "For all cover sections other than Public and Products Liability cover section, this means the person(s), companies or firms named on the current Policy Schedule as the Insured." 32The Policy contained a number of separate cover sections, each with their own insuring clause, exclusions from liability, and definitional provisions. One such cover section related to public and products liability. 33The Policy Schedule was comprised in a Schedule of Insurance dated 31 January 2008. The insured was named as Advantage, the business of the insured was identified as "Longwall Maintenance", and the insurance cover selected included public liability for $20,000,000 (limit any one original cause). Public liability cover - Insuring clause 34Under the heading "What you are covered for", the insuring clause in the public and products liabilty cover section of the Policy provided: "We agree (subject to the terms, Claims conditions, General Policy conditions, Exclusions, definitions and Limits of liability incorporated herein) to pay to You or on Your behalf all amounts which You shall become legally liable to pay as Compensation in respect of: 1. Personal Injury; and/or 2. Property Damage; and/or 3. Advertising Injury; happening during the Period of Cover within the Geographical Limits and caused by or arising out of an Occurrence in connection with Your Business." [Emphasis added.] 35The expression "You/Your/Insured (where used in this cover section)" was given the following meaning: "The person(s), companies or firms named on the current policy schedule as the "Insured". Each of the following is insured to the extent specified below: ... (d) every principal in respect of the principal's liability arising out of: (i) the performance by or on behalf of the Named Insured of any contract or agreement for the performance of work for such principal, but only to the extent required by such contract or agreement and in any event only for such coverage and liability as provided by this policy'; ... (i) every party including joint venture companies and partnerships to whom the Named Insured is obligated by virtue of any contract or agreement to provide insurance such as is afforded by this Policy; but only to the extent required by such contract or agreement and in any event only for such coverage and limits of liability as are provided by this Policy." [Emphasis added.] 36It was common ground that Advantage was a "Named Insured" as defined in this cover section, being "a corporation specified in the Policy Schedule". 37The expression "Your Business" in the insuring clause was defined, relevantly, to mean the business as described in the Policy Schedule. As noted above, the business of Advantage was described in the Policy Schedule as "Longwall Maintenance". No issue was raised at the trial as to whether the injury to Mr McDonald arose "out of an Occurrence in connection with Your Business", as referred to in the insuring clause. 38The public and products liability cover section of the Policy also provided indemnity in respect of defence costs and various types of supplementary payments. It is unnecessary to set out the terms of this indemnity. Nothing turns on it for the purposes of the appeal. Terms of the Agreement 39The Agreement between Centennial and Advantage was in writing and described as a "Form of Agreement", being a one-page document with a number of attachments. The Agreement was undated, but executed by Advantage on 28 April 2008 and by Centennial on 10 July 2008. The operative terms of the Agreement provided in cl D that: "The Contract incorporates the following documents in decreasing order of priority to the extent of any inconsistency: · Centennial Standard Conditions of Contract (Ver 17) - Part A ... · Schedules - Part C (if any) · Attachments - Part D · Attachment 1 - Centennial Standard Contractors Site Regulations (Ver 34) - Part D (if applicable); · Attachment 2 - Centennial Coal Policies; · Attachment 3 - Contractor's Insurance Details. ... ." 40Under the heading "Execution" and before the signatures of the parties, there appeared the following: "This Agreement is made subject to all terms and conditions set out in the Attachments and Schedule, which is hereby made a part of the Agreement by reference, and the particulars set out on this page, all of which form the basis of the Agreement between Centennial and the Contractor." 41The material provisions of the Standard Conditions of Contract in Part A, Schedule 1 of Part C, and the Standard Contractors Site Regulations in Attachment 1 of Part D of the Agreement, are set out below. 42It is to be noted that Attachment 3 of Part D, relating to the Contractor's Insurance Details, was left blank. Standard Conditions - Part A 43Clause 8 of the Standard Conditions of Contract (Standard Conditions) was entitled "Indemnities and Insurance", and relevantly provided: "8.1 You must indemnify Centennial and agree to hold and save Centennial harmless from all claims for: (a) injury to or death of any of your personnel, except to the extent that a claim for such injury or death arises as a result of the negligence of Centennial or a breach of this contract by Centennial; (b) damage to or destruction of any property belonging to You or in Your possession or under Your control except to the extent the Claim for such damage or destruction arises as a result of Centennial's negligence or breach of this Contract by Centennial; (c) injury to or death of any person (including employees, agents or sub-contractors of Centennial) or damage to or destruction of any property (including property of Centennial, its agents or sub-contractors) caused by an negligent acts or omission by You or Your Personnel or a breach of this Contract by You; ... (e) without limiting clauses 8.1(a) ... breach by You or Your Personnel of any of Your obligations under the Contract or any negligent act or omission by You or Your Personnel relating to the performance of the Contract. ... 8.3 You and your Personnel must maintain workers compensation insurance as required by applicable Laws and public liability and (unless agreed otherwise by Centennial in writing) professional indemnity in accordance with the table of minimum requirements set out in clause 8.4 below, together with any other insurance specified on the Purchase Order. If requested by Centennial at any time, You must provide such evidence as Centennial reasonably requires that You and Your Personnel are insured in accordance with this Contract." 44The table of minimum insurance requirements in cl 8.4 relevantly included: Location of Work Description of Work Public/Product Liability Professional Indemnity* Surface/Underground Physical labour, contract labour, machinery assembly and maintenance, underground duties, secondary roof support $10 m 45Clause 5 of the Standard Conditions was headed "Safety, security and care" and provided: "5.1 You must comply with all Laws and all occupational health, safety and environmental and rehabilitation requirements of Centennial relating to the Contract, including the Site Regulations. 5.2 You must comply with the Site Regulations and Centennial Policies at all times when on a Centennial Site." 46The dictionary of terms in cl 1 of the Standard Conditions provided: "Words used in the Purchase Order and Contract have the following meanings: Contract means the whole of the Agreement between us. ... Centennial Site includes any site or premises (whether or not owned by Centennial) where Centennial requires or permits You to perform the Contract. ... Law means any State and Federal legislation including laws and regulations relating to mine safety ... Personnel includes employees, agents and subcontractors. ... You means the supplier identified in the Purchase Order. Work means the work or services required under the Contract including the Supply of Goods." Schedule 1 - Part C 47Part C of the Agreement comprised Schedule 1. This Schedule described the "Contractor" as Advantage and identified "The Scope of Supply/Work and/or Services" as: "1. Labour for Longwall maintenance (Specification N00014). 2. Labour on maintenance days for servicing of Shuttle Cars and Feeders (Specification N00006)." 48Schedule 1 also stated: "THE CONTRACT APPLIES TO THE FOLLOWING SITE: Centennial Newstan Pty Limited Fassifern Road, FASSIFERN NSW 2283." 49Schedule 1 included a schedule of rates (per hour) for day shift, afternoon shift and night shift. The "Special Insurance Requirements" as noted in Schedule 1 included "Public Liability - $5,000,000". The Contractor's representative was identified as Lindsay Auston [sic]. 50It is to be observed that the amount of public liability cover specified in Schedule 1 of $5,000,000 was inconsistent with the minimum insurance requirements of $10,000,000, set out in cl 8.4 of the Standard Conditions. It was accepted by GIO on appeal, that the latter requirement took precedence over the amount of the cover specified in Schedule 1, having regard to the terms of cl D of the Agreement which regulated the priority of the attachments to the extent of any inconsistency. This should be accepted, although nothing turns upon the limit of cover in the present case. Site Regulations - Part D 51Part D of the Agreement comprised three attachments. Attachment 1 was entitled "Standard Contractors Site Regulations" (the Site Regulations). 52Clause 1 of the Site Regulations was headed "Introduction" and provided: "The Standard Contractor's Site Regulations have been prepared for use by all Contractors and their subcontractors engaged in the execution of any work for Centennial Coal Company Limited, its subsidiaries and related bodies on any of their colliery sites or other properties owned, or partially owned, leased or where legal access to a site has been obtained by them. The Standard contractor's Site Regulations include requirements relating to site conditions, the Coal Mines Health & Safety Act, 2002 and the Occupational Health and Safety Act 2000 (NSW). ... Unless otherwise expressly stated in any tender, contract, request for quotation, enquiry, purchase order or other document published by Centennial Coal Company limited, these Standard Contractor's site Regulations will apply to all Contractors." [sic] [Emphasis added.] 53The term "Contract" was defined in cl 3.3 of the Site Regulations to mean: "(a) the written agreement between the Principal and Contractor evidencing the terms on which the Contractor will perform work and/or services for the Principal and includes any amendments to it and/or annexures and schedules; and (b) if there is no written agreement between the Principal and the Contractor, the verbal agreement between the Principal and the Contractor under which the Contractor will perform work and/or services for the Principal." 54The term "Contractor" was defined in cl 3.4 to mean: "(a) the successful Tenderer with whom the Principal enters into formal agreement, evidenced in writing, to perform such works and/or services as described in the contract or any approved variation to it; or (b) any other company, firm or person who enters into an agreement, whether or not evidenced in writing, to perform works and/or services on behalf of the Principal." 55Clause 43 of the Site Regulations, which is pivotal to the appeal, provided as follows: "INSURANCE & INDEMNITY 43.1 The Contractor must have insurances referred to in the Contract whenever performing its obligations under the Contract and for the period (if any) set out in the Contract after the Contractor has performed all of its obligations under the Contract. 43.2 Special Insurance Requirements 43.2.1 All insurance policies must be with insurers which are subject to the prudential supervision of Australian Prudential Regulation Authority. 43.2.2 Unless otherwise agreed in writing by the Principal, public and product liability policies must note the Principal and all subcontractors as interested parties and must cover the respective liabilities of each of those parties to each other and to third parties. The policy must cover each indemnified party to the same extent as it would if each of the parties had a separate policy of insurance. 43.3 Evidence of Insurance The Contractor must provide evidence of insurances prior to performing any work and whenever requested to do so. 43.4 Failure to Insure If the Contractor neglects, fails or refuses to obtain any insurance policies as required by the Contract or the Standard Contractors Site Regulations the Contractor must indemnify the Principal for any loss or damage suffered by the Principal arising out of or in connection with the Contractor's failure to obtain the required insurance. 43.5 Inconsistency with Contract To the extent of any inconsistency between the provisions set out in this clause 43 and the provisions of any Contract, the provisions of the Contract will prevail." Purchase Order NS 123099 56The relevant Purchase Order NS 123099 issued by Centennial to Advantage in respect of the supply of labour at the time of the incident involving Mr McDonald was dated 15 August 2008. The description of the services was "hire of fitter for lw24b-c move". It may be inferred that "lw" refers to "longwall". Attached to the purchase order was Centennial's Standard Conditions which were in the same form as the Standard Conditions attached as Part A of the Agreement. Primary judge's reasons 57Having found that each of Centennial, Labourforce and Advantage breached their respective duty of care to Mr McDonald, the primary judge found in relation to the claims for contribution, that the specific acts and omissions which caused the incident in which Mr McDonald was injured were the sole responsibility of Centennial. Accordingly, he declined to order any contribution by Labourforce or Advantage: at [54]. 58The primary judge observed at [84] that cl 43.2.2 of the Site Regulations was framed in wide terms. His Honour considered that, prima facie, cl 43.2.2 should be read contrary to GIO's contention that it did not apply to the direct liability of Centennial to pay damages to Mr McDonald arising out of its negligent acts and omissions. 59At [87], the primary judge rejected the argument advanced by GIO, relying upon the decision of this Court in Erect Safe Scaffolding (Australia) Pty Ltd v Sutton [2008] NSWCA 114; 72 NSWLR 1, that cl 43.2.2 should be construed in a manner which restricted it, so that the cover would not apply if the liability of Centennial arose independently of its position as principal to Advantage under the labour supply contract. His Honour reasoned that the insurance provision in the present case was quite different to that in Erect Safe Scaffolding, noting that (a) cl 43.2.2 is not contiguous with the indemnity in cl 8.1 of the Standard Conditions; (b) it required cover for the respective liabilities of both Advantage and Centennial "to each other and to third parties"; and (c) it required that each of the interested parties would be insured with respect to its operations arising out of the provision of labour by Advantage at the Fassifern coal mine. 60The primary judge found at [88], that Advantage was required under the Agreement to provide insurance cover, the extent of which would indemnify Centennial against liability to pay damages and costs to Mr McDonald arising in the circumstances of the incident whether under the labour supply contract or independently of it. 61At [89], the primary judge found that the Agreement required Advantage to have effected the public liability insurance for the benefit of Centennial and that Centennial was an insured under the Policy. Matters arising on appeal 62The notice of appeal raises a single issue - whether Advantage was required by cl 43.2.2 of the Site Regulations to provide insurance cover, the extent of which would indemnify Centennial against its liability to pay damages and costs to Mr McDonald, arising in the circumstances of the incident at the Fassifern coal mine. 63However, the written submissions of GIO raised an anterior question as to whether the Site Regulations had any application at all to the supply of labour under the Agreement. GIO contended that the Site Regulations were not incorporated as terms of the Agreement. This issue was not raised in the Court below. It gives rise to two questions on appeal. 64The first is whether this Court should permit GIO to raise a new point on appeal. The second is whether the Site Regulations, in particular cl 43.2.2, were incorporated as terms of the Agreement. It is convenient to deal with the construction question first, before addressing the arguments directed to whether GIO should be allowed to raise this point on appeal. (1) Whether the Site Regulations had no application 65GIO submitted that the Site Regulations were not incorporated as terms of the Agreement. GIO relied upon a number of matters. First, it was noted that the incorporation of the Site Regulations in cl D of the Agreement was qualified by the words "(if applicable)". It was submitted that this suggested that the Site Regulations are not necessarily intended to apply to every contract, that is, the purchase orders, the subject of the Agreement. 66Secondly, it was submitted that the Site Regulations were intended to operate only in situations where parties contracted with Centennial to perform work on a site controlled by Centennial. It was contended that this was made clear by the introductory words in cl 1 of the Site Regulations, which stated that the Site Regulations "have been prepared for use by all Contractors and their subcontractors engaged in the execution of any work for Centennial ... on any of their colliery sites ...". GIO contended that this requirement was not met, in the case of the mere supply of labour by Advantage to Centennial. 67Counsel for GIO accepted that Mr McDonald was working on a Centennial colliery site, that he was the agent of Advantage, and that he was engaged in the execution of work for Centennial. He submitted however that Advantage itself was not "on site" and played no role in the supervision of the worker. It was contended that the Site Regulations were only directed towards those who were responsible for the supervision of workers engaged in the execution of work on a Centennial colliery site. 68Thirdly, it was submitted that it was doubtful that Advantage was even a "Contractor" as defined in cl 3.4 for the purposes of the Site Regulations. GIO argued that there was no suggestion that Advantage was a successful Tenderer as referred to in subparagraph (a) of the definition of "Contractor". GIO also contended that Advantage had not agreed to perform services "on behalf of Centennial". 69Fourthly, GIO contended that the terms of cl 5.1 of the Standard Conditions, which provided that Advantage "must comply with all ... occupational health, safety ... requirements of Centennial, including the Site Regulations" and cl 5.2 which provided that Advantage "must comply with the Site Regulations and Centennial Policies at all times when on a Centennial Site", did not incorporate the Site Regulations in the present case. Again it was argued that this was because Advantage was not performing work on a Centennial site, it was only supplying labour. Consideration Clause D Agreement 70As to the first matter, the qualifying words "(if applicable)" as found in cl D of the Agreement are not determinative. They simply mean that it is necessary to construe the Site Regulations, having regard to the terms of the Agreement as a whole, to determine whether they are applicable in whole or in part to the Agreement, or any purchase order issued by Centennial to Advantage for the supply of labour. Clause 1 Site Regulations 71As to the second matter, the better view is that first paragraph of cl 1 of the Site Regulations (see [52] above) is in the nature of a preamble to what follows, rather than having any operative effect. This is reflected by the use of the words "have been prepared" when describing the Site Regulations. The operative part of cl 1 is to be found, relevantly, in the final subparagraph which provides: "Unless otherwise expressly stated in any tender, contract, ... purchase order or other document published by Centennial ..., these Standard Contractors Site Regulations will apply to all Contractors." These words have the effect of incorporating the Site Regulations into the Agreement, unless there was an express provision to the contrary elsewhere in the Agreement, or relevantly, in any purchase order issued by Centennial to Advantage. 72In relation to the Agreement itself, there is no provision which expressly provides that the Site Regulations do not apply to the Agreement. As already noted, the qualifying words "if applicable", when used in reference to the incorporation of the Site Regulations in cl D of the Agreement, do not have that effect. Nor is there any such provision in Purchase Order NS 123099, which was the relevant purchase order in respect of the supply by Advantage of the services of Mr McDonald as at the date of the incident. 73If, contrary to the above, the first paragraph of cl 1 of the Site Regulations had operative effect as imposing a requirement that the Site Regulations were not applicable unless the Contractor itself was engaged in the execution of work for Centennial on any of its colliery sites, then this raises a factual question which was not determined by the primary judge. The mere absence of supervision of Mr McDonald by Advantage, as found by the primary judge at [53], was not a finding that Advantage was not engaged in the execution of work for Centennial on one of its colliery sites. The primary judge was not asked or required to decide this question, because it was not raised on the pleadings or by the parties. 74Centennial submitted that if it had been necessary for the primary judge to decide this question, there was sufficient evidence to satisfy this asserted requirement for the application of the Site Regulations. Alternatively, if the evidence was insufficient, then GIO should not be permitted to rely upon this new point on appeal. 75In my opinion, Centennial's submissions should be accepted. As to the factual issue, in a real and practical sense Advantage was engaged in the execution of longwall maintenance work at the Fassifern coal mine through its agent, Mr McDonald. The presence or absence on site of Mr Austin, the nominated representative of Advantage, is not to the point. Mr McDonald was clearly engaged in the execution of work on a Centennial site. 76The evidence of the description of work and/or services in Schedule 1 of Part C of the Agreement (see [47] above), together with the description of the work in the relevant purchase order (see [56] above), is sufficient, in my view, to establish that Advantage itself was engaged in the execution of work "on site" through its agent, Mr McDonald. However, if it were otherwise, then for the reasons given below, GIO should not be permitted to raise this new point on appeal. Clause 3.4 Site Regulations 77As to the third matter, the suggestion in Centennial's written submissions that Advantage was not a "Contractor" as defined in cl 3.4 of the Site Regulations, was not pressed by GIO during oral argument. Counsel for GIO accepted that Advantage was a "Contractor" and that work was being carried out by Mr McDonald on a Centennial site (AT tcpt 11, lines 12-21; tcpt 43, lines 43-44 - tcpt 44, line 1). The argument that Advantage was not a "Contractor" may be put aside. Clauses 5.1 and 5.2 Standard Conditions 78As to the fourth matter, it is necessary to consider cll 5.1 and 5.2 of the Standard Conditions separately. These provisions are set out at [45] above. 79The subject matter of cl 5.1 is compliance by Advantage with all occupational health, safety, and environmental and rehabilitation requirements of Centennial relating to the Agreement. It might be argued that, having regard to this context, the reference to compliance with Site Regulations only incorporated those Site Regulations to the extent that they dealt with the same subject matter, not a separate obligation to note the interest of Centennial and all subcontractors of Advantage on an insurance policy taken out by Advantage. I would not read cl 5.1 of the Site Regulations in such a limited manner. 80First, cl 43 of the Site Regulations relating to special insurance requirements and indemnity, is part of the broader contractual context involving more than one contractor operating on a Centennial site at one time, and for ensuring cover is extended under the required insurance policies to Centennial and all subcontractors of Advantage on site. 81Clause 43.4 obliged Advantage to indemnify Centennial for any loss or damage suffered by Centennial arising out of, or in connection with, Advantage's failure to obtain the insurance policies as required by the Contract or the Site Regulations. This indemnity is additional to the indemnity afforded by Advantage to Centennial in cl 8.1 of the Standard Conditions which included indemnity for all claims against Centennial for injury to or death of any of Advantage's Personnel (being its employees, agents, and subcontractors) or damage to or destruction of any property belonging to Advantage or in its possession which is not, in either case, the result of Centennial's negligence or breach of contract (cll 8.1(a) and (b)); and for injury to or death of any person or damage to or destruction of any property caused by the negligence of Advantage or its Personnel or a breach of contract by Advantage (cl 8.1(c)). 82The scope of the cl 43.4 indemnity is broader than the cl 8.1 indemnity in the Standard Conditions because the special insurance requirements in cl 43.2.2 cover a broader range of liabilities. The liabilities to which cl 43.2.2 is directed are not limited to the circumstances which are the subject of indemnity under cl 8.1 of the Standard Conditions. They include liabilities of Centennial to subcontractors of Advantage and to third parties and liabilities of subcontractors of Advantage to Advantage and to third parties, which would ordinarily include liabilities arising in negligence. There is no reason why the parties might be supposed not to have intended by cl 5.1 of the Standard Conditions to have incorporated the insurance and indemnity provisions in cl 43 of the Site Regulations. 83Secondly, cl 44.1 of the Site Regulations provides: "No contractor may commence work on the Site until: (a) the provisions of clause 43 of these Regulations and the provisions of any Contract relating to the requirement to have in place appropriate insurance have been met; ... ." 84The dictionary meanings of the word "work" relevantly include: "exertion directed to produce or accomplish something; labour or toil": Macquarie Dictionary online. 85The prohibition on the Contractor commencing work on site, until the required insurances have been put in place, is one of the requirements which the Contractor must comply with under the Site Regulations. The expression "commence work on the Site" includes, in my view, the supply of labour by Advantage to carry out longwall maintenance services for Centennial at the Fassifern coal mine. 86The subject matter of cl 5.1 of the Special Conditions, even if viewed as confined to occupational health, safety, and environmental and rehabilitation requirements of Centennial, is not inconsistent with the incorporation of, at least, cll 43 and 44 of the Site Regulations. 87As to cl 5.2 of the Standard Conditions, the reference to compliance with the Site Regulations as well as Centennial Policies "at all times when on a Centennial Site", is to be taken as a temporal reference - namely the time at which there must be compliance by the Contractor. Relevantly, in relation to the required insurances referred to in cl 43.2.2, this means not only must the Contractor have those insurances in place before commencing work on site, but it also must maintain those insurance policies whenever on a Centennial site. 88Thus, the content of the obligations imposed by cll 5.1 and 5.2 of the Standard Conditions is to be understood against the background of (a) the obligation of Advantage to maintain the minimum insurance requirements referred to in cll 8.3 and 8.4 of the Standard Conditions, (b) the further obligation of Advantage to arrange cover for Centennial and all subcontractors of Advantage under those policies as required by cl 43.2.2 of the Site Regulations, (c) the indemnity given by Advantage to Centennial under cl 43.4 of the Site Regulations, if Advantage failed to obtain the required insurance policies, and (d) the prohibition in cl 44.1 of the Site Regulations on Advantage commencing work on a Centennial site without the required insurances. 89When viewed in context and against the whole of the Agreement, cll 5.1 and 5.2 of the Standard Conditions are not inconsistent, in my view, with the incorporation of the Site Regulations as terms of the Agreement, as contended by GIO. To the contrary, these provisions support the incorporation of the Site Regulations as terms of the Agreement, subject only to the qualification in cl D of the Agreement arising from the words "(if applicable)". 90No other argument was advanced by GIO as to why cl 43 of the Site Conditions would not be applicable in the present case. 91GIO's submission that the Site Regulations, in particular cl 43, were not incorporated into the Agreement is rejected. New point on appeal 92In view of the above conclusion, the objection by Centennial to GIO being permitted to rely upon a new point on appeal, may be dealt with briefly. 93GIO submitted that the point sought to be raised on appeal was one of construction of the documents which comprised the Agreement, and could not have been met by evidence in the Court below. This argument should be rejected for the following reasons. 94First, the new point which GIO sought to raise on appeal, involved a question of fact as to whether Advantage was "engaged in the execution of any work for Centennial on any of their colliery sites ...". What was sought to be put in issue by GIO on appeal was whether Advantage itself was engaged in the execution of work on a Centennial site. There was no dispute that Mr McDonald, the agent of Advantage, was engaged in the execution of work on a Centennial site. 95This asserted "requirement" for the incorporation of the Site Regulations as terms of the Agreement was not a matter raised on the pleadings. Indeed, GIO admitted that the Site Regulations were express terms of the Agreement. Unsurprisingly therefore, neither the parties, nor the primary judge addressed this issue. 96Although not addressed by the parties or the primary judge, there was some evidence below relevant to the factual question of whether the labour services supplied by Advantage to Centennial involved the execution of work by Advantage for Centennial on a Centennial site. As noted at [74] above, in my view, this evidence would satisfy any requirement, if it existed in the Site Regulations, that Advantage was engaged in the execution of work on a Centennial site. 97However, if this evidence was considered to be insufficient to enable that conclusion to be reached, then as Advantage correctly pointed out, there was other evidence which might have been relevant to this issue, had it been raised below. This evidence included the terms of the earlier purchase orders and the specifications referred to in Schedule 1 of Part C of the Agreement, as well as evidence concerning the functions and responsibilities of Mr Austin, the nominated representative of Advantage referred to in Schedule 1, Part C of the Agreement. The new point is not simply one of construction of the Agreement. 98Secondly, a point cannot be raised for the first time upon appeal when it could possibly have been met by calling of evidence below: Water Board v Moustakas [1988] HCA 12; 180 CLR 491 at 497. The present is such a case. As the High Court has repeatedly emphasised, it is elementary that a party is bound by the conduct of its case. Thus, "(e)xcept in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so" (sic): Metwally v University of Wollongong (No 2) [1985] HCA 28; 60 ALR 48 at 71. 99GIO did not point to any exceptional circumstances existing in this case. 100Thirdly, there is a further reason for not permitting GIO to raise this new point on appeal. There is an admission by GIO on the pleadings relating to [14] of the third cross-claim by Centennial against GIO. GIO admitted that the Site Regulations were express terms of the Agreement. GIO did not seek to withdraw this admission on the appeal. It cannot raise a new point on appeal inconsistent with that admission. 101The anterior contention sought to be raised by GIO must be rejected. (2) Construction of cl 43.2.2 - Site Regulations 102GIO submitted that the primary judge erred in finding that cl 43.2.2 of the Site Regulations imposed an obligation upon Advantage to insure Centennial in respect of its liability to Mr McDonald. GIO's argument relied upon the following propositions: (1)That cl 43.2.2 did not impose any separate or freestanding obligation on Advantage to obtain insurance for the benefit of Centennial, rather it assumed the existence of public and product liability policies of insurance which provided cover to Centennial. (2)There is no obligation elsewhere in the Agreement requiring Advantage to obtain insurance for the benefit of Centennial. Thus, cl 43.2.2 has no work to do in relation to the required insurance. (3)Clause 43.2.2 does not modify the insurance obligation in cl 8.3 of the Standard Conditions such that it becomes an obligation to insure Centennial, let alone an obligation to insure Centennial for liabilities arising from its own negligence. (4)The insurance obligations in cl 8.3 of the Standard Conditions are in aid of the indemnities provided in cl 8.1 and should not be construed in a manner which required the indemnifying party (Advantage) to obtain insurance in respect of loss occasioned by negligence of the indemnified party (Centennial): see Erect Safe Scaffolding (Australia) Pty Ltd v Sutton. 103Alternatively, it was submitted by GIO that cl 43.2.2 of the Site Regulations is inconsistent with cl 8.3 of the Standard Terms, because it would have the effect of destroying the limitations on the indemnities provided by Advantage to Centennial in cl 8.1. In the event of inconsistency, the Standard Terms prevailed over the Site Regulations: see cl 43.5 of the Site Regulations. 104During oral argument, the parties' submissions addressed the meaning to be given to the words "must cover their respective liabilities to each of those parties to each other and to third parties" in cl 43.2.2. 105GIO contended that the words "respective liabilities of each of those parties" referred to liabilities in respect of the indemnities under the contract. 106As to the words "third parties", GIO contended that these words did not include employees of Advantage. It was argued by GIO that it did not make sense that Advantage would insure beyond the indemnity clause in cl 8.1 of the Agreement to provide cover in respect of Centennial's liability for its own negligence to an employee of Advantage. It may be taken that this argument extended to persons in the position of Mr McDonald, who was an agent of Advantage rather than an employee. Consideration 107The construction of cl 43.2.2 of the Site Regulations must have regard to the whole of the terms of the Agreement, including cll 8.1 and 8.3 of the Standard Conditions upon which GIO placed much emphasis. The words of every clause must, if possible, be construed so as to render them all harmonious with one another: Fitzgerald v Masters (1956) 95 CLR 420 at 437; Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109; Sigiriya Capital Pty Ltd v Scanlon [2013] NSWCA 401 at [30] per Leeming JA (Meagher JA and Sackville AJA agreeing). Scheme of the insurance and indemnity provisions 108When the Agreement is read as a whole, it may be seen that the scheme of its provisions in relation to insurance and indemnity was as follows. 109First, by cl 8.3 of the Standard Conditions, Advantage covenanted that it and "Your Personnel" - its employees, agents, and subcontractors - would maintain workers compensation insurance and public liability insurance in accordance with the table of minimum requirements set out in cl 8.4. Relevantly, cl 8.4 required a minimum of $10,000,000 public and product liability insurance in respect of work on the surface and underground involving physical labour, contract labour, machinery, assembly, and maintenance. 110Secondly, cl 43.1 of the Site Regulations reinforced cll 8.3 and 8.4 of the Standard Conditions by requiring that Advantage must have the insurances referred to in the Contract "whenever performing its obligations under the Contract ...". That is, Advantage and its employees, agents, and subcontractors, must have public liability insurance of not less than $10,000,000 whenever Advantage was suppling labour to Centennial for longwall maintenance, or for servicing of shuttle cars and feeders at the Fassifern coal mine. 111Thirdly, by cl 43.2.2 of the Site Regulations, Advantage was obliged to ensure that the public and product liability policies noted that "Centennial and all subcontractors" were interested parties and that the policies covered their own interests in the terms specified. This was a requirement that Advantage arrange cover under its public and product liability policies for the insurable interests of Centennial and all subcontractors of Advantage in "the performance of the Contract" by Advantage as referred to in cl 43.1 of the Site Regulations. 112The reference in cl 43.1 of the Site Regulations to the insurances "referred to in the Contract" included the policies required by cll 8.3 and 8.4 of the Standard Conditions. 113Fourthly, the relevant public liability cover which Advantage was required to maintain for the benefit of Centennial and all subcontractors of Advantage, was cover for "the respective liabilities of each of those parties to each other and to third parties". The reference to "those parties" is a reference to the "interested parties" under the Policy. This encompassed Advantage as the named insured, Centennial, and all subcontractors of Advantage with an insurable interest in Advantage's public liability policy. 114Fifthly, by cl 43.4 of the Site Regulations, Advantage was obliged to indemnify Centennial if it failed to obtain the required insurance policies. As already noted, this indemnity was in addition to the indemnity afforded by Advantage to Centennial under cl 8.1 of the Standard Conditions. 115The indemnity afforded to Centennial by cl 43.4 of the Site Regulations would be surplus if the special insurance requirements in cl 43.2.2 of the Site Regulations did no more than merely support the indemnity afforded to Centennial by cl 8.1 of the Standard Conditions. Preference is to be given to a construction of the Agreement which supplies a congruent operation to the various components of the whole: Wilkie v Gordian Runoff Ltd [2005] HCA 17; 221 CLR 522 at [16]. In Chapmans Ltd v Australian Stock Exchange Ltd [1996] FCA 474; 67 FCR 402 at 411, Lockhart and Hill JJ said: "A court will strain against interpreting a contract so that a particular clause in it is nugatory or ineffective, particularly if a meaning can be given to it consonant with other provisions in a contract." 116The scheme of these provisions is that the obligation to maintain insurance in cll 8.3 and 8.4 of the Standard Conditions was supplemented by the special insurance requirements and indemnity in cl 43 of the Site Regulations. The latter provisions did more than merely support the indemnity afforded by cl 8.1 of the Standard Conditions. 117The provisions of the Agreement recognised that the supply of labour services by Advantage to Centennial may lead to public liability to others, including Centennial or subcontractors of Advantage, for personal injury or property damage at the Fassifern coal mine. Clause 8.1 of the Standard Conditions afforded Centennial an indemnity by Advantage in respect of only certain types of claims against Centennial. That indemnity was supported by the insurance obligation in cll 8.3 and 8.4 of the Standard Conditions. 118The Agreement also recognised that such harm may lead to a liability of Centennial or subcontractors of Advantage in addition to that of Advantage as the party supplying labour services to Centennial. Clause 43 of the Site Regulations is a not uncommon provision in a contract between a principal and contractor, providing that one of them will take out a composite policy of insurance indemnifying all the parties who may be involved in work on the principal's site against liability flowing from the provision of work or services by the contractor to the principal. 119In this case, the services were the supply of labour by Advantage to Centennial to carry out maintenance work at the Fassifern coal mine, and the obligation to effect the public and product liability insurance and arrange such cover for the principal (Centennial) and others (all subcontractors of Advantage) was imposed on Advantage. The dispute between the parties as to the ambit of the cover afforded to Centennial in relation to its "respective liabilities" is to be understood in this context. Meaning of "respective liabilities" 120Both GIO and Advantage accepted on appeal that the reference to the "respective liabilities of each of those parties to each other and to third parties" is not a reference to those parties' respective liabilities at large, but requires some qualification. That qualification is to be found in the express terms of cl 43.1 of the Site Regulations, which identified that the required insurances were those which Advantage must have whenever it is "performing its obligations under the Contract". 121The "respective liabilities" of Advantage, Centennial, and all subcontractors of Advantage are the liabilities of those parties to each other or to third parties whenever Advantage was suppling labour to Centennial for the carrying out of longwall maintenance at the Fassifern coal mine. 122GIO submitted that the words "respective liabilities" in cl 43.2.2 are to be read down as being confined to where Advantage or its subcontractors have been negligent, and did not include liabilities caused by Centennial's own negligence to either Advantage, or a subcontractor of Advantage, or to third parties. 123GIO relied on four matters for giving such a confined meaning to the words "respective liabilities". The first was that the parties had agreed in cl D of the Agreement that the Standard Conditions took precedence over the Site Regulations. Secondly, because the policies to be effected by Advantage as referred to in cll 8.3 and 8.4 of the Standard Conditions did not extend to cover Centennial for its own negligence. Thirdly, because "respective" means the respective rights that Centennial and Advantage have under the Policy. Fourthly, that it was overwhelmingly improbable that a contractor in the position of Advantage would agree to provide cover for the liabilities of Centennial to any third party not arising in connection with the activities of Advantage and in circumstances where Advantage was not negligent and had no control over the activities at Centennial's coal mine. 124Dealing with each of these matters in turn. (a) Site Regulations 125The premise upon which the first matter is based is incorrect. The question of priority between the attachments to the Agreement only arises to the extent of any inconsistency: see cl D of the Agreement. 126GIO's submission assumed the conclusion to which it seeks to argue, namely, that there is an inconsistency between the required insurances under cll 8.3 and 8.4 of the Standard Conditions and the additional obligation imposed on Advantage by cl 43.2.2 to arrange cover for Centennial and all subcontractors of Advantage under the public and product liability policies referred to in the Agreement. There is no inconsistency. The special insurance requirements provided in the Site Regulations are supplementary to the provisions in the Standard Conditions dealing with insurance. (b) Cover for Centennial's negligence 127As to the second matter, it may be accepted that cll 8.3 and 8.4 of the Standard Conditions do not require Advantage to arrange cover for Centennial for its own negligence. However this is not to the point. Those provisions must be read together with the special insurance requirements provided by cl 43.2.2 of the Site Regulations. When the clauses are read together, and in the light of the indemnity in cl 43.4 of the Site Regulations for the failure to insure, it is clear that Advantage was obliged to arrange cover for Centennial and all subcontractors of Advantage under the same public and product liability policies as referred to in cll 8.3 and 8.4 of the Standard Conditions and that Centennial and all subcontractors of Advantage would receive insurance cover of the same character. It is unsurprising that Centennial might reasonably wish to be indemnified in relation to any risk that it may ultimately incur liability of that kind. Such a risk may arise because, for example, as found by the primary judge at [33]: "The totality of the operation of the mine, on the evidence, vested in Centennial, supervision was provided by Centennial, and the equipment available and used was provided by Centennial. Accordingly, the burden of taking precautions to avoid the risk of injury rested on Centennial." 128Likewise, Centennial might reasonably wish all subcontractors of Advantage to be indemnified in relation to any risk that they may ultimately incur liability of that kind. (c) "Respective" 129As to the third matter, the term of "respective" in the words "respective liabilities" does not refer to the respective rights that Centennial and Advantage have under the Policy. GIO's submission conflated the liabilities in respect of which Centennial wished that it and all subcontractors of Advantage be indemnified by the extension of cover under the Policy, with the rights of indemnity conferred on them as interested parties under the Policy effected by Advantage. (d) Not an improbable outcome 130As to the fourth matter, the construction of the words "respective liabilities" adopted above, does not lead to the improbable outcome suggested by GIO's submissions. Advantage was not obliged to arrange cover for Centennial for liability to any third party in no way connected with the activities of Advantage or its subcontractors in the performance of the Agreement. "Respective liabilities" are not confined by cl 8.1 131GIO also argued that the words "respective liabilities" are to be taken as a reference to liabilities arising under the Agreement and such liabilities were confined to the indemnity afforded by Advantage to Centennial under cl 8.1 of the Standard Conditions. 132The difficulty with this submission is that the subject matter of the indemnities in cl 8.1 is limited to liabilities of Centennial for only certain types of claims against Centennial. This clause did not address the liabilities of Centennial for injury or death of any of Advantage's Personnel or damage or destruction to any property belonging to Advantage in circumstances where Centennial has been negligent, nor the liabilities of subcontractors of Advantage to Advantage or to third parties, but these liabilities were the subject of the cover required to be arranged by Advantage for Centennial and all subcontractors of Advantage under cl 43.2.2 of the Site Regulations. 133It is readily apparent that the ambit of the indemnities afforded by Advantage to Centennial in cl 8.1, is narrower than the cover to be arranged for Centennial and all subcontractors of Advantage under cl 43.2.2. For this reason, the cover to be extended to Centennial and all subcontractors of Advantage by cl 43.2.2 of the Site Regulations is not to be taken as merely in aid of the indemnities provided in cl 8.1 of the Standard Conditions. 134Furthermore, there is no warrant for reading the words "respective liabilities" in cl 43.2.2 as being confined to liabilities under the Agreement, that is, the contractual indemnities in cl 8.1 of the Standard Conditions, as suggested by GIO. No such express limitation appears in cl 43.2.2 itself. The nature of the liabilities referred to in cl 43.2.2 would include liabilities in tort for personal injury or property damage. There is simply no basis for implying a further requirement that those liabilities must also be the subject of a contractual indemnity in the Agreement. Erect Safe Scaffolding v Sutton 135GIO next submitted that the insurance clause in the Agreement was required to be construed in the same manner as in Erect Safe Scaffolding (Australia) Pty Ltd v Sutton, where at [166] McClellan CJ at CL said: "The approach taken in each of these decisions is that, in the absence of express words, the obligation under an insurance clause in a contract which is provided to support an indemnity clause will not require the subcontractor to maintain insurance against loss occasioned by the head contractor's negligence." 136This statement of McClellan CJ at CL in Erect Safe Scaffolding v Sutton is not to be understood as a statement of principle, but merely an observation concerning the "approach" taken in a number of authorities when construing the obligation under an insurance clause which is provided to support an indemnity clause. His Honour's observation was also qualified by the need to have regard to the express words of the insurance clause under consideration. 137As noted by Hoeben J in Pritchard v Trius Constructions Pty Ltd [2011] NSWSC 749 at [109], although Giles JA and McClellan CJ at CL were not entirely in agreement in Erect Safe Scaffolding v Sutton as to how to interpret the indemnity clause under consideration, both agreed on the relevant principle of construction: "5 The operation of any contractual indemnity must be found in the application to the facts of the words of the relevant clause, construed as part of the contract as a whole. Decisions on the operation of contractual indemnities in different words in different contracts are likely to be of limited assistance." (Giles JA) "154 The resolution of any disagreement about a particular clause in a contract must be approached by considering the terms of the relevant document. Although the resolution of disputes in other cases may provide guidance, each dispute must be resolved by the application of the accepted principles of construction to the particular contract." (McClellan CJ at CL) 138The critical issue of construction in Erect Safe Scaffolding (Australia) Pty Ltd v Sutton concerned the meaning to be given to the words "arising out of the performance of the Subcontract Works" in a contractual indemnity afforded by the subcontractor to the head contractor against all damage, expense, or liability of any nature suffered or incurred by the head contractor. Those words were construed as not providing the head contractor with indemnity in respect of its own liability for negligence. At [12], Giles JA reasoned that the basis for the head contractor's liability was breach of its own duty of care to the injured person although the subcontractor's performance of the works provided the occasion for it to occur. His Honour considered that was insufficient for liability to have arisen out of the performance by the subcontractor of the subcontract works and its other obligations. Similar reasons were given by McClellan CJ at CL at [157] - although the occasion for the liability of the head contractor was the erection by the subcontractor of the faulty scaffold, the liability of the head contractor arose from its own independent act of negligence in failing to maintain an appropriate safety regime for the site. 139The terms of the Agreement in the present case are quite different. First, the terms of the indemnities afforded by Advantage to Centennial under cl 8.1 of the Standard Conditions are clear. There is an express carve out from those indemnities where the relevant claim has arisen as a result of Centennial's negligence or breach of contract. 140Secondly, whilst the obligation to maintain the required insurance policies in cll 8.3 and 8.4 of the Standard Conditions is immediately adjacent to the indemnity afforded under cl 8.1, and to that extent the clauses relating to indemnity and the obligation to maintain insurance are interrelated, these clauses are supplemented by the special insurance requirement and indemnity clauses in the Site Regulations and all of these provisions must be read together and, where possible, in a harmonious manner. 141Thirdly, the insurance clause in Erect Safe Scaffolding v Sutton was only directed to cover against "the respective rights and interests" of the head contractor and the subcontractor against liability to third parties for loss or damage to property and death or injury to any person in the context of the contractual indemnity given by the subcontractor to the head contractor "arising out of the performance of the subcontract works". By contrast, in this case the special insurance requirements in cl 43.2.2 of the Site Regulations were intended to provide cover to Centennial and all subcontractors of Advantage beyond the scope of the indemnity afforded to Centennial under cl 8.1 of the Standard Conditions. 142Fourthly, this construction of cl 43.2.2 of the Site Regulations - that the insurance clause does more than merely secure the indemnity afforded by cl 8.1 of the Standard Conditions - is supported by the existence of the separate indemnity in cl 43.4 of the Site Regulations in relation to any failure by Advantage to obtain the required insurance policies. The indemnity afforded by cl 43.4 of the Site Regulations would have no work to do if the clause relating to the obligation to obtain insurance cover for Centennial and all subcontractors of Advantage merely secured the indemnity afforded by Advantage to Centennial under cl 8.1 of the Standard Conditions. 143In my view, the decision in Erect Safe Scaffolding v Sutton is not determinative of the construction to be given to cl 43.2.2 of the Site Regulations. Respective liabilities to third parties 144Ultimately, the question of construction raised on this appeal turns on the meaning to be given to the expression "third parties" in cl 43.2.2 of the Site Regulations - relevantly in the case of Centennial, does this mean liabilities of Centennial to third parties external to Advantage and all subcontractors of Advantage, or does it include employees and agents of Advantage when Advantage was supplying labour for maintenance works at the Fassifern coal mine? 145It was common ground that Mr McDonald was an agent of Advantage. The focus therefore is upon Centennial's liability for its own negligence to an agent of Advantage. The submissions of the parties gave little attention to the construction to be given to the words "third parties". GIO relied upon its earlier submissions concerning the meaning of the words "respective liabilities" - in particular its contention that it was overwhelmingly improbable that a contractor in the position of Advantage would agree to provide cover for liabilities caused by Centennial's own negligence to a third party being an employee or agent of Advantage. Centennial contended that the words "third parties" clearly encompassed agents of Advantage. 146It is to be observed that the language of cl 43.2.2 of the Site Regulations in first referring to the respective liabilities of the interested parties in the insurance policies to "each other", in contradistinction to their liabilities to "third parties", does not include in the former category of liabilities their respective liabilities to each other's employees and agents. There is no warrant, in my view, for giving such an extended meaning to the words "each other". Accordingly, the question is whether the expression "third parties" includes the employees and agents of, relevantly, Advantage. 147The dictionary meaning of the words "third party" is: "any person other than the principal to some transaction, proceeding or agreement" : Macquarie Dictionary online. 148Centennial as the operator of the Fassifern coal mine, might render itself liable to a large number of third parties in the course of the mine's operations and insurance against the consequences of such liability no doubt was vital in the interests of Centennial, Advantage as the contractor supplying labour, all subcontractors of Advantage and, indeed, third parties. Apart from the admittedly limited circumstances in which Centennial might invite members of the general public to visit its coal mine, "third parties" would naturally include those associated with the operations of the coal mine and all their employees and agents. 149A construction of the respective liabilities of Centennial and all subcontractors of Advantage to third parties which includes the employees and agents of Advantage, does not, in my view, involve a strained construction of that language. As already noted, Centennial might reasonably wish to be indemnified, and for all subcontractors of Advantage to be similarly indemnified, in relation to any risk that they may ultimately incur liability of that kind. 150I am not persuaded by the arguments of GIO that it is overwhelmingly improbable that the parties intended that Advantage would maintain insurance cover in respect of Centennial's own liability for negligence to an employee, agent, or subcontractor of Advantage. Clause 43 of the Site Regulations providing for special insurance requirements, backed up by the indemnity in the event that Advantage failed to obtain the required insurance policies, was clearly directed to providing Centennial with cover of the same character under the Policy for its own interests in the performance of the Agreement by Advantage. 151Whenever Advantage was supplying labour for maintenance works at the Fassifern coal mine, Centennial, as the operator of the coal mine, was exposed to potential liability in negligence for injury suffered by employees, agents and subcontractors of Advantage. It is not improbable, as contended by GIO, that the parties intended that Centennial would receive cover of the same character under the Policy in respect of liabilities for its own negligence to employees, agents, and subcontractors of Advantage, such as Mr McDonald (an agent of Advantage). Orders 152For the reasons given above, the appeal must fail. I propose the following orders: (1)Appeal dismissed. (2)The appellant to pay the respondent's costs of the appeal. ********** 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. Decision last updated: 12 February 2014