Player v Australian Technology Park Sydney Limited

1. [1]

   By notice of motion filed 20 July 2015, the respondent to a subpoena to produce, issued by the first defendant on 11 December 2014, seeks an order that paragraph 2 of that subpoena be set aside pursuant to rule 33.4 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”).

2. [2]

   The plaintiff is Pamela Ann Player (“Ms Player”). The first defendant is Australian Technology Park Sydney Limited (“Australian Technology”). The second defendant is Arcadia Pacific Group Pty Ltd (“Arcadia”). The respondent to the subpoena to produce is AAI Limited trading as GIO (“GIO”).

3. [3]

   GIO relied upon two affidavits of Shona Wilde filed 17 July 2015 and 19 August 2015. Australian Technology relied on upon the affidavit of Leighton James Hawkes dated 12 August 2015.

4. [4]

   On 25 May 2010, Ms Player, while walking along a walkway situated at the premises of Australian Technology, slipped and fell suffering injury, loss and damage.

The pleading framework

1. [5]

   By amended statement of claim filed 11 September 2014, Ms Player alleges that on 25 May 2010, she fell due to a slippery and/or unsafe surface and that her injury, loss and damage was caused by the negligence of Australian Technology, as the occupier of the premises. Ms Player also alleges that Arcadia, being the cleaner of the premises, was negligent.

2. [6]

   By cross claim against Arcadia filed 29 August 2014, (“XC”) Australia Technology seeks indemnity, contribution and damages for breach of contract. Australian Technology alleges that it was an express term of its contract with Arcadia (“the cleaning contract”) that Arcadia would maintain public liability insurance to the limit of cover of at least $20,000,000 naming Australian Technology as an “additional insured” (clauses 32.1. and 32.3) and that it breached that term of the contract by failing to arrange an insurance policy which provided cover to Australian Technology. In other words, these are the issues in dispute in relation to the insurance policy.

3. [7]

   In its defence to the cross claim filed 22 May 2015, Arcadia denies any breach of contract. Although it admits that clauses 31, 32.1 and 32.3 were in the contract, it does not admit Australian Technology’s interpretation and/or references of those clauses.

The contractual provisions

1. [8]

   The cleaning contract is a formal instrument of agreement dated 1 July 2007 between Australian Technology Park Precinct Management Limited, as principal, and Arcadia Pacific Group Pty Limited, as contractor. The general conditions of the agreement relevantly provide:

The insurance policy

1. [9]

   Arcadia procured an insurance policy with GIO (“the insurance policy”). It is described as “AMP Trade Insurance”. The insurance policy for the calendar year 2010 has been supplied to Australian Technology.

2. [10]

   The policy schedule as at 25 May 2010 (the date of the accident), records that the public and products liability are insured. The schedule also records that Australian Technology is an interested party and that the limit of the policy is $20,000,000. The expression “interested party” is not defined in the policy. Australian Technology submitted that it is not clear whether or not it is an insured under the policy and if it is an insured, whether it is an insured as required by clause 32 of the cleaning contract.

3. [11]

   Clauses 32(1)(a) and (b) of the cleaning contract provide that the policies of insurance required to be taken out must name Australian Technology as additional insured, whereas, the schedule attached to the insurance policy identifies Australian Technology as an interested party. There is an ambiguity in the references to the use of the terms “additional insured” and “interested party” in the insurance policy. (My emphasis added).

Correspondence

1. [12]

   On 28 April 2014, Australian Technology’s solicitors wrote to GIO stating:

2. [13]

   On 18 June 2014, the liability claims advisor at Resilium replied:

3. [14]

   This letter identifies a reason for denying indemnity as being on the basis that the policy does not extend to cover Australian Technology for claims arising from its own negligence and/or arising from circumstances outside Arcadia’s contracted services pursuant to the cleaning contract.

The subpoena to produce

1. [15]

   On 11 December 2014, Australian Technology issued a subpoena to produce to GIO. Counsel for Australian Technology has now reframed paragraph (2) it relevantly reads:

UCPR 33.4 – set aside subpoena

1. [16]

   UCPR 33.4 relevantly reads:

2. [17]

   The test for determining whether a party is required to produce documents pursuant to a subpoena are set out in The City of Sydney v Streetscape Projects (Australia) Pty Ltd [2011] NSWSC 364, where Einstein J followed Beazley JA’s statement in Attorney-General (NSW) v Dylan Chidgey (2008) 182 A Crim R 536; [2008] NSWCCA 65 and held that documents must be sought for a legitimate forensic purpose. Einstein J stated at [8]:

Should the subpoena be set aside?

1. [18]

   Counsel for GIO submitted that the extent of the actual cover provided by the policy is irrelevant, provided that the cover is of sufficient breadth to comply with the contractual requirement. Counsel for GIO also submitted that issues as to the actual cover may have to be determined by a court in subsequent proceedings between Australian Technology and GIO. While I agree that the actual cover may have to be determined by the Court, I disagree that there will need to be subsequent proceedings. The current practice is that claims against an insurer (this I accept has not yet occurred here) are usually heard at the same time because they involve the same facts and circumstances. Ultimately, the hearing of these matters together reduces court time and saves costs.

2. [19]

   Counsel for GIO also submitted that for it to produce the documents sought in the schedule is oppressive. On 27 July 2015, Mr Aaron Taleb, of Hunt & Hunt solicitors, emailed GIO claims advisor Vicky Teichman enquiring as to the time and costs associated with GIO obtaining the underwriting file relevant to GIO’s policy. On 29 July 2015, Ms Teichman replied that “an approximate estimate of this cost to retrieve the documents if they are still in existence would run to hundreds of dollars and the time would run to months rather than weeks.” Although Ms Teichman was asked to provide a breakdown of hours and costs, she responded with an overall broadbrush approach. Since Ms Teichman made those statements, and after counsel for GIO prepared his submissions, counsel for Australian Technology narrowed the types of documents sought in paragraph (2) of the subpoena. Hence, I regard the statements of Mr Taleb as having little evidentiary weight.

3. [20]

   At this hearing, the parties were given an opportunity to discuss what documents should be produced in answer to the subpoena with a view to further reducing the number of documents being sought. The discussions were not fruitful.

4. [21]

   Counsel for Australian Technology submitted that it is not plain from the policy and the schedule whether or not Arcadia is an insured under the policy and if so, in what circumstances. The expression “interested party” is not defined. It, he says, is not a term of art and is open to interpretation.

5. [22]

   Counsel for GIO submitted that the meaning of “interested persons”, as referred to in the insurance policy, is one for legal argument, not for the production of further documents. According to GIO, whether or not the appropriate policy has been obtained is determined by looking at the policy and the schedule, not by how the insurer interprets the policy.

6. [23]

   It is common ground that Australian Technology has made a claim on the insurance policy which had been declined. Counsel for GIO submitted that the opinion of the insurer that the claims of Australian Technology fall outside the cover required by the contract, is irrelevant. GIO submitted that whether the insurer has declined and whether the declinature is proper, cannot affect whether or not Arcadia complied, at the time, with its contractual obligation to obtain the appropriate policy. In any event, according to counsel for GIO, it appears the declinature has been made on the basis that the claim is outside the contractual obligations of Arcadia to provide insurance. I agree.

7. [24]

   I also agree that the interpretation of the insurance contract is to be determined by the Court examining the contract and schedule after hearing legal argument as to its proper construction. However, as previously stated, there is an ambiguity between the use of the terms “additional insured” and “interested parties”. Neither of those terms are defined in the insurance policy itself.

8. [25]

   Counsel for Australian Technology argued that it is trite that an insurer is under an obligation to issue a policy on the express terms of the parties’ contract: see Shepherd v National Mutual Life Association of Australasia Ltd & Bob Broadley Pty Ltd (1994) 8 ANZ Ins Cas 61-233 at 75-615 and Marsh & McLennan Pty Ltd v Stanyers Transport Pty Ltd [1994] 2 VR 232; (1993) 7 ANZ Ins Cas 61-203. Counsel for Australian Technology says that likewise, it is trite that the purpose of an insurance policy document is to assemble, set out and record the intentions of the parties. Australian Technology says that there will be instances where some matters have been expressed orally and/or in writing during negotiations between the parties; and that some of the terms of the insurance policy may be, through the incorporation of other documents by reference to those other documents, in the insurance policy.

9. [26]

   Australian Technology referred to Electricity Generation Corp v Woodside Energy Ltd; Woodside Energy Ltd v Electricity Generation Corp (2014) 251 CLR 640; [2014] HCA 7 where French CJ, Hayne, Crennan, Kiefel and Gageler JJ said at [35]:

10. [27]

    According to counsel for Australian Technology, the documents sought by the subpoena may shed light on whether or not Arcadia arranged for Australian Technology to be an insured under the policy (and if so on what terms). Therefore, he submitted that the documents are relevant to determining whether or not Arcadia breached the indemnity clause (32) of the cleaning contract.

11. [28]

    It is my view that the documents sought are relevant because they may objectively explain what was intended by the use of the terms “additional insured” and “interested party”. For example, there may have been discussion about the use of the terms in correspondence and proposal forms.

12. [29]

    The subpoena is not seriously and unfairly burdensome or prejudicial. The cost of producing the documents was originally expected to run into several hundreds of dollars. This amount will now be less as the categories of documents sought have been narrowed. It is my view that producing the documents that are sought is not oppressive.

13. [30]

    The documents sought, however, must be limited to those that came into existence before 25 May 2010, as post contractual conduct cannot be relevant to the interpretation of a contract: Agricultural and Rural Finance Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57.

14. [31]

    The documents referred to in paragraph (2) of the schedule of the subpoena issued by Australian Technology addressed to AAI Ltd t/as GIO should be produced to the Court (except for those that came into existence post 25 May 2010). GIO’s notice of motion filed 20 July 2015 is dismissed.

15. [32]

    Costs are discretionary. Costs normally follow the event. The respondent is to pay the first defendant’s costs on an ordinary basis as agreed or assessed.