Swashplate v Liberty Mutual

FCA (16 January 2020)

Loss of cover for Aviation Transport Risk

Sometime between May-July 2018 and somewhere between Picayune, Mississippi USA and Queensland 2 helicopters were damaged in transit.

Each helicopter was inadequately chocked when first loaded into their separate containers at Picayune. When they were each damaged is not known but it was the inadequate chocking that led to the damage. When each aircraft was loaded into its container he wheels were not chocked in their final stowage position, as ought to have occurred, or insufficient strapping was employed.

The first helicopter was loaded 18 May Mississippi time. The second one was loaded the following day.

The insurance was arranged in Australia.

Indemnity for damage was granted for the helicopter loaded last.

Indemnity for damage to the helicopter loaded first was not granted and it became the subject matter of the litigation.

The value of each loss is not revealed in the judgement.

The Chief Justice decided the matter within the confines of the operation of the Insurance List in the Court. That List is designed for the speedy determination of discrete points which if decided assists the parties resolving the whole of the insurance dispute.

Landpower Australia v Penske Power Systems

[2019] NSWCA 161

Proportionate Liability, Contractual Liability, Assumed liability under contract

This case explored for the first time in an appellate Court, the operation of the proportionate liability provisions of the Civil Liability Act on contracts between alleged concurrent wrongdoers where the pursuing wrongdoer seeks to pass, by contractual indemnity to the other wrongdoer, the first person’s proportion of liability to the plaintiff.

The plaintiffs, Northcott had a poorly performing harvester and sued Landpower with whom they had a contract covering the machines performance.

Landpower subcontracted its services to Penske Power.

Landpower’s defence included the proportionate liability of various people including Penske on the basis of its negligent performance of its services. Landpower concurrently alleged that if Penske had been negligent in breach of contract but not liable to Northcott, it, Penske would still be liable to Landpower for breach of contract and also liable to indemnify for the whole of its, Landpower’s, liability to Northcott.

Landpower’s cross claim also included a claim for concurrent tort liability pursuant to the provisions of the Law Reform (Miscellaneous Provisions) Act 1946.

Northcott did not join any of the alleged concurrent wrongdoers as defendants.

Penske applied to have the cross claim against it dismissed on the basis that the whole of its content was inconsistent with the proportionate liability provisions under the Civil Liability Act.

The matter came to the Court of Appeal following a successful interlocutory application by Penske that the cross claim be struck out.

At the interlocutory hearing. Landpower conceded that its cross claim under the 1946 legislation was futile.

The Court of Appeal found it was wrongful to strike out the cross claim in so far as it related to the right of Landpower to pursue the contractual indemnity.

The matter will be returned to the lower Court.

If the matter progresses to trial and Landpower is liable to Northcott the lower Court will have to determine if Penske and Landpower are concurrent wrongdoers and if so whether Landpower’s cross claim based on the contractual indemnity is successful.

In granting Landpower’s appeal against the summary dismissal of the Cross Claim the Court of Appeal was unanimous. It considered the Civil Liability Act, as a whole, particularly section 3A, not merely the provisions covering proportionate liability.

Section 3A preserves the right of contractual parties to make express provision in relation to their rights obligations and liabilities including the ousting under the contract between Landpower and Penske of the provisions of proportionate liability.

If it was ultimately found that Penske was not a wrongdoer to Northcott but still in breach of its contract with Landpower, the proportionate liability provisions would not be relevant and the matter between Landpower and Penske would be decided solely by reference to the contract between them.

What the case did not include was whether there may be insurance implications for insureds in the position of Penske who may not be a concurrent wrongdoer to Northcott but contractually liable to indemnify Landpower if it was liable to Northcott.

While some liability policies, particularly PI policies, override the common assumed liability exclusion where an insured has contracted out of the operation of proportionate liability, where a liability policy has no express provision to that effect an insured may be exposed to a Penske-type risk that may not be insured due to a contractual indemnity exclusion.

However, if while Penske may not be a concurrent wrongdoer to Northcott, but in negligent breach of contract to Landpower, the assumed liability exclusion would be unlikely to be in play.

Argo Management Agency v. Al Kammessy

[2018] NSWCA 176 (15 August 2018)

Liability of Shopping Centre Cleaner

Contract cleaners (and shopping centre operators) are not guarantors that all risk hazards will be removed before they are encountered by a shopping centre patron.

The obligation is to exercise reasonable care and while a contract cleaner may be in breach of a cleaning agreement by not carrying out circulations as per the time limits in the contract, the contract cleaner may not be liable to a third party solely due to its failure to achieve circulations as per the cleaning contract.

Facts

Al Kammessy slipped on a wet portion of the floor outside Woolworths at Westfield Liverpool.

The wetness was clear liquid.

His evidence was that his clothes, legs and hands were wet as a result of the fall.

While the fall was captured on CCTV, the fall was in the background, not the foreground, limiting the usefulness of the CCTV as evidence of whether the cleaner looked around carefully. The CCTV did not capture the wetness on the floor before or after the fall.

A contract cleaner had done two circulations in the period 9 minutes prior to the accident, neither of which alerted the relevant cleaner to the existence of wetness on the floor.

At trial, Al Kamessy accepted that the first cleaner had acted entirely reasonably in her activities in the vicinity of the location of the fall. One suspects that concession was made because it was more likely that the wetness was not present at that time. The effect of the concession meant that if the wetness was there Al Kammessy did not consider the cleaner was negligent in not noticing it.

Nothing on the CCTV assisted in showing if there was a reason for the wetness.

It was accepted at trial and on appeal that the most reliable inference was that the wetness came into existence between the two circulations by the cleaner, meaning that the wetness was present when the second cleaner walked by approximately 24 seconds prior to the accident.

The Trial Judge concluded (and this was the epicentre of the appeal) that the area of wetness prior to the fall was approximately one metre in one direction (i.e. a large area not able to be missed by a cleaner acting reasonably).

It was that finding which allowed the Trial Judge to find the second cleaner had not acted reasonably in not detecting it.

While the shopping centre operator was sued, it settled the claim against it on terms which were not disclosed.

We assume that the terms were probably modest, having regard to the engagement of the contract cleaner for the purpose of discharging the owner’s responsibility to keep the floor safe for patrons.

Appeal

The appeal Court was unanimous in finding that the Trial Judge erred in concluding that the area of wetness prior to the accident was in the order of one metre in one direction.

The appeal Court was split on the extent of the wetness and whether the omission by the second cleaner to discover it, was a product of negligence.

By process of reasoning based on probabilities the appeal Judges concluded that the wetness was present when the second cleaner went by a short period prior to the accident.

The amount at stake was $476,736, plus costs.

While the trial Judge attached no relevance in his reasoning, to the extent of wetness which Al Kamessy described, the appeal Judge in the minority, considered that that evidence led him to conclude that the wetness must have been sufficiently extensive for a cleaner acting reasonably, to have discovered it.

The majority disagreed.

The majority in the Court of Appeal, considered that the totality of the evidence, including the absence of reaction by patrons, by reference to the CCTV, meant that the patch of wetness, was no more than a very small area.

There was some unchallenged expert evidence that a very small area of wetness, of a substance like water, would be very difficult to detect by a cleaner, specifically charged with the obligation of finding such things.

Had there been some evidence that a careful cleaner may have detected a very small area of clear wetness on a terrazzo floor, the cleaner’s appeal would probably have failed.

There was an express indication by the appeal Judges that a cleaner, and by inference, an owner were not guarantors of pedestrian safety. Their obligation was to act reasonably.

Take Out

Like all cases, they are to be judged based on their own facts, evidence and findings, touching upon whether a shopping centre owner, or cleaner, is vulnerable to liability.

Appeals are also to be considered on their individual merits, having regard to the evidence at trial, the way the case was put at trial and, the judicial findings being reviewed.

However, while the statement that the contract cleaner, and by inference, the centre owner, are not the guarantors of safety risks, it is heartening to see that repeated at the appellate level.

At a forensic level, it does seem that inadequate early attention may have been given to ascertaining, by the claimant, the likely extent of the wetness on which they slipped when that feature was likely to be an important forensic feature at the trial.

It reinforces the appropriateness of not only early investigations, but early investigations which are informed at a forensic level.