Toomey v. Scolaro's Concrete
DMC Category Rating: Developed
Mr Toomey suffered injuries following a fall from a balustrade rail in an apartment complex owned by Davidson Hughes Pty Ltd (DH). Hudson Conway Management Ltd (HCML) was appointed Project Manager during the construction of the complex. HCML and DH were both wholly owned subsidiaries of Hudson Conway Ltd (HC). The balustrade over which Mr Toomey fell did not comply with minimum height regulations.
Having ruled in favour of Mr Toomey on 17 August 2001, the Court was then asked to consider whether or not HCML was entitled to indemnity under a public liability policy issued by RSA. The policy defined Policyholder as HC and all subsidiary companies. The Business of the policy included the:
"ownership or occupation of, the carrying out of maintenance, alterations or additions to, or the demolition of the policyholder’s premises to which the policy applies".
The Court held that since HCML was not an owner or occupier of the premises, it was not entitled to cover under the policy. In so doing, the Court noted that the separate corporate personality of the companies cannot be:
"ignored so that ownership or occupation of property by one company can provide the basis for coverage by another in circumstances where coverage is dependent on ownership or occupation".
While he did not need to, given his findings in relation to the operation of the policy, Eames J went on to consider whether the policy’s professional duty exclusion clause would apply in the circumstances. The policy provided that the insurer shall not be liable for "claims arising out of any breach of duty owed in a professional capacity..."
As noted, HCML was Project Manager for the apartment complex in
which Mr Toomey suffered injury. HCML employed a Mr Jones to oversee various
aspects of the construction. Mr Jones, a carpenter by trade, was described as
"the lowest in the pecking order of HCML, working on the site as project
manager". His duties were to ensure that the builder was doing what he had
been contracted to do and was engaging appropriate numbers of sub-contractors.
After reviewing the main authorities dealing with this issue,
Eames J went on to hold that the question must be answered having regard to
"the totality of the circumstances". Where the policy provides cover
for breach of professional duty, the term will be given a wide reading so that a
range of activities that may not strictly be regarded as professional will fall
within the scope of the policy. On the other hand, in the case of a public
liability policy that excludes claims arising out of a breach of professional
duty, the term will be given a narrow reading, in accordance with the contra
Interestingly, the judge noted that it would be appropriate to
give the term an identical meaning where the insured held both a public
liability policy and a professional indemnity policy issued by the same insurer.
The appeal will be heard in February 2003.
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