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  4. Corestaff NT Pty Ltd v Insurance Australia Ltd - [2021] QSC 195

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Corestaff NT Pty Ltd v Insurance Australia Ltd[2021] QSC 195

Corestaff NT Pty Ltd v Insurance Australia Ltd[2021] QSC 195

SUPREME COURT OF QUEENSLAND

CITATION:

Corestaff NT Pty Ltd v Insurance Australia Ltd [2021] QSC 195

PARTIES:

CORESTAFF NT PTY LTD

ACN 129 495 263

(applicant)

v

INSURANCE AUSTRALIA LIMITED

ABN 11 000 016 722

(respondent)

FILE NO/S:

1369 of 2021

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

10 August 2021

DELIVERED AT:

Brisbane

HEARING DATE:

21 May 2021

JUDGE:

Williams J

ORDER:

  1. 1.The parties are directed to confer and provide to Chambers draft orders and brief written submissions as to the appropriate relief in light of these reasons and costs within 14 days.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – EXEMPTION CLAUSES – where proceedings have been commenced in the Federal Court against the applicant for damages for breach of contract and/or an order for compensation pursuant to section 236 of the Australian Consumer Law 2010 (Cth) (ACL) for misleading and deceptive conduct – where the applicant seeks declarations in respect of the proper construction of a policy of insurance which was issued by the respondent and held by the applicant – where the parties are in dispute about the proper construction of clauses 7.9(a) and (c) of the Policy – where the applicant contends that the alleged contraventions of ss 18 and/or 31 of the ACL in the Federal Court proceedings are covered by a policy of insurance issued by the respondent and held by the applicant – where the respondent contends that the ACL claims are excluded under clause 7.9(a) and/or clause 7.9(c) of the Policy – whether coverage for the ACL claims is excluded by clause 7.9(a) and/or clause 7.9(c) of the Policy

Australian Consumer Law 2010 (Cth), s 18, s 31, s 236

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37, considered

Onley v Catlin Syndicate Ltd (2018) 360 ALR 92; [2018] FCAFC 119, considered

QBE Insurance (Australia) Ltd v SLE Worldwide Australia Pty Ltd [2005] NSWSC 776, considered

Samways v WorkCover Queensland & Ors [2010] QSC 127, considered

Vero Insurance Ltd v Witherow [2004] VSC 272, considered

Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17, cited

Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561; [2016] NSWCA 370, cited

COUNSEL:

R Bain QC with J Hastie for the applicant

R Douglas QC for the respondent

SOLICITORS:

HWL Ebsworth for the applicant

Thynne & Macartney Solicitors for the respondent
  1. [1]
    The applicant commenced proceedings seeking declarations in respect of the proper construction of a policy of insurance which was issued by the respondent and held by the applicant for the period between 30 June 2018 and 30 June 2019 (Policy).
  2. [2]
    The parties are in dispute about the proper construction of clauses 7.9(a) and (c) of the Policy.   There is no factual dispute between the parties.
  3. [3]
    The parties agree that the Policy, exhibited at VJC-1 and VJC-2 of the affidavit of Victoria Jennifer Chalmers sworn 4 February 2021, is the relevant insurance policy.
  4. [4]
    Proceedings have been commenced in the Federal Court against the applicant (Corestaff), namely:
    1. (a)
      Alois Jack and Others v Corestaff NT Pty Ltd NSD 2162 of 2018 (Jack Class Action); and
    2. (b)
      Tami Kunjil v Corestaff NT Pty Ltd NSD 2024 of 2018 (Kunjil Action).
  5. [5]
    The applicant contends that the alleged contraventions of ss 18 and/or 31 of the Australian Consumer Law in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL) in the Jack Class Action and the Kunjil Action are covered by the Policy.
  6. [6]
    The respondent contends that the ACL claims are excluded under clause 7.9(a) and/or clause 7.9(c) of the Policy.
  7. [7]
    The parties agree that the breach of contract claim in the Jack Class Action is not covered by the Policy.[1]
  8. [8]
    Further, the parties agree that the correct approach to this application is that this Court consider the ACL claims as set out in the Originating Application and Amended Statement of Claim in the Federal Court proceedings on the basis that the claims can be made out.
  9. [9]
    Submissions were made in respect of the Jack Class Action, as both proceedings are materially the same.  The Kunjil Action has been stayed until the outcome of the Jack Class Action. 

Jack Class Action – Federal Court

  1. [10]
    The Originating Application in the Jack Class Action claims:
    1. (a)
      An order for compensation pursuant to s 236(1) of the ACL;
    2. (b)
      Damages for breach of contract; and
    3. (c)
      Interest and costs.
  2. [11]
    The proceedings are brought on behalf of Mr Jack for himself and as a representative party under Part IVA of the Federal Court of Australia Act 1976 (Cth).  The group members are described in the Originating Application as:

“The group members to whom the representative part of this proceeding relates (as explained in Part A and pleaded in Part B of the accompanying statement of claim) are all persons who:

  1. (a)
    received an Offer Letter from the respondent in or about 2011 and 2012;
  1. (b)
    received a Termination Letter from the respondent on or after 23 November 2012; and
  1. (c)
    are alleged to have suffered loss and damage as a result of the conduct of the respondent pleaded in the statement of claim.”
  1. [12]
    The schedule to the Originating Application names the individuals who are the second to the twentieth applicants.
  2. [13]
    Further, the Originating Application identifies the questions common to the claims of the group members as follows:

“The questions of law or fact common to the claims of the group members are:

  1. 1.Whether the respondent had reasonable grounds for making the statements that it did in each ‘Offer Letter’ (as defined in the accompanying statement of claim).
  2. 2.Whether the respondent contravened ss 18 and/or 31 of the ACL (including having regard to s 4 of the ACL which is relied upon) by making what is pleaded in the accompanying statement of claim as the:
    1. (a)
      Employment Representation;
    2. (b)
      Arrangements in Place Representation; and/or
    3. (c)
      Reasonable Grounds Representations.
  3. 3.Whether an Offer Letter, once accepted, constituted the terms of a binding contract.
  4. 4.Whether the respondent caused loss or damage for the purposes of s 236(1) of the ACL by issuing each ‘Termination Letter’ (as defined in the accompanying statement of claim).
  5. 5.Whether the respondent acted in breach of contract by issuing each Termination Letter.
  6. 6.The correct measure of any loss and damage payable.”
  1. [14]
    The Amended Statement of Claim[2] is structured into Parts A, B and C.  Part A is the introductory section (paragraphs one to six).  Part B contains the pleading in respect of the representative action being both misleading or deceptive conduct and also breach of contract (paragraphs seven to 42).  Part C sets out individual contract claims for each of the applicants, other than the first applicant (paragraphs 43 to 48).
  2. [15]
    For the purposes of the current application it is only necessary to consider the claim under the ACL.  However, given the way the pleading is structured, the claim as pleaded in Part B is the relevant claim to be considered.  The loss claimed in paragraph 42 is claimed as the “loss and damage by and resulting from the contraventions and breach of contract (or any one or combination of them) pleaded in this Part B”.  The calculation of the loss is then particularised as either “for the ACL contraventions” or “for breach of contract”.  The loss claimed will be further considered below.
  3. [16]
    Paragraph nine of the Amended Statement of Claim pleads that Corestaff was incorporated in Australia, carried on business in Australia and carried on a “labour on-hire” business whereby:
  1. “(i)
    the respondent hired workers from overseas for particular occupations in Australia;
  2. (ii)
    the respondent arranged for those workers to obtain temporary work visas in Australia and sponsored their visas as provided for in Australian migration law; and
  3. (iii)
    the workers would then be ‘on-hired’ by the respondent to its client organisations in return for a fee.”
  1. [17]
    On or about 4 January 2012 it is alleged the respondent sent an Offer Letter to the first applicant in the course of and for the purposes of the respondent’s business.  This was a standard form letter which was sent to each applicant.[3]
  2. [18]
    The first applicant resided in Papua New Guinea and was employed as a metal fabricator by a mining company.[4]
  3. [19]
    The respondent’s Offer Letter to the first applicant:[5]
  1. “(a)
    offered the first applicant ‘a three year full time employment contract in the position of Metal Fabricator ANZCO occupation code 322311 with Corestaff NT Pty Ltd (Corestaff) in Australia’;
  2. (b)
    stated that the first applicant ‘will be working on a mine site in the state of Western Australia’, which location ‘may change’ depending on the respondent’s client’s requirements;
  3. (c)
    stated that first applicant’s ‘base rate of pay is AUD 115000 per annum’;
  4. (d)
    stated that the first applicant would receive 9%  superannuation ‘payable to your nominated Australian superannuation fund’;
  5. (e)
    stated that, subject to ‘to the works site industrial instrument of the Client, the ordinary hours of work shall be 38 hours a week’;
  6. (f)
    invited the first applicant to ‘[p]lease complete the acceptance below and return the signed copy of the letter to our office within fourteen days’; and
  7. (g)
    otherwise is relied on and incorporated in full.”
  1. [20]
    Three separate representations are pleaded as arising from the Offer Letter.[6]  The representations are as follows:
    1. (a)
      Employment Representation (Amended Statement of Claim at [13(a)(i) to (iv)]):  the respondent impliedly represented that if the first applicant countersigned the Offer Letter and returned it within 14 days then the first applicant would be employed on the terms of the Offer Letter.
    2. (b)
      Arrangements in Place Representation (Amended Statement of Claim at [13(b)]: the respondent impliedly represented that the respondent had and would continue to have arrangements in place which were sufficient to meet a contractual obligation to the first applicant of the kind pleaded as the terms set out in the Offer Letter.
    3. (c)
      Reasonable Grounds Representations (Amended Statement of Claim at [13(c)]):  the respondent impliedly represented that the respondent had reasonable grounds to make the Employment Representation, the Arrangements in Place Representation and/or the offer and other statements which the respondent made in the Offer Letter (in particular as pleaded in [12(a) to (e)].
  2. [21]
    Each of the Employment Representation and the Arrangements in Place Representation (to the extent of it continuing to have arrangements in place) were representations with respect to a future matter for the purposes of s 4 of the ACL.[7]
  3. [22]
    It is then alleged that at the time of the Offer Letter the respondent did not have arrangements in place sufficient to meet a contractual obligation of the kind pleaded and accordingly did not have reasonable grounds for making either the Employment Representation or the Arrangements in Place Representation and further or alternatively, did not have reasonable grounds for making the Reasonable Grounds Representations.[8]
  4. [23]
    The Amended Statement of Claim then draws these aspects together as follows:
    1. (a)
      By making the Employment Representation, the Arrangements in Place Representation and/or the Reasonable Grounds Representations, the respondent engaged in conduct in trade or commerce within the meaning of s 18 of the ACL.[9]
    2. (b)
      Each of the Employment Representation, the Arrangements in Place Representation and the Reasonable Grounds Representations were misleading or deceptive or likely to mislead or deceive.[10]
    3. (c)
      By making each of the Employment Representation, the Arrangements in Place Representation and/or the Reasonable Grounds Representations, the respondent engaged in conduct in contravention of s 18 of the ACL.[11]
  5. [24]
    The Amended Statement of Claim under the heading “Misleading conduct relating to employment” pleads the “Further, or in the alternative” claim arising out of the alleged contraventions of s 31 of the ACL.
  6. [25]
    The pleading sets out that in making each of the Employment Representation, the Arrangements in Place Representation and the Reasonable Grounds Representations Corestaff engaged in conduct in relation to employment:
    1. (a)
      as specified in sub-paragraphs (a), (b) and (c);[12] and/or
    2. (b)
      that was to be, or may be, offered by the respondent within the meaning of s 31 of the ACL.[13]
  7. [26]
    Sub-paragraphs (a), (b) and (c) of [23A], [24A] and [25A] of the Amended Statement of Claim state as follows:
  1. “(a)
    That is pleaded in paragraph 13(a)(i)–(v) above;
  2. (b)
    That was to be, or may be, offered by the respondent at the time the Offer Letter was countersigned by the applicant; and
  3. (c)
    That would thereafter be offered by the respondent to the first applicant.”
  1. [27]
    Next the Amended Statement of Claim provides that:
    1. (a)
      at the time of the Employment Representation, the Arrangements in Place Representation and the Reasonable Grounds Representations, the first applicant was seeking employment within the meaning of s 31 of the ACL.[14]
    2. (b)
      On and from the time that each respective representation was made, the Employment Representation, the Arrangements in Place Representation and the Reasonable Grounds Representations were misleading as to “the availability, nature and terms or conditions of the employment that was to be or may be offered by the respondent.”[15]
  2. [28]
    It is alleged that Corestaff engaged in conduct in contravention of s 31 of the ACL by reason of:
    1. (a)
      Paragraphs 14 and 28 in making the Employment Representation.
    2. (b)
      Paragraphs 14, 14A(a) and 29 in making the Arrangements in Place Representation.
    3. (c)
      Paragraphs 14, 14A(b) and 30 in making the Reasonable Grounds Representations.[16]
  3. [29]
    In respect of reliance on the pleaded representations, the Amended Statement of Claim  pleads:

“in 2012:

  1. (d)
    on or about 25 January 2012, the first applicant countersigned the Offer Letter under the words, inter alia, “Acknowledged and accepted”, and returned it to the respondent;
  2. (e)
    the first applicant resigned from what was then his employment in PNG;
  3. (f)
    the first applicant travelled from PNG to Perth, Western Australia to commence his employment with the respondent; and
  4. (g)
    the first applicant incurred expenses in travelling from PNG to Australia.”[17]
  1. [30]
    Paragraph 35 of the Amended Statement of Claim states as follows:

“The respondent’s Offer Letter, once accepted by the first applicant, constituted a contract between the first applicant and the respondent on the terms and conditions of that letter.”

  1. [31]
    It is also pleaded that between July and 23 November 2012 the first applicant performed work for Corestaff, for which Corestaff or an associated entity paid to the first applicant “expenses, wages and entitlements.[18]  This work differed from what was detailed in the Offer Letter.[19]
  2. [32]
    On or about 23 November 2012 Corestaff issued a Termination Letter to the first applicant.[20]  From and after the time of the Termination Letter it is alleged:
  1. “(a)
    the respondent did not employ the first applicant in any capacity;
  2. (b)
    The respondent made no payments to the first applicant in respect of his employment entitlements; and
  3. (c)
    the respondent terminated the first applicant’s employment”.[21]
  1. [33]
    In or about December 2012 the first applicant obtained alternative employment.[22]
  2. [34]
    Paragraphs 40 and 41 plead matters relating to the alleged breach of the contract based on termination of the contract without any right to do so and/or failing to make payments in accordance with the contract and that the first respondent was ready, willing and able to perform the contract.  This is headed “Breach of Contract” and does not appear to be pleaded in respect of the ACL claim.
  3. [35]
    The last relevant section of the pleading is headed “Loss and damage”.  Paragraph 42 pleads loss and damage suffered “by and resulting from the contraventions and breach of contract (or any one or combination of them)”.  The particulars divide the loss into the ACL contraventions and breach of contract.
  4. [36]
    In respect of the calculation of the loss suffered for the ACL contraventions the particulars state:

“the difference between, on the one hand, the income the first applicant would have earnt in employment in PNG for the three years identified in the Offer Letter and, on the other hand, income actually received from the respondent and any other employer during that period, plus compensatory damages for the cost of, and the disappointment and injury to feelings occasioned by, relocating to Australia under false pretences and being left in Australia suddenly and unexpectedly without employment”.[23]

  1. [37]
    By way of contrast, in respect of the breach of contract claim, the loss is calculated on the basis of the total sum of the outstanding benefits under the parties’ contract for the remainder of the three years.[24]

Terms of the Policy

  1. [38]
    The Policy is a professional indemnity insurance policy which is constituted by general terms and conditions in a standard form and then a quotation schedule which contains the specific details of the insurance contract.
  2. [39]
    The quotation schedule includes the following:
    1. (a)
      the “Policyholder” is a number of companies including the applicant, Corestaff. 
    2. (b)
      the Policy covers professional services “Personnel/Recruitment Consultancy”.
    3. (c)
      “Employment Practices Liability” is “Not Insured”.
  3. [40]
    Section 1 of the Policy sets out terms in respect of interpretation of the Policy.  This includes:
    1. (a)
      Words in bold and with a capital letter are defined terms and the meanings are found in Section 9.[25]
    2. (b)
      Except if the context requires otherwise, if a word or phrase is defined, its other grammatical forms have a corresponding meaning.[26]
    3. (c)
      Paragraph headings are for reference only and do not form part of the Policy for interpretation purposes.[27]
  4. [41]
    Section 3 of the Policy contains the terms in respect of cover under the Policy.  Clause 3.1 relevantly states:

“We Cover the Insured up to the Policy Limit … in respect of Claims for Civil Liability to any third party incurred in the provision of the Professional Services …”

  1. [42]
    The relevant defined terms from Section 9 include:
    1. (a)
      “Civil Liability”:

“The compensatory damages, costs and expenses in respect of a Claim which includes the legal costs of the person making the Claim, for which an Insured becomes liable.”

  1. (b)
    “Claim”:

“The receipt by an Insured of:

  1. (a)
    any originating process (in a legal proceeding or arbitration), cross claim or counter claim or third party or similar notice claiming compensation against an Insured; or
  2. (b)
    any written or verbal demand from a third party claiming compensation against an Insured.”
  1. (c)
    “Cover”:

“Indemnity and indemnity shall not include any component of profit.”

  1. (d)
    “Insured”:

“Each of the following, individually and jointly:

  1. (a)
    the Policyholder;
  2. (b)
    any Subsidiary;
  3. (c)
    any past and/or present Employee, but only in his or her capacity as such.”
  1. (e)
    “Professional Services”:

“The provision by or on behalf of the Policyholder of the ‘Professional Services’ stated in the Schedule.

  1. [43]
    Section 4 contains terms relating to certain “extensions” of the cover under the  Policy which do not increase the Policy Limit unless expressly stated otherwise.[28]
  2. [44]
    Relevantly, clause 4.19 states:

“Notwithstanding Section 7.11 of this Policy, We Cover the Insured on the basis specified in Section 3 of the Policy in respect of breaches of the misleading & deceptive conduct provisions of Part 2 Part Div 2 of the Australian Securities and Investments Commission Act 2001, the consumer protection provisions of the Competition and Consumer Act 2010 (Cwlth) and corresponding consumer protection provisions of New Zealand and Australian state and territories Fair Trading legislation and any antecedents to any of this legislation (but not for criminal liability in respect of any of these).”

  1. [45]
    Section 5 contains “optional extensions”.  This optional cover is in relation to “Cyber cover”, “Employment practices liability cover” and “Fidelity cover optional extension”.  As is stated in the quotation schedule, none of these options were insured.
  2. [46]
    Section 6 contains terms in respect of the policy limit.  No issue is relevant to this on the current application.
  3. [47]
    Section 7 contains terms dealing with what is not covered.  The introductory words state:

“We do not provide Cover for any of the following Claims or Covered Claims”.[29]

  1. [48]
    Clauses 7.1 to 7.18 set out various matters that are excluded from cover under the Policy.
  2. [49]
    The respondent has identified clauses 7.9(a) and (c) as relevant to the current application.  Clause 7.9 states:
  1. “(a)
    based upon, directly or indirectly arising from or attributable to the Policyholder’s liability as an employer; or
  2. (b)
    arising from or which involves bodily injury (including mental anguish or emotional distress), sickness, disease or death of any Employee, contractor or worker who is under the direction, control and/or supervision of the Insured or for whose workplace safety the Insured is responsible;
  3. (c)
    arising out of or in respect of actual or alleged unlawful discrimination (or other unlawful act, error or omission) by any Insured against any Employee or employment applicant; or
  4. (d)
    If an Insured is either an incorporated body or a director or officer of any incorporated body, arising from any act, error or omission of a director or officer of any incorporated body while acting in that capacity; or
  5. (e)
    arising from ownership or occupation (or alleged occupation) of land or buildings by an Insured; or
  6. (f)
    arising from or in respect of the ownership, control over, operation or use of any aircraft, marine craft or motor vehicles of any kind”.
  1. [50]
    The subject matter dealt with in clause 7.9 is quite varied between the various subparagraphs.  While the heading to clause 7.9 refers to them by subject matter,[30] this is not to be used in the interpretation of the text.[31]
  2. [51]
    The exclusion in clause 7.11 is not relied upon by the respondent but may be relevant to the construction exercise as it is mentioned in clause 4.19.   Clause 7.11 states:

“arising from:

  1. (a)
    acts, errors, omissions by an Insured, with the intention of causing a third party loss, damage or injury, or with reckless disregard for the potential consequences of any acts, errors or omissions; or
  2. (b)
    any wilful breach of any statute, contract or duty by an Insured.”
  1. [52]
    Section 8 contains other general terms and conditions.
  2. [53]
    Relevantly, clause 8.19 of the Policy states:

“This Policy is governed by the law of the Territory or State where the Policy was issued, which is stated in the Schedule.  The courts of that place have exclusive jurisdiction in any dispute about or under this Policy.”

  1. [54]
    The schedule states that the “Place of Issue” is Melbourne, Victoria.
  2. [55]
    Neither party has challenged the jurisdiction of the Supreme Court of Queensland based on the governing law clause.  These reasons proceed on the basis that this Court does have jurisdiction to determine the application before it.
  3. [56]
    The submissions on behalf of the parties also make reference to clause 5.2 of the Policy that deals with “Employment practices liability cover”.  While this cover was not taken out it is referred to as part of the construction exercise.
  4. [57]
    Clause 5.2.1 states:

“Notwithstanding Section 7.9 a), b) or c), We Cover the Insured in respect of an Employment Practice Claim …”

  1. [58]
    Clause 5.2.2 states that certain claims are not covered.
  2. [59]
    Clause 5.2.3 sets out the relevant definitions applicable in respect of the “Employment Practices Liability optional extension”.
  3. [60]
    An “Employment Practice Claim” is dealt with in clause 5.2.3(b) as follows:

“i.  Receipt by the Policyholder of any written demand for money or damages or non-pecuniary relief alleging an Employment Practice Breach relating to the employment of an Employee and seeking relief including, but not limited to, reinstatement, re-employment or any other injunctive relief; or

ii.  Any writ, summons, application or other originating legal (criminal, civil or otherwise) or arbitral proceedings, cross claim or counter-claim alleging an Employment Practice Breach relating to the employment of an Employee; …”

  1. [61]
    An “Employment Practice Breach” is dealt with in clause 5.2.3(c) which relevantly states:

“Any actual or alleged wrongful or unfair employment-related:

i.  denial of natural justice;

ii.  discipline, discharge, dismissal or termination of employment;

iii.  misrepresentation;

iv.  breach of any oral, written or implied employment contract;

v.  unlawful discrimination (including but not limited to, discrimination on the basis of race, colour, religion, age, sex, disability, pregnancy, marital status, political affiliations or ideology, sexual orientation or preference).

vi.  harassment;

vii.  failure to employ;

viii.  failure to promote;

ix.  failure to grant tenure;

x.  deprivation of career opportunity;

xi.  demotion;

xii.  defamation;

xiii.  invasion of privacy;

xiv.  bullying;

xv.  infliction of emotional distress,

committed or attempted by any Insured on or after the ‘Retroactive Date’ as stated in the Schedule.”

  1. [62]
    Clause 5.2.3(d) states in respect of the loss covered:

“i.  The amount which a Policyholder becomes legally obliged to pay on account of a Covered Employment Practice Claim including:

  1. 1)Defence Costs;
  2. 2)awards of damages;
  3. 3)judgments;
  4. 4)settlements to which We have consented;
  5. 5)awards of claimant’s legal costs;
  6. 6)awards of interest;
  7. 7)order to pay compensation resulting from contravention of any statute;
  8. 8)punitive, exemplary, multiplied or aggravated damages that a Policyholder is ordered to pay by a Court of competent jurisdiction in which the Employment Practice Claim is determined …”
  1. [63]
    Pursuant to sub-clause (ii) certain losses are identified as not being included.

Issues for consideration

  1. [64]
    The issues to be considered are:
    1. (a)
      What are the relevant principles of construction?
    2. (b)
      What is the correct construction of clause 7.9(a) of the Policy?
    3. (c)
      What is the correct construction of clause 7.9(c) of the Policy?
    4. (d)
      In light of the correct construction of clause 7.9(a), is the ACL claim in the Jack Class Action excluded by the Policy?
    5. (e)
      In light of the correct construction of clause 7.9(c), is the ACL claim in the Jack Class Action excluded by the Policy?
  2. [65]
    The parties agreed at the hearing that further submissions should be made as to the appropriate relief once the Court has provided reasons in respect of the construction exercise.

Approach to construction

  1. [66]
    Both parties identify the relevant principles of construction, which are not in themselves contentious. 
  2. [67]
    The applicant identifies the relevant principles as including:
    1. (a)
      A policy of insurance is to be construed in accordance with the ordinary principles applicable to the construction of commercial agreements.[32]
    2. (b)
      As to the commercial purpose or objectives:
    1. (i)
      The High Court in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd described the approach as follows:[33]

“In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean.  That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract … Other principles are relevant in the construction of commercial contracts.  Unless a contrary intention is indicated in the contract, a court is entitled to approach the task of giving a commercial contract an interpretation on the assumption ‘that the parties … intended to produce a commercial result’.  Put another way, a commercial contract should be construed so as to avoid it ‘making commercial nonsense or working commercial inconvenience’.” (footnotes omitted)

  1. (ii)
    The commercial purpose or objectives are to be identified by reference to “… the genesis of the transaction, the background, the context [and] the market in which the parties are operating”.[34]
  2. (iii)
    In respect of policies of insurance, a commercial purpose or objective is the indemnification of an insured party against its liability to third-parties for its acts or omissions.[35]
  1. (c)
    The document must be construed as a whole,[36] and the words must be construed in the context in which they appear.[37]
  2. (d)
    Each word or part of the agreement should, to the extent possible, be given some work to do.[38]
  3. (e)
    The use of punctuation may inform the meaning of a particular provision, provided the Court is satisfied it has been used consciously and not haphazardly.[39]
  4. (f)
    An exclusion clause is to be interpreted in accordance with the general principles.[40]
  5. (g)
    Where the meaning of an exclusion clause in an insurance policy is ambiguous, it may be construed contra proferentum but that is a “last resort”.  That rule is only to be applied where:

“… after ascertaining the literal or grammatical meanings and evaluating them against the text, context and purpose of the contract, there is still real doubt …” as to its meaning.[41]

  1. [68]
    The respondent identifies some further principles that also assist in the construction of an insurance policy, including:
    1. (a)
      The insured bears the onus of invoking the primary cover afforded by an insurance policy together with any proviso to any exclusion to the cover, whilst the insurer bears the onus of invoking any such exclusion.[42]
    2. (b)
      The interpretation of the policy clauses in dispute is to be determined by construing each clause according to its natural and ordinary meaning, read in the light of the policy as a whole, giving direct weight to the context in which the clause appears, including the nature and object of the policy.[43]
    3. (c)
      To resolve any ambiguity the policy is to be read as a whole.[44]
    4. (d)
      In resolving ambiguities, a “reasonable construction” is preferred as representing the presumed intention of the parties.[45]
    5. (e)
      An insurance policy is subject to the contra proferentum rule, as it was proffered by the insurer.  This rule, however, is one of last resort and a principle of construction to remove ambiguity only where more rational approaches fail.[46]
    6. (f)
      In construing whether a claim falls within a policy exclusion, it is necessary to focus on the facts which give rise to the claim and not the form in which the claim is asserted.[47]
    7. (g)
      Further, it is relevant to have regard to the background against which the policy was entered into in determining where the claim fell within its terms.[48]
  2. [69]
    The respondent also refers to the principles outlined by the Full Federal Court constituted by Allsop CJ, Lee and Derrington JJ in Onley v Catlin Syndicate Ltd as underwriting member of Lloyd’s Syndicate.[49]  Bond J applied Onley in DMS Maritime Pty Limited v Royal and Sun Alliance Insurance Plc,[50] which was affirmed on appeal.[51]  The Full Federal Court in Onley relevantly summarised the “well-established principles concerning the construction of policies of insurance as commercial contracts” as follows:

“… Necessarily, a policy of insurance is assumed to be an agreement which the parties intend to produce a commercial result … as such, it ought to be given a businesslike interpretation being the construction which a reasonable business person would give to it … The contract is naturally enough interpreted, in a temporal sense, as at the date on which it was entered into … The Courts frequently have regard to the contextual framework in which a contract is formed, to the extent to which it is known by both parties, to assist in identifying its purpose and commercial objective … It goes without saying that a construction that avoids capricious, unreasonable, inconvenient or unjust consequences, is to be preferred where the words of the agreement permit.”  (case references omitted)

  1. [70]
    The position of the parties diverge as to the construction of clauses 7.9(a) and (c) in light of these principles.

Construction of the Policy

Applicant’s contentions

  1. [71]
    The applicant’s position is that:
    1. (a)
      the exclusion in clause 7.9(a) does not exclude coverage under the Policy for a claim made by an applicant for employment, as opposed to an employee, for misleading and deceptive conduct; and
    2. (b)
      the exclusion in clause 7.9(c) extends only to conduct which involves or concerns unlawful discrimination; it does not provide a broader exclusion for any conduct which is unlawful.
  2. [72]
    In respect of the construction of clause 7.9(a) the applicant contends:
    1. (a)
      The phrase “liability as an employer” requires a claim by an employee in respect of conduct which occurred at the time that the person was an employee.
    2. (b)
      A claim based on misleading conduct which occurred prior to becoming an employee (i.e. prior to the formation of an employer-employee relationship) cannot be regarded as giving rise to liability “as an employer”.
    3. (c)
      The applicant points to the definition of “employee” in clause 9.8 as support for the construction that it is necessary for the conduct which creates that liability to have occurred whilst the claimant was an employee.
    4. (d)
      Further, a claim based upon conduct which is directed towards a person who is an applicant for employment, but not an employee, cannot be characterized as a claim made by an employee against an employer, and cannot give rise to liability as an employer.
    5. (e)
      Clause 9.8 is found in the definitions section and provides in relation to “Employee” as follows:

“A natural person who is not a Principal, but who is or was, at the time the relevant act, error or omission giving rise to the Claim occurred, a person who:

  1. a)provided services to and was remunerated by the Policyholder for that service under a contract of service; or
  2. b)was or is deemed to be an employee or worker under the Superannuation Guarantee (Administration) Act 1992 (Cth), any workers compensation legislation in the relevant State or territory, or any other relevant legislation; or
  3. c)a volunteer worker, apprentice, trainee, work experience personnel or student,

and in respect of a), b) and c) above is or was at the time of the act, error or omission, under the Policyholder’s direction, control and supervision in the provision of Professional Services.” (emphasis added)

  1. (f)
    As a result of the definition of “employee”, clause 7.9(a) must concern a claim by an employee:  that is a claim by a person where they are providing services in exchange for remuneration at the time the act, error or omission giving rise to the claim occurred.
  2. (g)
    The Policy draws a distinction between an “employee” and an “applicant for employment”.  Clause 7.9(c) extends to a claim by an employee and to a claim by an employment applicant by the express words used.  The Policy could have easily included similar wording to expressly exclude liability for any claims by an applicant for employment, but it did not do so.
  3. (h)
    On the proper construction of clause 7.9(a), it is concerned with claims made against the Policyholder by employees in relation to acts, errors or omissions which occurred during that person’s employment.
  4. (i)
    Accordingly, misleading and deceptive conduct which occurs before the person becomes an employee is incapable of founding a claim caught by the exclusion in clause 7.9(a) of the Policy.
  5. (j)
    Further, it does not matter that a person, who was not an employee at the time the relevant conduct occurred, subsequently becomes an employee.  The relevant issue is the status of the person at the time the conduct upon which the claim is based occurred.
  6. (k)
    In the context of the Jack Class Action:
    1. It is irrelevant that the claimants subsequently entered into contracts of employment.  The relevant misleading and deceptive conduct occurred prior to the persons being employed.
    2. Whilst the loss was, in part, suffered by the claimants subsequently entering into a contract of employment with the Applicant,[52] any contravention of ss 18 and 31 of the ACL arose when the conduct occurred.  The claimant may have suffered loss by the subsequent act of entering into the employment contract, but that is separate to the misleading conduct giving rise to the claim.
  7. (l)
    Clause 7.9(a) does not operate to exclude coverage for a claim for misleading and deceptive conduct which concerns representations made to an applicant for employment.
  1. [73]
    In respect of the construction of clause 7.9(c) the applicant contends:
    1. (a)
      To construe clause 7.9(c) as extending to any conduct which is unlawful is to fail to pay sufficient regard to the internal structure of the clause. 
      1. The first words that appear in the clause are “unlawful discrimination”.  The phrase “or other unlawful act, error or omission” follows and also is contained within parentheses.
      2. It would be surprising and unnatural if the words within parentheses were intended to be broader than the phrase which precedes them.
      3. The typical function of parentheses is to set out an example or explanation of the words which exist outside the words within the parentheses, and not to add something new or of operative effect to the particular sentence.
      4. Had it been intended that the words within the parentheses were to significantly expand the operation of the clause, words could have been easily used to achieve that.  For example, structuring the clause to read “… any unlawful act, error or omission (including unlawful discrimination) …”.  This was not done but this is the effect contended for by the respondent.
      5. The phrase “unlawful discrimination” should be understood as governing the words which follow in the parentheses:  that is, it is the operative term which gives meaning to the balance of the clause.
      6. The work done by the words “unlawful act, error or omission” is to make it clear that liability for unlawful discrimination, whether that occurs positively or not, is excluded from coverage under the Policy.
    2. (b)
      To construe clause 7.9(c) in the way contended for by the respondent gives the words “unlawful discrimination” no work to perform and deprives the words of any meaningful effect. 
      1. The words “unlawful discrimination” would be rendered unnecessary as unlawful discrimination would already be included within the ambit of unlawful action.
      2. The parties cannot objectively have intended that outcome, particularly where the phrase appears first in the text of the clause.
    3. (c)
      The balance of the language in clause 7.9(c) sits “uncomfortably” with it applying to conduct other than that concerned with unlawful discrimination.
      1. The phrase “… by an Insured against an employee or employment applicant” (emphasis added) requires that the relevant act, error or omission must be “against” a particular employee or employment applicant.
      2. The term “against” accords with the concept of unlawful discrimination.
      3. The term “against” would not normally be used in respect of other conduct that would be included under the respondent’s construction.  For example, it would not normally be said that misleading or deceptive conduct, tortious conduct or breach of contract is an action “against” a particular person.
    4. (d)
      The respondent’s construction of clause 7.9(c) fails to pay sufficient regard to the context of the sub-clause.
      1. Clause 7.9 contains six sub-clauses, each with a separate and distinct subject and exclusion.
      2. A wide construction of clause 7.9(c) would be incongruous with the “carefully directed and confined operation of each of the other exclusions” within clause 7.9.
      3. A wide construction of clause 7.9(c) would leave clause 7.9(b) little work to do, as liability there would most likely also arise from an “unlawful act”.
    5. (e)
      “Unlawful” is not used anywhere else in the Policy except in conjunction with “discrimination”.
      1. Clause 5.2.3(c)(v) uses the word “unlawful” as part of the phrase “unlawful discrimination”.
      2. Had it been intended that “unlawful” had a meaning beyond being linked to discrimination, then the word may have been used at other places in the Policy where there is reference to conduct which could be described as an “unlawful act”, such as misleading and deceptive conduct or tortious conduct.  But that is not the case.
      3. The Policy refers to such conduct using other terms, including:
        1. Clause 4.18(a):  refers to conduct which is “dishonest, fraudulent, criminal or malicious”.
        2. Clause 5.2.3(c): refers to a breach of contract or a misrepresentation being “wrongful or unfair”.
        3. Clause 7.11:  refers to a ‘wilful breach of any statute, contract or duty”.
      4. None refer to conduct which is unlawful or acts which are unlawful.
    6. (f)
      It is proper to have regard to the language used in the relevant statutes in construing the Policy as the Policy was made in circumstances where those legislative regimes existed.  The legislative regimes therefore form part of the objective background and context.[53]
      1. The ACL uses “contravention” for example in respect of ss 18 and 31.
      2. The Commonwealth legislation uses “unlawful” to proscribe discrimination.[54]
      3. The Queensland legislation uses language of unlawfulness and “unlawful discrimination”, but also uses “prohibited”.[55]
    7. (g)
      On the proper construction of clause 7.9(c):
      1. the phrase “unlawful act, error or omission” is identification of an act, error or omission which concerns or involves discrimination; and
      2. a misleading conduct claim is not an unlawful act, error or omission for the purposes of clause 7.9(c) of the Policy, as such conduct is described otherwise in the language of the Policy.
    8. (h)
      The applicant’s construction of clause 7.9(c) best accords with the text, context and purpose of the clause.

Respondent’s contentions

  1. [74]
    The respondent contends that clauses 7.9(a) and (c) exclude from cover under the Policy, claims of the nature of the ACL claim in the Jack Class Action.
  2. [75]
    In respect of the construction of clause 7.9(a) the respondent contends:
    1. (a)
      The applicant’s construction of clause 7.9(a) is erroneous for three principal reasons:
      1. Liability for the contravention accrues at the time of, and only because of, the claimant’s employment being terminated or alternatively, at the earliest when the claimant became an employee.  The applicant was liable because it became and was the employer of the claimant.[56] 
      2. The term “employee” is not used in the clause:  the term used is “employer”.  The definition of “employee” is not applicable in any event as it relates to an act, error or omission of the “employee” for the purpose of vicarious liability cover under the Policy.
      3. The phrase “directly or indirectly arising from or attributable to” is wide language and forms the nexus to “liability as employer”.  The applicant’s construction does not give proper effect to the width of the phrase and the work it does in the clause.
    2. (b)
      The commercial intention of the parties was that the Policy did not provide cover for any liability of the applicant to its employees where the additional cover in clause 5 was not taken out.
    3. (c)
      The ACL claim in the Jack Class Action has a sufficient causal nexus with the applicant’s “liability as an employer” to be within the exclusion.
      1. The clause is not limited to contravening conduct during the term of employment.  It is broader.
      2. In accordance with the terms of the Policy, no civil liability existed until a cause of action accrued for damages.  A cause of action could only accrue if a claimant was employed by the applicant and subsequently terminated.  As a result, the applicant’s liability has a causal nexus with its “liability as an employer”.
      3. A mere contravention of ss 18 or 31 of the ACL did not vest a right of action in any claimant or a liability in the applicant.  The cause of action did not accrue unless and until the conduct (alleged to be misleading or deceptive) was relied upon and damage caused or suffered as a result.  The cause of action is under s 236 of the ACL, and that is the provision under which each claimant brings the claim against the applicant.
      4. The right or cause of action accrued upon termination of employment or, alternatively, at the earliest, acceptance of the applicant’s offer of employment.
      5. This is evidenced by the matters pleaded in the Amended Statement of Claim:  misleading conduct pleaded; reliance by accepting the offer of employment and resigning other employment and travelling to Australia to commence employment with the applicant pleaded; and damage caused by termination of employment pleaded.
      6. Mere contravention is insufficient to found liability, it only arises on later employment.
    4. (d)
      The definition of “employee” does not assist with the construction of clause 7.9(a).  The definition applies in respect of other purposes under the Policy, principally vicarious liability cover.
    5. (e)
      The relevant nexus is governed by the words a “Claim … based upon, directly or indirectly arising from or attributable to” liability as an employer.  The language used has great width, both cumulatively and individually.
    6. (f)
      The phrase “arising from or attributable to” has been considered by the courts, including as follows:
      1. Vero Insurance Ltd v Witherow:[57]

“There is a well-established line of authority to the effect that expressions such as “arising out of” in an arbitration clause or exclusive jurisdiction clause should not be construed narrowly … In Hi-Fert Pty Ltd v Kuikiang Maritime Carriers Inc Justice Tamberlin held that “arising from” is not materially different to “arising out of”.  I agree with that conclusion.” (footnotes omitted)

  1. (ii)
    QBE Insurance (Australia) Ltd v SLE Worldwide Australia Pty Ltd considered the phrase “liability arising from and in relation to the activities of the NRL at Stadium Australia” in an insurance context as follows:[58]

“When Ms Henderson fell on the slippery steps, it was not due to anything done, or omitted to be done, by the NRL except that had the NRL not organised and promoted the game, Miss Henderson would not have been at the stadium and exposed to the risk of the slippery steps.  It is in this context that the question must be answered whether SAM and Ogden’s liability to Miss Henderson arose from and was in relation to NRL’s activities.  The expression “arising from” or “arising out of” has been considered on a number of occasions in a context similar to the present.  The expression involves the notion of at least some causal or consequential relationship, although that may be indirect rather than proximate (Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500 at 505.)”

  1. (iii)
    Samways v WorkCover Queensland & Ors:[59]

“[71]  The interpretation of phrases such as ‘arising out of’ and ‘in connection with’ in different contexts, including compulsory third party insurance, does not determine its meaning in the present context.  However, guidance can be derived from authorities in which such phrases are used in comparable cases involving indemnity clauses.

The expression ‘arising out of’

[72]  The words ‘arising out of’ are wide.  The relevant relationship should not be remote, but one of substance albeit less than required by words such as ‘caused by’ or ‘as a result of’:  The phrase connotes a weak causal relationship:  However, more is required than the mere existence of connecting links:  The words require the existence of a causal or consequential relationship between, in this case, the use of the plant and the injury.” (footnotes omitted)

  1. (g)
    The phrase “attributable to” has been described in Derrington and Ashton “The law of liability insurance”[60] as follows:

“‘Attributable to’ … is wider than proximate cause and refers to any act, event or state of affairs which could properly be described as a cause, ranging according to its context from a loose causal connection to proximate cause [Royal Exchange Assurance v Kingsley [1923] AC 235 at 244], depending on the purpose of the relationship involved [Beazley Underwriting Ltd v The Travelers Companies Incorporated [2011] EWHC 1520].”

  1. (h)
    The applicant’s construction does not take into account these words and the width of the phrase.
  1. [76]
    In respect of the construction of clause 7.9(c) the respondent contends:
    1. (a)
      The clause expressly excludes claims made by an “employee” or an “employee applicant”.  It is conceded by the applicant that each of the relevant employees was an “employment applicant”.
    2. (b)
      Clause 7.9(c) is to be construed in the context of subclauses 7.9(a) and (b) which are directed towards no policy response in respect of civil liability in relation to an employee.
    3. (c)
      Additional cover in respect of liability involving employment was available under the Policy (clauses 5.2.1 and 5.2.3(b) and (c)) but the applicant did not take up that additional cover.  Any claim relating to employees or employment applicants was excluded, unless the additional cover was taken out.
    4. (d)
      If the parties had intended for the subclause to be confined to civil liability arising solely out of “unlawful discrimination”, then they could have done so in unequivocal terms.  For example, not including the words in parenthesis.  But the parties did not do so.
    5. (e)
      The term “or” at the start of the phrase in parenthesis is disjunctive in effect:  it connects two or more possibilities or alternatives.
    6. (f)
      The term “other” in the phrase in parenthesis is expansive, not limiting.  The respondent refers to synonyms such as “along with”, “together with”, “as well as” and “also”.
    7. (g)
      The use of “or” and “other” together, identifies that an “unlawful act, error or omission” is discrete from “unlawful discrimination”.
    8. (h)
      The proper construction of clause 7.9(c) excludes unlawful acts, errors or omissions, not just unlawful discrimination.  This would include contraventions of ss 18 and 31 of the ACL.
    9. (i)
      The phrase “unlawful discrimination” does not govern the meaning of the subclause, rather it provides a specified instance of an “unlawful act, error or omission” comprehended by the exclusion.  Accordingly, the phrase “unlawful discrimination” is not deprived of meaningful effect.
    10. (j)
      The use of the term “against” does not limit the relevant conduct to discrimination.
    11. (k)
      The respondent’s construction is consistent with subclauses (a) and (b).  As a suite of provisions they exclude policy response where the civil liability claim is one brought by an employee or employment applicant.
    12. (l)
      The absence of “unlawful” in other provisions in the Policy does not result in clause 7.9(c) being confined to “unlawful discrimination”.

Consideration – clause 7.9(a)

  1. [77]
    Clause 7.9(a) uses broad language in describing the claims which are excluded from cover under the Policy.  The words “… based upon, directly or indirectly arising from or attributable to” must be given due regard in the construction of the clause.  The applicant’s approach gives little, if any work for this phrase.
  2. [78]
    The phrase extends “liability as an employer” beyond claims which directly arise out of the actual employment relationship.  If the clause’s operation was to be only in respect of liability as an actual employer it could have easily said that and excluded the opening phrase.
  3. [79]
    The opening phrase was included and introduces a causal nexus which encompasses claims on a “broad spectrum” of causation.  To use the description from Derrington and Ashton’s text, this could include possibilities in the range of “a loose causal connection to proximate cause”.
  4. [80]
    If there is a sufficient nexus to the Policyholder’s liability as an employer then the exclusion applies.  It may be indirect or a weak causal connection, but cannot be too remote.
  5. [81]
    An ACL claim based on pre-employment misrepresentations in contravention of ss 18 and 31 of the ACL only becomes actionable if there is liability under s 236 of the ACL for loss or damage. 
  6. [82]
    Here, the cause of action arises where, the individuals in reliance on the representations, entered into contracts of employment with the applicant and commenced employment with the applicant.  Further, the loss and damage claimed was sustained when the employment relationship was terminated.
  7. [83]
    Clearly there is a nexus with the applicant having liability as an employer: the employment was entered into in reliance on the applicant’s conduct and it is the termination of the employment which gives rise to the loss.  It is “based upon”, “indirectly”, “arising from” or “attributable to” in the sense that the employment relationship is a key material fact giving rise to the cause of action claimed. 
  8. [84]
    This can be tested by considering the pleading of the material facts for the cause of action. The applicant being an employer in the particular circumstances could be said to be a “cause” and if that element was missing the cause of action would have to fail. 
  9. [85]
    The definition of “employee” cannot be deployed to limit the scope of the exclusion as that term is not used in clause 7.9(a).  The actual words in the clause must be construed using the principles of construction.
  10. [86]
    Part of the context is also that the Policy provided for additional cover by way of the “Employment practices liability cover” under clause 5.2 which was not taken out by the applicant.  The commercial context is also that the premiums paid in respect of the Policy were referable to the cover.  No component of the premium was in respect of the additional cover.
  11. [87]
    These are commercial parties and the Policy clearly sets out the types of matters that would be covered by the additional cover.   The words in clause 5.2.1 “Notwithstanding Section 7.9 a), b) or c), We Cover …” provides a strong indication that claims which fall within the additional cover are otherwise excluded under the exclusions in clause 7.9(a) to (c).
  12. [88]
    Further, proper characterisation of the claim in the Jack Class Action is required.  To merely characterise it as “an ACL Claim made by an applicant for employment” does not take into account the full nature of the claim.  It is impossible to properly consider whether the claim in the Jack Class Action is a claim “based upon, directly or indirectly arising from or attributable to” the applicant’s liability as an employer based on that characterisation.
  13. [89]
    The claim under the ACL in the Jack Class Action may be more appropriately characterised along the following lines:  A claim for loss or damage under s 236 ACL for pre-employment misleading and deceptive conduct in contravention of ss 18 and/or 31 of the ACL, where the applicant for employment in reliance on the misleading and deceptive conduct entered into a contract of employment, which was subsequently terminated giving rise to the claimed loss or damage.
  14. [90]
    The claim so characterised has a clear connection with the applicant as an employer, in that the applicant becoming the employer and subsequently terminating the employment is an integral part of the cause of action giving rise to the claim and the potential liability. 
  15. [91]
    Properly construed, clause 7.9(a) requires a causal connection between the claim and the applicant’s liability as an employer which is not too remote, can be indirect and need not be the proximate cause. 
  16. [92]
    That causal connection is present in respect of the ACL claim in the Jack Class Action and the exclusion in clause 7.9(a) would apply.

Consideration – clause 7.9(c)

  1. [93]
    The wording and structure of clause 7.9(c) is unusual and it is difficult to make sense of the clause when it is first read.
  2. [94]
    It is understandable why the parties have reached different constructions of this clause as the structure of and the words used in the clause gives rise to a potential ambiguity from the outset.
  3. [95]
    The opening words of “arising out of or in respect of actual or alleged” give some width to the provision and are immediately followed by “unlawful discrimination”.  Consequently, the circumstances of unlawful discrimination caught by the clause are to be given a wide construction.
  4. [96]
    The inclusion of the phrase “(or other unlawful act, error or omission)” immediately following the introductory words raises the issue of whether these words operate to in respect broaden “unlawful discrimination” or whether the words import a whole new category of unlawful conduct.
  5. [97]
    The use of parentheses would tend to support a construction that the operational words are “unlawful discrimination” and the words in parentheses aid or assist only.
  6. [98]
    However, the phrase starts with “or other” which would tend to support a construction that the words in parentheses are to operate to add additional scope to what preceded it.
  7. [99]
    Context more broadly does not offer any great assistance.  The context offered by the other sub-clauses in clause 7.9 may support a construction which is focused rather than an extremely broad exclusion as suggested by the applicant.
  8. [100]
    Equally, the context of the additional cover in clause 5.2 for “Employment Practice Claim” not being taken out and the recognition in clause 5.2.1 that clauses 7.9(a), (b) or (c) may operate to exclude claims of the nature that would otherwise be covered by clause 5.2 also needs to be considered (as contended for by the respondent).
  9. [101]
    On the express wording of the clause it applies to both an employee and an employee applicant. 
  10. [102]
    The construction of the clause which best accords with the text, context and the purpose of the clause is that the exclusion only extends to conduct which involves or concerns unlawful discrimination.
  11. [103]
    To construe the clause to exclude any conduct which is unlawful would be contrary to the clear structure of the clause and would render the words “unlawful discrimination” largely superfluous.  It would in effect “flip” the order of the clause such that the unlawful discrimination merely becomes an example.  If that is what the parties had intended they could have drafted a clause that provided for that.  They did not do so.
  12. [104]
    A construction which gives operational work to the words “unlawful discrimination” and its position in the structure of the clause and also gives some work to the words in parentheses is the preferable construction.
  13. [105]
    The words in parentheses in this approach do the work of clarifying that the liability for unlawful discrimination arises whether that occurred by way of a positive act or omission.
  14. [106]
    As identified above, the claim under the ACL in the Jack Class Action is a claim for loss or damage under s 236 ACL for pre-employment misleading and deceptive conduct in contravention of ss 18 and/or 31 of the ACL, where the applicant for employment in reliance on the misleading and deceptive conduct entered into a contract of employment, which was subsequently terminated giving rise to the claimed loss or damage.
  15. [107]
    While it could be argued that the claim does arise out of or in respect of what could be described as “an unlawful act, error or omission” in a general sense, it does not arise out of or in respect of unlawful discrimination.  Accordingly, the exclusion in clause 7.9(c) does not apply.

Further submissions on relief and costs

  1. [108]
    Given the construction of clause 7.9(a) outlined above, the applicant has been unsuccessful in respect of the application.
  2. [109]
    I indicated at the hearing some concerns about the form of the declarations sought in the Amended Originating Application (or in the negative as proposed by the respondent). 
  3. [110]
    In light of these reasons, further consideration should be given by the parties as to whether any declarations are appropriate in the circumstances or whether an order should be made dismissing the application. 
  4. [111]
    Accordingly, the parties are directed to confer and provide to Chambers draft orders and brief written submissions as to the appropriate relief in light of these reasons and costs within 14 days.

Footnotes

[1]  That is, it is excluded by clause 7.9(a) of the Policy.  The applicant submits this is because it arises from the actual employment relationship and therefore the liability arises “as an employer”.  T1-18.19-T1-19.18.

[2]  In these reasons, for ease of reference quotes from the Amended Statement of Claim do not show the additions and deletions in strikeout and underline.  In effect a “clean” version of the Amended Statement of Claim is used for this exercise.

[3]  Amended Statement of Claim at [10].  See also at [1].

[4]  Amended Statement of Claim at [11].

[5]  Amended Statement of Claim at [12].

[6]  Amended Statement of Claim at [13].

[7]  Amended Statement of Claim at [14].

[8]  Amended Statement of Claim at [14A].

[9]  Amended Statement of Claim at [15]-[17].

[10]  Amended Statement of Claim at [18]-[20].

[11]  Amended Statement of Claim at [21]-[23].

[12]  Amended Statement of Claim at [23A], [24A] and [25A].

[13]  Amended Statement of Claim at [24], [25] and [26].

[14]  Amended Statement of Claim at [27].

[15]  Amended Statement of Claim at [28]-[30].  The particulars for each refers to and repeats the particulars set out in [18]-[20] respectively.

[16]  Amended Statement of Claim at [31]-[33].

[17]  Amended Statement of Claim at [34].

[18]  Amended Statement of Claim at [36(a) and (b)].

[19]  Amended Statement of Claim at [36(c)] and see particulars.

[20]  Amended Statement of Claim at [37].

[21]  Amended Statement of Claim at [38].

[22]  Amended Statement of Claim at [39].

[23]  Particulars to Amended Statement of Claim at [42].

[24]  Particulars to amended Statement of Claim at [42].

[25]  Clause 1.1.

[26]  Clause 1.2.

[27]  Clause 1.3.

[28]  Chapeau at the commencement of Section 4.

[29]  The meanings of the relevant defined terms are set out above.

[30]  The heading states “[e]mployers’ liability, directors’ and officers’ liability, occupier’s liability, motor, marine”.  This appears to describe sub-paragraphs (a), (b) and (c) under the one description and then (d), (e) and (f) by the respective definitions.

[31]  Clause 1.3.

[32] McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR at 589 [22];  Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 at [15] (Gleeson CJ, McHugh, Gummow and Kirby JJ);  Todd v Alterra at Lloyd’s Ltd & Ors (2016) 239 FCR 12 at [42] (Allsop CJ and Gleeson J). 

[33]  (2015) 256 CLR 104 at 116-7 (French CJ, Nettle and Gordon JJ).

[34] Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 657 (French CJ, Hayne, Crennan and Kiefel JJ).

[35] Legal & General Insurance Australia Ltd v Eather (1986) 6 NSWLR 390 at 405 (McHugh JA).

[36] Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522 at [16] (Gleeson CJ, McHugh, Gummow and McHugh JJ).

[37] Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561 at [68] per Leeming JA (Macfarlan JA and Sackville AJA agreeing).

[38] Re Media, Entertainment & Arts Alliance; Ex parte Hoyts Corporation Pty Ltd (1993) 178 CLR 379 at 386 (Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ); Australian Broadcasting Commission v Australasian Performing Rights Association Ltd (1973) 129 CLR 99 at 99.  See also Dovuro Pty Ltd v Wilkins (2000) 105 FCR 476 at [152] (Finkelstein J).

[39] Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633 at [105] per Leeming JA (Ward and Emmett JJA agreeing).

[40] Darlington Futures v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510 (Mason, Wilson, Brennan Deane and Dawson JJ).

[41] Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561 at [140] per Leeming JA (Macfarlan JA and Sackville AJA agreeing).

[42] Australian Paper Manufacturers Ltd v American International Underwriters (Australia) Pty Ltd [1994] 1 VR 685 at 693-4 (Fullagar, Smith and JD Phillips JJ).

[43] Darlington Futures v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510 (Mason, Wilson, Brennan Deane and Dawson JJ).

[44] Zurich Australian Insurance Ltd v Fruehauf Finance Corporation Pty Ltd (1993) 7 ANZ Ins Cas.  78,007 at 78,011.

[45] Alex Kay Pty Ltd v General Motors Acceptance Corp & Hartford and Fire Insurance Co [1963] VR 458 at 463 (Sholl J).

[46] MGICA Ltd v United City Merchants (Australia) Ltd (1986) 4 ANZ Ins Cas at 74,350.

[47] Australia and New Zealand Bank Ltd v Colonial and Eagle Wharves Ltd [1960] 2 Lloyd’s Rep 241 at 255;  Government Insurance Office of New Wales v Council of the City of Penrith (1999) 102 LGERA 102.

[48] Investors Compensation Scheme Ltd v West Bromich Building Society [1998] 1 WLR 896.  See also Government Insurance Office of New Wales v Council of the City of Penrith (1999) 102 LGERA 102 at 114.

[49]  [2018] FCAFC 119.

[50]  [2018] QSC 303 at [84].

[51]  [2019] QCA 264.

[52] Wardley Australia Ltd v Western Australia (1992) 175 CLR 514.

[53] Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561 at [93]-[97] per Leeming JA.

[54]  For example, Racial Discrimination Act 1975 (Cth) s 9; Age Discrimination Act 2004 (Cth) pt 4; Sex Discrimination Act 1984 (Cth) s 14.

[55] Anti-Discrimination Act 1991 (Qld).

[56]  When the liability for the contravention arises is to be contrasted to the point in time when the contravening conduct occurred.

[57]  [2004] VSC 272 at [29] (Hollingworth J).

[58]  [2005] NSWSC 776 at [20] (White J).

[59]  [2010] QSC 127 (Applegarth J).

[60]  (2013) 3rd ed, vol. 1 at pp 498-9.

Close

Editorial Notes

  • Published Case Name:

    Corestaff NT Pty Ltd v Insurance Australia Ltd

  • Shortened Case Name:

    Corestaff NT Pty Ltd v Insurance Australia Ltd

  • MNC:

    [2021] QSC 195

  • Court:

    QSC

  • Judge(s):

    Williams J

  • Date:

    10 Aug 2021

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Alex Kay Pty Ltd v General Motors Acceptance Corporation [1963] VR 458
1 citation
Jump To
Cite 1 - [1963] VR 458
Australia and New Zealand Bank Limited v Colonial and Eagle Wharves Limited [1960] 2 Lloyd’s Rep 241
1 citation
Jump To
Cite 1 - [1960] 2 Lloyd’s Rep 241
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
1 citation
Jump To
Cite 1 - (1973) 129 CLR 99
Australian Paper Manufacturers v American International Underwriters ( Australia ) Pty Ltd [1994] 1 VR 685
1 citation
Jump To
Cite 1 - [1994] 1 VR 685
Beazley Underwriting Ltd v The Travelers Companies Incorporated [2011] EWHC 1520
1 citation
Jump To
Cite 1 - [2011] EWHC 1520
Corpn Of The Royal Exchange Assurance (Of London) v Kingsley Navigation Co Ltd [1923] AC 235
1 citation
Jump To
Cite 1 - [1923] AC 235
Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500
2 citations
Jump To
Cite 1 - (1986) 161 CLR 500
Cite 2 - (1986) 161 CLR 500
Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500
1 citation
Jump To
Cite 1 - (1987) 163 CLR 500
DMS Maritime Pty Ltd v Royal and Sun Alliance Insurance Plc [2018] QSC 303
1 citation
Jump To
Cite 1 - [2018] QSC 303
Dovuro Pty Ltd v Wilkins (2000) 105 FCR 476
1 citation
Jump To
Cite 1 - (2000) 105 FCR 476
Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd and Ors (2014) 251 CLR 640
1 citation
Jump To
Cite 1 - (2014) 251 CLR 640
Government Insurance Office of New Wales v Council of the City of Penrith (1999) LGERA 102
2 citations
Jump To
Cite 1 - (1999) LGERA 102
Cite 2 - (1999) LGERA 102
Insurance (Aust)) Pty Ltd v SLE Worldwide Australia Pty Ltd [2005] NSWSC 776
2 citations
Jump To
Cite 1 - [2005] NSWSC 776
Cite 2 - [2005] NSWSC 776
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896
1 citation
Jump To
Cite 1 - [1998] 1 WLR 896
Legal & General Insurance Australia Ltd v Eather (1986) 6 NSWLR 390
1 citation
Jump To
Cite 1 - (1986) 6 NSWLR 390
Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633
1 citation
Jump To
Cite 1 - (2014) 89 NSWLR 633
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37
1 citation
Jump To
Cite 1 - [2015] HCA 37
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104
2 citations
Jump To
Cite 1 - (2015) 256 CLR 104
Cite 2 - (2015) 256 CLR 104
Onley v Catlin Syndicate Ltd (2018) 360 ALR 92
1 citation
Jump To
Cite 1 - (2018) 360 ALR 92
Onley v Catlin Syndicate Ltd as the Underwriting Member of Lloyd's Syndicate 2003 [2018] FCAFC 119
2 citations
Jump To
Cite 1 - [2018] FCAFC 119
Cite 2 - [2018] FCAFC 119
Re Media, Entertainment and Arts Alliance; ex parte Hoyts Corporation Pty Ltd (1993) 178 CLR 379
1 citation
Jump To
Cite 1 - (1993) 178 CLR 379
Royal and Sun Alliance Insurance Plc v DMS Maritime Pty Limited [2019] QCA 264
1 citation
Jump To
Cite 1 - [2019] QCA 264
Samways v WorkCover Queensland [2010] QSC 127
2 citations
Jump To
Cite 1 - [2010] QSC 127
Cite 2 - [2010] QSC 127
Todd v Alterra at Lloyd's Ltd (2016) 239 FCR 12
1 citation
Jump To
Cite 1 - (2016) 239 FCR 12
Vero Insurance Ltd v Witherow [2004] VSC 272
2 citations
Jump To
Cite 1 - [2004] VSC 272
Cite 2 - [2004] VSC 272
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
1 citation
Jump To
Cite 1 - (1992) 175 CLR 514
Wilkie v Gordian Runoff Ltd [2005] HCA 17
1 citation
Jump To
Cite 1 - [2005] HCA 17
Willkie v Gordian Run-off Ltd (2005) 221 CLR 522
3 citations
Jump To
Cite 1 - (2005) 221 CLR 522
Cite 2 - (2005) 221 CLR 522
Cite 3 - (2005) 221 CLR 522
Zhang v ROC Services (NSW) Pty Ltd (2016) 93 NSWLR 561
4 citations
Jump To
Cite 1 - (2016) 93 NSWLR 561
Cite 2 - (2016) 93 NSWLR 561
Cite 3 - (2016) 93 NSWLR 561
Cite 4 - (2016) 93 NSWLR 561
Zhang v ROC Services (NSW) Pty Ltd [2016] NSWCA 370
1 citation
Jump To
Cite 1 - [2016] NSWCA 370
Zurich Australian Insurance Ltd v Fruehauf Finance Corporation Pty Ltd (1993) 7 ANZ Ins Cas. 78,007
1 citation
Jump To
Cite 1 - (1993) 7 ANZ Ins Cas. 78,007

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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