Professional Liability Guide

PROFESSIONAL LIABILITY GUIDE

The Court held that the exclusion did not apply. Buss JA relevantly observed that:

‘By the indemnity clause in the products liability cover, GIO agreed to indemnify Jobs Engineering, relevantly, in respect of sums which Jobs Engineering “shall become legally liable to pay for compensation in respect of bodily injury or damage to property as a result of an occurrence” and caused by “the nature, condition or quality” of any goods or products sold or supplied by it. If the nature, condition or quality of any machinery or equipment designed, manufactured and supplied by Jobs Engineering were to cause personal injury or property damage to any person, and the relevant nature, condition or quality was attributable to the negligent act or omission of Jobs Engineering, there is a significant likelihood that the person suffering the injury or damage would have a cause of action against Jobs Engineering. If any and all negligent acts and omissions of Jobs Engineering, of the kind I have just mentioned, were to be characterised as breaches of duty owed by it in a professional capacity, within [the exclusion clause], the cover under the indemnity clause of the products liability insurance would be severely circumscribed. The indemnity clause would not respond unless Jobs Engineering’s legal liability to pay was not attributable to its negligence or other breach of duty owed by it in a professional capacity, but arose on some other legal basis. The parties cannot have intended such an uncommercial and unreasonable result, and it is not a construction which the language of the policy unequivocally requires.’ 378 In 470 St Kilda Road Pty Ltd v Robinson, 379 in issue was whether the making of a statutory declaration was an actual or alleged act or omission ‘in the rendering of, or actual or alleged failure to render any professional services to a third party’. Mr Robinson was employed as the chief operating officer of Reed Constructions, a company retained to perform work for a third party under a design and construct contract. From time to time, Mr Robinson made statutory declarations to support progress claims under the contract. The third party brought proceedings against Mr Robinson concerning one of the statutory declarations, which it alleged he had made without reasonable basis, was misleading and deceptive, and was in breach of Mr Robinson’s duty of care. Mr Robinson sought to be indemnified in respect of the proceeding under his employer’s D&O liability insurance policy with Chubb. Chubb denied it was liable to indemnify Mr Robinson because the D&O policy excluded cover for loss in respect of any claim ‘for an actual or alleged act or omission … in the rendering of, or actual or alleged failure to render any professional services to a third party’ , which Chubb argued applied to Mr Robinson’s conduct. ‘ Professional services ’ was not defined in the D&O policy. Justice Kenny was asked to determine whether project management, and in particular the provision of the statutory declaration in question, was an act in the rendering of professional services such as to trigger the exclusion. Her Honour indicated that project management might be seen as a profession in some circumstances but that the commercial context of the policy and its terms and objects would determine whether the terms ‘ profession ’ or ‘ professional ’ applied. 380 Her Honour viewed Mr Robinson’s conduct in providing the statutory declaration as an act of providing information and, therefore, an administrative activity rather than a professional one, consistent with the authorities in FAI General v Gold Coast City Council 381 and GIO v Council of the City of Penrith. 382 Her Honour added:

378 Fitzpatrick v Job t/as Jobs Engineering [2007] WASCA 63, 76–7. 379 (2013) 308 ALR 411. 380 Ibid 428, 430. 381 [1992] 2 Qd R 341. 382 (1999) 102 LGERA 102.

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