Lindsay Plant Ltd v Norwest Holst Group Plc
| Jurisdiction | Scotland |
| Judgment Date | 17 November 1999 |
| Docket Number | No 13 |
| Date | 17 November 1999 |
| Court | Court of Session (Outer House) |
OUTER HOUSE
Lord Hamilton
Contract of hireIndemnityConstructionPursuers hiring JCB with operator from third party and sub-hiring it to defendersDefenders' employee settling claim for personal injuries against third party in respect of third party's JCB operator's negligencePursuers relieving third party of liability in respect of settlement and seeking to be indemnified by defenders thereforThird party's indemnity for loss caused by or arising from or claimed to have been caused by or to have arisen from use of JCBPursuers' indemnity right to be relieved by defenders of consequences of claims made by third parties arising from the actions of the operator including his negligenceWhether terms of third party's indemnity sufficient to include employee's negligenceWhether pursuers' indemnity habile to found claim against defenders for settlement losses
The pursuers hired to the defenders a JCB vehicle which, along with an operator, had been hired by the pursuers from its owners (Lomond). The operator also was supplied to the defenders. Condition 6 of the hire contract between the pursuers and the defenders (the Lindsay conditions) provided, inter alia,that the defenders should relieve the pursuers of and from the consequences of all claims of whatever nature which may be made against [them] by third parties arising from the actions of the operator, including claims arising from the operator's negligence and breach of statutory duty. Clause III(2) of the hire contract between the JCB owner and the pursuers (the Lomond conditions) provided, inter alia, that in the event of insurance liability to be provided by the pursuers being repudiated, the pursuers agreed to indemnify and hold the owner free from and against any loss, liability and expense caused by or arising from or claimed to have been caused or to have arisen from the use or operation (including loading and unloading) of [the JCB vehicle] which results, or is claimed to result, in loss or damage sustained by any person or persons including but not limited to the agents and employees of the owner and the pursuers.
An employee of the defenders sustained personal injuries in an accident when he was assisting the JCB operator and he sued the defenders and the JCB owner for negligence and breach of statutory duty. The negligence case was based on the operator's fault. The pursuers were convened by the JCB owner as a third party for the purposes of a claim of relief under their hire contract but that case was dismissed at procedure roll. Thereafter liability was admitted and the defenders and the JCB owner agreed an apportionment of their liability inter se. The JCB owner discharged their liability in damages and, after it had been discovered that the pursuers did not have insurance under their contract with the JCB owner, the pursuers relieved the JCB owner of their liability to the injured employee.
The pursuers sued the defenders on the basis of their indemnity under cl III(2) of the Lomond conditions. At debate the defenders sought dismissal of the action on the grounds that there were no relevant averments to instruct the proposition that the pursuers had any liability to the JCB owner and, in any event, to establish that the defenders were obliged to indemnify the pursuers in respect of any such liability on the part of the pursuers to the JCB owner.
Held (1) that many of the legal issues raised in debate could not be resolved without the factual background being established in evidence (p 99H); (2) that the only claim which could relevantly found a claim by the pursuers against the defenders under condition 6 of the Lindsay conditions was the ground of action by the injured employee that the accident had been caused by the negligence of the JCB operator (p 100E); (3) that the defenders could be liable under condition 6 to relieve the pursuers of a claim made by the JCB owner provided that the claim against the JCB owner in turn arose from the actions of the operator (p 100F); (4) that the admission of liability by the JCB owner in the injured employee's action could not be characterised as a compromise but was as effectual as an admission of liability made in the pleadings or a judicial finding of liability after a contested proof (p 100GH); (5) that such an admission was not, however, critical because cl III(2) of the Lomond conditions included an obligation to indemnify against loss claimed to have been caused by or to have arisen from the use or operation of the JCB as well as from loss or liability in fact so caused or arising (p 101BC); and (6) that the words used in cl III(2) were, in their ordinary meaning, wide enough to cover negligence of an employee such as the JCB operator (p 101E); and proof before answer allowed.
Lindsay Plant Limited brought an action against Norwest Holst Group PLC in the Court of Session under the commercial cause rules claiming a right of relief in terms of an indemnity clause in a contract of hire between the parties.
The full facts and the arguments of parties are adequately set forth in the opinion of the commercial judge (Lord Hamilton).
The cause called before the commercial judge for a hearing when the defenders sought dismissal of the action.
Cases referred to:
Bovis Construction (Scotland) Ltd v Whatlings Construction LtdSC 1994 SC 351
Canada Steamship Lines Ltd v The KingELR [1952] AC 192
Comyn Ching & Co Ltd v Oriental Tube Co LtdUNK [1979] 17 BLR 47
E E Caledonia Ltd v Orbit Valve Co EuropeWLR [1994] 1 WLR 1515
Investors Compensation Scheme Ltd v West Bromwich Building SocietyWLR [1998] 1 WLR 896
Murray v Caledonia Crane & Plant Hire Ltd 1983 SLT 306
Nelson v Atlantic Power and Gas Ltd 1995 SLT 102
North of Scotland Hydro-Electric Board v D & R TaylorSC 1956 SC 1
Smith v U M B Chrysler (Scotland) LtdSC 1978 SC (HL) 1
Stirling v Norwest Holst Ltd 1997 SLT 973
Stirling v Norwest Holst Ltd (No 2) 1998 SLT 1359
Textbook referred to:
Chitty, Contract (28th ed), paras 1401014013 and 14015
On 17 November 1999 the commercial judge allowed a proof before answer.
LORD HAMILTON'SOpinionSome time prior to the accident aftermentioned the pursuers (Lindsay) hired to the defenders (Norwest) a JCB vehicle. That vehicle was so supplied with an operator, Mr Winning. On or about 4 July 1993 a Mr Stirling, a labourer employed by Norwest at a building site in Castlemilk, Glasgow, was working on that site in the course of his employment. He was assisting Mr Winning who was there operating the JCB in furtherance of the hire agreement made with Lindsay. Mr Stirling sustained injury in the course of that operation when his right lower leg and foot were pinned between part of the JCB and a pavement and kerb.
Mr Stirling raised proceedings in the Court of Session for damages. He convened as defenders Norwest, his employer, and Lomond Plant Limited (Lomond). Lomond, it appears, was the owner of the JCB and the employer of Mr Winning. According to Lindsay's averments in the present action the JCB (with Mr Winning as operator) had in or about April 1993 been hired by Lindsay from Lomond. The grounds of action pled by Mr Stirling against Norwest were negligence at common law and breach of statutory duty. The cases at common law were based on alleged breaches of duties to take reasonable care to provide a safe place of work, safe plant and equipment and a safe system of working. The statutory cases were based on alleged breaches of seven separate regulations, namely, regs 26(3) and 49(1) of the Construction (Lifting Operations) Regulations 1961, reg 6(2) of the Construction (Working Places)...
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