The respondent, Centennial Newstan Pty Limited (Centennial), operated the Fassifern coal mine (the coal mine) near Newcastle. In 2008, Centennial entered into an agreement with Longwall Advantage Pty Limited (Advantage) for the supply of labour to Centennial at the coal mine (the Agreement). The plaintiff in the proceedings below (McDonald) was a fitter and turner employed by Longwall Labourforce Pty Limited (Labourforce) which had an agreement with Advantage to provide employees including McDonald to Centennial to work at the coal mine.
Advantage maintained a policy of insurance with the appellant (GIO) described as a “Combined Business Policy” (the policy) which included public liability cover. The policy included a definition of “Insured” which included every principal in respect of the principal’s liability arising out of any contract or agreement for the performance of work for such principal, but only to the extent required by such contract or agreement.
On 10 September 2008, McDonald was injured when his leg was crushed while working on the longwall installation at the coal mine. He brought proceedings in the District Court against Centennial, Labourforce and Advantage for negligence. The defendants brought cross‑claims against each other. Centennial’s cross-claim included a claim for indemnity from GIO claiming that it had the benefit of the policy. The primary judge found that all defendants were liable to McDonald but Centennial should bear 100% of the liability.
GIO’s defence to Centennial’s claim for indemnity raised whether Advantage was required under the Agreement to obtain insurance cover for Centennial’s liability for its own negligence to McDonald. The primary judge found that GIO should indemnify Centennial in respect of its liability to McDonald.
Under the heading “Execution” it was provided:
“This Agreement is made subject to all terms and conditions set out in the Attachments and Schedule, which is hereby made a part of the Agreement …”
Clause 8 of the Standard Conditions of the Agreement relevantly provided under the headings “Indemnities” and “Insurance”:
“8.1 You must indemnify Centennial [from] all claims for:
(a) injury to or death of any of your personnel, except to the extent that a claim for such injury or death arises as a result of the negligence of Centennial …”
“8.3 You and your Personnel must maintain… public liability [insurance] … in accordance with the table of minimum requirements …”
Schedule 1 of Part C included in the scope of work “Labour for Longwall maintenance”.
Clause 43 of the Site Regulations was key to the appeal and provided relevantly:
“Insurance and Indemnity
43.1 The Contractor must have insurances referred to in the Contract whenever performing its obligations under the Contract …
43.2.2 … public and product liability policies must note the Principal and all subcontractors as interested parties and must cover the respective liabilities of each of those parties to each other and to third parties. The Policy must cover each indemnified party to the same extent as it would if each of the parties had a separate policy of insurance.
43.4 Failure to Insure
If the Contract …fails … to obtain any insurance policies as required by the Contract or the Standard Contractors Site Regulations the Contractor must indemnify the Principal for any loss or damage suffered by the Principal arising out of or in connection with the Contractor’s failure to obtain the required insurance.
43.5 Inconsistency with Contract
To the extent of any inconsistency between the provisions [in] clause 43 and the provisions of any Contract, the provisions of the Contract will prevail.”
The primary judge found that the acts and omissions which caused McDonald’s accident were the sole responsibility of Centennial and he did not order any contribution by Labourforce or Advantage.
The primary judge observed that cl 43.2.2 of the Site Regulations was framed in broad terms and should be read contrary to GIO’s contention that it did not apply to the direct liability of Centennial. His Honour rejected GIO’s argument based on Erect Safe Scaffolding that cl 43.2.2 should be construed in a manner which restricted it so it would not cover the liability of Centennial independently of its position as a principal to Advantage under the Contract. The insurance provision here was quite different to Erect Safe Scaffolding noting cl 43.2.2:
(a) is not contiguous with the indemnity in cl 8.1 of the Standard Conditions;
(b) required cover for the respective liabilities of Advantage and Centennial “to each other and to third parties”; and
(c) required the parties to be insured in respect of the provision of labour by Advantage at the coal mine.
His Honour found that Advantage was required under the Agreement to provide insurance cover which would indemnify Centennial against liability to McDonald and that Centennial was an insured under the Policy.
The leading judgment is the judgment of Gleeson JA (with which Hoeben JA agreed) and Meagher JA also agreed, but briefly stated reasons.
The Notice of Appeal raised a single issue which was whether Advantage was required by cl 43.2.2 of the Site Regulations to provide insurance cover which would indemnify Centennial against its liability to McDonald arising out of the accident at the coal mine. However, the written submissions of GIO sought to raise a new point on appeal by contending the Site Regulations were not incorporated as terms of the Agreement. The Court of Appeal examined whether the new point should be allowed on appeal and also construction of the Agreement.
At trial, GIO admitted the Site Regulations were express terms of the Agreement and therefore this issue was not dealt with. GIO submitted that the new point was one of construction of the Agreement and could not have been met by evidence in the court below. Gleeson JA held the new point involved a question of fact whether Advantage was engaged in execution of work for Centennial in the coal mine and not simply construction of the Agreement.
Gleeson JA held that a point cannot be raised for the first time upon appeal when it could possibly have been met by calling evidence in the court below: Water Board v Moustakas . GIO did not demonstrate exceptional circumstances in this case. In the cross‑claim by Centennial against GIO, GIO admitted that the Site Regulations were an express term of the Agreement and did not seek to withdraw that admission on appeal.
Gleeson JA held that the construction of cl 43.2.2 of the Site Regulations must have regard to the whole terms of the Agreement including cll 8.1 and 8.3. The words of every clause must, if possible, be construed so as to render them all harmonious with one another: Fitzgerald v Masters ; Australian Broadcasting Commission v Australasian Performing Right Associated Limited ; and Sigiriya Capital Pty Limited v Scanlon . His Honour further held:
1. Reading the scheme of provisions in the Agreement as a whole cl 8.3 covenanted Advantage would maintain public liability insurance in accordance with the minimum requirements.
2. Clause 43.1 of the Site Regulations reinforced cll 8.3 and 8.4 by requiring that Advantage must have the insurances under the Contract “whenever performing its obligations under the Contract” (supplying labour to Centennial at the coal mine).
3. Clause 43.2.2 of the Site Regulations required Advantage to ensure that the public liability policies noted that Centennial and subcontractors were interested parties and policies covered their interests in “the performance of the Contract” by Advantage which includes the policies required by cll 8.3 and 8.4 of the Standard Conditions.
4. The public liability cover which Advantage was required to maintain was cover for “the respective liabilities of each of those parties to each other and to third parties”. The reference to the “interested parties” under the policy includes Centennial.
5. Clause 43.4 of the Site Regulations required Advantage to indemnify Centennial if it failed to obtain the required insurance and was in addition to the indemnity under cl 8.1 of the Special Conditions. The indemnity afforded to Centennial by cl 43.4 of the Site Regulations would be redundant if the special insurance requirements of cl 43.2.2 of the Site Regulations did no more than support the indemnity afforded to Centennial by cl 8.1 of the Special Conditions.
Gleeson JA stated that preference is to be given to a construction which provides a congruent operation to the components of the Agreement: Wilkie v Gordian Runoff Limited .
In Chapmans Limited v Australian Stock Exchange Limited  Lockhart and Hill JJ said:
“A court will strain against interpreting a Contract so that a particular clause in it is nugatory or ineffective, particularly if a meaning can be given to it consonant with other provisions in a Contract.”
Gleeson JA stated cl 43 of the Site Regulations is a not uncommon provision in a contract that one party will take out a composite policy of insurance indemnifying all parties involved in work on the principal’s site against liability flowing from the provision of services by the contractor to the principal. The dispute between the parties as to the ambit of the cover afforded to Centennial in relation to its “respective liabilities” is to be understood in this context.
Gleeson JA held that the question of priority between the Site Regulations and the Standard Conditions only arises to the extent of any inconsistency and there was none as the special insurance requirements in the Site Regulations are supplementary to the Standard Conditions.
Gleeson JA accepted that cll 8.3 and 8.4 of the Standard Conditions do not require Advantage to arrange cover for Centennial for its own negligence, however, this was not the key point. The Standard Conditions must be read together with the special insurance requirements provided by cl 43.2.2 of the Site Regulations. When read together, particularly in the light of the indemnity in cl 43.4 of the Site Regulations, it was clear that Advantage was obliged to arrange cover for Centennial and all subcontractors under the same public liability policy referred to in cll 8.3 and 8.4 and that Centennial would receive insurance cover of the same character.
Gleeson JA stated it is unsurprising that Centennial might reasonably wish to be indemnified in relation to any risk that it may ultimately incur because the primary judge found:
“The totality of the operation of the mine, on the evidence, vested in Centennial, supervision was provided by Centennial, and the equipment available and use was provided by Centennial. Accordingly the burden of taking precautions to avoid the risk of injury rested on Centennial.” 
Gleeson JA held that there was no express limitation in cl 43.2.2 to confine the liabilities to the contractual indemnities under cl 8.1 of the Standard Conditions as suggested by GIO and there was no basis for implying a further requirement that the liabilities under cl 43.2.2 must also be subject of the contractual indemnity in cl 8.1 of the Standard Conditions of the Agreement.
GIO submitted that the insurance clause in the Agreement was required to be construed in the same manner as Erect Safe Scaffolding where (at ) McClellan CJ at CL said:
“In the absence of express words … an indemnity clause will not require the subcontractor to maintain insurance against loss occasioned by the head contractor’s negligence.”
Gleeson JA held that the comments of McClellan CJ at CL is not a statement of principle but merely an observation concerning the approach in a number of authorities when construing an insurance clause provided to support an indemnity clause and was qualified by the need to have regard to the express words in the insurance clause under consideration.
Gleeson JA held that the terms of the Agreement in the present case are quite different to that in Erect Safe Scaffolding. Therefore, the decision in Erect Safe Scaffolding is not determinative of the construction to be given to cl 43.2.2 of the Site Regulations.
This judgment reinforces the statement of Giles JA and McClellan CJ at CL in which they agreed on the relevant principle of construction that:
“The operation of any contractual indemnity must be found in the application to the facts of the words of the relevant clause, construed as part of the contract as a whole. Decisions on the operation of contractual indemnities in different words and different contracts are likely to be of limited assistance.”
Therefore, the interpretation of indemnity clauses is likely to turn on the wording in each clause and it will be difficult to rely on authorities in respect of indemnity clauses with different wordings. Caution should be taken when attempting to rely on authorities which relate to indemnity clauses where the wordings are substantially different.
Caution should also be taken in reading indemnity clauses in isolation. They must be read in the context of the whole agreement including other documents attached to the agreement and must be read together such that preference is to be given to a construction of the overall agreement which supplies a congruent operation to the components of the whole agreement.
The definition of Insured in a policy can have wide import and where the definition extends to any Principal it needs to be determined if any contract or agreement contains an indemnity and/or insurance clause that may enliven the policy.