Assignment 2018 Sem 1
Author: D. Carbone
2
Assignment Question
You are required to advise each of
the
parties
for the legal
disputes
that
have
arisen from the
“Background facts” below, and briefly outline how a judge would decide the issues in dispute.
The two legal
disput
es
are:
1)
Adelaide Show Ltd v All Business Insurance Pty Ltd
.
2)
Peter v Amusement Rides Pty Ltd.
Background
F
acts
The Royal Adelaide Show is an annual event in South Australia that attracts thousands of
visitors over nine days in September. The Show is one
of the biggest in Australia and
features exhibitions and displays, including farm equipment and animals, fashion and
competitions. Its major attractions include a variety of carnival and amusement rides. The
Show is organised and operated by Adelaide Sh
ow Ltd on premises owned by it.
One of the Show’s oldest rides is the
“
Mad Mouse
“
. This is a roller coaster ride in which
separate open carriages holding two persons at a time ride at a rapid speed on a convoluted
track built high above the ground. The
track includes steep slopes and sharp turns that
provide thrills and enjoyment for the roller coaster’s riders. The roller coaster is owned and
operated by Amusement Rides Pty Ltd, which carries on the business of supplying and
operating amusement rides.
Unfortunately late on the third day of the Show, as one of the Mad Mouse’s carriages was
riding around the roller coaster’s tracks, it broke away from the ride. The carriage plunged
downwards landing on
the ground
next to the Mad Mouse ride. This accide
nt caused injuries
to two riders in the carriage at the time
,
Peter
and
his 8 year old daughter
.
He sustained
injuries to his body that will require medical treatment at a cost of $50,000.
Following the accident, the government agency SafeWork SA impound
ed the Mad Mouse
ride to undertake an investigation of the cause of the accident. This investigation reveals that
the ride did not have a current safety certificate that was mandatory under the law for the ride
to be operated. The investigation also reve
als that two of the four bolts that secured the front
wheel of the carriage had snapped in half and that the remaining two bolts she
a
red off, which
caused the carriage to break away from the ride.
1)
Adelaide Show Ltd v All Business Insurance Pty Ltd
Sh
ortly after the accident, Adelaide Show Ltd (Adelaide Show) sent a letter to its insurance
company, All Business Insurance Pty Ltd (ABI), advising of the accident and the likelihood
of claims being made by those who were injured or suffered loss as a resul
t. Adelaide Show
said that it expected the claims to be based on its negligence in failing to ensure that the Mad
Mouse ride’s operator had a current safety certificate.
ABI replied by a letter in which it stated that such claims arising from the acciden
t would not
come within the scope of the insurance cover taken out by Adelaide Show. The insurance
cover provided was set out in a
valid
written contract
signed by both parties
, the terms of
which had been drafted by ABI. The insurance contract included
clause 20 that
states
:
Assignment 2018 Sem 1
Author: D. Carbone
3
“(1)
The insurance cover under this policy extends to any liability for personal
injury or property damage arising from the acts or omissions of
Adelaide
Show Ltd, its employees, servants and agents on Adelaide Show Ltd’s
premises,
and
from the acts or omissions of
persons invited by Adelaide Show
Ltd onto its premises.
(2)
However, the insurance cover does not extend to
liability for personal injury
or property damage arising from
the acts or omissions of a person on
Adelaide Show L
td’s premises for an unlawful purpose.”
ABI said in its letter that the
insurance
cover was excluded by clause 20(2) since the operator
of the Mad Mouse ride not having a current safety certificate meant that the operator was “
a
person on Adelaide Show Lt
d’s premises for an unlawful purpose
“, namely operating an
amusement ride without a current safety certificate that was mandatory and required under
the law.
Adelaide Show has now started legal action against ABI as a result of ABI’s refusal to
indemnify
Adelaide Show for any claims resulting from the accident. Adelaide Show claims
that ABI has breached the express terms
of the
valid
insurance contract.
Adelaide Show points out that the day before the insurance contract was signed by it,
Adelaide Show se
nt an email to ABI that stated:
“Can you please explain the effect of clause 20(2). We are concerned that the clause
will leave Adelaide Show Ltd exposed to a range of legal claims for which we would
need insurance cover, especially the risks to the publ
ic arising from our animal
display and competition events and from the other attractions on our premises during
our Show.”
Later the same day, ABI telephoned Adelaide Show and replied by saying:
“Clause 20(2) is a standard term in all our insurance polic
ies. It applies to ensure
that we have no liability to indemnify for losses and damage arising from the acts of
persons who are on your premises illegally, such as trespassers and burglars. The
clause should therefore have no application to the risks men
tioned in your email.”
The next day Adelaide Show signed the insurance contract and delivered it to ABI.
