In a recent ACT Supreme Court decision, Swan v Phoenix Combat Sports Pty Ltd (In Liquidation), the court had to decide whether the plaintiff could add Insurance giant QBE, as a defendant to the proceedings.
The Plaintiff, Brendan Swan, originally commenced proceeding against a gym known as Phoenix Combat Sports (‘Phoenix’). He alleged he suffered concussion due to several incidents that occurred at the gym and that the post-concussion management provided was negligent. The Plaintiff further alleged he suffered injuries attributable to a breach of duty of care by the gym.
Phoenix had gone into liquidation and so the Plaintiff, sought to add QBE, Phoenix insurer, to the proceedings.
The issue was whether QBE was obliged to indemnify Phoenix for breach of duty of care.
QBE argued that the business was insured as a gymnasium and did not extend to cover the types of activities in which the Plaintiff was concussed i.e., combat sports. The Plaintiff argued that it is not unusual for gymnasiums to be used as a venue for different activities which did not necessarily involve the traditional gymnasium pursuits.
The Court found in favour of the Plaintiff and noted that that gymnasiums often allow various functions to occur on their premises and the activity undertaken by the Plaintiff might well be considered an activity in pursuit of fitness.
It was also argued by QBE that the Plaintiff was excluded under the specific terms of QBE policy. The exclusion clause relied upon by QBE was as follows:
The Broadform Liability Section of this Policy does not cover liability for claims in respect of:
- Personal injury or damage to property of persons actually participating in any performance, sport, game, contest or display involving athletic, acrobatic, military or equestrian skill or the use of firearms, missiles of any kind, explosives or combustibles.
- Personal injury or damage to property of persons caused by the use of mechanical amusement devices.
The Court noted the exclusion clause refers to persons “actually participating” in the activities. The Plaintiff’s position was that the negligence occurred after the participation in the activity in that the episodes of concussion, which did occur during the activity, were not properly managed thereafter by Phoenix.
QBE argued that the words in the exclusion provision “in respect of” gave the activities in the clause a breadth which would cover anything occurring between activities or following them.
The court found that whilst QBE position might be right, that the Plaintiff’s interpretation is not unarguable and as such, the court reached the conclusion that QBE was to be included as a party to the proceeding.
What this case highlights is the need for Gym owners to:
- check their current insurance policies and speak to their insurance brokers to ascertain if their current policies cover all personal injuries that might occur from activities allowed within the gym; and
ensure they have in place a post-concussion management protocols in place and that all staff are aware of same
