Can you please advise me what r the key issues for this case?
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 Show 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 accident 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 impounded 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 reveals that two of the four bolts that secured the front wheel of the carriage had snapped in half and that the remaining two bolts sheared off, which caused the carriage to break away from the ride.
1) Adelaide Show Ltd v All Business Insurance Pty Ltd Shortly 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 result. 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 accident 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: "(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 Ltd'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 Ltd'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 sent 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 public 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 policies. 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 mentioned in your email."