In Shamrock Civil Engineering Pty Ltd v Cleanaway Solid Waste Pty Ltd [2025] QCA 178, the Queensland Court of Appeal rejected a broad interpretation of an indemnity clause, which, if invoked, would have imposed liability for damage caused by an extreme weather event because the damage occurred at the site of, and during the course of, the relevant works.

Cleanaway Solid Waste Pty Ltd and Cleanaway Pty Ltd (Cleanaway) entered into an agreement (Contract) with Shamrock Civil Engineering Pty Ltd (Shamrock) for Shamrock to undertake earthworks at a waste disposal site owned by Cleanaway.

While Shamrock was undertaking the works, the site was affected by heavy rainfall causing flooding and contamination. Cleanaway allegedly incurred $31 million in remediating damage to the site and sought to recover that cost from Shamrock under an indemnity in the Contract.

Relevantly, Shamrock had agreed to indemnify Cleanaway against:

any liability, loss, claim or proceeding whatsoever in respect of loss, destruction or damage to any property … arising out of or in the course of or by reason of the execution of the Works.

Shamrock applied for summary judgment, arguing that the damage suffered did not trigger the indemnity clause because there was no nexus between the damage and the execution of its works. At first instance, the court refused summary judgment holding that there was a good prospect that Cleanaway could show that the damage was “in the course of” the works. Focusing on the ordinary and literal meaning of “in the course of”, the primary judge found that there was no need for Cleanaway to show a link between the damage suffered and the execution of Shamrock’s works. Rather, the clause merely required “some proximity” between the damage and execution of the works in “time and place”.

Shamrock appealed to the Court of Appeal, who also refused summary judgment. However, the Court did find that the primary judge had adopted an overly broad interpretation of the indemnity clause, noting that in order to bring the damage within the ambit of the expression “arising out of or in the course of the execution of the Works”, something more is required than the damage simply occurring at the site during the period of works.

If the broad interpretation of the indemnity provision was accepted, the Court of Appeal noted that Shamrock would be exposed to “uncertain liability” for events over which it had no control, effectively becoming an “unlimited insurer” for the principal. The Court of Appeal found that there was nothing within the Contract that suggested that Shamrock had accepted such an expansive or unspecified risk.

Ultimately the Court of Appeal rejected Shamrock’s application for summary judgment as it considered that a trial was necessary to hear Cleanaway’s alternate claim for damages arising from a breach of contract, and the factual basis of which could enliven a right of indemnity under a separate limb of the indemnity clause.

The decision can be found here.