Lloyd’s managing agency Marketform must pay more than $600,000 compensation awarded to a 20-year-old apprentice butcher who slipped on a piece of sausage mince and injured his back, a court has ruled.

Marketform, which represented underwriting members of Lloyd’s syndicate 2468, is liable for almost $614,000 owed by Ashcroft Supa IGA to the apprentice, following an appeal hearing in the Supreme Court of NSW.

The injury was sustained after Mathew Paul, then 20, arrived for work at 4am on October 10, 2012, at the IGA grocery store in Orange.

He began the shift cutting up lamb while a qualified butcher employed by Ashcroft cleaned sausage mince from the floor of the meat room. One piece of mince lying underneath a mobile work trolley was overlooked.

Mr Paul later slipped on that sausage mince, fell against the wall and injured his back.

Ashcroft, which held a shopping malls combined liability policy, was found to have breached a duty of care to the apprentice, who was awarded damages.

Ashcroft, by cross-claim, sought indemnity from Marketform for the amount it was liable to pay Mr Paul. Marketform was last year ordered to indemnify Ashcroft, but it appealed the decision.

It had argued Mr Paul’s injury was otherwise within the coverage under the policy, but relied on an exclusion in clause 16.5.

That clause stated the policy did not cover employers’ liability “for injury to any person under a contract of employment, service or apprenticeship with or for the provision of labour only services to the Insured where such injury arises out of the execution of such contract”.

A judge in the District Court had said this clause “did not yield an easily discernible grammatical construction,” as difficulty arose from the insertion of the words “with or for” in the middle of the sentence.

The judge said Mr Paul “was not a person under a contract to provide labour only services” and “in those circumstances the exclusion clause does not apply”.

Mr Paul was employed under a contract between Skillset and Ashcroft.

“The relevant contract was not one for the supply of ‘labour only services’ as it involved, at least, Skillset completing paperwork relevant to the apprentice, carrying out regular performance management of Mr Paul, resolving workplace issues, monitoring Mr Paul’s TAFE training and providing the first respondent with occupational health and safety assistance,” the judgment says.

During the appeal Marketform argued its exclusion clause was “easily understandable, grammatically reasonable”.

But the Supreme Court ordered the insurer to indemnify Ashcroft IGA for the payment it had been told to make to Mr Paul.

The full judgment can be read here.