Cavaliere P. v Kinoma Pty Ltd

[1995] FCA 631

IN THE FEDERAL COURT OF AUSTRALIA     )No QP 330 of 1995
GENERAL DIVISION                   )
BANKRUPTCY DISTRICT OF             )
THE STATE OF QUEENSLAND            )

RE:PAUL CAVALIERE

Judgment Debtor

EX PARTE:KINOMA PTY. LTD. ACN 010 697 980 (Trading as LOY'S ALLROUND ROOFING SERVICES)

Judgment Creditor

MINUTES OF ORDERS

JUDGE MAKING ORDER:                Drummond J
DATE OF ORDER:  14 August, 1995
WHERE MADE:  Brisbane

THE COURT ORDERS THAT:

1. A sequestration order be made against the estate of the debtor, Paul Cavaliere.

1. William John Fletcher be appointed trustee of the estate of Paul Cavaliere.

1. The petitioning creditor's costs of and incidental to the debtor's application to set aside bankruptcy notice QN 543 of 1995 and of and incidental to the petition in this matter be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth).

NOTE:Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA   )     No. QP 330 of 1995
GENERAL DIVISION                   )
BANKRUPTCY DISTRICT OF             )
THE STATE OF QUEENSLAND            )

RE:PAUL CAVALIERE

Judgment Debtor

EX PARTE:KINOMA PTY. LTD. ACN 010 697 980 (Trading as LOY'S ALLROUND ROOFING SERVICES)

Judgment Creditor

CORAM:    Drummond J
PLACE:    Brisbane
DATE:     14 August, 1995

REASONS FOR JUDGMENT

This is a creditor's petition for a sequestration order based on non-compliance with a bankruptcy notice.  The judgment was a default judgment.  The debtor, however, made an unsuccessful attempt to set it aside.  The debtor's point is that he was never personally indebted to the creditor; the true debtor was his company Cavaliere Constructions Pty. Ltd..  The debtor was until April 1994 registered as a builder under the Queensland Building Services Authority Act 1991 (Qld) ("the Act"). In April of this year an officer of the Queensland Building Services Authority ("the Authority") gave a notice pursuant to the Act to the debtor, Mr. Cavaliere, which in part reads as follows:

"TAKE NOTICE that the Queensland Building Services Authority has reason to believe that you may have
insufficient financial resources to meet possible liabilities in relation to building work.

The Authority has received information from a number of trade contractors which indicates that you may be indebted to those trade contractors to a significant degree.  The debts allegedly relate to residential construction work carried out by you over the past 3-4 years.

As a result, and subject to receiving your written representations (if any) prior to the date indicated below, the Authority proposes to impose the following condition on your licence, in accordance with Section 36 of the Queensland Building Services Authority Act 1991:-

1.You are not to enter into a contract to carry out building work, submit a tender to carry out building work, or make an offer to carry out building work until you have satisfied the Authority that you have paid all sub-contractors and suppliers monies allegedly owing in relation to the undertaking of residential constructions."

Following receipt of this notice, Mr. Cavaliere surrendered his licence. Section 42 of the Act prohibits the carrying out of building work unless the person doing the work is appropriately licensed under the Act. Only Mr. Cavaliere was licensed up to the time he surrendered it. Cavaliere Constructions Pty. Ltd. was never at any relevant time licensed under the Act.

The judgment debt arose out of work done by the creditor, a roofing contractor, on projects in which the debtor was involved as the builder.  That fact does not of itself necessarily establish that the debtor rather than his company must have contracted with the creditor for the supply of the creditor's materials and services to the debtor's building projects.  But if the position was as the debtor now contends, there must have been some special arrangement between the debtor, as the builder, who can have been the only person entitled to be paid by the building owner for the building work that incorporated the creditor's services and the debtor's company, who, on the debtor's case, had the obligation of paying the creditor for the creditor's materials and services supplied to the debtor's building projects.  The debtor has not, however, put any evidence before the Court to explain how it may have come about that he was entitled to be paid by building owners, while his company, from a source of funds not identified by the debtor, was said to be responsible to pay suppliers of materials and services to those building projects, other than to assert that he was an employee of Cavaliere Constructions Pty. Ltd. and that it was that company which dealt with the creditor.  This unlicensed company could not have lawfully contracted with building owners merely because Mr. Cavaliere, as its employee, was himself a licensed builder.

The creditor's principal, Mr. Loy, says in the affidavit he filed in support of his successful claim for summary judgment:

"I had personal dealings with Paul Cavaliere for services rendered by the Plaintiff Company [i.e., the creditor] at his request.

Annexed hereto and marked with the letter "A" are copies of six (6) invoices directed to Paul Cavaliere.  The last two (2) of those invoices also contained the name "Cavaliere Constructions".  This
was done at Mr Cavaliere's request although I believed it may have been a business name and not a registered Company.  I did not enquire with Mr Cavaliere or any other person as to whether there was a registered Company Cavaliere Constructions Pty Ltd as I had all my personal dealings with Mr Cavaliere and not a Company.

...

The Plaint and Summons in this matter was issued on 28th day of September 1994.  Since that time I have had numerous discussions with Mr Cavaliere and on numerous occasions he has agreed to make payment to me when he received a court settlement."

Mr. Cavaliere does not deny that he carried on business under the name Cavaliere Constructions Pty. Ltd..  It is clear enough from the evidence that that is the style under which he traded.  That Mr. Loy may at Mr. Cavaliere's request have sent some invoices to Cavaliere Constructions Pty. Ltd. rather than to Mr. Cavaliere personally is not, in my view, inconsistent with what Mr. Loy says about having done business only with Mr. Cavaliere personally. 

Mr. Cavaliere has produced evidence that a number of payments made to the creditor for materials and services supplied to Mr. Cavaliere's various projects were paid out of the bank account of Cavaliere Constructions Pty. Ltd., but, in the absence of an acceptable explanation from Mr. Cavaliere for how it could have come about that while Mr. Cavaliere was the builder entitled, in conformity with the Act, to payment by building owners for the work done in building various houses, it was his company, Cavaliere Constructions Pty. Ltd., not himself, who was responsible to organisations such as the creditor who supplied materials and did work on those projects, I am not prepared to find that there is any ground for doubting Mr. Loy's claim that it was Mr. Cavaliere personally with whom the creditor contracted.

I am satisfied that there is a debt truly owing by Mr. Cavaliere personally to the creditor on the same basis as that for which the judgment was given in favour of the creditor and I propose to make a sequestration order against Mr. Cavaliere's estate.

I certify that this and the preceding
four pages are a true copy of the
reasons for judgment herein of the
Honourable Justice Drummond.

Associate:

Date:         14 August, 1995