D'Anglers Paradise Pty Ltd v MMI General Insurance Ltd

[2000] FCA 425

FEDERAL COURT OF AUSTRALIA

D’Anglers Paradise Pty Ltd v MMI General Insurance Ltd [2000] FCA 425

D’ANGLERS PARADISE PTY LTD v MMI GENERAL INSURANCE LIMITED
NG 302 OF 1997

DOWSETT J

4 APRIL 2000

BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	NG 302 OF 1997

BETWEEN:	D’ANGLERS PARADISE PTY LTD APPLICANT
AND:	MMI GENERAL INSURANCE LIMITED RESPONDENT
JUDGE:	DOWSETT J
DATE OF ORDER:	4 APRIL 2000
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1.        The application for an adjournment be declined.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	NG 302 OF 1997

BETWEEN:	D’ANGLERS PARADISE PTY LTD APPLICANT
AND:	MMI GENERAL INSURANCE LIMITED RESPONDENT

JUDGE:	DOWSETT J
DATE:	4 APRIL 2000
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. When this trial commenced yesterday, the applicant sought an adjournment.  I was told that the applicant's counsel had instructions only to seek such an adjournment.  The reason for the application was alleged incapacity on the part of the principal officer of the applicant, Mr Loiero, to give instructions and evidence in the course of the trial.  It was said that he was the only director of the company and that there was reason to believe that he was mentally incompetent.

2. It turns out that he is not the only director. His wife is also a director, although she has orally indicated her wish to stand down from that position. There is no suggestion now of any instrument of resignation as required by the Corporations Law. Thus the company has two directors, one of whom is undoubtedly competent to give instructions, although it is suggested that she may not know much about the matter. I do not necessarily accept that assertion.

3. The true nub of the application for an adjournment is Mr Loiero’s condition.  I have been assisted by evidence from Dr Friend, a psychiatrist practising in Sydney, who has previously had dealings with him. Their first consultation was in 1988 when Mr Loiero was treated for a depressive-type illness.  It seems that Mr Loiero then suffered a minor head injury in 1993 and saw Dr Friend about it in 1994.  He complained of a lack of capacity to concentrate, apparently attributing that to the head injury.  He was examined by a neurologist who found no evidence of neurological deficit.  His subsequent history of consultations with Dr Friend is not entirely clear, but it seems that he consulted him in February of this year, saying that his condition had been substantially improved by the use of medication prescribed by Dr Schloeffel.  Dr Schloeffel has provided two reports, but I do not understand the applicant to rely upon them for present purposes. 

4. Dr Friend examined Mr Loiero this morning and formed the view that he may well not be competent to participate in the trial.  He gave oral evidence by telephone and was cross-examined concerning the content of an article which appeared this morning in a north coast newspaper.  It was written by a journalist named Ferler.  Mr Ferler has also given evidence by telephone today.  He had three telephone conversations with Mr Loiero yesterday and took 15 to 20 pages of notes of those conversations.  He said that he detected no confusion in Mr Loiero's capacity to provide information concerning this case.  In particular he said that all, or the bulk of the information contained in the following extract from the article was given to him yesterday by Mr Loiero.  The extract is as follows:

   Mr Loiero said authorities had quickly pointed the finger at him, alleging he had tried to blow up his business because it was trading poorly.  But he said the business had a turnover of almost $1,000,000 in the nine months it had been open and made about $180,000 in profit.

   Mr Loiero alleges MMI prevented him from re-opening his business.  He alleges it failed to pay out his insurance claim and then, as the Cartwright Centre's insurer, took possession of the business, changing the locks and alarm codes, because he could not get insurance with any other firm amid the arson and fraud allegations.

   His lease agreement required he must have public liability insurance.  Mr Loiero alleged MMI had no evidence to prove that he or anyone he knew was involved in the attempt to blow up his shop.

   And he said authorities had failed to properly investigate his assertion that the attack was a "payback".

   The case in Brisbane was adjourned until today.

   The extract concerns the facts alleged in this case; namely loss as a result of a fire caused by the presence of drums of fuel in the roof of the premises occupied by the present applicant.   Having heard the journalist in question give evidence this morning, I have no doubt that the extract accurately reflects the substance, or at least part of the substance of what was said to him yesterday by Mr Loiero.  Dr Friend was asked in cross-examination whether it would affect his view of Mr Loiero's capacity to participate in the trial if the latter had provided Mr Ferler with the information contained in the extract.  Dr Friend conceded the basis for his opinion as to Mr Loiero's capacity would be effectively undermined if he had in fact been able to give that account.

5. It is, I think, necessary to distinguish between Mr Loiero's capacity to give instructions on behalf of the applicant and his capacity to perform as a witness with a recollection of what happened at the relevant time in 1995.  Dr Friend seemed to think that Mr Loiero had demonstrated sufficient judgment to be able to attend and make judgments based upon legal advice.  His concerns were rather as to his capacity to participate in the trial as a witness, and it was those concerns which Dr Friend conceded were substantially undermined by the account given to the journalist.

6. In those circumstances Dr Friend's evidence goes no way towards demonstrating on the balance of probabilities, or even on any lesser standard, substantial grounds for believing that Mr Loiero is unable to participate in this case, either to the extent of giving instructions on behalf of the applicant or as a witness.  In any event I would be reluctant to adjourn the trial upon the basis of Dr Friend's evidence unless Mr Loiero had been produced as a witness to verify the complaints made to Dr Friend.  That has not been offered.  Quite apart from that matter, I am of the view that no basis for an adjournment has been made out, and I therefore decline the application.

I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated:             6 April 2000

Counsel for the Applicant:	Mr R Cameron
Solicitor for the Applicant:	Dennis & Company
Counsel for the Respondent:	Mr G A Thompson SC Mr D G Clothier
Solicitor for the Respondent:	Dunhill Madden Butler
Dates of Hearing:	3-4 April 2000
Date of Judgment:	4 April 2000