QBE Insurance (Australia) Limited v Martin Insurance Agencies Pty Ltd
[2018] FCA 903
•13 June 2018
FEDERAL COURT OF AUSTRALIA
QBE Insurance (Australia) Limited v Martin Insurance Agencies Pty Ltd [2018] FCA 903
File number: NSD 916 of 2018 Judge: ALLSOP CJ Date of judgment: 13 June 2018 Catchwords: INSURANCE – claim against former insurance agent and authorised representative – obligation of agent to deliver records and correspondence of principal, upon request, to principal Materials cited: Watts P and Reynolds FMB, Bowstead and Reynolds on Agency (21st ed, Sweet & Maxwell, 2018) Date of hearing: 13 June 2018 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance
Insurance ListCategory: Catchwords Number of paragraphs: 10 Solicitor for the Applicant: Mr P Hegarty of Hegarty Legal Counsel for the Respondent: Mr B Koch Solicitor for the Respondent: Crawford Legal ORDERS
NSD 916 of 2018 BETWEEN: QBE INSURANCE (AUSTRALIA) LIMITED (ACN 003 191 035)
Applicant
AND: MARTIN INSURANCE AGENCIES PTY LTD (ACN 008 032 120)
Respondent
JUDGE:
ALLSOP CJ
DATE OF ORDER:
13 JUNE 2018
THE COURT ORDERS THAT:
1.On or before 29 June 2018, the respondent, through an officer familiar with the claim, file and serve an affidavit, or affidavits, setting out the facts, matters and circumstances giving rise to a defence to the claims in the proceeding, in particular the claims for the repayment of money and the overcharging of Shahin Enterprises Pty Ltd.
2.On or before 29 June 2018, the respondent file and serve its defence to the statement of claim.
3.On or before 13 July 2018, the respondent produce to the applicant, or a person appointed by the applicant, all books, correspondence and documents (both in electronic and paper form) under its control relating to the affairs of the applicant, insofar as they relate to the claims made in the originating application and statement of claim.
4.Any application to vary orders 1, 2 or 3 be made on notice, supported by affidavit material, and be listed before Lee J.
5.The matter be listed for further case management at 9:30am on 5 September 2018.
6.There be liberty to apply on three days’ notice.
THE COURT NOTES THAT:
7.The parties intend to conduct a private mediation prior to 17 August 2018.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(Revised from the transcript)ALLSOP CJ:
In this matter, the applicant, QBE Insurance (Australia) Ltd, seeks various relief against one of its former insurance agencies, Martin Insurance Agencies Pty Ltd. In May 2005, QBE and Martin entered into a contract through which Martin agreed to act as an insurance agent of the applicant and as an authorised representative of it in respect of the sale of insurance products. That agreement was termed a “Distribution Agreement Corporate Authorised Representative” agreement. The agreement was varied in October 2006 and July 2008.
The arrangement came to an end in July 2017, pursuant to termination under cl 17, when, it is said, Martin cancelled its authorised representative status with the Australian Securities and Investments Commission. It is said that Martin also provided written notice to the applicant of its intention to terminate the Distribution Agreement, start trading as an insurance broker, and stop acting as an insurance agent.
Martin’s obligations under the agreement were set out in detail, in particular in cll 4.1 and 4.2. It was permitted to use documentation and intellectual property of QBE by cl 4.3; and, by cl 4.4, it was permitted to use QBE commercial computer systems. Martin’s money handling responsibilities were set out in cl 4.5 of the agreement, which included collecting premiums and other moneys payable to QBE, issuing receipts, holding such premiums and other moneys on trust for QBE, and paying such premiums and other moneys to QBE within specified periods of time.
The fundamental complaint in the statement of claim is one concerning the handling of money. Martin was instrumental in placing QBE on risk in the 2016/2017 and 2017/2018 insurance periods for an insured named Shahin Enterprises Pty Ltd for various policies, being individual special risk, public and products liability, machinery breakdown, electronic equipment, household, and fleet motor policies. These policies were on foot for this two-year period, at least.
The claim is that Martin collected premiums, totalling $1,449,416.48 in respect of the 2016-17 policy year and, of that money, $610,384.72 was not remitted to QBE. Further, it is said that the total premiums for the 2017-18 policies of $1,709,744.97 were not remitted to QBE. The third element of the claim is that Shahin Enterprises was said to have been overcharged for the 2016-17 policies, in the sum of $279,474.37, for which QBE would presumably be responsible for remitting to Shahin Enterprises. These monetary claims are also couched in terms of damages and breach of fiduciary obligation.
The matter was listed today for a case management hearing, unfortunately, too close to the service to permit Mr Koch, who appears for Martin, to give me any detailed answer to my question as to what the defence was. I make no criticism of Mr Koch.
The originating application seeks various relief, but does not seek specifically the delivery up of agency documents. In short minutes provided to me before this morning, there is a provision for a notice to produce by the applicant to Martin for documents. For the following reasons, I do not think, at this stage, that a notice to produce is necessary.
It is the duty of an agent to keep the property of the principal separate, and deliver business records and correspondence of the principal, upon request, to the principal. In the standard work on agency of Watts P and Reynolds FMB, Bowstead and Reynolds on Agency (21st ed, Sweet & Maxwell, 2018) it is stated at Article 50 that:
It is the duty of an agent –
(1)where he holds money or property belonging to his principal, to keep it separate from his own and from that of other persons;
(2)to preserve and be constantly ready with correct accounts of all his dealings and transactions in the course of his agency;
(3)to produce to his principal, upon request, or to a proper person appointed by the principal, all books, correspondence and documents (including emails and other electronic material) under his control relating to the principal’s affairs.
(citations omitted)
Under Article 51, it is stated:
An agent may be required to account in equity to his principal.
In the light of these general principles and what has been said today, what I propose to do is order the following:
THE COURT ORDERS THAT:
1.On or before 29 June 2018, the respondent, through an officer familiar with the claim, file and serve an affidavit, or affidavits, setting out the facts, matters and circumstances giving rise to a defence to the claims in the proceeding, in particular the claims for the repayment of money and the overcharging of Shahin Enterprises Pty Ltd.
2.On or before 29 June 2018, the respondent file and serve its defence to the statement of claim.
3.On or before 13 July 2018, the respondent produce to the applicant, or a person appointed by the applicant, all books, correspondence and documents (both in electronic and paper form) under its control relating to the affairs of the applicant, insofar as they relate to the claims made in the originating application and statement of claim.
4.Any application to vary orders 1, 2 or 3 be made on notice, supported by affidavit material, and be listed before Lee J.
5.The matter be listed for further case management at 9:30am on 5 September 2018.
6.There be liberty to apply on three days’ notice.
THE COURT NOTES THAT:
7.The parties intend to conduct a private mediation prior to 17 August 2018.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop. Associate:
Dated: 14 June 2018
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