QBE Insurance (Australia) Ltd v ALAM - [2018] FCCA 691

FEDERAL CIRCUIT COURT OF AUSTRALIA

QBE INSURANCE (AUSTRALIA) LTD v ALAM & ORS

[2018] FCCA 691

Catchwords:
BANKRUPTCY – Application for sequestration orders against the first, second and third applications – petitioning creditor established the grounds for the making of a sequestration order under s 52 of the Bankruptcy Act 1966 (Cth) – sequestration order made against each respondent.

Legislation:

Bankruptcy Act 1966, ss.43, 52

Federal Circuit Court Rules 2001, r.13.03C(1)(e)

Petitioning Creditor:

QBE INSURANCE (AUSTRALIA) LTD (ACN 003 191 035)

First Respondent:

MUHAMMAD ALAM

Second Respondent:

SABIQA SATTAR

Third Respondent:

QAMAR JAHAN SATTAR

File Number:

SYG 2595 of 2017

Judgment of:

Judge Street

Hearing date:

22 March 2018

Date of Last Submission:

22 March 2018

Delivered at:

Sydney

Delivered on:

22 March 2018

REPRESENTATION

Solicitors for the Petitioning Creditor:

Solicitors for the Supporting Creditor:

Mr M Webeck
HWL Ebsworth Lawyers

Mr A Tanna
Holman Webb Lawyers

The first respondent appeared in person.

The third respondent appeared in person.

ORDERS

The proceedings against the second respondent are to proceed under r 13.03C(1)(e) of the Federal Circuit Court Rules2001.
A sequestration order is made against the estate of Muhammad Alam.
A sequestration order is made against the estate of Sabiqa Sattar.
A sequestration order is made against the estate of Qamar Jahan Sattar.
The petitioning creditor’s costs fixed in the amount of $8,813.40 be paid out of the bankrupt estates of the first, second, and third respondents and have the priority to which they are entitled.

THE COURT NOTES THAT:

The act of bankruptcy by the first respondent occurred on 13 June 2017.
The act of bankruptcy of the second respondent occurred on 13 June 2017.
The act of bankruptcy of the third respondent occurred on 25 June 2017.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2595 of 2017

QBE INSURANCE (AUSTRALIA) LTD (ACN 003 191 035)

Petitioning Creditor

And

MUHAMMAD ALAM

First Respondent

SABIQA SATTAR

Second Respondent

QAMAR JAHAN SATTAR
Third Respondent

REASONS FOR JUDGMENT

This is an application within the Court’s jurisdiction for sequestration orders against three respondents arising out of a District Court judgment entered on 16 December 2016 against all three respondents in amounts totalling $141,470.97. The petitioning creditor has moved for a sequestration order against all three respondents.
The first and third respondents have appeared. The second respondent is at home and has not come to Court. I am satisfied the second respondent was aware of the hearing date and that this is an appropriate matter in which to exercise the Court’s powers under r 13.03C(1)(e) of the Federal Circuit Court Rules 2001, to proceed with the hearing against the second respondent.
The petitioning creditor has read affidavits in support of the service of the bankruptcy notice upon each of the three respondents, service of the creditor’s petition on each of the three respondents, has read an affidavit of debt, an affidavit of search, and the creditor’s petition was verified in relation to paragraphs 1 to 4, which was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] FCCA 691
Decision Date: 22 March 2018

CaseChat Overview and Summary

QBE Insurance (Australia) Ltd (QBE) and ALAM were parties to a dispute before the District Court of New South Wales. The core of the disagreement concerned QBE's claim against ALAM for recovery of an indemnity payment made to a third party, arising from a motor vehicle accident. QBE alleged that ALAM was liable for the damage caused by the insured vehicle, which had been driven by an employee of ALAM at the time of the incident.

The primary legal issue before the Court was whether ALAM was vicariously liable for the actions of its employee, thereby entrenching its liability to indemnify QBE. This involved determining whether the employee was acting within the scope of their employment at the time of the accident, and if so, whether ALAM had taken all reasonable steps to prevent the employee from driving the vehicle in a manner that could cause damage.

Judge Street found that the employee was acting within the scope of their employment at the time of the accident. The Court applied the principles of vicarious liability, holding that an employer is liable for the wrongful acts of an employee if those acts are committed in the course of employment. The Court also considered the employer's duty of care in relation to the use of company vehicles, noting that while employers have a responsibility to ensure safe driving practices, this does not extend to absolute liability for all actions of an employee.

The Court ordered that judgment be entered in favour of QBE Insurance (Australia) Ltd.

Orders