Valassis, D. v The Official Trustee in Bankruptcy

[1994] FCA 92

.

L JUDGMENT

IN THE FEDERAL COURT OF AUSTRALIA )

1

NEW SOUTH WALES DISTRICT REGISTRY ) No. N G 735 of 1993

1

GENERAL DIVISION )

ON APPEAL FROM A JUDGE OF THE

FEDERAL COURT OF AUSTRALIA

BETWEEN: DENNIS VAtASSIq

Appellant

AND: THE OFFICIAL TRUSTEE IN

BANKRUPTCY as trustee of
the estate of Colin James

Thomas McCabe, a bankrupt

Respondent

MINUTE OF ORDER

THE COURT	Neaves, Wilcox and Beazley JJ.
DATE OF ORDER	2 March 1994
WHERE MADE	Sydney
THE COURT ORDERS THAT:
--	Note- Settlement and entry of orders is dealt with in Order
36 of the Federal Court Rules.

l. The appeal be dismissed.

2.   The appellant pay the respondent's costs of the appeal.

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) NO. N G 735 of' 1993

)

GENERAL DIVISION 1

9 N APPEAL FROM A JUDGE OF THE

FEDERAL COURT OF AUSTRALIA

BETWEEN: DENNIS VALASSIS

Appellant

AND: THE OFFICIAL TRUSTEE IN

BANKRUPTCY as trustee of
the estate of Colin James

Thomas McCabe, a bankrupt

Respondent

CORAM: Neaves, Wilcox and Beazley JJ.

DATE: 2 March 1994

REASONS FOR JUDGMENT

THE COURT:

This is an appeal from a judgment of a Judge of this
Court (Einfeld J.) given on 7 September 1993 upon the review

of a decision made by the trustee of the estate of Colin James

Thomas McCabe, a bankrupt, rejecting a proof of debt lodged in	that estate by the appellant. Einfeld J. confirmed that
decision.
The proof of debt claimed that, on the date on which he became a bankrupt, namely 2 July 1992, M r McCabe was indebted to the appellant in an amount of $17,892.89. Of that amount, $14,146.25 was said to be the amount of a judgment

obtained by the appellant in the Local Court at Manly on 23 August 1990 against Mr McCabe and two companies, McCabe Insurances Pty Ltd and McCabe Wellings Insurance Brokers Pty Ltd. The balance of the amount claimed in the proof of debt represented interest on the judgment sum and costs.

~t appears that in ~ u l y 1983 the appellant arranged

with Mr McCabe, an insurance broker, for certain insurance policies to be effected on his behalf. Those policies were arranged and afforded cover to the appellant for the period ending 30 June 1984. The appellant then arranged with Mr McCabe for the policies to be renewed, or new policies to be effected, in respect of the same risks for the year ending 30 June 1985. Similar arrangements were made at the end of that year for cover in respect of the ensuing year ending 30 June

1986. Premiums of $3,241.44 and $4,123.39 were paid by the

appellant on 25 October 1984 and 26 August 1985.

The appellant's case before the primary judge was
that policies of insurance were not, in fact, effected in

respect of the years ended 30 June 1985 and 30 June 1986 and

that Mr McCabe was personally liable to refund the amounts of	$3,241.44 and $4,123.39 paid by way of premiums. The
appellant also claimed that Mr McCabe was personally liable to reimburse him for expenditure incurred by him in replacing

.	'>
:	t - '  certain glass in one of the properties that was supposedly

h',

I,>:,::L' ;	+!@
1%.	covered by one of the policies of insurance. The amount in
of the sum for which judgment was entered in the proceedings in the Local Court at Manly. The balance of the judgment sum apparently represented interest on the sums mentioned.
At the relevant time Mr McCabe and his wife were the sole directors and shareholders in a company called McCabe Insurances Pty Ltd. That company was carrying on the business of an insurance broker and it was that company which was to effect the insurance policies. To sustain the contention that Mr McCabe was personally liable for the amounts claimed, the appellant relied on a conversation with M r McCabe in which M r McCabe said that he and his wife were the only two directors and shareholders of the company, that he was the principal business officer, and his wife was the secretary, of the company, that he was licensed to be an insurance broker and that, if the appellant was to deal with the company, he would be dealing with Mr McCabe personally. According to the appellant, Mr McCabe promised him personal attention and what was described as "my personal guarantee". The appellant was also told, so he said, that he was a valuable customer and that M r McCabe would be happy to do business with him.

On the evidence before him, the primary judge found

that the relevant insurance policies were taken out by McCabe

Insurances Pty Ltd as a broker with various insurance

companies, that a number of insurance companies or

underwriters received the premiums paid by the appellant to Mr

McCabe's company and that the appropriate insurance policies

were brought into existence. His Honour concluded that it was

unnecessary to decide whether M r McCabe assumed personal

responsibility for the insurances because the basis on which

the appellant's claim was made, and the basis upon which the

judgment was obtained in the Local Court at Manly, was never

the fact. His Honour, however, went on to find that the

statement relied on by the appellant that Mr McCabe was

providing him with his personal guarantee was not intended to	I
be and was not in fact a personal guarantee of the obligations of McCabe Insurance5 Pty Ltd but an undertaking that he would give the appellant personal attention and proper and adequate professional treatment.	i I
The appellant has sought to have this Court overturn the findings made by the primary judge. Nothing that the appellant has put to us by way of submission leads us to doubt the correctness of the conclusion to which the primary judge came. On the evidence before his Honour no other conclusion was reasonably open.

The appeal is dismissed. The appellant must pay the respondent's costs of the appeal. I certify that this and the preceding 3 pages are a true copy of the Reasons for Judgment herein of the Court.

Associate

Dated: 2 March 1994

The appellant appeared in person

Counsel for the respondent : Mr R.D. Wilson

Solicitors for the respondent : Lobban McNally 5 Harney

Date of hearing	: 2 March 1994
Date of judgment	: 2 March 1994