FAI General Insurance Co Ltd v McSweeney, Brian Albert & Ors & Travel Compensation Fund v FAI General Insurance Co Ltd (Part III) [1998] FCA 357

FEDERAL COURT OF AUSTRALIA

INSURANCE - claims made and notified policy - insured, a firm of accountants - "dishonesty extension" covering dishonest or fraudulent conduct, but not that of any person committing or condoning fraudulent act - client of the firm, a travel agent and member of the Travel Compensation Fund ("TCF") - audited accounts required to be lodged annually with TCF as a condition of membership - accounts not prepared and audited in time - insured firm applied for extensions of time within which travel agent was to file audited accounts citing, as reasons, "computer failure" and "change of ownership" - whether applications for extension were fraudulent due to deliberate suppression of travel agent's insolvency and the intermingling of its accounts with those of a related entity - no independent duty of disclosure pleaded, statutory or otherwise - whether applications fraudulently gave rise to an implied representation that the extensions of time were required only because of "unremarkable practical difficulties" or "ordinary and unalarming reasons" unconnected with travel agent's financial condition or its relation with another entity for which accounts had to be produced so that travel agent's own accounts could be produced - whether insolvency and intermingling of accounts were reasons why audited accounts were not able to be lodged by date due - identification of what representations of fact were made - whether implied representation was made - whether all elements of fraud made out - identification of what representations of fact were intended to be made by the insured - whether TCF acted in reliance on the representations - relevance of fact that no evidence led directed to the issue of inducement - relevance of other fraudulent conduct as similar fact evidence - whether evidence of "significant probative value", "striking similarity" or "underlying unity" - whether disclosure by insured firm of financial condition of client would have breached insured's professional obligation. Travel Agents Act 1986 (NSW) Evidence Act 1995 (Cth), s 97 (1) Gould v Vaggelas (1985) 157 CLR 215 - appl. San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 - appl. Derry v Peek (1889) 14 App Cas 337 - appl. Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 - appl. D F Lyons Pty Ltd v Commonwealth Bank of Australia (1991) 28 FCR 597 - appl. Zaknic Pty Ltd v Svelte Corporation Pty Ltd (1995) 61 FCR 171 - appl. FAI GENERAL INSURANCE CO LIMITED v BRIAN ALBERT McSWEENEY & ORS NG 312 of 1992 TRAVEL COMPENSATION FUND v FAI GENERAL INSURANCE CO LIMITED NG 948 of 1992 REASONS FOR JUDGMENT (PART III) LINDGREN J SYDNEY 9 APRIL 1998