Grounds 2 and 3 - Standard of proof and sufficiency of evidence
55 Grounds 2 and 3 of the appeal are as follows:
2. The learned primary judge erred in failing to apply the Briginshaw standard to the allegations raised by the respondents against the [appellants] in the statutory defence having regard to the gravity of those allegations.
3. Having regard to the grounds raised at paragraphs 1 and 2 above, the learned primary judge ought to have found that there was no evidence or no sufficient evidence to support the statutory defence.
56 It is uncontentious that the amended defence alleged that BNMB's agents or employees had driven the vehicle in an "unsafe, improper or otherwise reckless manner" so as to cause the vehicle to become of unacceptable quality and/or damage the vehicle by abnormal use. The amended defence also alleged that Mr Govedarica exhibited "dangerous and illegal driving manoeuvres" in the presence of a Mercedes-Benz employee. In opening, Mr Miller, counsel for the respondents, told the primary judge he intended to call Mr Pamieta, an assistant service manager at Mercedes-Benz. He said that Mr Pamieta would give evidence of being in the vehicle when Mr Govedarica test-drove it at speeds between 150 and 180 km/h along the West Gate Freeway.
57 The appellants contended that the respondents' allegations were "serious allegations of criminal wrongdoing" and that the standard in Briginshaw v Briginshaw (1938) 60 CLR 336 (Briginshaw) therefore applied. They noted that the primary judgment does not refer to the Briginshaw standard and submitted that it contains no indication that the primary judge turned his mind to how that standard might be applied to the facts of the case.
58 The use of expressions such as "Briginshaw standard" or "Briginshaw test" has been criticised, including for having a tendency to mislead: Qantas Airways v Gama (2008) 167 FCR 537; [2008] FCAFC 69 at [110] (French and Jacobson JJ) and at [123] (Branson J). The standard of proof in the trial below was that set out in s 140 of the Evidence Act 1995 (Cth) (the Evidence Act). Section 140(1) provides that the standard of proof in civil proceedings is the balance of probabilities. Section 140(2) provides that a court, in deciding in a civil proceeding whether it is satisfied that a case has been proved on the balance of probabilities, must take into account: (a) the nature of the cause of action or defence; (b) the nature of the subject-matter of the proceeding; and (c) the gravity of the matters alleged. Having said this, s 140(2) effectively encapsulates Dixon J's classic discussion in Briginshaw regarding the operation of the civil standard of proof: Communications Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466; [2007] FCAFC 132 at [31] (Weinberg, Bennett and Rares JJ).
59 In effect the appellants assert that, having regard to s 140 of the Evidence Act, the primary judge failed to have regard to the gravity of the respondents' allegations when reaching the conclusion that he was satisfied that they had made out the statutory defences. They further allege that having regard to the onus and appropriate standard of proof there was insufficient evidence to support the primary judge's finding that the respondents made out the statutory defences.
60 I disagree. In my view the appellants failed to establish these grounds of appeal.
61 With respect to Ground 2, I say this because the appellants sought to overstate the seriousness of the respondents' allegations. While the amended defence alleged that Mr Govedarica engaged in dangerous and illegal driving manoeuvres the respondents did not call any witnesses to establish that. Nor did they press that allegation in their closing submissions. Their closing submissions did not make any allegation that Mr Govedarica or other BNMB agents or employees had driven the vehicle in an unsafe, improper or otherwise reckless manner. They submitted only that Mr Govedarica drove the vehicle in a manner which involved harsh acceleration and expressly said that they made no allegation of illegality, impropriety or immorality. They submitted that the harsh acceleration they asserted "may have been a result of burn outs, or race track style starts, but this is not necessarily criminal conduct if conducted at a race track or on a private road". Nor did the primary judge make any finding that Mr Govedarica had driven the vehicle dangerously, illegally or unsafely.
62 The respondents' allegation that Mr Govedarica drove the vehicle in a manner which involved harsh acceleration does not constitute a serious allegation of criminal wrongdoing. The gravity of the allegation required to be taken into account, pursuant to s 140(2), is lower.
63 In light of this and my finding in relation to Ground 1 above, Ground 3 also fails. I consider the primary judge's conclusion that the respondents established the statutory defences alleged was open on the evidence.
64 I say this, first, because although noting that there was no eyewitness evidence that the vehicle had been driven in a manner which involved harsh acceleration, the primary judge nevertheless considered that the evidence was sufficient to support an inference that such acceleration caused the damage to the rear sub-frame. The primary judge said (at [109]-[112]) that he based the inference that Mr Govedarica drove the vehicle in a manner involving harsh acceleration on:
(a) Dr Casey's opinion that the damage to the rear sub-frame was caused by harsh acceleration;
(b) Mr Graetz's evidence that there was a "massive pile" of burnt rubber on the inside of the rear wheel arches when he inspected the vehicle on 1 June 2011; and
(c) Mr Graetz's evidence that the tyres were bald on 1 June 2011, given that the tyre tread had been of an acceptable depth when the roadworthy check was undertaken and the vehicle had only been driven about 1,300 kilometres since then.
65 Building on that the primary judge concluded (at [120]) that Mr Govedarica's use of the vehicle amounted to misuse and was abnormal because:
(a) it was abnormal to drive a vehicle in a manner whereby the tyres became so hot as to disintegrate and to propel molten pieces of rubber tyre onto the inside of the rear wheel arch, as Mr Graetz said;
(b) the vehicle was in a perfectly acceptable state when sold, as Mr Kelly and Mr Graetz said in evidence;
(c) the vehicle passed the roadworthiness test prior to its sale;
(d) the vehicle's tyres had a good level of tread when the vehicle was sold yet Mr Graetz's evidence was that they were bald when he inspected the vehicle on 1 June 2011. At that point the vehicle had only been driven approximately 1,300 kilometres since delivery (noting that on Mr Kelly's evidence the tyres on the vehicle would have lasted 15,000 km with normal use); and
(e) while accepting that Mr Govedarica did not bear the onus in relation to the statutory defences, his explanation of the use and manner of driving of the vehicle was unsatisfactory.
66 I consider the evidence provides a sufficient basis for the inferences the primary judge drew.
67 Second, the appellants exaggerated the significance of Dr Casey's refusal to put an exact date on when the metal fatigue in the weld nuts in the rear sub-frame began.
68 His evidence was that the weld nuts on the rear sub-frame failed as a result of metal fatigue arising from harsh acceleration, but he was reluctant to offer an exact estimate of the distance in kilometres over which the fatigue process had occurred because he said it was a difficult parameter to quantify. He said that the absence of long-term rust and fretting on the fatigue surfaces of the weld nuts showed that the fatigue process had "not been taking place for very long prior to the final failure" and was "relatively recent" to the final failure. Dr Casey also said that the fact that the vehicle was repaired for a damaged tail shaft and worn tyres some two months prior to the failure of the rear sub-frame was consistent with harsh driving in the months preceding the final failure (although Mr Graetz later accepted that the tyres were not repaired until later). He concluded that the fatigue process had not been occurring for a prolonged period prior to the final failure.
69 The primary judge set out the thrust of Dr Casey's evidence (at [86]) as follows:
Dr Casey said if the harsh acceleration was on a very regular basis then the total time needed to make the nuts fail could have been short. As there was no rust present on the fracture surfaces, Dr Casey concluded that it was more likely than not that the fatigue cracking had not been taking place from a very long time prior to the final failure.
70 The evidence to which I have referred was a sufficient foundation for the primary judge's finding that Mr Govedarica drove the vehicle in a manner that involved harsh acceleration, thereby causing the failure of the weld nuts on the rear sub-frame, and which driving amounted to misuse or abnormal use of the vehicle.
71 Third, I do not accept the appellants' submission that the primary judge failed to consider whether the weld nuts in the rear sub-frame already had a defect at the time the vehicle was sold to BNMB. Essentially, the appellants base this contention on the primary judge's statement (at [113]) that harsh acceleration of the vehicle "caused or propagated" (emphasis added) the fractures to the weld nuts. They argued that merely propagating (meaning to spread or promote) a pre-existing defect in the vehicle does not meet the test for the statutory defences, and that the primary judge failed to consider the question whether the defect might have been present prior to the point of sale.
72 I disagree. The question as to when the process of metal fatigue in the weld nuts commenced was central in the case. Dr Casey's opinion, which the primary judge accepted, was that it was more likely than not that the fracture process was not of long standing and occurred relatively recently to the final failure. Notwithstanding his Honour's use of the conjunction "or" in the finding that harsh acceleration "caused or propagated" the failure, on a fair reading the primary judge found that the process of metal fatigue and failure in the rear sub-frame occurred after BNMB took delivery of the vehicle: see for example [84]-[86], [93], [114] and [121]. That conclusion was open on the evidence.
73 Fourth, while it is arguable that the primary judge misstated one aspect of Dr Casey's evidence, any such misstatement was not significant to the decision.
74 The primary judge set out the reasoning leading to the conclusion that Mr Govedarica drove the vehicle in a manner that involved harsh acceleration, that the harsh acceleration caused the fractures to the weld nuts, and that the vehicle suspension failed as a result. Having done so, in a paragraph which was not essential to the earlier reasoning, the primary judge went on to say (at [115]):
Embedded in the applicant's contention was the proposition that the vehicle was a high-performance vehicle, well capable of withstanding the forces generated by driving the vehicle in the manner a high-performance vehicle should have been driven. While superficially attractive, that submission overlooked the fact that the vehicle was nonetheless a road sedan. It was not a racing vehicle. As Dr Casey said, the vehicle was capable of acceleration but it was not necessary for there to have been an extraordinary level of acceleration, nor even extreme acceleration, before very harsh acceleration caused the vehicle's sub-frame to fail. In addition, the fact of the vehicle being a high-performance vehicle did not mean its driver could drive it to the point of failure expecting the manufacturer or vendors to meet the financial consequences of driving the vehicle to point of failure.
(Emphasis added in italics.)
75 The appellants contended that the italicised passage is inconsistent with the thrust of Dr Casey's evidence, essentially because Dr Casey said in cross-examination that the acceleration necessary to cause such a failure would have to be "way outside of normal", and he did not usually see that type of failure in similar types of vehicles. He said that he had never seen this type of failure before in a road registered sedan, although he regularly saw it on trucks and racing cars.
76 In my view the asserted misstatement is not material to the judgment. Dr Casey concluded that, based on his inspection of the failed weld nuts, the rear suspension failure was caused by "harsh acceleration". He was buttressed in that conclusion by the fact that the vehicle had suffered a drive shaft failure, and by the fact that the tyres had been rendered bald after only about 1,300 kilometres of post-sale driving. The asserted misstatement appeared after the primary judge had set out his conclusion, and his Honour clearly understood Dr Casey's evidence in regard to the level of acceleration required to generate forces sufficient to cause the metal fatigue in the rear sub-frame. This can be seen (at [93]) where the primary judge noted Dr Casey's evidence, as follows:
Dr Casey agreed with the question put, remarkably under cross-examination, "[s]o you're saying that it was accelerated at - in an extreme way, is that right?" to which Dr Casey said "[h]arsh way, yes". Then, the proposition was emphasised - "[s]o it doesn't have to be extreme acceleration?" to which Dr Casey said "[i]t would have to be very harsh, yes".
77 It is also worth noting the appellants did not put forward a case that Mr Govedarica drove the vehicle in a manner which involved harsh acceleration but which a high-performance vehicle should be capable of withstanding. Their case was that Mr Govedarica did not drive the vehicle in a manner which involved harsh acceleration. The primary judge did not accept Mr Govedarica's evidence in that regard.