Chebli v Insurance Australia Limited t/as NRMA Insurance Limited

The magistrate's decision 19Magistrate Still entered judgment in favour of NRMA Insurance on the basis that the plaintiff was unable to demonstrate to the Court's satisfaction, on the balance of probabilities, that the vehicle was in fact stolen from the place and in the timeframe alleged. Ms Chebli bore the onus of proving that her car was taken without her consent: Vidal v NRMA Insurance Ltd [2005] NSWCA 390; Hammond Brothers Pty Ltd v Insurance Australia Ltd [2004] NSWCA 366. 20Magistrate Still made various adverse credit findings of the plaintiff and the witnesses called on her behalf, his Honour stated: "In my view the Plaintiff's evidence was short on detail, confused, and general, with significant omissions and conflicts such that I can understand the defendants decision to decline the claim based on those conflicts and errors. Her evidence does not hang together with that of her husband, or in fact that of Krystle Chebli until corrected. In relation to the plaintiff's evidence I got the strong impression she was attempting to recount, or invent, or remember events as they should have been rather than as than they actually were and therefore she stumbled with detail and timelines, or alternatively she was attempting to tell a story she did not believe in or understand herself. Her husband's evidence was given in an almost combative manner, was again general and imprecise and with significant unresolved conflicts with the evidence of his wife and Krystle. While the husband's evidence was given in a cocky manner it was not particularly convincing and it seemed to me that he was prepared to answer questions in a convenient manner as it occurred to him. On detailed examination their evidence is contradictory and strains credibility. It further seems to me that the plaintiff and her husband's account is less than truthful and permits speculation about the exact location and circumstances of the car's removal or disappearance. There were 2 keys to the Mercedes owned by the plaintiff, one on a hook at number 42, and one kept by the husband in a bedside drawer. They were produced to the insurers investigator and subsequently examined by the expert who gave evidence. There is no suggestion the keys were otherwise than in the control of the plaintiff or her husband. My analysis of the evidence leaves me with some disquiet regarding the truthfulness of the plaintiff and her husband such that they are unable to demonstrate to the Court's satisfaction on the balance of probabilities that the vehicle was in fact stolen from the place and in the timeframe alleged. As I have already observed whilst there is conflict between the accounts given by herself, her husband and sister-in-law none of the other persons referred to in any of the testimony or evidence namely her father, her brother Martin, her brother Pasquale, or the neighbours were called to give evidence to corroborate any part of the evidence given. THE PLAINTIFFS' CLAIM MUST FAIL BECAUSE HER AND HER HUSBAND'S LACK OF TRUTHFULNESS AND CANDOUR MEANS THAT THE COURT CANNOT ACCEPT THEIR ACCOUNT OF WHAT OCCURRED AND THEY CANNOT DISCHARGE THE ONUS CAST UPON THEM TO DEMONSTRATE ON THE BALANCE OF PROBABILITIES THAT THE VEHICLE WAS STOLEN OTHERWISE THAN WITH HER INVOLVEMENT OR CONSENT."

Did the magistrate err in law? 21Ms Chebli submitted that the Magistrate erred in law by failing to consider a relevant piece of evidence. Mr Les Fuller, a forensic locksmith, referred to three alternative ways that the car may have been taken from the property. Counsel for the plaintiff submitted that the magistrate only made reference in his judgment to the first two methods set out as to how the vehicle might have been stolen but did not refer to the third method. Counsel for Ms Chebli submitted that the third method was uncontested, it was from the same report upon which the magistrate relied, it could have led to an available inference in Ms Chebli's favour and it did not appear to have been considered by the magistrate. Accordingly, it was asserted that the Magistrate, by not considering alternative 3, erred in law 22In Mifsud v Campbell (1991) 21 NSWLR 725, Samuels JA at [728] said: "... it is an incident of judicial duty for the judge to consider all the evidence in the case. It is plainly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected. The extent of the duty to record evidence given and findings made depend, as the duty to give reasons does, upon the circumstances of the individual case. Accordingly, a failure to refer to some of the evidence does not necessarily, whenever it occurs, indicate that the judge had failed to discharge the duty which rests upon him or her. However, for a judge to ignore evidence critical to an issue in a case and contrary to an assertion of fact made by one party and accepted by the judge - as the defendant's denial of having consumed alcohol - may promote a sense of grievance in the adversary and create a litigant who is not only 'disappointed' but 'disturbed' - to use the words which appear in the New Zealand case of Connell v Auckland City Council [1977] 1 NZLR 630 at 634. It tends to deny both the facts and the appearance of justice having been done. If it does, as in my opinion is the case here, then it will have worked a miscarriage of justice and have produced a mis-trial and resulted in what I would take to be an error of law which is reviewable on appeal. Whether it is an error of law or an error of fact, it seems to me a failure by the judge to do what the nature of the office requires." 23Mr Fuller was of the opinion that a Mercedes-Benz car of the type allegedly stolen can only be taken by: (1) Neutralising the steering lock and by-passing the engine immobiliser system by using a "donor replacement" control module; (2) Neutralising the steering lock by force so as to allow a flat-bed tow truck to drag the vehicle and load it on the truck; (3) Using a correctly coded electronic key to start the vehicle and drive it away. 24The evidence of Mr Fuller was that original keys may still be effective if they had not been electronically deactivated. 25Ms Chebli submitted that the magistrate heavily relied on the first two methods in coming to the decision that the car could not have been stolen by those methods due to the noise that would have been generated. The use of a set of keys would not have created the same amount of noise. 26Both the plaintiff and her husband Bradley Norman's evidence, if believed, was to the effect that the car was taken by it being placed on a tow truck (method (2)). On this topic, the plaintiff made the following statements in her record of interview: Q.261 Okay. Now you mentioned something about some tyre marks? A. Some what? Q.262 Tyre marks? A. Tyre marks yeah, on my brother's front, in their driveway they've got grass next to it and we saw marks leading towards - it goes towards next doors driveway. So it looks like the car was taken. Q.263 So it looked like someone had dragged it across. A. That's what Brad reckons. Q.262 So what, they dragged it across the grass? A. Yeah, okay so this is the driveway so they would have probably taken it out. Yep, probably dragged it out, yeah. Q.265 So they didn't drag it straight out. Has he got a concrete driveway? A. He's got a concrete driveway. Q.266 Alright, so were there any marks on the concrete? A. I don't think so. Hang on, the car was parked sorry, in front. I can't remember. Yeah, no it was in the driveway and then it was dragged out. I remember the tyre marks. ... Q.269 So did it have - was there just like one mark? A. I don't know, it just looked like tyre marks. You can tell it was dragged - you can tell it was dragged out. Q.270 So someone would have had to get a tow truck to drag it out? A. Something like that. 27Mr Bradley Norman (the plaintiff's husband) made the following statements in his record of interview: Q.240 Alright. Now you mentioned that it was up on the front lawn. Did you go backup and have a look to see if there was any glass or anything on the ground where they may have. A. There was no glass there. Q.241 Right. A. But it did look like that someone has driven up onto the grass. You can see like track marks of a car and you can see my track marks of my car. Q.242 Right. A. And it looks like you would have seen - so I don't know. I am not a thief you know but what it seems like is that they have kind of pushed it back and then they have pulled it. It is like it has been pulled by another car because you see in the dirt the wheels just turned like that. And common sense is you wheels on the ground can't turn like that, you know what I mean. If you are driving out, you are reversing out. You are not going in that direction, you are going outwards. And the rims were - the mark of the tyre was like that you know. Q.243 Alright. Where were those marks - where were they on the lawn? A. They were pulling right where the car was parked. A bit further back and they were facing like towards that direction. And you can see because I think it was raining before then so the grass was high and when you drive on the grass you can see the line. So I seen the two lines of a car and my car kind of thing going out. Q.244 Alright. A. So I went and knocked on the neighbour's doors to see if they heard anything. The Asians never heard nothing. They were telling me about their incident. They had their car stolen there too and the neighbour where my brother-in-law used to live had their car stolen too. I got a bit worried. I went and knocked on the door again and the son goes yeah I heard something about 1.30 in the morning. A bang or something. He goes I popped my head out. I was half asleep, I popped my head out, I looked out couldn't see nothing so I went back to bed. 28Ms Chebli's sister-in-law also gave evidence of tyre or track marks on the driveway and the grass in the front yard. 29On the alternatives postulated by the expert, the magistrate stated: "In relation to the expert evidence given by Les Fuller in summary his bottom line is that it was almost impossible to steal the Mercedes without the key and that any other technique to either enter the vehicle or render it driveable or capable of being moved would have been noisy and time consuming and alternatively removal by tow truck or tilt tray would have made undue noise." 30His Honour continued: "[T]he plaintiff postulates a manner in which the theft could've occurred by reference to drag marks found at the location ...With the exception of her sister in law Krystle and husband Bradley, no one else gave evidence of any such marks, and they did not appear to have been observed by anyone before the car was actually found to be missing, presumed stolen. Those marks apparently were only noticed thereafter, which is strange, particularly on her account where the vehicle would have had to have been dragged partially off a concrete driveway adjacent to where she parked it and where there was no evidence of marks on that drive way. Based on the evidence of the expert Les Fuller it would seem that the process of non-keyed entry and preparation of the vehicle for removal or actual removal of the vehicle by way of tilt try or tow truck would have created a lot of noise. It is hard to accept considering the location of the vehicle, that the vehicle could have been dragged or loaded onto a tilt tray truck or by any other tow truck without someone hearing something, even it is was just the noise of the truck itself." 31In 3.3 of his report, Mr Fuller expanded on alternative (3) where he stated: "3.3 Additional Keys Ordered I contacted Mercedes-Benz Australia and found that Mercedes records regarding a vehicle with the same VIN as per my instructions had had 2 additional keys ordered - 1 key was ordered on the 17th March 2008 and a second key was ordered on the 5th of March 2008. I noted that the Marshalls Mercedes invoices for the 2 additional keys was different to the above dates - 1 invoice with a key order was dated the 13th March 2008 and the 2nd invoice with a second key order was dated the 25th March 2008. As there are 2 OEM keys supplied with this vehicle from new and I examined 2 additional keys, and as Mercedes-Benz Australia confirmed only 2 additional keys had been ordered for this VIN, it was clear the 2 factory original keys were unaccounted for. 3.4 Original Keys May Still Be Effective It is Mercedes-Benz practice when supplying new keys to de-activate any lost/stolen keys so that they cannot be used to steal the vehicle. This requires the vehicle to be taken to a dealership where a diagnostic tool is attached and the lost/stolen keys are electronically de-activated. Such keys can be re-activated should the keys be found. It is my understanding that the vehicle was not taken to a dealership when the new keys were ordered and therefore the 2 factory original keys are most likely still activated." 32On the topic of keys, the plaintiff was asked in the record of interview as follows: Q.276. How many keys are there to the vehicle? A. Two. ... Q.279 Since you've had the car have you ever had any keys lost or stolen? A. No. Q.280 Have you ever had any keys copied or duplicated? A. No. Q.281 So there was no keys left in or attached to your vehicle at all? A. No. We actually handed both keys to NRMA. They said to return it so we already handed those in. 33Mr Norman also made the statements in his record of interview on the topic of keys: Q.261 Now when you have bought the car how many keys did you get? A. One. Q.262 One key? A. Yep. Q.263 Now have you had any keys copies or duplicated at all? A. Just the other one. Two. One key. Q.264 Yeah. A. Went missing when we first bought the car. Q.265 Hang on start again. When you bought the car you got one key? A. Yep. Q.266 Okay. A. And then when I purchased it and it came home it went missing. Q.267 Okay. A. So then I had to go and ring up Mercedes and had to give them my chassis number, VIN number, the chassis number and then I had to pay them so much money and they ordered me a key. So I ordered it, that was fine. And then when the car was finished I ordered another key. Q.268 Alright, A. Two keys yeah through Mercedes. 34It appears that there could have been four keys in existence, two currently accounted for, one previously lost by Mr Norman and one of the original keys not accounted for. 35NRMA Insurance submitted that Magistrate Still was not obliged, for the reasons identified in Mifsud, to consider the third method described by Mr Fuller, that the vehicle was driven away using a correctly coded key, as it was inconsistent with the evidence of Ms Chebli, her husband and her sister-in-law, that the vehicle had been dragged from the yard rather than being driven away. In circumstances where Ms Chebli had given evidence about the existence of drag marks, which had been repeated by two witnesses, his Honour was entitled to proceed on the assumption that the third method of theft identified by Mr Fuller did not apply in the circumstances of Ms Chebli's evidence. 36It is submitted by Ms Chebli that the credit findings of the magistrate did not affect the available inferences that could have been drawn from the evidence about the third method in para 3.3 and 3.4 of Mr Fuller's report. It was submitted that those paragraphs provide evidence upon which a reasonable inference could be drawn in support of the plaintiff's claims. 37Magistrate Still made adverse findings as to the credit of Ms Chebli, describing her and her husband's account as "less than truthful" and that their lack of truthfulness and candour meant the Court could not accept their account as to what occurred. In Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277 at [14], Macfarlan JA (with whom Basten JA agreed) discussed the circumstances in which an appellate court should intervene in relation to credit-based findings: "The circumstances in which a court exercising appellate jurisdiction by way of rehearing, but in circumstances where witnesses are not recalled, can intervene has been the subject of too much anxious analysis to warrant repetition: see, eg, Costa v The Public Trustee of New South Wales [2008] NSWCA 223. At least once in every decade, there has been a reassessment by the High Court: see, eg, Warren v Coombes [1979] HCA 9; 142 CLR 531; Abalos v Australian Postal Commission [1990] HCA 47; 171 CLR 167; State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In liq) [1999] HCA 3; [1999] HCA 3; 73 ALJR 306 and Fox v Percy [2003] HCA 22; 214 CLR 188. Some cases emphasise a deferential, non-interventionist approach based on judicial restraint and emphasising the primacy of the trial. Other judgments emphasise the entitlement of a dissatisfied party to a full review on the merits in accordance with the terms of the relevant statute, without the imposition of implied constraints. Since Fox v Percy, there has been a tendency to distinguish between errors which are described as credit-based and those where the demeanour of the witness does not constitute a substantial element in the fact-finding. In relation to the former category the test commonly applied, as identified by Macfarlan JA at [66] below, is to require, as a precondition to intervention, 'incontrovertible facts', uncontested testimony, compelling inferences to the contrary or a conclusion that the finding is 'glaringly improbable'." 38Basten JA continued: "15 However, while such guidelines are helpful, the supposed categories are so porous that no definitive test is possible. In most trials, the material facts do not depend upon the assessment of a witness, based upon demeanour alone, but on the complex interaction of documentary material, elements of testimony from different witnesses and matters of emphasis, none of which readily appear from reading a transcript. This fact, sometimes referred to as the 'disadvantage' suffered by the appellate court, is, of course, widely appreciated and is articulated by reference to the oft-cited passage in the speech of Lord Hoffmann in Biogen Inc v Medeva plc [1996] UKHL 18; [1997] RPC 1 at 45. As explained by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy at [41]: 'No judicial reasons can ever state all of the pertinent factors; nor can they express every feature of the evidence that causes a decision-maker to prefer one factual conclusion over another.' 16 It is clear that a nuanced approach is often required: see, eg, Shimokawa v Lewis [2009] NSWCA 266 at [176]- [188] (Giles JA) and the authorities there referred to. The present case was one in which his Honour did make findings based on the oral testimony of three key witnesses. Nevertheless, in careful and clearly articulated reasons, the primary judge explained the limited role that demeanour had played in his assessment and further explained his reasons by reference to the oral testimony and other considerations." 39In the same case, Macfarlan JA said at [66]: "Whilst in these circumstances it can be inferred that his Honour's reliance upon his views of the witnesses' demeanour was limited, it is apparent that that factor was not entirely excluded and that his Honour's conclusions must be regarded as at least in part credit based, attracting the need for the appellants to surmount the hurdle identified in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 in order to challenge his Honour's conclusions successfully. In substance it is thus necessary for the appellants to satisfy this Court that his Honour's findings were contrary to 'incontrovertible facts or uncontested testimony', 'glaringly improbable' or 'contrary to compelling inferences' (ibid at [28] - [29]). It is sufficient in this respect for an appellant to demonstrate that a primary judge has treated objective circumstances as providing material support for the credibility or reliability of a witness when those circumstances cannot reasonably be regarded as providing that support (see Shimokawa v Lewis [2009] NSWCA 266 at [181] and Davis v Veigel [2011] NSWCA 170 at [42])." 40In Percy v Fox [2001] NSWCA 100, Beazley and Handley JJA (Fitzgerald AJA dissenting) overturned a decision of Herron DCJ whose acceptance of the evidence of Ms Fox was inconsistent with the other evidence. In Fox v Percy [2003] HCA 22; (2003) 214 CLR 118, the High Court unanimously upheld the decision of the NSW Court of Appeal. McHugh J said at [94] to [96]: "94 The judgment of Beazley JA shows that her Honour was well aware that findings of fact, based on credibility or demeanour, can only be reversed by an appellate court in exceptional cases. As her Honour recognised, findings based, expressly or inferentially, on the credibility of Ms Fox and Mr Murdoch could not be overturned merely because the evidence of Ms Percy seemed more persuasive than their evidence. ... 96 No matter how unimpressive a witness Ms Percy appeared to be, these incontrovertible facts powerfully confirmed her testimony that she was on her correct side of the road. Conversely, no matter how impressive as witnesses Ms Fox and Mr Murdoch appeared to be, their testimony could not be accepted unless there was a rational explanation of these incontrovertible facts that was consistent with their testimony. The presence of the skid marks and the resting place of the van, in particular, pointed irresistibly to Ms Fox being on her incorrect side of the road." 41Ms Chebli submitted that the uncontested paragraphs of Mr Fuller's report provide evidence from which a reasonable inference can be drawn and thus Ms Chebli is not faced with the issues identified in Fox v Percy as to credit. I do not agree. If the third method was to be considered as a likely method by which the car was stolen (and this was not the case run by the plaintiff at trial), the magistrate would have had to accept the witnesses' evidence as being truthful. 42The magistrate would have had to make findings that neither the plaintiff nor her husband used their keys to start the car. Because of their lack of truthfulness and candour, he did not accept their account of what occurred and he could not make those findings. Without those positive findings that the plaintiff and her husband did not use their keys to start the car, they cannot be excluded as persons who may have used a key. Therefore, the factual basis for the expert's assumption of an unknown person using a key to take the car could not be made out. It follows that the factual matrix that underpinned method (3) was not made out. Hence method (3) did not need to be considered. There is no error of law. The decision of the magistrate dated 16 March 2012 is affirmed. The appeal is dismissed. 43Costs are discretionary. Normally costs follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed.

The Court orders that: (1) An extension of the time to appeal is granted. (2) The decision of Magistrate Still dated 16 March 2012 is affirmed. (3) The appeal is dismissed. (4) The summons filed 10 August 2012 is dismissed. (5) The plaintiff is to pay the defendant's costs as agreed or assessed.

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