HOLMES v. QBE INSURANCE LIMITED [2004] NSWCA 432

LOWER COURT District Court JURISDICTION : LOWER COURT DC 11361/2001 FILE NUMBER(S) : LOWER COURT Nield DCJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41225/03 DC 11361/01

Beazley JA Hodgson JA Campbell J

The appellant was injured when his motor cycle ran off the Tarana-Sodwalls Road, Tarana during a ride with 40 other members of the Blacktown Chapter of the Harley Owners Group.

The issue before the trial judge was whether the appellant's motor cycle had been clipped from behind by a motor cycle ridden by one Stephen Gray, who also crashed at the site and died. The trial judge found against the appellant on the basis of evidence given by a witness for the respondent which contradicted the appellant's evidence and which the trial judge held he was unable to reject.

The appellant appealed to the Court of Appeal on the ground that the trial judge did not give adequate reasons for his decision and that his Honour failed to consider the evidence properly. HELD per Beazley JA (Hodgson JA and Campbell J agreeing):

(i) The trial judge failed to analyse the evidence as a whole to determine whether the appellant's version of the accident should be accepted. The inconsistencies in the evidence of the witness whose version of events he accepted over that of the appellant. As a result, the trial judge treated the two principal witnesses inconsistently. (ii) A trial judge has an obligation to give adequate reasons for decision; Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 ; Mifsud v Campbell (1991) 21 NSWLR 725 ; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430.

(iii) The content of the obligation varies from case to case. It may be sufficient for a court, faced with two irreconcilable versions of an incident unsupported by any other evidence, to simply say that it preferred one witness rather than the other; Flannery v Halifax Estate Agencies Limited [2000] 1 WLR 377 .

(iv) Normally however, the contents of an adequate statement of reasons include a reference to relevant evidence, any material finding of fact and any conclusions or ultimate findings of fact reached, the reasons for making those relevant findings of fact and conclusions and the reasons for applying the law to the facts found; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 .

(v) In this case, the trial judge's error, in not properly considering the evidence of the appellant nor the inconsistencies in the evidence of the principal witness for the respondent, cannot be cured by a reconsideration of the facts without the advantages of a trial judge's assessment of the credit of the witnesses. Therefore, a new trial is the appropriate course; Hadid v Redpath (2001) 35 MVR 152 .

(i) If the substantial basis upon which the trial judge found against the appellant had been that the evidence of the appellant was unreliable, the trial judge's reasons would not have been inadequate.

(ii) It is not necessary in all cases, where a verdict is found for a defendant, for the judge to assess damages. If the decision is based on some legal deficiency in the plaintiff's case, then it is good practice to assess damages. ORDERS

2. Set aside verdict, judgment and orders made by the trial judge.

3. Order that the matter be remitted to the District Court for rehearing.

4. The respondent to pay the appellant's costs of the appeal, but to have a certificate under the Suitors Fund Act 1951 (NSW) if so entitled. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41225/03 DC 11361/01

Beazley JA Hodgson JA Campbell J

23 November 2004 DANIEL ST JOHN HOLMES v. QBE INSURANCE LIMITED Judgment 1 BEAZLEY JA: The appellant was severely injured when his motor cycle ran off the Tarana-Sodwalls Road, Tarana, which is located some kilometres east of Bathurst. The appellant was a member of the Blacktown Chapter of the Harley Owners Group and was on a motor cycle ride with about 40 other riders from Eastern Creek to O'Connell on the Oberon-Bathurst Road, via Bathurst. The accident occurred at about 1.45 pm, about 15 minutes after the appellant had left the O'Connell Hotel, O'Connell, where the group had stopped for lunch. 2 The essential issue in the case before the trial judge was whether the appellant's motor cycle had been clipped from behind by a motor cycle ridden by one Steve Gray, who also crashed at the same place and died. 3 The trial judge had before him the evidence of the appellant, a Mr. Bayliss, the police sergeant who attended the scene of the accident, Sergeant Madgwick, two expert reports, and statements of a number of other persons. The evidence of the appellant and Mr. Bayliss was in conflict in a way that I will describe more fully below. The trial judge accepted Mr. Bayliss' evidence and entered a verdict for the respondent. 4 The essential issue which emerged on the appeal is whether the trial judge gave adequate reasons for his decision.

Trial judge's reasons Consideration of the appellant's evidence: 5 The trial judge summarised the appellant's evidence-in-chief and his evidence in cross-examination. In addition, he referred to four statements that had been made by the appellant prior to hearing. He set these statements out verbatim. The first statement had been made by the appellant to Sergeant Madgwick at Lithgow Hospital about 5 hours after the accident. In that statement the appellant said: "I was the rider of the first bike. We were just travelling back towards Lithgow. I was coming around a right hand bend in the road. Something spooked and ran out onto the road. I don't know if it was a roo or a wallaby. I braked so to avoid hitting the thing. I tried to avoid hitting it. I don't know if the bike behind clipped me or what but the bike slid out and my foot went. I just heard a crunch and I was down the embankment. What speed were you travelling at. 80-90 kmh. I don't know. It was under the limit. I was gearing down to go around the bend. Do you know what order you were riding in. I was in front. There was another feller a long way in front of me. Steve Gray was behind me." 6 His Honour observed that the appellant did not remember making that statement but he accepted that it had been made. His Honour did not however refer to the fact that at the time the appellant made the statement, he had been treated with more than one dose of morphine and that the interview had to be stopped "due to the 'appellant's' need for treatment". 7 The second statement was again made to Sergeant Madgwick, this time three days after the accident and again whilst the appellant was in hospital. On this occasion, the appellant is recorded as saying: "What I said on Sunday was is basically it. I remember seeing Steve coming up behind me in my mirrors. I saw it coming as we ride with our lights on. I remember braking coming into the corner. The wallaby or whatever it was was there. I broke (sic) pretty heavy to let it get out of the way. That's when I felt the bump. That's it. I thought I had it but I didn't. I thought I had control. What is your riding experience. I've been riding since I was 17, 27 years." 8 The evidence before his Honour was that this statement was taken over a period of about half an hour. Counsel for the appellant made the point that much more must have been said during the course of the interview than these bare words, given the length of time for which the appellant was questioned. 9 The next statement was made on 24 March 1999 to the appellant's solicitor. Again, the appellant was still in hospital. The statement made to the solicitor was in the following terms: "On the above date I was the lead rider in a group of approximately eight riders travelling approximately north to north-east on the Tarana/Sodwalls Road between Bathurst and Lithgow in the direction of Lithgow. I was on a ride which was organised by the Harley Owners Group (H.O.G.), Blacktown Chapter. As I neared a right-hand bend, I sighted what I though (sic) to be a wallaby on the right-hand side of the road. It had been moving towards the edge of the road and, as I was concerned it might move into the roadway and into my path, I applied my hand and foot brake. I had already slowed the bike to enter into the bend, which I estimate I was entering at approximately 80 kilometres per hour. As I applied the brakes upon seeing the wallaby, I looked into my right-hand rear vision mirror to see the motorcycle behind me almost upon me. As soon as I saw this, I re-accelerated to attempt to avoid a collision but the front wheel of that motorcycle struck my rear wheel with force causing my bike to go over as a consequence of which I suffered severe injury to my right leg. A very close friend of mine, Stephen Gray, was riding the motorcycle, which struck me. Stephen died in this accident. At this stage I am unable to tell you what the cause of his death was." 10 The final statement was made on 24 March 1999 in the Motor Accident Personal Injury Claim Form which was completed by the appellant's solicitor and signed by the appellant. In that statement, the appellant said: "I was the lead rider in a group of approximately 8 riders travelling east on the Tarana/Sodwalls Road between Bathurst and Lithgow. My friend, Stephen Gray was riding immediately behind me. As I came into a sweeping right hand bend at approximately 80kph I saw what I think was a wallaby at the edge of the road on the right hand side. I re-applied my hand and foot brake in case the animal crossed my path. As my bike was pulling up I checked my rear vision mirror only to see Stephen's bike almost upon me. His bike hit my rear wheel and caused my bike to go over." 11 Having set out these statements, the trial judge at [34] next set out in summary form, the evidence of the appellant in chief and in cross-examination. Then at [35] his Honour set out the differences in the appellant's versions. In particular, he drew attention to the following differences. In his first statement the appellant said "The kangaroo or wallaby 'ran out to the road'". In his second statement he said that he "broke pretty heavy to let it get out of the way". In his third statement the appellant said he "was concerned it might move into the road and into my path"; whereas in the fourth statement he said I "re-applied my hand and foot brake in case the animal crossed my path". 12 Then, in his evidence as his Honour recorded it said "that the animal did not come onto the road ahead of him". The appellant's actual evidence on this was "I slowed down to make sure they weren't going to come across the road". The appellant continued, in what appeared to be a statement of his thought processes at that time "O yeah, they're gone, sweet, no problems there". 13 His Honour drew attention to the differences relating to the position of Steve Gray and whether Gray's bike clipped his. His Honour recorded the differences as being these: "… in his second statement [the appellant] said that he remembered 'Steve coming up behind me in my mirrors. I saw it (Steve's bike) coming as we ride with our lights on, … in his third statement [the appellant] said 'I looked into my right-hand rear vision mirror to see the motorcycle behind me almost upon me … the front wheel of that motor cycle struck my rear wheel. … in his fourth statement he said 'I checked my rear vision mirror only to see Stephen's bike almost upon me.'" 14 His Honour then compared those statements with the appellant's evidence-in-chief where he said that he had seen the lights from the headlight of Mr. Bayliss' motor cycle in his motor cycle's right hand rear vision mirror. The appellant's exact evidence in this regard was: "… The curve continued on my line and my right hand mirror filled up with headlight … I have looked around … over my right shoulder … As I looked around [the deceased] is heading straight for me on his bike … he is overtaking [Bayliss] which is against the rules in HOG you know, you're not allowed to do anything other than a single file around curves or corners and he's actually inside [Bayliss] … Heading straight for me. Straight lining at me … I would never have seen Steve going to hit me if [Bayliss] hadn't got in the same line as me and I've turned around. …" 15 The third difference to which his Honour adverted was that in the first statement, the appellant had said that he did not know whether the bike behind had clipped him, whereas in the second statement he said that he felt "the bump". His Honour did not refer to the appellant's evidence-in-chief in which he again stated that the bike behind him "Just clipped my back tyre or something". 16 Having considered the evidence to which I have referred, his Honour concluded that the appellant's memory had changed with the passage of time and his Honour found it difficult to accept that the plaintiff had a clear memory of what had happened. Earlier, at [25] his Honour had made a demeanour finding in respect of the plaintiff, which was sufficient to "give rise to a doubt about [his] evidence". In particular, his Honour noted that the appellant was a poor historian, stating that he was vague about many aspects of his life before the accident. He also observed that he was emotional, particularly when talking about the deceased. He said however that he was not prepared to reject the evidence of the appellant because of his manner when answering questions in evidence. 17 His Honour then considered the following aspects of Mr. Bayliss' evidence in relation to the accident. According to Mr. Bayliss in his evidence-in-chief, he had overtaken the deceased, Mr. Gray. He said that about a minute before the accident was about 3-5 metres behind the appellant. He described the appellant's motor cycle being "probably the middle of the left lane" and located his own position as being closer to the left hand edge of the road. He observed the appellant's motor cycle "drifting" and that the appellant "laid the bike over". He said he, Mr. Bayliss, had to "understeer the corner to avoid hitting the back of him" (it was agreed between counsel that the correct expression for Mr. Bayliss' manoeuvre was "oversteer"). He said that when he pulled up, he saw the motor cycle of another rider, Mr. McDonald, go past him and onto the left hand side of the road. In cross-examination Mr. Bayliss said, additionally, he "accelerated" his motorcycle and caught up with the plaintiff; the plaintiff "appeared … to drift to the left"; to avoid hitting the plaintiff, he "cut in across to the right" hand side of the road. In essence Mr. Bayliss' evidence was that Mr. Gray was never near him or the appellant and did not clip the wheel of the appellant's motor cycle. 18 His Honour had also made a demeanour finding in respect of Mr. Bayliss, making the same finding as he did about the appellant, namely that there were things about his demeanour which were such that "could give rise to a doubt about [his] evidence". His Honour gave different reasons for the finding in relation to Mr. Bayliss. He said that "Mr. Bayliss … was positive about everything in his evidence-in-chief, but he was less positive about many things in his cross-examination". His Honour also observed that he had not shown emotion during his evidence-in-chief but "was emotional, perhaps hostile, during his cross-examination" (emphasis added). He then came to the same conclusion about demeanour as he did in respect of the appellant, namely, that he was not prepared to reject his evidence because of his manner when answering questions. 19 Having summarised Mr. Bayliss' evidence, his Honour then referred to the statement evidence of other motor cycle riders, none of whom had seen either the appellant or the deceased lose control over their motor cycles. 20 His Honour next referred to the reports of the engineers. He noted that Mr. Keramidas, the engineer retained on behalf of the respondent had inspected the scene of the accident but based his conclusion upon a tyre mark on the road which was established not to have been caused by the motor cycle of either the appellant or Mr. Gray. Mr. Schnerring, who had prepared a report on behalf of the appellant, had not inspected the scene of the accident but based his report upon the materials provided to him. In his report, he supported the version of the appellant and rejected the analysis of Mr. Keramidas. Having made those observations about the expert reports, and none other, his Honour concluded that neither analysis assisted him in deciding whether to accept the evidence of the appellant or that of Mr. Bayliss. 21 His Honour then, at [43]-[49], set out his reasons for decision. He observed that there were really only two possibilities: either the rear wheel of the appellant's motor cycle was struck by the front wheel of Mr. Gray's motor cycle as the appellant claimed or it was not, as Mr. Bayliss claimed. He said that if the evidence satisfied him that the rear wheel of the appellant's motor cycle was struck by the front wheel of the deceased's, then the appellant was entitled to succeed, subject only to a question of contributory negligence. Conversely, if the appellant's rear wheel was not struck as he claimed, then he must fail. 22 His Honour observed at [44] that there was nothing inherently improbable in the version of either the appellant or Mr. Bayliss. He next commented, at [45] that the analysis by each of the engineers did not "unequivocally" support either version. 23 He next said, at [46], that he had carefully considered the evidence of both the appellant and Mr. Bayliss. He observed that both might be incorrect but at least one had to be incorrect. He then said: "46 … I have weighed the evidence of the plaintiff against the evidence of Mr. Bayliss (bearing in mind that the onus lies on the plaintiff to prove his case on the balance of probabilities) and I find that I cannot reject the evidence of Mr. Bayliss . 47. My accepting the evidence of Mr. Bayliss results in my rejecting the evidence of the plaintiff . I do not reject the evidence of the plaintiff because I think that he has lied, rather I reject his evidence because I prefer the evidence of Mr. Bayliss. I do not think that the plaintiff has lied, rather I think that he honestly believes what he said about the accident to be true, but I think that he is mistaken in his belief." (emphasis added) 24 The appellant claims that his Honour's reasons for judgment, so stated, are inadequate. In particular, he submitted that there had been a significant challenge to Mr. Bayliss' evidence and to his credibility which had not been dealt with by the trial judge. Counsel for the appellant identified six matters arising from the evidence that the trial judge had failed to deal with. He submitted that each was significant and relevant to the weight that should have been placed on Mr. Bayliss' evidence compared to the weight that should have been placed upon the appellant's evidence. 25 The first matter complained of was that there were inconsistencies between Mr. Bayliss' oral evidence and the prior Statutory Declaration provided by Mr. Bayliss to an investigator for the respondent. His Honour made no reference at all to that statement. In it, Mr. Bayliss had said that the appellant was 5-10 metres ahead of him. By contrast, in his oral evidence he said that the appellant was only 3-5 metres ahead of him. In his Statutory Declaration he placed his motor cycle to the right of the appellant stating "I think that I was a little off centre of the roadway (towards the nearside) and Danny occupied a similar position but perhaps a little closer to the nearside edge of the bitumen" whereas in his evidence he said that he was "on the outside left lane" and the appellant was "towards the middle of the left hand [lane]". In his Statutory Declaration, he said that the appellant's motor cycle "went down on its offside (right side) and skidded along the bitumen. It appeared as if his tyres had skidded on the loose gravel on the surface of the road, causing him to put the motor cycle down". In his evidence-in-chief however, Mr. Bayliss placed himself on the appellant's left hand side, as referred to above. He was asked what happened to the appellant. He said: "… It was just like slow motion. He sort of just laid the bike over and I was just watching trying to steer away from him. Q. Whereabouts did he lay the bike over? A. Just as it hit the dirt."

However, in cross-examination, he said he was not sure whether the appellant's motorcycle " came down on the dirt or the tar ". He made no reference, in his evidence to there being gravel on the road. 26 This was a significantly different version from that contained in the Statutory Declaration. Mr. Bayliss was cross-examined about some of these inconsistencies and omissions. Mr. Bayliss responded that he could not recall which side the motor cycle had gone down on and, as mentioned, he could not recall whether the bike skidded along the bitumen or not. 27 Counsel for the appellant also sought to exploit the differences in Mr. Bayliss' evidence as between his evidence-in-chief and cross-examination and his Statutory Declaration in relation as to the position of Stephen Gray. In his Statutory Declaration, Mr. Bayliss was specific as to the order of departure from the hotel. He said, in relation to the group that was involved in the accident, that the appellant went first followed by Gray, then himself, Alex McDonald and Victor Holmick, both of whom also crashed at the site. He said that he overtook Gray somewhere between Tarana and the accident but he could not specify exactly where. His inclination was to think he had done so early in the journey after leaving Tarana. He said they were all riding close together. In his evidence in the proceedings, Mr. Bayliss could not recall the order in which they had left Tarana, except that he remembered he and Gray left together but did not recall when the appellant left. He did recall overtaking Gray. I have already referred to the difference in the distances in the Statutory Declaration and in the evidence-in-chief. In the Statutory Declaration Mr. Bayliss said he was behind the appellant and that Mr. Gray was about the same distance behind him. In his evidence he said he had "no idea where Steve Gray was leading up to the corner". 28 In his cross-examination Mr. Bayliss became unsure of a number of things including how far behind the appellant he was at various times. He conceded however, that he was accelerating and catching up to the appellant. Nothing of this was said in the Statutory Declaration. This may have relevance to the appellant's claim that Mr. Bayliss said that he and Gray had been racing. I refer to this below. 29 There was no mention, let alone analysis, of any of these inconsistencies in the trial judge's reasons. Nor was there any reference to Mr. Bayliss' lack of recollection when giving his evidence and/or when he was challenged with the contents of his Statutory Declaration. This is relevant because an aspect of the demeanour finding in relation to the appellant was that he was a poor historian. It appears from the transcript that the matters in respect of which he was a poor historian related to the dates of his earlier working life. His Honour appears not to have appreciated that he was potentially treating the two principal witnesses inconsistently. 30 The appellant next points to the inadequacies in his Honour's reasons in his failure to deal with the objective evidence collected by Sergeant Madgwick at the accident site. According to a diagram made by Sergeant Madgwick of the accident, the riders were located in the following order along the side of the road. McDonald, who had been the third rider, was first along the side of the road. The appellant was next, near to a tree. The deceased, Steve Gray, was further back, that is, closer to the direction from which they had come, than the appellant. The last rider, Holmick, was further back again and closest to the curve around which they had come. There was no dispute about the location of each of the riders or their bikes once they had come off. 31 The appellant contends that an analysis of these positions, as compared to the evidence given by the appellant and Mr. Bayliss respectively, would have tended to a conclusion that the appellant's version was more probably correct than was Mr. Bayliss'. In particular, on Mr. Bayliss' version, the appellant had already crashed and he himself had brought his bike to a halt and nothing untoward had happened between the appellant's and Gray's motor cycles. As, on his evidence in the proceedings, Mr. Bayliss made no reference to there being gravel, or other material on the road which might have indicated a cause for the accident, and as he did not describe the bend as being dangerous, it was argued that if full weight was given to Mr. Bayliss' account then "given Gray's final position after the accident compared to that of the Appellant, and the fact that Bayliss had already safely come to a halt ahead of him, it is plain that Gray could not have gone off the road attempting to avoid a collision with the Appellant". It followed, according to the submission, that on Mr. Bayliss' account, Gray had simply gone off the road riding around a non-dangerous curve at a safe speed. 32 On the other hand, counsel for the appellant submitted that if Gray had been cutting the corner and attempting to overtake Bayliss and in the process clipped the rear of the appellant's motor cycle, which is the version of the accident for which the appellant contended, it was consistent that Gray may have become destabilised and come off the road west of the appellant, who, on his evidence, became destabilised, attempted to right his vehicle, but was not able to control it sufficiently to avoid coming off further down the road. Further, the fact that the appellant attempted to "stand his vehicle up" after having been clipped by Gray, is a version which is consistent with the injuries which the appellant sustained. 33 The point of course, for the purposes of this argument, is not to find a resolution of these matters. Rather it is to demonstrate that the trial judge did not even advert to them, let alone analyse them. 34 There are other omissions in the trial judge's reasons. One upon which the appellant relies is the statement he alleges Mr. Bayliss made to him at Lithgow Hospital later that day. According to the appellant, he had the following conversation with Mr. Bayliss: "Appellant: 'Oi mate, what's going on? Where did you come from?' Bayliss: 'What do you mean?' Appellant: 'Last time I saw you and Steve you were at least 150 metres behind me' Bayliss: 'Keep that to yourself' Appellant: 'Okay, no worries'"

His Honour did not advert to this at all. On the appellant's case, Mr. Bayliss' comment constitutes an admission which supports the version of the accident given by the appellant in evidence. There was also other evidence in the case to which I have referred above, namely the fact that the appellant conceded during cross-examination that he was increasing speed, which could give some support to the appellant's evidence that this conversation took place and which was a relevant factor to take into account in determining how the accident occurred. 35 The final matter to which reference should be made is the expert evidence. His Honour may have been correct in finding that the expert evidence did not necessarily assist him. However, there were aspects of the expert evidence which did support the appellant's evidence. In particular, there was a gouge mark on the road which ceased before the end of the bitumen. It appears to have been common ground that this mark was made by the appellant's motor cycle. It was consistent with his evidence that he had regained some control of his vehicle and managed to right it before he eventually went off the road.

Principles relating to a trial judge's duty to give adequate reasons 36 A trial judge has an obligation to give adequate reasons for decision. This principle is well worn legal territory: Soulemezis v. Dudley (Holdings) Pty. Limited (1987) 10 NSWLR 247 at 280B-C, 281B-C; Mifsud v. Campbell (1991) 21 NSWLR 725 at 728; Beale v. Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 431; Papadopoulos v. New South Wales Insurance Ministerial Corporation [1999] NSWCA 116; Archibald v. Bryon Shire Council (2003) 129 LGERA 311; Moylan v. Nutrasweet Co. [2000] NSWCA 337; Flannery v. Halifax Estate Agencies Limited [2000] 1 WLR 377. In Flannery, Henry LJ said: "The duty is a function of due process, and therefore of justice. Its rationale has two principal aspects. The first is that fairness surely requires that the parties especially the losing party should be left in no doubt why they have won or lost. This is especially so since without reasons the losing part will not know … whether the court has misdirected itself, and thus whether he may have an available appeal on the substance of the case. The second is that a requirement to give reasons concentrates the mind; if it is fulfilled, the resulting decision is much more likely to be soundly based on the evidence than if it is not." 37 The content of the duty varies from case to case. It may be sufficient for a court, faced with two irreconcilable versions of an incident unsupported by any other evidence, to simply say that it preferred one witness rather than the other: see Flannery at p.382 Moylan at [63]-[67]. 38 This is not such a case. The trial judge had before him a series of statements by the appellant as to how the accident occurred. There were inconsistencies in those statements which had to be evaluated. The trial judge also had before him more than one version of the accident given by the witness whom he preferred, Mr. Bayliss. There were significant inconsistencies in those different versions. There was independent evidence, such as the location of the various persons on the roadway after the accident which should have been analysed and the evidence of the appellant and Mr. Bayliss evaluated having regard to that evidence. There was at least some material in the experts' reports which lent weight to the appellant's version. 39 These various matters also should have been analysed and evaluated. They were not. Rather, his Honour pointed out inconsistencies in the appellant's evidence without any deeper analysis. He then simply summarised Mr. Bayliss' evidence given in the proceedings and made a brief reference to the other evidence given in the case without any analysis whatsoever. Having done that he then made a finding that he rejected the appellant's version because he accepted Mr. Bayliss'. His Honour did not either assess or explain Mr. Bayliss' hostility to which he referred in his demeanour finding, nor did he deal with any of the appellant's challenges to Mr. Bayliss' evidence, including that Mr. Bayliss was hostile to him when he found out that the appellant was blaming Steve Gray, who was clearly a close friend of Mr. Bayliss, for the accident. In my opinion, by approaching the matter in the way that he did, his Honour failed to adequately explain why he accepted Mr. Bayliss' version. 40 In what now tends to be the most oft quoted authority on the obligation to give reasons, Meagher JA in Beale v. Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 443 specified the contents of an adequate statements of reasons. They include that a judge is required to refer to relevant evidence; to set out any material findings of fact and any conclusions or ultimate findings of fact reached; the reasons for making those relevant findings of fact and conclusions; and the reasons for applying the law to the facts found. In this case, the trial judge did not comply with those obligations. It follows in my opinion that the reasons are inadequate. 41 The question is what ought to flow in this case from that error. This is an important question, as it does not necessarily follow that because there were inconsistencies, inadequacies and omissions in Mr. Bayliss' evidence that the appellant's evidence ought to be accepted. There were inconsistencies in the appellant's version as well. Upon a proper consideration of the evidence, the appellant's case could be accepted. However, this Court has not had the advantage of seeing either witness, and the outcome of the appellant's case will depend upon whether his version is accepted as more credible than the evidence given by Mr. Bayliss. The case is like in Hadid v. Redpath (2001) 35 MVR 152; [2001] NSWCA 416, where Heydon JA pointed out (at 165; [58]) that the trial judge's error could not be cured by a reconsideration of the facts without the advantages of a trial judge's assessment of the witnesses. In this regard, both parties agreed that in this case, if the Court concluded that the reasons of the trial judge were inadequate, then, the appropriate order was that there be a new trial. As the trial judge failed to give adequate reasons, and as damages have not been assessed, it is necessary that there be a new trial on all issues. 42 Accordingly, the orders I propose are:

2. Set aside verdict, judgment and orders made by the trial judge.

3. Order that the matter be remitted to the District Court for rehearing.

4. The respondent to pay the appellant's costs of the appeal, but to have a certificate under the Suitors Fund Act 1951 (NSW) if so entitled. 43 HODGSON JA: I agree with the orders proposed by Beazley JA, and substantially with her reasons. 44 The primary judge's consideration of the evidence of the appellant supported a conclusion that his evidence of the accident was unreliable. If that had been the substantial basis on which the judge found against the appellant, I do not think the reasons would have been inadequate. However, he said that what resulted in his rejecting the appellant's evidence was his accepting the evidence of Mr. Bayliss. Since that was his stated reason, it was necessary for him to consider the substantial attack that had been made on the evidence of Mr. Bayliss. 45 CAMPBELL J: I agree with Beazley JA, and with the additional remark of Hodgson JA.

Last Modified: 11/29/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.