Consideration
19The applicant recognised the disproportion between the legal resources that had already been expended on the case and the amount in issue. However Mr Lee submitted that demonstrable errors in the primary judgment warranted correction in exercise of what it termed this Court's visitorial jurisdiction.
20Mr Lee argued that the applicant had established that the primary judge misdirected himself on the onus question in a manner which was glaringly improbable and accordingly susceptible to appellate review in accordance with Fox v Percy [2003] HCA 22; (2004) 214 CLR 118. In his written submissions Mr Lee identified the misdirection in his Honour's rejection of the lurking thesis (see [ REF _Ref405366698 \r \h 10] above). He complained that this demonstrated that his Honour considered that if the respondent did not make out his case, the implication was that he was involved in serious misconduct. I do not accept that is the proper characterisation of his Honour's remark.
21The applicant had submitted that the primary judge should apply the principles as to the respondent's burden of proof explained in Hammoud Brothers Pty Ltd v Insurance Australia Ltd [2004] NSWCA 366; (2005) 13 ANZ Ins Cas ¶61 - 639 ("Hammoud"). In Hammoud, Bryson JA (with whom Ipp and Tobias JJA agreed) discussed the onus of proof in an appeal challenging a primary judge's finding that an insured had failed in a claim against an insurance company based on the proposition that his motor vehicle had been stolen. His Honour stated that the insurer did not bear any onus of proof: Hammoud (at [26]). In the course of his discussion, Bryson JA referred (at [32]) to Compania Naviera Vascongada v British & Foreign Marine Insurance Co Ltd (The Gloria) (1936) 54 Ll L Rep 35. In Compania Naviera Vascongada Branson J said in relation to an insurer which asserted a ship had been scuttled thus entitling it to avoid the policy, where there were competing hypotheses as to the cause of damage:
" ... If, however, the evidence is such that the court giving full weight to the consideration that scuttling is a crime, is not satisfied that the ship was scuttled, but finds that the probability that she was is equal to the probability that her loss was fortuitous, the plaintiffs will fail."
22In my view, the primary judge's statement concerning the "lurking thesis" hypothesis was not a misdirection on the onus of proof (which his Honour had earlier recorded rested on the respondent on the balance of probabilities to be assessed in accordance with s 140 of the Evidence Act 1995 (NSW)). Rather his Honour was saying that the applicant had not demonstrated that the "lurking thesis" was tenable to a point where it was equally consistent with the respondent's hypothesis that the damage to his vehicle was caused by an accident, thus warranting rejection of the claim: see Luxton v Vines [1952] HCA 19; (1952) 85 CLR 352; Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 (at 304).
23Mr Lee also complained that Mr Sculthorpe's analysis of the black box was irreconcilable with the respondent's account of the collision and that his Honour should accordingly have found the respondent had failed to discharge his burden of proof.
24He complained that the primary judge incorrectly attributed to Mr Sculthorpe a concession that he could not exclude the possibility of an accident happening as a result of the respondent taking action in an attempt to avoid an oncoming hazard, but that Mr Sculthorpe did not think this was a reasonable possibility (J13). Mr Lee pointed out that in the relevant section of the transcript Mr Sculthorpe had in fact refused to entertain that possibility at all.
25Elsewhere his Honour recorded, in a passage Mr Lee did not criticise, that Mr Sculthorpe agreed in cross examination that it was possible a driver "might in panic accelerate rather than brake and act in accordance with Mr Sculthorpe's expectation of a reasonably prudent driver" (J8).
26The primary judge looked at the logic of the events (Fox v Percy (at [31])), noting (J8) that the applicant's case based on Mr Sculthorpe's evidence was that the respondent "deliberately drove his car into a tree by accelerating shortly before impact and not deviating". His Honour found that thesis inherently improbable, asking rhetorically (J8) "why would the plaintiff expose himself to a significant risk of injury by running his car into a tree at an impact speed sufficient to deploy the air bags or write off the vehicle when most of the proceeds of any insurance recovery would have gone to a financier rather than into [his] pocket"?
27In my view, even if it be accepted that his Honour misstated one passage of Mr Sculthorpe's evidence, such error could not be said to have even arguably invalidated his Honour's overall assessment of the logic of the events and, accordingly, his rejection of that evidence as demonstrating the respondent's account should not be accepted. In my view the applicant did not establish any arguable error in this respect which would warrant appellate intervention.
28I also do not accept that the applicant has established that it has an arguable case for leave to appeal in relation to the truthful and frank defence ground. Mr Lee submitted his Honour should have accepted that the conversation with the investigator was truthfully recorded and that it could not stand with the respondent's evidence that he had only driven there once (a statement the respondent had apparently also made on other occasions), so that one of the statements must be untruthful, thus attracting the exclusion clause.
29However, in my view the primary judge was entitled to view the investigator's record with doubt for the reasons he expressed. In addition, the possibility the investigator misheard "first" for "fifth" in the telephone conversation cannot be excluded.
30The primary judge had the advantage of seeing the respondent give evidence. As I have said, his Honour determined that despite his reservations about him, the applicant had not demonstrated that the truthful and frank clause was engaged. It might be said that his Honour could have dealt with the truthful and frank defence in greater detail but, in my view, having regard to the matters to which the applicant drew the Court's attention, his Honour's rejection of that defence was open to him.
31Even if the applicant had demonstrated an arguable case in respect of this defence, the best outcome for it on appeal, as Mr Lee fairly accepted, would be a new trial. No doubt the respondent would seek on that occasion (although he did not at trial) to rely upon s 54 of the ICA. Although no doubt, there would be an argument in any new trial about the availability of that defence having regard to the way the first trial was conducted, it is conceivable that leave might be given to rely upon that provision. In such circumstances it is difficult to see how the untruthful statements for which the applicant contended could have caused the applicant any relevant prejudice within the meaning given to that expression in s 54 of the ICA.
32In my view the applicant did not demonstrate any arguable case of error in principle demonstrating fundamental injustice in the primary judgment if uncorrected which would warrant a grant of leave to appeal.
33MACFARLAN JA: The reasons given by McColl JA reflect my reasons for joining in the making of orders in this matter on 1 December 2014;