Kokou & Anor v NRMA

LEGISLATION CITED : Local Courts Act 1982 (NSW) - ss 73 & 75

Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Butler v Loneragan (1994) 19 MVR 361 Carr v Neill [1999] NSWSC 1263 Devries v Australian National Railways Commission (1993) 177 CLR 472 Hammoud Brothers P/L v Insurance Australia Ltd [2004] NSWCA 366 CASES CITED : Jones v Dunkel [1959] 101 CLR 298 Kearns & Anor v Fair Trading Tribunal of NSW & Anor [2001] NSWSC 951 Kioa v West (1985) 159 CLR 550 R L & D Investments Pty Ltd v Bisby [2002] 47 MVR 479, [2002] NSWSC 1082 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 CLR 588 Vidal v NRMA Insurance Ltd [2005] NSWCA 390

Antoinette Kokou (First Plaintiff)'

Camil Kokou PARTIES : (Second Plaintiff)

NRMA Insurance Limited (Defendant)

Mr J R Young (Plaintiffs) COUNSEL : Mr A Gruzman (Defendant)

Simon Diab &Associates (Plaintiffs) SOLICITORS : Keddies Litigation Lawyers (Defendant)

LOWER COURT JUDICIAL OFFICER : Magistrate G B Lerve

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

13720/2005 - ANTOINETTE KOKOU & ANOR v NRMA INSURANCE LIMITED

JUDGMENT (Appeal decision of Local Court Magistrate - whether car was stolen) 1 HER HONOUR: By summons filed 18 August 2005 the plaintiffs seek, firstly an order that the decision of the Local Court at Parramatta made on 21 July 2005 by his Honour Magistrate G B Lerve be set aside; and secondly, an order that a verdict be entered in favour of the plaintiffs with costs or in the alternative that the matter be remitted back to the Local Court to be determined according to law. 2 The first plaintiff is Antoinette Kokou. The second plaintiff is Camil Kokou. The plaintiffs are wife and husband. The defendant is NRMA Insurance Limited. The plaintiff relied on two affidavits of Elee Luke Georges sworn 13 October 2005 and 1 November 2005 and the affidavit of Joanne Farrell sworn 26 October 2005. 3 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 73 of the Local Courts Act 1982 (NSW) (the Act) permits a party who is dissatisfied with a judgment as being erroneous in point of law to appeal to this Court. The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156; Carr v Neill [1999] NSWSC 1263 and R L & D Investments Pty Ltd v Bisby [2002] 47 MVR 479; [2002] NSWSC 1082. It cannot be said that the judicial officer acted on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588. 4 More recently and most relevantly, in Swain v Waverley Municipal Council [2005] HCA 4, the Chief Justice at [2] reiterated that in the common law system of civil justice, the issues between the parties are determined by the trial process. The system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal. 5 Section 75 of the Act provides that the Court may determine an appeal by either (a) by varying the terms of the judgment or order or (b) setting the judgment or order aside or (c) by setting the judgment or order aside and remitting the matter for determination in accordance with the Court's directions or (d) by dismissing the appeal.

Grounds of appeal 6 The plaintiffs appeal from the whole of the decision of the Magistrate in proceedings 3865/2003 on the grounds; firstly, that the Magistrate erred in so conducting the trial and hearing of the matter that the plaintiffs were deprived of procedural fairness on the grounds that (a) his Honour referred to alleged unsatisfactory evidence of the second plaintiff relating to the passing of keys which his Honour did not identify or elaborate on, but stated that he would return to later in his reasons which he did not do; (b) his Honour made unspecified and unparticularised reference to demeanour; (c) his Honour misconstrued a submission relating to the assumption on which an expert witness for the defendant prepared his report; (d) his Honour drew an adverse inference from counsel for the plaintiffs failure to make a submission on the issue of the windows of the vehicle being down when the vehicle was located; (e) further or in the alternative to (d) his Honour did not raise the matter in (d) with counsel for the plaintiffs nor was it the subject of submission on behalf of the defendant; (f) his Honour referred to a manoeuvre performed by the second plaintiff, in the course of a view, as very much rehearsed, without putting such impression to the second plaintiff or counsel; (g) his Honour made findings in relation to the view contrary to or inconsistent with a statement made by his Honour during the hearing as to the view; (h) his Honour differentiated between the terms of a Jones v Dunkel [1959] 101 CLR 298 direction in relation the plaintiffs' case and the defendant's case in a manner which was unfair and gave the impression of a reasonable apprehension of bias. Secondly, his Honour erred in giving himself a Jones v Dunkel direction in relation to the failure of the plaintiffs to call a neighbour when such evidence was not called for by the pleadings or by the evidence. Thirdly, his Honour misused the advantage of being the judicial officer hearing the matter by stating that "no reading of the written transcript will reveal how unsatisfactory the plaintiffs were as witnesses" which statement was made without reasons or explanation in relation to demeanour. Fourthly, his Honour erred by making gratuitous and insulting remarks about English not being the first language of the plaintiffs. Fifthly, his Honour made unfair findings about the evidence of the second plaintiff (who gave evidence through an interpreter) as to the meaning of the word "co-operate". Sixthly, his Honour erred by misconstruing a submission that a report by a Mr Squire prepared on the basis that the vehicle was the subject of a bona fide theft (which assumption was not withdrawn or modified) could not rationally support a finding that the vehicle was not stolen. Seventhly, his Honour erred in drawing an adverse inference from the fact that there was no evidence that the vehicle had been hotwired. Eighthly, his Honour engaged in improper and unwarranted speculation that professional car thieves would have stolen more than was in fact stolen from the vehicle. I do not intend to cover every ground of appeal referred to above because in essence they seek to relitigate the whole of the proceedings. I shall focus on the main issues raised on appeal.

The Magistrate's decision 7 The plaintiffs Antoinette Kokou and Camil Kokou sought recovery of moneys from the defendant under an insurance policy for the loss of their motor vehicle. The plaintiffs asserted that on 13 and 14 June 2003 their motor vehicle was stolen from outside their property. The amount of damages was agreed so the trial proceeded on the issue of liability only. 8 The Magistrate held that he was not satisfied on the balance of probabilities that the RAV 4 vehicle registered AMK-97L was stolen on 13 June 2003 from the vicinity of the residence of the plaintiffs without their consent or connivance. His Honour ordered verdict and judgment for the defendant and ordered the plaintiffs to pay the defendant's costs as agreed or assessed. 9 At the hearing in the Local Court both plaintiffs gave evidence and were cross examined. The defendant relied on an expert, Mr Squire. Mr Squire's report was tendered in evidence and he was cross examined. The Magistrate and the parties attended a view and inspected the motor vehicle. The task before the Magistrate was to determine whether the motor vehicle was stolen from outside the plaintiffs' premises. The plaintiffs bore the onus of proving that the car was stolen. 10 In Vidal v NRMA Insurance Ltd [2005] NSWCA 390 the New South Wales Court of Appeal per Handley JA at [9] stated: "An appellate court should read the reasons for judgment of the trial court fairly and as a whole, without seeking to find fault. It should attempt, within reason, to reconcile any apparent inconsistencies by reading the relevant passages together." 11 Handley JA in Vidal at [15] further stated: "Sometimes an insurer simply puts the insured to proof without having a positive case. At other times, such as here, the insurer may have a positive case, what may be described as a negative pregnant. An insurer is fully entitled to run a positive case, without undertaking anything more than an evidentiary burden of displacing the plaintiff's prima facie case." 12 This is precisely the case run by the insurer in the Local Court before the Magistrate. 13 At the outset, Mr Squire an expert locksmith commenced writing his report on the assumption that the vehicle had been the subject of a bona fide theft and set out to discover the means of entry to the vehicle and the manner in which the ignition steering lock assembly (ISLA) had been bypassed (Report - para 2). At paragraph 5 Mr Squire reached his conclusion. They were: " 5.1 Vehicle not entered The subject vehicle had not been illicitly entered either by forceful or surreptitious means. 5.2 Immobiliser undisturbed The OEM engine immobiliser system had not been disturbed, meaning that the engine could not have been started in the absence of an electronically correct key. 5.3 Vehicle last driven with correct key It is clear that the last operation of this vehicle can only have been effected by use of an electronically correct key. 14 At the time the car was removed from outside the plaintiffs' premises the plaintiffs' evidence was that they had the electronically correct key in their possession. 15 The plaintiffs submitted that as the report contained an incorrect assumption (namely the bona fide theft assumption) and because Mr Squire arrived at a conclusion inconsistent with that assumption, the report should have been rejected. It is my view that if an assumption turns out to be unsustainable in the light of other facts then the expert should say so. He did so. He also gave the reasons why he reached that conclusion. 16 The plaintiffs submitted that the expert did not cover another means of theft namely that the vehicle may have been removed via an "all up" lift. An all up lift may be done without affecting the vehicle's security system and Mr Squire said that this method was outside the scope of his enquiry. Nevertheless, at hearing the plaintiffs' counsel Mr Young cross examined Mr Squire on the possibility of the "all up" lift. Mr Squire gave evidence on this topic. 17 The Magistrate summarised the evidence on this topic. His Honour stated: "Mr. Young cross-examined Mr. Squire on the possibility of the all-up lift. However, Mr. Squire made the point that the all up lift, if performed would have very probably been made by professional car thieves. There is also the possibility of the vehicle being subject to an all up lift, and then being taken to another location where the vehicle was damaged, and the air bags and stereo removed. There was no real challenge to the suggestion that an all up lift would in all probability have been done by professional car thieves. As a matter of common sense, it seems to me that if someone was go (sic) to the trouble of an all up lift, then the very real likelihood is that a great deal more would have been removed from the vehicle. I bear in mind what was said in Simon -v- NRMA Insurance in that it is inappropriate to assume that either the person(s) responsible for taking the vehicle were also responsible for the removal of some parts of the vehicle; or that the various parts of the vehicle that were removed were in fact removed at the location at where the vehicle was located on 25 June 2003. There is another aspect to the evidence of the all up lift. The police report that was tendered indicates that the vehicle was found with all windows down. In the course of cross-examination Mr. Squire maintains that some of the windows were fully up when he saw the vehicle. The vehicle was found in June and the entry in police records made on the date it was found, and Mr. Squire examined the vehicle in August. Accordingly, it seems to me that it would be better to rely upon the police report on the aspect of the condition in which the vehicle was found. There seems to be no real challenge to the proposition that for the electric windows to operate, an electronically correct key needs to be used. The windows would operate if the vehicle had been "hot-wire", but there was no evidence of this occurring. The plaintiffs' evidence was to the effect that a window might have been partially lowered during the trip home from the doctors on the evening of 13 June 1003. I was particularly careful in the course of final submissions to listen for submissions by Mr. Young for the plaintiffs on the aspect of the windows of the vehicle when located on 25 June 2003 being lowered but undamaged. A transcript may ultimately prove me incorrect, but I have no note, nor can I remember any such submission." 18 Mr Young submitted that there was more damage than that referred to by the Magistrate. Even if the Magistrate had made this factual error and there was more damage, there was another factor which made the all up lift unlikely namely the lack of explanation as to how all the car windows came to be open. 19 The Magistrate accepted Mr Squire's evidence and said: "I also had the opportunity to closely observe Mr. Squire while he was giving evidence. He was generally an impressive witness. However, I am constrained to comment that on some few occasions he did not react well to being challenged. Further, on occasions he became passionate about his evidence, and on a couple of occasions bordered on the dogmatic. Despite these comments, I accept the submission made by Mr. Gruzman that Mr. Squire was not shaken in cross-examination." 20 On the other hand the Magistrate had reservations with both the plaintiffs' evidence and commented upon various aspects of it throughout his judgment. 21 The plaintiffs submitted that if the evidence of the plaintiffs or either of them was accepted it followed inevitably that there must be a verdict for the plaintiffs. Unless the Magistrate rejected the evidence of both plaintiffs, his Honour was bound to find that the vehicle had been stolen from outside the premises on or about 13 June 2003. 22 Young J (as he then was) in Butler v Loneragan (1994) 19 MVR 361 at 366; 74 A Crim R 259 at 264 stated: "…a tribunal of fact is in the final analysis usually not left in a situation where it has to ask whether A's version or B's version of an event should be preferred. Sometimes that happens, but often the situation is that the tribunal of fact accepts everybody as a witness of truth but can see from their different perspectives an from the surrounding circumstances where the truth really lies..." 23 Recently this passage was quoted with approval in Vidal. 24 Bryson J in Hammoud Brothers P/L v Insurance Australia Ltd [2004] NSWCA 366 at [25] stated: "My access to the evidence is by way of the printed record, whereas the Trial Judge had the advantage of seeing and hearing the evidence, and of forming an impression of the demeanour of witnesses. His Honour did not express any reliance on observations of demeanour, or point out any particular observations which he had made, but overall it must be understood that his Honour was in a position of considerable advantage over myself, sitting on appeal, in coming to an appreciation of such influences. The influence of demeanour has been spoken of as subtle, although it is not always subtle, and the Trial Judge was in a position, legitimately, to allow his own impressions to have an influence on the appraisal of the evidence, including what were suggested to be anomalies." 25 Demeanour may be subtle. This Court does not have that advantage. The Magistrate was not impressed with the evidence of Mr Kokou. There are various reference to particular instances of evidence where he found Mr Kokou's evidence less than satisfactory. Likewise, the Magistrate specifically referred to inconsistent statements made by Mrs Kokou. The Magistrate was not obliged to either accept all of the Kokou's evidence or reject all of it.

Jones v Dunkel 26 There were two Jones v Dunkel directions made. The plaintiffs submitted that the Magistrate in doing so made errors of law. Firstly, the failure to call the neighbour in relation to the issue raised as one excuse by the first plaintiff for leaving the car parked in the street instead of in the driveway near the security lights. The absence of a neighbour from the witness box was unexplained, his evidence being available on this issue (J 6.5); and secondly, the failure to call the friends who had been entertained at the plaintiffs' home after the second plaintiff returned from the doctor (J 6.6). 27 The Magistrate had a discretion to make these inferences and he chose to do so.

Observations made during the view 28 The plaintiff submitted that because no specific observations were recorded in relation to the debris field observable on and around the immobiliser the plaintiffs were denied procedural fairness as they could not answer them in submissions. 29 After the view, the Magistrate recorded his observations (t 38-39). The Magistrate did not record any observations he made concerning any debris field observable on and around the immobiliser. In the judgment the Magistrate stated "I maintain that this 'debris field' was observable on and around the immobiliser when the second plaintiff dropped the glove box exposing the unit". This observation was the same as that expressed by Mr Squire albeit in slightly different terms.

Denial of natural justice 30 In relation to natural justice, Professor S A de Smith, Judicial Review of Administrative Act, 2nd ed., 180-181 has stated: "Natural justice generally required that persons liable to be directly affected by proposed administrative acts, decisions or proceedings be given adequate notice of what is proposed, so that they may be in a position: (a) to make representations on their own behalf; or (b) to appear at a hearing or inquiry (if one is to be held); and (c) effectively to prepare their own case and to answer the case (if any) they have to meet." 31 In Kioa v West (1985) 159 CLR 550 the High Court held that the duty to accord natural justice is a duty to act fairly. In the normal course, a party to judicial proceedings (as are those in a tribunal) could expect to be apprised of the nature of the case sought to be made against it, and of the date and time fixed for hearing such as to give it a reasonable opportunity to meet that case and to advance its own. These statements are similar to those expressed by Professor de Smith and referred to earlier. Brennan J (as he then was) at 628 stated: "A person whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters adverse to his interest which the repository of the power proposes to take into account in deciding upon its exercise." 32 In relation to procedural fairness, Mason J stated in Kioa that the law had now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention. Procedural fairness as a notion is a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case (454 and 455). 33 In Kearns & Anor v Fair Trading Tribunal of NSW & Anor [2001] NSWSC 951 Grove J stated at para 25: "There is ample authority that procedural fairness is denied if a decision maker fails to adjourn proceedings where such a failure has the effect of depriving a person of adequate opportunity to prepare or present a case: Sullivan v Department of Transport (1978) 20 ALR 323; Opitz v Repatriation Commission (1991) 29 FCR 50; Humphrey v Wills (1989) VR 439." 34 However whether there is a denial of procedural fairness depends on the circumstances in each case. In these circumstances, I do not think that there has been a denial of procedural fairness. 35 There has been no error of law. The appeal is dismissed. The decision of his Honour Magistrate Lerve dated 21 July 2005 is affirmed. The summons filed 18 August 2005 is dismissed. 36 Costs are discretionary. Costs normally follow the event. The plaintiffs are to pay the defendant's costs as agreed or assessed.

(2) The decision of his Honour Magistrate Lerve dated 21 July 2005 is affirmed.

(4) The plaintiffs are to pay the defendant's costs as agreed or assessed. **********

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