Applicable principles
199 The applicants, as the parties seeking relief, carry the burden of satisfying the Court of the facts that, in the absence of proof of other facts, would justify the grant of that relief on the civil standard: Warner v Hung (No 2) [2011] FCA 1123; 297 ALR 56 at [46] (Emmett J). As the case was conducted, the two critical facts were, first, whether there was at the time of manufacture or supply, a defect in the Fiat, namely a live signal wire in the steering column that was, or could become pinched, resulting in electrical arcing, and secondly, if so, did the defect cause the ignition of a fire in the Fiat and thereafter the house.
200 In Helton v Allen [1940] HCA 20; 63 CLR 691 at 712, Dixon, Evatt and McTiernan JJ cited with approval Dixon J's observation in Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336 at 361 that:
When the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality.
201 In this context, competing inferences of equal degrees of probability are inadequate, and the choice between them must not be "a mere matter of conjecture": Jones v Dunkel [1959] HCA 8; 101 CLR 298 at 315 (Windeyer J). The court is not authorised "to choose between guesses … on the ground that one guess seems more likely than another or the others": Jones v Dunkel at 305 (Dixon CJ). Dixon CJ said at 305:
[t]he facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied.
202 In Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1, Dixon, Williams, Webb, Fullagar and Kitto JJ explained (at 5):
Of course as far as logical consistency goes many hypotheses may be put which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence while [in] the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort where direct proof is not available it is enough [if] the circumstances appearing in the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture … But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then though the conclusion may fall short of certainty it is not to be regarded as a mere conjecture or surmise…
This passage was cited with approval by Dixon, Fullagar and Kitto JJ in Luxton v Vines [1952] HCA 19; 85 CLR 352 at 358.
203 In Warner v Hung (No 2), Emmett J, observed in a passage that has been frequently cited including at appellate level (at [48]):
48. Under s 140(2) of the Evidence Act 1995 (Cth) … the Court must, in deciding whether it is satisfied that a case has been proved to the requisite standard, take into account:
· the nature of the cause of action or defence;
· the nature of the subject matter of the proceeding; and
· the gravity of the matters alleged.
When proof of any fact is required, the Court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2).
204 In Seltsam v McGuiness [2000] NSWCA 29; 49 NSWLR 262 at [84] to [88] Spigelman CJ observed in relation to the line between inference and conjecture:
84. It is often difficult to distinguish between permissible inference and conjecture. Characterisation of a reasoning process as one or the other occurs on a continuum in which there is no bright line division. Nevertheless, the distinction exists.
85. Lord Macmillan in Jones v Great Western Railway Co (1930) 47 TLR 39, in the context of stating that a possibility that a negligent act caused injury was not enough, said (at 45):
'The dividing line between conjecture and inference is often a very difficult one to draw. A conjecture may be plausible but is of no legal value, for its essence is that it is a mere guess. An inference in the legal sense, on the other hand, is a deduction from the evidence, and if it is a reasonable deduction it may have validity as legal proof. The attribution of an occurrence to a cause is, I take it, always a matter of inference.'
86. After referring to this passage, Sir Frederick Jordan in Carr v Baker (1936) 36 SR (NSW) 301 said (at 306):
'The existence of a fact may be inferred from other facts when those facts make it reasonably probable that it exists; if they go no further than to show that it is possible that it may exist, then its existence does not go beyond mere conjecture. Conjecture may range from the barely possible to the quite possible.'
87. As Lord Wright put it in a frequently cited passage in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169-170:
'Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In some case the other facts can be inferred with as much practical certainty, as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.'
88. The test is whether, on the basis of the primary facts, it is reasonable to draw the inference. (See eg Luxton v Vines [1952] HCA 19; (1952) 85 CLR 352 at 358).
205 Causation is a question of fact to be determined by the application of common sense to the facts of each case: March v Stramare; Bennett v Minister for Community Welfare [1991] HCA 12; 171 CLR 506 at 515 (Mason CJ, Toohey and Gaudron JJ agreeing), at 522 (Deane J), at 530 (McHugh J). The question of causation is not resolved by philosophical or scientific theories of causation: Chappel v Hart [1998] HCA 55; 195 CLR 232 at 242 (McHugh J) citing March v Stamare at 509 (Mason CJ). Causation must be established as a matter of fact on the balance of probabilities: Sellars v Adelaide Petroleum [1994] HCA 4; 179 CLR 332 at 355 (Mason CJ, Dawson, Toohey and Gaudron JJ).
206 The applicants must do more than simply showing it is "possible" that their loss was caused by the respondents: Bonnington Castings Ltd v Wardlaw [1956] UKHL 1; AC 613, approved by the High Court of Australia in St George Club Ltd v Hines (1961) 35 ALJR 106 at 107 (Dixon CJ, Kitto, Taylor, Menzies and Windeyer JJ). Similarly, it is not sufficient for the applicants to establish that the respondents' conduct "cannot be excluded as a cause": Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307 at 339 (Beazley JA), see also Seltsam Pty Limited v McGuiness (2000) 49 NSWLR 262 at [80] (Spigelman CJ).
207 In Nguyen v Cosmopolitan Homes (NSW) Pty Ltd [2008] NSWCA 246, at [58]-[64] McDougall J (with whom McColl and Bell JJA agreed) discussed the common law test of causation, in an appeal concerned with the cause of a house fire:
58 The common law concept of causation requires only a finding that event A was a cause, not necessarily the cause or the sole cause, of result B. Causation is a question of fact. It is to be decided by the application of common sense to the facts of the case. See March v E & MH Stramare Pty Limited (1991) 171 CLR 506; Bennett v Minister for Community Welfare (1992) 176 CLR 408. Those cases make it clear that, as Mason CJ, Deane and Toohey JJ said in Bennett at 413, "the but for" test… is not a comprehensive and inclusive test of causation".
59 Further, in considering the question of causation, it is necessary to bear in mind the purpose of the inquiry. The court's finding as to causation is not an end in itself. It is a step along the way to reaching a determination on the question of liability for loss. As McHugh J said in March at 529, "the common law doctrine of causation is able to ignore some factors which are necessary to the production of a result because the rationale of that doctrine is the allocation of legal responsibility rather than the determination of what has happened".
60 In a particular case, expert evidence may assist the court to find causation in fact; but the court is not bound by an expert's expression of an opinion that, on the balance of probabilities, a causal relationship has been established. See Heydon JA in Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705 at 729 [59] (citing Lord President Cooper in Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh (1953) SC 34 at 39 - 40); and note his Honour's observations at 745 [87], [89]. The court does not abdicate its responsibility to an expert; an expert's opinion cannot be determinative, particularly in relation to ultimate facts. See Callinan J in Brodie v Singleton Shire Council (2001) 206 CLR 512 at 639 [355], citing his Honour's earlier observations to the same effect in Naxakis v Western General Hospital (1999) 197 CLR 269 at 306 [110].
61 Where the question for decision is whether, on the balance of probabilities, event A caused result B, the burden of proof is not satisfied merely by evidence that it is possible that the causal relationship exists. See Spigelman CJ in Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275 [80]; and see Stein JA in the same case at 293 [201]. However, as their Honours pointed out (see for example Spigelman CJ at 276 [89], [90]; and see also Stein JA at 293 [201]), the inference of causation may be drawn from all of the evidence in the case, including expert evidence as to the possibility that the causal relationship exists. And a number of pieces of evidence, considered together, may justify the drawing of an inference as to causation when none of them, considered individually, could do so. See the metaphor employed by Lord Cairns LC, of the combined illuminative power of numerous feeble rays of light, in Belhaven and Stenton Peerage (1875) 1 App Cas 278 at 279.
62 … I should add that proof, on the balance of probabilities, that event A caused result B is not achieved merely by showing that B followed A: the "post hoc propter hoc" fallacy. Proof that the fire occurred after the electrical cables were laid on brick ties (assuming, for the moment, that this is what happened) does not prove the existence of a causal relationship between the two events. This is not a case where mere evidence of temporal sequentiality, without more, is capable of proving causation.
63 Where B (not having occurred before) closely follows A, and where there is expert evidence to suggest that an event of the nature of A may cause a result of the nature of B, then the inference of causation may be drawn if, on the evidence, there is no acceptable alternative cause available. See Mason J (with whom Barwick CJ and Gibbs J agreed) in Tubemakers of Australia Ltd v Fernandez (1976) 50 ALJR 720 at 724; and note the comments of Mahoney JA on this topic in X and Y (by her tutor X) v Pal (1991) 23 NSWLR 26 at 33. I would add that the same inference may be available if ordinary human experience, rather than expert evidence, suggests that "A" events have been know to cause "B" results, and if there is no evidence of any other acceptable cause.
64 Finally, in this context, it is necessary to distinguish between inference and speculation. As Spigelman CJ pointed out in Seltsam at 275 [84], those two concepts occur "on a continuum in which there is no bright line division". An inference may be drawn from other facts where, as a matter of reason, those other facts make it more probable than not that the thing to be inferred exists. If they do no more than show a possibility that the thing in question exists, then its existence is a matter of conjecture, not inference. See Jordan CJ in Carr v Baker (1936) 36 SR (NSW) 301 at 306 and Lord Wright in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169 - 170.
208 An illustration of the sequence of events being relevant to the process of drawing an inference drawing is the analysis in Adelaide Stevedoring v Forst [1940] HCA 45; 64 CLR 538. Although medical science could not conclude that the work in which the plaintiff was engaged was probably the cause of his death, the High Court by majority held that there was sufficient evidence from which to draw an inference as to causation. Starke J (with whom Rich ACJ and McTiernan J agreed) stated that the relevant facts were that "the deceased was engaged upon heavy work and, whilst so engaged, collapsed and died almost immediately": at 567. Rich ACJ observed at 563:
… I am greatly impressed by the sequence of events [and after setting I the relevant facts]... I do not see why a court should not begin its investigation, ie before hearing any medical testimony, from the standpoint of the presumptive inference which this sequence of events would naturally inspire in the mind of any common-sense person uninstructed in pathology.
209 In Fernandez v Tubemakers of Australia Ltd (1975) 2 NSWLR 190, Mahoney JA at 199 said:
The question would be whether the evidence showed the connection between the possible cause and the condition which occurred was sufficiently close to warrant a reasonable mind, faced with the problem of determining the question upon the evidence before it, concluding that the possible was the actual cause.
210 In Anderson v Ausgrid [2015] NSWSC 1308, a case involving a house fire, Adamson J observed that:
84. The inability on the part of the plaintiffs to show precisely how the fire started is not fatal to proof of their case: Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307 at 317 per Mason P, citing Adelaide Stevedoring Co Ltd v Forst (1940) 64 CLR 538 at 563-564, 569; Tubemakers of Australia Ltd v Fernandez (1976) 50 ALJR 720.
211 I now turn to apply these principles to the evidence in this case.