Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd

Dates of hearing: 8, 9, 10, 11, 12 March 2010, 15 April 2010, 4 May 2010

Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd (No 4) [2010] FCA 482

CORRIGENDUM 1. On the cover sheet of the judgment, "Westfarmers General Insurance Limited" has been changed to read "Wesfarmers General Insurance Limited". 2. On the orders page of the judgment, "Westfarmers General Insurance Limited" has been changed to read "Wesfarmers General Insurance Limited". 3. On the first page of the Reasons for Judgment, "Westfarmers General Insurance Limited" has been changed to read "Wesfarmers General Insurance Limited".

I certify that the preceding three (3) numbered paragraphs are a true copy of the Corrigendum to Reasons for Judgment herein of the Honourable Justice Rares.

Dated: 28 June 2010 IN THE FEDERAL COURT OF AUSTRALIA

1. The proceedings be dismissed. 2. The applicant pay the respondent's costs. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT 1 On 16 January 2008, at about 7 pm Lana O'Shanassy was driving home in a Mercedes Benz E55 motor vehicle along Range Road, Mittagong in the Southern Highlands of New South Wales. She had been drinking alcohol. Her car left the roadway at a speed above 80 kilometres per hour. It hit two trees and rolled over onto its roof coming to rest against a third tree on the side of the road. Mrs O'Shanassy was held by her seat belt upside down in her seat. Her right foot was facing backwards pinned between parts of the damaged underside of the car. 2 The car was so extensively damaged that it was a write off. The car's owner was Sagacious Legal Pty Ltd, the incorporated legal practice of her husband, Paul,. It promptly made a claim for $173,000, the indemnity value of the car, on its insurer, then called Lumley General Insurance Ltd. Mrs O'Shanassy had been convicted twice before, in 1999 and 2002 for driving with in excess of the prescribed concentration of alcohol in her blood and she had been disqualified from holding a driver's licence for 18 months and 12 months respectively. 3 The insurer refused indemnity in early December 2008 on three bases that constituted the principal issues in these proceedings. The insurer contended that: (1) in September 2004 Sagacious had made a misrepresentation in connection with obtaining insurance for the car or breached its duty of disclosure under s 21 of the Insurance Contracts Act 1984 (Cth) in its proposal for insuring the car. This was because the insurer was not made aware of the cancellation or suspension of Mrs O'Shanassy's driver's licence in 1999 or of her conviction that led to this; (2) the policy had excluded its liability for the loss because, either: (a) Mrs O'Shanassy was driving the car "under the influence of intoxicating liquor"; or (b) an analysis of her blood taken within two hours of the accident contained a percentage of alcohol that exceeded the legal limit prescribed in the law of New South Wales. 4 The third issue, (2)(b), raised questions about the circumstances in which Mrs O'Shanassy's blood was both obtained later on the evening of 16 January 2008 and subsequently analysed. There was also a question whether s 37(2) of the Road Transport (Safety and Traffic Management) Act 1999 (NSW) ("the Road Transport Act") prohibited the results of any analysis of her blood being admissible at all or in proceedings to which the Evidence Act 1995 (Cth) applies. I will deal with each of the three issues below.

Jurisdiction 5 This matter has been in federal jurisdiction since at least the time of the insurer's refusal of indemnity. It involved rights and liabilities under a contract of insurance that owed their existence to a federal law, namely the Insurance Contracts Act: cf Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 at 262-263 [29], [32] per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ. As Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ explained in LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581: "When it is said that a matter will arise under a law of the Parliament only if the right or duty in question in the matter owes its existence to a law of the Parliament that does not mean that the question depends on the form of the relief sought and on whether that relief depends on federal law. A claim for damages for breach or for specific performance of a contract, or a claim for relief for breach of trust, is a claim for relief of a kind which is available under State law, but if the contract or trust is in respect of a right or property which is the creation of federal law, the claim arises under federal law. The subject matter of the contract or trust in such a case exists as a result of the federal law." 6 The insured pleaded a claim for interest under s 57 of the Insurance Contracts Act, thinking that this enlivened the jurisdiction of this court. However, that jurisdiction was attracted well before the pleading. This is because the controversy between the parties, from at least the time of the insurer's refusal to indemnity, involved the extent of the insured's compliance with its duty of disclosure under the Act, whether it had made a statement in or in connection with a policy of insurance with respect to Mrs O'Shanassy's driving record that was a misrepresentation and whether the insurer was entitled to avail itself of its rights under s 28 of the Act to refuse indemnity or limit the extent of its liability. It was thus a matter arising under a law made by the Parliament, and so in the general federal court civil jurisdiction conferred on this Court by s 39B(1A)(c) of the Judiciary Act 1903 (Cth).

The statutory scheme 7 Part IV of the Insurance Contracts Act, in which ss 21-27 are contained, is a statutory code that replaced the common law in relation to non-disclosure, misrepresentations and incorrect statements by insureds before entry into a contract of insurance: Advance (NSW) Insurance Agencies Pty Ltd v Matthews (1989) 166 CLR 606 at 615 per Mason CJ, Dawson, Toohey and Gaudron JJ. In contrast to ss 21, 26(1) and (2) operate on statements made in connection with a proposed contract of insurance. 8 Importantly, the Insurance Contracts Act is concerned with relevance of some particular matter to an objective assessment of the risk proposed for insurance. The decision whether a particular matter should be disclosed is a decision about the relevant risk: Permanent Trustee Australia Ltd v FAI General Insurance Company Ltd (In liq) (2003) 214 CLR 514 at 531-532 [32]. 9 Additionally ss 24, 26 and 27 of the Insurance Contracts Act are relevant in determining whether or not Sagacious made a misrepresentation in the 2004 proposal. Likewise s 21 is relevant on the question of whether Sagacious was in breach of its duty of disclosure. Although those sections use expressions that had a well settled meaning at common law, they must be construed in their context as part of the Insurance Contracts Act: Permanent Trustee 214 CLR at 531-532 per McHugh, Kirby and Callinan JJ. An insurer has an interest in the individual history and claims record of each person who seeks insurance with that insurer and, in a case like this, of each nominated driver for whom the insured seeks cover: Advance (NSW) Insurance 166 CLR at 616. The duty of disclosure in s 21 is informed by this understanding. 10 Section 21 of the Insurance Contracts Act provided: "21 The insured's duty of disclosure (1) Subject to this Act, an insured has a duty to disclose to the insurer, before the relevant contract of insurance is entered into, every matter that is known to the insured, being a matter that: (a) the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or (b) a reasonable person in the circumstances could be expected to know to be a matter so relevant. (2) The duty of disclosure does not require the disclosure of a matter: (a) that diminishes the risk; (b) that is of common knowledge; (c) that the insurer knows or in the ordinary course of the insurer's business as an insurer ought to know; or (d) as to which compliance with the duty of disclosure is waived by the insurer. (3) Where a person: (a) failed to answer; or (b) gave an obviously incomplete or irrelevant answer to; a question included in a proposal form about a matter, the insurer shall be deemed to have waived compliance with the duty of disclosure in relation to the matter." 11 The Act defined "proposal form" in s 11(1) as including: "… a document containing questions to which a person is asked to give answers (whether in the document or not), where the answers are intended (whether by the person who answered them, by the insurer or by some other person) to be used in connection with a proposed contract of insurance." 12 The effect of a deemed waiver in s 21(3) and of any misrepresentation by Sagacious must be considered in the context of ss 24, 26 and 27 of the Act which, relevantly provided: "24 Warranties of existing facts to be representations A statement made in or in connection with a contract of insurance, being a statement made by or attributable to the insured, with respect to the existence of a state of affairs does not have effect as a warranty but has effect as though it were a statement made to the insurer by the insured during the negotiations for the contract but before it was entered into. 26 Certain statements not misrepresentations (1) Where a statement that was made by a person in connection with a proposed contract of insurance was in fact untrue but was made on the basis of a belief that the person held, being a belief that a reasonable person in the circumstances would have held, the statement shall not be taken to be a misrepresentation. (2) A statement that was made by a person in connection with a proposed contract of insurance shall not be taken to be a misrepresentation unless the person who made the statement knew, or a reasonable person in the circumstances could be expected to have known, that the statement would have been relevant to the decision of the insurer whether to accept the risk and, if so, on what terms. … 27 Failure to answer questions A person shall not be taken to have made a misrepresentation by reason only that the person failed to answer a question included in a proposal form or gave an obviously incomplete or irrelevant answer to such a question." 13 These provisions are relevant because of the important protection given to the insurer by s 28. An insurer may have its liability in respect of a claim reduced under s 28(3) if it has not avoided a contract of insurance entered into in circumstances where the insured either failed to comply with the duty of disclosure or made a misrepresentation to the insurer before the contract was made. The reduction in liability will be to the amount that would place the insurer in the position it would have been in had the failure to disclose not occurred or the misrepresentation not been made. There is no issue that Mrs O'Shanassy would not have been covered by the insurer as a driver of the car. The insurer would not have accepted the risk of Mrs O'Shanassy being a nominated driver had Sagacious disclosed her 1999 conviction or cancellation of her driver's licence.

Standard of proof 14 The insured argued that because the insurer's defence raised allegations of criminal misconduct against Mrs O'Shanassy it had the onus of proving that she had committed the acts alleged. It contended that she was entitled to the benefit of the presumption of innocence. 15 These proceedings are civil proceedings and the standard of proof, as the insured accepted, required the insurer to prove its case in accordance with s 140 of the Evidence Act 1995 (Cth) which provides: "140 Civil proceedings: standard of proof (1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account: (a) the nature of the cause of action or defence; and (b) the nature of the subject matter of the proceeding; and (c) the gravity of the matters alleged." 16 In Communications, Electrical, Postal, Plumbing & Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466 at 479-482 [29]-[38] Weinberg, Bennett JJ and myself explained the operation of s 140 in the context of a party bearing an onus of establishing a serious allegation of a contravention of the law. I have adopted that explanation and approach in assessing the evidence in this matter. In my opinion, the insurer had to establish that the circumstances appearing in the evidence gave rise to a reasonable and definite inference, not merely to conflicting inferences of equal degrees of probability, that Mrs O'Shanassy had either driven under the influence of intoxicating liquor or had a blood alcohol level over the legal limit in the period up to two hours after the accident: see esp: CEPU 162 FCR at 482 [38]. I have also applied this approach in assessing the question of whether the insurer has established any breach of a proposing insured to satisfy the duty of disclosure in s 21 of the Insurance Contracts Act or that any insured made a misrepresentation in or in connection with any relevant contract of insurance. 17 I have given weight to the presumption that Mrs O'Shanassy was innocent of any criminal conduct alleged against her and that exactness of proof that she was not innocent is required, as Dixon J explained in Briginshaw v Briginshaw (1938) 60 CLR 336 at 363. In arriving at my findings, I have weighed the evidence having regard to s 140 of the Evidence Act, the approach identified in CEPU 162 FCR at 479-482 [29]-[38] and the authorities that the Full Court applied and considered there.

The misrepresentation case 18 The insurer pleaded that Sagacious' proposal for the 2004 policy falsely represented that: (a) the only driving conviction for Mrs O'Shanassy in the five years to September 2004 was for not wearing a seat belt; (b) she had not during that five year period been charged or convicted in connection with any intoxicating liquor or drug.

The non-disclosure case 19 The insurer also pleaded that Sagacious had failed to disclose Mrs O'Shanassy's driving record in its September 2004 proposal in circumstances where it knew, or a reasonable person in its position would be expected to know, that her 1999 conviction and licence cancellation would be a matter relevant to the decision of the insurer to issue the policy.

(a) The role of Prestige Car Insurance 20 Mr O'Shanassy was a solicitor. He completed a proposal form for Sagacious, as owner of the car, on 30 September 2004. The proposal form had been prepared by an underwriting agency, Prestige Car Insurance Pty Limited. The chief executive of Prestige was Raymond Woodlands. 21 Prestige had a binder with Lumley under which it was authorised to enter into contracts of insurance with insureds, on Lumley's behalf, to insure prestige vehicles with values between $40,000 to $500,000 and certain other special categories of vehicles. Prestige and Lumley agreed each year on the terms on which Prestige could write policies. They set these out in an operations manual that was updated each year. Debbie Jacks was the chief underwriter at Prestige. Only Mr Woodlands and Ms Jack had authority under the binder and within Prestige to accept any driver as a risk where that driver had one conviction for driving under the influence of intoxicating liquor, or with in excess of the prescribed concentration of alcohol (described compendiously in the operations manual as a "DUI offence") or if his or her licence had been suspended or cancelled. Prestige's operations manual provided that it had to decline any driver as a risk where the driver had more than one conviction for a DUI offence or had had his or her licence suspended or cancelled more than once.

(b) The Paul O'Shanassy disclosure 22 Mrs O'Shanassy's second conviction for driving with a middle range reading in excess of the prescribed concentration of alcohol in her blood (i.e. between 0.08 and less than 0.15 grams of alcohol in 100 ml of blood). That conviction and her disqualification from holding a driver's licence for 12 months occurred on 2 April 2002. After the disqualification period had ended Mrs O'Shanassy was issued with a driver's licence again on 11 April 2003. 23 On 28 April 2003, Prestige faxed a driver's declaration to Mr O'Shanassy. He then had a policy for another Mercedes Benz ML55 car that he had insured in his own name on 24 April 2002. He was the only driver nominated in the proposal form that he had completed and provided to Prestige on 13 May 2002, no doubt because his wife's licence had been cancelled very recently. The policy was again underwritten by Lumley and had been due for renewal on 24 April 2003. 24 Mr O'Shanassy completed most of the details in the driver's declaration before giving it to his wife to complete the balance. Both signed and dated the driver's declaration on 28 April 2003. Relevantly, the driver's declaration nominated Mrs O'Shanassy as an additional driver and contained the following information in relation to her driving history (the written answers are in italics): "B. Have you had insurance or driving licence declined, cancelled, or special terms imposed? 3 yrs Where YES provide details below Yes [P] No [ ] Please provide details if answered YES to any of the above. Mid Range PCA Charge 2 April 02 CLAIMS/ACCIDENTS (PLEASE STATE NIL IF NO CLAIMS) DATE TYPE OF OFFENCE (IN LAST 3 YEARS) Mid Range PCA 2 April 02" 25 On 29 April 2003, Mrs O'Shanassy faxed back to Prestige's Ms Jacks the completed drivers declaration and a covering letter that read: "Please find attached completed Driver's Declaration form. As per your instruction during our phone conversation this morning, I have listed any offences/claims within the last 3 years for each of the questions on the form. Can you please advise immediately if you require further information. I would appreciate if you could confirm my status as a nominated driver effective today as my husband is ultra conservative!!" 26 Mrs O'Shanassy had corrected the date on the driver's declaration that her husband had written in the first reference to the 2002 offence. Significantly, as Mrs O'Shanassy said in evidence, Mr O'Shanassy was aware of her 1999 offence when he filled in the form. Although she corrected the date from 15 to 2 April 2002 for the mid range offence, Mrs O'Shanassy said that she and her husband did not discuss the 1999 offence or the possible need to disclose it at this time. I do not believe that evidence. Mrs O'Shanassy was precise enough to correct the date of her most recent offence. Given the circumstances, in which this driver's declaration was completed and sent to Prestige, I am wholly unpersuaded that the question of what they were to do about Mrs O'Shanassy's 1999 conviction and licence cancellation was not discussed between them at this time. For the reasons I will give, I did not find Mrs O'Shanassy to be a satisfactory or reliable witness. 27 On the morning of 29 April 2003, before returning the driver's declaration, Mr and Mrs O'Shanassy telephoned Mrs Jacks on a speaker phone from their home. Mrs O'Shanassy had had previous dealings with Mrs Jacks about insurance premiums and claims. She said that her husband asked her to contact Mrs Jacks "…to find out if the section about the type of offence section, where 'mid-range PCA' was written by my husband had a time period attached to it". Mrs O'Shanassy gave various accounts of this conversation in her evidence. In chief she said: "I rang Ms Jacks on the morning after this document was signed, and I asked her - I don't remember the exact words, but they were words to the effect, Debbie, we've completed this form, however, this area above where it says Please provide details, if answered yes to any of the above, doesn't say whether it needs to be within three years as it does say at the bottom. Can you please clarify how many years we have to go back here. And what - did she say anything in response? --- She said, Yes, it has to be three years, and that's where I've written it on the side. When did you write the words three years on this form? --- Sorry, can you repeat that?" Did you write the words three years on the form at the same time that you were speaking to Ms Jacks? --- Yes." (emphasis added) In cross examination, Mrs O'Shanassy said: "And you rang Debbie Jacks. Correct? --- Yes. And you said to her, I suggest, words to the effect of, Do I only need to disclose three years of offences or claims. Correct? --- Yes. You didn't mention in your conversation with Mrs Jacks anything about insuring - I beg your pardon, you didn't mention with Mrs Jacks anything about having a driving licence, declined, cancelled or special terms imposed? --- No. You're agreeing with me? --- Yes. And Mrs Jacks said to you something to the effect of, You only need to disclose three years of offences and claims? --- Yes. Which is precisely what's contained in the bottom section of the form on page 18 under the heading - next to the heading Type of Offences. Correct? --- Yes." 28 However, when questioned in cross-examination whether she had mentioned anything to Mrs Jacks about section B of the driver's declaration, Mrs O'Shanassy said that she had asked Mrs Jacks about how many years' history she had to disclose there. This account of the conversation accorded with the letter Mrs O'Shanassy had faxed to Ms Jacks on 29 April 2003 shortly after the conversation. She gave this evidence about the discrepancy between her letter and her evidence: "You didn't think, in that letter, did you, to make it clear that you were interpolating a three year limitation on your disclosure of licence cancellations, did you? --- Sir, I think that's badly written. I think I would not have to have called her about the last section of the form because its very clear. Yes? --- I was calling her about the earlier section in the form and that's what I'm referring to in this. Yes. And that's precisely the proposition I was putting to you earlier, Mrs OShanassy. Nothing that Mrs Jacks said to you in that conversation was not already patently obvious from looking at the form? --- That is not true. I needed clarification on the middle section of the form. Why didn't you make any mention of the middle section of the form when you wrote the covering letter to the facsimile? --- Well, it was badly worded, but I was referring to the middle section of the form because the lower section needs no clarification. It says - - - It is certainly badly worded if that was the conversation that occurred, isn't it? If your evidence of the conversation, the second version you have given in my cross examination, if that is the correct version, then that cover sheet was very badly worded, wasn't it? --- I suppose, yes. Because it tends to conceal the true - what you now say is the true nature of your conversation with Mrs Jacks, and it rather suggests that your conversation with Mrs Jacks was no more than confirming what is patently obvious on the form; correct? --- No, sir." (emphasis added) 29 I do not accept that last denial. Mrs Jacks was an impressive and honest witness. Mrs Jacks firmly rejected the suggestion put to her in cross-examination that it was possible that she had informed Mrs O'Shanassy on the telephone that the driver's declaration needed only to give details of any cancellation of a driver's licence for the last three years. As she explained, if there had been more than one cancellation, Prestige was not authorised to, and so could, and would, not accept the risk under its binder with Lumley. And only Mrs Jacks and Mr Woodlands were authorised to consider whether to accept risks involving just one such cancellation. Mrs Jacks said that she would not have told any enquirer that the disclosure in relation to cancellation or suspension of a licence could be given or confined to the last three years. 30 I find that Mrs Jacks did not tell Mrs O'Shanassy that she need disclose cancellations only for the last three years. I am satisfied that no such conversation took place. Rather I accept that a conversation that accorded with the text of Mrs O'Shanassy's letter occurred. I find that Mrs O'Shanassy never raised in that conversation, directly or indirectly, whether she had to make any disclosure about any cancellation of her licence. I do not believe her evidence to the contrary. I am satisfied that had she done so Msr Jacks would have told her that all cancellations had to be disclosed whenever they had occurred. 31 Sagacious, however, relied on what Mrs Jacks had said about the handwritten notation of "3 yrs" next to section B on the driver's declaration. She said that "… the form had actually been altered, [so] we would have asked the person that had completed it to nominate anything else that had occurred, because the question wasn't limited to three years". Sagacious contended that no later document showed that any clarification had been sought of the nature that Mrs Jacks identified. Hence, it argued, the insurer had waived any obligation on Sagacious' part to provide any further information. 32 The driver's declaration had been returned with the covering letter immediately after Ms Jacks had spoken with Mrs O'Shanassy. The fax was addressed to Mrs Jacks. Given its subject matter, I am satisfied that the fax was given to Mrs Jacks when Prestige received it and she considered that it accorded with what had been discussed earlier that morning. 33 The covering letter explained that the notation of "3 years" was being limited only to disclosures of "offences/claims". It did not refer to a cancellation of Mrs O'Shanassy's licence. The conversation earlier that day had dealt only with the issue of claims and offences, and had not touched on question B. That conversation would have been fresh in Mrs Jacks' mind when she received a fax of the letter and the driver's declaration. The answer about the 2002 suspension was given in respect of question B. In one sense that question may indirectly have referred to offences, in that a driver's licence would be cancelled as a consequence of the commission of an offence. However, the driver's declaration form also had two further separate sections, one for details or claims and another for convictions. The letter merely stated that Mrs O'Shanassy had "… listed any offences/claims within the last 3 years for each of the questions on the form." These were direct questions relating to claims (which had no temporal limit) and convictions (which had a temporal limit of "in the last 3 years"). And, for the three prior years, the disclosure of offences and claims was correct. 34 But, as Mrs O'Shanassy recognised in the witness box, the letter was "badly worded" to achieve, what I find to have been the intention of her husband and her, namely to avoid disclosing the 1999 offence and licence cancellation. That intention is the obvious explanation for his wife's telephone enquiry of Mrs Jacks, orchestrated by Mr O'Shanassy, and the confirmatory letter. Had the conversation referred expressly to question B then Mrs Jacks would not have told Mrs O'Shanassy that she need only disclose for the previous three years. The relevance to the insurer of the earlier 1999 conviction and cancellation in deciding to accept the risk was obvious to both Mr and Mrs O'Shanassy. That is why she sought to deny that they had discussed it before the telephone call to Mrs Jacks. Their conduct toward Prestige and Mrs Jacks was disingenuous and lacking in integrity. 35 I am satisfied that Mr and Mrs O'Shanassy misrepresented Mrs O'Shanassy's driving record to the insurer on 29 April 2003 by omitting reference to the 1999 offence and cancellation of her driver's licence. I am not satisfied that Mr or Mrs O'Shanassy believed that he or she did not have to disclose those matters. This is because she and her husband never raised them in her discussion with Mrs Jacks or in the letter or driver's declaration. 36 I am not satisfied that Mr or Mrs O'Shanassy held a belief that the answer given to question B was all that the insurer required. I accept the insurer's submission that the careful wording of the conversation, letter and the driver's declaration were all designed to enable Sagacious, and Mr and Mrs O'Shanassy, to avoid disclosing the 1999 conviction and associated cancellation, so as to not alert Mrs Jacks and the insurer to those matters. A reasonable person in the circumstances would not have held that belief for the purposes of s 26(1) of the Insurance Contracts Act. The answer given to question B was untrue because of that omission. And I am satisfied that Sagacious, Mr and Mrs O'Shanassy, or a reasonable person in their position could be expected to have known that this omitted information would have been relevant to the decision of the insurer to accept the risk of her being a nominated driver for the purposes of s 26(2). 37 In answering question B, Sagacious misrepresented, by omission, the 1999 cancellation of Mrs O'Shanassy's driver's licence. The insurer accepted Mrs O'Shanassy as a nominated driver as a result of that untrue representation. 38 Additionally, Sagacious argued that s 21(3) of the Insurance Contracts Act deemed the insurer to have waived compliance with the insured's duty of disclosure in relation to question B. The Act defined "proposal form" in s 11(1) as including: "… a document containing questions to which a person is asked to give answers (whether in the document or not), where the answers are intended (whether by the person who answered them, by the insurer or by some other person) to be used in connection with a proposed contract of insurance." 39 I do not accept that the insurer was deemed to have waived compliance by Sagacious with the duty of disclosure when Prestige received the fax containing the letter and driver's declaration on 29 April 2003. The answer to question B was not obviously incomplete or irrelevant in the context provided by the letter and the telephone conversation. In that context the letter addressed the handwritten notation "3 yrs" next to question B. A reasonable reading of that material in the circumstances, and the reading Mr and Mrs O'Shanassy intended it to convey, was that she had no offences other than the 2002 one, no claims, and importantly that the 2002 offence was the only occasion on which her licence had been cancelled. 40 Accordingly, I am satisfied that if Mr and Mrs O'Shanassy had made a true representation or a proper disclosure of Mrs O'Shanassy's 1999 conviction and cancellation of her driver's licence, Mrs Jacks and Prestige would have rejected her as a nominated driver on 29 April 2003.

(c) The Fukura Proposal 41 Mr O'Shanassy completed a proposal form for insuring a Range Rover vehicle in the name of another of his companies, Fukura Pty Limited, on 27 May 2003, about 4 weeks after the above driver's declaration. That proposal form, relevantly, contained the following disclosures (the handwritten responses are in italics): "b - Have you or any nominated driver: … (ii) Had any motor accident, fire damage or theft happen in the last 5 years Yes( X ) No ( ) … Yes( X ) No ( ) (iv) Been convicted of/or charged with any motoring traffic offence or been issued with any infringement notice in the last 5 years, including with intoxicating liquor or drug (v) Been charged or convicted in connection with intoxicating liquor or drug Yes( X ) No ( ) (vi) Had any motor licence cancelled, endorsed or suspended in the last 5 years Yes( X ) No ( ) (vii) Having regard to "YOUR DUTY OF DISCLOSURE" at the beginning of this proposal is there any other matter or information which may be relevant to our acceptance of this proposal such as previous loss or damage, previous claims, damage or injury to third parties on their property whether insured or not; criminal convictions or charges pending or bankruptcy or winding up proceedings for any party to this insurance Yes( ) No ( X )

FOR EVERY QUESTION ANSWERED "YES" PLEASE GIVE FULL DETAILS BELOW INCLUDING COST, INSURER, DATES AND FULL NAME … Question No: b(ii) Full Name: Lana R O'Shanassy Details: (a) Claim on (your reference 8019) insurance Policy 6 DOM/3725081 (b) PCA mid range charge 2 April 02 and see Drivers Declaration on above policy dated 28/4/03" (emphasis added) 42 Sagacious argued that the reference to the driver's declaration was sufficient to discharge its duty of disclosure. It did this on the basis that the declaration either had provided a complete disclosure of what the insurer had required or was an obviously incomplete answer to the enquiry about the previous 5 year period in questions (b)(iv) and (vi) because the driver's declaration had only dealt with the previous 3 years. 43 The answers to questions (b)(iv), (v), (vi) and (vii) omitted any reference to Mrs O'Shanassy's 1999 conviction and the cancellation of her driver's licence. Those answers were statements made in connection with a proposed contract of insurance within the meaning of s 26(2). They were untrue and amounted to a misrepresentation. The insured has the onus of establishing its belief if it seeks to rely on s 26(1): Plasteel Windows Australia Pty Ltd v CE Heath Underwriting Agencies Pty Ltd (1990) 19 NSWLR 400 at 407G-408B per Samuels JA, Meagher JA agreeing. 44 Mr O'Shanassy did not give evidence of his belief. He was also the controlling mind and amenuensis of Sagacious and Fukura in completing the proposals. 45 Sagacious argued that s 27 assisted it because the information it had provided was "obviously incomplete and put the insurer on inquiry". It contended that by failing to inquire, as with s 21(3), the insurer had waived any right to rely on the incomplete answer. 46 I reject that argument. Fukura's reference to the driver's declaration was not necessarily incomplete. For all the insurer knew the 2002 offence and cancellation were full and complete answers to questions (b)(iv) and (vi): ie nothing else had occurred in the previous five years. And for similar reasons to those I have given in respect of the driver's declaration, those four answers made an untrue representation within the meaning of ss 24 and 26 of the Act that the only conviction and cancellation of Mrs O'Shanassy's driver's licence had occurred in 2002. The answers to the Fukura proposal conveyed falsely and in clear terms that, relevantly, Mrs O'Shanassy, as a nominated driver had had no other convictions or cancellations of her driver's licence in the previous 5 years other than the 2002 conviction and cancellation.

(d) The Sagacious 2004 proposal form 47 Mr O'Shanassy had had previous dealings with Prestige and had arranged two other policies for cars owned by himself and by Fukura. Sagacious nominated Mr O'Shanassy and Mrs O'Shanassy as drivers of the car in its 2004 proposal form. The last page of the proposal form had a section dealing with accident claims and personal details. Mr O'Shanassy completed these so that Sagacious 2004 proposal provided the following relevant information (the written answers are in italics): "PLEASE ANSWER EACH QUESTION BY STATING "YES" OR "NO" AS THE CASE MAY BE ... b Have you or any nominated driver: … (iv) Been convicted of/or charged with any motoring traffic offence or been issued with any infringement notice in the last 5 years, including "on the spot fines" YES (P) NO ( ) U(v) Been charged or convicted in connection with intoxicating liquor or drug YES ( ) NO (P) (vi) Had any motor licence cancelled, endorsed or suspended in the last 5 years YES ( ) NO (P) …

FOR EVERY QUESTION ANSWERED "YES" PLEASE GIVE FULL DETAILS BELOW INCLUDING COST, INSURER, DATES AND FULL NAME Question No: (iv) (iv) Full Name: Paul Shanassy Lana O'Shanassy Details: Speed camera No wearing seat belt 15 kms speed not produce licence

U Please note disclosures provided under separate cover provided by Prestige C Insurance in the names of Paul O'Shanassy Fukuda Pty Ltd I/We hereby declare: I/We have read "Our Duty of Disclosure" at the beginning of this proposal form. I/We have not withheld any information likely to affect acceptance of this insurance. To the best of My/Our knowledge and belief every question has been answered fully and frankly." 48 Mrs O'Shanassy's first conviction for driving with in excess of the prescribed concentration of alcohol in her blood was for a high range reading (i.e. in excess of 0.15 grams of alcohol in 100 ml of blood: see s 8A of the Road Transport Act). That conviction and her disqualification from holding a driver's licence for 18 months was imposed on 13 July 1999 and, so, happened more than five years before Mr O'Shanassy signed the proposal on 30 September 2004. Thus, the answers to questions b(iv) and (vi) were correct. However, the negative answer to question b(v) had to be understood in the context of the earlier two disclosures referred to in the asterisked note that Mr O'Shanassy had written on the proposal form.

(e) A further request for information by Prestige 49 On 7 December 2004, Prestige sent Sagacious an information request concerning its proposal for the car. The request appears to have been the third one made by Prestige for the information it sought. It referred to the receipt of the proposal form but said that: "…. To enable us to process this proposal would you please provide the information requested below. PLEASE CLARIFY NUMBER OF TRAFFIC OFFENCES INCURRED BY EACH DRIVER IN PAST THREE YEARS. THANK YOU" On 5 January 2005, a junior employee of Prestige made a handwritten notation on the copy of the request that she had spoken to Mr O'Shanassy to chase up the information. This notation also made a reference to 17 January. There was no evidence of any response to this request but Prestige effected the insurance and renewed it up to the accident. 50 Sagacious argued that the request revealed that the insurer had informed Sagacious that the insurer only wanted information on traffic offences for the past three years rather than the five years sought in question (b)(iv). Sagacious also contended that the insurer had not discovered adequately its records of what had been disclosed to it in order to obtain the policy the subject of these proceedings. 51 I am not satisfied that the insurer's discovery or retention of its and Prestige's records omitted any presently relevant matter. I accept that the information request should be construed as limiting question (b)(iv) to a period of three years. However, the unlimited scope of question (b)(v) was not affected by that request. Prestige and the insurer had not dispensed with, or qualified, Sagacious' obligation to reveal the 1999 conviction in answer to question (b)(v). 52 There was no evidence that the 1999 conviction and cancellation had ever been disclosed by Sagacious, Fukura, or Mr or Mrs O'Shanassy, or that the insurer had waived any obligation that these matters be disclosed. I am satisfied that Sagacious was aware at all times before 16 January 2008 that the insurer did not know of the 1999 conviction and cancellation. This is because Mr O'Shanassy had been careful not to answer accurately questions in the Sagacious and Fukura proposals and the drivers declaration that may have revealed his wife's 1999 conviction and the associated cancellation of her driver's licence while giving the incorrect impression that all the questions relevant to her driving record had been fully answered. 53 Sagacious had answered question (b)(v), by saying that no nominated driver had ever been charged with, or convicted in connection with, intoxicating liquor or drug but qualified the answer with the asterisk. That took the insurer to Mr O'Shanassy's and Fukura's earlier disclosures relevantly made in 2003 of Mrs O'Shanassy's 2002 offence. Moreover, questions (b)(iv) and (vi) related to a range of the previous five years. So, the affirmative answer to question (b)(iv) in relation to Mrs O'Shanassy related, first, expressly to her not wearing a seat belt. Secondly, by implication, it also referred to the 2002 offence that had been disclosed in another context, namely the letter of 29 April 2003 in relation to Mr O'Shanassy's policy and the false answer to questions (b)(iv), (v) and (vi) in the Fukura proposal. The 2004 form for Sagacious' proposal expressly sought a disclosure in answer to question (b)(v) that was unlimited as to time. 54 The answers to questions (b)(iv), (v) and (vi) in the Fukura proposal were untrue to the knowledge of Mr O'Shanassy and, through him, Fukura and Sagacious. A reasonable person in his position would have been expected to know that the answers concealed from the insurer, Mrs O'Shanassy's 1999 conviction for a very serious driving offence and her licence cancellation. These concerned a significant matter that was obviously relevant to the insurer. This was because, first, it had used a new fixed time period of five years, not three years. Secondly, it expressly separated the inquiry about any conviction for intoxicating liquor to an unlimited time in an unambiguous question. Thirdly, a reasonable person in Sagacious' and Fukura's position would have understood from the questions that the two convictions in three years indicated that Mrs O'Shanassy was a driver who posed a substantive risk of re-offending. I have no doubt that Mr O'Shanassy was aware, and certainly a reasonable person in his position in the circumstances could have been expected to have known, that the new questions, with the longer time period were relevant to the risk that the insurer was being asked to accept. He was a solicitor. He had sat silently next to his wife during her conversation with Mrs Jacks in April 2003. I infer that he was seeking to avoid disclosing her earlier offence for fear that the insurer would reject his wife as a nominated driver. 55 The responses in the proposal forms and driver's declaration given by Mr O'Shanassy, and in the latter case by his wife, were complete and unambiguous on their face. They did not reveal the truth. And question (b)(v) reasonably construed in both the Sagacious and Fukura proposals sought a disclosure unlimited as to any time period. There was no hint in the letter of 29 April 2003 and the accompanying driver's declaration that Mrs O'Shanassy had any other conviction or licence cancellation in connection with intoxicating liquor. The open ended question in the driver's declaration was about cancellation of her licence. That enquiry was also the subject of the new questions (b)(vi) that set a five year period in each of the subsequent Fukura and Sagacious proposals. 56 The request for information made by Prestige on 7 December 2004 in relation to the Sagacious 2004 proposal was directed to clarifying the answer to question (b)(iv) by limiting the scope of its enquiry to the previous three years, instead of the five years sought in the proposal form. And question (b)(iv) referred to "any motoring traffic offence". Prestige's request of 7 December sought clarification of the number of "traffic offences incurred by each driver in the past three years". It did not refer to the distinct disclosure sought, and falsely answered, in the response to questions (b)(v) and (vi) concerning convictions "in connection with intoxicating liquor" (which extended the inquiry beyond, but did not exclude, traffic offences) and cancellations of licences. 57 Question b(v) was, like questions b(i), (vii) and (viii), not limited to traffic or motor offences. It applied generally. The subjects of the enquiries posed in questions (b)(i), (vii) and (viii) such as the proponent's and other nominated driver's mental and physical health, general criminal history, specific criminal history relating to drugs and alcohol and financial position can readily be seen to be relevant both to an insurer's assessment of the risk and its decision to accept a proposal. The questions in section (b), other than question (b)(iv), did not refer to traffic offences. Thus, the information request of 7 December 2004 would have been understood by Sagacious, or a reasonable person in its position, as limited to seeking clarification only of the unclear answer to question b(iv). 58 I am not satisfied that the insurer waived compliance by Sagacious with its duty of disclosure by making the request of 7 December 2004 or that Sagacious held any belief that it had made an accurate representation in respect of Mrs O'Shanassy's 1999 conviction and associated cancellation of her driver's licence in the answers to questions (b)(v) and (vi). Mr O'Shanassy knew, and a reasonable person in the circumstances would have known, that these matters were relevant to the insurer's decision whether or not to accept the risk of his wife being a nominated driver.

Conclusion on the failure to disclose and misrepresentation defence 59 Had the falsely answered questions in the driver's declaration and Fukura proposal been answered accurately, Prestige would have been aware of the 1999 convictions and associated cancellation of Mrs O'Shanassy's driver's licence. And had question b(v) been answered correctly in the Sagacious 2004 proposal form, Mrs O'Shanassy's 1999 conviction would have been revealed to the insurer. In either case, Prestige would have rejected her as a nominated driver because its binder with Lumley did not allow it to cover a driver with more that one DUI offence or driver's licence cancellation. And, it follows that the insurer would have known of those matters and rejected Sagacious' inclusion of her as a nominated driver in the 2004 proposal and the subsequent renewals of its policy. It is entitled to reduce its liability to nil under s 28(3) of the Insurance Contracts Act.

The policy 60 Lumley, through Prestige Car Insurance, accepted Sagacious' 2004 proposal and issued a policy. That was renewed in 2005, 2006 and 2007. Sagacious did not correct any of the misrepresentations and breaches of its duty of disclosure that I have found before the 2007 renewal. That renewed policy was in force at the time of the accident. The policy provided that there were several general exceptions that relevantly were: Other circumstances not covered by your Contract of Insurance …. Driver is under the influence of drugs or alcohol Loss, damage, liability and/or compensation for damage caused whilst the Insured Vehicle or any motor vehicle covered by your Contract of Insurance is being driven by or is in the charge of any person under the influence of intoxicating liquor or of any drug. Driver is has [sic] a blood alcohol level over the legal limit in the period up to 2 hours after event Loss, damage, liability and/or compensation for damage caused whilst the Insured Vehicle or any motor vehicle covered by your Contract of Insurance is being driven by or is in the charge of any person in whose blood the percentage of alcohol is in excess of the legal limit as prescribed by the law in the relevant State or Territory, as indicated by analysis of the person's breath or blood taken within 2 hours of the occurrence of the event giving rise to such loss, damage or liability.

The accident 61 There is no dispute that during the afternoon of 16 January 2008, Mrs O'Shanassy drank some alcohol. But, there were significant issues about exactly when and how quickly she drank it, and how much she had consumed. 62 Mrs O'Shanassy had consumed some alcohol at Mittagong RSL Club. From there, she drove her car towards her home. Mrs O'Shanassy gave evidence that she did not feel that her facilities were impaired in any particular way when she was driving home. She said that when she saw the other car she put her foot on the brake and then felt the tyres "sort of loosen on the road". She said this sensation also happened on the gravel driveway at her home. She said that all she recalled occurring before the accident was raising her right arm to protect her face and head. Next she said: "I remember waking up and being upside down with my seat belt on". She also said that she smelt petrol. She asserted that because someone told her that that petrol was leaking she feared that the car was going to blow up and continued: "I just lost it. I thought I was going to die" by being burnt alive in the car. She claimed that the next thing she remembered was waking up at Liverpool Hospital days later. She said that she had a few "glazed memories" of rescue workers and one person in the car. 63 At about 6.55 pm Manuel Tavares was driving his car along Range Road towards Mittagong. He was with his wife Maria, who was in the rear seat. The road was dry and the weather overcast. They came over a small crest on a left hand sweeping bend in a section of road with double dividing lines. There was some gravel on the opposite side of the roadway that had washed down from a private driveway. They saw a silver Mercedes. Mrs Tavares said, and I accept, that the Mercedes was speeding as it came towards their car from the opposite direction. As the cars passed Mr Tavares realised that something was wrong. He looked in the rear view mirror and saw the Mercedes' passenger side wheels leave the main roadway. Mrs Tavares turned and watched. They saw the Mercedes knock down a tree, go over another tree and roll over, coming to rest, after hitting a third tree at the side of the road, upside down on its roof with the rear boot positioned over a metre above the ground pinned against a tree trunk. A tree was lying on top of the car. The front of the Mercedes was smashed inwards with very extensive damage and the bonnet pushed upwards. The photographs of the damage to it suggest that the accident occurred at considerable speed. 64 Mr Tavares stopped his car and turned back. As he did so, Mrs Tavaras rang the emergency number on her mobile phone and requested that the ambulance and police attend the scene. Mr Tavares got out of the car and arrived quickly at the upturned car, followed soon after by his wife. Mr Tavares immediately asked the lady in the upturned car if she was alright. She said she was. She asked for help. He tried to help Mrs O'Shanassy to get out of the car but he could not. She told him that her leg was stuck. At Mrs O'Shanassy's request Mrs Tavaras telephoned her husband. Mrs Tavares said that while the lady in the car answered their questions, she seemed to be upset. 65 Both Mr and Mrs Tavares did not smell any petrol. Although Mrs Tavares said that she was concerned about the car exploding because it was upside down, she stated positively, and I accept, that she did not smell petrol. No other witness expressed concern about any risk of an explosion. Any such risk would have passed away rapidly after nothing happened following the crash. There was no fuel leak. No other witness except Mrs O'Shanassy said that he or she smelt petrol. I reject Mrs O'Shanassy's evidence that she had smelt petrol or was in the condition she exhibited on the evening of 16 January 2008 because of her panic at the thought that she might be at risk of an explosion from leaking fuel. 66 Monique Berry, a neighbour who lived on Range Road drove to the scene immediately after the accident. She also spoke to Mrs O'Shanassy who said that she wanted her phone to speak to her husband and her lawyer. Ms Berry smelt alcohol coming from inside the car and saw that two empty VB "stubbie" bottles of beer were lying beside the car. They had been dislodged from inside it during the accident. 67 Jim Farrell, an ambulance paramedic of 31 years experience was the first emergency services officer to attend at the scene of the accident. He received instructions to attend at 7.01 pm. He arrived at the scene at 7.12 pm. He immediately approached the Mercedes, and saw the driver inside. She was upside down held in her seat by her seatbelt. Mr Farrell got inside the car. He immediately smelt alcohol. He gave this evidence of their first conversation in which he said Mrs O'Shanassy spoke in a very controlled but level voice: "What did you say to her? --- I introduced myself as to who I was and where I was from, and I asked her her name. And what did she say? --- And she said, Mrs O'Shanassy. And what did you say? --- And I said, Well, I'm here to see what injuries you've got. And I don't remember the exact words, but words to that effect, and she said, Are you going to get me out of the vehicle? And I said, Well, the rescue squad will be here shortly, but in the meantime I need to examine you, assess your injuries, and treat you. And she said, If you're not getting me out of the vehicle, I want you out of the vehicle. And what did you say? What did you do? --- I said, We probably need to go through this again, and I introduced myself again, told her who I was, and again she said her name was Mrs O'Shanassy, and if I wasn't going to get her out of the vehicle, I was to get out of the vehicle." 68 He ascertained that Mrs O'Shanassy could not move her leg because it, or her foot, was trapped against a firewall behind the brake pedal. But, Mr Farrell complied with Mrs O'Shanassy's demand and got out of the car. Soon after Mr Farrell spoke to Senior Constables Bennett and O'Brien. Those police officers had arrived in the meantime. They had received a dispatch to attend on the police communications system at 7.07 pm. Senior Constables Bennett and O'Brien went to the car and immediately smelt alcohol emanating from where Mrs O'Shanassy was trapped. Senior Constable O'Brien told her that she needed to have the treatment being offered by the ambulance officers because she was injured and that they had to get her out of the car. They too were rebuffed and told by Mrs O'Shanassy who repeatedly told them to go away. Mrs O'Shanassy also told Senior Constable O'Brien that she did not want to be treated. 69 Soon after, Senior Constable Williams and Constable Boserio arrived. Mrs O'Shanassy continued to refuse Mr Farrell's and their attempts to get her to allow Mr Farrell to assess and assist her. 70 At one point, while she remained trapped in the car, she spoke to Senior Constable Williams who gave this evidence that I accept: "--- I said to her to stop being stupid, that she may have serious spinal injuries. And that she asked to be cut from the vehicle so she could walk home. And I said, How are you going to do that? Your foot's facing the wrong way. And she said, words to the effect of, I'll be right. Just cut me out. I just want to go home. And I said, Well, you won't get very far. And was that the extent of that exchange? --- Yes. That was." 71 Damian Rynehart, a member of the volunteer rescue squad, attended the car with hydraulic spreaders that he used to free Mrs O'Shanassy's foot. He also experienced her aggressively telling him a few times to get out and leave her alone. He described her aggressive language as being very colourful and as continuing during the whole time that he was trying to remove her. During his rescue effort his head was next to Mrs O'Shanassy's and, although he could not remember smelling anything about her person, he smelt alcohol in the car as did another rescue squad member, Kiaran Drew. 72 Mrs O'Shanassy was in some pain from the significant injuries that she had sustained and she also had experienced some degree of shock. But she did not display to Mr Farrell any symptoms of having lost consciousness and had been immediately alert when she spoke with Mr and Mrs Tavares moments after the crash. After Mrs O'Shanassy's foot had been freed from the wreckage, she was placed on a stretcher. Senior Constable Williams and Constable Boserio said that she was laughing at this time and then tried to sit up on the stretcher. Mr Farrell found her to be still aggressive towards him in his efforts to assess and assist her in the ambulance. This behaviour continued until Mr O'Shanassy came to the ambulance when he told his wife to behave and let herself be treated. 73 Mr Farrell's contemporaneous notes recorded that "… there is a smell of intoxicating beverages about her person. The patient was rude and unco-operative". He said this smell was noticeable in both the car and the ambulance. The ambulance left Range Road at 8:12 pm and arrived at the emergency department of Bowral & District Hospital at 8.22 pm.

Events at Bowral Hospital 74 Mrs O'Shanassy was triaged by nurses Henning (who gave evidence), and Pearsall and placed under the care of Dr Debbie Chan. I found Dr Chan to be an impressive and careful witness and I accept her evidence. After some initial difficulties the nurses had in inserting a cannula into one of Mrs O'Shanassy's veins. Dr Chan succeeded in finding a vein and inserting the cannula. She immediately took a sample of Mrs O'Shanassy's blood using a syringe as she was required to do by s 20(2) of the Road Transport Act. She handed the syringe to nurse Henning who put the sample into a vial in a blood alcohol kit with serial number 566293. Dr Chan explained that it is necessary to take a blood sample as soon as the cannula has been inserted into a patient, and before any fluids or medication are administered to treat the patient, so as not to contaminate or dilute the patient's blood with substances not present when he or she had been driving. The hospital records note that the first intravenous fluid was administered to Mrs O'Shanassy at 20:55 that night. 75 Dr Chan recorded in a note that Mrs O'Shanassy had had a peripheral shutdown, i.e. her superficial blood vessels become constricted. This was a reference to the difficulties that the nurses had had in inserting a cannula and why, ultimately, the doctor performed that task. She said that such a shutdown occurred when the body was trying to conserve blood in the central part of the body. It is a common reaction in cases of blood loss, acute shock, hysteria and also where the patient is in pain. Dr Chan noted that she had inserted a cannula in the area of Mrs O'Shanassy's elbow and had taken the blood alcohol sample from this. However, she was unable to get blood for other tests from this cannula and had to insert a second cannula on Mrs O'Shanassy's left hand, taking a small amount of blood from there to determine her haemoglobin level as an indicator of possible blood loss. 76 Soon after this Mrs O'Shanassy refused to allow more blood to be taken. Dr Chan then went to the waiting room and spoke to Mr O'Shanassy. The hospital's nursing notes recorded that he visited Mrs O'Shanassy. The relevant nursing note was in the form of an interlineation in notes written earlier. I prefer Dr Chan's evidence to the nursing notes. I infer from Dr Chan's notes that she spoke to Mr O'Shanassy because she wanted him to ask his wife to co-operate so that the hospital would know her blood type in case she needed an urgent transfusion or surgery. He told Dr Chan that he was a lawyer and a patient could refuse to take a blood test. He told Dr Chan that she could not take blood from Mrs O'Shanassy without her consent. I infer that Mr O'Shanassay's intervention occurred at about 8.55 pm. I find that the blood alcohol sample was taken by Dr Chan from Mrs O'Shanassy in the period before 8.55 pm and within two hours of the accident. I will return to the time at which the sample was taken when considering the admissibility of the analyst's certificate under s 33(6) of the Road Transport Act. 77 Dr Chan's contemporaneous notes recorded a history that Mrs O'Shanassy had given her. She made the notes at 9.15 pm after she had seen Mrs O'Shanassy. Mrs O'Shanassy told Dr Chan that she had been driving at 80 to 100 kilometres per hour and had had two beers at lunch. She told the doctor that she was near home, the road was wet but it was not raining. She said that she had hit the kerb and lost control, but she did not refer to having hit any trees. Mrs O'Shanassy said that her right leg had been trapped between the car floor and the engine. She told Dr Chan that she had not lost consciousness, had no nausea or vomiting or neck pain but was experiencing chest, back and abdominal pain. She complained of pain in her right forearm, right knee, right ankle and big left toe. Dr Chan followed a process in accident cases of reviewing the whole body of the patient with him or her. Dr Chan had also obtained some information from the ambulance officers. Mrs O'Shanassy told Dr Chan that she only took alcohol occasionally. 78 Dr Chan noted that Glascow coma scale testing of Mrs O'Shanassy had the best possible score of 15. That score is equivalent to normal alertness. Indeed, the hospital records noted two such tests at 8.35 pm and 8.55 pm both with that score. Next, Dr Chan also made a notation "ETOH++", which was her abbreviation for alcohol. She used her own scale of one plus to three plus depending on what she smelt on the patient's breath while talking to her. I infer that Dr Chan smelt a significant amount of alcohol on Mrs O'Shanassy's breath. 79 The doctor observed soft tissue swelling on Mrs O'Shannasy's left upper eyelid but noted that there was no orbit involvement, signifying that her eye was not injured. Dr Chan observed that Mrs O'Shanassy had grazes on both knees, her legs were uninjured, but her right ankle may have been fractured or dislocated and she had some tenderness on her left toe. Dr Chan said that while Mrs O'Shanassy was in her care, she was yelling that she was in pain, sometimes quite demanding, sometimes very rude, obstructive, hysterical, crying and screaming. However, as Dr Chan explained, behaviour of the kind exhibited by Mrs O'Shanassy is common in people who are hysterical irrespective of whether they are intoxicated. She said that some car accident victims can behave very bizarrely. 80 Nurse Henning also described Mrs O'Shanassy's behaviour as somewhat aggressive and a bit combative. She recalled that Mrs O'Shanassy was verbally abusive and was pushing the nurses away when they were trying to use equipment to assess and treat her. Nurse Henning also said that Mrs O'Shanassy's breath smelt of intoxicating liquor.

Some credibility issues 81 I reject Mrs O'Shanassy's evidence that she remembered, first, waking up after the car crashed and that the next thing she remembered was waking up in Liverpool Hospital. At no point on the day of the accident did she mention, or exhibit any sign of, loss of consciousness to the many people who saw and spoke to her. She was alert when speaking to Mr and Mrs Tavares who were on the scene almost immediately. Her alertness was tested several times at Bowral Hospital and, according to Dr Chan, Mrs O'Shanassy was just like a normal person with several Glascow coma scale scores of 15. 82 Mrs O'Shanassy's memory of the events may well have been affected first by alcohol consumed by her earlier that day, and secondly, after 16 January 2008, by the drugs she was taking for her pain management, post operative treatment and care. But I do not accept that she had a memory of "waking up" just after the accident or that she did lose consciousness. First, if her memory of the subsequent events was as bad as she said, I cannot believe that she remembered only "waking up". Secondly, her other "memory" of being upside down in the car was that there was a smell of petrol and a risk of explosion. That "memory" was not a credible recollection of what happened. Again, it may have been a product of her drinking and intoxication but I do not accept that it is a recollection of any actual event. It is inconsistent with her forceful refusal to allow Mr Farrell to assess and assist her. In addition, she never told anyone at the scene or at the hospital on 16 January that she had smelt fuel at the time and was in fear of her life. A person who was trapped in a car with the smell of fuel and a fear of fire or explosion occurring, is highly likely to articulate such a fear and to seek rescue and reassurance. Mrs O'Shanassy's conduct at the scene was so different from that of a person in fear for her life from the risk of fire or explosion, that I am unable to believe her later assertions that she smelt fuel while she was trapped in the car. I have a number of other concerns about Mrs O'Shanassy's evidence and the weight that I can place on it to which I will come later in these reasons. 83 The insured criticised the evidence of the police officers because none of them had followed standard procedures. It argued that they had largely prepared their first written account of the events of 16 January 2008 many months later, all drawing from Senior Constable O'Brien's event report. It may have been better for each of the attending police officers to have made his or her own contemporaneous note or statement, as standard police procedure required. However, the event report did not refer at all to Mrs O'Shanassy's behaviour and, because that report referred to her blood alcohol analysis, the matter seemed a straightforward case of her having driven with in excess of the prescribed concentration of alcohol. I am satisfied that the police witnesses gave their genuine recollections of Mrs O'Shanassy's behaviour and the events that they witnessed. Her unusual conduct was memorable, in itself. 84 In assessing the police witnesses' evidence, I have taken into account that in the ordinary course of their duties they attended many incidents, each having its own distinctive features, and that one important reason that police should make contemporaneous notes of each of these incidents is to ensure that they will be able to refresh their memories for the purpose of giving evidence from a relatively contemporaneous, independent record. Nonetheless, I am comfortably satisfied that the police witnesses' evidence was reliable. First, it was consistent with the observations and evidence of the other witnesses in relation to Mrs O'Shanassy's behaviour. Secondly, that behaviour was unusual and no police officer had any reason to give an account beyond his or her recollection. I have accepted their evidence that I have drawn from in my findings above. I found the other independent witnesses' evidence to be generally reliable.

The psychiatric evidence 85 Since the accident Mrs O'Shanassy has seen two psychiatrists, Dr S Roberts and Dr D Watson, for treatment of a number of personal problems. She gave these doctors intimate and highly personal details of her history. It would not be appropriate for these matters to be set out publicly in these reasons: cf Van Rheeden v Westpac Savings Bank Ltd (unreported, Federal Court of Australia, Gummow J, 27 November 1992) at p 22. On 16 March 2009 she also saw, with her husband, Dr R Hampshire who provided a forensic psychiatric report initially for the purposes of her criminal case. Dr Hampshire offered his opinion, based on a history given by Mrs O'Shanassy that differed in very significant respects from those she had given to Dr Roberts and Dr Watson. 86 Dr Hampshire's report was tendered by Sagacious and he was not required for cross-examination. He opined that at the scene of the accident and later on 16 January 2008, Mrs O'Shanassy "… was clearly dissociated and was suffering from both a depersonalisation and derealisation state". He said that this was consistent with the perilous situation she was in while trapped in the car with the smell of fuel around her. His diagnosis was that she now suffered from post traumatic stress disorder with depression and panic attacks. Dr Hampshire said that the best predictor of post traumatic stress disorder was a dissociative state. He considered that the observations of the police, ambulance officers, doctors and others of her behaviour at and after the accident was consistent with dissociative states. He said dissociative states led to inappropriate behaviours. Importantly, Dr Hampshire said that Mrs O'Shanassy's "… psychological state then and now cannot be explained by any alcohol consumption she had immediately prior to her motor vehicle accident". 87 However, Dr Hampshire's opinion significantly depended on his assumption that Mrs O'Shanassy had no prior psychiatric illness before the accident and that immediately after it she suffered a profound and severe dissociative state. He also stated that there was no genetic family history in her first degree relatives. He also recorded a history that Mrs O'Shanassy had only had "a drink" at the club. It suffices to say that the histories that Mrs O'Shanassy gave separately to Dr Roberts and Dr Watson were of significant prior psychiatric illnesses of herself and her parents. It is not necessary to explore whether she felt inhibited in giving a full history to Dr Hampshire by the presence of her husband or had not felt able to confide in him. 88 I am not satisfied that Dr Hampshire's opinion that alcohol had no role in her behaviour on 16 January 2008 has any probative value because he arrived at it without any consideration, or knowledge, of Mrs O'Shanassy's pre-accident history as given to Dr Roberts and Dr Watson. As will appear, Mrs O'Shanassy also had consumed a considerable amount of alcohol, not just "a drink". I accept the histories given by Mrs O'Shanassy to Dr Roberts and Dr Watson as being inherently plausible and likely to be significantly more reliable than what she told Dr Hampshire. The latter history was taken by him either with her husband present or in the knowledge that he was likely to read it and that it may be tendered in the Court proceedings brought by the police based on the analysis of her blood alcohol level. In contrast, Mrs O'Shanassy appeared to have been more open with each of Dr Roberts and Dr Watson, whom she saw for treatment, not forensic purposes. 89 Mrs O'Shanassy confided to Dr Roberts that she "drives under the influence" and Dr Watson that "I was drinking and driving too fast" on the night of the accident. However, on these occasions she was still taking pain killing drugs that could have affected her mental state and there were other aspects of her account of the accident given to Dr Watson that do not appear to be precise. Despite this, I am satisfied that Mrs O'Shanassy was acknowledging to both Dr Roberts and Dr Watson that she believed that at the time of the accident she had been driving "under the influence"; in other words, she was acknowledging that her earlier consumption of alcohol had affected her driving to an appreciable extent. 90 Sagacious contended that I was bound to accept Dr Hamshire's unchallenged expert opinion by force of Precision Plastics Pty Ltd v Demir (1975) 132 CLR 362 at 370-371 per Gibbs J, Stephen J and Murphy J concurring. However, this is not a situation where Dr Hampshire's credit was in issue; rather the issue is whether the opinion he gave, on assumptions as to Mrs O'Shanassy's history that are significantly wrong, should nonetheless be accepted, even though he has offered no opinion about what his diagnosis would have been had he been given an accurate history. 91 In Paric v John Holland (Constructions) Pty Ltd (1985) 62 ALR 85 at 87-88 Mason ACJ, Wilson, Brennan, Deane and Dawson JJ said that for a medical opinion to be of any value, the facts upon which it is based must be proved by admissible evidence. Their Honours said that this did not mean that the facts so proved had to correspond precisely with the proposition (or assumption) on which the opinion was based. They held that it is a question of fact whether the case assumed by the expert were "sufficiently like the one under consideration to render the opinion of the expert of any value". Trifling differences will not be sufficient to warrant the expert opinion being rejected. Their Honours explained that there must be a failure to establish a sufficient correspondence in some one or more important facts: Paric 62 ALR at 88 approving: Wigmore on Evidence (3rd ed) (Chadbourn rev 1979) Vol II s680 pp 941-942; see too: Paric v John Holland Constructions Pty Ltd [1984] 2 NSWLR 505 at 509D-510B per Samuels JA, Hutley and Priestly JJA agreeing; Reg. v Turner [1975] QB 834 at 840 at 840F; cf Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 745 [89], 749 [98]. 92 If Dr Hampshire's opinion were to be given weight, the assumptions on which it was based had to be established by evidence. He referred twice in his report to Mrs O'Shanassy having no prior history of psychiatric illness. He also referred to her smelling fuel when trapped in the car, but no witness apart from Mrs O'Shanassy supported a suggestion that any fuel had leaked and I have not accepted her evidence on this point. Neither Dr Roberts nor Dr Watson recorded her giving a history of smelling fuel at the time she was trapped, again revealing a second material difference in Mrs O'Shanassy's account of the accident to them in comparison to that which she gave to Dr Hampshire and in her evidence. And, he appears to have accepted her history of having consumed only a "a drink" at the club. 93 Dr Hampshire's opinion explained that Mrs O'Shanassy's behaviour at the scene of the accident and shortly afterwards at the hospital had a close association with the subsequent development of new mental illnesses. Yet, the franker and fuller histories she had given to Dr Roberts and Dr Watson showed that Dr Hampshire arrived at his opinions about her current condition, its aetiology, and his explanation of Mrs O'Shanassy's odd behaviour on 16 January 2008, on significantly incomplete data about her pre-existing mental state. He also assumed that Mrs O'Shanassy smelt fuel while trapped. I have not accepted her evidence that she did. He was unaware that Mrs O'Shanassy had consumed a significant amount of alcohol in the period before the accident. 94 I do not feel persuaded by Dr Hampshire's opinion. There were material differences in the history he had been given and the true position. His opinion depended on erroneous assumptions including, that she had no earlier psychiatric illness, so as to exclude the effect of her consumption of alcohol on her behaviour. He was not aware that Mrs O'Shanassy had consumed a considerable amount of alcohol in the hours before the accident. I do not accept her evidence that she smelt fuel or was in fear of the risk of fire or explosion while she was trapped in the car. I am not able to assess, on the evidence, the impact that Mrs O'Shanassy's actual history would have had on whether Dr Hampshire would have formed the opinion that he reached on the different and inaccurate history he had been given, namely that the accident triggered or led to her condition when he saw her. 95 I have allowed for the impact of the trauma and shock resulting from the accident on Mrs O'Shanassy's reactions, including the possibility that these caused some dissociation in her mind leading to some of her incongruous behaviour in arriving at my findings. However, I am comfortably satisfied that Mrs O'Shanassy's observed behaviour was substantially caused because she was significantly affected by alcohol.

What alcohol had Mrs O'Shanassy consumed before the accident? 96 The time at which Mrs O'Shanassy's blood alcohol sample was taken at the hospital by Dr Chan was critical for at least two reasons. First, the sample had to be taken within two hours of Mrs O'Shanassy having driven the car if it were to be admissible in proceedings for an offence under s 32(2) of the Road Transport Act. Secondly, the amount of alcohol absorbed into her blood when the accident occurred depended on when and how much alcohol Mrs O'Shanassy actually had consumed in the period preceding the accident; in other words, if her version of events were true, although she may have imbibed the intoxicating liquor before the accident, it may not, by then, have been absorbed into her blood so that she was not driving under its influence. 97 Mrs O'Shanassy gave very precise evidence that she had gone to the club in order to gamble arriving at about 6.30 pm. She said she left the car in the club's car park. She identified four mobile phone calls on Sagacious' telephone account that she made to banks between 6.34 and 6.40 pm originating from Bowral that she claimed she had made from the club. She also called her husband at 5.20 pm in a call recorded as originating from Bowral. Other calls on that same mobile phone in that account were noted to have originated from Mittagong. There was no explanation why the calls that Mrs O'Shanassy asserted she made from Mittagong RSL Club were listed on the telephone account as having originated from Bowral which is some kilometres away from Mittagong. Mrs O'Shanassy was not cross-examined about this apparent discrepancy. She said that she had walked into the lounge area of the club whence she made the phone calls to the banks, but she was unsuccessful in obtaining any more money than the few hundred dollars she already had with her. She said that after waiting to see whether her sister had deposited money into a bank account and ringing the banks again to check, she walked to the bar and ordered two Johnnie Walker red label double whiskies with coke. She said that she took the drinks to the poker machine area, sat at a machine, placing the drinks beside it, and began to gamble. 98 Mrs O'Shanassy explained, and I believe, that she always got a drink before going to the poker machines to play because she did not want to stop playing to go to the bar to get a drink later. She said that she felt terribly guilty about being at the club gambling and that her husband and she would have a "huge fight" if he learnt of it. This was because she had suffered from a gambling addiction to poker machines that had led to her divorce from her first husband. Initially, she had hidden the addiction from Mr O'Shanassy but when he found out he had helped her to deal with it. She claimed that she had not gambled for about six years before 16 January 2008. 99 Mrs O'Shanassy said that she frequently checked her mobile phone when she played the poker machines to see if anyone had tried to call her. She thought her husband was at work in Sydney but when she looked at her mobile phone she saw a message on it indicating that she had a message and missed two calls from his car's mobile phone number. The telephone account shows that Mr O'Shanassy had made two calls at 6.35 pm and 6.36 pm; that is, in between Mrs O'Shanassy's calls to the banks at 6.34 pm and 6.40 pm. Thus, Mr O'Shanassy's calls were made before Mrs O'Shanassy said that she had walked to the bar and ordered drinks. She did not explain how, when she dialled the banks at 6.40 pm, she had not seen any message or missed call on the screen of her mobile phone. Rather she said that it was noisy in the poker machine area. 100 However, she claimed that when she checked her phone after she had installed herself at the poker machine and commenced sipping her first drink, she saw the two missed calls and message. At that point she said that she panicked because she did not want her husband to know that she was at the club. So she said she used up her gambling credits on a couple of plays on the poker machine, and sculled the second drink after finishing the first. She said that she went straight to her car and drove towards her home, arriving on Range Road within minutes. 101 Mrs O'Shanassy said that the road was wet but that it had not rained for a while. There was gravel on the road and she was rushing to get home to find out if her husband was there. After she saw a car approaching hers over the crest of a hill, she felt the car lose traction on the gravel as she braked. She said a warning light came on and that, next, all that she recalled before the accident was putting her right arm up to protect her face and head, as I have described above. 102 Mrs O'Shanassy's evidence, if accepted, obviously would support Sagacious' case that the alcohol she had consumed had not had time to be absorbed into her blood before the accident. I do not consider Mrs O'Shanassy to be a reliable witness about the circumstances leading to the accident and in particular her alcohol consumption. Importantly, when she was facing a criminal charge of driving within excess of the prescribed concentration of alcohol, she prepared a driver's declaration with her then solicitors, VA Lawyers, for submission to the police. She thought that she did this after she had returned home from hospital while still taking a prescribed opiate, oxycontin, as medication for ongoing pain management. I accept that the pain medication was strong and may have affected her recollection and reliability. 103 Nonetheless, in her signed driver's declaration prepared for provision to the police after she had been charged she stated that the accident occurred at approximately 6.30 pm. If that were so, the blood sample was recorded as having been taken more that two hours after the accident and would thus be inadmissible in her prosecution. And she also gave a history to Dr Hampshire on 16 March 2009 that, as he wrote: "It is or was her recollection that she left Mittagong around about 6.30pm to head back towards the family home having paid some bills, done some shopping and had a drink at the local RSL Club." (emphasis added) 104 In cross-examination she said that the time of 6.30 pm was misrecorded by Dr Hampshire. I reject that evidence. It suited her defence of the criminal charge to assert that she had left the club at 6.30 pm so that her last ingestion of alcohol could not have been less than two hours before her blood sample was taken. That history made no mention of any gambling. Additionally, she gave evidence that she did not just have "a drink" but two double whiskies. Now, in these proceedings, it suits the case that, Sagacious, her husband's company, wishes to advance that she left the club later in a panic because of her discovery of the two missed calls. I do not accept that evidence either. In these proceedings, Mrs O'Shanassy was aware of the other evidence that the accident happened a significant time after 6.30 pm and close to 7 pm. She and Sagacious were still very conscious that the timing of the accident in relation to her ingestion of alcohol and the taking of the blood sample were critical to the availability of both the policy exclusions on which the insurer relied. This is apparent from the following evidence she gave: "And its your awareness of the importance of the precise times that has caused your recollection to change from leaving the Mittagong RSL at about 6.30 and arriving at the Mittagong RSL some time before then to the evidence you give today. Isn't that right? --- No, sir. I'll never forget the exact time that I left the Mittagong RSL because it was one of the last things that happened before the accident. Madam, Mrs OShanassy, you didn't even remember the exact time you left the Mittagong RSL until some time in late 2009? --- That's not true. When did you first write down an account of the events that occurred that night? --- When I prepared the statement for VA Lawyers. The driver version? --- Yes. Well, your recollection certainly improved, on your evidence, since you did that? --- Yes. I was high on drugs at the time, sir. It has improved. ..... But since then, since coming off the pain medication - - - ? --- Yes. - - - your recollection of precise times on the night of the accident has been restored to you; correct? --- Yes. Now, I want to suggest to you, Madam, that all of that evidence is false? --- No, sir. And you're inventing it? --- No, sir. HIS HONOUR: Can you tell me when you first recall leaving the RSL after - you'd earlier said it was 6.30 - when you were having this medication or preparing the drivers version? --- Yes. I remember the events that occurred at the Mittagong RSL. I remember what I did. I sat in the lounge, I made phone calls. I then went to the bar, and then I went to the poker machines. And now I've had access to telephone records and things, I've been able to pinpoint a closer time to when each of those events happened. And I remember one time only. I don't remember the exact times of everything. And that was then I looked at my phone. MR BRAHAM: Yes. See, if you've had the recollection of looking at your phone, you could never have told anyone that the accident happened at about 6.30? --- A precise time in the criminal proceedings and any other conversations private conversations I've had with my doctors was not relevant. What time did you have the accident? It was about 6.30. But you say you gave that answer, notwithstanding that there was in your head, at the time you gave the answer, a very precise time at which you believed the accident occurred? --- Yes. And that that time was 6.55 or 7 o'clock, on your evidence; correct? --- Yes. And notwithstanding that that was your understanding, you say at all times since the accident and you had that understanding with some precision when asked about it you said about 6.30? --- Yes. On a number of different occasions? --- Yes. Including a statement that you were going to give to the police which you were anxious to ensure was accurate? --- Yes. You didn't think to say about 7 o'clock? --- No. HIS HONOUR: Why not? --- When someone asks me what time did you have the accident, I didn't think I needed to give a precise time. So 6.30 it could have been 6.30. It could have been 7 o'clock. Why would you put the time you didn't think was the right one? --- Because I didn't want to say the precise time 6.49. When someone like your doctor asking you, What did you have for breakfast? Cereal. And they say, What time did you have it? It was about 7 o'clock. I'm not going to say 7.02 am, even though I was looking at my clock at the time." (emphasis added) 105 If Mrs O'Shanassy had always recalled the exact time she left the club, she gave no credible explanation for giving the erroneous times to her lawyers, Dr Hampshire, and if her driver's version statement were given to them, to the police. I do not consider her to be a witness whose evidence I can accept without independent corroboration. In particular, I do not accept her evidence on when she drank alcohol or how much she drank on 16 January 2008.

The insurer's re-opening 106 One month after the hearing had concluded and I had reserved my decision, the insured argued a motion to set aside my order made at the commencement of the trial refusing it leave to file an amended reply. If I had granted that relief Mr and Mrs O'Shanassy would have been called and re-called respectively to give evidence. As a precaution for that eventuality, the insurer issued a subpoena to Mittagong RSL Club that was returned at the hearing of that motion. The insured did not oppose the tender of the documents produced in answer to the subpoena. 107 The club produced a guest membership application of Mrs O'Shanassy dated 16 January 2008 three poker machine payout vouchers and a print out of all payouts made on that day. The three vouchers recorded that Mrs O'Shanassy received payouts of $1,000 at 16:50, $200 at 16:57 and $1,986.05 at 17:50 on 16 January 2008. 108 Having regard to the vouchers, Mrs O'Shanassy's oral evidence about when she arrived at the club and began drinking and gambling was false. She had begun gambling at least two hours before the accident. I accept her evidence that she drank alcohol when she gambled. I find that she was drinking alcohol over the whole period she was at the club. I do not believe her evidence unless it is independently corroborated. She has been prepared to give accounts of the accident and the circumstances leading to it that are tailored to her, her husband's and Sagacious' perceived forensic advantages in the two proceedings (namely her criminal charge and these) in which she has had differing interests to pursue. I cannot place any weight on what she has chosen to say in evidence unless it is against her interests, or is inherently probable (such as her drinking when gambling) or corroborated by independent evidence. 109 I am unable to assess whether Mrs O'Shanassy left the club after her first two payouts and went to Bowral where she spoke to her husband at 5.20 pm and then returned to the club to gamble and win the third payout. It may be that she left the club once more after that and went to Bowral again, where she made the further calls to the banks between 6.34 pm and 6.40 pm. Whatever she did, I am comfortably satisfied that Mrs O'Shanassy had been drinking fairly constantly over at least the two hours before the accident and that her evidence of only rapidly consuming alcohol just before it was false. 110 I reject her evidence about having had only two double whiskies just before she began driving. I am comfortably satisfied that she had been drinking a larger amount of intoxicating liquor consisting of double whiskies at the club for some period before she got into her car. The amount of alcohol that Mrs O'Shanassy actually consumed has been concealed by her. She gave a false account for use in her criminal case to Dr Hampshire of having had only one drink. She also told him that she had left the club at 6.30 pm. She gave a considered account to the police of having left the club at 6.30 pm. If that were true it would demonstrate that the blood sample had been taken more than two hours after the accident so as to render it inadmissible in the criminal proceedings. 111 She said in evidence that she does not drink beer. I do not believe her. She told Dr Chan that she had had two beers at lunch. I find that she had consumed the two stubbies found at the accident during the afternoon of 16 January 2008. I consider that Mrs O'Shanassy bought one or two double whiskies each time she collected each of her three winning payouts and had commenced her gambling after purchasing another two double whiskies. I am satisfied that she bought the drinks before beginning to play, or recommence playing, and drank them before collecting her winnings on each of the three payouts. I find that she had drunk at least six and, possibly more, double whiskies over the two hours before the accident. I am confident that she was accurately recounting the effect on her of that alcohol intake on 16 January 2008 to Dr Roberts when she said to him that she "drives under the influence".

Was Mrs O'Shanassy driving "under the influence"? 112 The first exclusion in the policy applies in respect of loss or damage caused while the insured car "is being driven by … any person under the influence of intoxicating liquor". The wording does not require a nexus between the affect of the alcohol and the accident. Rather, it applies if the vehicle is being driven by a person "under the influence" at the time of the accident: cp Cory v Club Motor Insurance Agency Pty Ltd [1969] VR 189 at 190 where Winneke CJ, Smith and Gowans JJ assumed this; Louden v British Merchants Insurance Co Ltd [1961] 1 All ER 705 at 706-707 per Lawton J; Ford v SGIC General Insurance Ltd [2000] SASC 206 at [24] per Debelle J. Thus, the exclusion requires the driving ability of the driver to be impaired at the time of the accident by the affect of intoxicating liquor: Ford [2000] SASC 206 at [24]. In Forbes v Australian Associated Motor Insurers Ltd (1990) 12 MVR 165 at 170, Cox J said: "A person is "under the influence of intoxicating liquor" if he has consumed such a quantity of intoxicating liquor as disturbs the balance of his mind for the quiet, calm, intelligent exercise of his faculties: Mair v Railway Passengers Assurance Co Ltd (1877) 37 LT 356. Louden v British Merchants Insurance Co [1961] 1 WLR 798. Cassidy v State Government Insurance Office [1965] WAR 81. Cory v Club Motor Insurance [1969] VR 189." 113 Curiously, the leading authority on the policy wording "under the influence of intoxicating liquor" is still the judgment of Lord Coleridge CJ in Mair v Railway Passengers Assurance Co (Ltd) (1877) 37 LT 356 at 358 with whom, on this point, Denman J agreed at 359. The Lord Chief Justice elaborated on the distillation of his reasons made by Cox J in the passage I have quoted. He said that there was a point at which liquor impedes or disturbs the exercise of the intellect. He said that it is very difficult to ascertain precisely in the English language where that point is, and continued (Mair 36 LT at 358): "- to ascertain with precision where that … but it is enough to say that there is a point, and it seems to me these words would be satisfied when the influence of intoxicating liquor is found in point of fact to be such as to disturb the quiet and equable exercise of the intellectual faculties of the man who has taken the liquor." 114 Lord Coleridge CJ said that if the intoxication had been enough to contribute to the accident it would follow "a fortiori that it had arrived at the disturbing point", that would satisfy the exclusion in the policy of assurance there. In short, as Denman J summarised the liquor must exercise a disturbing influence on the quiet, calm, intelligent exercise of the faculties: Mair 37 LT at 359. 115 As Lord Coleridge CJ recognised, and as experience teaches, it is very difficult to lay down a more precise explanation of when a person has arrived at the point or crossed the line between not being and being under the influence of intoxicating liquor. This was also the view of Stanley J with whom Townley J agreed in Noonan v Elson [1950] Qd R 215 at 219-220. There, Stanley J referred to a stage at which a person's power of effective control of the vehicle may become impaired through intoxicating liquor so that the person's behaviour is "sufficiently abnormal to warrant a finding that he was then under the influence of liquor". 116 Like "drunkenness", the precise definition of the expression "under the influence of intoxicating liquor" is difficult to express and apply: cp CAL No 14 Pty Ltd v Motor Accidents Board (2009) 239 CLR 390 at 413 [53] per Gummow, Heydon and Crennan JJ. Persons other than the individual whose condition is under scrutiny can only observe his or her behaviour. But, as Gummow, Heydon and Crennan JJ said there, it is difficult for an observer to assess whether a person has reached the point denoted by the relevant expression. 117 And, different people react to the consumption of alcohol in different ways. Their reactions may depend upon their physique, how much they had to eat, how much and how quickly or slowly over a period they had consumed alcohol and the situation in which they are when the observation is made. Behaviour suggestive of a person being "under the influence" may be more readily perceived if the person is in a serious situation, such as a business meeting or even a courtroom as compared to the same person being at a party or a pub. And, it is the observer's perception of the other person's behaviour that often influences the conclusion that the observer reaches, which may or may not be an accurate assessment. Nonetheless, in reality persons are affected by alcohol in ways that cannot be ignored merely because it is difficult for a judge or jury to arrive at an accurate assessment of whether he or she had consumed alcohol, and the degree to which that consumption affected the person at the time of an event. 118 Difficulties of evaluating and assessing the affect of alcohol on an individual in particular circumstances may weigh more heavily in the evidentiary scales in criminal proceedings so as to prevent the tribunal of fact being satisfied beyond reasonable doubt more readily than in civil proceedings. And here there is also a need for caution in uncritical acceptance of the observations of witnesses about Mrs O'Shanassy's behaviour because the alcohol she had ingested was progressively being absorbed into her blood stream over the period between the accident and when Dr Chan took the sample of her blood for analysis. There is no "norm" by which the affect on an individual of the ingestion of alcohol can be assessed: cp Acama Pty Ltd v Ellis (2010) 263 ALR 576 at 590 [62] per French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ applying State Government Insurance Commission v Laube (1984) 37 SASR 31 at 32-33 per King CJ. 119 The determination is one of fact and degree based on the evidence, including, particularly, the observations of those who saw the person at or close to the critical time. In evaluating those observations, it will be important to bear in mind that the effect of the intoxicating liquor on the behaviour of the person will vary depending on when he or she last drank alcohol and how much he or she had consumed. If the alcohol was only consumed just before the accident, there may not have been sufficient time for it then to have had any or any disturbing affect on the person, even though its affect would be evident a short time later. However, I have no doubt that Mrs O'Shanassy had been drinking during at least the preceding two hours, and had consumed a considerable quantity of alcohol and gambled. She had ample time and cash to obtain more drinks as she collected her winnings during her sojourn at the club. 120 I find that she was considerably impaired by the alcohol she had consumed and lied about her consumption to assist the insured's case. Her assertion that she rapidly consumed only two double scotches just before the accident was intended to give an air of credibility to the insured's case that she was not driving under the influence of intoxicating liquor. She was conscious in giving her evidence that she was very much under that influence just before and at the time of the accident. I am satisfied that this is the true explanation of Mrs O'Shanassy's behaviour and the smell of alcohol about her that the independent witnesses noticed. 121 I accept Mrs Tavares' evidence that Mrs O'Shanassy appeared to be speeding as her car approached theirs and that Mr Tavares remarked "She is not going to make it", around the time their vehicles passed. The smell of alcohol in the vehicle and coming from Mrs O'Shanassy was consistent with both recent and longer term drinking on her part. Mrs O'Shanassy's interaction with Mr and Mrs Tavares was limited and each of them was in shock from having witnessed the accident. Mr Farrell was on the scene within 17 minutes. At that time Mrs O'Shanassy was reacting in a way that was consistent with her balance of mind having been impaired. Her demand that he leave the vehicle if he were not going to release her was powerful evidence that her mind was not working in the way a sober person's would. In addition, her self introduction, to him twice, as "Mrs O'Shanassy" appeared a little odd. 122 She continued acting in a bizarre way, consistent with her being significantly under the influence of alcohol as the evidence of the other witnesses at the scene showed. Her assertion to Senior Constable Williams that she intended to walk home once her foot was freed, reinforced that impression. While some witnesses referred to her being in pain, Mrs O'Shanassy's right ankle was fractured as was her left big toe. Had she been sober, she could not have made such an absurd response to Senior Constable Williams. The effect of the alcohol she had earlier consumed had dulled her sense of pain. Mrs O'Shanassy had told Mr and Mrs Tavares that she was alright. She had not complained to them of experiencing any pain. 123 While she may have been in some shock, from moments after the accident onwards, Mrs O'Shanassy was engaging in bizarre conversations and was not so significantly in pain that she was able to suggest walking away once her back turned foot was released. That was not the reaction of a sober person. I am satisfied that her balance of mind was significantly impaired by the effect of intoxicating liquor at the time of the accident. In plain language, Mrs O'Shanassy was drunk. The insurer has established that it is entitled to rely on the policy exclusion in respect of a driver who was driving the insured vehicle under the influence of intoxicating liquor.

Admissibility of results of blood analysis 124 Sagacious argued that s 37(2) of the Road Transport (Safety and Management) Act 1999 (NSW) prohibited the admissibility in this matter of the certificate or results of any analysis of Mrs O'Shanassy's blood taken at Bowral Hospital on 16 January 2008. Relevantly, ss 23(1) (which is in Pt 2 Div 4 of the Act), 33(6) and 37(2) of that Act (which is in Pt 2 Div 7) provide: "23 Analysis of samples of blood taken under this Division (cf Traffic Act, s 4G (1)-(6)) (1) The medical practitioner or nurse by whom a sample of a person's blood is taken in accordance with this Division must: (a) place the sample into a container, and (b) fasten and seal the container, and (c) mark or label the container for future identification, and (d) give to the person from whom the sample is taken a certificate relating to the sample that contains sufficient information to enable the sample to be identified as a sample of that person's blood. Maximum penalty: 20 penalty units. … 33 Certificate evidence about breath or blood analysis in proceedings for offences under section 9 (cf Traffic Act, ss 4E (12) and 4G (9)-(11A)) (6) In proceedings for an offence under section 9, a certificate purporting to be signed by an analyst certifying any one or more of the following matters: (a) that the analyst received, on a specified day, a sample of a specified person's blood in a container submitted for analysis under this Part, (b) that the container, as received by the analyst, was sealed, and marked or labelled, in a specified manner, (c) that on receipt by the analyst of the container, the seal was unbroken, (d) that the analyst carried out an analysis of the sample to determine the concentration of alcohol in the sample, (e) that the concentration of alcohol determined pursuant to the analysis and expressed in grammes of alcohol in 100 millilitres of blood was present in that sample, (f) that the analyst was, at the time of the analysis, an analyst within the meaning of this Act, is admissible and is prima facie evidence: (g) of the particulars certified in and by the certificate, and (h) that the sample was a sample of the blood of that specified person, and (i) that the sample had not been tampered with before it was received by the analyst. … 37 Evidence of breath test, breath analysis, oral fluid test, oral fluid analysis or blood or urine analysis and related facts not admissible in insurance cases to prove intoxication or drug use (cf Traffic Act, ss 4E (13), 4G (12) and (13) and 5AB (5) and (6)) … (2) For the purposes of any contract of insurance, the results of any analysis of blood or urine under Division 3A, 4, 4A or 5 are not admissible as evidence of the fact that a person was at any time under the influence of or in any way affected by intoxicating liquor or other drug or incapable of driving or of exercising effective control over a vehicle or horse. (3) Nothing in subsection (1) or (2) precludes the admission of any other evidence to show a fact referred in the subsection. (4) The provisions of this section have effect despite anything contained in any contract of insurance. (5) Any covenant, term, condition or provision in any contract of insurance is void: (a) to the extent that the operation of this section is excluded, limited, modified or restricted, or (b) to the extent that it purports to exclude or limit the liability of the insurer in the event of any person being convicted of an offence under section 9, 11B (1) or (3) or Division 3 or 3A. (6) However, nothing in subsection (5) precludes the inclusion in a contract of insurance of any other covenant, term, condition or provision under which the liability of the insurer is excluded or limited." 125 Importantly, s 37(2) does not refer to a certificate; rather it provides that the results of any analysis of blood under, relevantly, Div 4 are not admissible as evidence of particular facts; namely that the person whose blood it was, was at any time under the influence of or in any way affected by intoxicating liquor. However, s 33(6) provides for an analyst to give a certificate as to a number of matters, including the concentration of alcohol in a blood sample. 126 The vial containing Mrs O'Shanassy's blood sample was in a container the seal of which was broken at the time that it was received by the analyst. This may have contravened the requirement for admissibility of an analysis in proceedings for an offence under s 9 of that Act by force of ss 33(6)(b) and (c). Sagacious did not object to the analysis certificate on the ground of hearsay. But it contended that s 37(2) made the result of analysis inadmissible. It argued that this result flowed from the ratio of the majority decision of the Court of Appeal of the Supreme Court of New South Wales in NRMA v McCarney (1992) 16 MVR 34. 127 The analysis could be relevant on two levels. First, it may be evidence of the likely affect of alcohol on Mrs O'Shanassy at the time of the accident. Secondly, it simply may address whether or not the exclusion in the policy of insurance dealing with blood analysis was engaged; i.e. objectively did Mrs O'Shanassy's blood sample, if taken within two hours of the accident, have more than the prescribed concentration of alcohol? That second question has nothing to do with whether the other exclusion was engaged, namely whether she was driving under the influence of intoxicating liquor. 128 In Territory Insurance Office v Lemmens (1995) 118 FLR 103 at 105 Mildren J held that the express words of a similar section to s 37(2), deal with the latter situation, not the former. He said that the section did not prohibit the results of the analysis being admissible to prove that the blood had a particular concentration of alcohol. The insured argued that this decision was wrong and that the majority in Carney 16 MVR 34 had held to the contrary. The insured contended that a driver with any blood alcohol reading in an analysis would be shown to be within the words "in any way affected by intoxicating liquor" in s 37(2) because the relevant affect would be that he or she had alcohol in his or her blood i.e. the purity of a person's blood was affected by the concentration of alcohol. 129 In McCarney 16 MVR at 41-42 Cripps JA, with whom Meagher JA agreed, held the predecessor of s 37(2), s 4E(13) of the Traffic Act 1909 (NSW) had: "[t]he plain meaning … that where an issue is litigated under a contract of insurance as to whether a person is driving under the influence of intoxicating liquor, the court cannot receive evidence that the person has undergone a breath test or submitted to a breath analysis or receive evidence of the results of any such test or analysis." (emphasis added) 130 Importantly, s 4E(13) was differently worded to s 37(2). The repealed provision was relevantly: "(a) The fact that a person has undergone a breath test or submitted to a breath test analysis, and the result of a breath test or breath analysis or the fact that a person has been convicted of an offence under subsection (1D), (1E), (1F), (1G)(6) or (7) shall not, for the purposes of any contract of insurance, be admissible as evidence of the fact that that person was at any time under the influence of or in any way affected by intoxicating liquor or incapable of driving or of exercising effective control over a motor vehicle, but nothing in this subsection precludes the admission of any other evidence to show any such fact." (emphasis added) 131 Handley JA dissented. He held that s 4E(13) did not provide that the result of the breath analysis inadmissible to prove the facts of the time of the analysis and the result. Rather, he found that the results did not prove, without other evidence, that the person was under the influence of intoxicating liquor: McCarney 16 MVR at 36-37. 132 Both Handley JA and Cripps JA made their observations after stating that they were not necessary to decide the appeal because it had already failed on an independent ground: McCarney 16 MVR at 35, 40. The insured argued that nonetheless the observations by the majority, through the reasoning of Cripps JA, were, part of the ratio decidendi and thus binding on me, as a single judge in construing s 37 of the Road Transport Act. 133 I reject that submission. The reasoning process of a court in construing a particular form of words in one enactment is not a binding precedent in the construction of another or a subsequent enactment even where exactly the same words have been used in the two relevant sections or provisions: McNamara v Consumer Trader and Tenancy Tribunal (2005) 221 CLR 446 at 661 [40] per McHugh, Gummow and Heydon JJ, per Gleeson CJ and Hayne J agreeing at 650 [1], 668 [61]. As the plurality said there: "It would be an error to treat what was said in construing one statute as necessarily controlling the construction of another: the judicial task in statutory construction differs from that in distilling the common law from past decisions." (footnote omitted) 134 It follows that McCarney 16 MVR 34 is not a binding authority on the construction of the different wording of s 37. However, the observations of the judges who decided it may be of assistance in construing the later statutory provision. I am of opinion that the observations in McCarney 16 MVR 34 on which the parties relied were obiter dicta. Cripps JA introduced his consideration of the other grounds of appeal, including that in relation to s 4E(13) saying: "Notwithstanding that the above finding concludes the matter in favour of NRMA, I wish to deal with the other grounds of appeal." (emphasis added) 135 No doubt, his Honour considered that his succeeding remarks would assist in providing guidance as to the matters he discussed. But, as he made clear, his remarks were not necessary to the determination of the appeal: Bank of New South Wales v Commonwealth (1948) 76 CLR 1 at 330 per Dixon J; Rejfek v McElroy (1964) 112 CLR 517 at 520 per Barwick CJ, Kitto, Taylor, Menzies and Windeyer JJ; Attorney-General (Queensland) v Australian Industrial Relations Commission (2002) 213 CLR 485 at 528 [127] per Kirby J; see too Campomar Sociedad Limitada v Nike International Limited (2000) 202 CLR 45 at 59 [23] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ and The Queen v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 243 per Aickin J; Bitumen and Oil Refineries (Australia) Ltd v Commissioner for Government Transport (1955) 92 CLR 200 at 212 per Dixon CJ, McTiernan, Webb, Fullagar and Taylor JJ referring to Viscount Simonds' views set out at 209: see too G W Paton and G Sawer: Ratio Decidendi and Obiter Dictum in Appellate Courts (1947) 63 LQR 461 at 472, 474. 136 The principle, if discernable, which informs or grounds the actual order of the court is its ratio decidendi: O'Toole v Charles David Pty Ltd (1990) 171 CLR 232 at 267 per Brennan J; cf Gala v Preston (1991) 172 CLR 243 at 284 per Toohey J citing from Julius Stone: Precedent and the Law (1985) at 123; see Re Tyler; Ex parte Foley (1994) 181 CLR 18 at 37-38 per McHugh J (approved by Brennan CJ, Gaudron, McHugh and Gummow JJ in Victoria v The Commonwealth (1996) 187 CLR 416 at 484) as to the distinction between the doctrines of stare decisis and ratio decidendi. As McHugh J explained in Woolcock St Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 at 542 [59]: "The common law distinguishes between the holding of a case, the rule of the case and its ratio decidendi. The holding of a case is the decision of the court on the precise point in issue -- for the plaintiff or the defendant. The rule of the case is the principle for which the case stands -- although sometimes judges describe the rule of the case as its holding. The ratio decidendi of the case is the general rule of law that the court propounded as its reason for the decision." 137 The insured argued that the views of the majority in McCarney 16 MVR 34 on s 4E(13) were part of the ratio decidendi based on what Finkelstein J said in McBride v Monzil (2007) 164 FCR 559 at 562-563 [6]-[7]. I do not understand his Honour to have said that where a court or a majority of judges expresses a ground for the orders made but goes on to express a view on other matters argued that were not stated to be essential to the orders, that those view form part of the ratio. Such a conclusion is contrary to the authorities in the High Court to which I have referred. Part of the common law process of decision-making involves the acceptance of the need for the binding effect of a court's decision to be confined to what is necessary, not merely interesting or desirable to dispose of the controversy between the parties. Judicial decisions are not legislative but specific. They can, and should, be understood as decisive only on the necessary groundwork to justify the orders made. That does not constrain a court from expressing views about other points, as the judges in McCarney 16 MVR 34 did. But those views are obiter dicta; that is, statements not necessary to resolve the controversy. If, however, a judge or court decides two or more points are necessary in order to arrive at a decision and it is not possible to segregate one as determinative, it is likely that all those points form the ratio decidendi. This is because all were reasons why the decision was made: McBride 164 FCR at 562-563 [6]-[7]; London Jewellers Ltd v Attenborough [1934] 2 KB 206 at 222 per Grier LJ; Ex parte King; re Blackley (1938) 38 SR (NSW) 483 at 490 per Jordan CJ with whom Davidson and Owen JJ agreed; Paton and Sawer op. cit 67 LQR at 470. 138 More fundamentally, s 4E(13)(a) is in substantially different terms to s 37(2). First, s 37(2) refers to the results of any analysis of blood "under Div … 4", whereas s 4E(13) referred to the results of breath analysis. Secondly, s 37(2) refers only to the results of an analysis, and does not extend, as s 4E(13) did, to the fact that the person had undergone a breath test or been convicted of an offence under s 4E. The second reading speech of the Minister for Transport shows (Hansard, Legislative Assembly NSW, 4 December 1968 p 421) that s 4E(13) was included in the Traffic Act at the request of the NRMA to protect comprehensive insurance cover held by the driver. The Minister said: "Simply stated in terms of this clause, the fact that a person is involved in any proceedings associated with this bill will not be admissible as evidence, so far as an insurance policy is concerned, to prove that he was under the influence of intoxicating liquor." 139 The explanatory note to the Road Transport (Safety and Traffic Management) Bill stated: "Clause 37 limits the extent to which evidence of a breath test, breath analysis or blood or urine analysis under the Part and related facts is admissible in insurance cases to prove intoxication or drug use. The proposed section substantially re-enacts the provisions of sections 4E(13), 4G(12) and (13) and 5AB(5) and (6) of the Traffic Act 1909." 140 The parties were not able to identify any explanatory material for either the differences in wording in s 37(2) when it was enacted or any particular purpose in the enactment of s 37. The parties did not refer to any case that has considered s 37 in the present context. It is difficult to see any public policy rationale to justify why s 37(2) was enacted when it allows a contract of insurance to exclude liability of the insurer if it otherwise proves that the driver was under the influence or otherwise affected by intoxicating liquor. I must have regard to the public policy - whatever it is - that only the results of an analysis under Div 4 of the Road Transport Act sufficient to warrant a criminal conviction and the potential incarceration of a driver, should not be admissible to prove that a driver was under the influence of intoxicating liquor for the purpose of an insurer (other than a compulsory third party liability insurer) establishing an exclusion from its liability. 141 Mildren J in Lemmens 118 FLR at 105 held, like Handley JA, that an analogue of s 4E(13) did not preclude the admissibility of the result of a breath analysis for the purpose of showing the fact of the driver's blood alcohol level exceeding a level sufficient to constitute an offence, thus enlivening the applicability of an exclusion in a policy of insurance. 142 The insurer argued that the words "at any time" in s 37(2) negated this construction. It contended that those words would be otiose if the prohibition in the section were construed to refer to any physiological effect at all. I reject that argument. The analysis of blood taken at a particular time indicates that at the moment when the sample of blood was taken, the person had a particular blood alcohol level. That level can be used, as the pharmacological expert witnesses did in their evidence tendered at the trial, to demonstrate the blood alcohol level that the person would be likely to have had at an earlier time. Hence, the words "at any time" in s 37(2) have the purpose of prohibiting such evidence. 143 The word "affected" is defined in the Macquarie Dictionary, as the insured argued, as including the meanings, "influenced injuriously, impaired". The Oxford English Dictionary defines one sense of "affected" as meaning "acted on, influenced, or moved either physically or materially". That source also suggested that an earlier usage of the words as meaning "affected or tainted by disease" had merged in the meaning I have just set out. 144 Relevantly, the prohibition against admissibility in s 37(2) is in respect of the results of an analysis of blood being evidence that the person was affected by intoxicating liquor. The collocation of other prohibitions in s 37(2) suggests that the sense in which "affected" is used in the section is "influenced injuriously" or "impaired", as in the Macquarie Dictionary definition. 145 However, s 37 does not make the results of an analysis of blood inadmissible for all purposes. In particular, the ordinary and natural meaning of the section does not exclude the admission of the results as evidence of the concentration of alcohol in the person's blood at the time that the analysed sample was taken. Those results are not evidence that the person was under the influence of alcohol, or affected in any particular or general way by it or that he or she was incapable of driving or exercising effective control over the vehicle. Rather, the results are evidence that the person's blood contained a particular level of alcohol. But, the effect on the person of that level of alcohol in the person's blood as shown in the analysis result is not something that is self-evident, however high or low the reading is. Also, that result does not indicate anything, in itself, about the effect, or even presence, of any alcohol in the person's blood at an earlier time. 146 Importantly, s 37 does not contain the broader prohibition in its statutory precedessor, s 4E(13), against the admissibility of the fact that a person had undergone an analysis of his or her breath or blood. That additional prohibition, coupled with the prohibitions against use of the results of the analysis (now in s 37(2)) and the fact of a conviction based on the analysis (now in s 37(5)(b)) may have given some support to the view of Cripps JA in McCarney 16 MVR 34. However, as s 37(3) shows, the use of the analysis that is excluded from evidence, is to establish any effect on the driving ability of the person. The section does not preclude establishing the effect of alcohol on the person by evidence other than the results of the analysis. 147 Here, the insured's policy excludes liability if the result of the analysis shows a blood alcohol concentration of a particular character provided that the blood sample was taken within two hours of the accident. The exclusion operates because of the objective fact that the result of such an analysis shows the person's blood sample has that character. The exclusion operates irrespective of whether the person was in any way affected by alcohol at the time of the accident; indeed, it can operate where the person had not had any alcohol in his or her blood at the time of the accident, but had consumed it afterwards and, as a result, either not been prosecuted or convicted for driving in excess of the prescribed concentration of alcohol in his or her blood. Thus, the wording of the exclusion does not attract the avoiding operation of s 37(5). 148 This construction of s 37 is reinforced by s 37(6) which entitles an insurer to exclude liability for other reasons. The ordinary and natural meaning of s 37, read as a whole, does not render void the exclusion in the insured's policy that operates in respect of the results of the driver's blood analysis. 149 Here, the seal on the vial was not intact when Mrs O'Shanassy's blood sample was received by the analyst. That did not necessarily have the consequence that the analyst's certificate did not provide results of an analysis under Div 4. This is because the chapeau to s 33(6) is phrased distributively. It allows the analyst to certify as to one or more of the matters in pars (a)-(f) in s 33(6), including the concentration of alcohol in the sample (s 33(6)(e)) even if the analyst did not certify as to the seal being unbroken when he or she received the vial (s 33(6)(c)). Indeed, on a literal reading of s 33(6) in such a case, the analyst's certificate would be prima facie evidence of the matters in pars (g)-(i) of s 33(6). Thus, an analyst's certificate that did not certify that the seal was unbroken would still be prima facie evidence that the sample had not been tampered with before it was received by the analyst: see s 33(6)(i). 150 I am of opinion that s 37 does not make the results of the analysis of Mrs O'Shanassy's blood inadmissible as evidence of her blood alcohol level at the time that the sample was taken. 151 It is unnecessary to express a final view on the insurer's additional argument that s 37 is not picked up as a surrogate federal law by s 79 of the Judiciary Act 1903. It contended that this was because von Doussa J had held in Chapman v Luminis Pty Ltd [No 2] (2000) 100 FCR 229 at 252 [70] and see too at 252 [81], 253 [84], that s 56(1) of the Evidence Act 1995 is comprehensive as they key provision controlling admissibility of evidence and delimits the sources of exceptions to that provision, being the other provisions of the Evidence Act. As a matter of comity, I would be inclined to follow what von Doussa J held there.

Discretion to reject the blood analysis results 152 The insured also argued that the analyst's certificate should be rejected or given little or no weight because: · it should have been excluded under s 135 of the Evidence Act. This was because its probative value was allegedly substantially outweighed by the danger that it was misleading and it was unfairly prejudicial because the seal had been broken in circumstances where the possibility of tampering had not been excluded; · the certificate was made admissible by the Road Transport Act only as evidence to prove an offence under s 9 of that Act and not for other purposes; · the certificate addressed the ultimate issue on the policy exclusion in respect of driving under the influence of intoxicating liquor. 153 First, I do not consider that I should reject the certificate as evidence under s 135 of the Evidence Act. While the seal was not intact at the time that the analyst received the blood sample, on the balance of probabilities and having regard to s 140 of the Evidence Act, there is no reason to think that the sample was contaminated. No witness who had the opportunity to do so, was asked whether he or she had broken the seal or contaminated the sample. There was no evidence or suggestion of who might have intended to or had a motive to engage in the malign activity of alerting the blood sample, let alone that anyone had intact behaved in that manner. 154 Dr Ogden, with whose evidence on this point Prof Starmer agreed, said that it would be very difficult to tamper with the sample in a way that was effective. However, Prof Starmer, in a supplementary affidavit said that the receipt by the analyst of the vial with a broken seal meant that it was impossible to be absolutely sure that the sample had not been contaminated whether deliberately or accidentally. He said that this possibility of contamination "… renders the result of the analysis of such a sample unsafe". 155 I am not persuaded that the mere and unproven possibility of tampering because the seal was unbroken when the analyst received the sample is a sufficient reason in the circumstances of this matter to reject the results of the analysis or to give them little or no weight. The requirement for a seal is a cautionary one, properly insisted on by the legislature to protect the interests of persons accused of crimes and the integrity of the analysis. But, as Dr Ogden said, with Prof Starmer's agreement, in order to adulterate the vial deliberately, a malefactor would have required specialised equipment and considerable expertise that was available to few people. I am satisfied that the possibility of deliberate tampering is, in the circumstances of this case, very remote. Additionally, the possibility of innocent tampering is also so highly unlikely that I am satisfied that the results are likely to be very reliable as an analysis of Mrs O'Shanassy's actual and uncontaminated blood. Sagacious advanced no intelligible reason why anyone would have contaminated the blood or how, in the course of its being conveyed from the hospital to the analyst someone would have opened the vial and tampered with its contents. For the purposes of ss 135 and 140 of the Evidence Act I am satisfied that the results of the analysis are accurate and that the blood analysed was Mrs O'Shanassy's uncontaminated sample taken by Dr Chan at 20:45 on 16 January 2008: CEPU 162 FCR at 481 [35]. 156 Moreover, having regard to the fact that Mrs O'Shanassy had been drinking a number of double whiskies and two stubbies of beer found at the scene for at least two hours before the accident, the analysis result, of a relatively significant reading well in excess of the legal limit, is inherently likely to be accurate on the pharmacological evidence. 157 Secondly, the insured accepted that the certificate recorded the analysis of the blood in the vial as received by the analyst. While it may or may not have been admissible under the Road Transport Act, the certificate is relevant as evidence of the results of the analysis of Mrs O'Shanassy's blood taken less than two hours after the accident provided that it is proved that the blood had not been tampered with and was hers. 158 Thirdly, the only way in which the concentration of alcohol in Mrs O'Shanassy's blood sample could be proved is by an analysis, such as is referred to in the certificate. That result would be relevant to make out the exclusion on which the insurer relied. 159 For these reasons, I am not satisfied that the admission of the analysis into evidence would be unfairly prejudicial to the insured or otherwise ought be excluded under s 135.

Conclusion on admissibility of certificate 160 I am of opinion that I should admit the certificate as evidence that, as it records, the sample of Mrs O'Shanassy's blood taken at 20:45 on 16 January 2008 had a concentration of alcohol of not less than 0.124 grammes of alcohol in 100 millilitres of blood. I am comfortably satisfied that this accurately reflected the alcohol concentration in her blood less than two hours after the accident. It follows that the insurer has established that the exclusion in the policy dealing with the driver's blood alcohol level has been enlivened. 161 The analysis is also suggestive that at the time of the accident, Mrs O'Shanassy was under the influence of intoxicating liquor. The expert pharmacological evidence suggests that, based on the relatively high concentration of alcohol in the sample of Mrs O'Shanassy's blood, if she started drinking at about 5 pm or 6 pm and continued until just before the accident, her blood alcohol concentration would have been in the following ranges at the time of the accident: Drinking from Approximate Consumption Pure Alcohol Victoria Bitter beer at 4.8% a.b.v. Wine at 12.5% a.b.v. Spirits at 40% a.b.v. 5.00 pm 60 to 77 gm 4 to 5Ľ stubbies 605 to 776 ml 189 to 243 ml 6.00 pm 56 to 68 gm 4 to 4ľ stubbies 564 to 686 ml 176 to 214 ml

(one standard whiskey is about 8 to 9 grams of pure alcohol) Blood alcohol concentration at time of collision Drinking from: Minimum Maximum Likely 5.00 pm 0.069% 0.131% > 0.11% 6.00 pm 0.049% 0.113% > 0.09%

162 But even this observation does not necessarily assist in evaluating the degree to which she, as an individual, was affected. The expert pharmacological evidence was careful to emphasise that it is not possible to generalise from studies what effect any particular blood alcohol level would have on an individual. This accords with the approach the courts have adopted: Acama 263 ALR at 590 [62]; Laube 37 SASR at 32-33. Nonetheless, given my finding that Mrs O'Shanassy had been drinking double whiskies during a period of at least two hours before the accident, the two stubbies of beer at some time that afternoon, her behaviour at the scene and the pharmacological evidence, I am satisfied that the analysis of 0.124 is probative of her being under the influence of intoxicating liquor at the earlier time of the accident. I find that she was under that influence then.

Conclusion 163 For these reasons, these proceedings should be dismissed with costs. I certify that the preceding one hundred and sixty-three (163) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.