Vidal v NRMA Insurance

LOWER COURT Local Court JURISDICTION : LOWER COURT 4531/2002 FILE NUMBER(S) : LOWER COURT Ellis LCM JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

12177/2003 - FRANCE MONIQUE VIDAL v NRMA INSURANCE LIMITED

JUDGMENT (Appeal from decision of Local Court Magistrate) 1 MASTER: By summons filed 22 August 2003 the plaintiff seeks firstly an order that the appeal be allowed; secondly, an order that the judgment of Ellis LCM for the defendant against the plaintiff dated 28 July 2003 be set aside; thirdly, an order that there be a verdict and judgment for the plaintiff against the defendant in the sum of $14,044.17 plus interest; fourthly, an order that the defendant pay the plaintiff's cost of the appeal and the proceedings at first instance initiating from the local court of NSW. The plaintiff is France Monique Vidal (Vidal). The defendant is NRMA Insurance Limited (NRMA). The plaintiff relied on the affidavit of Paula Maryanne Newton sworn 1 October 2003. The defendant relied upon the affidavit of Tiffany-Jane Powell sworn 28 November 2003. 2 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the appellant/plaintiff. Section 69(2) of the Local Courts (Civil Claims) Act 1970 (NSW) permits a party who is dissatisfied with a judgment as being erroneous in point of law to appeal to this Court. The onus lies on the appellant to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 and Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156. It cannot be said that the Tribunal member acted on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588.

Grounds of appeal 3 The grounds of appeal relied upon by the plaintiff fall into two main categories. The first is whether or not the Magistrate misdirected herself as to where the onus of proof lay on the issues pleaded; and secondly, whether the Magistrate drew inferences that were not open or cannot be reasonably inferred in the circumstances. A third issue was also raised, namely was there a question of a Jones v Dunkel (1959) 10 CLR 298 issue. I will refer to this later in the judgment. Background 4 On or about 1 December 1999 the Plaintiff was the owner of a sapphire blue Peugeot 206 XT hatch, Registered No. AHX 91J (the vehicle). From on or about 1 December 1999 the Defendant issued a policy of insurance Policy No. MOTO 15190667 (the policy) to the plaintiff. The policy was renewed on or about 11 March 2000 and 11 March 2001 respectively. 5 It was a term and condition of the policy that, in the event the vehicle was stolen and not found or stolen and found damaged, the defendant would pay the plaintiff the agreed value of the vehicle less excess. The agreed value of the vehicle under the policy was in the amount of $21,450.00. The excess under the policy was in the amount of $400.00.

6 On or about 20 November 2001 the vehicle was stolen. On 21 November 2001 the plaintiff made a claim under the policy in relation to the theft of the vehicle. On 21 November 2001, police found the vehicle in a damaged and burnt out condition. On 23 May 2002 the vehicle was sold as a wreck for $7,300.00. The net proceeds of sale were $7,005.83.

7 On 18 April 2002 the plaintiff commenced proceedings against the defendant by ordinary statement of claim. On 17 June 2002, the defendant filed a notice of grounds of defence. By statement of agreed facts and issues dated 28 February 2003 the parties agreed that the issue was whether the loss and damage to the vehicle was intentionally caused by the plaintiff or with her express or implied consent. The defence alleged fraud. 8 Ellis LCM heard the proceedings on 3 March, 2003, 1 May, 2003 and 24 June, 2003. On 28 July 2003 Ellis LCM delivered judgment in favour of the defendant/respondent. 9 The principles according to which this appeal to be decided are stated definitively in a short passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. It is, I think, useful to re-state them as follows: "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."

Onus of proof 10 The Magistrate correctly stated that the plaintiff must prove on the balance of probabilities that her vehicle was stolen and that the defendant must prove fraud on the balance of probabilities in the manner formulated in Briginshaw v Briginshaw (1938) 60 CLR 336. 11 The Magistrate summarised the plaintiff's evidence as follows: "1 Ms Vidal gave evidence on 3 March 2003 and 16 May 2003.

2 For the Plaintiff the main points are: a) Ms Vidal left her car on the afternoon of 20 November 2000, parked outside the 3-storey block of units. There is no evidence as to whether she parked nose or rear in. Exhibit 8 has a car parked in the same spot as Ms Vidal states her car was parked. b) Ms Vidal shared the unit with her infant son and partner. However, on this week she was at the unit with only her son. c) She activated the central locking before leaving the car. She last saw the car at about 10 or 11 PM on 20 November 2001. d) The following morning, she noticed the car was not where she had left it. She eventually called the Police and reported the theft to her Insurer, NRMA. The car was ultimately found burnt in the Newcastle area. e) Ms Vidal denied knowing who was involved in the stealing of her car. The Plaintiff gave evidence on oath that Question: "Did you give your vehicle to anyone that evening or that following morning?" Answer: "No." Q: Did you authorise anyone to take your vehicle?" "No." (See Page 29 of the 3.3.03 transcript) Q: "Do you know who took your vehicle and left it at Newcastle in a burnt out condition?" Answer: "No" (see transcript 3.3.03 page 31) f) There were no duplicate keys and both keys were with Ms Vidal when she last saw by her (Exhibit 9, and Page 35 of 3.3.03 transcript) g) There was no evidence to refute that Ms Vidal's partner was anywhere but on the school camp as she claimed." 12 The Magistrate made a finding that she accepted the plaintiff as a witness of truth and stated that the plaintiff's denials as to having any knowledge were not shaken in cross-examination. The Magistrate made a further finding that the plaintiff could not have personally been involved with the physical taking of the car to Newcastle and burning it out. Stolen means "taken away without the co-operation or connivance of a person in the position of Ms Vidal (see Simon v NRMA Insurance, unreported NSWCA 1991). So, by accepting the plaintiff as a witness of truth the Magistrate accepted the plaintiff's evidence that she did not authorise anyone to take her vehicle, she had both keys to the car and she was not personally involved in the physical taking of the car to Newcastle and the burning out of it. The plaintiff submitted that from this finding it follows that the car was taken away without her co-operation or connivance and therefore the plaintiff has discharged her onus of proof. While the Magistrate made the finding referred to above, it does not equate to a finding that the car was taken away without her co-operation or connivance. 13 After quoting the following passage from Butler v Loneragan (1994) 19 MVR 361 at 366: "… a tribunal of fact is in the final analysis usually not left in a situation where it has to ask whether A's version or B's version of an event should be preferred. Sometimes that happens, but often the situation is that the tribunal of fact accepts everybody as a witness of truth but can see from their different perspectives and from the surrounding circumstances where the truth really lies or the tribunal may in fact disbelieve every witness but still be able to come to a conclusion on the objective facts and surrounding circumstances, or that part of the evidence of one witness will be accepted as credible and another part of that witness's evidence discarded with similar choices being made from other parties' evidence. Finally, the Court may take the view that it has not been satisfied as to where the truth lies in which case the residual legal principle applies and there must be a verdict for the defendant. It is not to be suggested that a learned Magistrate when he highlights the fact that the two principal witnesses have differed from each other is thereby saying that he must only give his or her decision depending upon whether one or other witness satisfies the Magistrate that his particular version is correct." 14 Her Worship stated that in coming to a determination as to whether the plaintiff had made out her case that the car was stolen; she reviewed the expert evidence that had been adduced for both parties. In reviewing the experts' evidence, the Magistrate referred to Makita Australia Pty Ltd v Sprowles (2001) 52 NSWLR 705 and Fox v Percy (2003) 197 ALR 201. 15 The Magistrate accepted that the car was overinsured. In relation to the expert evidence, the Magistrate held that the views of the forensic locksmith, Mr Squire and Mr Bailey the assessor were preferable to those of Messrs Jennings and Booth. She made a finding that there were no visible points of entry which would have been expected if a means of access other than a key was used. The Magistrate acknowledged that she did not accept that the car was removed by using replacement keys because she had accepted that the two known keys were with the plaintiff at all times. The Magistrate said it was not possible to tow away the car without considerable noise and/or without great difficulty. The shroud covering the steering lock was broken but this did not provide sufficient evidence to conclude it was the entry point. The picking of a lock was a possibility but using force on the lock would have caused severe damage which had not occurred. So this was rejected, as was the use of PVC strapping as a means of internal access. Thus, there was no real explanation as to how the car was stolen without access to the original keys. 16 The Magistrate then summarised the evidence by stating that there was no interference, apart from the removal of the shroud or cover on the steering column to the motor vehicle and that minimal damage was affected to the steering lock to indicate that it was removed by means other than by the insertion of a relevant key. 17 The Magistrate concluded: "I am therefore of the opinion that I am not satisfied that Ms Vidal has proved on the Balance of Probabilities, that the car was stolen, on the footing that the probability that it was exactly equal to the probability that it was not: see Palamisto General Enterprises Sa v Ocean Marine Insurance Co Ltd (1972) 2 QB 625 at 636 per Sachs LJ quoting with approval the dictum of Branson J in Compania Naviera Vascongada v British and Foreign Marine Insurance Co Ltd (The Gloria) (1936 54 LL LR 35 at 50-1. (As stated and confirmed in Simon's case). In addition, I am of the opinion that having found the Plaintiff has not proved that her car was stolen, it is not ultimately necessary for me to determine the affirmative Defence. Having regard to the higher onus on the Defence as enunciated in the Briginshaw case, and on the material before me, I am not of the view it would be made out." 18 If a particular crucial fact is in dispute, conflicting evidence on this disputed fact has to be reconciled by the court. Without rejecting any evidence or finding the plaintiff's credit in doubt, it is difficult, with the exception of her Worship's finding that the vehicle was over-insured, to appreciate how the Magistrate came to the conclusion she did. Nevertheless, because of this finding it was open for the Magistrate to arrive at the decision that she did. The decision is not one with which this court should interfere. 19 The plaintiff further submitted that the Magistrate misdirected herself when she referred to the "scuttling" test referred to in Craig v Associated National Insurance Co Ltd (1983) 71 FLR 455 at 456. In Hammoud Brothers Pty Ltd v NRMA Insurance Ltd [2004] NSWCA 1, Meagher JA (with whom Santow JA agreed) refrained from expressing any view as to their utility as statements of principle in relation to the same issues ventilated here, namely it was for the plaintiff to prove theft and for the NRMA to negate that assertion by their allegation of fraud, if it were capable of proof. The ability successfully to establish one. Prior to referring to Craig the Magistrate made it clear that she was considering the NRMA's claim not the plaintiff's claim. There is no misdirection here.

The inferences 20 Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In some cases the other facts can be inferred with as much practical certainty as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture - see Caswell v Powell Duffryn Associates Collieries Ltd [1939] 3 All ER 722 at 733. 21 The plaintiff submitted that the Magistrate erred in finding that there was insufficient evidence to support the argument that internal access to the vehicle could be obtained by the use of PVC strapping when the evidence of Mr Bellanto established that "accessing the innerlock release on this model is accessible using packing tape." The evidence was that there was nothing more than superficial damage to the ignition lock and steering lock. This finding was open to the Magistrate. 22 The plaintiff submitted that the Magistrate erred in law in drawing the inference that the theft of the vehicle resulted in a nil result. Mr Squire gave evidence concerning the difficulty of the time and cost involved in obtaining a replacement Engine Control Unit. It was open to the Magistrate to make this inference. 23 Ground 17 was not pressed. 24 It is my view that all of these inferences were open to the Magistrate to make. These grounds of appeal fail.

Jones v Dunkel 25 The plaintiff submitted that the Magistrate erred in failing to find that Mr Michael Megahey, technical services and training manager at Peugeot Automobiles Australia was a witness available to be called by the defendant and could have given evidence in relation to the security system fitted to the vehicle, and an inference should have been draw from the failure of the defendant to call Mr Megahey that his evidence would not have assisted the defendant's case. It is my view that the Magistrate was not obliged to make a Jones v Dunkel (1959) 10 CLR 298 finding in these circumstances. This ground of appeal fails. 26 The decision of Ellis LCM dated 28 July 2003 is affirmed. The appeal is dismissed. The summons is dismissed 27 Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. Orders 28 The court orders that:

(1) The decision of Ellis LCM of the Local Court dated 28 July 2003 is affirmed.

(3) The plaintiff is to pay the defendant's costs as agreed or assessed.

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