Category Archives: Civil

The evidence is the only truth we know

One of the things non-lawyers find most problematic about litigation is the notion of truth in the courtroom. Litigation lawyers on the other hand, especially the battle-weary ones, realise how fraught, and indeed relative, such a notion can be.


It is perhaps one of the most thorny discussions one can have with a client, which ordinarily goes something like, ‘I know what you’re telling me is the truth but the evidence points in another direction…perhaps we should settle the case.”


It is this gap between what the evidence bespeaks and the version of events embraced by each party, which appears at the root of many of the cases that reach trial. In my experience, it is only the boldest of litigants who are willing to lie under oath and ordinarily it is more likely they are simply convinced of their own version over that of the other side.


Sometimes a particular version of events will seem plausible yet the way the evidence unfolds, especially in the hands of a capable advocate, casts some doubt on the favoured scenario. This is where the lay-person and the lawyer diverge.


Truth is as much a feeling for a non-lawyer, one uncorrupted by the analytical mindset that necessarily becomes a part of who we are as lawyers. The lawyer says that where a detailed analysis of the evidence casts sufficient doubt on that which may seem the most likely version of events, it cannot be accepted by the court, viz, it isn’t true.


Judges can also be affected by the same kind of ‘gut-feel’ that one version of events gives over the other. However, this can be the root of a host of problems when from this starting point they then construct their reasons. The clinical ravages of the appellate process await.


The recent case of Bradley v Matloob [2015] NSWCA 239 was the one that got me thinking about all of this. The plaintiff was approaching a set of traffic lights driving along a dual carriageway when a car travelling in the opposite direction made a right hand turn into her path. Whilst the plaintiff managed to avoid a collision with the vehicle, she lost control and collided with a truck further along the road causing her serious injury.


About 15-20 metres away there was an eye-witness to the accident (who we’ll call “P”). P said that the other car was a ‘tannish brown’ Ford with a black sun grille installed across the outside of its back window. P also said that as the Ford drove off along the street into which it had made its turn he decided to follow it until he observed it turn into a nearby factory unit. About 10 minutes later P drove into the factory unit and found a car that he thought was the same car as he had seen earlier and took its registration. He also drove around the whole car park to ensure there were no other cars like it. The registration P recorded was that of the first defendant’s car.


Seems pretty compelling at first glance. Yet the owner of the vehicle matching that registration, Mr Bradley, denied any knowledge of the incident when interviewed by the police.


The plaintiff also sued the Nominal Defendant, which for the uninitiated is a statutory body funded by a levy on CTP premiums to compensate the victims of car accidents where the negligent party is either uninsured or cannot be identified. So the dispute as to who should pay came down to one between the Nominal Defendant and Mr Bradley.


At the trial it was never suggested to Mr Bradley that he had lied about his involvement in the incident. Instead, the way it was put to him in cross-examination was:


“Q: If you had come within a metre of an oncoming car as you made a right hand turn that would be something that you would be well and truly be aware of?


A: Yes.”


The witness P’s evidence however, was heavily challenged in cross-examination, revealing two matters that enabled his reliability to be questioned:


  • He was shown pictures of Ford vehicles of clearly differing colours yet he described them both in the same way as he described the plaintiff’s vehicle, ie. ‘tannish’ or ‘tannish brown’ (at one stage, when shown a photo of Mr Bradley’s vehicle, P agreed that it was not the offending vehicle, though this was tidied up in re-examination by his barrister); and
  • He made repeated reference to the black grille on the rear window of the car he saw, yet the plaintiff’s car did not have one installed.


Both of these things, the trial judge was willing to overlook. However, here’s the rub, as it was skilfully submitted by Mr Bradley’s barrister – to find Mr Bradley liable the judge would have to have find that his evidence was not credible. Furthermore, the Court would have to find that Mr Bradley had in fact lied to the police shortly after the incident (and in court) in saying he had no knowledge of it.


Whether he was fully cognisant of the need to do so or not, the trial judge largely avoided this submission, which lay somewhat inconveniently in the way of the account he wanted to accept, ie. that of P. The knock-on effect of this failing was in Beech-Jones J’s view (with Leeming JA in agreement) to render the trial judge’s reasons inadequate by failing to ‘engage with, or grapple or wrestle with, the cases presented by each party’ (at [75]).


Nor did either of the other parties to the litigation suggest to Mr Bradley that he had lied. This resulted in a lack of procedural fairness, which placed the situation squarely in Browne v Dunn territory, a rule which also applies equally to judges (as pointed out by McColl JA at [6]).


The absence of a proper finding that Mr Bradley had lied left only one possible result: that the identity of the driver at fault simply could not be established…judgment reversed and entered against the Nominal Defendant instead!

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Filed under appeals, Civil, evidence, Insurance

Proof in Insurance Fraud Litigation: making the angels dance

Persuasion is highly a nuanced matter, especially when it comes to insurance fraud litigation.

An insurer with sustainable doubts about the veracity of its insured’s version of events will normally do at least two things:

  1. Deny the insured event took place; and
  2. Allege fraud.

The burden of proof for number 1 lies with the insured and for number 2 with the insurer and there is a difference in the standard of proof for each which is slight yet significant.

The insured’s job of proving the insurable event need only be achieved to the ordinary civil standard, the balance of probabilities, ie. more probable than not.

But if a party alleges fraud, for obvious reasons, a court should not make such a finding lightly. Therefore, it has been said that given the seriousness of the allegation, a court will need to achieve a higher degree of certainty before reaching such a conclusion. This position resides in the common law by virtue of well-known decisions such as Briginshaw v Briginshaw and has also been legislated (sub-section 140(2) of the Evidence Act).

This was the cocktail of burdens and standards of proof facing the NSW Court of Appeal in Sgro v Australian Associated Motor Insurer’s Limited [2015] NSWCA 262.

The plaintiff/appellant was the owner of a Ferrari he alleged was stolen after he went out one evening to watch a movie and parked it on a suburban street. The principal issues were whether the vehicle had in fact been stolen and secondly, whether the plaintiff had made the claim fraudulently in breach of section 56 of the Insurance Contracts Act (Cth).

The generally accepted definition of fraud under section 56 was set out in Tiep Thi To v AAMI (2001) 3 VR 279:

…a false statement, knowingly made in connection with a claim for the purpose of inducing the insurer to meet the claim.

The trial judge found that there were some inconsistencies in the plaintiff’s version of the events that took place on the evening in question which meant she could not be satisfied the vehicle had been stolen. Therefore, the plaintiff’s claim for indemnification under the insurance contract was rejected for failure to prove the existence of the insurable event (ie. theft of the vehicle).

It may seem that given the plaintiff’s evidence was not accepted on the question of theft, it follows that a court should also accept that the plaintiff had made a false statement in making the claim. This was the position urged by the insurer.

The trial judge’s position on the issue was that: “for whatever reason the plaintiff was not honest or candid in the answers that he gave about his whereabouts [on the afternoon of the alleged theft]” [emphasis added].

The Court of Appeal found this could not amount to a finding of fraud, highlighted by her use of the words “for whatever reason”. The trial judge’s use of these words, it said, indicated that she hadn’t reached a sufficient level of certainty to permit such a serious finding as fraud. In particular, the words indicated that the trial judge was not satisfied that any perceived lack of candour on the part of the insured was motivated by a desire to induce the insurer to meet a claim to which he was not entitled. In fact, she simply couldn’t say why, hence the use of the words “for whatever reason”.

In taking this position the Court also affirmed earlier decisions such as Hammoud Brothers v Insurance Australia [2004] NSWCA 366 when it said (per Meagher JA at 76):

Nor was her Honour’s conclusion necessarily equivalent to a finding of fraud because, in a case where the only reasonable alternative was that the appellant had participated in the vehicle’s disappearance, it was open to her Honour to find that she was not satisfied the vehicle had been stolen where the probability that it had been stolen was equal to the probability that it had not [citations omitted].  

The Court’s decision shows that whilst questions of proof in cases like these can seem like angels dancing on the head of a pin, they are often decisive.

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Adventure Sports Providers Beware

To a lay bystander, Glenworth Valley Horse Riding’s entry into the business of recreational quad biking rides seems like it was handled carefully enough. They had participants sign waiver that made specific reference to the (Civil Liability) Act under which they were to ultimately seek protection. They gave riders a training assessment before letting them loose on an open trail and even had a sign posted at the spot where riders waited to be allocated a bike saying “…quad biking is an inherently dangerous activity.” But for a bit of marketing puff and a slightly over-zealous instructor their position seemed watertight.

In Alameddine v Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA 219 the plaintiff sued for injuries sustained while on a quad biking excursion. The key factual finding made by the first instance judge was that the instructor sped up on the way back to the finishing point causing the plaintiff, in her attempt to keep up with him, to lose control and crash.

Given what seemed a fairly painstaking set of measures Glenworth had taken to ensure they would be protected if an accident took place, one would have thought they’d be immune from suit. The trial judge also thought so, finding that the waiver the plaintiff’s mother had signed on her behalf as part of an application form was enough to protect Glenworth.

However, the NSW Court of Appeal (Macfarlan JA with Simpson JA and JC Campbell AJA agreeing) soundly knocked down this and the several other statutory defences Glenworth alleged so as to reverse the trial judge’s decision. The manner in which it did so is informative for all providers of adventure sports in this state.

Starting with section 5L. This section provides a defence if the harm suffered by the plaintiff is the result of “the materialisation of an obvious risk of a dangerous recreational activity”.

There is some useful commentary on what is a “dangerous recreational activity” taken from a previous decision of the Court in Falla v Mourlas [2006] NSWCA 32 to the effect that the totality of circumstances need to be taken into account. As such, what is or isn’t defies any clear categorisation.

In the present case, the contents of Glenworth’s website proved problematic. In what seemed to be a bit of marketing overstatement in an attempt to attract those who might otherwise be scared away from quad biking, the website described it as ‘surprisingly easy’ and requiring ‘no experience’. Of course, once they were on site the punters were given all the heavy stuff about danger and risk by way of the waiver and signage.

Despite there being an expert in support of Glenworth who said that quad bikes are inherently unstable and susceptible to rolling, the Appeal bench was unpersuaded. So it found section 5L didn’t apply because this kind of quad biking wasn’t a “dangerous recreational activity”.

However, even if it was a dangerous recreational activity, the Court called on some ice skating rink decisions on this issue which were made before the Civil Liability Act came into force to find that if the ‘obvious risk’ defence was to apply, the risk in question had to be one which was ‘inherent’ in the activity itself. Applying that position to the facts, it found that the instructor’s conduct in accelerating so as to cause the plaintiff to go outside her comfort zone was not a risk inherent in the activity as promoted by Glenworth.

On the same basis the Court also knocked out section 5M, which dealt with risk warnings “in respect of a risk of the activity”. The instructor’s conduct was not “a risk of the activity”, the Court found. That is, it was not a risk inherent to the activity itself but one created by an outside influence (ie. the instructor’s conduct).

The Court then dealt with section 5N of the Act and contractual waivers. In this regard the Appeal Court took the view that the primary judge had made a wrong finding of fact that the contract had been entered when the application form, which included the waiver, was signed on the plaintiff’s behalf. The contract, it said, had been formed when the plaintiff’s mother had made the booking and provided payment over the phone the previous day. This is consistent with the old ‘ticket cases’ in contract law. Therefore, the waiver was not part of the contract and fell outside the reach of 5N.

Another basis the Court identified for refusing to recognise the waiver was that its wording did not specifically refer to the exclusion of liability for negligence on the part of the defendant, Glenworth. Instead it made a general reference to the ‘negligence of others’.

Even if they had made out one of the Civil Liability Act defences, Glenworth was still faced with the plaintiff’s claim for a breach of the warranty under section 60 of the Australian Consumer Law for its alleged failure to supply quad bike instruction services of a sufficient standard. The 5L and M defences have already been found to be inapplicable to a claim under this provision’s predecessor under the Trade Practices Act in past cases.

However, the Court found the waiver contained in the application form would have provided Glenworth with a defence to a breach of section 60 (pursuant to section 139A of the Competition and Consumer Act) but for it failing to limit Glenworth’s liability to only personal injury. It was wider and covered property damage too. Therefore, section 139A was not satisfied either.

So what is to be learnt by adventure sports operators? Don’t understate the dangers and physical challenges of the pastime on your website. If you are in the habit of taking payment over the phone in advance, make any waiver clear on the website. This way, it is more likely to form part of the contract. Check the wording of your waiver itself so it accords with the Court’s decision and….woah Tonto!

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