Category Archives: Crime

Admissibility of Police Reports

 

Police reports can often provide a useful contemporaneous account of an incident that later becomes the subject of court proceedings, criminal or civil.

However, police reports are prima facie a form of hearsay, so unless the party seeking to rely on the document can enliven one of the exceptions to that rule, the report will be inadmissible.

In this regard, it is also uncontroversial that police reports are a form of business record and therefore fall within the ambit of the exception to the hearsay rule contained in section 69 of the Evidence Act. If admitted as a business record, the report can then be used as evidence supporting the truth of the matters recorded therein, which is of course the main game when it comes to evidence at trial.

However, section 69 contains a couple of exclusions for the kinds of business records that do not pass the smell test for reliability that a document created in the course of everyday business (eg. an email) would otherwise possess.

One of these exceptions covers a situation where the matters contained in the report are recorded “in connection with an investigation relating or leading to a criminal proceeding” (per ss 69(3)(b)). That kind of report would ordinarily be inadmissible, the rationale being that once a criminal investigation is underway, human nature dictates that people, including perhaps even the police themselves, may tend to behave in a self-serving fashion.

In a recent decision that could ultimately prove frustrating for insurers in cases where fraud is alleged, Basten JA in Averkin v Insurance Australia Ltd [2016] NSWCA 122 ruled strictly on the question of the admissibility of a police report.

In any argument over the admissibility of a report, the principal question will be whether, objectively speaking, the police report reveals the police to have undertaken “an investigation which would probably lead to a criminal proceeding.” (Averkin at [28]).

The police report in Averkin described the incident as a ‘stolen vehicle’ case, noted a view that there was likely an accelerant used to start the car fire and recorded the nature of inquiries made of the car owner’s wife and neighbours.

The trial judge took the view that the test is whether the investigation has reached a particular stage where, in the ordinary course of events, it would have led to a criminal proceeding. In the instant case, where the police inquiries were very much of a preliminary nature, the trial judge found that the test wasn’t satisfied and therefore the report was admissible.

However, his Honour Basten JA took the following contrary view (at [28]) and found the report should have been ruled inadmissible:

It is patently obvious that on arrival at the scene the police had quickly formed the view that at least two serious property offences had been committed. If the correct approach is an objective assessment [of whether criminal proceedings are probable], this Court should come to the same view on the facts then apparent to the police.

There is an argument that the first few interviews and inquiries police make can be valuable in revealing a picture that is untainted by invention, collusion and lawyerly intervention. However, where even the slightest possibility of impartiality is revealed his Honour has deemed the risk of unfairness too great.

It is sometimes costly, inconvenient and even impossible to have in court the witnesses whose representations are recorded in police reports. However, when the report reveals even a preliminary view on the investigating officer’s part, parties will now need to find another way to make their case.

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High Court decision in Highway Hauliers tightens wriggle room on refusals

Another chapter in the ongoing battle between insurers and their insureds regarding the reach of section 54 of the Insurance Contracts Act (Cth) 1984 was recently decided by the High Court; in the insured’s favour this time.

Section 54 seeks to strike a balance between permitting insurers to include terms in an insurance policy that prevent their level of risk from increasing after the policy has commenced, versus unfairly relying on technicalities in drafting to deny the insured a valid payout.

If the effect of the insurance policy is to allow the insurer to deny coverage only by reason of some act of the insured occuring after the policy has been entered, the insurer’s right to deny indemnity is limited to a situation in which there is a causal relationship between the particular act in question and the actual loss. If there is no causal relationship, but the insurer’s interests are nevertheless prejudiced, section 54 also permits the insurer to reduce its libility to the extent such prejudice can be defined in monetary terms.

Maxwell v Highway Hauliers Pty Limited [2014] HCA 33 was an invitation to the High Court to delineate where the line between fairly limiting risk and avoiding indemnity should lie.

Highway Hauliers was in the business of freight transport and owned a fleet of trucks. The vehicles were insured under a policy which included an endorsement that all drivers undertake and receive a particular rating in a nominated driver safety attitudinal test (ie. the policy stated that no indemnity would be provided unless this condition was satisfied).

The drivers of trucks involved in the accidents said to trigger the policy had not undertaken the requisite test and the insurer invoked the term to deny liability.

At first instance and in the WA Court of Appeal the insurer conceded that the drivers’ failure to undertake the testing was not in any way causally related to the accident. In fact, the validity of the test was never established. Therefore, relying on section 54, the insured successfully claimed that the insurer’s denial of liability was invalid becuase the omission bore no causal relationsip to the loss suffered.

Nevertheless, the insurer was granted special leave in the High Court to use the case as a vehicle to test the meaning and effect of section 54. In principal, the argument put by the insurer was reduced by the High Court to this (at 17]):

[A] ‘claim’ to which s 54(1) refers is limited to a claim that is an insured risk.

Effectively, the insurer argued that the policy endorsement was simply a means of defining the scope of coverage. Therefore, on this argumemt, the failiure to have the truck drivers tested meant that the ‘claim’ never made it within the scope of the policy in the first place. As such, section 54 had no work to do, there being no valid ‘claim’.

In the end, the Court was unattracted to this argument and therefore able to dispose of the argument quite simply and with perhaps a somewhat disappointingly (but understandably) brief analysis.

In picking up an aspect of its earlier decision in Antico v Heath Fielding Pty Limited (1997) 188 CLR 652 the Court cited with approval the following words (appearing at CLR 659 of Antico):

[n]o distinction can be made, for the purposes of the section, “between provisions of a contract which define the scope of cover, and those provisions which are conditions affecting the entitlement to a claim”.

Not great news for insurers obviously.  For example, had the decision gone the other way (ie. a finding that a ‘claim’ must be found to fall within the scope of the policy before section 54 has any work to do), it would have provided a means of limiting risk through policy drafting which more narrowly defined the scope of cover.

The effect of Highway Hauliers is to make plain the position that it doesn’t matter whether the limitation on coverage the insurer seeks to enshrine in the policy is treated as an exclusion, endorsement or forms part of identifying the insured risk, section 54 will limit the insurer’s ability to deny liability on account of the actions of an insured unless those actions are causally linked to the loss itself. It seems a fair result, but one which now further confirms the strict limits facing insurers when seeking to deny liability.

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UCPR Offers of Compromise and Costs: the posts have shifted again

This entry is both a postscript to my previous entry on 10 rules for making offers of compromise and a response to an inquiry I have gratefully received from a reader.

 

The question of how to deal with the issue of costs in making offers of compromise under rule 20.26 of the UCPR (NSW) has proved a vexing one. Up until a recent change to the rules, the relevant part of rule 20.26 read:

 

“…(2) An offer must be exclusive of costs…”

 

This wording has caused great trouble for practitioners. Does it mean that costs need to be dealt with separately or not at all? What’s more, I have also heard some experienced litigators say that when they are dealing with opponents that do not conduct litigation very often there is a fear that if they don’t say that costs are also payable as agreed or assessed, the offer risks being rejected for confusion.  

 

This may go some way to explaining why there are so many 20.26 offers in the ether which say the offeree should pay the offeror’s costs as agreed or assessed.  In Old v McInnes and Hodgkinson [2011] NSWCA 410 the NSW Court of Appeal (per McColl J) found that this kind of offer does not comply with the rule.

 

However, since Old there have been a number of decisions questioning the validity of that decision by questioning why a party should be denied an order for indemnity costs simply by re-stating the position in part 42 of the UCPRs, ie. if a 20.26 offer is accepted, under 43.13A an offeror would normally receive their costs on the ordinary basis.    

 

In a recent decision of the full Appeal Court in Whitney v Dream Developments Pty Ltd [2013] NSWCA 188 (25 June 2013) Bathurst CJ opined that this reasoning is not entirely apposite.

 

An offer in identical terms to that which was considered in Old was up for consideration in Whitney and the Chief Justice found that Old was correctly decided. He pointed out that to state the position with respect to costs in the offer sought to inappropriately dislodge the discretion contained in rule 43.13A(2)(b) which a court has regarding whether or not to order costs, albeit one which is rarely exercised.  

 

Therefore, Bathurst CJ said (with the other 4 judges agreeing):

 

 “[24]…The use of the phrase “exclusive of costs” suggests that what is intended is that a compliant offer will not deal with costs at all.” 

 

The matter would seem settled there. But wait… there is now the Uniform Civil Procedure Rules (Amendment No. 59) 2013. Effective from the date of its publication, being 7 June 2013 a compliant offer under 20.26:

 

“…(c) must not include an amount for costs and must not be expressed to be inclusive of costs” 

 

There is also a new rule 42.13A which has as its heading “Where offer accepted and no provision for costs”.

 

Where does this leave the court’s decision in Whitney? In my view it has changed things again. The new rule 20.26 seems to contemplate the mention of costs (ie- “plus costs as agreed or assessed”) just not a specific amount (see emphasis added above) or as having been included in the judgment amount. Indeed, by using the words “no provision for costs” new rule 43.13A also appears to be drafted in such a way as to envisage a situation whereby costs are included in the offer, ie. the rule simply wouldn’t apply.

 

However, until there is an appellate judicial opinion expressed on the new rule, I would still err on the side of caution and leave costs out of a 20.26 offer altogether. The new rule 42.13A will still get you the same result if the offer is accepted (ie. “plus costs as agreed or assessed”).  

 

If there is a concern about confusing your opponent and risking an ill-informed rejection of the offer, it can’t hurt to explain your own view of the law on this question in a (separate) cover letter.

 

Note: the amendment also includes a new Schedule 12 to the rules with a transitional provision to the effect that the amended rule will only apply to offers made after the publication date of the amending act. Therefore, Whitney remains authoritative for offers made before 7 June 2013.

 

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