GIO General Ltd v Beck, Damien Mark
[1996] FCA 66
•16 FEBRUARY 1996
C A T C H W O R D S
APPEAL - appeal from ACT Supreme Court hearing appeal from Magistrate - restriction of power of Supreme Court to set aside findings of magistrate affected by credit of witnesses - power of Supreme Court to draw its own inferences from primary facts found by Magistrate - extent to which this Court should interfere with inferences drawn by Supreme Court inconsistent with inferences drawn by Magistrate.
INSURANCE CONTRACT - appellant insurer claiming benefit of exclusion clause in insurance policy where vehicle in unroadworthy condition known to insured.
Petreski v. Cargill (1987) 18 FCR 68
Uranerz (Aust.) Pty. Ltd. v. Hale (1980) 54 ALJR 378
Warren v. Coombes (1979) 142 CLR 531
ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
GIO GENERAL LIMITED v. DAMIEN MARK BECK
No. ACT G39 of 1995
Coram: Jenkinson, Miles and Finn JJ.
Date: 16 February 1996
Place: Canberra
IN THE FEDERAL COURT OF AUSTRALIA )
AUSTRALIAN CAPITAL TERRITORY ) No. ACT G39 of 1995
DISTRICT REGISTRY )
GENERAL DIVISION )
ON APPEAL FROM THE SUPREME COURT
OF THE AUSTRALIAN CAPITAL
TERRITORY
BETWEEN: GIO GENERAL LIMITED
Appellant
AND: DAMIEN MARK BECK
Respondent
MINUTES OF ORDER
JUDGES MAKING ORDER: Jenkinson, Miles and Finn JJ.
DATE OF ORDER: 16 February 1996
WHERE MADE: Canberra
THE COURT ORDERS THAT:
The appeal be dismissed with costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
AUSTRALIAN CAPITAL TERRITORY ) No. ACT G39 of 1995
DISTRICT REGISTRY )
GENERAL DIVISION )
ON APPEAL FROM THE SUPREME COURT
OF THE AUSTRALIAN CAPITAL
TERRITORY
BETWEEN: GIO GENERAL LIMITED
Appellant
AND: DAMIEN MARK BECK
Respondent
Coram: Jenkinson, Miles and Finn JJ.
Date: 16 February 1996
Place: Canberra
REASONS FOR JUDGMENT
THE COURT:
This is an appeal from a judgment of the Supreme Court of the Australian Capital Territory (Gallop J.) upholding an appeal from the ACT Magistrates Court. The Magistrate found for the appellant/defendant in an action by the respondent/ plaintiff claiming indemnity under a comprehensive motor vehicle insurance policy for the cost of repairs to the vehicle. The plaintiff was for relevant purposes the owner of the vehicle. The vehicle was damaged on 4 October 1992 when the plaintiff lost control of the vehicle whilst driving in heavy rain and as a result the vehicle slid off the wet road into collision with an electric light pole. The Magistrate held that the defendant was entitled to the benefit of an exclusion clause in the insurance policy which relieved the defendant from the obligation to indemnify the plaintiff where the damage was "caused as a result of an unroadworthy or unsafe condition of the insured vehicle, being a condition that was known to the insured, or should reasonably have been known to the insured".
The Magistrate found that the defendant had discharged the onus of proving that the vehicle was in an unroadworthy or unsafe condition and that the condition was known or should reasonably have been known to the plaintiff. As an essential part of the process of reasoning, the Magistrate also made the intermediate finding that the rear tyres, inspected by a number of persons shortly after the collision and observed to be lacking in thickness of tread, were the tyres which were on the rear wheels at the time of the collision. The Magistrate made the further intermediate finding that the smooth condition of the rear tyres was the cause of the plaintiff losing control of the vehicle and of the subsequent damage.
On appeal to the Supreme Court, Gallop J. held that the Magistrate had arrived at a wrong conclusion on the evidence. His Honour identified the errors which he considered led to the wrong conclusion. First, his Honour considered that "certain probabilities" arising from the evidence had not been taken into account by the Magistrate on the issue of whether the tyres, the subject of inspection, were those on the vehicle at the time of the collision. His Honour concluded that, when these matters were taken into account, the defendant had not established that the tyres were the same on both occasions. Secondly, his Honour considered that the Magistrate had not taken sufficient account of evidence relating to regular servicing of the vehicle prior to the date of collision. That evidence led his Honour to the conclusion that, on the probabilities, the tyres on the vehicle were in good condition at the time of the collision. It followed on these findings on the part of his Honour that the defendant had not proved that the plaintiff was aware or should have been aware of the defect in the tyres, and that any such defect was the cause of the collision. Accordingly his Honour allowed the appeal and ordered that judgment be entered for the plaintiff in an agreed sum of damages.
Before deciding the merits of the appeal, it is necessary to refer only briefly to the principles to be applied in an appeal such as the present one before the Court. Although this appeal is not technically an appeal by way of re-hearing, but an appeal stricto sensu (Petreski v. Cargill (1987) 18 FCR 68), the appeal to the Supreme Court was by way of re-hearing on the evidence received in the Magistrates Court. The principles the Supreme Court was obliged to observe in determining the appeal from the order of the Magistrates Court make provision for the circumstance that the judge of the Supreme Court will not see or hear the witnesses: see Uranerz (Aust.) Pty. Ltd. v. Hale (1980) 54 ALJR 378. In that case Gibbs CJ at 381 said that on an appeal from the Workmen's Compensation Tribunal (N.T.), the Supreme Court of the Northern Territory:
".... was not entitled to reverse the finding of the Tribunal which was based on its view of the credibility of the witnesses unless it was seen clearly to be wrong on grounds which did not depend merely on credibility - for example, on the ground that the evidence which was accepted was inconsistent with established facts, or was so improbable that no reasonable person could accept
it, or that the judgment of the Tribunal disclosed that its conclusion was affected by some error of law or fact."
There are eleven grounds in the notice of appeal alleging error in the Supreme Court. With the possible exception of one ground, all grounds are against findings of fact on the part of Gallop J. The possible exception is the ground alleging that his Honour erred in accepting evidence of usual business practice in relation to servicing the vehicle in question as evidence of the good condition of its tyres at the time of the vehicle's service. On the face of it, that is an allegation of error of law. However, upon analysis and having regard to the submissions made by Mr. Crispin, QC, on behalf of the appellant, the argument was rather that upon all the evidence his Honour should not have drawn the conclusion that the defendant had not discharged the onus of proving that the tyres were defective immediately before the collision. Accordingly and in the light of the authorities, the defendant, as the appellant in this Court, must show that his Honour fell into error by interfering with the findings of the Magistrate based on credit or by interfering with findings in respect of which no error in the sense of inconsistency with established fact or of inherent unreasonableness or of inherent improbability was demonstrated.
The state of the evidence may be summarised as follows. The plaintiff was not regarded by the Magistrate as a reliable witness, but there is no issue that there was sufficient evidence or agreement otherwise than to establish that the vehicle was purchased new sometime in 1987 and, we would add, that it had four new tyres at the time. There was no evidence as to the brand of manufacture of the tyres on the vehicle when purchased. On 21 December 1989 two new Kelly brand tyres for the rear wheels were purchased from ACT Tyrepower. Neither his Honour nor the Magistrate made a finding that they were fitted to the rear wheels, but both judgments are consistent with such a finding or assumption, which in the absence of anything to the contrary, we would consider wholly justified.
Next, on 19 August 1991, two new Bridgestone tyres were purchased for the vehicle from the Shell Manuka Service Station. Again, in the absence of any evidence or finding to the contrary, we would infer that those tyres were probably fitted to the wheels of the vehicle, and, probably, to the front wheels.
At all relevant times the plaintiff had the vehicle serviced at the Shell Manuka Service Station. Exactly what services were rendered and how often was not clear, but the owner of the service station gave evidence of a high level of quality control on the part of his staff such as to make it likely that when a vehicle was subject to regular service they would notice anything that made it patently unsafe or unroadworthy and would report any such observed defect to the owner. In particular the staff could be relied upon to examine for and report on any such defect as insufficient tread on the tyres. The vehicle was the subject of service to the rear disc pads on 27 July 1992 and again on 20 August 1992, some six weeks before the date of the collision. There was no evidence that the mechanics noticed any untoward lack of thickness on any of the tyres or any other defect. His Honour thought that the whole of the evidence on servicing the vehicle was a strong indicator of the probability that none of the tyres were defective at the date of service. We would agree with this assessment. His Honour also thought that the Magistrate had failed to give sufficient weight to the probability so raised. To that aspect we shall return, because it involves the consideration of other evidence and other conclusions on the part of the Magistrate.
After the collision and whilst the vehicle was in the yard of a wrecker, John Crossley Motors, Mr. Crossley and a number of other people inspected it for the purpose of observing whether or not the tyres were defective. Mr. Crossley, who gave evidence, was described by the Magistrate as a liar and, somewhat surprisingly, as a thief. In any event, the Magistrate treated his evidence as establishing no more than that at some stage after arrival in his yard and between the day of the collision and the date it was removed from his yard, 26 October 1992, the wheels of the vehicle were removed. That fact, so found by the Magistrate and accepted by his Honour, opens up the possibility that, although there were four wheels and tyres on the vehicle on the occasions of the various inspections, the rear tyres on one or more of those occasions were not the tyres on the vehicle at the time of the collision.
The evidence of the various people who inspected the tyres at John Crossley Motors, and later at another wrecker's yard, is rife with extraordinary confusion. It is not necessary to set out the various accounts of the ten people who inspected the tyres on the various occasions. The Magistrate does not appear to have rejected the evidence of any of those persons, except to the extent that the Magistrate rejected the denials by Mr. Crossley and the plaintiff that the rear tyres lacked sufficient tread. The Magistrate appears to have accepted the evidence of Mr. Wingrove who inspected the tyres on 3 November 1992 as the most reliable account of their condition. Mr. Wingrove observed that one of the rear tyres was of a size larger than the other three tyres on the vehicle. The front tyres were of Bridgestone manufacture, size 215, consistent with being tyres purchased on 19 August 1991. The offside rear tyre was of Kelly brand manufacture, size T225, and over-inflated. The rear near side tyre and the spare tyre were both of Dunlop manufacture, size T215. The spare tyre had sufficient tread but the two rear tyres were "visibly worn to the extent that both had exceeded their respective designed tread life" and the nearside tyre was so worn that in many places it was "virtually void (sic) of visible tread pattern". In Mr. Wingrove's view, neither rear tyre was capable of expelling water from between the tyre and the road surface in wet conditions, and the advanced state of tread wear had a significant contributing effect on the driver's ability to maintain control of the vehicle in wet conditions.
Neither the evidence of Mr. Wingrove nor that of any of the other persons who inspected the vehicle was capable in itself of proving that the tyres at the time of inspection were those on the vehicle at the time of collision. That was an issue that could be resolved only by way of inference from the evidence of inspection and other evidence in the case, or, more precisely, such parts of the other evidence as were acceptable. In the absence of any evidence as to the purchase of Dunlop tyres, the plaintiff could offer no explanation as to how the two Dunlop tyres came to be on the vehicle, except on the hypothesis that those tyres, or the wheels to which they were fitted, had been exchanged after the collision with the tyres or wheels fitted at the time of the collision. Mr. Crossley's evidence that he allowed the wheels, or some of them, to be removed went part of the way towards establishing that hypothesis. In contrast, there was no other evidence capable of showing that prior to the collision the rear wheels were fitted with anything but the two Kelly brand tyres that had been purchased on 21 December 1989.
The Magistrate approached the matter by making the intermediate finding of fact that there was no satisfactory explanation for the plaintiff losing control on the wet road other than a defective condition in the tyres. Proceeding from that finding the Magistrate considered that a likely and more precise explanation of the plaintiff's loss of control was a defective condition of the rear tyres such as that described by Mr. Wingrove. From there, the Magistrate decided as a matter of judgment that the hypothesis of defective tyres on the vehicle at the time of loss of control was corroborated by the evidence of Mr. Wingrove that the tyres inspected on the vehicle afterwards were in fact defective. It seems that the Magistrate considered that the weight of evidence about the servicing of the vehicle was insufficient to exclude the explanation of the plaintiff's loss of control by reference to the smoothness of the tyres at the time.
There was nothing, in our view, unreasonable about the Magistrate's approach. We consider that it was clearly open to him as a tribunal of fact which was required to weigh up the competing hypotheses that might be drawn from the evidence. However, we are not sitting on the appeal from the Magistrate but on the appeal from his Honour. His Honour's reasoning, as we have said, began with the established fact that the wheels were removed from Crossley's premises at some stage between 4 October and 26 October 1992. His Honour considered that it was unlikely that the wheels would have been removed if they were not adequate for registration purposes and further that it was unlikely that they would have been replaced. To that his Honour added what he considered to be the probability that the service station mechanics would have noticed any defects in the tyres if the defects were there when the vehicle was serviced some six weeks prior to the collision. His Honour expressly stated that the Magistrate had given insufficient consideration to these matters. Again, that approach was well open to his Honour in evaluating the evidence and deciding what inferences were to be drawn from it.
The primary fact finding tribunal was the Magistrate. It was the function of his Honour sitting as a court of appeal to interfere with the facts found by the Magistrate only if he did so in accordance with the established principles outlined above. To a limited extent the Magistrate had an advantage in evaluating the evidence of Mr. Ellis, the service station proprietor. Although that evidence was hardly challenged, it was of a nature which the defendant could not be expected to contradict. The Magistrate who saw and heard the witness could legitimately approach that evidence with some caution. The Magistrate adverted to the evidence in his decision, stating that it was "all very well as far as it goes". The Magistrate also observed that the plaintiff had told a representative of the defendant that the tyres then being inspected were similar to those on the vehicle before the collision. It appears that the Magistrate did give consideration to the evidence of Mr. Ellis, but ultimately granted it little weight. In this regard the Magistrate enjoyed very little advantage, as it was not so much the credibility of Mr. Ellis that was in issue but the weight of his evidence in the light of other evidence and established facts.
No doubt there is a fine line to be observed before a court hearing an appeal from a primary fact finder decides that the primary fact finder has given insufficient weight to a particular item or aspect of the evidence. The Magistrate, as we have said, approached the evidence of Mr. Ellis with understandable caution. In contrast, Gallop J. considered that that evidence should have been accepted and acted upon by the drawing of permissible inferences from it. As Warren v. Coombes (1979) 142 CLR 531 clearly establishes, an appeal court is in just as good a position as a tribunal appealed from to draw inferences from primary findings of fact. The Magistrate considered that the inference should be drawn from the collision itself, in the light of the other circumstances, that the tyres lacked proper tread at the time of the collision. On the other hand, Gallop J. considered that the inferences should be drawn that the tyres were in good condition some weeks before the collision and that the tyres inspected after the collision were not those on the vehicle at the time of collision. Gallop J. thought that, in the light of all the evidence, the likelihood of the latter inferences being correct was greater than the likelihood of the inference drawn by the Magistrate being correct. That decision was open to his Honour, and having made it, he was bound to find that the Magistrate had erred in fact. We are not prepared to say that in making this decision Gallop J. was wrong. Accordingly the appeal is dismissed with costs.
I certify that this and the preceding ten (10) pages are a true copy of the reasons for judgment of the Court.
Associate:
Date: 16 February 1996
Counsel for the appellant: Mr. K. Crispin, QC with
Ms. P. Burton
Solicitors for the appellant: Meyer Boettcher & Clapham
Counsel for the respondent: Mr. F.J. Purnell, SC
Solicitors for the respondent: Snedden Hall & Gallop
Date of hearing: 30 October 1995
Date of judgment: 16 February 1996
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