Nguyen v Cosmopolitan Homes
[2008] NSWCA 246
•16 October 2008
New South Wales
Court of Appeal
CITATION: Nguyen v Cosmopolitan Homes [2008] NSWCA 246 HEARING DATE(S): 6 August 2008
JUDGMENT DATE:
16 October 2008JUDGMENT OF: McColl JA at 1; Bell JA at 2; McDougall J at 3 DECISION: Appeal dismissed with costs. CATCHWORDS: EVIDENCE – standard of proof – on balance of probabilities - where house and contents damaged by fire – onus on plaintiff to show that fire caused by negligent acts and omissions alleged against defendants – tribunal of fact must feel sense of actual persuasion – circumstantial case – not necessary for proof on balance of probabilities that all possible causes inconsistent with negligence be excluded. - EVIDENCE – expert opinion evidence – distinction between inference and speculation – expert evidence as to causation – whether more than conjecture - tribunal of fact not bound to accept opinions of experts. - CONTRACT – breach of contract – need to prove that alleged breach caused loss – tribunal of fact not bound by experts’ opinion as to existence of causal link. - NEGLIGENCE – duty of care – need to prove that alleged breach caused loss – tribunal of fact not bound by experts’ opinions as to existence of causal link. - PRACTICE – discretion to allow affidavit to be read when maker not available, when required, for cross-examination – no question of principle. LEGISLATION CITED: Civil Liability Act 2002
Civil Liability Amendment (Personal Responsibility) Act 2002
Home Building Act 1989CASES CITED: Bennett v Minister for Community Welfare (1992) 176 CLR 408
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Briginshaw v Briginshaw (1938) 60 CLR 336
Brodie v Singleton Shire Council (2001) 206 CLR 512
Carr v Baker (1936) 36 SR (NSW) 301
Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152
Chappel v Hart (1998)195 CLR 232
Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh (1953) SC 34
Davies v Taylor [1974] AC 207
Girlock (Sales) Pty Limited v Hurrell (1982) 149 CLR 155
Helton v Allen (1940) 63 CLR 691
Jones v Dunkel (1959) 101 CLR 298
Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705
Malec v JC Hutton Pty Limited (1990) 169 CLR 638
March v E & MH Stramare Pty Limited (1991) 171 CLR 506
Naxakis v Western General Hospital (1999) 197 CLR 269
Rhesa Shipping SA v Edmunds [1985] 1 W LR 948
Ruddock v Taylor (2003) 58 NSW LR 269
Schellenberg v Tunnel Holdings Pty Limited (2000) 200 CLR 121
Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262
Tubemakers of Australia Ltd v Fernandez (1976) 50 ALJR 720
West v Government Insurance Office of NSW (1981) 148 CLR 62
X and Y (by her tutor X) v Pal (1991) 23 NSWLR 26PARTIES: Minh Lay Nguyen (First Appellant)
Mai Than Pham (Second Appellant)
Cosmopolitan Homes (NSW) Pty Ltd (ACN 002 640 413) (First Respondent)
KR & MA Massingham Pty Ltd (ACN 001 873 249) (Second Respondent)FILE NUMBER(S): CA 40576/07 COUNSEL: T A Alexis SC / J G Duncan (Appellants)
T E F Hughes AO QC / G M McGrath (First Respondent)
J E Marshall SC / D S Weinberger (Second Respondent)SOLICITORS: Courtenay & Co (Appellants)
Stojanovic Solicitors (First Respondent)
Ferguson Bolton Lawyers (Second Respondent)
LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 3457/05 LOWER COURT JUDICIAL OFFICER: Balla DCJ LOWER COURT DATE OF DECISION: 07/08/07
CA 40576/07
16 October 2008McCOLL JA
BELL JA
McDOUGALL J
1 McCOLL JA: I agree with McDougall J.
2 BELL JA: I agree with McDougall J.
3 McDOUGALL J: On 22 July 2004, a fire broke out at the appellants’ house at Chipping Norton. The house and its contents suffered substantial damage. The appellants (Mr and Mrs Nguyen) say that the fire was caused by a fault in the electrical wiring. The house had been constructed by the first respondent (Cosmopolitan) in 1999/2000. The electrical work, including the wiring in question, had been performed by the second respondent (Massingham). Mr and Mrs Nguyen say that the wiring was installed negligently. Thus, they claim against Cosmopolitan for breach of warranties implied by s18B of the Home Building Act 1989 and against Massingham for negligence.
4 Mr and Mrs Nguyen’s case was heard by Balla DCJ. Her Honour concluded, in reasons given on 7 August 2007, that Mr and Mrs Nguyen’s case failed because they had not discharged the onus of proving, on the balance of probabilities, that the fire was caused by negligent installation of the wiring so as to constitute a breach of Cosmopolitan’s statutory warranties and a breach of Massingham’s duty of care. Mr and Mrs Nguyen appeal from her Honour’s decision.
- The issues
5 The essential issues on the appeal were:
(1) Whether, contrary to the conclusion of the trial judge, the evidence for Mr and Mrs Nguyen showed that the cause of the fire could be related back to alleged negligent installation of a section of the electrical wiring (grounds 1 to 4); and
Factual background(2) Whether the trial judge had erred in refusing leave to Mr and Mrs Nguyen to rely upon an affidavit of Mr Nguyen sworn 27 March 2006, in circumstances where the respondents had required Mr Nguyen to attend for cross-examination but he could not be produced for that purpose (ground 5).
6 The house was built not for Mr and Mrs Nguyen but for their predecessors in title, Mr and Mrs Murray. Mr and Mrs Murray entered into a contract with Cosmopolitan to construct the house according to what seems to have been a standard design frequently used by Cosmopolitan. Cosmopolitan subcontracted the electrical work (except that relating to air conditioning) to Massingham.
7 Construction of the house was completed in about April 2000. Mr and Mrs Murray moved in. Some three years later, they sold it to Mr and Mrs Nguyen, by contract dated 7 May 2003 and settled on 30 June 2003. There is no doubt that Mr and Mrs Nguyen, as successors in title to Mr and Mrs Murray, are entitled to the benefit of the statutory warranties implied into the contract between Mr and Mrs Murray and Cosmopolitan. See s18D of the Home Building Act.
8 The house is a substantial two-storey structure. It appears to be constructed on a concrete slab at ground level. The construction is of brick veneer. The method of construction relevantly involved the erection of the timber framing (both exterior and interior) and then the erection of the exterior brick wall. The brick wall was tied to the timber frame by brick ties spaced regularly both horizontally and vertically. Those brick ties were cemented into the brick wall between courses of bricks, and were nailed to vertical elements of the timber framing. The cavity between the interior of the brick wall and the exterior of the timber frame appears to have been about 50mm wide.
9 The electrical wiring was run in the cavity after the brick wall had been constructed. Mr and Mrs Nguyen say that the cabling rested on the ties. Massingham says that it did not, and that it was bunched and “tied” to other elements of the structure, by which means it was supported. The interior walls of the house consisted of gyprock attached to the interior of the timber framing. There is no direct evidence, but the likely course of construction was that the electrical wiring was run through the cavity before the interior gyprock walls were fixed in place.
10 The trial judge found that the seat of the fire was at a point in the upper level of the eastern wall of the house, adjacent to an interior “nib” wall which formed a partial divider between the master bedroom and a “retreat”. The nib wall – in effect, a kind of archway – comprised timber framing with gyprock sheeting affixed to it. It is likely that the timber framing for the nib wall was constructed at about the same time as the other timber framing work was carried out, and that the gyprock lining was fixed when gyprock was fixed to the other interior walls. Thus, in my view, it is likely that the affixing of gyprock to the frame of the nib wall occurred after the electrical wiring had been run through the cavity.
- The fire
11 The fire was first observed at about 3:00pm on 22 July 2004. At that time, the house was empty. The fire brigade had to break through a door to gain entry to the interior of the house, from which it is reasonable to infer that the house had been locked before the occupants departed.
12 Both the fire brigade and experts called by Mr and Mrs Nguyen fixed the seat of the fire at the point to which I have referred: within the eastern cavity wall at the first floor level, behind the nib wall. The fire brigade and the experts attributed the fire to an electrical fault. It will be necessary to consider in more detail the precise mechanisms suggested by the experts as the cause of the fire.
13 The fire caused substantial damage – said by Mr and Mrs Nguyen to exceed $540,000.00 – to the house and its contents. They made a claim upon their insurer, Australian Associated Motor Insurance Limited (AAMI). AAMI paid the claim. It brought the action in the names of Mr and Mrs Nguyen pursuant to its right of subrogation. That is something to be borne in mind, the parties say (although for different reasons), in considering the second issue.
14 The amounts of some of the elements of the claim were admitted. Others – in particular, the value of the contents – were not. The trial judge made no finding as to quantum.
The expert evidence
15 Mr and Mrs Nguyen relied upon two experts: Mr Munday and Mr Gardner. The trial judge said that they were both “extremely experienced fire investigators” who “gave their evidence in a reasoned and persuasive manner”. She said that “they made concessions where it was appropriate to do so”. In this, she contrasted them with witnesses called by the respondents, whom she considered were acting “as advocates for the” party who had called them.
16 The trial judge accepted the evidence of Mr Munday and Mr Gardner as to the seat of the fire. She did not however accept their evidence as to the cause of the fire. The written outline of submissions for Mr and Mrs Nguyen expressed at least implicit criticism of the trial judge’s so acting: accepting the experts’ opinion on one matter, but not accepting it on another matter. To the extent that the criticism was intended and pressed, it must be rejected. The experts’ opinion as to the seat of the fire does not stand or fall with their opinions as to the cause of the fire (I say “opinions” because, as will become apparent, each expert had a different view of the causal mechanism). There was ample physical evidence from which, by a process of logical inference informed by expert knowledge, the seat of the fire could be identified. The identification of the seat of the fire did not depend solely on an identification of the cause of the fire.
17 Mr Munday and Mr Gardner agreed in substance as to the immediate cause of the fire. They differed, however, as to the mechanism underlying that cause.
18 In substance, Mr Munday and Mr Gardner said that the fire was caused by a fault in an electrical cable that gave power to the electric off-peak hot water system (the implicated cable). That cable was one of four running through the cavity in the manner that I have described. Mr Munday and Mr Gardner said that the cable was lying on what they called the “narrow” surface of a brick tie (the implicated tie) immediately behind the nib wall in the master bedroom suite.
The implicated tie
19 To understand the expert evidence, and the debate concerning it, it is necessary to describe the implicated tie. The implicated tie was a piece of galvanised metal about 50 to 75mm wide and (according to at least some of the evidence) no more than 0.5mm thick. The tie was corrugated at one end. That end was designed to be inserted in the mortar between two courses of bricks. There were two holes at the other end of the tie. They were designed to enable it to be nailed to the timber framework. To enable the tie to be fixed in the manner described, and nailed to a vertical rather than a horizontal surface of the timber framework, it was twisted through about 90 degrees approximately half way along its length. Thus, at the “brickwork” end, the flat surface was horizontal. At the other end, the flat surface was vertical.
20 The trial judge found that the implicated tie “had been inserted beyond its normal depth into the brick course…”. The evidence on which this finding was based was not exposed in the course of argument. The Court was taken to various reports prepared by Mr Munday and Mr Gardner. Those reports referred to their observations of electrical wiring lying on brick ties, including the implicated tie. They did not suggest that the implicated tie “had been inserted beyond its normal depth into the brick course”. I note that the allegations of breach of warranty and negligence did not include, as a particular, that the installation of the implicated tie was other than in accordance with good and usual practice.
21 Mr Munday first inspected the premises on 30 July 2004 – eight days after the fire. He made a number of observations, and took a number of photographs.
22 Mr Gardner first inspected the property on 10 August 2004 – nineteen days after the fire. He too made a number of observations, and took a number of photographs. It may be, although the evidence does not make it clear, that the photographs were taken on a subsequent, more detailed inspection on 15 August 2004.
23 Each of Mr Munday and Mr Gardner said that when he inspected the property, the fire damage along the eastern wall at the first floor level was so substantial that the inner skin of the brick wall was visible. Each said that he saw, lying on the implicated tie and on ties adjacent to it on either side, four electrical cables. Three of those cables were intact. The fourth – the implicated cable – was not.
24 Each of Mr Munday and Mr Gardner said that when he inspected the property, he observed that the electrical cabling was lying on the narrow edge of the implicated tie. Each referred to photographs that purported to demonstrate this. However, when enlargements of those photographs were provided to the Court, it could not be said that they supported the proposition that the cabling in question – in particular the implicated cable - was lying on the narrow surface of the implicated tie.
25 The photographs taken by Messrs Munday and Gardner were printed out and tendered to the Court below. They were stored on CD roms and DVD roms which were also tendered. Mr JE Marshall SC, who appeared with Mr DS Weinberger of counsel for Massingham in this Court, provided the Court with both A4 sized prints of some of the photographs and with enlargements (again on A4 paper) of parts of some of those prints. No objection was taken to the Court’s having the benefit of those prints. At least some of those prints, which were said without objection (and appeared) to show the implicated tie, suggested that the cables were resting on the flat surface and not on the narrow edge of that tie.
26 It is of course possible that the position of the cables had shifted from time to time. That however does not help Mr and Mrs Nguyen. If the cables shifted (for example) after Mr Munday inspected them and took photographs but before Mr Gardner did so, it is possible that they had also shifted (for example) before Mr Munday inspected them. In this context, I note that before Mr Munday first inspected the property, at least one other person had inspected the property on behalf of AAMI, and an Inspector Bailey of the New South Wales Fire Brigade had carried out an investigation on 23 July 2008 (both these matters are referred to in paragraph 1 of Mr Munday’s preliminary report dated 5 August 2004).
27 The prints that were put before the trial judge were smaller, and contained less readily visible detail, than the prints put before this Court. The matters to which attention was drawn on the hearing of the appeal were not visible – at least readily – on the smaller prints that the trial judge had. For that reason, perhaps, there was no cross-examination of Mr Munday or Mr Gardner on the apparent discrepancy between the observations of each as to the location of the electrical cables in relation to the implicated tie, and what appears to be shown, in relation to the same subject, on some of the photographs.
28 There is another aspect of the evidence that bears on this. Mr Ken Massingham, a director of Massingham, gave evidence. He did not himself lay the cables in question. He did however inspect the work that was done. He said that:
(1) He “would have inspected the job at the end”;
(2) It was not an “option to lay the cable through the studs, through the timber studs”;
(3) Running the cabling through the cavity did “not necessarily” mean that they had to be supported on the brick ties within the cavity;
(5) He was on the site from time to time, and did inspect the electrical work.(4) Had he seen that the cabling was laid on the ties he “would have made them go back and return and cable tie the cables away from the brick ties”; and
29 Mr Massingham gave reasons for his opinion that it was not “an option” to lay the cabling through the timber studs. He was not challenged on this. Nor was he challenged on his evidence as to what he would have done had he observed, in the course of inspecting the work, that the cables had been laid on the brick ties. In particular, the photographs that on any view showed electrical wiring lying at one point in time on brick ties at the first floor level along the eastern wall of the property were not put to him.
30 Another witness who gave evidence on this topic was Mr Peacock, who was at the relevant time the principal of Cosmopolitan. Mr Peacock supervised the construction of the house, and made observations of the work done by the various subcontractors, including Massingham. Mr Peacock did not acknowledge in terms that the wiring in question was laid on top of the brick ties, but I think it is the better view of his evidence as a whole that this was what happened. For example, he said that he knew that whatever brick ties he had decided should be used “would’ve been used as a support for the electrical cable”. Mr Peacock said in addition that he left the cable laying to Massingham, although he acknowledged that he could have directed Massingham “as to how they were going to install the cables”.
31 Although Mr Massingham was called after Mr Peacock, these aspects of Mr Peacock’s evidence were not put to Mr Massingham in cross-examination.
32 The proposition, that the electrical wiring in question was laid on the brick ties, was fundamental to the case put for Mr and Mrs Nguyen on negligence: both as to content and breach of duty, and as to causation. It is regrettable that the anomalies in the evidence to which I have referred were not explored in cross-examination.
How did the fire start?
33 Each of Mr Munday and Mr Gardner took as his starting point that the electrical wiring in question had been laid over the brick ties, including the implicated tie. Each postulated a breakdown of the external insulating layer of the implicated cable. Each said that, as a result, the positive and negative conductors in that cable became insufficiently insulated, and that current flowed from one to the other through the degraded insulation. Each said that this would cause the degraded insulation to heat up and to undergo chemical changes, by reason of which a carbonised path or “matrix” would form, enabling smouldering to be transmitted from the wiring to the timber stud adjacent to it. Each said that, on the day in question, this would take some time. Thus, it was not necessary, for this mechanism, that the implicated cable should have been energised at the time the fire broke out. It was sufficient that it had been energised earlier, and initiated smouldering that thereafter was transmitted from the conductors through the carbon matrix to the timber stud.
34 Two strands of the implicated cable were broken when Mr Munday and Mr Gardner inspected it. Each said that he observed evidence of electrical arcing on those two conductors. Although it was acknowledged that electrical arcing could be either the cause of a fire or its result, each said, in substance, that his observation of the consequences of the arcing suggested that it had been the immediate cause of the fire: i.e, as I understand it, the means by which the carbon matrix began to smoulder and, eventually, ignited the timber stud.
35 As I have noted, degradation of the external insulating layer of the implicated cable was a necessary pre-condition for this ignition mechanism. Mr Munday and Mr Gardner differed in their views as to how that degradation had occurred. Mr Munday’s hypothesisassumed that the implicated cable had been at the bottom of the four cables passing through the cavity, and had been resting on the narrow edge of the implicated tie. He said that the pressure caused by the weight of that cable and the overlying cables could cause a phenomenon known as “creep”, whereby the external insulating layer of the cable deformed, and became thinner and insufficient for its intended duty.
36 On Mr Munday’s hypothesis, whilst mechanical damage to the implicated cable might have contributed to the failure of the insulation, it was not a necessary condition for the existence of that failure.
37 On the other hand, Mr Gardner said that he thought the way in which the cabling was laid through the cavity suggested that it had been “pulled through.” Thus, he said, it was possible that the bottom-most cable (on his view, the implicated cable) came into contact with and was dragged over the brick ties, and in particular their narrow edges. By that he means, he said, mechanical damage could have been caused to the external insulating layer of the implicated cable. This, he said, could have made the insulating layer insufficient for its duty.
38 Mr Gardner said that mechanical damage, of the kind described, was essential:
- I think the probability of some sort of mechanical damage at the point or somewhere along the cable where the cable was near that [implicated tie] preliminary damage is the only explanation I can think of that would be plausible and even probable.
39 Mr TA Alexis SC, who appeared with Mr JG Duncan of counsel for Mr and Mrs Nguyen, submitted that it was not necessary to resolve the difference of opinion between Mr Munday and Mr Gardner. He submitted that the breach of warranty and negligence were to be found in the laying of the electrical cabling over and in contact with the brick ties – in particular, in contact with the narrow edge of the implicated tie. He submitted that it did not matter which failure mechanism one chose; the result was that the cause of action was made good.
40 I do not accept that submission. It overlooks what Hayne J in Chappel v Hart (1998)195 CLR 232 at 281 [111] said was “[t]he elementary proposition that a defendant is liable in negligence only if the damage suffered by the plaintiff was caused by the defendant’s negligent act or omission”. If it be assumed, for the moment, that it was not in accordance with usual and proper standards of workmanship to lay electrical cabling of the kind in question over and in contact with brick ties, that could demonstrate (using the language of negligence only) breach of a duty of care. Demonstrating breach is the first step in the case for Mr and Mrs Nguyen. However, they must go further. They must show that the breach caused, according to the law’s concept of causation, the loss for which they claim damages.
The trial judge’s reasoning
41 The trial judge accepted the experts’ evidence as to the seat of the fire. Her Honour accepted also the experts’ view as to the immediate mechanism for ignition. However, she did not accept the evidence of either of them as to how that mechanism itself was caused or initiated. Thus, she found that Mr and Mrs Nguyen had not made good their case on causation.
42 Her Honour’s reasons for rejecting the experts’ views on causation may be summarised as follows:
(1) The variation between their respective opinions as to how the external insulating layer of the implicated cable had become degraded: creep or mechanical damage. Her Honour noted in particular that each asserted, as the fundamental reason for the degradation of the insulation, something that the other said was not essential; and each denied that a matter said by the other to be essential was in fact essential.
(2) What her Honour saw as the hypothetical basis of the opinions. In substance, each expert said that his hypothesis as to causation was one of which it could not be said that it could not have occurred. Thus, it could not be said to involve impossibility. Her Honour said that “to say that the hypothesis is a scenario which is not impossible is not proof on the balance of probabilities”.
(3) Each expert had made assumptions, in the course of arriving at his opinions, not all of which assumptions had been proven. Some of those assumptions her Honour regarded as obvious to the point that it was “far fetched and fanciful” to suggest the converse. In this category, her Honour put the proposition that an intruder may have gained access and started the fire. Her Honour noted that the fire brigade had to force entry on arrival, and that in any event it would be most unlikely that an intruder would deliberately start a fire within a wall cavity. However, her Honour said that other assumptions on which the experts relied were not “far fetched and fanciful”.
(5) The experts had not had an opportunity of speaking to Mr or Mrs Nguyen, or to a Mr Tan Le, who was also living in the premises at the time in question.(4) Each expert acknowledged that in some cases it was simply impossible to say how a fire started, or there were several alternative explanations, or possible explanations, each of which was equally plausible.
43 Before returning to the parties’ submissions in respect of her Honour’s reasoning, and to the relevant evidence, I shall deal with the parties’ submissions as to what is needed to meet the standard of proof on the balance of probabilities in a case where the evidence is circumstantial.
Discharge of the burden of proof: the relevant principles
44 A number of cases, of high authority, insist that for a tribunal of fact to be satisfied, on the balance of probabilities, of the existence of a fact, it must feel an actual persuasion of the existence of that fact. See Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336. His Honour’s statement was approved by the majority (Dixon, Evatt and McTiernan JJ) in Helton v Allen (1940) 63 CLR 691 at 712.
45 Dixon CJ put the matter in different words, although to similar effect, in Jones v Dunkel (1959) 101 CLR 298 at 305 where his Honour said that “[t]he facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied”. Although his Honour dissented in the outcome of that case, the words that I have quoted were cited with approval by the majority (Stephen, Mason, Aickin and Wilson JJ) in West v Government Insurance Office of NSW (1981) 148 CLR 62 at 66. See also Stephen J in Girlock (Sales) Pty Limited v Hurrell (1982) 149 CLR 155 at 161 – 162, and Mason J (with whom Brennan J agreed) in the same case at 168.
46 It is clear, in particular from West and Girlock, that the requirement for actual satisfaction as to the occurrence or existence of a fact is one of general application, and not limited to cases where the fact in question, if found, might reflect adversely on the character of a party or witness.
47 In Malec vJC Hutton Pty Limited (1990) 169 CLR 638 Deane, Gaudron and McHugh JJ said at 642-643:
- A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred.
48 On analysis, I think, what their Honours said is not inconsistent with the requirement that the tribunal of fact be actually persuaded of the occurrence or existence of the fact before it can be found. On their Honours’ approach, what is required is a determination of the respective probabilities of the event’s having occurred or not occurred. There is nothing in that analysis to suggest that the determination in favour of probability of occurrence should not require some sense of actual persuasion.
49 There are nonetheless judicial pronouncements, again of high authority, that suggests that proof on the balance of probabilities can be achieved merely by weighing the competing probabilities. The authorities, and the competing views, were considered extra-curially by Carruthers J in “Some observations on the standard of proof in marine insurances cases, with special references to the “Popi M” case” (1988) 62 ALJ 199; and by Hodgson J, again writing extra-curially, in “The scales of justice: probability and proof in legal fact–finding” (1995) 69 ALJ 731.
50 In the earlier article, Carruthers J referred to “the objective probability school” and the “belief school”. The former requires simply a mechanistic assessment of the probabilities, and the finding that the balance comes down “at least 51 to 49 that such – and – such has taken place or will do so” (see Lord Simon of Glaisdale in Davies v Taylor [1974] AC 207 at 219). The latter, as its name suggests, describes the approach laid down by Dixon J in Briginshaw.
51 In the later article, Hodgson J suggested that the two approaches could be combined. He did so in a way that, I think, is consistent with what I have said above as to Malec. He said at 732 that “if, on the basis of adequate material concerning circumstances of a particular case, the tribunal [of fact] believes that an event has occurred, with the strength of that belief being at least such as would be indicated by a probability in excess of 50%, then the civil onus is discharged”. Thus, his Honour adhered to the requirement of a feeling of actual persuasion. But he made it plain that, once the feeling has been obtained, it is sufficient for it to lead to the conclusion that the event in question is more likely than not to have occurred, with “a probability in excess of 50%”.
52 In my view, that is the approach that should be adopted in the resolution of disputed questions of fact. It is something of particular significance where a resolution of the disputed question depends upon the drawing of inferences from entirely circumstantial evidence. It also accommodates the requirement that attention be paid to the seriousness of the fact in issue, or the consequences of finding that it has occurred.
53 It is of course trite to observe that, in an appropriate case, circumstantial evidence may lead to satisfaction beyond reasonable doubt; and, a fortiori, on the balance of probabilities. However, in considering the probative quality of circumstantial evidence, there is a significant distinction to be observed according to whether proof is required beyond reasonable doubt, or on the balance of probabilities. In the former case, the tribunal of fact must be able to exclude any reasonable hypothesis that stands against the existence of the fact sought to be proved. In the latter case, it is not necessary to do so. See Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5. There is a qualification, in the “post hoc propter hoc” field of discourse. I deal with that, in the context of causation, at [63] below.
54 In Bradshaw, the Court (Dixon, Williams, Webb, Fullagar and Kitto JJ) said at 5 that in considering whether circumstantial evidence proves the existence of a fact on the balance of probabilities, “it is enough in [sic: obviously, “if”] the circumstances appearing in the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is [a] mere matter of conjecture…. But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then though the conclusion may fall short of certainty it is not to be regarded as a mere conjecture or surmise…”. That does not however authorise a court “to choose between guesses… on the ground that one guess seems more likely than another or the other”, as Dixon CJ pointed out in Jones v Dunkelat 304.
55 The position may be summarised as follows:
(1) A finding that a fact exists (or existed) requires that the evidence induce, in the mind of the fact-finder, an actual persuasion that the fact does (or at the relevant time did) exist;
(2) Where on the whole of the evidence such a feeling of actual persuasion is induced, so that the fact-finder finds that the probabilities of the fact’s existence are greater than the possibilities of its non-existence, the burden of proof on the balance of probabilities may be satisfied;
(3) Where circumstantial evidence is relied upon, it is not in general necessary that all reasonable hypotheses consistent with the non-existence of a fact, or inconsistent with its existence, be excluded before the fact can be found; and
Causation: the relevant principles(4) A rational choice between competing hypotheses, informed by a sense of actual persuasion in favour of the choice made, will support a finding, on the balance of probabilities, as to the existence of the fact in issue.
56 The parties’ submissions in this Court addressed the common law concept of causation. The Court pointed out that ss 5D and 5E of the Civil Liability Act 2002 appeared to be relevant. The parties were asked to provide written submissions dealing with the application of those sections to the question of causation. Their written submissions on this point were unhelpful. Mr and Mrs Nguyen and Massingham took the view that those sections were applicable but that, on the facts of the case, neither section had “any relevant application”. Thus, they said, they “did “not propose to provide the Court with further written submissions”.
57 Cosmopolitan too accepted that ss 5D and 5E did apply. It pointed out that those provisions had been drawn to the attention of the trial judge. It submitted that her Honour “proceeded in accordance with the principles embodied in them, … albeit without specific reference in the judgment”. But Cosmopolitan, having accepted that the question of causation should be dealt with according to the statutory test, did not put submissions as to how this task might be undertaken.
Causation: the common law test
58 The common law concept of causation requires only a finding that event A was a cause, not necessarily the cause or the sole cause, of result B. Causation is a question of fact. It is to be decided by the application of common sense to the facts of the case. See March v E & MH Stramare Pty Limited (1991) 171 CLR 506; Bennett v Minister for Community Welfare (1992) 176 CLR 408. Those cases make it clear that, as Mason CJ, Deane and Toohey JJ said in Bennett at 413, “the but for” test… is not a comprehensive and inclusive test of causation”.
59 Further, in considering the question of causation, it is necessary to bear in mind the purpose of the inquiry. The court’s finding as to causation is not an end in itself. It is a step along the way to reaching a determination on the question of liability for loss. As McHugh J said in March at 529, “the common law doctrine of causation is able to ignore some factors which are necessary to the production of a result because the rationale of that doctrine is the allocation of legal responsibility rather than the determination of what has happened”.
60 In a particular case, expert evidence may assist the court to find causation in fact; but the court is not bound by an expert’s expression of an opinion that, on the balance of probabilities, a causal relationship has been established. See Heydon JA in Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705 at 729 [59] (citing Lord President Cooper in Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh (1953) SC 34 at 39 – 40); and note his Honour’s observations at 745 [87], [89]. The court does not abdicate its responsibility to an expert; an expert’s opinion cannot be determinative, particularly in relation to ultimate facts. See Callinan J in Brodie v Singleton Shire Council (2001) 206 CLR 512 at 639 [355], citing his Honour’s earlier observations to the same effect in Naxakis v Western General Hospital (1999) 197 CLR 269 at 306 [110].
61 Where the question for decision is whether, on the balance of probabilities, event A caused result B, the burden of proof is not satisfied merely by evidence that it is possible that the causal relationship exists. See Spigelman CJ in Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275 [80]; and see Stein JA in the same case at 293 [201]. However, as their Honours pointed out (see for example Spigelman CJ at 276 [89], [90]; and see also Stein JA at 293 [201]), the inference of causation may be drawn from all of the evidence in the case, including expert evidence as to the possibility that the causal relationship exists. And a number of pieces of evidence, considered together, may justify the drawing of an inference as to causation when none of them, considered individually, could do so. See the metaphor employed by Lord Cairns LC, of the combined illuminative power of numerous feeble rays of light, in Belhaven and Stenton Peerage (1875) 1 App Cas 278 at 279.
62 Having regard to Mr Alexis’ submission set out at [39] above, I should add that proof, on the balance of probabilities, that event A caused result B is not achieved merely by showing that B followed A: the “post hoc propter hoc” fallacy. Proof that the fire occurred after the electrical cables were laid on brick ties (assuming, for the moment, that this is what happened) does not prove the existence of a causal relationship between the two events. This is not a case where mere evidence of temporal sequentiality, without more, is capable of proving causation.
63 Where B (not having occurred before) closely follows A, and where there is expert evidence to suggest that an event of the nature of A may cause a result of the nature of B, then the inference of causation may be drawn if, on the evidence, there is no acceptable alternative cause available. See Mason J (with whom Barwick CJ and Gibbs J agreed) in Tubemakers of Australia Ltd v Fernandez (1976) 50 ALJR 720 at 724; and note the comments of Mahoney JA on this topic in X and Y (by her tutor X) v Pal (1991) 23 NSWLR 26 at 33. I would add that the same inference may be available if ordinary human experience, rather than expert evidence, suggests that “A” events have been know to cause “B” results, and if there is no evidence of any other acceptable cause.
64 Finally, in this context, it is necessary to distinguish between inference and speculation. As Spigelman CJ pointed out in Seltsam at 275 [84], those two concepts occur “on a continuum in which there is no bright line division”. An inference may be drawn from other facts where, as a matter of reason, those other facts make it more probable than not that the thing to be inferred exists. If they do no more than show a possibility that the thing in question exists, then its existence is a matter of conjecture, not inference. See Jordan CJ in Carr v Baker (1936) 36 SR (NSW) 301 at 306 and Lord Wright in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169 – 170.
Causation: the statutory test
65 Sections 5D and 5E of the Civil Liability Act read as follows:
(1) A determination that negligence caused particular harm comprises the following elements:
5D General principles
(b) that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused ( "scope of liability").(a) that the negligence was a necessary condition of the occurrence of the harm ( "factual causation"), and
(3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent:(2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation , the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.
(b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest.(a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and
(4) For the purpose of determining the scope of liability , the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.
In determining liability for negligence , the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.5E Onus of proof
66 The parties accepted that those provisions applied in this case. They were correct to do so. Those sections, among others, were inserted into the Civil Liability Act by the Civil Liability Amendment (Personal Responsibility) Act 2002 (the Personal Responsibility Act). Clause 6(1) of Part 3 of Schedule 1 to the Civil Liability Act provides that the amendments made by the Personal Responsibility Act “extend to civil liability arising before the commencement of the amendments, but do not apply to or in respect of proceedings commenced in a court before that commencement”. Relevantly for present purposes, schedule 1 of the Personal Responsibility Act commenced on 6 December 2002. These proceedings were commenced in the court below in 2005.
67 Section 5D(i)(a) sets out the test of what it calls “factual causation”. Factual causation requires, in the words of the paragraph, “that the negligence was a necessary condition of the occurrence of the harm”. In this sense, the negligence could be said to be a “causa sine qua non” of the harm.
68 Event A may be one of several, or indeed many, of the causal events that were individually necessary, and together sufficient, to bring about result B. But neither the common law nor, where it is applicable, s 5D imposes liability in tort for every such necessary cause. Once it is shown that A is a necessary condition for the existence of B, the imposition of liability depends upon a process of normative evaluation. That is made clear, in relation to s5D, by ss(1)(b): the “scope of liability” test.
69 In applying the scope of liability test, it might be appropriate to inquire, in a particular case, whether the necessary condition is so far removed from the damage that it would not be appropriate to extend liability to the person responsible for that necessary condition. For example, at common law, liability in damages might not be attributed to someone who is responsible for the existence of a necessary condition of the loss if some supervening cause effectively breaks the chain of causation between the necessary condition and the loss. It will still be the case that the loss, B, would not have occurred in the absence of the necessary condition, A. But the supervening cause is adjudged to be of such potency that, as a matter of policy, legal responsibility for the loss should not be attributed to the person responsible for A. Similar normative considerations will inform the application of the statutory scope of liability test.
70 It follows, in my view, as Ipp JA said in Ruddock v Taylor (2003) 58 NSW LR 269 at 286 [89], that the principles embodied in s5D of the Civil Liability Act “are in accord with the common law”.
Submissions for Mr and Mrs Nguyen
First issue: the parties’ submissions
71 Mr Alexis submitted that the causal mechanisms suggested by Messrs Munday and Gardner, although different, were not inconsistent. He submitted that each was based on a rational inference arising from the available physical evidence, and that neither was contradicted. Thus, he submitted, the trial judge should have found that the fire was caused by the negligent installation of the implicated cable.
72 Mr Alexis attributed to the trial judge a view that the experts’ reasoning “was merely an exercise of speculation… that [could] not provide proof on the balance of probabilities”. That submission, although based on some observations made by the trial judge, does not accurately describe her Honour’s reasoning. Her Honour started from the proposition “that there must be a limited number of potential causes of a fire starting within a wall cavity some years after construction”. She then drew attention to the following matters:
(1) The difference in opinion between Mr Munday on the one hand and Mr Gardner on the other;
(2) The fact that each in effect proceeded by considering a number of hypotheses, discarding those to which there was a valid objection, and leaving (so each said) a hypothesis that no expert could characterise as one that “could not have happened” or “was impossible”: the “last man standing” approach;
(4) The possibility that rodent activity was an alternative, and unrebutted, cause of damage to the implicated cable.(3) What she saw as unproven but relevant assumptions, and what she saw as deficiencies in the reasoning of each expert; and
73 Based on those matters (which I have not elaborated in detail) her Honour did say that one aspect of Mr Munday’s reasoning “can properly be described as speculative”. That referred to his assumption – unproven and untested – “that sufficient creep could occur within the time scale available since the installation of [the implicated] cable for that to be a causative mechanism”.
74 For the whole of the reasons that she gave, her Honour said that she was “satisfied that the opinions of the experts do not rise above conjecture or speculation”. That observation has to be read bearing in mind not only the distinction between conjecture on the one hand and probative inference on the other, but also her Honour’s observation, to which I have referred already, that “to say that the hypothesis is a scenario which is not impossible is not proof on the balance of probabilities”.
75 Mr Alexis went in some detail to the evidence that had been adduced before the trial judge. He submitted that her Honour had overlooked evidence of the physical cause of the fire. That evidence included:
(1) The location of the cables (including the implicated cable) across the brick ties (including the implicated tie);
(2) The cycling of the electric off-peak water heater, which was said to have been “likely to cause softening and degradation of the cable insulation where it was under mechanical stress with eventual breakdown and carbon tracking…”;
(4) Mr Munday’s evidence to the effect that the nib wall would have hindered, if it did not prevent, interference with the electrical cables at the point where the fire was thought to have started.(3) The evidence of arcing, said in this case, in the circumstances described by Mr Munday, to be more likely to be the cause than the result of the fire;
76 In addition, Mr Alexis submitted that there was no other rational explanation given for the postulated damage to the implicated cable. In particular, Mr Alexis submitted, the suggestion that someone had interfered with the cable (for example, by drilling into the gyprock wall) was unconvincing when the damaged section of the cable had been covered by the construction of the nib wall. The suggestion of damage through rodent activity was only marginally more convincing: involving the proposition that a rat, or some other animal, might descend into the cavity, somehow support itself on the cables, and chew away at the bottom cable.
Submissions for Massingham
77 Mr Marshall referred to what he said were inconsistencies and weaknesses in the evidence of Mr Munday and Mr Gardner.
78 Mr Marshall submitted that the causal mechanisms postulated by Messrs Munday and Gardner were completely inconsistent. In particular, he submitted, Mr Gardner’s evidence effectively denied the causal mechanism propounded by Mr Munday.
79 Mr Marshall pointed out that Mr Gardner’s only explanation for the inferred damage to the insulation of the implicated cable was that the cables had been pulled through the cavity, and had scraped across the brick ties (including the implicated tie). Mr Marshall submitted that this explanation was unsustainable having regard to the absence of abrasion elsewhere on the implicated cable.
80 Thus, Mr Marshall submitted, accepting Mr Gardner’s evidence negating creep as a cause did not mean that one should accept also his alternative explanation of cause, in circumstances where that alternative explanation was fatally flawed.
81 Further, Mr Marshall submitted, there were other defects in Mr Munday’s explanation (i.e., apart from its being inconsistent with Mr Gardner’s evidence). Chief among these was that Mr Munday acknowledged that he had determined that creep was a “potential cause which involved a possible electrical defect of some kind”. Thus, he “took the decision that the rest of that examination should be carried out by a specialist in electrical matters”. That further examination would include a consideration of the weight of the cabling and the susceptibility of its insulation to creep. Mr Munday acknowledged that so far as he was aware, no such further investigation had been undertaken, and acknowledged further (although with some reluctance) that it was obvious that “there’s a relevant factor in relation to AAMI’s case theory which no expert has undertaken”.
Submissions for Cosmopolitan
82 Mr TEF Hughes QC, who appeared with Mr G M McGrath, of counsel for Cosmopolitan, submitted that each of Mr Munday and Mr Gardner had acknowledged in substance that his explanation was no more than conjecture. He too referred to what he said were inconstancies in their explanations.
83 Mr Hughes noted that it was fundamental to Mr Munday’s creep hypothesis that Mr Munday, as he acknowledged, had “made assumptions that (a) creep could occur and (b) that sufficient creep could occur within the time scale available since the installation of that cable for that to be a causative mechanism”. In this context, Mr Hughes submitted, Mr Munday’s acknowledgment that a relevant matter had not been investigated was of particular significance.
First issue: decision
84 In my view, it was open to her Honour to conclude, as she did, that the hypotheses advanced by Messrs Munday and Gardner did no more than raise possible causes of the fire, but that they did not prove, on the balance of probabilities, what was the cause of the fire. There was ample material to justify her Honour’s ultimate conclusion that she was not satisfied, on the expert evidence, that the fire had started in a way that bespoke breach of warranty or negligence.
85 In substance, each of Mr Munday and Mr Gardner said that the hypothesis as to causation advanced by him is the only one that could withstand challenge. However, as I have said, those theories are inconsistent. Thus, to the extent that their evidence can be accepted, each undermines the “last man standing” hypothesis of the other. Further, in this context, it is necessary to bear in mind that, as Lord Brandon of Oakbrook said in Rhesa Shipping SA v Edmunds [1985] 1 W LR 948 at 966, the rejection of one of two competing hypotheses as to the cause of an event does not mean that the other must be accepted. As his Lordship had noted at 951, a court is not bound to make a finding one way or the other as to causation. It may simply conclude (as did the trial judge in this case) that the party bearing the onus of proof has failed to discharge it.
86 Mr Gardner gave evidence to the effect that mechanical damage to the insulation of the implicated cable was the only cause that could be regarded as “plausible and even probable”. Mr Gardner had said earlier that cable of the kind in question “is fairly robust and it’s designed for using in domestic and commercial installations that it would take more than just the weight of the cable to cause [creep] damage”. Further, he said, his initial view that the insulation might have been damaged by the weight of the cable pressing it against the tie “was less likely, yes”.
87 As I have noted at [36] above, Mr Munday said that mechanical damage to the insulation of the implicated cable would have contributed to its (presumed) failure, but was not a condition necessary for the occurrence of that failure.
88 That inconsistency does not mean that one hypothesis should be adopted in preference to the other. As to Mr Munday’s hypothesis, his acknowledgment (see at [81] above) that further work was required to validate the hypothesis, which further work had not been carried out, is sufficient to warrant its rejection.
89 There is a different, although equally damaging, problem with Mr Gardner’s hypothesis.
90 Mr Gardner said “that somehow or other” the process of laying the cables had “peeled the sheath away and that instead of being the full thickness of the sheath plus the insulation, it’s weakened the insulating properties of the cable at that point”. Mr Gardner however conceded that if this had happened at the point where the implicated cable lay on the implicated tie, “it would have occurred at other points along the cable” as well. He examined so much of the implicated cable as remained intact and visible, but was unable to find evidence that any other part of that cable had been damaged by being pulled through the cavity wall, or evidence that any other part of that cable had overheated.
91 If Mr Gardner’s hypothesis were to be regarded as plausible – i.e., as something that could inspire a sense of actual persuasion as to its correctness – one would expect that he would have found abrasion damage on other parts of the cables in question, including the implicated cable. The unexplained absence of any such damage is of itself sufficient to warrant the rejection of his hypothesis.
92 Each of Mr Munday and Mr Gardner acknowledged the hypothetical nature of his reasoning.
93 Mr Munday said “that there is a plausible causative mechanism within the area in which I believe that the fire started, and as far as I can see – and I haven’t had any alternative theory put to me, within that cavity to me it is most – its the only plausible combination of circumstances”. Mr Munday was asked whether he would accept that his reasoning process was “hypothetical or speculative”. He replied that “it would be fair to describe them as hypothetical” and added that he could not come up with an alternative hypothesis “which adequately explains a fire originating in a wall cavity”.
94 Mr Munday said further that he “ended up with a hypothesis which involved a complex – as I’ve said a complex chain of events but with no evidence, no specific evidence which I can point to and say, no, that could not have happened. Whereas with every other hypothesis I tried I could point to specific evidence and say, no, that could not have happened”.
95 Mr Gardner said “you get to the stage where you don’t have any physical evidence and you’ve got to say, well, in the absence of all others, you’ve been able to eliminate some things as being more likely than others and you come up with a theory that really can’t be discounted”. Mr Gardner acknowledged that by “can’t be discounted” he meant to indicate that an expert “could not say that that theory is impossible”. He then gave the following evidence:
- “Q. And it doesn’t really rise any higher than that, does it?
A. No, that’s right. That’s what a fire investigation’s about.
96 The hypothetical nature of their reasoning, combined with the inconsistency between their respective theories and the problems with each theory, makes it very difficult to accept either theory as persuasive. Further, those matters make it well-nigh impossible to accept them both, as Mr Alexis submitted should be done.
97 For these reasons, it was open to the trial judge to conclude, as she did, that Mr and Mrs Nguyen had failed to prove that any negligence in the installation of the cables had caused the fire. I should add that although Mr and Mrs Nguyen had pleaded a “res ipsa loquitur” case, that case was not pressed either before the trial judge or on appeal. Accordingly, it is unnecessary to explore the limits within the doctrine operates (as to which see, by way of example only, Schellenberg v Tunnel Holdings Pty Limited (2000) 200 CLR 121).
98 The trial judge concluded that Mr and Mrs Nguyen’s action must fail because they had “failed to establish the cause of the fire on the balance of probabilities”. It may be more accurate to say that the action must fail because Mr and Mrs Nguyen had failed to establish, on the balance of probabilities, that the fire was caused by something amounting to breach of warranty or negligence. With that possible qualification, the matters to which I have referred justified – indeed, in my view, required – the conclusion that her Honour reached.
99 Her Honour referred to a number of other matters. Some of those postulated other causes for the fire. To the extent that her Honour may have thought that it was incumbent on Mr and Mrs Nguyen to negative all causes of the fire other than the cause (or causes) propounded by their experts, then her Honour overstated the burden of proof. However, that is no reason for rejecting a conclusion that is otherwise soundly based. It is therefore unnecessary to consider the parties’ submissions based on alternative hypotheses, which included deliberate or accidental ignition, damage caused by “drilling holes in the wall or fiddling around afterwards” damage by rodents or possible damage “in a number of other ways” (unspecified in her Honour’s reasons).
100 There is however one other matter that does require some consideration. Mr Munday and Mr Gardner agreed that the insulation of an electrical cable could be softened, and thereby degraded, if the cable became overheated. Mr Gardner said that the implicated cable was sufficient for its design load: a current of about 20 amps. There was evidence that the thermostat of the hot water system had failed twice in 2004: once in February, and again some two or three weeks before the fire. In their reports, Messrs Munday and Gardner discounted this as a cause of the fire. However, in cross-examination, Mr Gardner accepted that a fault in the thermostat would be expected to “cause an increase in the internal temperature of the wiring as compared to say a normal thermostat”. He said that this would occur “all along the wiring”, “along the rest of the cable”, including “in the area where [he said] the fire originated”.
101 In re-examination, Mr Gardner was referred to this aspect of his evidence and asked “is there any circumstance surrounding a fault in the thermostat in the hot water system that would have altered the opinions that you formed?” He answered “no”. I do not regard that evidence as rebutting the possible inference of damage through overheating that can be drawn from the earlier evidence to which I have referred.
102 I accept that Mr Gardner may have intended to say in effect that overheating might have contributed to the degradation of the cable, which in his opinion had been initiated by mechanical damage caused when the cable was pulled through the cavity wall. However, any such answer would need to be assessed against the absence, on unburned sections of the implicated cable, of any indication of mechanical damage consistent with the cable’s having scraped against the implicated tie and others.
103 Thus, there was some evidence of the existence of a condition that could have caused overloading of the implicated cable, and an increase in its temperature beyond what would be expected in ordinary service. It was common ground between Messrs Munday and Gardner that if the implicated cable were overheated then the external insulating sheath could soften and degrade. Messrs Munday and Gardner accepted that the irregular operation of the thermostat in 2004 did not bespeak breach of warranty or negligence in the construction of the house in 1999 and 2000.
104 Accordingly, on this evidence, there is a possible explanation for the degradation of the external insulating sheath of the implicated cable that does not indicate breach of warranty or negligence on the part of Cosmopolitan or Massingham. Degradation of the external insulating layer was an essential part of the mechanism postulated by each of Mr Munday and Mr Gardner. Where the evidence suggests a possible cause of degradation that does not indicate breach of warranty or negligence, then it is very difficult to see how the burden of proof, on the balance of probabilities, has been discharged. In this context, one should bear in mind that each of Mr Munday and Mr Gardner acknowledged, as the trial judge recorded, “that there is always a proportion of fires where the most likely cause cannot be assessed or there are two or three plausible alternative explanations or potential explanations for the ignition”.
105 For these reasons, the first issue – reflecting the first four grounds of appeal – must be resolved adversely to Mr and Mrs Nguyen.
Second issue
106 The second issue relates to the trial judge’s refusal to permit Mr and Mrs Nguyen to rely upon an affidavit sworn by Mr Nguyen when he was not available for cross-examination.
107 Her Honour correctly directed herself by reference to UCPR rule 35.2. That rule reads, relevantly, as follows:
(1) A party may, by written notice served on the party serving or proposing to use an affidavit, require the attendance for cross-examination of the person by whom the affidavit has been made.35.2 Cross-examination of deponent
(2) Such notice is to be given a reasonable time before the time at which the person is required to attend for cross-examination.
(3) If reasonable notice of such a requirement has been given in respect of an affidavit, and the deponent does not attend for examination, the affidavit may not be used unless the deponent is dead or unless the court orders otherwise.
108 It was common ground that the respondents had given the written notice contemplated by subrule (1), and that they had done so a reasonable time before the hearing in accordance with subrule (2).
109 The trial judge found that, in the circumstances, AAMI, had taken all reasonable steps to secure the attendance of Mr Nguyen for cross-examination. The respondents do not challenge that conclusion and it is unnecessary to examine it further. Of course, the rule refers to the use of an affidavit by “a party” and in this case the relevant parties were the nominal plaintiffs, Mr and Mrs Nguyen. The respondents did not suggest however that her Honour erred, in her application of the test, by considering the attempts made by the real plaintiff, AAMI, to secure the attendance for cross-examination of Mr Nguyen.
110 The application for leave determined by her Honour related, and the ground of appeal relates, to the whole of the affidavit. However, in his oral submissions on this issue, Mr Alexis limited the argument to paragraphs 16 to 19. The point made through those paragraphs was that Mr and Mrs Nguyen had done nothing to the house that might have caused the implicated cable to break down.
111 Mr Nguyen’s affidavit dealt with the following matters:
(1) it identified a bundle of relevant documents that were sought to be tendered.
(2) It dealt with the purchase by him and Mrs Nguyen of the house.
(3) In paragraphs 15 to 24, it said in substance that after he and his wife bought the house, they did no electrical or other work apart from installing “some large and expensive chandeliers”.
(4) It said that Mr Nguyen and his wife had not done anything to the hot water system;
(5) It said (paragraph 22) that “[t]here was never any occasion upon which… any electrical appliance in the house acted in an unusual or unexpected fashion which might have alerted [him] to the possibility of some electrical problem with either the appliance or the house’s electrical system”;
(7) It dealt at some length with the contents of the house, their value, and AAMI’s settlement of the claim.(6) It dealt with events on the day of the fire;
The trial judge’s reasons
112 The trial judge dealt with the submissions put for Mr and Mrs Nguyen on this issue. Mr Alexis did not submit that her Honour had omitted to consider any relevant submission that had been put. Relevantly for present purposes, her Honour noted that a submission that nothing in Mr Nguyen’s affidavit was “truly in dispute”. Her Honour dealt with this submission in two parts. As to quantum, she noted that the value of the contents had not been admitted. She said that denying the respondents the opportunity to test Mr Nguyen’s evidence on the value of the contents would deprive them of the opportunity “to challenge and test the veracity of what they asserted seemed to be an inflated claim”.
113 Her Honour then considered the possibility that evidence might have been adduced from Mr Nguyen relevant to the cause of the fire. Contrary to the written outline for Mr and Mrs Nguyen, her Honour did not find “that any further details about the hot water service would have impacted on the experts’ evidence.” She found, instead, “that the evidence of Mr Nguyen may have impacted on matters relevant to the cause of the fire”. The distinction is important.
114 Her Honour referred also to the “apparent inconsistency” between Mr Nguyen’s assertion that there had been no prior electrical problems, and the record of failures to the off-peak hot water service in February and July 2004. Her Honour observed that the respondents “would lose the opportunity to test [Mr Nguyen’s] evidence in relation to this issue if the affidavit was admitted”.
115 Thus, her Honour concluded, the interests of justice did not require that she give AAMI leave to rely on Mr Nguyen’s evidence notwithstanding his unavailability for cross-examination.
The parties’ submissions
116 Mr Alexis submitted that the trial judge had taken an irrelevant matter into account, and had erred in a number of respects.
117 The alleged irrelevant matter taken into to account was her Honour’s statement, in answer to the submission advanced to her, that the action was in truth one brought by AAMI pursuant to its right of subrogation. She said, in my view correctly, that this was not a factor relevant to the exercise of the discretion. Having said that, she noted that “an inadvertent consequence of this submission would be to put the insurer in a better position than if the plaintiffs themselves were bringing this application.”
118 Mr Alexis submitted further that her Honour had erred in a number of her findings:
(1) the asserted finding “that any further details about the hot water service would have impacted upon the experts’ evidence”;
(3) the finding that the apparent inconsistency between Mr Nguyen’s evidence and the electrical records may have been significant.(2) the asserted finding “that any further information about the time the premises were last occupied would have impacted upon the experts’ evidence”; and
119 The submission for the respondents took issue with some of the characterisations of her Honour’s findings. Otherwise, those submissions were to the effect that no error had been shown in the exercise of the discretion given by the rule.
- Decision
120 As to the position of AAMI: what her Honour, in substance, was saying was that if Mr and Mrs Nguyen themselves were bringing the action, there could be no question of allowing Mr Nguyen’s affidavit to be read without his being available for cross-examination (assuming, of course, that reasonable written notice had been given). If this is the correct way to read the relevant part of her Honour’s reasons, I do not think that error is disclosed. It would be highly unusual to permit a plaintiff’s affidavit to be read in circumstances where (as was the case here) that plaintiff had chosen voluntarily to absent himself from the country and not to respond to requests to attend for the purpose of giving evidence. In substance, her Honour was observing that AAMI could be in no better position than Mr and Mrs Nguyen. That does not seem to me to involve any irrelevant matter, or error of principle. The suggested analogy of death of a deponent is quite irrelevant: except perhaps in the case of suicide, a dead deponent does not voluntarily choose not to participate in proceedings.
121 As to the suggested error embodied in the submission referred to at [118(1)] above: the first point to make is, as I have said, that the submission misstates, in a significant way, her Honour’s finding. The second point to make is that, for the reasons that I have given at [100] to [104], the failures of the thermostat, and the consequential overheating of the implicated cable, were matters of at least potential relevance; and I do not regard Mr Gardner’s evidence in re-examination as requiring a different conclusion.
122 The third point is that each of Mr Gardner and Mr Murray said that, in an ideal world, when investigating a fire he would like to speak to the owners or occupiers of the premises. Her Honour noted correctly that the experts “did not unequivocally assert that there was no further information which could have impacted on their respective opinions”. The unavailability of Mr Nguyen for cross-examination meant that the respondents were deprived of the opportunity to seek to elicit from him matters that might have borne upon the opinions expressed upon Mr Munday and Mr Gardner.
123 As to the suggested error referred to at [118(2)] above: again, the submission misstates her Honour’s finding. Her Honour said no more than that evidence of Mr Nguyen “may have impacted on matters relevant to the cause of the fire”. In this context, I repeat what I have just said as to the practice of Mr Munday and Mr Gardner in seeking to speak to the owners or occupiers of premises when investigating fires.
124 Finally, as to the apparent inconsistency between Mr Nguyen’s evidence of absence of electrical fault and the records relating to failures of the off peak hot water system, I refer again to what I have said above at [100] to [104]. Given the possibility of overheating of the implicated cable, and given the agreed position that overheating could soften the external insulating layer, and thereby cause or contribute to its failure, the respondents were entitled to seek to ellicit what they could from Mr Nguyen on this topic.
125 I do not think that any error has been shown in the way that her Honour exercised her discretion under rule 35.2.
Conclusion
126 In my view, each ground of appeal fails. The appeal should be dismissed with costs.
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