Nominal Defendant v Hekeik, Youssef, Younan

[1999] NSWCA 376

CITATION:	NOMINAL DEFENDANT v HEKEIK, YOUSSEF, YOUNAN [1999] NSWCA 376
FILE NUMBER(S):	CA 40868/98; 40870/98; 40415/99
HEARING DATE(S):	16 August 1999
JUDGMENT DATE:	25 October 1999
PARTIES :	Nominal Defendant - Claimant/Appellant Rema Lilly Hekeik, Steven Youssef, Mary Younan - Opponents/Respondents
JUDGMENT OF:	Mason P at 1; Sheller JA at 2; Beazley JA at 45

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S) :	8972/95 21179/98 8918/95
LOWER COURT JUDICIAL OFFICER:	Phegan DCJ

COUNSEL:	C R R Hoeben SC - Claimant/Appellant S G Campbell - Opponents/Respondents
SOLICITORS:	Connery & Partners - Claimant/Appellant Stacks, The Law Firm - Opponents/Respondents
CATCHWORDS:	NEGLIGENCE - motor vehicle accident - unidentified motor vehicle - appeal on liability - whether failure of defence of fraud meant that plaintiffs' case succeeded; PRACTICE & PROCEDURE - District Court - whether application for leave to appeall was out of time - where no judgment or order on liability given
ACTS CITED:	Evidence Act 1995 District Court Act 1973 Supreme Court Act 1970
CASES CITED:	Purkess v Crittenden (1965) 114 CLR 164 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 Briginshaw v Briginshaw (1938) 60 CLR 336 National Employers Mutual General Insurance Association Ltd v Manufacturers Mutual Insurance Ltd (1989) 17 NSWLR 223 Carr v Finance Corporation of Australia (No 1) (1981) 147 CLR 246 Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 Bass v Permanent Trustee Company Ltd (1999) 73 ALJR 522
DECISION:	1. Leave to the claimants to appeal from the judgments and orders of Judge Phegan on 12 March 1999; 2. Appeals allowed; 3. Remit the proceedings to the District Court for a new trial limited to liability; 4. Costs of the first trial to be in the discretion of the Judge hearing the new trial; 5. Opponents and respondents to pay the claimant and appellant’s costs of the applications for leave to appeal and of the appeal but to have certificates under the Suitors Fund Act 1951 if so qualified.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40868/98; 40870/98; 40415/99
DC 8972/95; 21179/98; 8918/95

MASON P
SHELLER JA
BEAZLEY JA

NOMINAL DEFENDANT v HEKEIK, YOUSSEF, YOUNAN

The opponents were the occupants of a vehicle which was struck by an unidentified van. They each sued the claimant. The trial Judge held the claimant liable and awarded damages to each of the opponents.

The claimant appealed from the decision of the trial Judge on the issue of liability only. The claimant argued that the accident did not occur in the way the opponents alleged because the condition and location of the vehicle and the surrounding circumstances immediately after the accident were not consistent with the opponents’ account of what happened and further, that the opponents could not be accepted as credible witnesses.

The opponents’ argued that the claimant’s applications for leave to appeal were out of time and incompetent because Part 51 r4 of the Supreme Court Rules required applications for leave to appeal to be made within 28 days after the material date, the material date in this case being 21 October 1997, the date that the decision on liability was given. The applications for leave to appeal were filed on the 5 November 1998 and the 8 June 1999.

Held:
By Sheller JA, Mason P and Beazley JA agreeing:
(1) The trial Judge was right to treat the burden on the claimant alleging fraud to be a burden of proof in the sense of introducing evidence. The claimant was not trying to establish a case but was introducing fraud as a defence. The claimant’s failure to prove fraud on the balance of probabilities did not mean the claimant’s case failed in the sense that the opponent’s case as a matter of logic succeeded, but only that the claimant had not satisfied the court that the opponents were engaged in fraud. Purkess v Crittenden (1965) 114 CLR 164 referred to.
(2) This Court must be careful not to engage in overcritical and hairsplitting analysis of reasons for judgment, but must look to them as a whole to see whether the proper principles have been stated and applied. However, while in the present case there was no doubt that the trial Judge appreciated and stated how he should approach the exercise of determining liability on the evidence, the ultimate decision was fairly read as a conclusion that because the claimant’s case of conspiracy to perpetrate fraud had failed this permitted the trial Judge to accept the opponents’ account of the collision on the balance of probabilities.
(3) Had this followed acceptance of the opponents’ evidence on crucial issues, any apparent connection between the claimant’s failure to satisfy the trial Judge on the probabilities of fraud, and the need for the opponents to satisfy the trial Judge on the probabilities that the accident occurred as they said, would almost certainly not have mattered. But there was no such acceptance of the opponents’ evidence. How the accident happened was left in the judgment as a matter of serious doubt, about which it was difficult if not impossible to come to a confident conclusion. It followed that the judgments and orders in favour of the opponents must be set aside.
(4) Section 127 (1) of the District Court Act 1973 enabled a party who was dissatisfied with a judgment or order in an action to appeal to the Supreme Court. The District Court Act did not define either “judgment” or “order” in a way which encompassed other decisions. No judgment or order on liability was made. Judgment on damages was given on the 9 October 1998 and 12 March 1999. On one view, there was no right of appeal to the Court until judgment on 9 October 1998 and 12 March 1999. It was plain enough that the claimant delayed making applications to appeal from the decision on liability until final judgment in order to avoid the possibility of there being two appeals, one on liability and one on damages. This was entirely proper, and an order should be made extending the time to apply for leave to appeal up to and including the dates upon which the applications were served.

Statutes:
District Court Act 1973
Evidence Act 1995
Motor Accidents Act 1988
Supreme Court Act 1970
Supreme Court Rules

Cases:
Bass v Permanent Trustee Company Ltd (1999) 73 ALJR 522
Briginshaw v Briginshaw (1938) 60 CLR 336
Carr v Finance Corporation of Australia(No 1) (1981) 147 CLR 246
Fidelitas Shipping Co Limited v V/O Exportchleb [1966] 1 QB 630
National Employers Mutual General Insurance Association Limited v Manufacturers Mutual Insurance Ltd (1989) 17 NSWLR 223
Neat Holdings Pty Limited v Karajan Holdings Pty Ltd (1992) 67 ALJR 170
Purkess v Crittenden (1965) 114 CLR 164

ORDERS

1. Leave to the claimants to appeal from the judgments and orders of Judge Phegan on 12 March 1999;

2. Appeals allowed;

3. Set aside the verdicts and judgments for the opponents;

4. Remit the proceedings to the District Court for a new trial limited to liability;

5. Costs of the first trial to be in the discretion of the Judge hearing the new trial;

6. Opponents and respondents to pay the claimant and appellant’s costs of the applications for leave to appeal and of the appeal but to have certificates under the Suitors Fund Act 1951 if so qualified.

*******

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40868/98; 40870/98; 40415/99
DC 8972/95; 21179/98; 8918/95

MASON P
SHELLER JA
BEAZLEY JA

Monday, 25 October 1999

NOMINAL DEFENDANT v HEKEIK, YOUSSEF, YOUNAN

JUDGMENT

1    MASON P: I agree with Sheller JA.

2    SHELLER JA: The opponents to these applications for leave to appeal, Rema Lilly Hekeik, Steven Youssef, and Mary Younan, claimed to be the occupants of a red Holden Gemini motor vehicle on 6 November 1994 between 3 and 3.30 am. Ms Hekeik was the driver, Mr Youssef, the owner and front seat passenger and Ms Younan, a passenger in the back seat. The vehicle was stationary facing west at a red traffic light in River Avenue at the intersection with The Horsley Drive, Carramar, when, allegedly, a white Mazda van ran into the back of it causing extensive damage in the area of the boot. The boot was crushed in up to the rear window and the three occupants injured. They alleged the white van then backed off, pulled over to the empty lane to the left of the Gemini, drove passed it and took a right hand turn into The Horsley Drive. The white van remained, after due inquiry and search, unidentified; s28 of the Motor Accidents Act 1988.

3    According to the opponents, shortly after the collision a vehicle occupied by an elderly couple pulled up alongside them. The couple offered assistance and subsequently took the opponents to Fairfield Police Station where the incident was reported.

4    In separate actions the opponents each sued the Nominal Defendant, the claimant in these applications. The three proceedings were heard together by Phegan DCJ. His Honour dealt separately with liability. He decided that issue against the Nominal Defendant on 21 October 1997. Subsequently, his Honour heard evidence in each case on damages and found verdicts for each of the opponents in amounts less than $100,000. According to the summonses, in Ms Hekeik’s and Mr Youseff’s cases final judgment was delivered on 9 October 1998 and in Ms Younan’s case on 12 March 1999.

5    The Nominal Defendant’s applications for leave to appeal made by summonses which were filed, in the cases of Ms Hekeik and Mr Youseff on 5 November 1998 and in the case of Ms Younan on 8 June 1999, are from the trial Judge’s decision on the issue of liability only. The late filing of the summons in the application in Ms Younan’s case did not attract any comment by any of the parties.

6    The Nominal Defendant’s case was that the accident did not occur, at least in the way the opponents alleged. Judge Phegan said that this was the real issue and the one most vigorously contested. This case, based on inconsistencies in the evidence the opponents gave, the pre-trial statements they made and the evidence of a consulting engineer, John Jamieson, who inspected the vehicle a year after the accident on 29 November 1995, was that:

(a) the condition and location of the vehicle and the surrounding circumstances immediately after the accident were not consistent with the opponents’ account of what happened; and

(b) the opponents could not be accepted as credible witnesses.

7    Early in his judgment his Honour expressly acknowledged that the issue which he had to decide was whether on the balance of probabilities he was satisfied on the evidence before him that the driver of the unidentified motor vehicle was guilty of negligence in causing the collision and the alleged injuries to the three opponents.

8    The trial Judge summarised what he said was the most important aspect of Mr Jamieson’s report. This concerned the position of the vehicle as found after the accident, the absence of skid marks on the roadway and the condition of the back seat of the vehicle and of Ms Younan, who occupied it at the time of the collision. Judge Phegan said:

“First of all it was his [Mr Jamieson’s] view that a stationary vehicle, such as a Holden Gemini, struck from behind by a van which he assumed to be 2,700 kilogram in weight, travelling at an estimated speed somewhere between thirty and fifty kilometres an hour, would be expected to have driven the stationary vehicle some nine metres forward into the intersection at which it had come to a stop.
The evidence of the plaintiffs in this respect, although certainly not precise, but as far as both Steven Youssef and Rema Hekeik could remember, was that the vehicle moved no more than two metres, and possibly closer to one, from the point where it had come to a stop. That presented a very substantial inconsistency between the expert evidence of Mr Jamieson and the evidence of the plaintiffs, sufficient Mr Sexton [who appeared for the Nominal defendant at the hearing] argued to throw more than serious doubt on the plaintiffs’ account of what had happened.
Basically what Mr Jamieson was saying and what he confirmed in his oral evidence, was that an impact of this kind, causing damage as extensive as that which it was assumed had occurred to the Gemini, could not lead to a movement as limited as between one and two metres on the part of the car which had been struck.
Secondly his conclusion was that if the damage to the rear of the vehicle was as extensive as alleged, the back wheels of the vehicle would have been jammed by the metal which had been driven into the wheels, as a consequence of the impact and that therefore, the wheels having become locked, the vehicle, as it was propelled forward, would have made skidmarks on the roadway. There were, according to all of the evidence, including that given by Police Constable Spender [sic Spencer], who examined the scene of the collision from her patrol car when the accident was reported to her shortly after it had been reported to Fairfield Police, no skidmarks on the roadway.
Thirdly was the loss of the rear window and the consequent effect of that on the back seat area of the vehicle. According to Mr Jamieson’s evidence the window would have been shattered and glass would have been spread over the back seat and it would have been highly likely in those circumstances that anyone sitting in the back seat would have suffered certainly some, if not quite substantial, cuts from the flying glass. There was no evidence that Ms Younan who was alleged to have been sitting in the back seat suffered any such injury. There was in that respect also, the corroborating evidence of Constable Spender [sic Spencer] who also testified that when she examined the vehicle after the alleged collision, there was shattered glass in the back seat.”

9    Despite cross-examination by Mr Campbell, who appeared for the opponents, about the distance the vehicle might have been expected to travel after impact and the variety of factors on which this would depend, his Honour observed that Mr Jamieson was firm in his view that even if generous allowance were made for uncertainties of this kind, the estimate which he had made might be reduced from some nine to possibly five or six metres, but certainly not the one or two metres to which the opponents had testified. The trial Judge continued:

“In this respect I have to refer to one particular aspect of the evidence which caused me considerable concern and about which it is extremely difficult to draw any confident conclusion. In her initial account of the accident, Ms Hekeik claimed, and this was the assumption on which Mr Jamieson relied in his report, that she had not applied the brakes, either before, at the time of or after the impact. In her evidence in court however, she testified that she had her foot on the brake pedal and in response to the feel of the impact had pressed hard on the brake.
It is possible in my view, that if that latter evidence were accepted, this would go at least some significant way to explaining why the vehicle had not necessarily travelled as far as Mr Jamieson had calculated, since his calculations were based on the assumption that there had been no application of the brake.
The difficulty that I have in dealing with that particular part of the evidence is two-fold. One is that it was not specifically tested to any degree in cross-examination, that is cross-examination of Mr Jamieson, except in a general way when the application of the brakes was included in a rather long list of possible factors what might vary his calculations. It is therefore not possible to rely on a considered opinion from Mr Jamieson on that particular question.
Secondly there is the inconsistency in Ms Hekeik’s evidence itself. It might be said and it certainly would be consistent with the general arguments which were put on behalf of the defendant, that Ms Hekeik may have added a gloss to her earlier account, having discovered the content of Mr Jamieson’s report and searching for some feasible explanation for why the car travelled such a short distance.”

10    Mr Jamieson had to make assumptions about the weight of the unidentified Mazda white van and its approaching speed before the collision alleged. The impact of the collision on the Gemini would, Mr Jamieson concluded, have caused its rear wheels to lock. The motor vehicle remained in the position it was after the collision until removed by a tow truck. Even so, Mr Jamieson was of opinion, as his Honour said, that the impact would have pushed the motor vehicle forward by a distance of at least five metres. Whether or not Ms Hekeik pressed hard on the brake and whether or not this would have made any difference to the estimated distance of travel, bearing in mind that the rear wheels were locked, there remained no explanation for the absence of skidmarks. Of all this the trial Judge said:

“But all I can say in this regard is that the issue remains clouded and while I accept that the evidence of Mr Jamieson in this regard does raise very serious doubts about the account given by the plaintiffs, there are some difficulties in the path of a firm conclusion.”

11    The Nominal Defendant submitted that this passage from the reasons for judgment suggested that the onus lay on it to prove that the accident did not occur as the opponents alleged.

12    The trial Judge continued:

“The most that can be said about the absence of skidmarks is that the assumptions on which Mr Jamieson relied in this regard were no more than that. In other words he assumed that the wheels were locked, although he was not able to verify this assumption because he had not had the benefit of inspecting the vehicle immediately after the accident. But it would be difficult, from the evidence available, to come to the conclusion, that the absence of the skidmarks would necessarily mean that the evidence of the plaintiffs could not be believed and that therefore the accident, must have happened in a very different way from that described by the plaintiffs.”

13    With due respect, this last sentence is delphic. The evidence of the opponents was that the Gemini had to be removed by a tow truck. Mr Youseff said: “The back guard, I think it was, the left hand side rear back guard, was into the tyre and it just wouldn’t move.” Ms Hekeik said: “The body of the car was all over the wheel sort of. The back wheels.” Mr Jamieson said that the wheels having become locked the vehicle as it was propelled forward from the impact would have made skidmarks on the roadway. It is not obvious that his evidence would have been any different if he had been asked to assume that Ms Hekeik had her foot pressed hard on the brake. His Honour did not explain why the absence of the skidmarks would not necessarily mean that the evidence of the opponents could not be believed. It is hard to see what that explanation could have been.

14    The trial Judge continued:

“As to the glass, this was a matter on which the evidence of the plaintiffs, in particular Youssef and Hekeik was quite consistent and clear. Their evidence was that the vehicle had been tinted with a film on the inside of the glass, including the rear window and that when the glass fell out of the rear window, although it shattered, it remained fixed to the tint film which came away at the same time. According to their evidence therefore there was very few, if any, pieces of glass separated from the sheet of tint to which the shattered glass remained attached. That account would offer at least a feasible alternative explanation for why, for example, Miss Younan was not injured by flying glass when the back window became dislodged.”

15    In this and the earlier passage which I have quoted his Honour discussed the competing possibilities without making any findings about which of them he preferred. The last sentence quoted suggests an assumption that the evidence of the opponents should be accepted if there was on offer at least a feasible alternative explanation for Ms Younan’s not being injured by flying glass. The police officer called to the scene of the accident, Constable Spencer, remembered seeing pieces of glass on the back seat and the rear tray and agreed that the record of an interview she had in September 1995 with an insurance investigator that:

“there was glass on the back seat but I can’t say if anyone had been sitting there or not, but, if they had, they would have been covered in glass. I can tell you I would not have liked to have been sitting there”

accorded with her recollection of what she observed on the night. Constable Spencer agreed that the record of interview was not signed by her, up to the time that she gave evidence had not been seen by her and was not a precise and accurate record of what she actually said. The trial Judge regarded Constable Spencer’s evidence about shattered glass in the back seat as corroborating Mr Jamieson’s evidence.

16    After referring to the feasible alternative explanation his Honour continued:

Having said that, I acknowledge, that Mr Jamieson’s report certainly reaches a number of conclusions which, in no sense, are answered on the rest of the evidence and which do create serious doubt as to whether the accident could have occurred in the manner described by the plaintiffs.
There is also the quality of the plaintiff’s evidence and the range of inconsistencies which can be found amongst them and as between their evidence and that of other witnesses, over and above Mr Jamieson.
In this regard I propose to deal with the issue very briefly, for reasons I indicated earlier and to say only this. While there were a large number of inconsistencies, some of which remained unexplained, most if not all were of a kind which could reasonably be attributed to the recollection of a relatively traumatic experience by a participant in such an event as the alleged collision and by the passage of time, over which some of these inconsistencies found their way into accounts given by the plaintiffs of what had occurred.
It is certainly not possible to conclude from these inconsistencies that they, so undermine the credibility of the plaintiffs, for the purpose of accepting that the accident occurred more or less in the way described by the plaintiffs, that the plaintiffs’ evidence must be rejected.”

17    While it was quite open to the trial Judge to deal with the inconsistencies between the accounts given by the opponents both in evidence and otherwise in the way that he did, I have difficulty in understanding how his Honour dealt with the conclusions in Mr Jamieson’s report, which he regarded as in no sense answered on the rest of the evidence and which created serious doubt as to whether the accident could have occurred in the manner described by the opponents.

18    Next the trial Judge pointed out that the elderly couple who stopped to offer assistance, according to the opponents’ evidence, after taking them in their own car to Fairfield Police Station, left without identifying themselves and without making any independent report to the police. A police constable at Fairfield Police Station at the time said that he had been told by Mr Youseff that the opponents had come to the police station by taxi. The opponents denied this and Mr Youseff denied that he said this to the police constable.

19    After dealing with submissions about the unlikelihood of the number of inconsistencies between the opponents’ evidence if they had conspired to provide a false account of what happened and a falling out between Ms Younan and the other two opponents, the trial Judge continued:

“What I have said about the evidence provides some indication of what has been the pervasive difficulty with this case. There is any amount of room for speculation, about what is to be made of the evidence before me and therefore, on many of the points which were argued, both of a general and of a more specific kind, it has proved to be difficult if not impossible to come to a confident conclusion as a matter of fact.
I must nonetheless come to a conclusion. It is a burden which is carried by a plaintiff in any action in negligence that the plaintiff must satisfy the tribunal of fact on the balance of probabilities, of negligence on the part of the defendant. That task is of course always complicated where a nominal defendant is involved and a measure of unavoidable uncertainty surrounds the occurrence of the accident. But the onus nonetheless remains on the plaintiff to prove what, in general terms is a breach of duty, on the part of the defendant, in this case the driver of the unidentified motor vehicle.”

20    The paragraph which followed explained, I think, the rest of the reasons for judgment. His Honour said:

“The principal case put by the defendant does amount, as was forcefully argued by Mr Campbell on the plaintiffs’ behalf, to inviting me to conclude that the plaintiffs have severally and/or jointly, engaged in a deliberate attempt to perpetrate a fraud and indeed a fraud on this Court. In those circumstances it is quite clear and I refer here without quoting at any length to the celebrated judgment of Dixon J in the case of Briginshaw v Briginshaw (1938) 60 CLR at 362, where his Honour there emphasises, and this has been generally taken to apply in particular to allegations of fraud on the part of a party and/or witness, that there is at least an evidentiary burden on the party alleging fraud to make out such a case. The gravity of any such allegation is one which bears an evidentiary onus, even though the general onus in the case may rest on the other party.”

21    The expression “evidentiary burden” in this passage is explained by Barwick CJ, Kitto and Taylor JJ in Purkess v Crittenden (1965) 114 CLR 164 at 167-8 as follows:

“We do not regard [ Watts v Rake (1960) 108 CLR 158] as formulating the proposition that once a plaintiff has established a prima facie case that he has been incapacitated as a result of the injuries inflicted upon him by the defendant’s negligence the burden of establishing that his incapacity is wholly or partially the result of, or that a total or partial incapacity would, in any event, have resulted from, some pre-existing condition in the plaintiff passes to the defendant in the sense that, when the whole of the evidence in the case has been given, the onus of proof on this issue rests upon him. The expression ‘burden’ or ‘onus’ of proof, ‘As applied to judicial proceedings…….has two distinct and frequently confused meanings: (1) the burden of proof as a matter of law in pleading - the burden, as it has been called, of establishing a case, whether by preponderance of evidence, or beyond a reasonable doubt; and (2) the burden of proof in the sense of introducing evidence’ (Phipson on Evidence, 10th ed (1963) para 92). This is a proposition which has been frequently acknowledged (see eg Fitzpatrick v Walter E Cooper Pty Limited (1935) 54 CLR 200 at 218 and Mummery v Irvings Pty Limited (1956) 96 CLR 99 at 118 et seq.) The position is, we think, correctly stated by the learned author to which we have referred when he says: ‘the burden of proof in the first sense is always stable, the burden of proof in the second sense may shift constantly, according as one scale of evidence or the other preponderates’ (ibid. par 95) and it was with the meaning of this expression in its secondary sense that the case mentioned was concerned. We understand that case to proceed upon the basis that where a plaintiff has, by direct or circumstantial evidence, made out a prima facie case that incapacity has resulted from the defendant’s negligence, the onus of adducing evidence that his incapacity is wholly or partly the result of some pre-existing condition or that incapacity, either total or partial, would in any event, have resulted from a pre-existing condition, rests upon the defendant. In other words, in the absence of such evidence the plaintiff, if his evidence be accepted, will be entitled to succeed on the issue of damages and no issue will arise as to the existence of any pre-existing abnormality or its prospective results, or as to the relationship of any such abnormality to the disabilities of which he complains at the trial.”

22    In my opinion, and despite the submission put to the contrary by Mr Campbell for the opponents, Judge Phegan was right to treat the burden on the Nominal Defendant alleging fraud to be of the second category referred to. The Nominal Defendant was not trying to establish a case but was introducing evidence of fraud as a defence to the opponents’ cases. What is important for present purposes is that the Nominal Defendant’s failure to prove fraud on the balance of probabilities did not mean that the Nominal Defendant’s case failed in the sense that the opponents’ case as a matter of logic succeeded, but only that the Nominal Defendant had not satisfied the court that a conspiracy by the opponents to provide a false account of what happened was made out. It remained for the opponents to prove their case. Of course if Judge Phegan had rejected the Nominal Defendant’s case of a conspiracy because he said he preferred the opponents’ account of what happened to the account given by witnesses the Nominal Defendant relied on, the failure of the Nominal Defendant to prove fraud would have gone hand in hand with the success of the opponents’ case. But conspiracy or not, the Nominal Defendant’s evidence, in his Honour’s opinion, created “serious doubt as to whether the accident could have occurred in the manner described by the [opponents]” and raised “very serious doubts about the account given by the [opponents]”.

23 Section 140 of the Evidence Act 1995 applied at the hearing on liability which occurred in October 1997. The section is headed “Civil proceedings: standard of proof” and provides:

“(1) In a civil proceeding, the Court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2) Without limiting the matters that the Court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence, and
(b) the nature of the subject matter of the proceeding, and
(c) the gravity of the matters alleged.”

24    Mr Hoeben SC, who appeared for the Nominal Defendant, referred us to Neat Holdings Pty Limited v Karajan Holdings Pty Limited (1992) 67 ALJR 170. That case concerned a claim by the purchaser (the appellant) of a business that the vendor (the respondent) had knowingly misrepresented the projected takings of the business. The question at trial resolved itself into whether the vendor had falsified its past takings or the purchaser was falsifying the current takings. In a joint judgment Mason CJ, Brennan, Deane and Gaudron JJ said at 170-171:

“The ordinary standard of proof required of the party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary ‘where so serious a matter as fraud is to be found’. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. As Dixon J commented in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362:
‘The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved….’
There are, however, circumstances in which generalisations about the need to clear and cogent evidence to prove matters of the gravity of fraud or crime are, even when understood as not directed to the standard of proof, likely to be unhelpful and even misleading. In our view, it was so in the present case.”

25    That case depended upon a choice between competing and mutually inconsistent allegations by each party against the other of fraudulent conduct. The present case is not so complicated and I see no error in the way in which Judge Phegan approached the task when considering the burden on the Nominal Defendant affirmatively to establish a conspiracy to provide a false account of what happened. But that is not the end of the matter. Judge Phegan continued as follows:

“There are a significant number of important matters on which the plaintiffs’ account of the accident has been put into doubt. In that regard I have to commend the case which was put by Mr Sexton on behalf of the Nominal Defendant, because certainly there was more than enough evidence to justify raising questions which were raised on behalf of the Nominal Defendant. There remains very considerable doubt in my mind about what happened.
However, it falls short of evidence which enables me to come to a confident conclusion that the plaintiffs engaged in a deliberate fraud. If that is my conclusion and because, the areas of inconsistency including those on what I have described as the technical side of the case, are left in doubt, permits me to accept the plaintiffs’ account of the collision as one which is feasible and one on which I can be satisfied on the balance of probabilities occurred.
I have, with very considerable difficulty, come to the conclusion, that the liability of the Nominal Defendant, has been established and therefore the Nominal Defendant is liable to all three plaintiffs.”

26    On these applications the Nominal Defendant seeks leave to appeal on two grounds:

“1. That his Honour incorrectly applied the principle in Briginshaw v Briginshaw and reversed the onus of proof so that the claimant as defendant was required to disprove the opponents’ claim.
2. In the alternative, his Honour ought to have been satisfied that the motor vehicle accident did not occur as had been asserted by the opponent and that there was error in his Honour’s reasoning upon the facts.”

The parties agreed that the Court should, if minded to grant the Nominal Defendant leave to appeal, deal with the appeals themselves.

27 It is convenient that I should first deal with the opponents’ preliminary point that the applications were out of time and incompetent. The opponents submitted that Part 51 r 4 (1) of the Supreme Court Rules required an application for leave to appeal to the Court of Appeal to be made by ordinary summons or holding summons within 28 days after the material date and that the material date in relation to these applications meant, because no judgment was given on 21 October 1997, the date on which the decision on liability itself was given, namely that date. See Pt 51 r2 (1) and the definition of “material date”, particularly para (e).

28 Section 103 of the Supreme Court Act 1970 provides that an appeal shall, by leave of the Court of Appeal, lie to the Court of Appeal from a decision in proceedings in the Court of any question or issue ordered to be decided separately from any other question or issue. The section, of course, does not apply to a decision in proceedings in the District Court. Section 127 (1) of the District Court Act 1973 enables a party who is dissatisfied with a Judge’s judgment or order (my emphasis) in an action to appeal to the Supreme Court. The District Court Act does not define either “judgment” or “order” in a way which would encompass other decisions; see s4 and compare s19 (1) of the Supreme Court Act 1970 before its amendment in 1989 and National Employers Mutual General Insurance Association Limited v Manufacturers Mutual Insurance Limited (1989) 17 NSWLR 223. Subsection (2) provides for appeals by leave of the Supreme Court but only from judgments or orders including an interlocutory judgment or order. In Australia the test for determining for the purposes of the rules relating to appeals, whether a judgment or order appealed from is final or not is whether the judgment or order, as made, finally determines the rights of the parties: Carr v Finance Corporation of Australia(No 1) (1981) 147 CLR 246 at 248. If Judge Phegan had entered judgment for damages to be assessed the judgment would have been an interlocutory judgment; see Fidelitas Shipping Co Limited v V/O Exportchleb [1966] 1 QB 630 at 642, referred to with approval by the High Court in Bass v Permanent Trustee Company Limited (1999) 73 ALJR 522 at 535. Section 127 (3) of the District Court Act provides that “in any other case, an appeal lies as of right”.

29    At the end of his reasons for judgment, Judge Phegan said:

“I foreshadow that in those circumstances I would envisage ordering that the defendant pay the plaintiff’s costs. Is there any further submission on that, Mr Sexton?
SEXTON: No, your Honour.
HIS HONOUR: There is then the further question of the resolution of the outstanding matter of quantum of damages. I do not know whether that was a matter the parties wanted to take up with me now or simply have the matter re-listed independently.
SEXTON: Your Honour we would ask that they be re-listed independently in due course.
HIS HONOUR: All right, so that I do not have to take any further steps in that particular regard. I think the only other order I have to make in the circumstances is that the exhibits be returned and I so order.”

30 There was no judgment or order on liability and thus, on one view, no right of appeal to the Court of Appeal until judgment on 9 October 1998 and 12 March 1999 respectively. It may be that in light of the point taken here the legislative provision for appeals from the District Court should be reviewed and an equivalent to s103 of the Supreme Court Act inserted. It is plain enough that the Nominal Defendant delayed seeking to appeal from the decision on liability until final judgment in order to avoid the possibility of there being two appeals, one on liability and one on damages. This was entirely proper and in the circumstances to avoid any doubt about the matter an order should be made extending the time to apply for leave to appeal up to and including the dates upon which the applications were served.

31    In support of the grounds raised, Mr Hoeben relied upon the following passages from the judgment of Dixon J, as his Honour then was, in Briginshaw v Briginshaw at 359-360 and 369. In that case the petitioning husband had failed to satisfy Martin J of his wife’s adultery. Accordingly Martin J dismissed his petition and he appealed to the High Court. Dixon J said at 359-360:

“In the course of reviewing the evidence, which I have summarized above, Martin J said that all the witnesses gave their evidence well and that he could gather nothing adverse to them from their demeanour. He concluded his reasons for judgment thus: ‘I do not know what to believe. I have been very much troubled. I think that Lamprill holds the key. It seems he may have held the pistol at both parties’ heads. I have done my best to decide, but the petitioner must satisfy me that his story is true. I think I should say that if this were a civil case I might well consider that the probabilities were in favour of the petitioner, but I am certainly not satisfied beyond reasonable doubt that the evidence called by the petitioner should be accepted.’
The view which his Honour has thus expressed places the appellant in an unusually favourable position in attacking what otherwise might have been regarded as a finding of fact upon which the opinion of the primary judge must prevail. For it not only excludes the demeanour of the witnesses as a source of enlightenment, but it suggests at least an inclination of mind towards the acceptance of the version of the facts supporting the appellant’s case. At the same time, the learned judge, in expressing his want of certainty as the ultimate reason for his decision, adverts to a standard of persuasion the application of which to an issue of fact in a matrimonial cause is open to dispute. The case thus comes to depend in a great measure upon a proper understanding of the exact opinion which his Honour formed and of the degree to which his mind was affected by the strength of the petitioner’s case. My own interpretation of what he said is that not only had the evidence fallen far short of satisfying his mind beyond reasonable doubt of the adultery alleged, but that he had not formed an actual belief that the adultery took place, although he thought that possibly he might consider that the probabilities disclosed by the evidence were greater in favour of that conclusion than against it .” (emphasis added)

Mr Hoeben said that in the present case Judge Phegan had reached no more definite opinion about the opponents’ claim in his reasons for judgment.

32    At 369 Dixon J said:

“This view of the law makes it necessary to return to the conclusion expressed by Martin J. If I thought that his Honour had formed a definite opinion that the respondent had committed adultery with the co-respondent, and had abstained from giving effect to his opinion because he applied the standard of persuasion appropriate to criminal cases, I should regard a rehearing as necessary. But, as in effect I have already said, I do not so interpret his reasons. Nor do I think that his Honour means to convey that he has not directed his mind to any other question than whether adultery was established beyond reasonable doubt. From the whole tenor of his reasons, I think that it clearly appears that his Honour found himself unable to arrive at any satisfactory or firm and definite conclusion that adultery had been committed although conceding that perhaps in the probabilities arising upon the evidence there was some preponderance of those fork over those against, such a conclusion. It follows that, in order to succeed upon this appeal, the petitioner must satisfy this court, either that the learned judge ought to have been satisfied of the adultery alleged or that his conclusion was determined by some mistake or error in his reasoning upon the facts.”

33    Mr Hoeben submitted that Judge Phegan’s reasons for judgment demonstrated a like inability to arrive at any satisfactory or firm or definite conclusion according to the probabilities that the accident had occurred as the opponents alleged. Despite the reference to inconsistencies in their evidence at no point did his Honour say that he accepted the opponents’ account of what happened. Rather his Honour’s mind seems to have been directed to non-satisfaction that the Nominal Defendant had established fraud.

34    Moreover, on the question of the application by Ms Hekeik of the brake and the absence of skidmarks, his Honour did not say whether he accepted her evidence that she had pressed hard on the brake but said only, for reasons which I have difficulty in following, that it was not possible to rely on the considered opinion from Mr Jamieson on that particular question. At the same time his Honour accepted that the evidence of Mr Jamieson in this regard raised very serious doubts about the account given by the plaintiffs. Beyond this his Honour said no more than that the issue remained clouded and that there were some difficulties in the path of a firm conclusion.

35    When his Honour said that the assumptions on which Mr Jamieson relied in regard to the absence of skidmarks were no more than that, because he assumed that the wheels were locked, his Honour made no mention of the opponents’ own evidence about the immobility of the vehicle or Ms Hekeik’s evidence that she had pressed hard on the brake. Yet having made no findings about these matters, his Honour said that it would be difficult to come to the conclusion that the absence of the skidmarks would necessarily mean that the evidence of the opponents could not be believed. This left unstated whether the trial Judge did believe the evidence of the opponents.

36    Again did his Honour believe what was said about the shattered glass? He described Constable Spencer’s evidence as corroborating Mr Jamieson’s evidence. Even so his Honour said only that the account about the fixing of a tint film was a feasible alternative explanation for why Ms Younan was not injured by flying glass when the back window became dislodged. His Honour then reiterated that Mr Jamieson’s report reached conclusions which in no sense were answered on the rest of the evidence and which did create serious doubt as to whether the accident could have occurred in the manner described by the opponents.

37    It is not clear to me whether, and if so why, his Honour included these matters in the inconsistencies which he put aside on the basis that they did not so undermine the credibility of the opponents for the purpose of accepting that the accident occurred more or less in the way they described, that the opponents’ evidence must be rejected.

38    Undoubtedly Judge Phegan recognised that the onus remained on the opponents to prove a breach of a duty of care by the driver of an unidentified motor vehicle. Having referred to Briginshaw v Briginshaw his Honour reiterated that there remained very considerable doubt in his mind about what happened. This fell short of evidence which enabled him to come to a confident conclusion that the plaintiffs engaged in a deliberate fraud. I again quote the sentence that followed:

“ If that is my conclusion and because , the areas of inconsistency including those on what I have described as the technical side of the case, are left in doubt, permits me to accept the plaintiffs’ account of the collision as one which is feasible and one on which I can be satisfied on the balance of probabilities occurred.” (emphasis added)

39    In my opinion this Court must be careful not to engage in an overcritical and hairsplitting analysis of reasons for judgment but must look at them as a whole to see whether the proper principles have been stated and applied. There is no doubt in this case that his Honour appreciated and stated how he should approach the exercise of determining liability on the evidence. Unfortunately the last sentence quoted, which is at the heart of the ultimate decision, can, I think, fairly be read as a conclusion that because the Nominal Defendant’s case of conspiracy to perpetrate a fraud had failed this permitted the Judge to accept the opponents’ account of the collision on the balance of probabilities.

40    Had this followed acceptance in other parts of the reasons for judgment of the opponents’ evidence on crucial issues, any apparent connection or blurring of the Nominal Defendant’s failure to satisfy the Judge on the probabilities of fraud and the need for the opponents to satisfy the Judge on the probabilities that the accident occurred as they said, would almost certainly not have mattered. But there is no such acceptance of the opponents’ evidence on crucial questions. How the accident happened is left in the judgment as a matter of serious doubt, a matter about which it is difficult if not impossible to come to a confident conclusion. Right at the end of his judgment, Judge Phegan repeated that there remained very considerable doubt in his mind about what happened. In dealing with these doubts on the opponents’ case, all his Honour said was that he had, with very considerable difficulty, come to the conclusion that the liability of the Nominal Defendant had been established.

41    In my opinion, the Nominal Defendant can legitimately say that read as a whole but with particular regard to the sentence I most recently quoted, his Honour came to this conclusion because not satisfied that the Nominal Defendant had established a conspiracy by the opponents to perpetrate a fraud. It follows, in my opinion, that the judgments and orders in favour of the opponents must be set aside.

42    Mr Hoeben relied upon the passage which I have quoted from the judgment of Dixon J in Briginshaw v Briginshaw to submit that his Honour’s expressions of doubt should be treated as representing a conclusion by the trial Judge that the opponents had not made out their case on the probabilities and that, accordingly, this Court should substitute a judgment in each proceeding for the Nominal Defendant. However, I do not think that this approach can be taken.

43 In my opinion, and with due respect, it is not clear from the reasons for judgment that Judge Phegan correctly addressed the question of whether on the balance of probabilities the opponents had made out their case. As I have said, there is an absence of crucial findings. That being so it seems to me inevitable that the verdicts and judgments for the opponents should be set aside and there should be a new trial but limited to liability; Pt 51 r23 (2) of the Supreme Court Rules 1970. If on the new trial the opponents succeed on liability the findings on damages will remain undisturbed.

44    I propose the following orders:

1. Leave to the claimants to appeal from the judgments and orders of Judge Phegan on 12 March 1999;
2. Appeals allowed;
3. Set aside the verdicts and judgments for the opponents;
4. Remit the proceedings to the District Court for a new trial limited to liability;
5. Costs of the first trial to be in the discretion of the Judge hearing the new trial;
6. Opponents and respondents to pay the claimant and appellant’s costs of the applications for leave to appeal and of the appeal but to have certificates under the Suitors Fund Act 1951 if so qualified.

45    BEAZLEY JA: I agree with Sheller JA.

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