Suncorp Insurance and Finance v Hill

[1998] QCA 112

IN THE COURT OF APPEAL	[1998] QCA 112
SUPREME COURT OF QUEENSLAND

Appeal No. 2029 of 1997

Brisbane

Before Fitzgerald P.
Davies J.A.
Williams J.

[Suncorp v. Hill]

BETWEEN:

SUNCORP INSURANCE AND FINANCE

(Defendant) Appellant

AND:

GLYNN ROBERT HILL

(Plaintiff) Respondent

REASONS FOR JUDGMENT - FITZGERALD P.

Judgment delivered 29 May 1998

The circumstances giving rise to this appeal are set out in the reasons for judgment of Williams J. I am

in general agreement with his Honour’s reasons in relation to liability,[1] and propose only to make brief

[1]             Because it is unnecessary to do so, I have not given attention to the damages awarded by the respondent. However, I note that the award of $50,000 for the respondent’s “loss of opportunity to pursue, to the extent that his diminished capacity would have permitted, employment by participation in the management of a family company’s undertaking” seemed to me unsupported by evidence or principle at the end of the hearing.

comments.

1.          As Williams J. has noted, there are similarities between this case and the decision of the New

South Wales Court of Appeal in NRMA Insurance Ltd v. Tatt.[2] McHugh J.A.’s dissent in that case

[2] (1989) 94 F.L.R. 339.

provides no assistance to the present respondent. His evidence, which was the foundation of his claim,

did not fall for consideration in isolation, or only in opposition to the contradictory testimony of another

witness; “... other evidence and probabilities [were] involved”.[3] It was plainly erroneous for the trial

[3]          Soulemezis v. Dudley (Holdings) Pty Ltd (1987) 10 N.S.W.L.R. 247 at p. 280 per McHugh J.A.

judge initially to focus solely on an assessment of the respondent as a witness, and, only after he had

accepted the respondent as credible, to make “precautionary” findings with respect to matters which

were relevant to the crucial issue of the respondent’s credibility which he had predetermined. This error

was exacerbated by the rejection of vital evidence by the respondent which was adverse to his interest.

2.          While the cause of the fire might not have been able to be completely isolated from other issues,

it was central to the dispute. The determination of that matter, even if only in the negative sense of a

finding that the appellant’s expert’s evidence did not persuade the trial judge to the requisite standard

that his opinion was correct or that the opinion of the respondent’s expert was incorrect, was critical.

The trial judge erroneously failed to make sufficient findings with respect to the cause of the fire and to

adequately explain his reasons for those findings.[4]

3.          The deficiencies in the approach adopted by the trial judge are emphasised by the consideration

that the appellant’s case was, predictably, circumstantial. The failure to make findings with respect to

the material circumstances, to consider those circumstances when weighing the respondent’s evidence,

and to explain the reasoning adopted were manifest errors.

[4]             See NRMA v. Tatt; Cypressvale Pty Ltd v. Retail Shop Lease Tribunal [1996] 2 Qd.R. 462.

4. The problems to which reference has been made are illustrated by the circumstance that this Court cannot decide whether the respondent’s claim should succeed or fail. Whatever might be thought of the apparent strength of the respondent’s case, there is no alternative but to order a retrial.

I agree with the orders proposed by Williams J.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 2029 of 1997

Brisbane

Before Fitzgerald P.
Davies J.A.
Williams J.

[Suncorp Insurance and Finance v. Hill]

BETWEEN:

SUNCORP INSURANCE AND FINANCE

(Defendant) Appellant

AND:

GLYNN ROBERT HILL

(Plaintiff) Respondent

REASONS FOR JUDGMENT - DAVIES J.A.

Judgment delivered 29 May 1998

I agree that the appeal must be allowed for the reasons stated by Williams J. I also agree

with the further comments on liability by the President. I also share their Honours' view that, had it been

necessary to consider it, the award of $50,000 for loss of opportunity was unsupportable.

I agree with the orders proposed by Williams J.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No.2029 of 1997

Brisbane

Before Fitzgerald P

Davies JA Williams J

[Suncorp Insurance and Finance v Hill]

BETWEEN:

SUNCORP INSURANCE AND FINANCE

(Defendant) Appellant

AND:

GLYNN ROBERT HILL

(Plaintiff) Respondent

REASONS FOR JUDGMENT - WILLIAMS J

Judgment delivered 29 May 1998

There is no doubt that on 17 August 1993 the home owned by the respondent - plaintiff at 195

California Creek Road, Cornubia, was destroyed by fire. As at that date there was a policy of

insurance issued by the appellant - defendant which covered those premises for loss by fire. The

appellant declined to pay out on the loss because it contended that the fire was deliberately lit by the

respondent. In consequence the respondent sued in the District Court for $200,000 damages for

breach of contract. In its defence the appellant relied on the exclusion clause which related to damage intentionally caused. In other words, the principal issue at the trial was whether or not the respondent

had deliberately started the fire.

The trial lasted eight days. There were 22 witnesses whose evidence took up approximately

600 pages of transcript, and 70 exhibits. The witnesses included both lay persons and experts; each

side called an expert in arson detection.

The learned District Court Judge gave brief reasons for concluding that the appellant “has not

proved that the plaintiff intentionally lit the fire”. He went on to assess damages, and included in his

award $50,000 compensation for “the plaintiff’s loss of opportunity to pursue, to the extent that his

diminished capacity would have permitted, employment by and participation in the management of a

family company’s undertaking.” By the appeal the appellant primarily challenges the conclusion that it

had not proved arson by the respondent, and further, it challenges the award of $50,000 as

compensation for the loss of opportunity.

The principal ground of appeal on the issue of liability is that the learned Trial Judge erred in law

“in failing to give adequate reasons” for his conclusion. There are associated grounds alleging that the

learned Trial Judge failed to address the evidence given by the appellant’s forensic scientist, failed to

address the issue of the respondent’s motive to light the fire, and failed to address the issue of the

respondent’s opportunity to light the fire. The allegations in the notice of appeal with respect to the

$50,000 are that the learned Trial Judge failed to give adequate reasons for that finding, that there was

no evidence capable of supporting that finding, and that in any event the award was manifestly

excessive.

The issue of liability was determined in the second paragraph of the reasons given by the learned

Trial Judge which is to the following effect:

“I have concluded that the insurer has not proved that the plaintiff intentionally lit the fire. The insurer’s case on the evidence is circumstantial. It includes no evidence of any confession by the plaintiff. To assess the accuracy and reliability of the evidence received, I have considered the whole of the evidence carefully and with very substantial reliance upon how the received evidence, including the many gestures and expressions, was given. To support the inference of fact for which the insurer contends, it submits, as it must, that the plaintiff’s evidence that he did not light the fire is neither accurate nor reliable. That submission of lack of accuracy and reliability becomes part, a necessary part, of the insurer’s urged circumstantial case on the evidence. I have assessed to be both accurate and reliable the plaintiff’s evidence that he did not light the fire either intentionally or unintentionally - the insured’s case being an allegation of intentional setting by and only by, the plaintiff. That assessment of the plaintiff’s evidence necessarily precludes the upholding of the inference or conclusion of the ultimate fact which the insurer pursues.”

In other words the learned Trial Judge resolved the critical issue of fact by making a finding of credibility

in favour of the respondent. It is clear from a reading of the reasons as a whole (they are very brief,

occupying five pages in all) that it was the learned Trial Judge’s assessment of the plaintiff as a witness

whilst in the witness box which determined the issue of credibility. It is not a case where, for example,

confirmation of the evidence of a witness was found elsewhere and such circumstance was relied upon

by the Trial Judge in determining that the particular witness should be accepted as credible.

After disposing of the issue of liability in the paragraph quoted above the learned Trial Judge

went on to deal with quantum. Having dealt with all issues relevant to quantum he returned to some

questions which had been raised (undoubtedly in Counsel’s submissions) with respect to liability. He

introduced his discussion of three particular questions by saying:

“Useful precautionary conclusions of fact cannot be formulated when, to do so, requires either the assumption of facts inconsistent with or contrary to those determined by the primary Court or the assumption that accepted evidence is ignored; and that is so where, as here, the case put is a circumstantial case on the facts in which the primary Court, when determining whether the ultimate inference pursued is to be upheld or not, must act upon the entire of the evidence assessed to be accurate and reliable.”

There was a footnote reference to the phrase “precautionary conclusions” which directed the

reader to the decision of Pincus J in Atkinson v Hastings Deering (Qld) Pty Ltd (1985) 8 FCR 481.

In that case the plaintiff lost on the issue of liability and the trial judge considered the question of

assessing damages “in any event”. At 491 he said: “The findings which follow are made on a hypothesis

as to liability - that is, on the assumption that I am wrong in my conclusion on that aspect and that I

should have found the respondent liable on the basis that the tractor was not suitable for the intended

purpose . . .”. When a trial judge carries out the exercise of assessing damages “in any event”, it must

be done on the basis of hypothetical findings of fact which would ordinarily be particularised in the

reasoning.

That is not the situation which faced the learned Trial Judge here. It appears that he was

equating the term “precautionary facts” with the hypothetical facts referred to by Pincus J. But he was

not making alternative findings. In essence he was dealing with questions of fact, which in his opinion,

were not necessary for his determination of liability, but which had been the subject of argument. This

is a vastly different situation from Atkinson and the use of an expression such as “precautionary

conclusions of fact” is not helpful.

Thereafter the learned Trial Judge referred to the three questions in some detail, but it is clear

from reading the reasons as a whole that these “precautionary facts” played no significant role in the

reasoning which led to his conclusion that the appellant had not established arson. The three matters

were:

(i)          evidence as to a “fire trail”;

(ii)         the length of time the respondent was absent from the house;

(iii)        the place where the fire started.

It is helpful to consider each in some detail.

The first question the learned Trial Judge considered was whether or not the evidence proved

that there was a “fire trail” on the fire damaged floor carpet in and near the hall way. He expressed the

view that the evidence was equivocal as to whether or not there was such a “fire trail”, but accepted that

there was fire damage in a “straight line” pattern on the floor. He went on to state that the “opinions

content of the expert evidence received on this point I assess to be accurate and reliable”, and

expanded on that by observing that one of the experts (called by the appellant) was of opinion that

“damage of that description could be caused by a fire following a trail of pre-laid accelerant”, while the

opinion of the other expert (called by the respondent) was that such damage “could be caused by a

protective object either being upon or having fallen upon the floor in such a way as to protect part of

the carpet from fire”. There was other evidence which suggested the possibility of a protective object

falling on to the floor during the progress of the fire. That led to the learned Trial Judge stating his

conclusion that “this particular part of the whole of the evidence to which I am referring does not prove

but has left as equivocal whether there was or was not a “fire trail” present.”

Counsel for the appellant made a number of submissions on that passage. Firstly, the learned

Trial Judge appears to have limited his consideration of the “fire trail” to the indication of that “in and

near” the hallway. The evidence from Nystrom, the appellant’s expert, detailed a more extensive area

than that. Further, the evidence as to “a fire trail” was not considered and analysed in the light of the

totality of the evidence as to the cause and spread of the fire. A significant part of the analysis of the

fire made by Nystrom was that the evidence of a fire trail, in the context of a number of other relevant

matters, strongly suggested the use of an accelerant. Nystrom recognised that some of the “fire trail”

could possibly be explained by the presence of a protective object, the favoured theory of Casey (the respondent’s expert), but ultimately he rejected that theory when all he regarded as relevant factors

were brought into account.

The learned Trial Judge was probably correct in concluding that if one looked at the hallway

area alone, then it would be difficult, if not impossible, to prefer one theory to another. What is of real

significance for present purposes is that it cannot be said that the learned Trial Judge directed his mind

to the totality of Nystrom’s evidence and concluded that the evidence as a whole did not support his

theory that an accelerant was used and evidence of its use was to be seen in the fire trail.

The second question addressed as a “precautionary fact” related to the period of absence of

the respondent from the home prior to the fire being noticed. The learned Trial Judge said that the

respondent’s “post-damage estimate that he was absent from the house for less than ten minutes is, I

would have concluded, an inaccurate estimate”. He went on: “I would have concluded that the evidence

of distances, time, activity, and the plaintiff’s apparent stress and worry after the fire was seen by him

would have supported the conclusion that he was absent from the residence for much more than ten

minutes.”

The learned Trial Judge made no attempt to rationalise those assessments with his earlier critical

conclusion that the respondent’s evidence was “both accurate and reliable”. As senior counsel for the

appellant contended, an impartial reader of the reasons for judgment could well query the extent to

which, if at all, the learned Trial Judge took that inaccuracy on a very vital matter into account before

concluding that the whole case on liability could be resolved by accepting the respondent’s evidence

as being “accurate and reliable” on the critical issue.

Further, it should also be noted that the learned Trial Judge did not refer in any detail to the circumstances in which the respondent initially made the estimate of “less than ten minutes”, nor did he refer to other evidence which might be regarded as confirming that time estimate. Clearly the learned

Trial Judge recognised that there were difficulties in reconciling the respondent’s evidence that he was

absent for “less than ten minutes” with the conclusion that he was not responsible for lighting the fire.

That problem cannot be overcome, at least rationally, merely by saying that the time estimation was

inaccurate.

The third “precautionary conclusion” considered by the learned Trial Judge related to the place

where the fire commenced. His Honour came to the conclusion that it “commenced within the lounge

room within the residence near to the externally installed electrical switchboard”. It is clear from that

statement that the reference to the external switchboard was merely to give a point of reference. When

one looks at the whole of the evidence it is clear that the external switchboard was different from the

power board which Casey considered was the origin of the fire. What is of vital importance for present

purposes is that Casey and Nystrom agreed that the origin of the fire was in the general area of the

lounge room identified by the learned Trial Judge in his reasons. In consequence such a finding did not

necessarily support the ultimate conclusion arrived at by the learned Trial Judge, namely that the

respondent did not light the fire.

A consideration of those three issues makes it clear that the “precautionary facts” discussed by

the learned Trial Judge, and his conclusions in relation thereto, afforded no support to his ultimate

conclusion that the appellant had not proved that the fire was deliberately lit by the respondent. All of

his findings expressed in those paragraphs could have been used as part of the chain of circumstantial

evidence establishing that the fire was deliberately lit, and deliberately lit by the respondent.

It should also be noted that in the penultimate paragraph of the reasons for judgment the

following observation was made:

“A separate observation which should be made is that the treatment of the expert evidence received at this hearing made its assessment and application unnecessarily difficult. All of the expert evidence received disclosed that, in its preparation and, therefore, its presentation, no attention was given to the distinctions between first, primary facts within the experts direct personal knowledge, second, primary facts which the expert was intended to be requested to assume, third, the opinion content of the expert evidence, and, fourth, the need for the opinion evidence received to identify those facts which must be proved to have been in existence to justify the application of the sworn opinion if it be assessed to be accurate and reliable.”

I must confess to some difficulty in understanding the point made in that passage. A reading of

the reports of both experts generally indicates what were considered to be the material facts, the

process of reasoning, and the conclusion. If the evidence in chief and cross examination is considered

in the light of the reports there is, in my respectful view, no basis for criticising the evidence on the basis

that the distinction between fact and opinion was blurred. It was, of course, for each party to establish

by evidence admissible at the trial those facts on which that party’s expert evidence was dependent.

If any critical fact was not established by evidence then the necessary foundation for the opinion

evidence was removed.

Careful reading of the reasons for judgment does not support the submission made by Counsel

for the respondent that the learned Trial Judge “accepted the expert evidence of Mr Casey and did not

accept that of Mr Nystrom.” Certainly the learned Trial Judge did not say that expressly. On the

question whether there was a “fire trail” in the region of the hallway he was unable to decide between

the conflicting expert opinions. On the question where the fire commenced, his finding was consistent

with the evidence of each expert. From that it cannot be deduced that he accepted either expert in

preference to the other. Certainly he made no analysis of the overall evidence of either expert witness.

Indeed that is one of the complaints made on behalf of the appellant. No reason has been given for rejecting (if that be the case) the detailed evidence given by Nystrom. If that evidence was rejected

then, because it was the essence of the appellant’s case, the appellant was entitled to know why.

Nystrom could well be regarded as a highly qualified and experienced arson investigator. He

examined the scene of the fire over some nine hours on the day following the fire. He inspected the

scene again some years later shortly before the trial. His report was lengthy and detailed, as was his

oral testimony. For reasons expanded on in the report and oral evidence he concluded that the fire had

been deliberately lit and an accelerant used. In his oral evidence he stated that the inability to detect

residues of an accelerant did not mean that none was there prior to the outbreak of the fire. His

conclusion that the fire was deliberately lit and an accelerant used was also in part based on evidence

as to the spread of the fire and the time it took to reach the ceiling. None of those matters was

canvassed at any length in the reasons for judgment. The appellant does not know why that evidence

was rejected. The rejection is not logically explained simply by saying that the respondent is believed

when he says he did not light the fire.

Further, as already noted, there was no analysis of Casey’s evidence, nor any comparative

evaluation of the totality of Casey’s evidence with that given by Nystrom. Casey’s assessment, based

on an inspection over three years after the fire, was essentially that electrical malfunction was a possible

cause of the fire. Again that particular hypothesis was not specifically addressed in the reasons for

judgment.

There were a number of other circumstances relied on by the appellant as pointing to the fact

that the fire was deliberately lit by the respondent. The most significant of those circumstances can be

broadly stated as follows:-

(i)          The respondent was in tight financial circumstances. He had numerous debts which he

was unable to pay as they fell due. He was in default in making repayments to his bank,

and in consequence the bank had threatened to place his name on a credit defaulters

list.

(ii)         The respondent was in arrears in making repayments to the building society on his house

loan. He had received a number of default notices with respect to that. A notice of

intention to exercise power of sale had been served on him on 19 July 1993 giving him

30 days to remedy the default.

(iii)        The respondent did not readily admit the extent of his financial difficulty. He was

evasive under cross examination, and only admitted, for example, service of the notice

of intention to exercise power of sale when the document itself was produced to him.

(iv)        The insurance on the house expired the day after the fire and he could not afford to pay

the renewal premium.

(v)         His sole employment was with a family company business which was not successful.

The company had borrowed heavily and was in default. The respondent had received

no income for about two years and was living on his wife’s Social Security payments.

(vi)        On the evening in question the respondent and his family (wife and children) left the

house on his own statement “no more than ten minutes before the fire”. The family left

in a group taking the dogs with them. That was an unusual circumstance.

(vii)       A short time after the family left the home it was well and truly ablaze.

None of those matters was adverted to in the reasons for judgment, but it is obvious that a

number were relevant to the credibility of the respondent. Given what was said in the critical passage

from the reasons quoted above, one does not know what regard, if any, the learned Trial Judge had to

these matters in determining the issue of credibility. One does not know, for example, whether some

of the “many gestures and expressions” alluded to were such that it was concluded that the matters just

particularised should bear little weight.

It is also true, as emphasised by Counsel for the respondent, that the weight of evidence was

to the effect that the respondent did not stand to gain financially from setting fire to the house. Certainly

that was a matter which had to be taken into account when evaluating the significance of the matters

referred to above as part of the appellant’s circumstantial case. It is not for this Court to assess what

weight should be accorded to that relevant matter.

The failure of a trial judge to give sufficient reasons for making findings of fact critical to the

resolution of the litigation has been considered in a number of cases. This Court dealt with it in some

detail in Cypressvale Pty Ltd v Retail Shop Leases Tribunal [1996] 2 Qd.R.462. The New South

Wales Court of Appeal also considered the topic in NRMA Insurance Ltd v Tatt (1989) 94 FLR 339,

a case which was remarkably similar to that now under consideration. Of the other authorities reference

need only be made to Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 and King

Ranch Australia Pty Ltd v Cardwell Shire Council [1985] 2 Qd. R. 182. As was pointed out in

Cypressvale the obligation to give reasons varies according to the circumstances of the particular case.

Fitzgerald P said there, at 476-7: “The broad principle deducible from the cases is that the decision-

maker is required to give reasons which disclose what was taken into account and in what manner, and

thus whether an error has been made. . . . There have been many attempts to elaborate; indicating for example, the need for findings of fact, usually related at least in broad terms to the evidence on which

each finding is based, and an explanation of the reasoning process; vague general statements, or

unexplained conclusions are not sufficient; . . .”. See also per McPherson and Davies J.J.A. at 482.

In the reasons of the latter it was said at 483: “the extent of the duty to give reasons is affected by the

function that is served by the giving of reasons.”

As already noted, Tatt was a case very similar to the present. There was detailed evidence of

particular burn patterns, and evidence as to the speed of spread of the fire, on which an expert based

his opinion that the fire had been deliberately lit. As in this case, the learned trial judge found against

the insurer basing his conclusion on “observation of the respondent’s demeanour” and concluding

primarily because of that credibility finding that the onus of proving arson had not been discharged.

Samuels J.A. (with whom Hope J.A. agreed) noted at 351 that the “appellants primarily complained

of the learned Judge’s failure to make any findings on material issues rather than error in making the

wrong findings.” After referring to some specific matters raised in the evidence he went on: “findings

about all of these matters were, in my view, essential to a proper assessment of the case.” (352). His

Honour then referred to some authorities which dealt with the situation where there was a finding of

credibility which was inconsistent with facts incontrovertibly established. He then, correctly in my view,

pointed out “that the permanent position of advantage enjoyed by the trial judge concerns the resolution

of a question of fact which depends upon a view taken of conflicting testimony”; but the position is

different when, as is the case here, there is a conflict between a mere denial by a witness and expert

opinion to the contrary based on facts supported by some evidence. That led his Honour to say at 352

that it was not a legitimate use of the principle relating to the advantageous position of the trial judge

on questions of demeanour to “apply it to overcome such a body of expert evidence by a favourable appreciation of the respondent’s demeanour. That must be all the more so where, as here, no

examination of the technical evidence rejected is to be found in the judgment”.

Samuels J.A. then went on to say:

“Certainly, it cannot be said that the learned judge gave no reasons; but in my judgment he failed to provide those findings and reasons which enable a proper understanding of the basis upon which the verdict entered has been reached. That point is to my mind sufficiently taken by the grounds of appeal which complain that the Judge failed “to give any sufficient or any consideration to”, amongst other things, the evidence of Mr Carmody and Mr Dowling and the cause of the fire and “failed to take into account” a number of aspects of the scientific evidence. By recording only one side of the judicial equation he has deprived this Court of the opportunity of assessing the weight to be given to the finding on credit, which might thus be accorded far greater cogency than in the whole of the context it properly deserves. It is, to my mind, impossible for a judge to make a finding on credit in a vacuum, as it were, without relating the witness’ evidence, demeanour and particular circumstances to the other material evidence in the case.” (352-3)

Those observations apply with equal, if not greater, force to the present situation.

I am mindful of the strong dissent of McHugh J.A. in that case and that learned Judge’s

observation to somewhat similar effect in Soulemezis at 280 where he said: “. . . where the resolution

of a case depends entirely on credibility, it is probably enough that the Judge has said that he believed

one witness in preference to another . . . the position will usually be different if other evidence and

probabilities are involved.”

In my view the situation here was such that the resolution of the case did not depend entirely

upon credibility. There was, at least arguably, a strong circumstantial case contrary to the oath of the

respondent. It was not sufficient in those circumstances for the learned Trial Judge merely to accept that

the respondent was telling the truth when he denied lighting the fire, and ignore entirely the other

evidence.

In my view in failing to address his mind to the arguably strong circumstantial case against the

respondent in the course of his reasons, the learned Trial Judge fell into error. The unfortunate

consequence is that there must be a retrial.

In those circumstances it is not strictly necessary for this court to consider further the appeal

with respect to the assessment of $50,000 as compensation for loss of opportunity. But as the matter

was fully argued it is desirable that some observations be made thereon.

The learned Trial Judge commenced this segment of his reasons by saying: “I have concluded

that $50,000 is appropriate compensation for the already mentioned loss of an opportunity.” He then

mentioned the “diminished capacity” of the plaintiff which was a reference to the fact that the respondent

had to care for his wife who had been injured in a motor vehicle accident some time prior to the fire.

She was at the material time in need of “extraordinary personal assistance and care”.

The learned Trial Judge referred to the fact that approximately two years prior to the fire the

respondent had “purchased a business” of manufacturing nursery potting mix and selling nursery

supplies. To that end a family company was utilised and the respondent was a director of it. The

business was conducted from a shed erected on the same property as was the house in question. As

the residence was uninhabitable after the fire, and given the family’s financial situation, they were

compelled to live in the shed and that seriously disrupted the business. It was that disruption that gave

rise to the claim for damages under this head. There was evidence that because the family were living

in the shed machinery had to be removed and there were other disruptions to the business activities.

The learned Trial Judge went on to state:

“My conclusion, already stated, is that $50,000 is appropriate compensation for that loss of opportunity both to and after now. That assessment reflects my conclusions in respect of fact, values, and conclusions about the strengths of both past hypothesis and predictions of fact which would have been and would be the uninterrupted history of the plaintiff’s gain from conducting the company’s business. Those strengths are uncertain. The proved primary facts important to those assessments commence with the company incurred trading losses since the plaintiff had effective control of its affairs - losses of approximately $1,877.00, $11,316.00 and $13,340.00 during the income years of respectively 1991, 1992 and 1993. Wages had been paid during the year ended 30 June 1990 but not to the plaintiff. The company business sustained a very severe reversal, which much reduced its activity to, indeed, a temporary activity in late 1991 when the company’s potting mix products were alleged to have been identified as the source of a transmitted Legionnaire’s disease carried by fertiliser and potting mix products of the type manufactured by the family company. Thereafter the company’s activities, under the plaintiff’s control, were restricted to the supply of non-controversial landscaping products, such as palms, natives, mushroom compost, and foul manure. By August 1993, when the fire damage occurred, the company’s business from the shed was very modest and in slow recovery mode.”

His Honour then noted that the company was not a claimant in the action; rather the damage

claimed related to the respondent’s diminished capacity to conduct the company’s affairs and participate

as its employee. Based on some evidence which had been led, His Honour then noted that the

respondent could have earned $131,750.00 nett if employed as a landscape gardener from the date of

the fire to the commencement of the trial, but his Honour did not indicate how that figure was relevant

to the claim for compensation in question.

In my view the learned Trial Judge failed to adequately explain how he arrived at the sum of

$50,000.00 as “appropriate compensation”for the loss of opportunity in question. No loss of

opportunity as such have been pleaded. There was reference in the plaint to losses of the landscaping

business, but the particulars contained therein have no correlation to the approach adopted by the

learned Trial Judge.

In my view it is sufficient to say that there was no evidence which justified a conclusion that the

respondent suffered a loss of the order of $50,000.00 in the circumstances alleged. The business had

always been running at a loss and there was no evidence that, but for the fire, the position would have been any different. In the circumstances it is not necessary to consider the relevance of the reasoning

in Seymour v Gough [1996] 1 Qd. R 89 to the facts of this case.

Even if the finding of liability made by the learned Trial Judge were to stand the assessment of

compensation in the sum of $50,000.00 under this head could not stand.

The respondent seeks a certificate under the Appeal Costs Fund Act if a retrial is ordered.
In my view in the circumstances the costs of the first trial should be each party’s costs in the

cause being the second trial, but there should be a certificate granted covering the order that the

respondent pay the appellant’s costs of the appeal.

My orders would therefore be:

Appeal allowed. Set aside the judgment of the District Court and order a retrial. Order that the costs of each party of the first trial be that party’s costs in the cause being the retrial. Order that the respondent pay the appellant’s taxed costs of and incidental to the appeal. Grant the respondent an indemnity certificate under the Appeal Costs Fund Act with respect to the costs of the Appeal.