DIMOVSKI v GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES (GIO); ZORANKO v GIO; DURDEVIC v GIO SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CLARKE, MEAGHER and SHELLER JJA 18 May 1995, 27 June 1995 [1995] NSWCA 126 MOTOR VEHICLE ACCIDENT — APPEAL IMPROPER USE OF CREDIBILITY FINDING FINDING BY TRIAL JUDGE NOT BASED ON OBJECTIVE EVIDENCE — RETRIAL ORDERED FACTS There was a motor vehicle accident between two vehicles. The trial judge did not accept that the accident was fortuitous and between two drivers unknown to each other. However, there was no evidence that the appellants had falsified the accident. Although the respondent had successfully destroyed the appellants' credibility, the respondent had not pleaded fraud or conspiracy. HELD Her Honour had acted upon an unproven suspicion that each of the appellants was involved in a deliberate decision to stage the accident. However, her Honour can only act on the evidence in the light of the issues raised in the case. Her Honour had misused findings on credibility in a significant way which could and should be seen to reflect on the judgment as a whole. Her Honour made critical findings on credibility in relation to the damages claims without carrying out any analysis of the medical evidence to determine whether, and to what extent, the two appellants' complaints were supported by objective evidence. The appeal is thus allowed. ORDERS (1) Appeals allowed; (2) Judgment of Karpin DCJ of 20 July 1993 set aside; (3) In lieu thereof direct entry of judgment for each of the plaintiffs and remit the matters to the District Court for the assessment of damages in each case; (4) The respondent should pay each of the plaintiff's costs of the hearing at first instance and of the appeal. Clarke JA At about 6.30am on 19 June 1985 a Hughes Hire Car mini bus, driven by Dzardz Malaj crashed into the rear of a stationary Holden, the driver of which was the appellant, Durdevic, in Regent Street, Chippendale. The evidence given by Durdevic established that he had been driving his vehicle in a northerly direction in Regent Street when he was forced to stop by traffic control lights and while stationary was struck from behind. The driver of the mini bus, Malaj, died before being able to give evidence and therefore gave no oral evidence. Nor was there any written statement from him. The appellants Zoranko and Dimovski, who were passengers in the mini bus and Durdevic sued claiming they had received significant injuries in the accident and the case was heard by Judge Karpin for three days in December 1991 and two days in August 1992. She gave judgment for the respondent, the Government Insurance Office, on 20 July 1993. Her Honour accepted that Durdevic was the driver of a vehicle which was stationary at traffic lights in Regent Street at about 6.30 am at which time he claimed that without warning the mini bus driven by Malaj collided with the rear 2 UNREPORTED JUDGMENTS of his vehicle. Her Honour noted that following the accident police attended the scene and all the plaintiffs were conveyed to hospital by ambulance. Her Honour observed that the respondent did not dispute that at about 6.30 am on 19 June 1985 in Regent Street, Chippendale, these vehicles came into collision, nor that Dimovski and Zoranko were travelling in the vehicle driven by Malaj. She stated that Const. (later Sgt.) Soames attended at the scene, produced a traffic accident report and took statements from each of the parties involved. According to his notes there were no independent witnesses. Having made those observations her Honour dealt at length with the evidence of each of the appellants concerning the surrounding circumstances and the injuries they sustained. Neither of the passengers was able to say much more than that he had been in the mini bus when the collision occurred and Durdevic's evidence as to being struck in the rear was not questioned. In summing up her Honour made a number of general observations which bear repeating: "They (the plaintiffs) have based their respective cases upon a version of the events which requires the court to accept that at 6.30am on 19 June 1985 Dimovski and Zoranko, who admittedly were friends, were travelling in a bus driven by a man unknown to them, and that a collision occurred with the rear of another vehicle driven by a man unknown to any of the occupants of the bus.... In order to find for the plaintiffs it is axiomatic that the Court be able to find on the balance of probabilities that this was a fortuitous accident occurring between drivers who were strangers, to each other, and that the only persons who knew one another were the two passengers in the bus, Dimovski and Zoranko. That is the case the plaintiffs have brought to this Court. In relation to all three of these plaintiffs, I have formed the view that no reliance can be placed on their evidence. Each of them showed an absolute determination to deny facts which they believe would not assist their case, to evade questions which they thought were not helpful to their case, to tell outright and unabashed untruths and, particularly in relation to Zoranko and Dimovski to give absurd explanations when it became clear that the answers they had provided would not stand. Although the onus of proof in civil cases is not high there is a threshold below which plaintiffs cannot drop. Each of these plaintiffs falls well short of the threshold which would allow the Court to come to the view that the plaintiffs could succeed. It is no part of the function of the Court to pick through evidence of plaintiffs for such evidence as will support the plaintiffs' case ignoring substantial areas of unreliable, and in my view, dishonest evidence. The mere fact that there was undoubtedly a collision between these two vehicles does not take the plaintiffs to the threshold.... The court must be satisfied that it was a fortuitous accident between drivers of vehicles unknown to one another, because, as I say, that is the case the plaintiffs have mounted. The evidence of these three plaintiffs falls so far short of that position that I have no hesitation in finding a verdict in favour of the defendant on the threshold question of liability in each case." It is this finding which the appellants challenge. Two points should be made at the outset. The first is that the respondent did not plead a conspiracy nor did he put to the appellants in the course of their evidence any questions which suggested that the accident was not a genuine one. He certainly cross-examined them in an endeavour, successful in the event, to destroy their credit. But at no stage did he challenge their accounts of the accident, albeit that two of the appellants knew very little of what had occurred. Her Honour was alive to these facts as is demonstrated by the following WRVOVSKI v GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES (GIOZ ZORANKO v GIO; DURDEVIC v GIO (Clarke JA) "The evidence adduced by the defendant could not, in my view, establish fraud. There is not evidence which would lead to a finding that this plaintiff (Dimovski) was involved in a conspiracy to stage an accident and claim damages." She went on to say that such a conclusion did not inevitably lead to a verdict for the plaintiff upon whom lay the onus of establishing his case on the balance of probabilities. Because she could not accept him as a witness of truth she found a verdict for the defendant in his case. In the second place there was the evidence of Const. Soames who was not cross-examined on his observations and which her Honour mentioned in passing only. When he arrived at the scene of the accident he observed the front vehicle approximately three-quarters of the way through the intersection of Regent and Lee Streets and then the small mini bus which had collided with the rear of that vehicle. He considered that, bearing in mind the age of the front vehicle and the nature of the extensive damage, it was a write-off. The mini bus also had sustained significant damage because it had to be towed away. In response to a question about the severity of the accident he said: "Upon my arrival I was quite confident that persons were injured to the point that I might have required a rescue squad. After a short time there I was able to ascertain that the persons were not that badly injured but it was still necessary to call the ambulance." Const Soames observed skid marks approximately six metres in length, apparently left by Durdevic's vehicle. The constable's P4 Traffic Accident Report was tendered and it included the following summary: "As vehicle 2 (Durdevic) was stationary at a red traffic control light in Regent Street at the intersection of Lee Street vehicle 1 (Malaj) ran into the back of vehicle 2." His occurrence pad entry was also tendered and that included a reference to Malaj driving his vehicle at "a stated speed at 50 kph". There was, therefore, adduced before the Court clear and compelling evidence that an accident happened in the manner suggested by the cases advanced by the appellants which evidence was not directly challenged either in cross-examination or by the leading of contradictory evidence. A conspiracy was not pleaded. Indeed it was found a conspiracy had not been made out. That is not surprising for there was no evidence that Dimovski and Zoranko knew the driver of the hire car. Nor was there evidence that at the time that the accident happened they knew DurdeVic. It is true that Durdevic said that before the accident he did not know Zoranko but may have seen him and that since the accident he had seen him in premises at Alice Street, Newtown. This evidence could not, in my opinion, establish fraud on the part of Durdevic or his participation in a conspiracy as her Honour recognised when she said: "Whilst the facts of the motor vehicle accident were not in issue the circumstances in which it occurred were (a distinction which I find difficult to grasp). Or to put it bluntly what was suggested by the defendant without pleading fraud, or suggesting that fraud could be established, was that the accident was not fortuitous but was the result of deliberate action on the part of one or more of the persons involved." In my opinion the contention put by counsel for the respondent was not open in the circumstances of the case. Not only was it not open but it was expressed in terms which were meaningless in the context of the cases before the court. To 4 UNREPORTED JUDGMENTS say that the accident was the result of the deliberate action of one or more unidentified parties provided the judge with no basis upon which to reject the claims. Even if her Honour had concluded favourably to the respondent on this submission that conclusion could not in the circumstances found proved have justified a verdict for the respondent against, for instance, DurdeVic Such a verdict could only have been justified if her Honour had been satisfied that Durdevic was a person involved in the deliberate falsification of the accident. If that was not proved against him there was no basis for denying him his verdict even if (and this was not the case) the judge had found that, for instance, Malaj faked the accident. Quite apart from those considerations what the respondent was doing, according to her Honour's statement, was putting another label on the conduct which he attributed to the appellants. In circumstances where he had not pleaded fraud or conspiracy and had not put one question to any of the appellants suggesting that he had been guilty of fraud or had deliberately faked the accident it simply was not open to put the contention to which her Honour referred. To subvert a basic rule of procedural fairness and justice by making the charge against unnamed persons exposed not only the lack of substance in the submission but the lack of a basis in law for denying the appellants their verdicts on the proven facts (see the discussion on the topic of procedural fairness in Ghazal v GIO (1992) 29 NSWLR 336). What in essence counsel was inviting her Honour to do in this case was to act on the unproven suspicion that each of the appellants was involved in a deliberate decision to stage the accident. In my opinion it was not open to counsel to put this submission to the court and it was not open to her Honour to act upon it as she did. Although her Honour couched her decision in terms of the onus of proof it is clear to me that she denied the appellants a verdict, despite proven facts which entitled them to one, because of unproven suspicions generated during the cross-examination on credit. I take it to be basic that a court is not entitled to act on unproven suspicions. It must act on the evidence in the light of the issues raised in the case. Unfortunately, her Honour did not heed this basic principle. Take the case of DurdeVic Her Honour found that he "was the driver of a motor vehicle which was stationery (sic) when it was struck from the rear". The police officer established that he had been stationery at traffic control lights. He was, on the findings and the evidence of the police officer, entitled, prima facie, to a verdict. No doubt the prima facie case may have been answered by, for instance, cogent proof that the brakes on the other vehicle had failed in circumstances imputing no negligence to the driver. But it could not be answered by unproven suspicions, whether or not counsel had squarely raised the issue during the trial. I accept there may be circumstances where a judge may not be satisfied that an accident happened in the manner asserted by the plaintiff even though there is no contradictory evidence in the case. This has occurred in, for example, cases involving the nominal defendant (see Askarou v Nominal Defendant ([1989] 8 MVR 491) where there is evidentiary material which contradicts, in material respects, a plaintiffs version of an accident or the circumstances surrounding an accident. But in this case the position is quite different. The judge accepted that the plaintiffs Zoranko and Dimovski were passengers in the mini bus. She accepted that an accident happened between the mini bus and the vehicle driven by DurdeVic She accepted that Durdevic's vehicle was stationary at the time of the accident and she accepted that the vehicle driven by Dzardz Malaj struck the UWRVOVSKI v GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES (GIO® ZORANKO v GIO; DURDEVIC v GIO (Clarke JA) rear of the stationary vehicle. It is not surprising that she made those findings for the evidence given by the police officer was powerful support for those conclusions and a contrary finding would, arguably, have been perverse. In these circumstances, as the trial judge recognised, a finding in favour of all three plaintiffs against Dzardz Malaj would follow almost as night follows day unless the evidence revealed a basis upon which the judge could properly conclude either that she was not satisfied that the accident happened in the way suggested or that there had been fraud or conspiracy or something of that nature. Neither fraud nor conspiracy were pleaded. Neither was alleged and her Honour expressly rejected conspiracy. She was correct to do that because the evidence did not support, and could not have supported, such a finding. Although, subject to what follows, it is not open to the appellants to challenge her Honour's findings on credibility, and they were extremely adverse to all three plaintiffs, the findings were based primarily on the cross-examination of each of the appellants upon their allegations of injury and incapacity, and also upon associations they may have had since the accident. These cross-examinations may well have raised suspicions in her Honour's mind. Once, however, her Honour rejected fraud and conspiracy and once it is understood that there was no basis for any such charge it is difficult, if not impossible, to understand any other basis for her Honour's lack of satisfaction than unproven suspicions. If that were all it is clear that the verdict could not be sustained as her Honour drew upon unproven suspicions in answer to what was a prima facie case of negligence. But the matter did not rest there for at no stage during the hearing did counsel for the respondent ever seek to put to any of the witnesses the charge that they were involved in a fraudulent exercise. During the hearing of the appeal counsel informed the court that he launched a vigorous attack on the credit of each of the three plaintiffs and he asserted that they could have been under no illusions as to the existence of an issue on liability. While it is clear counsel did attack the plaintiffs' credibility, and substantially succeeded in his attack, his challenge rose no higher than destroying their credit and tending to raise suspicions about the genuineness of their claims that they had received significant injuries. Notwithstanding the success of the attack it failed to expose any 'putting of heads together' or even that the two passengers knew Dzardz Malaj prior to the accident. This would have been a critical factor in the proof of any conspiracy. There was, as it seems to me, no basis upon which an unlawful agreement could have been found, and unproven and unjustified assumptions that there might have been something of that nature do not justify the verdict or answer what was the clear prima facie case of negligence established. It was also submitted by counsel for Durdevic that there were errors which infected her Honour's conclusions as to his credibility. In this context it was contended that her Honour was clearly influenced in her conclusion as to Durdevic's credibility by her adverse reaction to the two other plaintiffs and that the matters to which she referred in the judgment could not possibly support a conclusion that his credibility was utterly destroyed. In my view there is substance in some of these submissions, particularly in regard to her Honour's conclusion that in saying he did not know Malaj was a Yugoslav name Durdevic gave an answer 'almost contemptuous in its absurdity'. It may be that her Honour has particular knowledge not enjoyed by other judges as to the origin of the name of Dzardz Malaj but, quite apart from the impermissibility of using personal knowledge which does not qualify as common knowledge, this evidence was a 6 UNREPORTED JUDGMENTS very thin reed on which to reject the credit of the witness. It is not necessary to embark on a detailed consideration of these submissions for the hearing was limited to the question of Durdevic's entitlement to a verdict and my finding that the verdict against him cannot stand means that it is unnecessary further to examine the question of his credibility. The same does not apply in respect of the plaintiffs Dimovsky and Zorenko because the respondent has asked that this Court assess the damages upon the basis of the trial judge's findings on credibility. There is much to be said for an assessment by this Court because that would save both time and cost. On the other hand her Honour has, in my opinion, misused findings on credibility in a significant way which could and should be seen to reflect on the judgment as a whole. Of equal importance is the fact that her Honour made critical findings on credibility in relation to the damages claims without carrying out any analysis of the medical evidence to determine whether, and to what extent, the two appellants complaints were supported by objective evidence. On the contrary, in the case of Zoranko she said, understandably, that in the light of her conclusions it was pointless to summarise the various medical reports which were tendered. She then went on to say "It is clear from reading these reports that there were no objective signs of injury, even of an underlying condition, which may have been exacerbated". In his written submissions counsel for Zoranko pointed out that there were at least six separate pieces of evidence which could properly be considered to be objective evidence which provided powerful support for Zoranko's complaints of a knee and a back injury. There was, for instance, Dr Amin's finding of swelling and bruising over the left knee and spasm of the para-spinal muscles of the thoracic and lumbar spine on 15 August 1985. There was the report of the Royal Prince Alfred Hospital of 12 September 1985 which noted evidence of bruising over the left patella. Both Dr Williams, in a report of 26 June 1985, and Dr Ellis, in a report of 14 January 1985, noted that radiological films demonstrated a tiny fleck of bone behind the lateral facet of the left patella. Dr Williams also noted spasm in the supporting musculature of the thoracic spine and Dr Lim, in a report of 14 September 1987, noted muscle spasm of the lumbar spine. These could readily be understood as objective evidence, or at least some of them could. Her Honour seems, in her conclusions, to have overlooked these or, for reasons which were not exposed in the judgment, to have reached the conclusion that they were not objective signs. In my opinion it is impossible for this Court to proceed and assess the damages due to Zoranko in the absence of an analysis of the damages claim, including the objective support for it, by the trial judge who made such adverse findings on credibility. It follows that I do not think it appropriate that this Court proceed to an assessment of Zoranko's damages and, in those circumstances, I would not be disposed to embark on that task in respect of Dimovski. For these reasons I would allow the appeals and remit the matters to the District Court for an assessment of damages. The following orders should be made in each case: (1) Appeals allowed; (2) Judgment of Karpin DCJ of 20 July 1993 set aside; (3) In lieu thereof direct entry of judgment for each of the plaintiffs and remit the matters to the District Court for the assessment of damages in each case; (4) The respondent should pay each of the plaintiff's costs of the hearing at first instance and of the appeal. Meagher JA I agree with Clarke JA. WRVOVSKI v GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES (GIOY, ZORANKO v GIO; DURDEVIC v GIO (Sheller JA) Sheller JA I agree with Clarke JA. q) (2) (3) (4) Appeals allowed; Judgment of Karpin DCJ of 20 July 1993 set aside; In lieu thereof direct entry of judgment for each of the plaintiffs and remit the matters to the District Court for the assessment of damages in each case; The respondent should pay each of the plaintiff's costs of the hearing at first instance and of the appeal. COUNSEL: Appellant - K KEESING for Dimovski and Durdevic K ANDREWS for Zoranko Respondent - A P QUINLIVAN SOLICITORS: Appellant - MILICEVIC for Dimovski and Durdevic McGRATH DICEMBRE for Zoranko Respondent - SOLICITORS FOR THE NEW INSURANCE MINISTERIAL CORP