HASSAN and Anor v GIO OF NSW SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, COLE and BEAZLEY JJA 3 April 1997, 3 April 1997 [1997] NSWCA 139 Failure of trial judge to give adequate reasons for decision — Pettit vy Dunkley [1971] 1 NSWLR 376; Soulemezis applied. Beazley JA In the early hours of 30 December 1988 the appellant's shop, located at 302 Summer Street, Orange, was damaged by fire. At that time the appellants had a policy of insurance with the respondent which covered loss occasioned by fire. The respondent denied liability under the policy. The appellants commenced proceedings in the District Court seeking indemnity under the policy of insurance. The respondent raised, by way of defence to the claim, that they were not liable under the policy as the fire had been deliberately lit by the first appellant or by someone else with the first appellant's knowledge and acquiescence. The trial judge dismissed the claim, finding that the first appellant had lit the fire. Although two essential points were argued on the appeal, the result of the appeal turns on one issue only. That is whether the trial judge gave adequate reasons for decision. Complaint is made of his Honour's failure to deal in his judgment with the credit of the alibi witnesses. Counsel for the respondent, though not conceding that his Honour's failure was an error of law, was not able to advance any cogent submission as to why it was not. In my opinion it was clearly an error of law: see Pettit v Dunkley [1971] 1 NSWLR 376, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, and later cases where the obligations of a trial judge to give reasons are clearly stated. Subject to the respondent's Notice of Contention, this error requires that there be a new trial. By Notice of Contention, the respondent contended that although his Honour failed to consider whether the fire was lit with the appellant's knowledge and acquiescence, his Honour's findings were such that the only conclusion to which he could have come was that the fire was so lit, so that the decision should be affirmed. The trial judge's assessment of the credit of the alibi witnesses was, in the circumstances of this case, a relevant matter to take into account in the assessment of the first appellant's credit. That assessment could impact upon a determination of whether the respondent's alternative basis for its defence of arson was made out. In my opinion, therefore, it cannot be said that it was inevitable or virtually inevitable, that the trial judge could only have concluded that the fire was lit with the knowledge and acquiescence of the first appellant. Accordingly I consider that the appeal should be allowed. I would propose that the orders of the Court should be: 1. Appeal allowed. 2. Judgment of McDevitt DCJ be set aside. 3. The matter be remitted to the District Court for a new trial. 2 UNREPORTED JUDGMENTS 4. The respondent pay the appellant's costs of the appeal 5. The costs of the first trial to abide the outcome of the second trial. Priestley JA I agree. 5 Cole JA I also agree. Priestley JA The orders of the Court will, therefore, be as proposed by Beazley JA. Appeal allowed. Judgment of McDevitt DCJ be set aside. The matter be remitted to the District Court for a new trial. The respondent pay the appellant's costs of the appeal The costs of the first trial to abide the outcome of the second trial. WRWNS 15 Counsel for the Appellant: M Holmes QC/T Boyd Solicitors for the Appellant: Cameron Gillingham Boyd Counsel for the Respondent: J Mater Solicitors for the Respondent: A Lee (solicitor for the GIO)