McCarthy v NRMA Insurance Limited [2001] NSWSC 508

New South Wales Supreme Court

CITATION : McCarthy v NRMA Insurance Limited [2001] NSWSC 508 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S) : SC 12047/00 HEARING DATE(S) : 07/06/01 JUDGMENT DATE : 7 June 2001

PARTIES : Kylie McCarthy (P) NRMA Insurance Limited (D) JUDGMENT OF : Young CJ in Eq

LOWER COURT Local Court JURISDICTION : LOWER COURT 9572/98 FILE NUMBER(S) : LOWER COURT Magistrate Price JUDICIAL OFFICER :

COUNSEL : B Debuse (P) P Renehan (D) SOLICITORS : Craddock Murray Neumann (P) Abbott Tout (D) CATCHWORDS : INSURANCE [80] Motor vehicle insurance- Stolen- What covered. MAGISTRATES [128][194]- Reasons for decision- Must deal with critical issues- If not case will be remitted. WORDS & PHRASES- "Stolen". LEGISLATION CITED : Justices Act, 1902, s 109 Mifsud v Campbell (1991) 21 NSWLR 725 CASES CITED : Pierpoint v Pittis [1999] NSW SC 857 Simon v NRMA Insurance Ltd (Samuels AP, 22.10.1991) DECISION : Appeal allowed.

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

YOUNG CJ in Eq

THURSDAY 7 JUNE 2001

12047/00 - McCARTHY v NRMA INSURANCE LIMITED

JUDGMENT 1 HIS HONOUR: This is an appeal from a Magistrate sitting in the Civil Claims Jurisdiction of the Local Court. 2 The plaintiff was the owner of a motor vehicle which she claims was insured with the defendant at an agreed value of $14,000 against it being stolen. She claims it was stolen and subsequently found damaged. She made a claim under the policy which was refused. 3 The defendant filed a denial that, inter alia, the vehicle was stolen, and also alleged that the plaintiff was not truthful and frank in a statement she made in her claim, and that the claim was made fraudulently, and the plaintiff did not act towards the defendant with the utmost good faith. 4 The trial before the learned Magistrate took place on 21 February 2000 and 26 June 2000 and he gave a reserved judgment on 7 July 2000. The learned Magistrate found a verdict for the defendant. 5 The plaintiff appeals on a number of grounds, but essentially the appeal is to the effect that the learned Magistrate did not adequately express reasons for the finding he made. 6 Essentially his reasons are on p 5 of his judgment as follows: "In these matters there is an evidentiary onus upon the applicant plaintiff. Equally there is an onus upon the defendant to satisfy the Court where a specific allegation of fraud is made against a claimed plaintiff. "The cumulative effect of all of the available evidence leaves this Court to conclude that not only is the plaintiff unable to discharge her evidentiary onus but rather that the overall circumstances constitute a fraud, a civil fraud, upon the defendant. "There will be a verdict in favour of the defendant." 7 The facts and circumstances need not be fully gone into. The plaintiff's basic case was that she had left her car parked in a public car park at Bankstown when she went to a social function. When she came back a few hours later the car was gone. She reported it to the Bankstown Police, the police station being about ten minutes walk away from where she left the car. 8 The police found the vehicle about half an hour or so later in a road at Richmond with its lights still on, crashed into a cliff or wall, with evidence that someone had jumped up and down on its roof. 9 The defendant's case essentially was that the plaintiff had deliberately arranged herself an alibi whilst some accomplice removed her car from the car park, drove it to Richmond, then damaged it as much as possible so that it would be a complete write-off. 10 The defendant pointed to factors which made this conclusion, it said, more likely than not, including the fact that, in the police officer's view, it was unusual for car thieves to have treated the car in the way this car was treated, including removing what would appear to be a useless stereo system, emptying the glove box of trifles, stomping on the roof etc, and that there were other aspects of the plaintiff's evidence which gave rise to great suspicion. 11 At the trial the only evidence was the oral evidence of the plaintiff, who was cross-examined at considerable length; evidence of a work mate of the plaintiff; in the defendant's case the police officer who investigated the accident; and a solicitor who gave formal evidence. The plaintiff's former boyfriend had been subpoenaed by the defendant to attend the Court and obeyed that subpoena but he was too much of a "hot potato" for either side to call. 12 The plaintiff appeared to be a person who in general would agree with whatever the questioner said to her though, when the defendant's counsel got to the Browne v Dunn points she was quite clear in her answers. For instance (transcript p 98) the defendant's counsel put: "Q. I suggest to you the vehicle was not stolen on that evening, but that you knew it was going to be taken from the car park and disposed of? A. No, I didn't know. Q. And you made arrangements for that to occur? A. No. Q. And you did that because you had been unable to sell the vehicle for some time and that you were in financial difficulties with the Bankstown Credit Union with your loan from them in relation to the car? A. No, I wasn't. ... Q. I suggest to you that you decided the only way that you were going to pay off the Bankstown Credit Union was to arrange for the car to be stolen and then written off? A. No… ." 13 It was, accordingly, a case where the credit of the plaintiff was a matter which went to the heart of the case, and which the Magistrate needed to decide. Was the plaintiff telling the truth when she said that she had just parked the car and it was stolen without her involvement, or was the defendant's case correct and she had arranged for the vehicle to be removed and disposed of so that she could get the agreed value from the defendant and so extricate herself from her financial difficulties. 14 There were, as the learned Magistrate recognised, really two matters to think about in the ultimate question to be asked: