Celik v NRMA [2000] NSWSC 380

New South Wales Supreme Court

CITATION : Celik v NRMA [2000] NSWSC 380 FILE NUMBER(S) : SC 12266/99 HEARING DATE(S) : 2-3/05/00 JUDGMENT DATE : 16 May 2000

PARTIES : Hasan Celik & Hasreat Celik v NRMA Insurance Limited JUDGMENT OF : James J

LOWER COURT Local Court JURISDICTION : LOWER COURT 1994/98 FILE NUMBER(S) : LOWER COURT CJ Barkell - Magistrate JUDICIAL OFFICER :

COUNSEL : G Watkins -Plaintiffs-Appellants J Duncan -Defendant-Respondent SOLICITORS : Nicholas G Pappas & Company -Plaintiffs- Appellants Abbott Tout - Defendant/Respondent DECISION : Summons Dismissed

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JAMES J

Tuesday 16 May 2000

12266/99 - Celik & Anor v NRMA Insurance Limited

JUDGMENT 1 HIS HONOUR: This is an appeal by Hasan Celik and his wife Hasreat Celik pursuant to s69(2) of the Local Courts (Civil Claims) Act from a judgment of a magistrate given on 18 August 1999 in proceedings in the Local Court, which had been brought by Mr and Mrs Celik against NRMA Insurance Limited ("NRMA Insurance") on a policy of insurance issued by NRMA Insurance to Mr and Mrs Celik. In the proceedings in the Local Court the magistrate gave judgment for the defendant NRMA Insurance in the action brought by Mr and Mrs Celik and also gave judgment for NRMA Insurance on a cross-claim which it had brought against Mr and Mrs Celik for the recovery of amounts previously paid to them by NRMA Insurance pursuant to the policy of insurance. 2 The appeal is governed by the new Pt 51B of the Supreme Court Rules. An affidavit by a solicitor was filed, to which were exhibited a copy of the transcript of the proceedings in the Local Court and a copy of the magistrate's judgment of 18 August 1999. On the hearing of the appeal a number of documents which had been exhibits in the proceedings in the Local Court were admitted into evidence. 3 There was no dispute, either in the Local Court or on the appeal, about any of the following facts. In June 1995 Mr and Mrs Celik acquired a Toyota motor vehicle. On 27 June 1995 NRMA Insurance issued a policy of comprehensive motor vehicle insurance on the vehicle. Temporary cover under the policy commenced on 27 June 1995. Conditionally upon the cost of the policy being paid by 18 July 1995 (an event which happened), the term of the policy of insurance was twelve months from 27 June 1995. The policy of insurance was renewed in June 1996 and June 1997. At various times NRMA Insurance paid to Mr and Mrs Celik amounts totalling $10,290 pursuant to the policy. On 28 August 1997 the vehicle was involved in an accident and was damaged beyond repair. Mr and Mrs Celik then made a claim on the policy. NRMA Insurance refused the claim, on the grounds that there had been a failure to disclose driving offences and traffic infringements by Mr Celik in the period of five years preceding the issue of the policy and that there had been a further failure to disclose further driving offences and traffic infringements by him before renewals of the policy. Mr and Mrs Celik disputed that NRMA Insurance was entitled to refuse the claim and brought the proceedings in the Local Court to enforce the claim. NRMA Insurance brought a cross-claim to recover the amounts which it had previously paid pursuant to the policy. 4 There was no dispute that, within the period commencing five years before 27 June 1995 and expiring on the date of the second renewal of the policy, Mr Celik had committed a number of traffic offences. In particular, in Burwood Local Court on 15 December 1994 he had been convicted of driving on 22 November 1994 with a middle range prescribed concentration of alcohol in his blood and had been disqualified from driving for five months from 15 December 1994 and in Newtown Local Court on 11 August 1995 he had been convicted of driving whilst disqualified on 7 April 1995 and had been disqualified from driving for six months from 11 August 1995. 5 The magistrate said in her judgment, "the main factual issue of this case concerns the taking out of the insurance". On this issue there was a conflict between the evidence of Mr Celik (supported to some extent by the evidence of Mrs Celik) and the evidence of witnesses called by NRMA Insurance. 6 Mr Celik's version, as summarised by the magistrate in her judgment, was that on 9 June 1995 Mr and Mrs Celik had gone to the premises of a car dealer, Western Toyota, and had selected a vehicle for purchase. Mr Celik had then told the manager of Western Toyota, Mr Spiteri, to arrange the financing and insuring of the vehicle. He had said to Mr Spiteri, "when I come back, I only want to pick up the car". Mr Celik told Mr Spiteri that he had lost his licence because of drink driving and that was why the vehicle was being bought in his wife's name, as well as his own. 7 On 27 June 1995 Mr Celik collected the vehicle from Western Toyota. By that time Mr Spiteri had arranged everything, including insurance on the vehicle. Mr Celik had played no part in obtaining the insurance. 8 The version which was supported by the evidence of witnesses called by NRMA Insurance, and particularly by the evidence of a Ms Fuller who in June 1995 was an employee of NRMA Insurance working at its Auburn branch, was that on 27 June 1995 Mr Celik had personally attended at NRMA Insurance's Auburn branch and had himself applied for insurance on the vehicle he and his wife were purchasing. 9 At the time of giving her evidence in the Local Court Ms Fuller had no actual recollection of the circumstances in which the policy of insurance on Mr and Mrs Celiks' vehicle had been taken out. Her evidence was based on certain records of NRMA Insurance, on some of which her payroll number 2708 (which was her personal identification number as an employee of NRMA Insurance) appeared and on what she said was the usual practice in June 1995 in the Auburn office. 10 Ms Fuller gave evidence that in June 1995 a person applying to NRMA Insurance at its Auburn office for comprehensive motor vehicle insurance was not required to complete a paper proposal form. The procedure used at the Auburn office, when someone applied at the Auburn office for motor vehicle insurance, was as follows. An employee of NRMA Insurance such as Ms Fuller would bring up on the screen of her computer terminal a "prompt", that is a series of questions to be asked of an applicant for insurance. She gave the following further evidence:- Q. And rather than the insured read the questions on a proposal form you would read them off the screen to the insured, is that right? A. That's correct. Q. And then as the insured responded to the questions you would type in the answers directly into the computer? A. That's correct". 11 The questions in the prompt included "over the last five years has any owner or driver had insurance (1) refused (2) cancelled (3) avoided or (4) renewal not offered (5) any claim refused or (6) special conditions imposed?" and "in the last five years has any owner or driver had any driving offences or traffic infringements?" 12 Ms Fuller identified a computer generated document called "confirmation of details" relating to the insurance of the vehicle being purchased by Mr and Mrs Celik (which became exhibit 3 in the proceedings in the Local Court) as a document created by her by typing the answers she had received to questions asked by her in accordance with the prompt. Ms Fuller's payroll number written in her own handwriting appeared on a print out of this confirmation of details. 13 The confirmation of details included the following:- "Driver history for the past 5 years Mr H Celik - Date of birth 28/02/61 - Years driving 10 - In the last 5 years this driver has had no insurance refused - No insurance cancelled - No insurance avoided - No insurance renewal not offered - No claims refused - No special conditions imposed - Accidents and incidents - At fault in an accident-other vehicle involved 19/01/91 Cost $0 - Offences - No driving offences or traffic infringements". 14 Ms Fuller gave evidence that, according to the usual practice, a copy of a print out of the confirmation of details would have been given to the person applying for insurance, to take away with him. 15 Ms Fuller also gave some evidence which was based on an entry in an NRMA Insurance internal record, reading:-