New South Wales Court of Appeal CITATION: Vidal v NRMA Insurance Ltd [2005] NSWCA 390 HEARING DATE(S): 1 November 2005 JUDGMENT DATE: 15 November 2005 JUDGMENT OF: Mason P at 1; Handley JA at 2; Brownie AJA at 18 DECISION: Appeal dismissed with costs CATCHWORDS: APPEAL – question of law – inconsistent findings – no question of principle - ND Butler v Loneragan (1994) 19 MVR 361 CASES CITED: Rhesa Shipping Co SA v Edmunds [1985] 1 WLR 948 France Monique Vidal (Appellant) PARTIES: NRMA Insurance Ltd (Respondent) FILE NUMBER(S): CA 40242 of 2004 C R C Newlinds SC/P T Newton (Appellant) COUNSEL: R W Seton SC (Respondent) Heidtman & Co (Appellant) SOLICITORS: Abbott Tout (Respondent) LOWER COURT JURISDICTION: Supreme Court - Common Law Division LOWER COURT FILE NUMBER(S): SC 12177 of 2003 LOWER COURT JUDICIAL OFFICER: Master Harrison IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40242 of 2004 MASON P HANDLEY JA BROWNIE AJA 15 NOVEMBER 2005 FRANCE MONIQUE VIDAL v NRMA INSURANCE LTD CATCHWORDS APPEAL – question of law – inconsistent findings – no question of principle FACTS The appellant owned a car which was insured against theft under a policy issued by the respondent. She alleged that the car had been stolen but her claim under the policy was rejected. The Local Court found for the insurer and her appeal to the Supreme Court, limited to a question of law, also failed. On a further appeal by leave the appellant contented that the Magistrate's decision could not stand because she had made inconsistent findings. HELD: The findings were not inconsistent. ORDERS Appeal dismissed with costs. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40242 of 2004 MASON P HANDLEY JA BROWNIE AJA 15 NOVEMBER 2005 FRANCE MONIQUE VIDAL v NRMA INSURANCE LTD Judgment 1 MASON P: I agree with Handley JA. 2 HANDLEY JA: This appeal arises from a claim by the appellant under a comprehensive motor vehicle policy for the theft and destruction of her Peugeot car on 20 November 2001. The insurer rejected the claim and the appellant sued on the policy in the Local Court. She was put to proof of the theft, and the insurer also relied on an exclusion clause which denied cover for "loss or damage intentionally caused by you or a person acting with your express or implied consent" and it also alleged that the claim was fraudulent. 3 The Magistrate rejected the claim and entered judgment for the insurer. An appeal to the Supreme Court, limited to questions of law, was dismissed by Master Harrison. This further appeal was brought with the leave of this Court. It is based on what was alleged to be a serious inconsistency in the Magistrate's findings. The Magistrate correctly directed herself on the plaintiff's onus of proof stating (para 2(2)) that she was obliged to prove on the balance of probabilities that her car was stolen otherwise than with her involvement or consent. She also correctly directed herself that the insurer had the onus of proving that the claim was fraudulent. 4 After a lengthy summary of the plaintiff's evidence and that of the experts called on both sides the Magistrate said (para 6(1)): "I accept Ms Vidal as a witness of truth. Her denials as to having any knowledge were not shaken in Cross Examination. I accept she could not have personally been involved with the physical taking of the car to Newcastle and burning it out." 5 On the face of it, and read in isolation, that appears to be a finding that the plaintiff had discharged the onus of proving that her car was stolen, that is taken away without her cooperation or connivance. Mr Newlinds SC, appearing for the appellant, submitted that this finding should have been the end of the case and the appellant should have won. However the Magistrate's reasons for judgment continued for almost another four pages and she concluded (para 6(7)): "I am therefore of the opinion that I am not satisfied that Ms Vidal has proved on the Balance of Probabilities, that the car was stolen, on the footing that the probability that it [was] was exactly equal to the probability that it was not." 6 The Magistrate then found, correctly, that the insurer's affirmative defence failed although it was not necessary for her to record that finding. 7 The relevant comparison for the purposes of establishing inconsistency is between her acceptance of the plaintiff as a witness of truth who was not personally involved in the removal of the car in para 6(1) and her finding that she had not proved that the vehicle was stolen in para 6(7). 8 The argument for the appellant was put in various ways but if this Court were persuaded that the judgment, properly understood, contained inconsistent findings, an error of law would be established which would require the appeal to be allowed with an order for a new trial. 9 An appellate court should read the reasons for judgment of the trial court fairly and as a whole, without seeking to find fault. It should attempt, within reason, to reconcile any apparent inconsistencies by reading the relevant passages together. 10 In para 6(3) of her reasons the Magistrate quoted from the judgment of Young J in Butler v Loneragan (1994) 19 MVR 361, 366: "A tribunal of fact is in the final analysis usually not left in a situation where it has to ask whether A's version or B's version of an event should be preferred. Sometimes that happens, but often the situation is that the tribunal of fact accepts everybody as a witness of truth but can see from their different perspectives and from the surrounding circumstances where the truth really lies." 11 In para 6(1) the Magistrate found that the plaintiff was "a witness of truth" but in the passage quoted from Butler v Loneragan Young J applies this description to an honest witness whose evidence, when judged "from the surrounding circumstances", was not reliable but mistaken. The truth lay elsewhere. That was the context for the Magistrate's statement in para 6(4): "Therefore, in coming to a determination of whether the Plaintiff has made out her case that the car was stolen; I review the Expert evidence that has been adduced for both parties." 12 In my judgment the Magistrate's finding in para 6(1) that the plaintiff was "a witness of truth" was a limited or qualified finding. She did not make a finding that the plaintiff's evidence was reliable and should be accepted as establishing the truth. In order to determine the case she undertook a further examination of the expert evidence and made further findings. Having completed that task she then made her ultimate finding that the plaintiff had not proved on the civil onus that her car was stolen. 13 I am therefore satisfied that the findings of the Magistrate were not inconsistent and that neither the Magistrate, nor the Master, fell into legal error. 14 Some of the problems in this case arose because the insurer pleaded defences by way of confession and avoidance under which it had the onus of proof. In reality they were the mirror image of the plaintiff's claim, on which she had the onus, that her vehicle had been stolen, that is, removed without her consent or connivance. 15 Sometimes an insurer simply puts the insured to proof without having a positive case. At other times, such as here, the insurer may have a positive case, what may be described as a negative pregnant. An insurer is fully entitled to run a positive case, without undertaking anything more than an evidentiary burden of displacing the plaintiff's prima facie case. The question was considered and explained by the House of Lords in Rhesa Shipping Co SA v Edmunds [1985] 1 WLR 948. This was a marine insurance case where the underwriters denied that the ship had been lost by perils of the sea, and sought to prove that she had been scuttled. Lord Brandon said at 951: "… it is important that two matters should be borne constantly in mind. The first matter is that the burden of proving, on a balance of probabilities, that the ship was lost by perils of the sea, is and remains throughout on the shipowners. Although it is open to underwriters to suggest and seek to prove some other cause of loss, against which the ship was not insured, there is no obligation on them to do so. Moreover, if they chose to do so, there is no obligation on them to prove, even on a balance of probabilities, the truth of their alternative case. The second matter is that it is always open to a court, even after the kind of prolonged inquiry with a mass of expert evidence which took place in this case, to conclude, at the end of the day, that the proximate cause of the ship's loss, even on a balance of probabilities, remains in doubt, with the consequence that the shipowners have failed to discharge the burden of proof which lay on them." 16 This statement applies, with appropriate modifications, to insurance claims for theft, fire and the like. 17 The appeal should be dismissed with costs. 18 BROWNIE AJA: I agree with Handley JA. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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