New South Wales Supreme Court CITATION : Wade v Golden Manly Management Services Pty Ltd trading as Fantastic Aussie Tours [2009] NSWSC 239 HEARING DATE(S) : 05/11/2008 JUDGMENT DATE : 3 April 2009 JURISDICTION : Common Law JUDGMENT OF : McCallum J (1) The order of the Magistrate dismissing the action in the Local Court is set aside. DECISION : (2) The matter is remitted to the Local Court for determination in accordance with these directions. (3) The defendants are to pay the plaintiffs' costs of these proceedings. (4) The costs of the proceedings below are to abide the outcome of the further determination of the matter in the Local Court. LEGISLATION CITED : Compensation Court Act 1984 Local Courts Act 1982 CATEGORY : Principal judgment Beale v GIO (1997) 48 NSWLR 430 Housing Commission v Tatmar Pastoral Co Pty Limited [1983] 3 NSWLR 378 Pender v Robwenphi Pty Limited [2008] NSWSC 1144 CASES CITED : Pettitt v Dunkley [1971] 1 NSWLR 376 Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 TCN Channel 9 Pty Ltd v Anning [2002] NSWCA 82; (2002) 54 NSWLR 333 Todorovic v Moussa [2001] NSWCA 419; 53 NSWLR 463 Rosslyn Maria Wade (1st Applicant) PARTIES : John Charles Wade (2nd Applicant) Golden Manly Management Services Pty Ltd trading as Fantastic Aussie Tours (1st Respondent) Malcolm Neil Grounsell (2nd Respondent) FILE NUMBER(S) : SC 11506/08 COUNSEL : Mr S Maybury (Applicants) Mr N E Chen (Respondents) SOLICITORS : Mason Black Lawyers (Applicants) TressCox Lawyers (Respondents) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 7555/2007 LOWER COURT JUDICIAL OFFICER : Quinn LCM LOWER COURT DATE OF DECISION : 10 March 2008 - 15 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION McCALLUM J 3 APRIL 2009 11506/08 ROSSLYN WADE & ANOR v GOLDEN MANLY MANAGEMENT SERVICES TRADING AS FANTASTIC AUSSIE TOURS & ANOR JUDGMENT 1 HER HONOUR: On 1 December 2002, Rosslyn Wade was driving a van along the Great Western Highway at Wentworth Falls when she had to brake hard to avoid hitting a large bus. She says she was about to pass the bus when it began to move into her lane without indicating. Mrs Wade managed to avoid a collision but she lost control of the van. It veered off the road and did a complete roll, landing back on its wheels next to a railway fence. The driver of the bus did not realise what had happened and continued on his way. 2 Mrs Wade owned the van jointly with her husband. They sued the owner of the bus, Golden Manly Management Services Pty Limited, and the driver, Malcolm Grounsell (an employee of that company) for the damage to their van. 3 A Magistrate of the Local Court dismissed the claim and Mr and Mrs Wade have appealed against that decision. An appeal lies as of right against the judgment, but only as being erroneous in point of law: s 73(1) Local Courts Act 1982. 4 The only ground of appeal pressed by Mr and Mrs Wade is that the learned Magistrate failed to give sufficient reasons for her judgment. Two other grounds of appeal had been identified in the amended summons but those grounds were abandoned at the outset of the hearing of the appeal. The hearing in the Local Court 5 The pleadings in the Local Court were not tendered at the hearing of the appeal. According to the Magistrate's judgment, the particulars of negligence relied on by the plaintiffs against Mr Grounsell were: (i) failure to keep a proper lookout; (ii) failure to give way; (iii) failure to indicate an intention to change lanes; (iv) failure to comply with "Australian road rules"; (v) changing lanes when it was unsafe to do so. 6 The hearing before the Magistrate commenced shortly before the morning tea break and concluded shortly after the lunch break. The transcript of the hearing discloses that, at the conclusion of the evidence, Counsel made oral submissions. However, the content of those submissions has not been transcribed. There were no written submissions. The Magistrate delivered her decision ex tempore, after taking a short adjournment. 7 There was a contest between the parties as to both liability and contributory negligence. The amount of loss caused by the damage to the van was agreed, subject to a small issue as to the cost of hiring a replacement vehicle. 8 Mr Maybury, who appeared for Mr and Mrs Wade in the Local Court (and on the appeal), opened the plaintiffs' case in the following terms: "My client, one of the plaintiffs, says she was driving her vehicle through a part of the Blue Mountains in the right hand lane of a two lane part of the Great Western Highway and there was a bus driven by the second defendant in the left hand lane marginally ahead of her and she says, essentially without any warning, that bus moved into her lane and basically cut her off. She took evasive action of applying the brakes heavily and subsequently lost control of the vehicle and came to grief. There was no collision between the vehicles - that is common ground - but we say that essentially the second defendant created this emergency situation through his negligent conduct and so here we are, so it is not a collision case but, your Honour, that is essentially our broad proposition." 9 The evidence-in-chief of all witnesses was given in statement form and each was cross-examined. Mrs Wade's statement was broadly in accordance with Mr Maybury's opening remarks set out above. In paragraph 5 of the statement, Mrs Wade stated that she was travelling in the right hand lane of two lanes. She was not cross-examined on that evidence. 10 In paragraph 12 of her statement, Mrs Wade said: "As I came over the other side of the crest I became aware that the first defendant's vehicle had begun to move into my lane without indicating. I was travelling just behind the first defendant's vehicle. I'm not aware of the exact distance but it would have been less than half a car length." 11 Mr and Mrs Wade also called evidence from Mr Chris Pospisil, who was driving behind Mrs Wade when the accident occurred. He did not know Mrs Wade at the time of the accident and was described by the Magistrate as an independent witness. Mr Pospisil broadly confirmed the account of events given by Mrs Wade. In particular, he said that the van was in the right hand lane at the time the bus began to change lanes. He was not challenged on that issue in cross-examination. 12 As already noted, the driver of the bus, Mr Grounsell, was unaware that an accident had occurred until he was contacted by his employer several hours later. He did not purport to have a specific recollection of the relevant events but gave evidence by reference to his knowledge of his own driving habits. He said that where there were two lanes, it was his normal practice to travel in the left hand lane to allow other vehicles to pass by. He said that when merging or changing lanes he always used his mirrors and that it was his practice to check the mirrors about every 20 seconds. He said that he would not continue a lane change if he could see another vehicle in the mirror. It did not appear to be part of his practice to check the rear view other than with the use of the mirrors. 13 In paragraph 7 of his statement, Mr Grounsell said: "On 1 December 2002, when merging at this section of Highway, I do not recall seeing a vehicle in the right hand lane when I checked my mirror." 14 However, it was apparent from the cross-examination (at T30.37-31.8) that Mr Grounsell did not mean, by that statement, that he actually remembered looking in the mirror at the relevant time. He was speaking by reference to his usual practice, as an experienced driver, of checking his mirrors before changing lanes. 15 One of the key issues on liability to be determined by the Magistrate was, accordingly, whether Mr Grounsell did check his mirror before he began to move the bus into the right lane. The determination of that issue required the resolution of the tension between Mr Grounsell's evidence as to his usual practice and Mrs Wade's evidence (supported by the independent witness) that she was in the right lane at the time the bus began to move into her lane. The Magistrate's reasons 16 The Magistrate gave her reasons orally. Her Honour's remarks were not recorded in a separate judgment, but appear at the conclusion of the transcript of the hearing. 17 The Magistrate noted that the matter was a civil matter and outlined the nature of the claim by reference to the pleadings. Her Honour observed that it was not in dispute that there had been an accident and added that the relevant events had occurred in 2002, which she noted was a considerable time ago. 18 The Magistrate recorded her acceptance that all of the witnesses had given evidence to the best of their ability and that "none of them were telling lies or gilding the evidence to suit themselves. They were giving their evidence to the best of their recollection". She noted that the plaintiffs had to prove their case on the balance of probabilities and identified the particulars of negligence relied upon by them. 19 The Magistrate proceeded to summarise the facts. In summarising the evidence of Mrs Wade, her Honour said (at T40.32): "[Mrs Wade] said the bus was travelling slightly slower than herself, he was in front of her of course, and before the two lanes merged there is an opportunity for cars to overtake and the bus was in the far left lane and she said so as well and she was going to overtake it." 20 Her Honour then quoted the first sentence of paragraph 12 of Mrs Wade's statement (set out above) in which she stated that the bus began to move into her lane without indicating. The Magistrate noted that one of the questions for her determination was whether or not the bus driver had used the indicator. Her Honour then summarised the bus driver's evidence on that issue. In doing so, the Magistrate said "He looked in his mirror. He did not see anybody." 21 It is not clear whether the Magistrate intended by that statement simply to record the evidence given by Mr Grounsell or whether she was indicating her acceptance of it. The Magistrate then noted that, in her statement to police in 2002, Mrs Wade had said: "All of a sudden he changed lanes and moved across to the middle lane". 22 The Magistrate contrasted that statement with Mrs Wade's statement in the proceedings in which she said: "I came over the other side of the crest. I became aware the first defendant's vehicle had begun to move into my lane without indicating. I was travelling just behind the first defendant's vehicle … I was not aware of the exact distance but it would not have been less than half a car length". 23 The Magistrate indicated that her reason for setting out those words was that, since she accepted that all of the witnesses had given evidence to the best of their ability, it was necessary to look for any anomalies within the evidence to enable her to determine the issues of fact. Her Honour proceeded to consider the fact that the bus was "absolutely huge" and Mr Grounsell's evidence that, owing to the nature of the bus he was driving, merging lanes had to be completed slowly. Her Honour also noted Mr Grounsell's evidence that the bus had no power steering, that its tare weight was about 10 to 12 tonnes and that it had no power in the accelerator so that all movements had to be planned and carried out as early and safely as possible. 24 The Magistrate did not, however, articulate any conclusion from that discussion. A possibility is that those considerations prompted her to reject the statement made by Mrs Wade to police after the accident that the bus driver changed lanes "all of a sudden", or to doubt the reliability of Mrs Wade's evidence generally, but her Honour did not say so. Her Honour did not record any conclusion, in that part of the judgment, as to whether Mr Grounsell had indicated. 25 The Magistrate then said: "So first of all I have Mr Grounsell saying 'I looked in the mirror and I didn't see her'. That vexed me somewhat because I thought, 'Why didn't he see her as she was trying to overtake him'. There is no question there was a collision, that she did not hit that car, she said she was going to overtake and then she realised he was coming over into her lane. That is what she said and that is what her statement says – essentially that is what it is. So it was not that she was up beside him and he looked in the mirror and did not see her or did not look in the mirror. If he had looked in the mirror and did not see her before he moved over that is because she was, on her own evidence, behind him - behind the bus." 26 It is not clear whether the Magistrate intended to record a finding of fact in that passage of the judgment. The use of the conditional clause, "if he had looked in the mirror", suggests that it was part of her Honour's consideration, not a conclusion. 27 The Magistrate then reverted to the question as to whether the bus driver indicated and referred to some of the evidence of the witnesses on that issue. Returning to a discussion of Mr Grounsell's evidence that he looked in the mirror and did not see Mrs Wade, her Honour said: "In my view Mr Grounsell on the evidence before me could not have seen Mrs Wade if on her own evidence she was behind his car. He is then moving over to merge right which is what (sic) has got to do because the left lane is going to end in any event. So he is merging over to the right, he looks in his mirror, which I accept he did, and there is nobody there so he starts merging over." 28 I do not understand the process of reasoning set out in that passage. It is possible that the Magistrate drew an inference, from Mrs Wade's statement that she was travelling "just behind" the bus, that the van was travelling in the left lane before the bus began to move into the right lane. However, that inference would be inconsistent with other evidence apparently accepted by the Magistrate. Mrs Wade said that she became aware that the bus had begun to move into "her lane" (the right lane) without indicating. Another possibility is that the Magistrate inferred that Mrs Wade was in the right lane, but in a blind spot in the mirror's rear view because she was so close to the bus. 29 The only evidence on the issue of where the parties were before the bus began to change lanes was to the effect that the bus was in the left lane and the van was in the right lane. The unchallenged evidence of both Mrs Wade and Mr Pospisil was that Mrs Wade was in the right lane when the bus began to merge from the left lane into the right lane. The Magistrate did not reject that evidence. Her Honour made no reference to it at all, in any part of her reasons. 30 It is appropriate to set out the conclusion of her Honour's reasons in full: "Both sets of evidence are in stark contrast but mainly in relation to whether or not he had his indicator on but that is not the full extent of the matter in my view. He did not see her. If I accept that he looked in his mirror and looked behind I am prepared to accept that he most probably did have his indicator on but whether or not he did or did not in my view is not the main matter. On the balance of probabilities I have to decide on those facts before me, and I do not think there are any other facts, and Mr Pospisil did not say much more I have to say. He looked up ahead, he saw the bus moving over – moving over he said – and then he saw the accident. Am I satisfied on the balance of probabilities that Mr Grounsell failed to keep a proper lookout? I am not. Am I satisfied that he failed to give way? I am not so satisfied. He failed to indicate an intention to change lanes, there is one question there, which in my view I am not sure that I have enough evidence to even decide that question five years down the track with nobody knowing if there was indicator on except Mr Grounsell saying that he may or may not have put it on but in his view it was always his practise to do so. If I accept that he did so, that it was his usual practise, and if I accept that he looked in his mirror and if I accept that on her own evidence that Ms Wade was behind his car, there was no collision, he drove off and I do not believe he drove off because he knew she was there or there had been an accident. It is simply in his view he was in his big large bus and was driving off and did not even see it because there was no hitting onto his vehicle. I am not so satisfied that he failed to indicate. I am not satisfied that he failed to comply with the road rules or he changed lanes when it was unsafe to do so. If I accept that he looked in his mirror, she was not there, and I have accepted her evidence that she was behind him and then decided to overtake, if he did not see her, and she said she was only half a car length behind him, that is, directly behind that bus and on his own evidence and on looking at it the mirrors on the side of the bus, you look down beside, if the cars were a long way back he would see them. He could not see somebody who was only half a car length on her own evidence in her statement that was directly behind his bus and then decided to overtake. In view of that I am not satisfied that the plaintiff has made its case out on the balance of probabilities and the action must be dismissed." Extent of the duty to give reasons 31 This Court's jurisdiction to hold that a failure to give reasons is an error of law was recognised in Pettitt v Dunkley [1971] 1 NSWLR 376, but only so far as the reasons could be related to a right of appeal: at 388E per Moffitt JA, Manning JA agreeing. The rationale for that principle was that the purpose of giving reasons is to enable an appellate court to ascertain whether the decision entailed error. Subsequently, in Housing Commission v Tatmar Pastoral Co Pty Limited [1983] 3 NSWLR 378, Mahoney JA at 386C described the duty to give reasons as "an incident of the judicial process" that was not limited to cases where an appeal lay. His Honour recognised, however, that the extent of the duty was related to the function to be served by the giving of reasons. His Honour repeated that discussion in Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 at 270E, and those views were endorsed by McHugh JA at 280G. 32 Soulemezis was an appeal under s 32(1) of the Compensation Court Act 1984, which limited the appellate jurisdiction of this Court to cases where a party was aggrieved "in point of law or in relation to the admission or rejection of any evidence". In separate judgments, Mahoney JA and McHugh JA concluded that the reasons of the trial Judge had been adequate in that statutory context (Kirby P dissenting). The principle that emerges from that case is that, although the reasons need not be lengthy or elaborate, the Judge or Magistrate must articulate the essential ground or grounds upon which the decision rests so as to enable the parties to understand the view reached and to allow them to exercise any right of appeal: see 271B per Mahoney JA and 280D per McHugh JA. 33 McHugh JA, however, drew a distinction between cases where there is a right of appeal only in respect of a question of law and cases where there is a full appeal. His Honour expressed the view that a failure to state the basis of a finding of fact in respect of which there is no right of appeal will only constitute an error of law "if the failure can be characterised as a breach of the principle that justice must be seen to be done": at 281B. 34 Accepting the correctness of that principle, I am of the view that justice will not be seen to be done if, having regard to the particular circumstances of the case, the reasons are not sufficient to enable the parties to know or understand why the decision was made. As noted by Meagher JA in Beale v GIO (1997) 48 NSWLR 430 at 442.2, if the decision cannot be understood, a feeling of injustice can arise. The opportunity for the losing party to understand why he lost is, in my opinion, central to the appearance of justice. 35 It must be acknowledged, as cautioned by McHugh JA in Soulemezis at 281G, that the Court must take care, when considering the adequacy of the reasons in the Court below, not to be misled by dissatisfaction with the findings of fact. The question is not whether the findings were correct. The question is whether the reasons, however erroneous, were adequate to articulate the essential ground on which the decision rests. 36 The judicial obligation to give reasons was considered more recently by the Court of Appeal in Todorovic v Moussa [2001] NSWCA 419; (2001) 53 NSWLR 463. In that case, the Court approved the principle that, although the reasons need not be elaborate, the Judge or Magistrate must articulate the essential ground or grounds upon which the decision rests: at [37] per Beazley JA, Powell and Sperling JJA agreeing; citing Soulemezis at 280D per McHugh JA. 37 Todorovic was cited with approval in TCN Channel 9 Pty Ltd v Anning [2002] NSWCA 82; (2002) 54 NSWLR 333 at [150] per Spigelman CJ, Mason P and Grove J agreeing. In that case, the trial Judge had not indicated any basis upon which she came to prefer the evidence of the respondent's experts. Spigelman CJ concluded that the Judge's rejection of the evidence of the appellant's expert was "critical to one aspect of the case" and that, by failing to refer to it, the Judge had failed to give adequate reasons for preferring the evidence of the respondent's experts. His Honour indicated that, but for his conclusion on another issue, that error would have required a new trial on damages. 38 Mr Maybury submitted that the remarks made by Spigelman CJ in Anning were equally applicable in the present case. Todorovic and Anning were, however, cases where the right of appeal was not constrained in the terms of s73(1) of the Local Courts Act and must accordingly be applied with caution in the context of an appeal under that section. 39 It is well established that the Magistrate must articulate the essential grounds upon which the decision rests. However, in accordance with the principles articulated in Soulemezis, there is a qualification to that principle in an appeal under s 73(1) of the Local Court Act. That is, that the failure to state the basis for a finding of fact that does not involve the application of a legal standard will only constitute an error of law if it can be characterised as a breach of the principle that justice must be seen to be done. Was there a failure to give adequate reasons in the present case? 40 The present matter was, as Mr Maybury said at the outset of the hearing in the Court below, a fairly straightforward contest on liability. The resolution of that contest turned on a factual dispute within a relatively narrow compass. 41 Acknowledging that the matter was not one that called for lengthy or elaborate reasons, the critical question is whether the Magistrate's reasons exposed, in an understandable way, the essential grounds upon which her Honour determined the case. 42 Although the liability issue implicitly involved the application of a legal standard, the hearing was conducted on the basis that the bus driver's compliance with that standard was to be measured by reference to the resolution of two questions which were essentially questions of fact. They were whether the driver indicated his intention to change lanes and whether he looked to see if there was a vehicle in the right lane before he began to move the bus into that lane. 43 In order to reach a conclusion on the second issue, the Magistrate had to resolve the tension between the unchallenged evidence that Mrs Wade was travelling in the right hand lane and the driver's evidence that he did not recall seeing anyone in that lane. That was a critical issue, if not the critical issue in the case. 44 With great respect to the learned Magistrate, and acknowledging the virtues of deciding cases promptly, I am of the view that the reasons given in the ex tempore judgment do not disclose how the Magistrate determined that issue. They do not articulate the ground on which the case was decided so as to enable the plaintiffs to understand why they lost the case. 45 The only clear finding of fact made by the Magistrate was that the driver of the bus did look in his side mirror before he began to change lanes. The judgment contemplates the possible conclusion that he did not see Mrs Wade when he did so because, at that time, Mrs Wade's car was directly behind him in the left lane. Inconsistently, however, the Magistrate appears to have accepted Mrs Wade's evidence that the accident occurred when the bus began to move into her lane. If the Magistrate accepted that evidence, it followed that Mrs Wade was in the right lane, not the left lane, when the bus began to merge. The judgment does not record a finding of fact on that issue, and makes no reference to the evidence that Mrs Wade was in the right lane. The plaintiff had called an independent witness on that issue. I accept, as submitted by Mr Maybury, that the plaintiffs were entitled to expect that the Court would deal with the evidence of Mr Pospisil in some way, whether by rejecting it (with appropriate reasons) or otherwise. 46 With inconsistent premises as to whether Mrs Wade was in the right lane or the left lane when the bus began to merge, the Magistrate's reasoning process does not make sense. Further, the judgment failed to grapple with a critical factual issue. One reading of the judgment is that the grounds for the decision were that the Magistrate accepted Mr Grounsell's evidence that he did look in the side mirror (and did not see Mrs Wade), which in turn was a ground for rejecting Mrs Wade's evidence that she was in the right lane. An alternative reading is that the Magistrate misunderstood Mrs Wade's evidence as being that she was in the left lane just before the bus began to move. A third possibility is that the Magistrate was simply not satisfied of any facts on the balance of probabilities. The reasons are not adequate to enable the Court or the parties to understand whether the decision was based on one or other of those grounds or some other ground. 47 Mr Chen, who appeared for the defendants, submitted that, having regard to the way in which the case was opened to the Magistrate by Mr Maybury, the reasons given by the Magistrate were not legally insufficient. He said that the case was essentially put forward as "version A versus version B" and that, in that context, it was enough for the Magistrate to indicate that she accepted the evidence of the bus driver that he looked in the mirror. 48 In support of that submission, Mr Chen relied on the remarks of Hall J in Pender v Robwenphi Pty Limited [2008] NSWSC 1144 from [56] where his Honour noted that the level of detail required of reasons given depends on the particular circumstances of the matter being considered by the Court. I accept that the extent of the reasons required in a given case will be informed by the manner in which a case has been conducted, and that due allowance must be made for the submissions that were before the Court. However, I do not think it is right to say that Mr Maybury characterised the case as a simple matter of accepting one version or the other. 49 Regrettably, I have accordingly reached the conclusion that the decision was erroneous in point of law within the meaning of s73(1) of the Local Courts Act. In my view, justice was not seen to be done. The reasons given would have left the plaintiffs without an understanding as to why they lost, so as to engender a sense of injustice. 50 In coming to that conclusion, I acknowledge the burden carried by Magistrates in this State and the constant constraints under which they work. I also acknowledge that, unlike the Magistrate, I have had the benefit of a transcript of the proceedings and written submissions from the parties. 51 Mr Maybury submitted that, if I accepted that the decision was erroneous in point of law, it would be open to me to enter a verdict for the plaintiffs. I disagree. I accept, as submitted by Mr Chen, that the further determination of the matter requires the making of findings of fact. Even if I were satisfied that a finding of negligence was the only finding reasonably open on the evidence, it would remain for me to deal with the issue of contributory negligence. This issue was not touched on by the Magistrate. Accordingly, the appropriate course is to remit the matter for further determination. 52 I have heard the parties on costs. In my view, the costs of the appeal should follow the event. 53 I make the following orders: (1) That the order of the Magistrate dismissing the action in the Local Court be set aside. (2) That the matter be remitted to the Local Court for determination in accordance with these directions. (3) That the defendants pay the plaintiffs' costs of these proceedings. (4) That the costs of the proceedings below abide the outcome of the further determination of the matter in the Local Court. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.