JC Automotive Repairs Pty Ltd t/as JDR Motorsports & 4x4 Enhancements v John Hardy

This appeal is brought by JC Automotive Repairs Pty Ltd, trading as JDR Motorsports & 4x4 Enhancements (JC Automotive), against a judgment for a sum of something over $16,000 plus indemnity costs entered against it, in favour of Mr John Hardy in civil proceedings in the Local Court of New South Wales.

Reduced to their essence, the grounds of appeal, as set out in the further amended summons of JC Automotive filed on 18 April 2017 and pressed at the hearing of the appeal before me, are as follows.

First, it was said that the Magistrate committed an error of law in finding for Mr Hardy with regard to liability and causation when there was no evidence in support of those matters, or in the alternative no adequate evidence.

Secondly, it was said that his Honour committed a further error of law in that he provided inadequate reasons for the findings in relation to liability and causation.

Thirdly and finally, it was said to be an error of law for his Honour to have determined that the forensic position of JC Automotive was “hopeless”, and to have ordered indemnity costs on that basis.

The background of the appeal may be shortly stated.

Mr Hardy gave evidence (by way of an affidavit, confirmed in the witness box) that he had provided his motor vehicle to JC Automotive on 15 December 2014 so that its performance could be upgraded.

When it was returned to him on 20 December 2014, he noticed that the tyres were very badly damaged.

He had previously had an audio-visual recording device installed in his motor vehicle. The product of that device was placed before his Honour. There was no dispute before the Magistrate that the product of that device showed the way that the car was driven during the time that it was in the custody of JC Automotive.

To the extent reasonably practicable, the parties to the appeal reconstructed the portions of the product of the device that had been placed before the Local Court, and placed them before me.

The affidavit of Mr Hardy concluded with the following statement “My motor vehicle was damaged as a result of the actions of the Defendant.”

Mr Hardy also read in his case an affidavit from a motor mechanic, Mr Duran, to the effect that the cost of repairing damage to the vehicle observed by him would be something in the order of $16,000.

Mr Duran, like Mr Hardy, was called to the witness box to confirm the contents of his affidavit.

In a nutshell, then, the case for Mr Hardy in the Local Court was that, whilst his vehicle was in the custody of JC Automotive, it was used by employees of the latter in such a way as to damage it. The primary legal basis for the statement of claim was the implied term to be found in s 60 of the Competition and Consumer Act 2010 (Cth), Schedule 2 Australian Consumer Law (the ACL).

As for the conduct of the case for JC Automotive in the Local Court, its filed defence made no positive assertions of fact. The closest that document came to doing so was to assert in the alternative that, if one of its servants or agents had acted negligently or recklessly (a proposition that was not admitted), those actions were outside the scope of their employment or agency, with the asserted result that JC Automotive could not be held liable for such actions.

Separately, JC Automotive adduced no evidence, whether documentary or oral, at the hearing in the Local Court.

Furthermore, although as I have said both Mr Hardy and the motor mechanic were called to the witness box by counsel for Mr Hardy, no questions were asked of them in cross-examination by counsel for JC Automotive.

Oral submissions were received at the conclusion of the evidence. In a nutshell, the position of counsel for JC Automotive at that stage was as follows.

First, the proposition advanced by his Honour in discussion that the case could be decided on the basis of the legal doctrine of bailment was resisted by counsel for JC Automotive; because ancillary reliance on bailment in the judgment of his Honour founded two grounds of appeal that were explicitly abandoned before me, I shall not discuss that controversy further.

Secondly, with regard to s 60 of the ACL, it was accepted that the provision had a role to play. However, it was submitted that the service that was captured by s 60 of the ACL was the installation of the upgrade, nothing more. And it was said that that had indeed been completed without difficulty.

Thirdly, it was said that there was no evidence that the person actually driving the vehicle at the time that the damage allegedly occurred was in any way associated with JC Automotive.

Fourthly, the question of causation was squarely raised by counsel for JC Automotive. It was said that the evidence of Mr Duran did not explain “how what one sees in those videos translates to any damage being caused to the vehicle, particularly mechanical damage”. That lacuna in the evidence of the case of Mr Hardy was said to be the end of his case, bearing in mind the onus of proof that he bore as plaintiff.

Fifthly, it was submitted that there was no evidence that the vehicle had actually been repaired.

Sixthly and finally, on a number of bases, it was said that “quite simply, your Honour, there is no evidence whatsoever of damage or loss.”

The judgment of his Honour is relatively short, and it is convenient to set it out in its entirety:

After that success on the substantive question, an application was made by counsel for Mr Hardy for indemnity legal costs. That application was granted by his Honour, over the opposition of counsel for JC Automotive, on the basis that the case for JC Automotive was hopeless.

The first pressed ground contained in the further amended summons founding the appeal was as follows:

As I have said, the submission of JC Automotive is that the Magistrate erred in law in finding that the defendant had established that JC Automotive had caused $16,590.90 in damage to the vehicle of Mr Hardy.

The submission was that Mr Duran was simply a motor mechanic to whom a damaged vehicle was brought. He provided an estimate of what it would cost to repair that damage, although it seemed that he had not actually done so. But there was no evidence from Mr Duran that the driving shown in the product of the device had caused, or even could possibly have caused, the damage that Mr Duran saw.

Separately, it was said that the evidence of Mr Hardy did not establish causation either.

The point was made by counsel for JC Automotive that the motor car in question was a high-performance vehicle. In other words, it was said that the Magistrate was not entitled to draw the inference from the material contained in the device product that the extreme form of driving depicted would actually have damaged such a specialist car.

In short it was submitted that there was a significant gap in the case for Mr Hardy. Whether or not JC Automotive adduced evidence, or cross-examined either of the witnesses for Mr Hardy, was not to the point. It was said that a party to civil proceedings is perfectly entitled to rely upon the onus of proof, and to point out a missing element within a legal claim.

Turning to my determination of this ground, I shall not pause to discuss whether a ground alleging inadequacy of evidence (as opposed to complete absence of evidence) constitutes a ground alleging error of law, or is, in truth, a ground asserting an error of fact. That is because I am satisfied that there was ample evidence from which the Magistrate could draw the inference that JC Automotive had caused damage to the car of Mr Hardy.

Here, there was uncontradicted evidence from Mr Hardy that he provided the vehicle to JC Automotive for a mechanical upgrade. There was no evidence that the vehicle was in poor condition before it was provided to JC Automotive; paragraph 15 of the affidavit of Mr Hardy, the subject of neither objection, nor dispute, nor contradiction in the Local Court, can surely be read as evidence that it was in good condition at that time.

There was also uncontradicted evidence from Mr Hardy that, when the vehicle was returned to him, its tyres were very badly damaged.

There was also uncontradicted evidence, in the form of his final statement in his affidavit, that the vehicle had not been damaged by anything other than during its time in the custody of JC Automotive.

There was also evidence in the form of the disc derived from the in-car device that clearly showed that the vehicle had been driven very harshly whilst it had been in the custody of JC Automotive. On the material placed before me on the appeal, one is well entitled to infer that the person who was driving the vehicle in the way shown was an employee of JC Automotive – I say that because the vehicle was driven in daylight hours from a workshop, with nothing to suggest that it was being stolen or taken without permission.

As I have recounted, there was uncontradicted evidence that, when Mr Duran saw the vehicle on 22 January 2015, he observed it to be damaged in a number of ways.

On those basic facts, I consider that it was well open to the learned Magistrate to infer as the tribunal of fact that the vehicle had been damaged by the way it had been driven whilst it was in the custody and care of JC Automotive.

It is perfectly true that a defendant in civil proceedings (and an accused in criminal proceedings) is entitled to rely upon the onus of proof to be discharged by the moving party, whether that party be a plaintiff or the Crown. And it is also quite true that, here, Mr Hardy bore the onus on the balance of probabilities of demonstrating that acts or omissions of JC Automotive caused the damage to his vehicle.

But it is surely not irrelevant to the task of drawing inferences in a civil matter that neither Mr Hardy nor his witness was cross-examined in any way whatsoever. For example, it was never put to Mr Hardy that, or even explored with him whether, the car had been defective before it was provided to JC Automotive; or that it had been damaged after its return, and before its presentation to Mr Duran.

Nor did JC Automotive call any evidence whatsoever. In particular, no evidence supportive of an alternative rational hypothesis, inconsistent with the case for Mr Hardy on causation, was placed before the Magistrate. By way of further example, no evidence was produced by JC Automotive that a person had broken into its appropriately-secured premises, stolen the vehicle, and damaged it.

In those forensics circumstances, bearing in mind the rule of fairness to be found in Browne v Dunn (1893) 6 R 67, and the available inference to be found in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8, I consider that it was open to the to the Magistrate to find that JC Automotive had been negligent with regard to the motor vehicle, and that its negligence had caused the damage of which Mr Hardy complained.

It is true that there was a degree of inferential reasoning required in that process. But a tribunal of fact (whether a judicial officer or a jury) is not prohibited from engaging in such reasoning. And here the process of inferring that an undamaged car was damaged, as shown by the product of the device, and thereafter required expensive repair, was free from complexity. It did not, in my opinion, bespeak an error of law.

This ground is not made out.

The second pressed ground was as follows:

It was said in support of this ground of appeal by counsel for JC Automotive that causation was an important part of the dispute at first instance. And yet the concluding portion of the judgment is as follows “the question of causation is not something that needs to be explored in the circumstances. The Civil Liability Act tests are plainly met. It is too obvious to require further reasons.”

It was said by counsel that, in truth, much of the judgment focused upon s 5B of the Civil Liability Act 2002 (NSW) (the Act). And yet that part of the statute is not to do with causation; nothing was said about ss 5D and 5E of the Act, which are the sections that deal with that concept.

In short it was an accepted that, in the Local Court, one should not expect or demand a lengthy legal treatise. Nevertheless, what was provided here, it was respectfully said, was simply inadequate.

Reading the judgment in its entirety, I do not accept that proposition. I say that for the following reasons.

First, this was a claim for something over $16,000. It did not require lengthy reasons.

Secondly, there was no need to determine any credit issues, in light of the way the case was run.

Thirdly, there was a strong case for Mr Hardy that damage to the vehicle had been caused by harsh driving whilst it was in the custody of JC Automotive. As I have said, the process of reasoning towards that finding was hardly complicated, and founded on common sense and “real evidence” by way of the device product.

Fourthly, that strong case was neither contradicted by evidence nor impugned by cross-examination. In other words, there was no need to balance competing evidence, or to reflect upon damage done in cross-examination to the witnesses of Mr Hardy.

Fifthly, the proceedings were conducted in the Local Court, which is notoriously busy. My assessment of the adequacy of reasons must reflect that practical reality.

Sixthly, the judgment was given ex tempore; again, that will inform the degree of punctiliousness with which those reasons should be analysed.

Seventhly and finally, I do not accept that there is a bright line to be drawn between those parts of the judgment that discuss duty of care; its breach; causation; bailment; and the assessment of the measure of damages. To the contrary, I believe that a substantial proportion of the findings of his Honour with regard to causation are interleaved within the first part of the judgment (at pages 13 and 14). I extract those portions below:

In summary, this was a straightforward case, with regard to a relatively small sum of money, in which the tribunal of fact was called upon to draw a simple inference of causation from the compelling evidence in the form of the device product. Much of what his Honour found about causation was actually to be found in the discussion about separate legal topics. In those circumstances, detailed reasons (beyond those that were provided) under the separate rubric of causation were not required.

I do not consider that this ground has been made out.

The third pressed ground was as follows:

By way of explanation of this ground, one of the orders sought in the further amended summons founding the appeal of JC Automotive was that, if any substantive ground found success, the costs order made in the Local Court should, as an ancillary matter, be reversed.

But it was separately said that it was not open to the discretion of his Honour to order indemnity costs on the basis that the case presented by JC Automotive at first instance was hopeless. Reference was made to the well-known authority of House v The King (1936) 55 CLR 499 (House v The King) with regard to the review on appeal of discretionary decisions.

It was said in short that, even if it be the case that JC Automotive deserved to lose in the Local Court (of course, an ancillary position adopted by counsel for the sake of this argument only), its position of relying upon the onus of proof and the perceived lacuna in the case for Mr Hardy was hardly a hopeless forensic position that called for the “punishment” of indemnity costs.

Turning to my determination, it is quite true that minds may reasonably differ as to whether a case is so weak as to be able to be characterised as hopeless. Minds may also reasonably differ about the evaluative judgment as to whether to order indemnity costs, even if the first characterisation is established.

As I have shown above, however, neither the filed defence of JC Automotive, nor its approach to the evidence of the two witnesses in the case for Mr Hardy, nor any evidence called on its behalf, resisted in an affirmative way his simple contention: he had given his car in good condition into the custody of JC Automotive, it was returned to him damaged, and the digital evidence led very readily to the comfortable inference that that damage occurred whilst the item was under the care and responsibility of JC Automotive.

I think it was open to his Honour to find that the resistance to the claim, as it was presented at the hearing, was indeed hopeless. I also think that it was open, based on that finding, for his Honour to decide to order indemnity costs.

In short, applying the well-known limitations upon appellate review of discretionary decisions discussed in House v The King, I would not uphold this ground.

Because of my opinion that no substantive ground of appeal should succeed, there is no other basis for interfering with the costs order made at first instance.

No ground of appeal having been established, the appeal must be dismissed.

Neither party resisted the proposition that, if the appeal of JC Automotive were to fail, then it should be called upon to pay the costs of that appeal of Mr Hardy on the ordinary basis.

I make the following orders: