Elskaf v GIO General Limited

THE COURT: This is an appeal from a decision of the District Court. The primary Judge (Wass SC DCJ) dismissed the appellant’s claim against the respondent (GIO) under a Motor Vehicle Insurance Policy (Policy) for the agreed value of a Ferrari 360 Modena vehicle (Vehicle). [1] The appellant’s case was that the Vehicle was rendered a “statutory write-off” when he drove the Vehicle at the direction of the police into floodwaters on Newbridge Road, Moorebank on 8 March 2012. Under the Policy the agreed value of the Vehicle was $185,000.

The primary Judge noted the parties’ agreement that a vehicle sustains “non-repairable damage” so as to become a “statutory write-off” if the cabin of the vehicle is inundated with water to a level higher than the inner doorsill. [2] Her Honour stated that a resolution of the claim in the appellant’s favour depended on the Court being satisfied on the balance of probabilities that the cabin of the Vehicle was inundated to at least that level. [3] There is no dispute that her Honour correctly identified the factual issue requiring determination.

The primary Judge found, after a careful review of the lay and expert evidence, that the appellant had failed to establish that the Vehicle had sustained sufficient water damage during the incident of 8 March 2012 to be rendered a statutory write-off. The primary Judge’s finding rested in significant part on her Honour’s rejection of the appellant’s evidence as “wholly unreliable” and in some important respects “inherently unbelievable”. [4] However, her Honour also found on the basis of the expert evidence that there was no reliable objective material to support the appellant’s claim. In these circumstances the appellant faces a formidable task in identifying and establishing that the primary Judge’s findings were affected by appellable error. [5]

The appellant gave different accounts of the relevant events in two affidavits sworn some 28 months apart. In substance, however, he claimed that he was driving the Vehicle in Moorebank when he was forced to stop by floodwaters on Newbridge Road. As he was unable to reverse the Vehicle, he was directed by police to move forward. He proceeded slowly but noticed that the water came up to the headlight assembly on the front of the Vehicle. At that point the Vehicle stopped and would not start again. Water gushed into the Vehicle as it was being pushed out of the floodwaters. According to the appellant, the water inside the Vehicle reached above the level of the doorsill.

The primary Judge identified numerous inconsistencies and implausible claims made in the appellant’s evidence. These led her to the conclusion that his evidence was wholly unreliable. Although the appellant’s evidence was supported by his brother, who was a passenger in the Vehicle at the relevant time, her Honour considered that little weight could be given to the brother’s evidence. [6] Her Honour noted that the brother had not made an affidavit and had given oral evidence of events that had occurred five years earlier only after he had listened in court to the appellant’s account.

The primary Judge considered in detail four reports tendered by the parties. The appellant tendered a report by Mr Wainwright, an automotive loss assessor. GIO tendered reports from its Assessing Manager and Senior Technical Motor Assessor, as well as two reports from Mr Cracknell, an Automotive Technical and Forensic Examiner.

The primary Judge identified numerous deficiencies in Mr Wainwright’s report. [7] These included the failure to comply with the requirements for the admissibility of an expert report and the fact that his opinions were based on an inspection of the Vehicle some seven months after the incident. By contrast, the GIO’s witnesses inspected the Vehicle shortly after the incident and their reports, particularly those of Mr Cracknell, provided affirmative and persuasive evidence that the Vehicle had not been inundated to the level claimed by the appellant. [8]

The primary Judge observed that even without GIO’s expert evidence she would have had difficulty accepting the evidence of the appellant and his brother. [9] She gave these reasons: [10]

The primary Judge went on to say that the accounts of the appellant and his brother had to be weighed against the expert evidence which: [11]

The primary Judge said that she would have awarded damages for the repairs required to the Vehicle as a result of water damage. But the appellant had abandoned that case and had adduced no evidence as to the cost of any repairs. [12] Accordingly the claim had to be dismissed.

The appellant’s notice of appeal contends that her Honour should have accepted the appellant’s account that water inside the Vehicle came up at least to the height of the inner doorsill. The appellant says that the primary Judge’s adverse credit findings were improperly based on her belief that the Ferrari was deliberately driven into the floodwaters. The appellant also complains that the Primary Judgment was not delivered until eleven months after the hearing, although it is not clear what is said to follow from the delay and nothing was said on the subject during oral argument.

The principal argument advanced in the appellant’s written submissions is that the trial miscarried because the primary Judge speculated that the appellant had been involved in a fraud, when GIO had not pleaded fraud. The basis for this submission is what is said to be the primary Judge’s rejection of the appellant’s evidence that a photograph of a partially submerged Ferrari was a photograph of the Vehicle taken on the day of the incident. According to Mr Allen, who appeared for the appellant, a fair-minded person would reasonably suspect that the primary Judge decided or “at least speculated” that the appellant was not honest because he had arranged for someone to take a photograph of the Vehicle being deliberately driven into floodwaters.

It is true that her Honour expressed considerable scepticism as to the circumstances in which the photograph came into the appellant’s hands from an unnamed source, as the following passage shows: [13]

But despite that scepticism, which seems to have been well-founded, her Honour said that she accepted: [14]

The primary Judge noted that it was “curious” that the unnamed photographer photographed the Vehicle, yet did not stay to document the stalling of the Vehicle and water gushing into the cabin. But given the state of the evidence her Honour made no finding in respect of that matter. [15]

When the Primary Judgment is read as a whole, it is clear that the primary Judge made no finding of fraud, and indeed was prepared to accept that the photograph was authentic. Even so, she considered that the evidence fell short of persuading her that the level of inundation was such as to render the Vehicle a statutory write-off. The appellant makes no complaint about her Honour’s assessment of the expert reports which not only did not support the appellant’s case but provided positive evidence that the water had not risen above the level of the doorsill. Mr Allen, in response to a question from the Bench, very properly agreed that there was no objective material that cast doubt on the primary Judge’s findings.

The appellant’s submissions also overlook the need for her Honour to have assessed the credibility of the appellant’s account of the relevant events. It was quite appropriate for her Honour to comment on the inconsistencies in the appellant’s account and the implausibility of some of his evidence. If the appellant’s submissions are intended to suggest that the primary Judge’s approach raises a question of apprehension of bias, they fail to appreciate that the appellant’s credit was directly challenged and that her Honour had to address that challenge.

The appellant drew attention to the primary Judge’s comment that she found “particularly unbelievable” the seemingly coincidental presence of the unnamed photographer at the scene. [16] Mr Allen submitted that this was a finding that was somehow unfair to the appellant. However the comment was made in the context of her Honour’s explanation as to why, even without GIO’s expert evidence, she would have had difficulty in accepting the evidence of the appellant and his brother. The comment does not detract in any way from her Honour’s analysis of the expert evidence, which was based on the assumption that the Vehicle entered the floodwaters on 8 March 2012, as depicted in the photograph annexed to the appellant’s affidavit. Nor does it detract from the critical finding that the appellant failed to establish that water had flooded the Vehicle to the level of the doorsill.

It is not to the point that the appellant’s evidence was consistent with his claim that the Vehicle was inundated above the inner doorsill. The primary Judge had to determine the reliability of that evidence having regard both to her assessment of the appellant’s truthfulness and to the objective facts established by the reports of the experts, particularly those of Mr Cracknell. Contrary to the appellant’s submissions, by making a determination adverse to the appellant the primary Judge did not display “hostility” to the appellant’s claim.

We add the following observation. We are not aware of the reasons why the Primary Judgment took eleven months to be delivered, but it is not desirable that the parties to litigation, the resolution of which depends on the outcome of relatively straightforward factual disputes, should have to wait nearly a year for the judgment. However, the appellant has not identified any flaw in the primary Judge’s approach that could be said to be a consequence of the delay in delivering judgment.

The appeal must be dismissed, with costs.