Case note: Lee v Lee & Ors [2017] QSC 42

1. Highlights

  • In circumstances where there are doubts in relation to indemnity or there is an ongoing dispute between an insurer and a potential insured as to indemnity, a detailed and multi-faceted investigation of the evidence is critical for insurers in determining coverage.
  • An insurer does not necessarily have an obligation to call an insured as a witness if the insurer, on reasonable grounds, believes that the insured will provide an untruthful account of the relevant facts. This proposition is not affected by the insurer’s statutory right to apply to cross-examine the insured.
  • Relevant considerations:
    • the weight to be given to witness evidence and expert evidence; and
    • adverse inferences pursuant to the principle in Jones v Dunkel.

2. Facts

  • Lien-Yang Lee (the plaintiff), a 17 year old without any form of driving licence, suffered catastrophic spinal injuries when the vehicle in which he was travelling with his family on Stradbroke Island in Queensland collided head on with another vehicle.
  • The plaintiff asserted that his father (the first defendant) was driving the family’s vehicle at the time of the collision, and that the plaintiff was a back seat passenger with his two brothers. The first defendant and the plaintiff’s mother (the second defendant), also maintained that the first defendant was driving at the time of the accident, although the first defendant was not ultimately called as a witness at trial. Police attending the scene of the accident formed the view that the plaintiff was driving the vehicle at the time of the collision.
  • The plaintiff commenced proceedings in the Supreme Court of Queensland claiming damages against the first and second defendants, as well as the CTP insurer for the family vehicle, RACQ Insurance Limited (the third defendant).
  • The third defendant pleaded in its Defence that the plaintiff was driving the vehicle at the time of the collision, and that by doing so without a driving licence, the plaintiff was entirely responsible for his own injuries, or alternatively, was 100% contributorily negligent.
  • The third defendant also made a counterclaim to recover the compensation monies that it had paid to the plaintiff and first and second defendants following the accident, on the basis of their false representations that the first defendant was the driver at the time of the accident.

Plaintiff’s submissions

  • The plaintiff relied upon the witness evidence provided by himself and his parents in support of his claim, and submitted that the evidence suggesting that he was the driver of the vehicle was entirely circumstantial. In particular, the plaintiff argued that:
    • Whilst the expert evidence suggested that the plaintiff’s injuries were more consistent with him sitting in the driver’s seat, the medical experts also accepted that the plaintiff’s injuries could have occurred whilst he was sitting in the back passenger seat; and
    • The plaintiff’s DNA was the only DNA found on the airbag in the driver’s seat because the first defendant had transferred the plaintiff’s blood there. The plaintiff stated that the first defendant lifted him out of the back seat immediately following the accident, and that the first defendant then wiped his hands on the driver’s seat airbag.

Third defendant’s submissions

  • The third defendant stated that the straightforward nature of the collision was consistent with the plaintiff (an inexperienced driver) being the driver of the family’s vehicle at the relevant time. The third defendant also submitted that:
    • The expert medical and biomechanical evidence suggested that the plaintiff’s facial, dental and spinal injuries were consistent with him having struck a deployed airbag without any restraint from a seatbelt. The back passenger seats did not have airbags.
    • The DNA and other forensic evidence indicated that the blood on the driver’s airbag was the plaintiff’s blood, and that this blood had come from direct contact with the plaintiff rather than via his father’s hands.
    • The witness evidence provided by the plaintiff, first defendant and second defendant lacked credibility, was evasive, and was not consistent with the expert mechanical or forensic evidence. The plaintiff also declined to be interviewed by the police following the accident and failed to call the first defendant as a witness during trial, despite the third defendant attending the entirety of the trial.

3. Decision

  • The trial judge found in favour of the third defendant in both the plaintiff’s claim, and the third defendant’s counterclaim.

Balancing the witness evidence and the expert evidence

  • The trial judge, Boddice J, found that the evidence given at trial by the plaintiff and the second defendant lacked reliability and credibility. His Honour placed significance on the fact that neither the plaintiff’s nor the second defendant’s evidence provided an explanation as to how a substantial amount of the plaintiff’s blood was on the driver’s airbag.
  • Boddice J also did not accept the accuracy of the sworn statement provided by the first defendant to the third defendant’s investigator (tendered as evidence at trial), as this statement was contradicted by the evidence of the driver of the other vehicle in the accident and the expert mechanical evidence.
  • Of the large amount of expert evidence obtained in this matter, His Honour found the mechanical evidence in relation to the condition of the car and the forensic evidence in relation to the blood staining on the driver’s airbag as among the most persuasive. Expert medical evidence in relation to the cause of the injuries suffered by the plaintiff also supported a finding that the plaintiff was the driver at the time of the accident.

Jones v Dunkel

  • Both the plaintiff and the third defendant made submissions that the failure of the other to call the first defendant as a witness was capable of giving rise to an adverse inference pursuant to the principle in Jones v Dunkel.
  • In relation to the plaintiff’s submission that the third defendant had an obligation to call the first defendant because he was one of the third defendant’s insured persons, His Honour did not accept that such an obligation exists and stated that there was a reasonable explanation as to why the third defendant did not call the first defendant, as follows:

The third defendant, on reasonable grounds, believed that the first defendant had given an untruthful account to its investigator. It is not reasonable to expect, in such circumstances, that an insurer would call in its case a witness whose account was untruthful”.

  • His Honour stated that this conclusion is not affected by the third defendant’s statutory right to apply to cross-examine the first defendant.
  • His Honour found no such reasonable explanation as to why the plaintiff failed to call the first defendant as a witness. His Honour noted that the first defendant could have given evidence directly supportive of the plaintiff’s case, that the first defendant was present in court throughout the trial and that he lived with the plaintiff.
  • In response to the plaintiff’s explanation that the first defendant was an insured person who should have been called by the third defendant, His Honour noted the inconsistency of this argument by stating that the plaintiff did not hesitate to call the second defendant, who was also an insured.
  • However, Boddice J did not ultimately draw any adverse inference against the plaintiff, as he reached the conclusion that the plaintiff was the driver at the time of the accident without needing to draw any such adverse inference.

Counterclaim

  • Following on from the conclusions reached in relation to the plaintiff’s claim, Boddice J found that each of the insurance claim forms submitted on behalf of the plaintiff, first defendant and second defendant falsely represented that the first defendant was the driver at the time of the accident.
  • On this basis, His Honour concluded that the plaintiff, first defendant and second defendant knowingly deceived the third defendant, with the intention of inducing the third defendant to make compensation payments that it was not required to make (if the plaintiff was the driver). Accordingly, both the plaintiff’s claim and the third defendant’s counterclaim resulted in a verdict for the third defendant.

4. Implications

  • The decision in Lee acts as an important reminder about the need for insurers to thoroughly investigate claims where there are any doubts in relation to indemnity, or when there are ambiguities as to the factual circumstances of a claim.
  • The decision also confirms that an insurer is not necessarily required to call an insured if the insurer, on reasonable grounds, believes that the insured will provide an untruthful account of the facts relevant to the claim.

 

This case note was written by Principal Robert Minc and Senior Associate Tim Brown. For further information, please feel free to contact them.

Disclaimer: This information is current as of February 2018. These articles do not constitute legal advice and do not give rise to any solicitor/client relationship between Meridian Lawyers and the reader. Professional legal advice should be sought before acting or relying upon the content of these articles.

 

 


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