Case Note – Azar v Kathirgamalingan [2011] NSWDC 56

Case law and mass media are replete with examples of claims whose outcomes have been influenced by surveillance evidence.

If surveillance builds a persuasive picture of a claimant’s abilities, and in circumstances where it is of sufficient quantity and consistency, the fact that a claimant does not know he/she is under observation might be serve to endow the evidence with objective qualities.

Similarly, it has been the practice of insurers to rely on surveillance evidence without prior service and without notice to the claimant.  This approach holds that if a claimant’s bona fides are not impugned by the observations, his or her response to the surveillance will possess merit without need for preparation or contrivance.

In recent times, an insurer’s ability to rely on surveillance without prior service has, on occasion, suffered via application of Uniform Civil Procedure Rule 31.10.  This rule provides:

(1)       At least 7 days before the commencement of a hearing, a party who intends a tender any plan, photograph or model at the hearing must give the other parties an opportunity to inspect it and to agree to its admission without proof.

(2)     A party who fails to comply with sub-rule (1) may not tender the plan, photograph or model in evidence except by leave of the court.

There are instances where the NSW District Court has relied on this rule as a ground to exclude surveillance evidence that has not been served. The rule has not been considered by a superior court.

The rule was addressed by Truss DCJ in a motion on 17 March 2011 in the matter Azar v Kathirgamalingan [2011] NSWDC 56.  The strategy adopted by the insurer in that matter, and her Honour’s response to that strategy, are instructive.

Ms Azar was injured in a motor vehicle accident.  Her claim was substantial.  A significant element of it concerned psychiatric injury.  The defendant insurer asserted that Ms Azar’s credit would be a central issue.  The insurer obtained surveillance evidence that it said would be significant to assessment of credit. 

The insurer took steps to ensure that it could rely on the surveillance evidence during cross examination without prior service.  It brought a Notice of Motion seeking 3 orders: 

• leave be granted under Rule 31.10(2) to show the surveillance evidence to the plaintiff in cross examination and to use and tender it at the hearing
• the defendant be excused from compliance with Rule 31.10(1) in respect of the surveillance evidence
• the defendant have leave to show the film to his experts and not be required to serve supplementary reports dealing with the film until after cross examination.

The insurer sought consideration of the motion on an ex parte basis – this request was declined and her Honour insisted that the plaintiff be given opportunity to be heard. The motion was heard without affording the plaintiff’s representatives an opportunity to view the surveillance evidence; whilst the evidence’s existence was disclosed, its content was not revealed.

Her Honour was invited to view the film so that she could ascertain whether it was germane to credit.  She declined to do so.  She accepted the insurer’s contention on this point.

The insurer observed that despite the application it did not concede that Rule 31.10 applied to surveillance film.  The insurer’s overriding contention was, and would remain, that the rule does not capture surveillance video.  The insurer submitted that annotation 31.10.15 in Ritchie’s, to the extent that it suggests that surveillance video is captured by the rule, is not correct.

The parties were not able to identify a relevant NSW superior court decision.  Her Honour dealt with the issue of the rule’s applicability to surveillance video as follows: 

“[17]   The Court informed counsel that due to insufficient time for this issue to be argued and determined fully, the Court would deal with this application on the basis that Rule 31.10 applies to surveillance evidence.”

Proceeding from this basis, the insurer offered submissions in support of its motion.  It submitted that the orders should be granted because of the extent to which credit would be an issue and the relevance of credit to the court’s deliberations.  The insurer observed authority for the proposition that presentation of its case would entail not merely an opportunity to adduce evidence, but additionally an opportunity to test the claimant’s evidence.  The defendant provided examples of cases where a plaintiff’s access to evidence was withheld until after cross examination.

The plaintiff submitted that the video should be served prior to cross examination.  Her submissions noted a “trend in litigation in more recent times towards what was colloquially referred to as a cards on the table approach as opposed to the former, often referred to as trial by ambush”.  [20].

Her Honour’s deliberations contemplated Halpin & Ors v Lumley General Insurance Ltd [2009] NSWCA 372.  In this matter the Court of Appeal permitted a defendant to exclude affidavits and other evidence from orders requiring service.  The Court of Appeal in Halpin’s matter commented:

“There is no inconsistency between these statements of principle and the existence of a power, exercisable for good cause and appropriate circumstances, to direct that a party may withhold affidavits until trial.  The making of such a direction does not imply that the trial is to be conducted by ambush, … on the contrary … a direction to be made should ensure that the issues are clearly defined and the party seeking the directions demonstrates that the ‘dictates of justice’ will be served by the direction.”  [101]

“For these reasons I conclude that the courts in New South Wales have power under the Civil Procedure Act and the UCPR to make orders relieving one party to civil litigation for complying, in whole or in part, with directions that would otherwise (require a party) to disclose to the other in advance of the trial all affidavits and reports to be adduced in evidence at the trial.”  [107]

“The reasonable entitlement of a defendant to preserve pre-trial confidentiality and the results of its investigations, in the face of suspected fraud, remains a legitimate interest.”  [317]

The Court of Appeal indicated that when determining whether evidence must be served it is not necessary for a judge at an interlocutory stage to be satisfied that there is fraud or untruthfulness, but merely to be satisfied that there is a “real basis for suspicion so that to withhold the material is legitimate in all the circumstances”.

Judge Truss resolved the competing arguments by the following formulation.

“[26]     Obviously caution is required before one party is given what could be regarded as a forensic advantage by being exempted from a requirement of the rules.  (Counsel for the plaintiff) submitted that the making of the orders sought would cause unfairness to the plaintiff, as she may not now be able to recall the events recorded in this evidence … plaintiffs are only required to give their evidence to the best of their recollection, imperfect as that may be.  A plaintiff giving truthful evidence generally has nothing to fear from surveillance evidence.  On the other hand, the disclosure of such evidence would give the plaintiff, not giving evidence in a truthful manner, the opportunity to tailor his or her evidence to meet the film.  Whilst openness and co-operation are not only desirable but are now also required in modern litigation it is not necessarily appropriate where credit is an issue.”

Her Honour made the first 2 orders sought by the defendant.  The defendant was not required to serve the surveillance evidence and would be permitted to rely upon it in cross examination, and tender it, without prior service.

Her Honour declined to make the third order sought.  She found that permitting the defendant’s experts to comment on surveillance evidence in supplementary reports, without serving those supplementary reports until after cross examination, would give the defendant an unfair advantage.

Her Honour observed the provisions of the Civil Procedure Act.  She opined that her decision concurred with section 58 and the emphasis that it places on pursuit of “dictates of justice”.

Practical Relevance of this case to Insurers