Facts
The Supreme Court of New South Wales
[1] recently allowed two appeals from a decision of a Magistrate in respect of property damage claimed as a result of a motor vehicle collision. The collision involved a BMW motor vehicle owned by Pabi Holdings Pty Ltd and driven by Parrai Bitsikas and two vehicles belonging to the NSW Police Force which were driven by police officers.
As a result of the accident, damage was sustained by all three of the vehicles involved. The State of NSW (on behalf of the NSW police) commenced proceedings against Mr Bitsikas for the damage occasioned to the police vehicles which totalled $6,642.37. Pabi Holdings commenced proceedings against the State of NSW alleging damage to his BMW in the sum of $32,869.14. The two proceedings were heard at the Burwood Local Court on 13 May 2008 before Magistrate Pierce who found in favour of Mr Bitsikas and Pabi Holdings. The State of NSW appealed this decision to the Supreme Court of NSW alleging that the Magistrate had erred in his application of the law in concluding negligence on the part of the NSW Police.
Background to the accident
On 2 February 2007 the police were conducting a period of surveillance upon Mr Bitsikas at his mother’s home in Dulwich Hill. At approximately 2.00pm that day, Mr Bitsikas reversed his BMW vehicle out of the driveway of the premises. At this time, two police vehicles drove towards Mr Bitsikas and stopped in front of his vehicle. A third vehicle approached Mr Bitsikas from behind. The police vehicles were unmarked and the police officers were not in uniform.
Mr Bitsikas’ vehicle collided with the two police vehicles that had approached him from the front resulting in damage to all three vehicles. The factual circumstances which culminated in the collision remained a point of contention between the parties at the hearing. While Mr Bitsikas claimed that the police vehicles rammed his car in an attempt to stop his vehicle, the police officers claimed that their vehicles were parked with a gap left between them and that Mr Bitsikas, in an attempt to escape, drove his vehicle between the two police vehicles. It was at this time that the collision involving the three vehicles occurred. There was a further factual dispute in relation to whether and at what time, sirens and police lights were used throughout the incident.
The NSW Police claimed negligence on the part of Mr Bitsikas including travelling at an excessive speed, failing to brake, steer or swerve so as to avoid the collision, failing to give way to the police vehicles and failing to keep a proper lookout. Mr Bitsikas, in his defence, alleged similar bases of negligence on the part of the police. Pabi Holdings Pty Ltd, the owner of the vehicle being driven by Mr Bitsikas also bought a claim against the police. Both Mr Bitsikas and Pabi Holdings alleged that the police had been negligent in the operation of their motor vehicles.
The Local Court Hearing
The Magistrate found in favour of both Mr Bitsikas and Pabi Holdings and held the NSW Police to be negligent and liable for the damage in respect of both matters.
On the issue of credibility, The Magistrate opined that the Mr Bitsikas, in his examination in chief, relayed his evidence in a spontaneous manner and thereby appeared as though he were telling the truth. For this reason, the Magistrate preferred Mr Bitsikas’ recount of the incident over that of the police officers.
The Magistrate found on the balance of probabilities that the police siren and lights were not initiated until such time that it was too late for Mr Bitsikas to realise that the vehicles were in fact police vehicles and to stop his vehicle. The Magistrate described Mr Bitsikas as being “preoccupied with the gun toting policeman in front of him” and found there to be no reason for the police to have blocked the exit as there was no such evidence that the defendant was an imminent risk to society. The Magistrate found the defendant to simply have been citizen who was being stopped by police at gun point.
On the issue of the damages recoverable, the Magistrate found that Pabi Holdings was able to recover damages for both the $9,000 diminution in value of the vehicle as well as for the cost of repairs of $33,649.29. The Magistrate, in allowing damages in respect of the vehicle’s diminution in value, relied upon the principle that the object of damages is to place the plaintiff in the same position as he would have been in had the negligence not occurred.
[2]
The central issue surrounding this determination was whether there was adequate evidence to support the claim for diminution in value. This involved consideration of the existence of expert evidence to support such a claim. Mr Bitsikas was the only person who gave evidence concerning the vehicle’s depreciation. In his statement, Mr Bitsikas outlined that “the car was sold at a significantly lower price than which I purchased it…it was evident that it had undergone major repairs…”
Mr Bitsikas further stated that in his experience of buying and selling M3 prestige BMW vehicles for the last 15 years, such vehicles involved in a motor vehicle accident are almost always sold for a significantly lower price as buyers are not prepared to pay a premium for these vehicles.
[3]
The Magistrate accepted Mr Bitsikas as an expert for the purposes of determining the issue of depreciation. Mr Bitsikas was not cross-examined on the price that he claimed to have paid for the vehicle and the subsequent price that he received when it was sold. Counsel for the NSW Police drew attention to the fact that Mr Bitsikas failed to comply with the experts’ code of conduct and sought to rely upon the proposition expounded in
Makita v Sprowles [4] concerning the requirement for experts to explain and describe their reasoning and the facts upon which their opinions are based.
The Magistrate rejected this proposition and stated that as Mr Bitsikas was not challenged on this issue, the matter must be distinguished from Makita v Sprowles and therefore the failure to cross-examine Mr Bitsikas on this critical issue cannot later be relied upon in order to support a claim that Mr Bitsikas lacked the requisite qualifications and experience to be classified as an expert.
The Magistrate decided both matters to the detriment of the NSW Police and as such, the State of NSW was held liable for the damage caused to the vehicle owned by Pabi Holdings Pty Ltd.
Issues on appeal
The NSW Police appealed the Magistrate’s decision in respect of both matters upon the following bases:
1.holding the plaintiff liable to the defendant without making any finding that the drivers of the plaintiff’s motor vehicles had been negligent (“the negligence point”);
2.failing to determine critical issues of facts put forward for determination (“the facts point”);
3.failing to provide adequate reasons (“the reasons point”).
In relation to the Pabi Holdings proceedings, there were two further grounds of appeal as follows:
4.admitting evidence in contravention of section 79 of the Evidence Act 1995 and the common law as it applies to expert evidence; and
5.awarding damages for depreciation.
The Supreme Court Judgment
Justice Davies allowed the appeals and found the Magistrate’s decisions to be both inadequate and substantially flawed. His Honour outlined the principles that are to be applied in determining the adequacy of reasons referring to, among others, the obligation to outline the reasoning process undertaken by the judge in reaching a determination on a critical point.
[5] Failing to do this may result in an inadequate decision making process and moreover, an inadequate judgment. According to Davies J, the Magistrate was obliged to make a finding of fact about the circumstances of the incident so that a determination of negligence on the part of one or more parties could be both justified and understood.
[6] At first instance, Mr Bitsikas was found to have not been negligent in misjudging the width of the gap between the two police vehicles. It should not and cannot then follow that the police officers were thus negligent. Davies J highlighted the possibility that the accident may have occurred without negligence on the part of any person or alternatively that both Mr Bitsikas and the police officers were contributorily negligent. The Magistrate was obliged to reach conclusions as to several factual matters prior to concluding that one party was responsible for the accident. Furthermore, the Magistrate failed to adequately reason why he preferred the evidence of Mr Bitsikas over that of the police officers. According to Davies J,
“it is not possible for an Appeal Court to form a view about who might have been negligent when essential findings of fact have not been made.”
[7]
The Magistrate erred further in allowing into evidence Mr Bitsikis’ statements concerning the depreciation of his motor vehicle. This evidence contravened the Expert Witness Code and according to Davies J, the evidence was entirely inadequate to establish any expertise in Mr Bitsikas.
[8]
Conclusion
The two appeals were allowed by the Supreme Court of NSW and both matters have been remitted to the Local Court to be heard and determined according to law by another Magistrate. The Magistrate at first instance made several crucial errors of both fact and law which were irreconcilable. In failing to reach findings on several crucial factual matters, the Magistrate was unable to reach a finding of negligence with any reason in both law and fact. This failure to reason was a reoccurring feature of the Magistrate’s judgment which applied to determinations as to credibility, negligence and the admissibility of evidence. The Supreme Court judgment upholds the deeply entrenched principle of our legal system that judges are to make findings based strictly upon the application of legal principles and reasoning rather than merely reach a finding by way of opinion or personal preference. A failure to give adequate reasons will result in appellate intervention.
The case also reaffirms the need to obtain properly admissible expert evidence in relation to alleged losses.
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[1] In
State of NSW v Bitskikas & State of NSW v Pabi Holdings Pty Ltd [2010] NSW 773.
[2] The Magistrate referred to
Halsbury's Laws of Australia (no citation noted).
[3] At para [30] of Mr Bitsikas statement which was tendered as evidence in the Local Court hearing.
[5] Soulemizis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR247, 260 per Kirby J.
[6] State of NSW v Bitsikas & State of NSW v Pabi Holdings Pty Ltd [2010] NSWSC 773,25.
[7] State opf NSW v Bitsikas & State of NSW v Pabi Holdings Pty Ltd [2010] NSW 773,36
[8] State of NSW v Bitsikas & State of NSW v Pabi Holdings Pty Ltd [2010] NSWSC 773,44.
