Citation: Hanna v Mahbub; Hanna v The Nominal Defendant [2018] NSWDC 310
Court: District Court of New South Wales
Date: 30 April 2018
Judge: P Taylor SC DCJ
Background
A minor rear-end collision occurred on 1 January 2014 when the defendant, an employee at the plaintiff's pizza shop, failed to stop his vehicle before nudging a stationary Honda Accord parked outside the shop. The defendant maintained from the outset that the Honda Accord was unoccupied at the time, and that the vehicle's owners had been inside the shop when the collision occurred.
Several months after the collision, both the male and female plaintiffs lodged personal injury claims under the motor accident compensation scheme, each making solemn statutory declarations that they had been occupants of the stationary vehicle. Their claims described extensive physical and psychological injuries. The defendant insurer resisted both claims on the basis that they were fraudulent.
When the matter came to trial, neither plaintiff appeared. The defendant sought to proceed to a hearing on the merits rather than simply have the claims dismissed, citing the fraud allegations and the insurer's statutory obligations in relation to fraudulent claims.
Legal Issues
- Whether the court should proceed to hear the matter on the merits under r 29.7(2) of the Uniform Civil Procedure Rules 2005 in the absence of the plaintiffs, or dismiss the proceedings under r 29.7(4).
- Whether the plaintiffs were in fact occupants of the stationary vehicle at the time of the collision.
- Whether the personal injury claims were false and fraudulent.
- Whether indemnity costs were appropriate given the conduct of the proceedings.
Decision
On the procedural question, the court acceded to the defendant's request to proceed to a hearing on the merits under r 29.7(2) of the UCPR, rather than simply dismissing the proceedings. The court noted that the absence of the parties and the operation of r 36.16 may limit the complete finality that would otherwise attach to the resulting judgment.
On the substantive question of fraud, the court accepted the defendant's oral evidence as honest and reliable. The defendant described seeing the vehicle's usual occupants enter the shop before the collision occurred and then emerge from the shop immediately after the collision. His evidence was consistent throughout and was not contradicted by any documentary evidence.
The court applied the principles from Briginshaw v Briginshaw (1938) 60 CLR 336, which require that the gravity of an allegation such as fraud be taken into account when assessing whether it has been established on the balance of probabilities. Notwithstanding that higher standard of satisfaction, the court found itself comfortably satisfied that the plaintiffs had not been in the vehicle at the time of the collision and had not sustained any physical injuries as a result of it. The claims were found to be false and fraudulent.
On costs, the court ordered indemnity costs against both plaintiffs. The claims were found to have had no merit and to have been known to be false since at least 2014, when the defendant had reported their falsity to the insurer. Despite that knowledge, the plaintiffs continued to prosecute the proceedings up to the hearing date, generating ongoing costs for the defendant.
Orders Made
In Mr Hanna's proceedings (2015/79747):
- Judgment for the defendant.
- Plaintiff to pay the defendant's costs on an indemnity basis.
- Evidence in proceedings 2015/79768 to stand as evidence in these proceedings.
In Mrs Hanna's proceedings (2015/79768):
- Judgment for the second defendant.
- Plaintiff to pay the second defendant's costs on an indemnity basis.
- Evidence in proceedings 2015/79747 to stand as evidence in these proceedings.
Key Takeaways
- The District Court confirmed that under r 29.7(2) of the UCPR, a defendant may elect to proceed to a hearing on the merits when a plaintiff fails to appear at trial, rather than seeking simple dismissal under r 29.7(4). The court noted this course may, however, affect the finality of any resulting judgment by operation of r 36.16.
- Where fraud is alleged in civil proceedings, the Briginshaw standard applies: the court must be satisfied on the balance of probabilities, but the gravity of the allegation requires a correspondingly higher degree of satisfaction before that standard is met.
- Sufficient evidence existed here, based on a single credible witness whose account was internally consistent and supported by documentary evidence, to satisfy that elevated standard and establish fraudulent conduct.
- Indemnity costs will be appropriate where claims are not only found to be false but were known to be false by the claimants, and the proceedings were nonetheless pursued through to a hearing.
- Statutory declarations attached to motor accident claim forms carry real weight: the court treated those declarations as central documents asserting the plaintiffs' presence in the vehicle, and their falsity was integral to the fraud finding.
Legislation and Cases Referenced
Legislation:
- Uniform Civil Procedure Rules 2005 (NSW), rr 29.7, 36.16
Cases:
- Briginshaw v Briginshaw (1938) 60 CLR 336