Zardo v Ivancic [2003] ACTSC 32 (16 May 2003)

Last Updated: 20 May 2003

NICK ZARDO v MATE IVANCIC [2003] ACTSC 32 (16 May 2003)

JUDGMENTS AND ORDERS - Relief of liability to pay consent judgment - judgment procured by fraud.

MOTOR ACCIDENTS ACT 1988 (NSW), s 66 - Judgment obtained by fraud - complete knowledge only defence - proof of due diligence not required.

Motor Accidents Act 1988 (NSW), ss 49, 65, 66, 79A

Evidence Act 1995 (Cth), s 60

Interpretation Act 1987 (NSW), s 34

John Pfeiffer Pty Limited v Rogerson [2000] HCA 36; 203 CLR 503

Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 112 ALR 627 Toubia v Schwenke [2002] NSWCA 34; (2002) 54 NSWLR 46

Lee v The Queen [1998] HCA 60; (1980) 195 CLR 594

Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691

Jamieson v The Queen (1993) 177 CLR 575

Jones v Dunkel (1959) 101 CLR

Booth v Bosworth [2001] FCA 1453; (2001) 114 FLR 39

Toubia v Schewnke (unreported, 28 July 2000, District Court of New South Wales)

Fox v Wood [1981] HCA 41; (1981) 148 CLR 438

Ramsay v Watson (1960) 108 CLR 462

Paric v John Holland (Constructions) Pty Ltd [1985] HCA 58; (1985) 59 ALJR 844

Motor Accidents: The Act and Background Papers, NSW Government Printer, 1989

Second Reading Speech (Parliamentary Debates (Hansard) 29 November 1988) at 122

No SC 772 of 2000

Judge: Connolly J

Supreme Court of the ACT

Date: 16 May 2003

IN THE SUPREME COURT OF THE )

) No SC 772 of 2000

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: NICK ZARDO

Plaintiff

AND: MATE IVANCIC

Defendant

ORDER

Judge: Connolly J

Date: 16 May 2003

Place: Canberra

THE COURT ORDERS THAT:

1. The plaintiff be relieved of liability under the consent judgment obtained in matter No SC 619 of 1997 in the sum of $350,000.

2. The defendant pay the plaintiff's costs of these proceedings.

1. This is an action brought pursuant to s 66 of the Motor Accidents Act 1988 (NSW) (the Motor Accidents Act) to set aside a consent judgment obtained by the present defendant, Mr Ivancic, against the present plaintiff in respect of a motor vehicle accident, which occurred in New South Wales on 3 July 1997. The basis for setting the consent judgment aside is, in short, that the present plaintiff claims that Mr Ivancic obtained the judgment by fraud. Mr Ivancic commenced proceedings in this Court by way of Originating Application filed on 29 August 1997 (SC 619 of 1997). By Statement of Particulars dated 19 June 2000 and served on the present plaintiff's solicitors, who were acting on instructions from the Third Party motor insurer, NRMA Insurance, Mr Ivancic claimed that he was precluded from working due to significant soft tissue injuries and psychological difficulties arising from the motor vehicle accident. Mr Ivancic provided various medical reports in support of his claim, and he was examined by Doctors R McEwin and P Snowdon for the present plaintiff.

2. Settlement negotiations were entered into in about July 2000, and on 14 August 2000 terms of settlement were agreed which resulted in a judgment for Mr Ivancic against the present plaintiff in the sum of $425,000 plus legal costs which were agreed at $30,000. The judgment was formally entered in this Court on 16 August 2000.

3. There was evidence before me in this hearing that before the settlement NRMA had authorised video surveillance of Mr Ivancic, and a certain period of surveillance had been requested shortly before the settlement negotiations. Due to an administrative oversight, no one advised the investigator that the matter had settled and, acting on his previous instructions, the investigator continued, amongst other surveillance tasks, to monitor Mr Ivancic after the settlement. Video film was obtained of Mr Ivancic acting in a manner which, it is said by the present plaintiff, was totally inconsistent with his claimed medical condition, and with the earlier video surveillance material obtained before the settlement. The present plaintiff claims that Mr Ivancic grossly exaggerated and lied about the extent of his accident-related disabilities in order to improperly obtain a large judgment from the insurer.

4. Superior courts have always had an inherent jurisdiction to set aside a judgment obtained by fraud, even where the judgment has been obtained by consent. The Motor Accidents Act has created a statutory scheme to deal with the assessment of motor claims arising from accidents in New South Wales, and the Act also deals with fraudulent claims. Because this accident occurred in New South Wales the law to be applied is, pursuant to the principles in John Pfeiffer Pty Limited v Rogerson [2000] HCA 36; 203 CLR 503, the law of New South Wales.

5. Section 65 of the Motor Accidents Act makes it an offence punishable by a maximum penalty of 50 penalty units or twelve months imprisonment, or both, for a person to make a statement knowing it to be false or misleading in a material particular when furnishing information to any person concerning any claim relating to a motor accident.

6. Section 66 of the Act provides:

REMEDY AVAILABLE WHERE CLAIM FRAUDULENT

66(1) [Financial benefit obtained] This section applies to a claimant if it is established that, for the purpose of obtaining a financial benefit, the claimant did or omitted to do anything (including the making of a statement) concerning a motor accident or any claim relating to a motor accident with knowledge that the doing of the thing or the omission to do the thing was false or misleading.

66(2) [Relief or recover of financial benefit] If this section applies to a claimant:

(a) a person who has a liability in respect of a payment, settlement, compromise or judgment relating to the claim is relieved from that liability to the extent of the financial benefit so obtained by the claimant; and

(b) a person who has paid an amount to the claimant in connection with the claim (whether under a settlement, compromise or judgment, or otherwise) is entitled to recover from the claimant the amount of the financial benefit so obtained by the claimant and any costs incurred in connection with the claims.

7. The present plaintiff commenced these proceedings on 10 November 2000, at a time when the judgment sum had not yet been paid over, so the relief that is sought is a relief from the liability to pay the judgment to the extent of the benefit obtained by reason of the false or misleading statements, pursuant to s 66(2)(a).

8. The test to be applied in an action commenced pursuant to s 66 of the Motor Accidents Act has been set out by Handley JA in the New South Wales Court of Appeal in Toubia v Schwenke [2002] NSWCA 34; (2002) 54 NSWLR 46. Justices Heydon and Hodgson agreed with his Honour's reasons. The relevant test, it seems to me, is that set out at [13] to [15] of his Honour's reasons where he says :

Plaintiffs bringing proceedings under s 66 must prove (where statements are relied on) that the defendant made statements for the purpose of obtaining a financial benefit and with knowledge that they were false or misleading. ...

The references in s 66(2)(a) and s 66(2)(b) to "the financial benefit so obtained" require proof of a causal link between the false or misleading statement and the obtaining of the benefit. The causal link is that required under the general law to establish fraud, namely proof of inducement, that is that the representee accepted the representation as true and acted on that belief to his detriment.

It must be established that the representee was deceived when he acted on the fraudulent misrepresentation. Knowledge of the truth at the relevant time would be an answer to an action under s 66. The relevant principles are summarised in Spencer Bower, Tuner and Handley Actionable Misrepresentation, 4^th ed (2000) London, Butterworths at 116-117:

"A representee who knows or discovers the truth in time is not deceived. Such knowledge is a good answer to any form of proceeding based on the misrepresentation. A representee cannot be misled by a statement which he knew to be false ... It is sufficient that the facts became known to the representee from whatever source before he altered his position ... a representation normally continues during the interval between its communication and any alteration of position under its inducement ... The representee's knowledge of the truth must be full and complete. Partial and fragmentary information, or mere suspicion, will not do: `... suspicion, doubt and mistrust do not have the same consequence as knowledge'."

9. As a single judge of this Court, I would normally regard a decision of the Court of Appeal of that jurisdiction, while not strictly binding, of great persuasive authority. Given that the High Court has stated in Pfeiffer v Rogerson that I must apply the law of New South Wales, and the law of New South Wales for present purposes is s 66 of the Motor Accidents Act, it may well be that I am in fact bound, as a judge of this Court, to apply the law as it has been held to be by the New South Wales Court of Appeal. In that sense, the decision of the New South Wales Court of Appeal, which states the law in New South Wales could be seen as binding on a single judge in another jurisdiction. The implications of Pfeiffer v Rogerson on the doctrine of precedent have yet to be fully worked through.

10. Even if not strictly binding, it seems to me that, in considering the effect of an interstate enactment, a single judge of another court should not depart from an interpretation placed on that legislation by an intermediate appellate court unless convinced that that interpretation is plainly wrong. This is the approach that the High Court has endorsed in relation to the interpretation of uniform legislative provisions in Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 112 ALR 627 at 629.

11. I note that the decision in Toubia v Schwenke was the subject of an application for special leave to the High Court on 13 December 2002. The application was dismissed with costs, Gummow J saying:

The Court is of the view that the decision of the New South Wales Court of Appeal was correct.

12. Mr Webb, for Mr Ivancic, urged me to adopt a different construction of the section, but it seems to me that the construction set out by Handley JA and endorsed by Heydon and Hodgson JJA is correct. In any event it represents the law in New South Wales, which I am bound to apply, and it has been endorsed by the High Court, albeit in the context of rejecting an application for special leave. I adopt that approach.

13. A preliminary point, which must be determined, is the question of who it is that must have been misled. It is the present plaintiff's case that the relevant person in this case was the assessor in the insurance company who authorised the settlement figure on behalf of the insurer. It seems to me that this is correct, and is consistent with the reasoning of Toubia v Schwenke, where it is implicit in the reasoning of Handley JA that it is the state of mind of the insurer that is in question ([16], [20]). There was no real contest in relation to this point, and indeed at a directions hearing in this matter I ordered the present plaintiff to prepare an affidavit setting out the reasoning process of the relevant officer in the insurer, Mr Robert Nunn, who approved the settlement. An affidavit of Mr Nunn was tendered, and he was subjected to extensive examination and cross-examination.

14. I find that on 3 July 1997 the defendant was involved in a motor vehicle accident in which he sustained an injury, which was recorded in the ambulance notes as pain in the neck with no other injuries, no loss of motor response and no loss of consciousness (exhibit B document 2(a)). On examination at the Queanbeyan Hospital he was found to have a right-sided head haematoma, and normal power to both arms and legs. He complained of slight neck pain. He was kept under observation for some hours, and then discharged home (exhibit B document 2 (a)).

15. He attended his general practitioner, Dr G Rosendahl, who identified soft tissue injury to the neck and what he described in his report of 13 August 1997 (exhibit B document 2 (d)) as:

an acute stress problem arising from the personal danger of the accident which is already exhibiting itself in phobic fear of the driving circumstance.

16. By November 1997 Dr Rosendahl had varied his diagnosis to "significant intellectual impairment and soft tissue neck injury in a motor vehicle accident", and expressed the view that he "considered it unlikely that Mr Ivancic would return to work as a bricklayer in the building and construction industry" (exhibit B document 2(f)). Mr Ivancic also complained of knee difficulties. I note that in a number of the medical reports before me he has told various doctors that he was unconscious in the accident, notwithstanding the contemporaneous record of the ambulance officers.

17. He was examined on behalf of the present plaintiff by Dr RJ Oakeshott on 8 December 1997, who found a full range of movement in the neck, arms and knees, and concluded that (exhibit 1):

It is possible that he did sustain musculo-ligamentous (soft tissue) injuries to his neck and back and arms and legs at the time of the accident.

At today's clinical examination I could not find any underlying injury or pathology that resulting in the accident of the 3^rd July 1997, that could account for his ongoing symptoms...

I believe that his symptoms are not related to any significant injury caused in that accident and will continue to improve.

I consider that it is important that he return to work.

18. It is clear that as a consequence of the apparent conflict between Dr Oakeshott's findings and the findings of the other doctors in Mr Ivancic's case, the insurer authorised surveillance of Mr Ivancic. The pre-settlement surveillance film and reports were contained in exhibit D. These generally showed Mr Ivancic in sedentary type activities, although certain parts of the April 2000 film contained activities that Mr Ivancic says ought to have put the present plaintiff on notice that he was capable of more activity than he had disclosed to doctors. I will return to this point later in these reasons.

19. The present plaintiff's case is that Mr Ivancic, while plaintiff in matter SC 619 of 1997, made statements to various medical practitioners which were false or misleading knowing that the statements were false or misleading and with the intention of obtaining a financial benefit. The present plaintiff says that parts of the video surveillance film obtained after the settlement are entirely inconsistent with the representations made by Mr Ivancic to his doctors and the insurer's doctors, and with the Statement of Particulars filed in SC 619 of 1997. Mr Nunn gave evidence that he gave instructions to settle the matter based on the medical reports.

20. The principal reports on which the insurer relied were the reports commissioned by the insurer, being the reports of Doctors McEwin and Snowdon. These reports are contained in exhibit C. I am satisfied that the reports record representations made by Mr Ivancic as to his history, symptoms and disabilities, and that the record of those representations is properly in evidence before me (Evidence Act 1995 (Cth), s 60; see also Lee v The Queen [1998] HCA 60; (1980) 195 CLR 594). It was not put to either doctor, who gave evidence in these proceedings, that they had incorrectly recorded these representations, and Mr Ivancic did not give evidence in these proceedings to contradict this. In all the circumstances I am satisfied that these representations were made to the doctors by Mr Ivancic.

21. Dr McEwin's report of 2 November 1999, part of exhibit C, contains the following statements as to Mr Ivancic's disabilities caused by the accident:

He was unable to work since the accident because of his injuries.

He was unable to carry 5 kilograms for very long at all.

He was unable to cut his own lawn.

He was unable to undertake vacuuming, carrying the wet washing, low cleaning or any job involving flexing forward.

He was only able to do very light gardening.

He was required to hold onto a banister when walking up stairs.

He was unable to rotate his neck to the right without being restricted to 20 per cent of normal range.

He was unable to rotate his neck to the left without being restricted to 40 per cent of normal range.

He was unable to extend his neck without being restricted to 30 per cent of normal range.

He was unable to abduct either shoulder without being limited to 140 degrees.

He was unable to achieve anterior flexion of either shoulder without being restricted to 130 degrees.

He was unable to squat without being restricted to one quarter of the normal range due to knee pain.

22. In his report, Dr McEwin concluded that there was no organic basis for Mr Ivancic's extensive complaints, and expressed the view that they may be secondary to his psychiatric condition. He said that the views of a psychiatrist should be obtained. On 9 February 2000 Mr Ivancic was examined by Dr Snowdon, psychiatrist, for the defendant, and his report of 18 February 2000 was part of exhibit C.

23. I am satisfied that Mr Ivancic made representations to Dr Snowdon that:

He was experiencing pain in both knees when walking up stairs, and needed to heavily use banisters.

He had driven a motor vehicle on only three occasions since the accident and his continued failure to drive was due to a combination of pain, anxiety and decreased mobility of his cervical spine.

He was, due to anxiety related issues, even afraid to travel as a passenger in a motor vehicle, and reacted by pushing his foot against the foot well.

He was, due to physical limitations, only able to manage the watering of his garden and was unable to mow the lawn.

24. Dr Snowdon in his report found that the plaintiff had sustained soft tissue injuries to his cervical spine and knees which were accident related, and had developed a Post Traumatic Stress Disorder following the accident, as well as a severe Adjustment Disorder with Depressed mood and a Pain Disorder. He expressed the view that due to his pain and depression he was unable to perform any part-time or full-time work.

25. In the Statement of Particulars filed on 19 July 2000 Mr Ivancic set out a series of disabilities as being a result of the accident. These included:

3.17 inability to drive a motor vehicle;

3.20 inability to undertake pre-injury employment;

3.21 inability to undertake pre-injury social and leisure activities;

3.28 reduced range of movement of the neck and back;

3.29 dizziness and unsteadiness on his feet;

3.37 reduced tolerance for sitting, standing or walking with concomitant necessity to vary posture frequently;

3.38 poor balance with a concomitant tendency to fall.

26. I accept that the insurer was also entitled to rely upon the Statement of Particulars as statements made by Mr Ivancic in further advancing his claim for financial gain (Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 697-698), although I am mindful of the observations of the High Court in Jamieson v The Queen (1993) 177 CLR 575 concerning the caution to be applied if pleadings are to be relied on as the basis of an allegation of fraud. In this case the fraud is based not just on the particulars, but on the various statements which I am satisfied were made by Mr Ivancic.

27. The present plaintiff submitted that these representations could not be reconciled with levels of activity undertaken by Mr Ivancic and shown on video surveillance obtained after the settlement. The activities, say the present plaintiff, are inconsistent with Mr Ivancic's assertions as to the nature and extent of his disabilities at all relevant times. The video material obtained post settlement, and surveillance reports, were in evidence as exhibit G, and it is appropriate for me to deal with a number of what seem to me to be clear inconsistencies, as highlighted in the written submissions prepared by Mr Stitt for the present plaintiff:

The Court would be satisfied that the statements referred to above were false and misleading. The basis for that factual finding would be the following:

The range of activities observed in the video evidence and surveillance reports thereto (exhibit G) are unarguably inconsistent with the defendant's assertions as to the nature and extent of his disabilities at all relevant time.

The following are highlights of the surveillance material which, it is submitted, is patently inconsistent with the statements of Ivancic as to his ongoing disability:

11 August 2000:

The plaintiff is observed to be kneeling on both his knees on a concrete surface with both knees (sic) for lengthy periods of time contrary to his statements that he was unable to squat and carry out a deep static crouch due to pain and limitation.

18 August 2000:

Ivancic was observed using a large broom appearing to level dirt in preparation for planting contrary to his statements that he was only able to do very light gardening and due to physical limitations was only able to manage watering of the garden.

19 September 2000

The plaintiff is observed undertaking physically demanding tasks including lifting and carrying a rack of bricks in a bricklayers hob repeatedly as well as lifting and carrying shovels of cement on a number of occasions. These observations were contrary to his statements that he was unable to work since the motor vehicle accident, was unable to carry heavy weights, was unable to undertake any tasks involving flexing forward and was unable to stand for longer than 10 minutes.

20 September 2000:

The plaintiff was observed driving his motor vehicle in a confident fashion which required him to turn his neck to both the left and right sides. This is contrary to the statements of Ivancic that he was unable to drive a motor vehicle and that he had severe restrictions in the range of movement in his neck to the left and right.

20 September 2000:

The plaintiff is observed standing on the top rung of a ladder and undertaking work in and around the roof area of his premises. This included using a handheld hammer vigorously. Ivancic is observed ascending and descending the ladder on numerous occasions without any limitation or hesitation in his movements. This is contrary to the statements of Ivancic that he experienced dizziness and unsteadiness on his feet and that he had poor balance with a concomitant tendency to fall.

21 September 2000:

Ivancic is again observed driving his motor vehicle to a local shopping centre, pushing a shopping trolley, lifting a full carton of beer into his motor vehicle and loading shopping bags into the passenger side of his vehicle. These observations are inconsistent with Ivancic's statements that he was unable to drive a motor vehicle, that he required assistance to carry bags or groceries, such activities currently being undertaken by Ivancic's wife.

27 October 2000:

Ivancic is observed driving his motor vehicle to the Australian Croatian Club and remaining at that club for at least a number of hours, contrary to the plaintiff's statements of an inability to undertake pre-injury social and leisure activities, inability to drive a motor vehicle and alleged depression.

28 October 2000:

Ivancic is observed utilising various motorised gardening implements including a blower/vac, whipper snipper and lawn mower, contrary to Ivancic's statement that he was unable to cut his own lawn or undertake anything other than watering of his garden. The surveillance is also contrary to the plaintiff's statements that he requires assistance for gardening tasks such as mowing, trimming and edging the lawn at 4 hours per month, such tasks by necessity now undertaken by his son.

28 October 2000:

Ivancic is observed in the passenger seat of his vehicle apparently providing his son with a driving lesson which lasted in excess of 30 minutes. This is contrary to the statements of Ivancic that he was unable to drive a motor vehicle due to pain and anxiety and also had anxiety related issues as a passenger in a motor vehicle.

29 October 2000:

Ivancic is observed driving his motor vehicle to a shopping centre and undertaking shopping for approximately one hour. These observations are inconsistent with the plaintiff's statements that he was unable to drive a motor vehicle and also required assistance in carrying bags and groceries, such activities being undertaken by his wife.

3 November 2000:

Observations are undertaken of the plaintiff sitting in the passenger seat of the vehicle whilst his son was driving, apparently providing his son with a driving lesson. Again these observations are inconsistent with Ivancic's statements that he was unable to drive a motor vehicle and had difficulties being a passenger due to anxiety related issues.

28. The video material was provided to Dr McEwin and Dr Snowden, and they provided reports setting out their views as to the levels of observable activity. They were both called to give evidence, and were cross-examined at some length.

29. In his report of 9 October 2000 following the viewing of the initial post-settlement video material, Dr McEwin said (exhibit J document (b)):

The activities seen in the video films indicate that he has a much wider range of capacity in physical activities than he described to me in his history of 2 November 1999. The history given to me regarding his capacity for physical activity was inconsistent with the movements and activities seen on the video films.

30. Dr McEwin in his report sets out a series of detailed observations of the movements on the video. In a subsequent report of 30 July 2002 (exhibit J document (b)), Dr McEwin said:

I do not believe that it is possible that the improved movement and capacity shown in the videos could be due to natural recovery. The degree of recovery is dramatic and excessive, over a fairly short period, to be accepted as natural - it is inconsistent and completely beyond my expectations.

The degree of recovery indicates to me that the history given on 2.11.99 was incorrect. This is supported by the claimed chronicity of recovery from the period of his accident to the date of my examination on 2.11.99.

31. Dr McEwin was not challenged in cross-examination in respect of these opinions, and no evidence was lead to suggest that natural recovery would explain the greater range of movement.

32. Dr Snowdon also examined the film and provided reports dated 5 October 2000 and 16 August 2002. In his first report (exhibit J document (a)) he said:

With regard to summarising Mr Ivancic's activities, as video taped in September, I think that they not only support, but very much add to the conclusion that this man has consciously falsified his description of his disabilities, which I think casts into very considerable doubt the truthfulness of his report of all his other symptoms.

33. In his later report he said:

As a result of reviewing all of the issues in this case, and the subsequent evidence, I feel that Mr Ivancic has been purposely untruthful to me in his account of 9 February 2000, and his representation was in fact false and misleading

34. He continued (at 23):

Looking at this case overall therefore, there is no doubt in my mind that Mr Ivancic has intentionally, and presumably for financial gain, misled me with regard to his description of his disabilities at the time of the examination of 9 February 2000.

35. Dr Snowdon was shown some of the video material during his oral evidence, and he described aspects of it as "grotesquely beyond" what Mr Ivancic had said he could do (T 187.5-187.15). Later he said in respect of the history given to him by Mr Ivancic

Frankly I think in lay terms he lied to me.

...

He lied, yes, absolutely he lied to me. And this is a term if anyone had access to all of the reports that I've ever written over six years, I rarely, rarely use, is that this has been a frank case of malingering, it really has. (T 192.40-193.5)

36. Dr Snowdon was not challenged in cross-examination in respect of his evidence that Mr Ivancic had deliberately made statements to him that were untrue.

37. There was a further report commissioned by the insurer before settlement that is relevant to this claim, that being a report from Ms D Hayward, an occupational therapist, who works with IRS Total Injury Management. The report of Ms Hayward of her examination of the plaintiff on 16 February 2000 (exhibit C document (b)) contains the following representations:

That he was unable to stand for longer than 10 minutes.

That he had significant restrictions in the active range of movement in the neck, shoulders and knees.

That he was unable to carry out a deep static crouch and squat due to pain and limitation and that he had significant weight restrictions in the course of manual lifting and handling of any object.

That he has only attempted driving on three occasions since the accident but becomes fearful and needs to be driven.

38. I accept that these statements were made by Mr Ivancic. A further report was provided by IRS Total Injury Management dated 17 October 2000 which sets out a number of areas where Mr Ivancic's statements were inconsistent with the video material. This report was exhibit J document (c). The observed inconsistencies related to standing tolerance [1], active range of movement [2], deep static crouch [3], rotation standing [4], manual handling [5] and muscle strength [6]. The author of these reports was not required for cross-examination, and I am satisfied that the statements made to her were misleading.

39. I am satisfied from the evidence contained in the video material, which I have summarised in [27] above, that Mr Ivancic's representations made to Doctors McEwin and Snowdon, and to IRS Total Injury Management, were misleading and false. I am satisfied for the same reasons that the statements in the Statement of Particulars set out in [25] above were false and misleading. The Motor Accidents Act requires that the insurer show, not merely that false or misleading statements were made, but that they were knowingly made. In this respect I have the evidence of Doctors McEwin and Snowdon.

40. There was no evidence given by Mr Ivancic. His failure to give any rebutting testimony in the face of the overwhelming evidence led against him that he consciously set about to deceive the insurer is, it seems to me, a matter to which I am entitled to have regard, and may properly draw the Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298) inference that the evidence would not have assisted his case. In Jones v Dunkel Menzies J set down the following three propositions (at 312):

(i) that the absence of the defendant...as a witness cannot be used to make up any deficiency of evidence;

(ii) that evidence which might have been contradicted by the defendant can be accepted the more readily if the defendant fails to give evidence;

(iii) that where an inference is open from the facts proved by direct evidence and the question is whether it should be drawn, the circumstances that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.

41. In Booth v Bosworth [2001] FCA 1453; (2001) 114 FLR 39, Branson J extensively reviewed the authorities concerning the so-called Jones v Dunkel inference and concluded at [42] that the correct approach to take in a case where a respondent chooses not to give evidence is:

(a) as the burden of proof with respect to each of the facts in issue between the parties lies on the applicant, the applicant must establish evidence of each of the facts in issue notwithstanding that some relevant and important evidence is peculiarly within the knowledge of the respondents;

(b) the failure of the respondents to give evidence does not of itself amount to proof of any fact in issue.

(c) however, provided that there is before the Court evidence tending to establish each of the facts in issue, (albeit it may be "meagre in the extreme"- see Jones v Dunkel per Kitto J at 305), in assessing the probability of the existence of a fact in issue (ie in weighing the evidence on that issue) use may be made of the failure of the respondents to give evidence apparently in their possession relevant to that fact in issue. That is, it is open to the Court to draw the inference that the evidence which the respondents could have given to the Court would not have been favourable to their case and thus more confidently to draw inferences available to be drawn from the evidence that is before the Court.

42. In the present case it seems to me that video material viewed against the representations made by Mr Ivancic, the evidence of Dr Snowdon, that he lied, and the evidence of Dr McEwin that the observable significant differences in range of movement and activity were not consistent with any process of natural healing, allow me to draw the inference that Mr Ivancic knew that his statements were misleading, and that I can more readily accept this because he chose not to attend to give any evidence to the contrary. Moreover, I can draw the inference that the knowingly false or misleading statements were made for financial gain. They were made in the context of a claim for monetary compensation. It seems to me that the only conclusion that can be drawn is that the statements made in the course of pursuing a claim for monetary compensation were made for the purposes of financial gain, and again the absence of Mr Ivancic means that I can more readily so find.

43. Mr Stitt also made the submission that there was no evidence called from any of Mr Ivancic's treating doctors or medico-legal specialists who had provided reports supportive of his claim. Of most significance here, it seems to me, is the absence of any report from Dr Canaris, who was Mr Ivancic's medico-legal psychiatrist. A report from him, indicating that he had observed the relevant video material, could have been of considerable probative value, but no report was tendered, and so there is nothing to contradict the opinions expressed by Dr Snowdon. Moreover, a psychiatrist could perhaps provide the only evidence to counter the inevitable inference that Mr Ivancic knew that he was making false claims, if the psychiatrist was of the opinion that there was some psychiatric reason for the statements. No such evidence was before me, and Dr Snowdon was clear in his view that this was malingering.

44. I am thus satisfied that the present plaintiff has established that Mr Ivancic, for the purpose of obtaining a financial benefit, made representations that he knew to be false or misleading within the terms of s 66 of the Motor Accidents Act