Chebli v Insurance Australia Ltd t/as NRMA Insurance Ltd [2013] NSWSC 261

A recent judgment of the NSW Supreme Court upheld the decision of a local court magistrate to disregard a party’s evidence, where the party’s overall account was considered ‘less than truthful’.

In Chebli v Insurance Australia, Ms Chebli claimed that her Mercedes was stolen from her home. NRMA Insurance rejected the comprehensive motor vehicle insurance claim, on the basis that it was fraudulent.

Ms Chebli then brought a breach of contract case against NRMA in the Bankstown Local Court. The magistrate found in favour of NRMA Insurance on the basis that the Ms Chebli was unable to demonstrate, on the balance of probabilities, that the vehicle was stolen from the place and in the timeframe alleged. The magistrate rejected Ms Chebli’s evidence as being ‘less than truthful’.

Ms Chebli appealed this decision, on the basis that the magistrate failed to consider a relevant piece of evidence. In the original proceedings, a forensic locksmith referred to three methods by which the car could have been stolen. The magistrate only made reference to the first two methods in his judgment.

The third method involved starting the car ‘using a correctly coded electronic key’, meaning two original keys that are kept at the Mercedes factory for a particular car. Ms Chebli argued that the third method could have led to an inference in her favour, and that the magistrate had made an error in law by failing to consider that method.

On appeal, the Court concluded that if the third method could be considered a likely method by which the car was stolen (and this was not the case Ms Chebli ran at trial), the magistrate would have had to accept Ms Chebli’s evidence as being truthful.

The Court agreed with the findings of the magistrate. Due to Ms Chebli’s lack of truthfulness and candour, the possibility that Ms Chebli or her husband started the car themselves was not excluded. Consequently, the factual basis of the third method could not be made out and it did not need to be considered.

The magistrate’s decision was found to have been correct, and Ms Chebli’s claim against the insurer failed.