The recent Supreme Court of New South Wales decision of Kalloghlian v Chubb Insurance Company of Australia Ltd [2016] NSWSC 902 provides a valuable reminder of a decision-maker’s obligation to give reasons when making decisions, and demonstrates the potential for inadequate reasons to form a ground for an appeal.


Mr Kalloghlian made a claim against his insurer, Chubb Insurance Company of Australia Ltd (Chubb) regarding to a Rolex watch that went missing during a holiday in ‎Rio de Janeiro. Mr Kalloghlian had purchased the Rolex for AU$32,000 in Syria nine years ago, and had insured it under Chubb’s ‘Deluxe’ policy, which covered ‘loss of property wherever that occurred’ (Policy).

Chubb rejected Mr Kalloghlian’s claim on the basis that he had failed to prove his loss. Mr Kalloghlian had no receipt or other documentation relating to the purchase of the Rolex, no police report of the alleged incident, nor could he recall the jeweller from whom he purchased it. As a result, Chubb claimed he had failed to comply with a condition of the Policy.

Mr Kalloghlian commenced proceedings in the Local Court (the equivalent of the Magistrates’ Court of Victoria) where he relied almost solely on the oral evidence of Mr Sanossian, the family jeweller who had serviced the family’s watches for many years. Mr Sanossian gave evidence that he had cleaned the Rolex, photographed Mr Kalloghlian wearing the watch and received a call from him at the time the watch went missing. The Magistrate ultimately found in favour of Chubb.


Mr Kalloghlian appealed the decision to the Supreme Court on the basis of an error in law in the Magistrate’s failure to provide any, or any adequate, reasons for the issues in the proceedings. Essentially, the plaintiff submitted:

  • that the Magistrate must have rejected his evidence that he had purchased the Rolex but that the Magistrate did not expressly say so, nor why he did so
  • that the Magistrate had made no finding as to whether he had accepted the evidence of Mr Sanossian nor considered the fact that he was not cross-examined.

Chubb submitted that the Magistrate had impliedly rejected Mr Kalloghlian’s evidence on the basis of a lack of corroborative material to support the fact that he had possessed and lost the watch.


Davies J of the Supreme Court allowed the appeal, on the basis of a failure to give adequate reasons. The Court found that the Magistrate had failed to assess Mr Kalloghlian’s evidence and explain why it was not accepted. Further, he did not state whether he accepted or rejected Mr Sanossian’s evidence and, if accepted, why it did not support Mr Kalloghlian’s case.

In summarising the law, the Court considered the principles adopted in Abdel Naser Qushair v Naji Raffoul [2009] NSWCA 329, where it was determined that the giving of adequate reasons lies at the heart of the judicial process.[1] While lengthy and elaborate reasons are not required, the reasons must adequately reveal the basis of the decision, expressing the specific findings that are critical to the determination of the proceedings.[2] The extent and content of the reasons will depend on the particular case and issues under consideration.[3]

In relation to the case before it, the Court held that:

  • the parties, particularly Mr Kalloghlian, did not know why the decision was made and that in order to avoid him feeling a ‘real sense of grievance’ he was entitled to sufficient reasoning to enable him to understand why he lost[4]
  • that the judgment did not provide adequate reasons to enable an appeal tribunal to gain a proper understanding of the lower court’s decision[5] nor deal with an appeal on any other ground other than a failure to give reasons.

The result was that the Court found there was an error of law. The matter was remitted to the Local Court to be dealt with by a different magistrate.


This case serves as a timely reminder of the obligation on decision-makers, whether Magistrates or a person making an administrative decision on affecting a person’s rights, to make it clear what they are deciding and provide an explanation as to why they decided in the way they did.

An aggrieved party is entitled to understand the basis of a decision, sufficient to enable them to appeal the decision, where that mechanism is available. A failure to do so may result in the decision being invalid, set aside and perhaps remitted for reconsideration.