Australia: Issue Estoppel – Statement of Claim dismissed as liability determined unfavourably by Local Court

Curwoods Case Note
Last Updated: 16 February 2013
Article by Laura D'Alessandri and Vanessa Jason

Charafeddine v Morgan [2013] NSWDC 7

Judgment date: 11 February 2013
Jurisdiction: District Court of New South Wales1

In Brief

An unfavourable determination of a property damage claim in the Local Court involving decisions as to fault and contributory negligence can amount to issue estoppel of subsequent personal injury proceedings.


On 8 September 2009, Ms Charafeddine (plaintiff) and Mr Morgan (defendant) were involved in a motor vehicle accident.

Mr Morgan sued Ms Charafeddine in the Local Court for damage to his motor vehicle. The property damage claim came before the Assessor on 2 May 2011. The Assessor then gave a decision in favour of Mr Morgan, after considering statements from both parties. Findings as to contributory negligence, liability and speed were made. That decision was not challenged.

Ms Charafeddine commenced proceedings in the District Court in relation to injuries sustained in the accident. Mr Morgan filed a Defence denying liability and pleaded the following:

"The defendant says that these proceedings are not maintainable due to an issue estoppel which has arisen as a result of a judgment in the Local Court of NSW on 2 May 2011 in favour of the defendant in these proceedings against the plaintiff in these proceedings in the matter of James Roko Morgan v Hanadi Charafeddine 2010/356559, relating to property damage suffered by Mr Morgan in the same accident as is the subject of these proceedings."

At the commencement of the Hearing, the defendant brought an application for summary judgment on the basis that his success in the Local Court proceedings amounted to issue estoppel, as it raised common issues (namely, breach of duty of care and contributory negligence).

Court Decision

The matter came before Judge Gibson who determined that there were 2 issues before her:

  1. Whether there was issue estoppel.
  2. Whether, if there was issue estoppel, the Court should exercise a discretion not to apply the principles of issue estoppel.

Whether there was issue estoppel

The governing principles of issue estoppel as stated by Dixon J in Blair v Curran 2 were noted by Handley JA in Tiufino v Warland 3 . The principal issue for determination is whether the issue was the same as that which had been decided in the Local Court, there being disputes as to whether the parties and causes of action were the same.

Judge Gibson found that the facts in this case were identical to Tiufino and the circumstances differed in only 2 respects; namely that the relevant legislation and court rules had changed and the subject proceedings were commenced some 9 months after the proceedings in the Local Court were concluded.

The plaintiff submitted that it was not enough for the issues to be common, but that the legislative structure in the Local Court was so different that it would preclude questions of issue estoppel arising. The plaintiff raised the following issues in this regard:

  • There are limited rights of appeal from the Local Court
  • There was no entitlement to cross-examination and as such there could be no finding as to credit.
  • The decision was made by an Assessor rather than a Magistrate.

Judge Gibson determined, however, that Tiufino was binding on the District Court and that she was not persuaded that the orders made by the Local Court did not amount to issue estoppel.

Whether, if there was issue estoppel, the Court should exercise a discretion not to apply the principles of issue estoppel

Judge Gibson noted that the authorities upon which the Court can exercise a discretion rested on "an uncertain foundation". Nonetheless, Judge Gibson determined that no such discretion should be exercised in this matter as there were strong reasons to apply the principles of issue estoppel, including for the purposes of delivering justice between the parties, and avoiding the parties and the community devoting further resources to the re-agitation of a matter which have been the subject of earlier proceedings. This was particularly so as the Plaintiff was aware of the local Court decision in advance of commencing the current proceedings.


This case confirms the application of issue estoppel in motor vehicle accident claims where a determination is made by an inferior Court. In most instances this involves the Local Court making a determination in respect of a property damage claim.

The application of these principles can work both in favour of and against the insurer. It is important that insurers determine the status of any property damage claims at the outset, and if necessary, thought should be given to seeking to delay or join those proceedings.


1 Gibson DCJ
2 (1939) 62 CLR 464
3 (2000) 50 NSWLR 104

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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