The "Ferrcom inference": what it is and is not

Stambolziovski v Nestorovic and Camanaro Prestige Properties Pty Ltd t/as Sydneyhome Real Estate [2015] NSWCA 332

51 The reference to a Ferrcom inference is a reference to what was said by Handley JA in Commercial Union Insurance Company of Australia Limited v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418E, applying the principles in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 to the situation where a party fails to ask questions of a witness in chief. In that case, his Honour (with whom Kirby P agreed) was of the opinion that the Court should not draw inferences favourable to the insured on matters going to whether it could and would have obtained insurance cover without a particular endorsement (an issue relevant to the question of damages in that case) when no attempt was made to prove those matters by direct evidence, and in particular where no relevant questions were asked of the principal of the insured.

56 First, as was made clear in Ferrcom, the drawing of such an inference is an application of the principles in Jones v Dunkel. It is an inference that may be drawn where a party fails to adduce particular evidence that one would have expected that party to adduce and where the failure to do so is not satisfactorily explained. One might expect relevant evidence to be adduced by Ms Nestorovic from a witness who was, colloquially speaking, “in her camp”. However, the fact that Mr Sogenovski was called to give evidence by her does not make him in some way “in her camp”. Mr Sogenovski was an independent witness who could have been called by either party. It is well recognised that there is no property in a witness. That Ms Nestorovic’s legal representatives had conferred with Mr Sogenovski before he gave evidence or that Mrs Stambolziovski’s legal representatives had only little notice that he was to be called, is not to the point. There was nothing to preclude an application for a short adjournment for them to confer with him.
57 Second, as was put to the primary judge, the rule does not permit an inference to be drawn that the uncalled or untendered evidence would in fact have been damaging to the party not tendering it. It cannot be used to fill gaps in the evidence or to convert conjecture and suspicion into inference. Thus it could not be used, as was conceded by Mrs Stambolziovski at the hearing below, to draw an inference in favour of there being a leaking toilet.
58 Third, the submission that Ms Nestorovic needed to explain the presence of water on the floor assumes that there was water on the floor in the first place and subverts the onus of proof. It was Mrs Stambolziovski who bore the onus of proving both that there was water on the floor where she slipped and that the water came from a leaking toilet. The fact that Counsel for Ms Nestorovic did not question Mr Sogenovski as to his observation of the condition of the floor or as to whether he saw any cleaning equipment at the scene of the accident does not warrant the drawing of an inference adverse to Ms Nestorovic as to either of those two matters.