Work Of Fiction?

Court of Appeal dismisses insurer’s argument that trial judge didn’t give weight to Plaintiff’s dodgy tax returns.

the situation

Jack was a 53-year-old tiler.

Jack was on his way home after a hard day’s work.

Jack was thinking about what to make for dinner as he sat stationary at lights on Mains Road, Sunnybank.

Jack sat contemplating a hot lamb roast, braised beef cheek, or perhaps penne pasta.

Jack thought life was hard enough trying to pick what to have for dinner…


Jack was rear-ended by another car.

Jack was immediately transferred to the QE2 Hospital. He underwent a course of strong painkillers and was discharged the next day. In the next few days, though, Jack had to take a visit to his doctor after he developed neck and back pain.

Unfortunately, Jack was no stranger to pain. Jack had already been hit by a car just 18 months earlier. At least that time he largely recovered from his neck injuries.

He wasn’t so lucky the second time around.

The second crash aggravated his pre-existing neck condition, and he couldn’t return to work.

Prior to the accident, Jack worked as a successful tiling contractor. He was a good tiler and hardworking man. Now he found himself rejecting job offers and being unable to carry out heavy work or work on a full-time basis.

the judge's decision

Jack sued the insurer for damages caused by the second car accident.

Just when Jack thought life couldn’t get unluckier, his credibility in court was questioned due to phoney financing.

The Judge found great inconsistencies in his past tax returns and declared they were a ‘work of fiction’. The financial evidence Jack provided in court did not align with the money he had previously declared.

Fortunately for Jack, the Judge concluded that the weight of witness statements and medical evidence outweighed the questions brought on by his creative accounting.

Jack received $461,249 in compensation at trial.

The insurer appealed this decision in the Supreme Court of Queensland.

The insurer argued that Jack’s inconsistent financial figures should have displayed enough dishonesty to allow rejection of his evidence.

The trial judge to closely scrutinise Jack’s and his tax records. When the trial judge looked at the tax returns he found:

  • the tax returns were lodged years late
  • Jacks increase in income after the accident was inconsistent with his claim that his symptoms worsened
  • The character evidence provided by previous colleagues found inconsistencies in his success as a contractor compared to the low turnover figures in his tax returns
  • Jack admitted working on a barter basis but did not declare the value of the benefit in his tax returns
  • There was an expense of $25,000 simply referred to in the tax return as “expenses for bob”

The Court of Appeal confirmed the trial judge’s decision that the tax returns were not reliable evidence. But that:


Court of Appeal Judge

 “a finding that there has not been honest compliance with taxation laws does not inevitably mean that loss of earning capacity or economic loss cannot be made out on other evidence

The Court of Appeal held that the trial judge did not base his acceptance of Jack’s evidence alone, but the judge preferred and accepted the evidence of medical experts and other witnesses .

The Court of Appeal said:


Court of Appeal Judge

what is evident is that the learned trial judge did not make a blanket rejection or acceptance of the evidence of Mr Marinkovic. His honour was quite careful to make express findings on matters where he rejected his account, because it was inconsistent with documents or it was evasive or simply because he was no persuaded of its reliability. However the trial judge was equally careful to make findings as to what he accepted from that evidence and whether Mr Marinkovic was credible and reliable

The Court of Appeal rejected the insurer’s argument and decided that the trial judge had got it right the first time.

the critical evidence

The critical evidence in this case was the medical evidence and the character evidence.

medical expert

  • Medical expert- is a medical specialist who examines a claimant for medico-legal purposes and provides a report to the court. The medical expert has a duty to assist the court and this duty overrides any obligation the expert may have to any party to the proceeding or to any person liable for the expert’s fee or expenses.

the result


  • An award of damages for pain and suffering,
  • past and loss of superannuation
  • damages for out of pocket expenses
  • future out of pocket expenses


  • Ability to work full time hours
  • Ability to work to full capacity
  • Psychiatric condition
  • Life long pain and suffering

the conclusion

This case proves more evidence is key.

The judge weighed up the alleged dodgy tax returns against the evidence of the medical experts and lay witnesses. The insurer at the trial argued the judge should accept the tax returns as reliable evidence. This prompted the judge to look closely at the tax returns and scrutinize them and Jack. While the judge did not accept all of Jack’s evidence in relation to his earning capacity pre-accident, he considered how Jack had reported the symptoms to the medical experts and to lay witnesses, and the expert medical opinion to conclude that Jack had suffered real injuries which was cause Jack to lose income in the future. The Court of Appeal upheld the trial judge’s decision and Jack was awarded compensation for the injuries that changed his lifestyle dramatically.