Cook v Sirius International Insurance Corporation Australian Branch

Case •

[2021] NSWCA 192

•

02 September 2021

No judgment structure available for this case.

Court of Appeal


Supreme Court


New South Wales

  • Summary available
  • Amendment notes
Medium Neutral Citation: Cook v Sirius International Insurance Corporation Australian Branch [2021] NSWCA 192
Hearing dates: 28 June 2021
Date of orders: 2 September 2021
Decision date: 02 September 2021
Before: Gleeson JA at [1];
Payne JA at [2];
Brereton JA at [3].
Decision:

Appeal dismissed with costs.

Catchwords:

INSURANCE – Claims – Property insurance – Fire – Proof – Circumstantial case – Where insurers alleged that fires in hotel premises deliberately lit – Whether plausible hypotheses consistent with innocence – Relevance of financial motive – Whether means and opportunity – Passive infrared sensors – Timing – Layout of premises – Plausibility of intruders – Appeal dismissed

APPEALS – From findings of fact – Function of appellate court – Where primary judgment not dependent on credibility findings – Court obligated to conduct a real review of the evidence and reasons

Legislation Cited:

(NSW) Evidence Act 1995, s 140

(NSW) Supreme Court Act 1970, s 75A

Cases Cited:

Belhaven & Stenton Peerage (1875) 1 App Cas 278

Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1

Chamberlain v The Queen (No 2) (1984) 153 CLR 521; [1984] HCA 7

Lee v Lee (2019) 266 CLR 129; [2019] HCA 28

Palmer v Dolman [2005] NSWCA 361

Sharma v Insurance Australia Ltd t/as NRMA Insurance [2017] NSWCA 307

Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125

Category:Principal judgment
Parties: Stephen William Cook (First Appellant)
Christine Margaret Cook (Second Appellant)
Sirius International Insurance Corporation Australian Branch (First Respondent)
Certain Underwriters at Lloyd’s of London Subscribing to Contract Number GH01613 (Second Respondent)
Representation:

Counsel:
GM Watson SC with PG Cutler (Appellants)
JE Sexton SC with JC Lee (Respondents)

Solicitors:
Fitzpatrick Solicitors (Appellants)
Clyde & Co Australia (Respondents)
File Number(s): 2020/340533
 Decision under appeal 
Court or tribunal:
Supreme Court
Jurisdiction:
Equity Division
Citation:

[2020] NSWSC 1631

Date of Decision:
18 November 2020
Before:
Ward CJ in Eq
File Number(s):
2016/240683

HEADNOTE

[This headnote is not to be read as part of the judgment]

In the early hours of the morning of 7 September 2010, two fires were deliberately lit at a hotel in Cowra, causing damage to the premises. One was lit in the ground floor storeroom and the other in the first floor function room. The respondents – the insurers of the hotel – declined indemnity to the policyholder, a company owned and directed by the appellants, alleging that Mr Cook, one of the appellants, had deliberately lit the fires. The appellants, who obtained an assignment of the insurance policy upon the company’s liquidation, sued for a declaration that this declinature was in breach of the policy, and for damages. In the Equity Division, that claim was dismissed on the basis that the respondents had made out their defence of arson. On appeal to this Court, the only issue was whether that conclusion was correctly reached by the primary judge.

Held (per Brereton JA; Gleeson JA and Payne JA agreeing), dismissing the appeal: [1] (Gleeson JA), [2] (Payne JA), [61] (Brereton JA).

1. Although the primary judge’s ultimate decision involved rejecting Mr Cook’s evidence, it did not depend on any credibility finding formed as a result of seeing and hearing him or any other witness give evidence. This Court is therefore not limited to interfering only with findings that are “glaringly improbable” or “contrary to compelling inferences”. The Court is in as good a position as the primary judge and, on appeal by way of rehearing, is obliged to conduct a real review of the evidence and reasons: [17]-[20].

Lee v Lee (2019) 266 CLR 129; [2019] HCA 28, considered.

2.  The primary judge did not effectively reverse the onus of proof. Consistent with the proper approach in circumstantial cases, her Honour considered whether there were plausible hypotheses consistent with innocence on the part of Mr Cook, with reference the civil standard of proof and Evidence Act 1995 (NSW), s 140. Accordingly, it was correctly accepted that the respondents were only required to prove, on the balance of probabilities, having regard to all the circumstances, including the gravity of the allegations, that Mr Cook deliberately lit the fires: [21]-[24].

3. While the evidence reveals notorious indicia of insolvency in respect of the hotel business, the presence of a financial motive is a slight basis for a conclusion of arson, and was not relied upon by the primary judge: [26]-[29].

4. Having regard to the evidence as a whole, the probable explanation of the circumstances – including the timing of the relevant events, the layout of the hotel and motel premises, passive infrared sensor detections inside the premises, and Mr Cook’s own testimony – was that it was Mr Cook who set the fires, and alternative hypotheses consistent with Mr Cook’s innocence, involving one or more intruders, were improbable. The primary judge did not err in concluding that the respondents had proved that it was Mr Cook who set the fires: [60]-[61].

Judgment

  1. GLEESON JA: I agree with Brereton JA.

  2. PAYNE JA: I agree with Brereton JA.

  3. BRERETON JA: On 7 September 2010 the Townhouse Hotel Motel in Cowra was damaged by two concurrent fires, which it is not disputed were deliberately lit. The respondents (“the Insurers”) were the insurers of the hotel. They declined indemnity to the owner SW & CM Cook Investments Pty Ltd, now in liquidation, of which the appellants Mr and Mrs Cook were the shareholders and directors, alleging that the fires had been deliberately set by Mr Cook. Mr and Mrs Cook, having obtained an assignment of the insurance policy from the liquidator, sued for a declaration that the Insurers had wrongfully and in breach of the policy declined indemnity to the company, and for damages. On 18 November 2020, Ward CJ in Eq dismissed the claim with costs, upholding the Insurers’ defence of arson. [1] Mr and Mrs Cook now appeal to this Court.

    1. Cook v Sirius International Insurance Corporation Australian Branch [2020] NSWSC 1631 (“Primary Judgment”).

The hotel

  1. The hotel was on the southern side of, and fronted, Kendal Street, Cowra. Down the eastern side of the hotel ran a driveway which led to the motel complex, comprising 35 separate rooms at the rear of the hotel.

  2. Along the Kendal Street frontage of the hotel, from west to east, was a public bar, bottle shop, saloon bar, then a bistro, and, at the east, a reception room with reception desk and office. Access to the reception area was available through double door opening to the front of the hotel onto Kendal Street, through side doors opening onto the driveway, and through doors that led into the bistro. Behind the reception area to the south was a kitchen, a second office which was used as part of the manager’s accommodation, and behind that office, in the south-eastern corner of the building, the manager’s bedroom. The manager’s bedroom was accessible only through the second office. [2]

    2. In order to assist understanding, a plan of the hotel premises is attached. It does not show the motel premises at the rear.

  3. From the rear of the reception area, stairs ascended to a function room on the upper level. Above the staircase leading up to the function area, in the southern wall of the upper level directly above the last flight of stairs, was a window. Outside the window was a roof or awning, and below it a trellis. Stairs also descended from the rear of the reception area, to a door which opened into a corridor leading out to a courtyard around which the motel rooms are located. Along that corridor, another door provided access from the corridor into a storeroom, which was located under the rear of the bistro.

  4. The hotel was fitted with smoke alarms, and also with a number of passive infra-red (“PIR”) sensors – which detect movement, not smoke. There were no PIR sensors located in the upstairs function area, nor in the upper part of the stairwell leading to it. Nor were any located on the lowest level, where the storeroom was.

  5. However, there were multiple sensors on the entry (middle) level. Two PIR detectors monitored the reception and entry. Relevantly, in the reception area, one was positioned in the cornice in the north-western corner and observed towards the south-east, covering virtually the entire reception area. Another was located on the wall outside the reception office – collocated with a “screamer” alarm which activated when a PIR was triggered – observing towards the bottom of the stairs leading up to the function level (“the stairwell PIR”). There were also two sensors in the bistro. One, near the front (north) of the room, observed south-easterly towards the doors from the reception area into the bistro. Another covered the rear of the bistro, including the access into the bar.

The fire

  1. On the night of 7 September 2010, Mr Cook, who was managing the hotel business, was in the hotel. Mr Cook says he closed the hotel premises between 9:00 pm and 9:30 pm on the evening of 6 September 2010, securing the doors around the premises and activating the alarm system at about 9:25 pm. The alarm system was activated by keying in a code on the keypad located at the entrance to the reception office; this is confirmed by a printout of the security company Custom Security Services (“CSS”), which records activity concerning the alarms. According to Mr Cook, he then retired to bed.

  2. Early in the morning of 7 September 2010, a fire was ignited in the storeroom on the lowest level, and another in the function room on the uppermost level. Thus, the fires were set in locations not monitored by sensors.

  3. However, at 2:23 am, the stairwell PIR sensor – monitoring the corridor leading to the manager’s accommodation, and the lower part of the ascending stairway leading to the function area – detected movement. In response, CSS made a call to the landline telephone number for the hotel at 2:23:48 am; it went unanswered. The closest landline telephone to Mr Cook’s bedroom was in the reception office. A call was then made to Mr Cook on his mobile telephone. Mr Cook says that he was woken at approximately 2:20 am by a call on his mobile telephone from CSS reporting an alarm on the stairwell. According to the CSS printout, that call was from 2:24:44 am to 2:25:44 am. As the primary judge observed, there is no independent evidence as to where in the hotel Mr Cook was at that time. [3]

    3. Primary Judgment at [37].

  4. Mr Cook said that after receiving that telephone call he went to the office and turned off the alarm. The CSS printout confirms that the alarm was turned off at 2:26 am. Mr Cook says that he then walked down the stairs to the doors at the bottom (which lead to the courtyard and to the storeroom), to ensure that they were locked. He said that when locked they could be opened only by key, and that he did not go outside because the doors were locked, but he was able to look outside (which includes the vicinity of the storeroom door), and did not see anything unusual. He said that he walked back up the stairs, checked the fire doors in the reception foyer and found them to be locked, checked the side exit doors and found them too to be locked, then walked into the bistro and checked that the deck doors were closed, and that he looked towards the outer area of the restaurant and saw nothing unusual. Mr Cook said that he returned to his room, went to the toilet, and then went to bed and lay there for some minutes trying to get to sleep before realising that he had forgotten to reactivate the alarm, and so got out of bed again, went to the reception office, reset the alarm, and returned to bed. The CSS printout records that the alarm was reactivated at 2:42 am.

  5. At 2:48 am, multiple PIR sensors reported movement on the ground floor of the hotel, in the bar, bistro, and reception areas. These alarms appear to have been triggered by the fire in the storeroom burning through alarm cables. CSS again called Mr Cook.

  6. According to Mr Cook, he must have “drifted off” after resetting the alarm, and the next thing he remembers is his mobile telephone ringing with another call from CSS with reports of multiple alarms. Mr Cook says that he got out of bed and went to the reception foyer; that he could see a large amount of white smoke; that he went through the reception door and called the fire brigade on 000 and then went to the motel rooms and knocked on the doors to get the guests to evacuate; and that he moved his car from near the reception area. He then assisted the fire brigade to access the motel courtyard, providing access to the mains switch so that the electricity could be disconnected, and turned off the gas supply. He waited outside while the fire brigade extinguished the fires. During the course of the morning, a fire brigade officer informed him that, as well as the fire in the storeroom, there was a fire in the upstairs function room, and that it appeared suspicious.

  7. It is not in doubt that, when the fires were ignited, Mr Cook was physically in the hotel, and there is no evidence that anyone else was in the hotel premises (as distinct from the adjacent motel accommodation, in which there were a number of guests). The Insurers’ case was that Mr Cook triggered the sensor covering the rear of the reception area and stairwell, in an attempt to create evidence of an intruder; that he knew that he would receive a telephone call from CSS to which he responded; that he then deactivated the alarm system under the pretence of inspecting the premises; and that during that period he lit both the fires, before reactivating the alarm. As her Honour explained,[4] the critical circumstances on which the Insurers relied were that a single PIR alarm was activated in the location outside the reception office; that there was no cogent evidence of forced entry; that there was a time period of sixteen minutes during which the alarm was deactivated; and that the alarms were ultimately triggered by the burnt cables as a result of the fire in the storeroom.

    4. Primary Judgment at [192].

The appeal

  1. The sole ground of appeal is that the primary judge incorrectly held that the Insurers had proved their case that Mr Cook deliberately set the fires.

  2. Although her Honour’s ultimate adverse finding involved rejecting Mr Cook’s evidence, it did not depend on any impression formed by her Honour as a result of seeing and hearing him (or any other witness) give evidence. Thus her Honour said: [5]

“[171] Furthermore, in any event, I did not regard Mr Cook as evasive or [obstructive] in the witness box. I formed the impression that some of his evidence (as to the options for refinancing and the like) may have been unduly optimistic but, overall, I do not make any adverse findings as to that evidence. Likewise, I do not see that the issue in relation to the accounts on which Mr Cook was cross examined does not mean that he was not given the opportunity to put his side of the evidence. In this connection, those complaints here made also go nowhere.

…

[176] At this juncture, I note that, ultimately, this case will not be decided on the question of motive in and of itself; nor will it be decided on the basis of an assessment of Mr Cook’s character, which I accept up to this point has not been shown to be otherwise than unblemished; nor of his demeanour in the witness box, which I considered to be matter of fact and not evasive or obstructive (as I have also noted above). Again, I here make no adverse credibility finding against Mr Cook in relation to the giving of his evidence, although I accept that a finding on the balance of probabilities as to arson or fraud does involve adverse credit findings as to his involvement in such conduct.”

5. Primary Judgment at [171], [176].

  1. Her Honour’s conclusion adverse to the Cooks was fundamentally based on objective evidence, most importantly that provided by the PIR sensors:[6]

“Rather, and as will be seen from my reasons below, I have reached the conclusion that, on the balance of probabilities and conscious of the need for an actual persuasion having regard to the serious nature of the allegations, it was Mr Cook who deliberately lit the fires (whether alone or with assistance); and, crucially, this is principally because of the weight that I place on the evidence of the PIR activations (as to which, see the chronology above), the lack of any evidence of forced entry to the main part of the premises and the evidence that there had been no disturbance to the staircase windowsill.”

6. Primary Judgment at [177].

  1. This appeal, being one governed by (NSW) Supreme Court Act 1970, s 75A, is by way of rehearing, so that this Court has the powers and duties, including powers and duties concerning the drawing of inferences and the making of findings of fact, of the court of first instance. As the High Court explained in Lee v Lee (“Lee”):[7]

“A court of appeal is bound to conduct a “real review” of the evidence given at first instance and of the judge's reasons for judgment to determine whether the trial judge has erred in fact or law [Fox v Percy (2003) 214 CLR 118 at 126-127 [25] per Gleeson CJ, Gummow and Kirby JJ; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at 686 [43]; 331 ALR 550 at 558]. Appellate restraint with respect to interference with a trial judge's findings unless they are “glaringly improbable” or “contrary to compelling inferences” [Fox v Percy (2003) 214 CLR 118 at 128 [29] per Gleeson CJ, Gummow and Kirby JJ; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at 687 [43]; 331 ALR 550 at 558-559] is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts [Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392 at 434-435 [144]; Thorne v Kennedy (2017) 263 CLR 85 at 104 [42]]. Thereafter, “in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge” [Warren v Coombes (1979) 142 CLR 531 at 551 per Gibbs A-CJ, Jacobs and Murphy JJ; see also Fox v Percy (2003) 214 CLR 118 at 127 [25]].”

7. (2019) 266 CLR 129 at 148-149 [55] (Bell, Gageler, Nettle and Edelman JJ); [2019] HCA 28.

  1. This passage emphasises both the duty of the appellate court to conduct a real review of the evidence and reasons, and that the restraint that confines appellate interference with findings of fact to those that are demonstrated to be wrong by “incontrovertible facts or uncontested testimony”, “glaringly improbable”, or “contrary to compelling inferences”, is confined to those factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. Reliance on matters of “impression” and “demeanour” having been eschewed, this Court is in as good a position as the primary judge to decide on the proper inferences to be drawn from the established facts.

  2. The appellants submitted that her Honour effectively reversed the onus of proof, by rejecting alternative theories as to how the fires might have been started, maintaining that it was not for Mr Cook to explain how the fires occurred.

  3. As her Honour observed, the Insurers bore the onus of establishing that they were entitled to rely on the exclusion clause or that there had been a breach of the insured’s duty of utmost good faith, and the applicable standard of proof was that referred to in (NSW) Evidence Act 1995, s 140, having regard to the nature of their defence, the nature of the subject matter of the proceedings, and the gravity of the matters alleged. [8] And as her Honour also observed, in a case which relies on circumstantial evidence, one must consider “the weight which is to be given to the united force of all the circumstances put together”,[9] and that the onus of proof is to be applied at the final stage of the reasoning process, it being “erroneous to divide the process into stages and, at each stage, apply some particular standard of proof”, as doing so destroys the integrity of a circumstantial case; [10] that the inference said to be supported by the proved facts must be weighed against realistic possibilities, rather than possibilities that might be regarded as fanciful; [11] and that where the competing possibilities are of equal likelihood, or the choice between them can only be resolved by conjecture, then the allegation is not proved. [12] But, subject to those considerations, as her Honour also accepted, the Insurers were not required to negate, beyond reasonable doubt, all possibilities other than fraud on the part of the insured, but only to persuade the court on the balance of probabilities, having regard to all the circumstances, including the gravity of the allegations, that it was Mr Cook who set the fires.

    8. Primary Judgment at [60].

    9. Primary Judgment at [155], citing Chamberlain v The Queen (No 2) (1984) 153 CLR 521 at 535 (Gibbs CJ and Mason J); [1984] HCA 7 and Belhaven & Stenton Peerage (1875) 1 App Cas 278 at 279 (Lord Cairns LC; Lord Hatherley and Lord Redesdale agreeing).

    10. Primary Judgment at [156], quoting Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 at 129 (Winneke P).

    11. Primary Judgment at [157].

    12. Primary Judgment at [158], citing Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5 (Dixon, Williams, Webb, Fullagar and Kitto JJ). For all of the four propositions above, see Primary Judgment at [154], citing Sharma v Insurance Australia Ltd t/as NRMA Insurance [2017] NSWCA 307 at [66] (Meagher JA; Macfarlan JA and Sackville AJA agreeing) and Palmer v Dolman [2005] NSWCA 361 at [41] (Ipp JA; Tobias JA and Basten JA agreeing).

  1. That her Honour did not misunderstand the onus or the standard of proof is apparent in her Honour’s conclusion: [13]

“[208] In my opinion, acutely conscious of the seriousness of the allegations here made against Mr Cook, I consider that the matters to which the Insurers point (namely, the complexity of two fires on different levels, the impossibility of forcing the doors at the base of the staircase leading down towards the storeroom thus necessitating an outside perpetrator entering and exiting the hotel part of the building externally to light the fire in the function room, the single alarm activation outside the manager’s flat which would not have occurred had an intruder simply entered and exited via the stairwell window, the absence of evidence of forced entry to the hotel part of the building, the evidence against the stairwell window being open and the sixteen minutes during which the alarm system was switched off) inexorably point to Mr Cook lighting both fires.

[209] To my mind, the single alarm activation from the staircase PIR (which would not have been triggered had the upstairs function room fire been lit by someone entering and leaving by the stairwell window alone and not descending further down the staircase) and the sixteen minute time period in which the alarm was deactivated points to Mr Cook (with or without assistance) light the fires.”

13. Primary Judgment at [208]-[209].

  1. Her Honour did not “reverse the onus”, but, consistently with the well-established proper approach to a circumstantial case, considered whether there were plausible hypotheses explaining the circumstances consistent with innocence. Because the case was not a criminal case, and the standard of proof was not beyond reasonable doubt, it was not incumbent on the Insurers to show that there was no reasonably plausible hypothesis consistent with innocence. Nonetheless, in considering whether, on the balance of probabilities, it was Mr Cook who had set the fires, it was relevant to consider alternative explanations and whether they were realistic, reasonable, and plausible.

  2. In cases of this kind, insurers typically endeavour to prove that:

  1. the fire was not accidental but deliberately lit. In this case, that was not in dispute;

  2. the insured had a motive – usually, a financial one – to set the fire; and

  3. the insured had the means and opportunity to do.

Motive

  1. The Insurers endeavoured to establish a financial motive, through a body of evidence that indicated that the motel was, at the least, under financial pressure. Mr Cook was cross examined to suggest that the business of the company was performing so badly as to give rise to a motive for arson.

  2. However, her Honour accepted Mr Cook’s evidence, corroborated by documentary material, that mortgage payments were being made punctually. Her Honour said:[14]

“I accept that there may have been some confusion on Mr Cook’s part as to whether what was put to him was a final document in relation to the accounts. However, what is relevant is that Mr Cook was adamant as to the issue of interest payments and was shown to be correct. Accordingly, to my mind, this complaint goes nowhere.”

14. Primary Judgment at [170].

  1. Nonetheless, in the course of his cross examination, Mr Cook conceded, inter alia, that the company had entered into an arrangement to pay $1,000 per month to discharge a tax debt of $95,450 to the Australian Taxation Office; [15] that the company owed $57,000 to Cowra Council for unpaid rates, and had entered into an arrangement to pay it off; [16] that the company was funding purchases on a credit card, the balance of which was increasing; [17] and that the company was not paying its bills as and when they fell due. [18] These are, of cause, notorious indicia of insolvency.

    15. Tcpt, 6 August 2020, p 25(33)-(39).

    16. Tcpt, 6 August 2020, p 26(6)-(9).

    17. Tcpt, 6 August 2020, p 31(3)-(27).

    18. Tcpt, 6 August 2020, p 36(1)-(6).

  2. However, her Honour did not rely on the existence of a financial motive. Like her Honour, I do not regard the financial evidence as having significance. Even the presence of a financial motive, if established, does not mean that it was acted on. A financial motive is a flimsy basis for a conclusion of arson: very many businesses experience financial pressure; few resort to arson as the remedy.

Means and opportunity

  1. As her Honour observed, there is no doubt that the sixteen minute period while the alarm was deactivated afforded Mr Cook an opportunity to move around the hotel without triggering PIR sensors, during which period he could have set both fires. [19] Of course, that does not mean that he did so.

    19. Primary Judgment at [193].

The PIR evidence and its implications

  1. At this point, it is necessary to examine in greater detail the PIR evidence. With reference to the reception area, Mr Kelly, a fire investigator retained by the Insurers, reported:

“9.1 … A passive infrared detector (PIR) installed in the north western corner faced at an angle towards the reception area. A further PIR was observed on the wall over the entrance to the office area. The PIR was mounted below what is generally referred to as a screamer siren. Mr Cook identified that the door marked with the sign Staff Only opened into the office area where the alarm keypad was located.”

  1. Mr Kelly also reported:

“10.6 Access to the first floor is available via the reception stairs monitored by a PIR detector and the alarm system. The positioning of the PIR is such that it would detect any person moving on the stairs or out of the area where Mr Cook resides. This is the PIR that operated causing the first alarm signal. As Mr Cook reset the alarm, there was no fault detected in the PIR circuit that allowed the alarm to arm again. The PIR therefore was set off by someone passing in the detection zone, above the door leading to where Mr Cook was residing. Mr Cook exiting that door could have set the alarm off. No other person, access or egress nor any sign of forced entry was observed during my examination.

10.7 Of note is that the reception area is also monitored by a second PIR in the norther western corner that did not signal yet would cover the area across reception and the entrance to the bistro. There are other PIRs in the premises but none report a breach of security to the building. This therefore suggests only one signal was caused by a person passing near the PIR closest to the reception stairwell being the PIR referred to above the door leading to Mr Cook’s room. This alarm breach and signal received by CSS was notified to Mr Cook shortly after the signal was received.

10.8 If an offender coming down from the first floor used the reception steps, the extension of the stairway to the lower ground floor that would allow access to the workshop is available however the door was locked and checked by Mr Cook. Egress/exit is available through the bistro however the bistro doors are monitored by another PIR. Going back upstairs does not allow any offender to exit the building. Exiting via the bistro is via the lounge bar which is also monitored by PIR however as reported, I do have some reservations regarding the effective distance that the PIR could monitor given the length of the lounge bar area. Of note however, is that this area is monitored and would only give access out through front doors that are closed and monitored by PIRs to the alarm or the rear emergency exit, which was locked.

10.9 The downstairs doors were locked and checked by Mr Cook. The locks are key operated with no manual movement or manipulation available to operate the lock and get out or gain access. If an offender went down to that area, they then had to come back up as they couldn’t and didn’t get out as it was locked when Mr Cook checked it even shaking the doors to check.

10.10 An alternative is for an offender to try and leave either through the bistro which itself is monitored by two PIRs or via the front emergency doors onto Kendal Street, which are also monitored by a PIR. There is no alarm response from those other areas indicated on the alarm printout. It appears there was only one pass of the PIR.

10.11 If egress were gained from the hotel after lighting the function room fire, an offender would then need to gain access back into the lower ground floor area to access, break in and light the fire in the workshop having already lit a fire on the first floor. This would need to occur with the potential for detection increasing all the time whilst the fire was burning on the first floor. There is no internal access from the workshop to the function room on the first floor.

10.12 An alternate opportunity might be suggested by first accessing and lighting the fire in the workshop. Similarly, access into the building would need to be made however all external doors were locked and checked by Mr Cook. There is no evidence of forced entry to any door or window, nor any alarm detection that would indicate someone moving around the various sections of the hotel.

10.13 If the fire was lit in the workshop first, that fire was also developing however it is noted that the door to the workshop was open and if the fire was already developing, access would need to be made into the building to light the second fire. This scenario provides a further question surrounding how did someone access the building and also cause the stairwell PIR to signal. If Mr Cook as he states was asleep in his bedroom, the doors at the east end of the building were closed and locked. Mr Cook confirms this. There are no alarm signals from any other area of the hotel. The emergency exit door was closed and locked yet the PIR that alerted the alarm monitoring company was the one outside the doorway where Mr Cook would enter and exit his room, that also monitored the stairs and reception area.”

  1. While caution is required in dealing with Mr Kelly’s evidence, as her Honour found his report “not to be objective and to be very much an assortment of statements of opinion and speculation as to various of the matters about which the plaintiffs have complained”,[20] and that he was “advocating for his own views as to what had happened”, and so treated his opinions with some caution and circumspection, and ultimately formed her own views without the need to rely on those of Mr Kelly,[21] his observations of fact do not fall in the same category.

    20. Primary Judgment at [189].

    21. Primary Judgment at [191].

  2. In short, given that no fault or problem was identified with the alarm system and PIR sensors, and having regard to the positions of windows and doors, and the locations of the PIR detectors, it would have been expected that, had someone other than Mr Cook, such as an intruder, been present, their movement in the various sections of the hotel would have triggered a PIR detector and presented as a signal from locations other than those where Mr Cook stated he had been. In particular, anyone in the reception area, exiting through the fire doors or through the bistro, would have triggered the PIR in the north-western corner of the reception area, and/or the PIR in the bistro which covered the doors into it from the reception area. While these conclusions are informed by Mr Kelly’s evidence, they do not depend on it: they are drawn from examination of the locations and arcs of the PIR detectors in the reception area and in the bistro.

  3. The only possible access to and egress from the upstairs function room was via the stairs, or the window. If the stairs were used, then they could be reached and left by an intruder only through the reception area, or through the lower stairs leading to the door that opens into the corridor and leads to the storeroom. However, Mr Cook’s evidence was that that door was locked, so that possibility can be excluded. If that door was locked, an intruder could not have moved internally between the storeroom and the function area – or vice versa – without triggering at least one other PIR detector in the reception and/or bistro area.

The window

  1. For that reason, the possibility that access and/or egress had been gained through the window requires consideration.

  2. Mr Cook’s evidence was that when he walked through the premises with his wife, once they were allowed back in following the fire, the window was open, and “there were no soot marks on the top of the window”. It emerged in cross-examination that this was not an observation he made at the time, but one that he based on a photograph he had seen, which had been taken after the window had been reclosed. The reference to “the top of the window” appears to relate to the area along the top of the lower half of the window (which comprised two frames, opened by raising the lower frame), where the locking mechanism was located. [22]

    22. Tcpt, 6 August 2020, pp 52(45)-54(17).

  3. Senior Constable Walker reported (emphasis added):

“The function room accommodated the top storey of the hotel. Access was via previously mentioned staircases from the southern sides of the reception area, and the main bar. A window was positioned in the southern wall of the staircase leading from reception. The window consisted of a timber sash frame which was found to be slightly open. The window overlooked the roof area of the kitchen. There was no disturbance to the dust collected on the sill of the window. Investigations reported that this window had been opened by attending Fire Brigade, along with other windows within the function room, to allow for air flow.”

  1. Mr Kelly reported:

“9.6 Three steps lead to a landing in a southerly direction, which then turned east, rising via 14 steps to a landing where the entrance to the function area was located. In this area I observed two timber and glass constructed windows that were fitted with locks. An examination of those locks revealed condensation runs in soot around the windows that opened onto the clip lock roofing, which extended out over the kitchen and bistro area. I examined those locks and identified dust and debris. I formed the opinion that the dust and debris deposits were indicative of and consistent with, the windows being closed at the time of the fire development. This is because the dust and soot deposits were not present in the openings of the window, which is consistent with the window being closed at the time of the fire. If the window was open I would have expected there to be soot and dust deposits on the window opening.”

  1. Her Honour addressed this, as follows: [23]

“[194] The possibility that a person or persons could have entered the Hotel through the window located on the southern side of the Hotel above the stairwell leading up to the top level function room is not consistent with the evidence that the window was opened by the fire brigade in order to allow air into the building (noting the statement of Senior Constable Walker that the window had been opened by the attending fire brigade – see at [103] above) and is not consistent with the evidence that the dust and debris on the windowsill was undisturbed.

[195] To the extent that this evidence alone does not foreclose the possibility that someone entered (and, perhaps, exited) through this window (noting here that Senior Constable Walker might have been wrong in her record), I consider that such a possibility is inherently implausible. More particularly, it is implausible that someone entering the Hotel by those means would then have triggered the single PIR detector but could then have moved around the premises and escaped without setting off other PIR detectors (and, indeed, without being seen by Mr Cook in the period of time that he says he went around the premises looking to check for any disturbance).

[196] Likewise, I accept that it would be extraordinary (and, again, I consider inherently implausible) that somebody (having on this hypothesis gained entry through that window) lighting a fire in the upstairs function room, having triggered and alarm, then to escape through that window and get out on to the flat roof, without leaving any evidence of any footprints or the like, and then even perhaps to turn around and close the window (which on the evidence that the window was opened by the fire brigade would have to be the case).

[197] As I have just adverted to, I accept that the evidence as to the window being closed at the time of the fire rests to a large extent on the accuracy of the account given to, and recorded by, Senior Constable Walker (i.e., that the window was opened by the fire brigade). I bear in mind the caution in placing weight on the accuracy of entries of that kind (and the complaint by the plaintiffs that evidence was not adduced directly from Senior Constable Walker). However, there is simply no evidence that the window was left open; nor is there any evidence that the window was forced; nor that there was any entry through or out of that window. …”

23. Primary Judgment at [194]-[197].

  1. In order to be reasonable and plausible, a theory involving use of the window has to accommodate an intruder:

  1. entering through the window. Unless it was left open or at least unlocked, this would have involved forcing it;

  2. setting the fire in the upstairs function area, and either before or after doing so, descending the stairs and triggering the PIR detector at the office, near the foot of the stairs; and

  3. returning up the stairs, and exiting via the window. Such an intruder could not have exited via any other route, because it would have involved triggering the PIR detectors covering the reception area and exits from it, which detected no movement.

  1. Although it seems unlikely, it is not impossible that an intruder could have scrambled up the trellis onto the awning outside the window, and her Honour did not discount the theory on that basis. There is force in the appellant’s submission that no dust or debris from the fire would have accumulated on the windowsill at the time of entry and exit, though it would have afterwards as a result of the fire, and so the absence of disturbance was not of itself a sound basis for an inference that there had been no movement through the window. There was hearsay evidence of Senior Constable Walker that the window had been opened by the fire brigade, and opinion evidence of Mr Kelly that the window was closed at the time of the fire; however, there was evidence of a fire brigade officer that they had not opened that window, which shows that Senior Constable Walker may have been mistaken. Nonetheless, the window had a conventional window lock. There was no evidence from Mr Cook that he had left the window open or unlocked. There was no sign of the window lock having been broken or disturbed, or entry having been otherwise forced. That suggests that it is unlikely to have been opened by an intruder.

  2. More importantly, to my mind, the prospect of an intruder being able to exit via the window was very remote, given the location of the window, offset from the landing and above the stairs, which would have posed a considerable physical challenge; and given also that the window was open only slightly. Mr Cook, it is true, did not accept this: [24]

    24. Tcpt, 6 August 2020, pp 49(42)-50(6).

“Q. The window is above the stairs themselves, not the landing, correct?

A. Correct.

Q. Which would make it quite difficult to climb up to that window in order to get out through it, correct?

A. No.

Q. Why not?

A. It’s not that high.

Q. How high do you say it is?

A. From the stair?

Q. Yes.

A. When you’re standing on the step, it’s probably three and a half foot, four foot, if that.”

  1. However, photographs depicting the relationship of the window and the stairs tell a different story.

  2. The appellants criticised the finding in [195] of the Primary Judgment, on the basis that the relevant hypothesis was not that an intruder “moved around the premises”, but rather that such an intruder more likely exited through one of the reception doors, which were fire doors. Her Honour in fact addressed that possibility, observing:[25]

“[206] … The suggestion that an intruder or intruders might have escaped through the fire doors, again, does not explain that there was only a single PIR activation before the cabling was burnt and the multiple sensors were activated (and, also, that Mr Cook did not observe or hear such an escape).”

25. Primary Judgment at [206].

  1. A similar criticism was made of the finding at [199]:[26]

“[199] Again, the hypothesis that an outside intruder gained access to the upstairs function room from the staircase window does not, to my mind, plausibly explain how only the single PIR activation occurred. This is not least because, on that hypothesis, the intruder must then have come down the stairs in order to trigger the alarm but the intruder could not have got out through the downstairs stairwell (and the door leading to the maintenance room) because that door was locked according to Mr Cook’s evidence and he was adamant that those doors could not be forced open in the manner in which Mr Burgin suggested in his evidence … . Moreover, if it was not Mr Cook who had set off the alarm outside the manager’s residence then again it was inherently implausible, if not inexplicable, that other PIR alarms (say in the reception or bistro area) would not have been activated by the putative intruder.”

26. Primary Judgment at [199].

  1. Once the disposition and orientation of the PIR sensors are understood, these findings of her Honour are compelling. If an intruder, having entered through the window, descended the stairs, and triggered the sensor outside the reception office, and then exited through the reception doors, the second PIR in the north-western corner of the reception area would also have been triggered. It was not. That leaves as the only possibility that an intruder, having descended the stairs and triggered the alarm, returned up the stairs, and exited through the window through which entry had been made. Physically, the location of the window above the stairs makes exiting through it in this way an even more challenging proposition than entering through it.

The storeroom

  1. Given Mr Cook’s evidence that the door at the foot of the stairs leading to the corridor and the storeroom was locked, the possibility of an intruder moving from the site of one fire to the other via the staircase can be excluded. An alternative, external means of access to the storeroom was required. Such access could be obtained from the courtyard, which in turn was surrounded by the buildings which housed the motel rooms. Access to the courtyard could be gained, other than from the hotel, only through two hallways at the southern end of the courtyard, or through the motel rooms, the rear of which opened onto the courtyard.

  2. At the time of the fire, the door of the storeroom was observed, by a security officer who responded to signs of fire and accompanied Mr Cook to alert occupants of the motel, to be open; it was later noted that there were no signs of forced entry.

  3. A fire brigade incident report timed at 6:47 am on 7 September stated:

“Adjacent door to accommodation rm 1 had signs of being forced and was also open.”

  1. A fire brigade incident report timed at 7:03 am on 7 September stated:

“Accommodation room adjacent to storeroom had forced entry by unknown person. [V]isible tool marks on door/jamb.”

  1. On inspection of the premises by police later that morning, it was found that:

  1. one of the hallway doors to the courtyard was unlocked and had been opened, reportedly by Mr Cook, to allow fire brigade personnel to access the storeroom;

  2. the other hallway door remained locked;

  3. the door to room 2 was open, and slight damage was visible adjacent to the door lock; there was no damage to the strike plate and no evidence of entry or disturbance to the room; and

  4. there was no evidence of forced entry to any access door to the courtyard.

  1. It is apparent, from photographs which show the relationship of room 2 and room 3, which was to the south of room 2, that the reference to the door to room 2 was to the internal door – that is, the door which led from the unit to the courtyard, not the external door, which led from the unit to the carpark and exterior. When and how the damage to the internal door to room 2 was occasioned is not clear; there is some not very satisfactory evidence that it was after the fire developed, for the purpose of accessing the electrical supply, [27] but this does not appear consistent with the fire brigade incident reports referred to above, and is not self-evidently logical. Regardless, the damage was not indicative of entry having been successfully forced, as there was “no damage to the strike plate and no evidence of entry or disturbance to the room”. And in any event, damage to the internal door (hypothetically by an intruder seeking to escape from the courtyard) does not explain how the intruder could have gained access in the first place, when “there was no evidence of forced entry to any access door to the courtyard”, although it cannot be excluded that access might have been gained through an unlocked hallway day: Mr Cook gave evidence that one of the hallways was not locked.

    27. Tcpt, 7 August 2020, p 139(25)-(28).

  2. However, there is also the circumstance that the door to the storeroom, where the fire was set, was found by the security officer, and the fire brigade, to be open, with the fire alight inside it. The storeroom had double timber doors, fitted with a Diamond brand key-operated lock, with a snib-lock on the rear. There was no sign of forced access to the workshop, which was most probably therefore accessed by someone with a key, although there was some evidence that the door could be opened by “using a flat piece of metal to push back the latch”, and that following the fire the spare key to the storeroom could not be located, though it had not been used for quite some time before and it was not known how long it had not been in its usual place. As has been noted, Mr Cook said that when (at about 2:27 am) he looked through the windows of the doors at the bottom of the internal stairs, into the corridor off which the storeroom is located, he observed nothing unusual and everything appeared normal, and although he was not particularly looking at the workshop doors, he did not notice any sign of flames or smoke. It is unlikely that, after the alarm had already been sounded at 2:23 am, an intruder was able, unnoticed by Mr Cook, to defeat the storeroom door and set the fire, such that by 2:48 am (six minutes after Mr Cook had reset the alarm at 2:42 am, and twenty minutes at most after he had seen no sign of anything unusual there) the fire was sufficiently intense to set off multiple detectors by burning through the alarm cables, coincidentally during the period that Mr Cook had ostensibly returned to bed and forgotten to re-activate the alarm.

Conclusion

  1. The possibility of an intruder setting both fires in locations that were not monitored by PIR sensors, and triggering only the single PIR sensor that was triggered is, at best, remote. Of all the PIR sensors, it was the one closest to the bedroom in which Mr Cook says he was that was triggered, and he could not disarm the alarm system without first passing that sensor. The fact that it was only that PIR – which covered an internal part of the motel which could not be reached (except from upstairs) without first passing through the field of one or more other PIR sensors – that was triggered, points to it being triggered by someone who was already in the premises.

  2. The only person apparently already in the premises was Mr Cook, who was undoubtedly present in the hotel when the fires were set. Notably, although Mr Cook said that, being asleep in his bedroom, he was first awoken by the call on his mobile (and not by the call to the landline in the office, or by the screamer alarm), the alarm, which was located just outside the reception office, could be heard in the background on the audio recording of the call made at 2:24 am. During the sixteen minutes while the alarm was deactivated – including the twelve minutes when Mr Cook had ostensibly returned to bed but forgotten to reactivate it – he had the opportunity to set both fires.

  3. The alternative hypothesis requires either that there be two intruders (one entering and exiting via the window and setting the fire in the upstairs function area, and the other accessing the courtyard and the storeroom and setting the fire there and then exiting via the same means); or that one intruder do all this in succession, which involves making the second entry and setting the second fire after the first was alight and burning but not yet detected; notwithstanding that after the alarm was triggered, Mr Cook was awoken by the phone call from CSS, arose and inspected the premises, and found nothing.

  4. It is clear that no intruder passed the PIR in the reception area, and thus neither access nor egress was obtained through that area; the only possible access and egress for that intruder was the window. The acrobatics involved in exiting from the stairs through the window, which was only slightly open, are such that it is a most unlikely scenario. Even if the window was open during the fire, that would not explain why an intruder, having entered through the window and set the fire in the function room and then descended the stairs and triggered the stairwell PIR, could or would – with the alarm sounding – re-ascend the stairs and exit through the window, rather than proceed out the reception fire doors and make good a much easier escape than returning upstairs and clambering through the window. It is even less likely that an intruder who, having entered through the window, descended the stairs, and triggered the stairwell PIR, would, with the alarm sounding, return upstairs and set the fire in the function room, before climbing out through the window. These theories are highly improbable, if not implausible.

  5. As to the fire in the storeroom, it is not inconceivable that an intruder could have gained entry to courtyard through a motel room, or one of the hallways, and exited, possibly via room 2. However, it is much more difficult to see how the intruder was able to unlock the storeroom, and set a fire there, in the minutes after the alarm had first been triggered and Mr Cook says he had looked through the windows of the downstairs doors and seen nothing unusual, and returned to bed – but forgotten to reactivate the alarm. This theory is improbable.

  6. The combined improbabilities of the alternative explanations for each fire are such that there is no apparent reasonably plausible alternative hypothesis that explains the concurrent setting of the two separate fires, that is consistent with the PIR evidence and Mr Cook’s evidence. Conscious of the requirement for “comfortable satisfaction”, there was nonetheless no error in her Honour’s conclusion that, on the balance of probabilities, it was Mr Cook, not an intruder, who triggered the PIR, and who set the fires.

  7. The appeal must be dismissed with costs.

**********

Annexure (285273, pdf)

Endnotes

Amendments

02 September 2021 - attached Annexure

Decision last updated: 02 September 2021

Cases Citing This Decision

0

Cases Cited

13

Statutory Material Cited

2

Luxton v Vines [1952] HCA 19
Luxton v Vines [1952] HCA 19
Chamberlain v The Queen (No 2) [1984] HCA 7