Dixon v Commercial Union Assurance Company of Australia Ltd
[1999] TASSC 104
•15 October 1999
[1999] TASSC 104
CITATION: Dixon v Commercial Union Assurance Company of Australia Ltd [1999] TASSC 104
PARTIES: DIXON, Keith Charles
v
COMMERCIAL UNION ASSURANCE COMPANY
OF AUSTRALIA LTD ACN 004 478 371
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 292/1998
DELIVERED ON: 15 October 1999
DELIVERED AT: Hobart
HEARING DATES: 20 - 24 September 1999
JUDGMENT OF: Wright J
CATCHWORDS:
Insurance - Fire insurance - Losses and claims - Fraudulent claims - Whether loss caused by deliberate act of insured - Circumstantial case - Burden of proof - Standard of proof.
Chamberlain v R (No 2) (1984) 153 CLR 521; O'Garey v King [1972] Tas SR 136; Askeland v R 59/1983; Jeffrey v R (1991) 1 Tas R 336; Nesterczuk v Mortimore (1965) 115 CLR 140, considered.
Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125, followed.
Briginshaw v Briginshaw (1938) 60 CLR 336; Plomp v R (1963) 110 CLR, applied.
Aust Dig Insurance [97]
REPRESENTATION:
Counsel:
Plaintiff: P W Tree
Defendant: E G Stewart
Solicitors:
Plaintiff: Smith & Glover
Defendant: Dobson Mitchell & Allport
Judgment Number: [1999] TASSC 104
Number of Paragraphs: 48
Serial No 104/1999
File No 292/1998
KEITH CHARLES DIXON v COMMERCIAL UNION ASSURANCE
COMPANY OF AUSTRALIA LTD ACN 004 478 371
REASONS FOR JUDGMENT WRIGHT J
15 October 1999
The plaintiff, who currently resides at a caravan park at Stanley Pines, was born at Ulverstone and educated at Forest and Smithon in the north-west of Tasmania. He is now 67 years of age and is retired. He ceased formal education at 13 years of age and commenced employment clearing timber. For some time, he worked as a self-employed logging contractor and after that as a dairy farmer at Togari, near Smithton.
The plaintiff has owned and lived in numerous residences during his life. At various times, he has built, bought, leased and sold properties. He has sold properties quickly for profit and, sometimes, for loss. He has also exchanged properties with other people, with appropriate cash adjustments.
Eventually, the plaintiff purchased an old shop in Forest and, having made some improvements to it, sold it after a period of approximately six months. Soon after, he built and sold a house in Forest within a short period of time.
At the instigation of his teenage daughter, in December 1997, the plaintiff purchased the property situated at RA 578 Mengha Road, Forest ("the Mengha Road property"). He was hopeful of establishing some dog kennels on that property, as a means of providing employment for his daughter. However, his development application was rejected by the local council, presumably as a result of objections received from the occupiers of neighbouring properties.
The plaintiff then decided to sell the Mengha Road property although, initially, few people expressed interest. However, within a month or two, he subdivided and sold most of the land to a neighbour, Gary House. The plaintiff stated that this land was not particularly useful to him, as it was "broken" and, due to a bad knee, he could not work the land. This sale was completed in about June 1998.
The plaintiff then placed the remainder of the Mengha Road property, consisting of his residence and a small area of land surrounding it, in the hands of estate agents for sale. On 28 July 1998, the residence was severely damaged by fire. In fact, Mr and Mrs Hamlet had inspected the house the day before the fire and had expressed interest in a "swap" transaction with a cash adjustment. This transaction was attractive to the plaintiff as the Hamlet's property included seven acres of flat land which may have been useful to him.
The evidence clearly showed that this was a genuine proposal in which both Mr and Mrs Hamlet and the plaintiff were interested, albeit that no contract had been signed at that stage. The plaintiff claimed that he was in no hurry to sell or move out of his property. He had even thought "of just tidying it up a bit more, and just renting it out".
The plaintiff acknowledged that he was, and still is, a heavy smoker. He smoked "roll your own" cigarettes and would save and re-use any remaining butts. These were stored in a pocket, the tobacco pouch, a tin, or a sheet of paper.
Prior to the fire at the Mengha Road property, the plaintiff had undertaken some interior painting and varnishing to make the house more attractive to prospective purchasers. He stored the used paint brushes in a plastic container containing sump oil and turpentine, which he then kept on top of the troughs in the laundry.
The laundry was located at the rear of the house. The floor was bare concrete. The external walls were painted weather-board and the plaintiff gave evidence that the interior walls of the laundry and toilet were lined with particle board, whereas, the balance of the house was lined with pine.
The laundry roof was corrugated iron, however, two iron sheets had been replaced with transparent fibreglass sheeting, which acted as skylights. The rear laundry door was constructed of solid timber. The latch did not work and the door was only secured by a nail. There were no windows in the laundry.
The house was equipped with two wood heaters. The plaintiff gave evidence that on the day of the fire, he had ignited the wood heater in the sun room but not the wood heater at the front of the house. To start the wood heater in the sun room he used paper, shavings, sticks and pine cones. The sticks and pine cones were stored in bags in the laundry. He had never used fire lighters and did not have any at his home on the day of the fire.
The 28 July 1998 was a cold day, with rain and very strong and gusty winds. The plaintiff gave evidence that on the morning of the fire he had woken at about 8.30am. He then used some towels to wipe up some water from the laundry floor. This had seeped under the rear door due to the lack of an appropriate weather seal. The wet towels were then placed in the laundry sink.
After breakfast, the plaintiff lay on his bed and listened to the radio until it stopped abruptly, due to a power failure. He then spent a little time playing with his dog, a Chihuahua. The plaintiff could not be certain of the time that he left his home that morning, but thought it was between 12.30pm and 1pm. However, after leaving his home with his dog, he drove his car to the local rubbish tip, where he was seen by Mrs Donoghue at approximately 1pm. Thereafter, he drove to Roelf Vos supermarket in Smithton to purchase some meat, to the newsagent to get the newspaper, to the Tall Timbers Hotel to get some tobacco and port and then back to his home.
The evidence of several witnesses established, and the plaintiff acknowledged, that he is a slow, cautious driver. He was uncertain how long it took him to undertake his journey that day, but he arrived back at his home during the fire as the blaze was being fought by two fire brigades.
The plaintiff gave fairly graphic evidence of his feelings when he saw his house alight. It was as if he had "been hit in the head with a pick handle". He could remember speaking to Sergeant Daniels, a police officer who was in attendance, but little else. Mr de Jong spoke to the plaintiff and noted that he appeared to be in shock. The plaintiff could not remember seeing Mr de Jong at that time. His main concern was for his possessions within the house, such as photographs, his mother's bed, ornaments and his mother's glory box. The glory box was recovered, although most other items were destroyed or suffered smoke damage.
Various witnesses gave evidence of their observations from the vicinity of the Forest General Store, however, no witness was able to give more than an approximation of the time of day.
Mrs Vivienne House said that she left her home at Jock's Road at about 12.30pm. She was driving a Toyota Land Cruiser, travelling at between 80 to 100 km/h and remembers passing the plaintiff at the "S" bends on Backline Road. It then took her a further five to six minutes to drive to the Forest General Store where she met Mesdames M Smith, S Thorpe and T Gray.
About ten minutes after Mrs House arrived at the store, Mrs D Briggs arrived and informed the other ladies of the smoke coming from the general direction of Cutt's Machinery. The ladies then went out of the shop.
Mrs M Smith gave evidence that she was standing in the street outside the store with the other ladies when the fire truck (driven by Mr T Gale) drove passed them ¾about 15 to 20 minutes after Mrs Briggs had first noticed the fire.
Mr T Gale gave evidence that having arrived at the fire station and reporting the fire, he drove the fire truck passed the Forest General Store on his way to the plaintiff's house. As he did so, he noticed the ladies standing outside the store. Exhibit No D13 is a record from and shows that Mr Gale made the above-mentioned telephone call from the fire station at about 1.19pm.
The only other witnesses to have seen the plaintiff during his travels on the day of the fire were Mrs J Donoghue who, as previously noted, observed Mr Dixon at the tip at approximately 1pm, and Mr M de Jong who recalled seeing Mr Dixon in Smithton at about 11.30am that day.
The plaintiff agreed, and it became common ground, that Mr de Jong must have been incorrect in his recollection of the time. By a written claim dated 29 July 1998, the plaintiff made a claim against the defendant for the loss and damage to his home. The defendant refused to pay any money to the plaintiff, alleging that he had deliberately set fire to his property and that the claim was fraudulent. As a consequence, the plaintiff has instituted these proceedings.
A circumstantial case exists where a party, lacking direct evidence such as eye witness testimony, documents or admissions, produces evidence of facts or circumstances, which, when viewed collectively, are capable of persuading the relevant tribunal of fact that inferences should be drawn which are determinative of, and favourable to, that party upon crucial disputed issues.
The capacity of a circumstantial case to have this persuasive effect will, of course, depend upon whether the case is criminal or civil and it will also be affected by the gravity of the allegation which is being contested (Briginshaw v Briginshaw (1938) 60 CLR 336). Suspicion is not proof. In a civil trial, the evidence in question must persuade the tribunal of fact affirmatively on the balance of probabilities. The existence or non-existence of a motive for the conduct alleged will always be an important factor, see Plomp v R (1963) 110 CLR 234 per Menzies J at 249; Askeland v R 59/1983 per Neasey J at 22, and my own judgment in Jeffrey v R (1991) 1 Tas R 336 at 366. The existence or non-existence of opportunity will also be of crucial relevance, although, particularly in cases of arson, the contrived absence of the alleged arsonist from the scene of the fire may be explained by his or her engagement of a criminal confederate to actually start the blaze.
In the present case, there has been no suggestion of a complicit agent being involved and a good deal of the evidence has been directed to establishing that the plaintiff must have been present at his home when the fire started. The evidence from independent witnesses as to the plaintiff's movements are not entirely mutually consistent and their evidence as to the time at which the plaintiff was seen travelling from his home to the tip and, then, at Smithton, was based upon estimate, rather than accurate recollection by reference to a clock or watch. Furthermore, although Mr Dyson was, in most respects, a thoroughly convincing and persuasive witness, I have considerable doubt as to the accuracy of his estimate of the time at which the fire started, which, in turn, was based upon estimates of fuel load within the laundry, the time from ignition until flashover, and the descriptions of the progress of the fire by eye witnesses who observed the house aflame.
I think that the best conclusion which can be reached, based upon this material, is that it is not inconsistent with the weight of the evidence that Mr Dixon may have been at home when the fire commenced. This, however, is not the same as finding that he was or must have been at home at that time.
In considering whether or not a circumstantial case has been established by the evidence, it is necessary to view all the evidence together, rather than isolating specific aspects of the evidence and considering the weight of each piece of that evidence as a discrete issue. It is often a combination of events which will lead to a particular conclusion (Chamberlain v R (No 2) (1984) 153 CLR 521; O'Garey v King [1972] Tas SR 136 and Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125).
The evidence of Sergeant Daniels, Mr Direen and, particularly, Mr Dyson, leads me to a firm conclusion that the fire which damaged Mr Dixon's home on 28 July 1998 originated in the laundry area and, in all probability, behind the washing machine. Fire damage to the washing machine indicates that it was in its normal position in the corner at the time and this indicates that the source of the fire was behind the washing machine at, or near, floor level. This strikes me as a somewhat peculiar place for anyone to choose as the starting point for a deliberately lit fire, but nothing turns on this.
As I have said, although Mr Dyson was, generally speaking, a most impressive witness, I have difficulty accepting his estimate of the time for which the fire would have been burning undetected in the laundry. Much of the defence case was built around that estimate, based upon which, it was contended that Mr Dixon must have been at his home at the time the fire started. As an aside to this, it may be observed that it was interesting to me that Mr Dixon, when giving evidence, agreed that Mr de Jong's estimate of the time at which he was in Smithton that day was erroneous. Mr Dixon agreed generally with the time estimates given in evidence by the defence witnesses which tended to show that he left home between 12.30pm and 1pm.
Had he wished to establish a better alibi than he otherwise had, he may well have agreed with Mr de Jong that he was in Smithton around 11.30am or 11.45am as Mr de Jong said. Mr de Jong was an impressive witness in all respects, and with support from the plaintiff as to times, his estimates may well have been accepted. I will return to other aspects of Mr de Jong's evidence shortly.
I think Mr Dyson's estimate of the time at which the fire commenced is, at best, an educated guess but, having regard, particularly to his lack of awareness of some features such as the effect of gusting wind around buildings and trees, and the presence of fibreglass skylights and particle board lining in the laundry (as to which, I accept Mr Dixon's evidence). I find myself unable to use his evidence as a reliable basis for finding that Mr Dixon was at home when the fire started.
This, of itself, does not destroy the defence case, however. It is well-known that arsonists will often take steps to provide themselves with an alibi by setting a slow burning fire which will allow them to decamp and be seen by witnesses at a place or places far removed from the crime scene.
The defence case has also established to my satisfaction that when the fire started, the power supply to Mr Dixon's home had been interrupted, presumably due to storm damage to the local power reticulation system. In short, the power was off and an electrical source was impossible.
It was suggested that a strong motive existed for Mr Dixon to set fire to his home. As already mentioned, he had purchased it six or seven months previously to provide an employment opportunity for his daughter to establish a dog boarding kennel. When planning approval was refused, his daughter subsequently left home. However, there was no evidence that he was in financial difficulties or that he was being seriously frustrated in efforts to sell the place. He had sold a large acreage to a neighbour, Mr House, some weeks before the fire. He had over $100,000 in the bank. He was used to "wheeling and dealing", to use his own expression, in property, and the very day before the house burnt down, he had been approached by Mr Hamlet, in company with an agent, with a view to a sell/swap proposition which may well have come to fruition if the fire had not occurred.
Mr Tree was critical of the evidence of Lyndon Scott and Heath Marthick. His criticisms were all valid insofar as they identified inconsistencies between them and also inconsistencies between what they told Constable Williams and what they said under oath in the witness box. Mr Tree suggested that the inconsistencies were such as to suggest that their knowledge of the position of a pile of pine cones on the laundry floor and the washing machine, tended to suggest that they had been present in the laundry before the fire was ignited. Thus, it was submitted, there were indicators that they were, or may have been, responsible for starting the fire. My conclusion is that the inconsistencies did not have this significance and did no more than indicate a certain tendency to rationalise, reconstruct and succumb to suggestion. My overall impression was that they were two relatively simple, yet honest, young countrymen. Whilst I cannot entirely acquit them of suspicion, I am relatively certain that they were not involved in any way with an arson attack on Mr Dixon's home.
A conclusion in these terms is, nonetheless, of some value to the plaintiff because the possibility of involvement of a third party in setting fire to the house cannot be entirely discounted and this, of itself, amounts to a reasonable hypothesis consistent with the innocence of Mr Dixon. If this were a criminal trial, such a conclusion would be sufficient to acquit the plaintiff of guilt.
This has been an interesting case and I have listened carefully to the witnesses but, whilst it is plain that the expert witnesses and the plaintiff's insurers were justified in being suspicious of the plaintiff's claim, I am unable to say that I am satisfied on the balance of probabilities that the plaintiff intentionally lit the fire for the purpose of facilitating an insurance fraud.
Other possibilities which must be considered are:
(1)That a malicious third party entered the premises in the plaintiff's absence and set the place on fire.
(2)That the fire in some way started from an ember from the wood heater in the dining room or from some unidentified external source.
(3)That the plaintiff unintentionally dropped a cigarette near flammable materials in the laundry.
The plaintiff denies ever using Jiffy fire lighters, yet Ms Nguyen says her scientific tests showed the presence of such material from the sample taken by Sergeant Daniels in the south-west corner of the laundry. However, bearing in mind the strange location of this part of the building as the origin of the fire, the fact that the plaintiff had only owned the premises for six or seven months, and the concession made by Mr Dyson that the fire could have started in the middle of the floor, rather than behind the washing machine, it is not impossible that this trace of material came from an old fire lighter left in the house by a prior occupant and not connected with starting the fire in question. There was no evidence that the plaintiff had ever purchased or had possession of Jiffy or similar fire lighters.
It is of significance to me that sentimental possessions and other property of the plaintiff had not been removed from the premises before the fire. Mr de Jong's graphic account of the plaintiff's shock and distress on arriving home after the fire was extinguished, also suggests that the plaintiff, who struck me as a fairly phlegmatic and unexpressive individual, was capable of giving an Oscar winning performance if he was indeed the arsonist.
A criminal prosecution based upon circumstantial evidence cannot succeed unless all reasonable hypotheses consistent with innocence are excluded, but in a civil case all that is required is evidence raising a reasonable, definite and more probable, inference in favour of the essential issues which have been alleged. Thus, it is unnecessary to exclude reasonable hypotheses consistent with the contrary of that which is alleged, (Chamberlain v R (No 2) (supra) at 535; Bradshaw v McEwans Pty Ltd (High Court 27 April 1951) and Transport Industries v Longmuir (supra) at 128 - 129 (Winneke P) and 141 (Tadgell JA).
Applying this standard of proof to the present case, I must say that the possibility of a malicious third party entering the plaintiff's home and deliberately setting fire to it in the short time available after he had left to drive to Smithton, is very remote and so improbable that I feel bound to reject it.
During the trial, surprisingly little, if any, attention was given to the fact that the plaintiff smokes "roll your own" cigarettes and the possibility that a carelessly dropped butt may have led to the fire. This is not a far-fetched notion, in my opinion. A strong draught under the back door upon a glowing butt near the pine cones may well have started a fire of this kind. The presence of a strong motive for the plaintiff to commit arson may well render such an hypothesis less attractive, but, try as I might, I am unable to see why the plaintiff would want to set his home on fire. Although he was able to salvage his mother's glory box, other sentimental property was damaged or destroyed. It was not shown that he had removed property of any description from the house before the fire. He had $106,000 in the bank. He owned the property, mortgage free. He had no debts or other pressing liabilities. Although the boarding kennel enterprise had not eventuated, he had sold the greater part of the land adjacent to the house for an apparently satisfactory price. The very day before the fire, a prospective purchaser (who could scarcely be regarded as a "tyre-kicker"), had inspected the property and the plaintiff had inspected his property with a view to a "swap". The plaintiff had been carrying out minor improvements, including painting, to make the property attractive. The plaintiff had only owned the property for a few months and was accustomed to buying and selling residential properties. There is nothing to suggest that he was in any great hurry to do so on this occasion.
Mr Stewart, counsel for the defendant, in a very able final address, pointed out that motives are frequently unknown or impossible to prove and that, in any event, motives may sometimes be quite illogical. All of this is true, but the fact remains that the evidence points strongly to a complete lack of motive on the plaintiff's part.
Whilst the evidence plainly establishes that the fire did not start adjacent to the wood combustion heater in the dining room, I am unable to exclude an ember or spark from that source as the vital cause of ignition in the laundry. Mr Dyson rejected that proposition out of hand, but I am by no means so sure. Certainly, a constant westerly wind would tend to blow any sparks or embers in the opposite direction towards the front of the house, but the wind that day was strong, gusty and, apparently, intermittent. Swirls and back draughts may well have been created. The back door into the laundry was only fastened by a nail. It may have blown open and then shut again. Opening and closing the glass side door as Mr Dixon left to get in his car to drive to Smithton could have been sufficient to propel an ember back into the laundry. There were two ready ignition sources there ¾the turpentine in the troughs and the kindling and pine cones on the floor.
Mr Dyson also rejected the notion that an ember or spark may have escaped from the chimney flue and blown down outside the house to start the fire behind the washing machine. I have already commented upon the area behind the machine as an unlikely place for someone to deliberately start a fire. It may be argued that someone aware of fire language and its capacity to indicate the source of initial combustion may set a fire in such a position to suggest an electrical fire in the washing machine drive mechanism, but this argument leaves out of account the plaintiff's awareness, and free admission to investigators of his awareness, that the power was off at all relevant times. He did not attempt to argue that a sudden power surge on reconnection may have caused a spark and, more importantly, he has always been resistant to the idea that the fire started in the laundry. He has maintained that it started in the combustion heater.
I find it difficult to reach a firm conclusion, one way or the other, as to the cause of this fire. It has some of the hallmarks of arson but, on the whole of the evidence, I find myself unconvinced. At best, from the defence point of view, I could say I am in a state of equipoise (cf Nesterczuk v Mortimore (1965) 115 CLR 140). The defence has accepted that it has the onus of establishing that the plaintiff deliberately set fire to the premises and has made a fraudulent claim. As this onus has not been discharged, I propose to enter judgment for the plaintiff for the agreed sum of $66,878.75.
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