Rukaj v Commonwealth Insurance Limited
[2014] VCC 1920
•21 November 2014
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-13-03044
| SOKOL RUKAJ | Plaintiff |
| v | |
| COMMONWEALTH INSURANCE LIMITED (ACN 067 524 216 ) | Defendant |
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JUDGE: | HIS HONOUR JUDGE LACAVA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 28, 29, 30 and 31 October 2014 | |
DATE OF JUDGMENT: | 21 November 2014 | |
CASE MAY BE CITED AS: | Rukaj v Commonwealth Insurance Limited | |
| MEDIUM NEUTRAL CITATION: [First revision 2 February 2015] | [2014] VCC 1920 | |
REASONS FOR JUDGMENT
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Subject:INSURANCE
Catchwords: Tenancy agreement – insurance included exclusion clause – no cover provided if there was no signed tenancy agreement in force at the time of loss/damage – whether tenancy agreement brought into existence fraudulently in order to deny the defendant the benefit of exclusion – No tenancy agreement signed between the plaintiff and tenant at the time the property was damaged
Legislation Cited: Insurance Contracts Act 1984 (Cth), s56; Evidence Act 2008, s140(2)
Cases Cited:Briginshaw v Briginshaw (1938) 60 CLR 336; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66
Judgment:Plaintiff’s claim dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P Lithgow | Ascot Solicitors Pty Ltd |
| For the Defendant | Mr A Donald | Turks Legal |
HIS HONOUR:
1 This is a claim by the plaintiff as the insured against the defendant, an insurer, in which the plaintiff seeks indemnity for losses under a policy of insurance and/or damages for alleged breach of the policy. The defendant admits the existence of the policy but denies that it is liable to the plaintiff to indemnify him for any loss. The defendant argues the claim made upon it by the plaintiff was made fraudulently within s56 of the Insurance Contracts Act 1984 (Cth) (“the Act”) entitling it to refuse payment on the claim made by the plaintiff. The defendant also argues that the loss claimed by the plaintiff is not all covered by the terms of the policy of insurance issued by it to the plaintiff and also that the plaintiff has failed to mitigate any loss suffered by him.
2 In summary form, these are the issues to be resolved in this proceeding. Many of the facts are not in dispute. It is necessary to set out some of those facts to put the issues raised by the proceeding into context.
3 By a Contract of Sale dated 19 September 2011, the plaintiff purchased a property at 16 Bristol Road, Pascoe Vale[1] (“the property”). The contract provided for the payment of a deposit and for settlement to occur on 16 December 2011. At settlement, the plaintiff, as purchaser, was entitled to vacant possession of the property.[2] According to a letter to the plaintiff from solicitors who acted for him on the purchase of the property, settlement occurred on or about the due date. A Statement of Adjustments prepared when the plaintiff purchased the property made no adjustment for rent.[3]
[1]Court Book (“CB”) 209
[2]CB 210
[3]Exhibit G
4 Notwithstanding that there was no mention in the Contract of Sale or, any of the conveyancing documents, of the property having been rented at the time of the contract and, at settlement, it appears that the property was in fact rented out and was occupied.
5 On 23 June 2009, the vendor of the property had entered into the terms of a lease with a person named as John Manners as the tenant.[4] The vendor was Gokhan Cakir, an estate agent. He gave evidence he leased the property to John Manners and that Manners signed the tenancy agreement in his presence.[5] The lease was for a term of twelve months, expiring on 23 June 2010. Thereafter, unless the lease was renewed, the tenant continued to hold possession of the property “as a periodic tenancy”.[6]
[4]Exhibit 19
[5]Transcript (“T”) 265-266
[6]CB 200
6 The lease provided for the tenant to lodge a bond of $2,100.00.[7] Mr Cakir said that his office held the bond until “a few months after settlement”[8] when it was transferred to the plaintiff, who told Cakir he would manage the property himself.[9] On or about 25 May 2012 (more than six months after settlement), a document bearing the date 25 May 2012 signed by the plaintiff was lodged with the Victorian Residential Tenancies Bond Authority (“VRTBA”), the effect of which was to give the plaintiff control as landlord of the bond money lodged by the tenant, Manners, in respect of the property on or about 23 June 2009.[10]
[7]CB 203
[8]T267
[9]T267
[10]Exhibit 11
7 It is common ground that at and after settlement, the property continued to be occupied by a tenant, probably Manners. The plaintiff’s case is that Manners entered into the terms of a new lease in writing with him on or about 20 January 2012[11] and, at the time of the occurrence of the damage giving rise to the claim on the policy, he occupied the property pursuant to its terms.
[11]Exhibit E
8 The defendant’s case is that exhibit E is a fraud and that the purported signature of Manners on it is a forgery. The defendant’s case is that the plaintiff, with the assistance of his brother, embarked on this fraud when he realised that the defendant, as insurer, was not liable for any loss under a policy of insurance issued by it in respect of the property unless there was a valid tenancy agreement in writing in existence. Manners was not called to give evidence for reasons which will soon become clear. The case that his purported signature is a forgery is a circumstantial one.
9 The plaintiff’s case against the defendant depends upon there having been in existence from 20 January 2012, a valid tenancy agreement, namely, exhibit E. The form of the document itself raises a number of questions which makes me somewhat sceptical as to its validity. It purports to have been signed by Manners. The plaintiff’s brother, Orijal Rukaj, gave evidence about the circumstances in which exhibit E was signed, to which I will later refer. I do not accept his evidence. Orijal also gave evidence, as did the plaintiff, that the handwriting on the document was his (Orijal’s). Where the pro-forma lease provides for “Date bond payment due” the date “23/06/09” has been inserted. The monthly rental is stated to be $2,100.00 and the “Date first rent payment due” is stated to be “20/01/12”. Under the heading “Period”, the pro- forma lease differentiates between a “Fixed period” on the one hand and, “Periodic” on the other. However, when the form was completed, the parties did not choose between a fixed period lease or a periodic agreement. They did not fill in on the pro-forma lease any relevant information as to what the term of the tenancy would be. When Orijal Rukaj gave evidence, he said he did not know why the dates or period of the tenancy agreement was not completed.[12] Therefore, in terms, the document does not say when the lease commenced or over what period it was to extend. Mr Lithgow submitted the document as exhibited constitutes a monthly lease. I do not accept that argument.
[12]T90
10 It is common ground between the parties that after settlement, the plaintiff arranged insurance cover for the property with the defendant. Although there was some initial confusion on the part of the defendant as insurer, it is common ground the policy of insurance covered malicious damage or theft, to or from the property by a tenant and, the cover included cover for loss of rent limited to a period of twelve months.[13] The clear intention of the parties was to insure the property which was to be held by the plaintiff as an investment not as a home.[14] Hence, the policy of insurance included an exclusion in the following terms:
“You will not be covered if there is no signed tenancy agreement in force at the time of the loss or damage.”[15]
[13]CB 60, CB 72 and CB 76
[14]CB 72
[15]CB 76
11 The provision of this exclusion clause in the insurance policy gives rise to the central issue that I must decide in this proceeding, because the defendant contends that the signed tenancy agreement upon which the plaintiff relies was brought into existence by the plaintiff only after the property had been damaged in order to deny the defendant of the benefit of the exclusion. The plaintiff relies upon exhibit E to satisfy the exclusion.
12 Having regard to the pleaded defence of fraud, I am conscious that the defendant bears the onus of proof in making out the defence on the balance of probabilities but that I must be comfortably satisfied the evidence makes out the defence.[16]
[16]Evidence Act 2008, s40(2); Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 per Dixon J; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66
13 I have examined all of the evidence thoroughly and, I am comfortably satisfied exhibit E was not signed on the date that it bears, namely 20 January 2012, by John Manners or the plaintiff. I am satisfied exhibit E was brought into existence much later in 2012 and was never signed by Manners who, by the time exhibit E was brought into existence, had well and truly vanished. I am comfortably satisfied there was no tenancy agreement in existence between the plaintiff and John Manners at the time the property was damaged in the circumstances giving rise to the claim. The exclusion in the policy to which I have earlier referred would therefore operate to enable the defendant as insurer to deny liability under the policy quite separately from any question of the operation of s56 of the Act. It is necessary to set out my pathway of reasoning in arriving at this conclusion.
14 It is common ground between the parties that after the plaintiff had settled the purchase of the property on or about 16 December 2011,[17] the property was being used by the occupier for the purpose of growing cannabis hydroponically and, the use of the property in this way caused extensive damage to it. Sometime prior to the end of March 2012, police attended at the property but there was no apparent occupier present. Police have tried to locate John Manners unsuccessfully. It is probable the person who had occupied the property and cultivated cannabis in it was not in fact named John Manners but had instead assumed his identity.[18]
[17]Exhibit G
[18]Evidence of Detective Sgt O’Connell at T109 et seq
15 The plaintiff gave evidence that he was born in Kosovo and is now 27 years of age. He migrated to Australia in 2000 with his family and the family has a carwash business. English is his second language, although I formed the opinion that both he and his brother, Orijal, are able to speak English and to clearly understand property and insurance matters. Both brothers gave their evidence without the need for an interpreter. In 2011, the plaintiff had three properties which he owned for investment that had been purchased by borrowing from the bank.[19] Although English is the plaintiff’s second language, I formed the strong opinion that in matters of commerce in Australia, the plaintiff is no “babe in the woods”. He clearly understood his rights and obligations at law.
[19]T8-9
16 The plaintiff gave evidence that he purchased the property and he identified the contract.[20] He said he had not inspected the property on the inside before the purchase. He had dealt with Cakir, the vendor and an estate agent, who told him the property was tenanted.[21] He said he was not sure if he was shown a tenancy agreement when he purchased the property.[22] As I said earlier, there is no mention of the property being tenanted in the contract.
[20]Exhibit 1; T20
[21]T21
[22]T22
17 The plaintiff said that he took possession of the property on 16 December 2011 and he was “pretty sure” the tenant had paid the rent for the next month.[23] But the Statement of Adjustments did not adjust the settlement price for rent. When pressed, the plaintiff said he was not one hundred per cent sure how the rent was paid. He said he was not thinking too much about the property because his wedding was pending on 3 January 2012.[24] He then gave evidence the tenant paid the January rent.[25] He said his brother, Orijal, was dealing with all of the matters about the property.[26]
[23]T23
[24]T24
[25]T25
[26]T26
18 The plaintiff’s evidence that his brother handled most of the matters concerning the property differs from the evidence of the agent, Cakir, who gave evidence of dealing with the plaintiff about arrears of rent and of dealing with the plaintiff concerning the issue of the plaintiff taking over management of the property direct and also concerning the transfer of the bond to the plaintiff.
19 The plaintiff was shown an Order of VCAT made on 25 July 2012.[27] That Order was made after the plaintiff applied for a bond paid by the tenant of $2,100 in 2009 to be paid out by the VRTBA to himself as landlord. That Order sets out findings of the VCAT Senior Member on the plaintiff’s application and, presumably on the basis of evidence put before it by the plaintiff. The Senior Member found the tenancy terminated on 15 March 2012 and that the rent was paid until 15 January 2012.[28] This evidence contrasts with the plaintiff’s evidence that the tenant had paid the rent for January.
[27]Exhibit 2
[28]Exhibit 2, CB 871
20 The plaintiff gave evidence it was his brother, Orijal, who went and saw the tenant and collected the January rent.[29] Orijal gave similar evidence. The VCAT Order suggests VCAT was given a different version of events.
[29]T33
21 The plaintiff gave evidence that he went to the property in late March 2012 for the purpose of cutting down some trees when he noticed damage to the property which was then vacant. There was police tape and a business card from police left inside the property. He contacted the police and made a claim on the policy by telephone on 20 April 2012.[30]
[30]T12-13
22 There was a great deal of evidence called on the question of the plaintiff’s dealings with the insurer over the telephone and, with a loss adjuster appointed by the defendant to investigate the claim. The purport of this evidence was that the insured was told at an early stage of the claim that he must produce a valid tenancy agreement. He did not do so and, he did not make any mention of the existence of a tenancy agreement that purported to have been signed by Manners on 20 January 2012.[31]
[31]Exhibit E
23 Exhibit E was not in fact provided to the defendant by the plaintiff until 12 November 2012, when it was produced by Brand Partners, solicitors, who were then acting on the plaintiff’s behalf.[32] The defendant’s case is that an inference can be drawn that the agreement that went into evidence as exhibit E was not produced earlier in 2012 or, when it was requested by the defendant, because it did not in fact exist until shortly before it was actually produced by the plaintiff’s solicitors. The defendant submits that exhibit E is a forgery created for the specific purpose of demonstrating to the defendant that Manners occupied the premises pursuant to a valid tenancy agreement in writing at the time the loss was suffered. I accept this submission.
[32]Exhibit 5
24 On 10 May 2012, the plaintiff had a telephone conversation with a representative of the defendant about his claim. A transcript of the conversation went into evidence.[33] In that conversation, the plaintiff was asked, among other things, if there was a signed tenancy agreement in place before he purchased the property. The conversation was in part as follows:
[33]Exhibit 6, CB 429-440
A:“I think before I purchased it I think it was a paper signed because there was a contract till January either January or February I can’t remember exactly and then like I said I had people from overseas and I got married and all that stuff and I completely forgot to make the new contract.
Q:Would you be able to organise a copy of the tenancy agreement from the agent that used to manage through at the time?---
A:I can, I can, look I will go over there on the office and ask them and see what they can provide me with.”[34]
(My emphasis)
[34]CB 430
25 The defendant leads this as evidence of an admission by the plaintiff himself that there was no valid tenancy agreement in place at the time the property was damaged and vacated by the tenant. In the same recorded conversation, the plaintiff said that he did not know at that time if there was a bond that had been paid in relation to the property.[35] He also said he had not had any contact with the tenants and he did not even know who they were.[36] In the recorded conversation, the representative of the defendant told the plaintiff the defendant would require the tenancy agreement, together with a bond receipt and a copy of the rental register.[37] In this conversation, the plaintiff did not advise the defendant either that exhibit E was in existence or, that his brother, Orijal, was away overseas and, it was he (Orijal) that had been dealing with the tenant direct. Also, he did not say the lease was inaccessible, it having been locked away in Orijal’s apartment in Southbank.
[35]CB 430
[36]CB 431
[37]CB 437
26 Rodney Williams gave evidence. He is a loss adjuster employed by the defendant. He prepared a report related to malicious damage to the property dated 23 May 2012.[38] Mr Williams gave evidence of a discussion with the plaintiff by telephone on 13 June 2012 when the plaintiff advised that he had faxed tenancy documents and a ledger to the defendant.[39] There was a follow-up conversation between Mr Williams and the plaintiff on 22 June 2012, at which time Mr Williams made a note of the plaintiff telling him there was no tenancy agreement in place at the time of the incident.[40] He said at this time, the defendant had not been provided with a copy of any tenancy agreement relating to the property.[41] Again, this evidence is led as evidence of an admission by the plaintiff that there was no tenancy agreement in place at the time of the damage to the property.
[38]Exhibit 15, CB 145
[39]T184-5
[40]T185-186
[41]T186
27 On 29 June 2012, Mr Williams had a further conversation with the plaintiff. He made a note that he asked the plaintiff about the tenancy to confirm there was no rental agreement in place. He noted the plaintiff having told him that he had been told by the agent the tenant had been on a month to month rental basis. He asked the plaintiff to have the agent telephone him to confirm the details.[42] He said that by 29 June 2012, the defendant had not received any documents relating to the tenancy of the property.
[42]T187
28 Mr Williams gave evidence of a further telephone conversation with the plaintiff on 18 July 2012 where he advised the plaintiff that given the documentation he then had, as there was no tenancy agreement in place, then by the letter of the policy, there was no cover. He asked the plaintiff to give him a copy of the purchase contract to establish if there was anything in it that might assist the plaintiff’s claim.[43]
[43]T187-188
29 Mr Williams gave evidence of meeting with the plaintiff on 20 July 2012, at which time he received the copy of the sale contract. He noted the plaintiff was to leave for overseas the following weekend and would be away for two months. Mr Williams said he telephoned the plaintiff on 24 July 2012 and advised the defendant would deny the claim because there was no signed tenancy agreement in place at the time the damage was suffered. He said the plaintiff was generally unhappy about what he had said.[44]
[44]T190
30 In cross-examination, the plaintiff agreed he told Williams there was no rental agreement in place and, that he (the plaintiff) had been told by the agent, Cakir, the tenant occupied the property on a month to month basis.[45] The plaintiff agreed that in his conversations with Mr Williams between May and July of 2012, he made no mention of the tenancy agreement evidenced as exhibit E.[46]
[45]T43
[46]T44
31 In his evidence, the plaintiff said that he did not know the tenancy agreement even existed.[47] He said he first became aware there was a document after he spoke to his brother when he (the plaintiff) came back from overseas. He said his brother went away before him, and he went away on his honeymoon towards the end of July after his brother.[48] He was not asked and, he did not mention, any telephone conversation with his brother, Orijal, whilst Orijal was away. He did not say he had been advised by Orijal in a telephone conversation whilst Orijal was overseas that Orijal had a signed tenancy agreement which was locked away in Orijal’s Southbank apartment and, it would be produced when Orijal returned. Orijal later gave this evidence, which I do not accept.
[47]T49
[48]T72
32 When pressed as to whether he had signed the agreement in January 2012, as it is dated, the plaintiff said he had signed the agreement but he thought it was an agreement between he and the tenant and he did not realise the significance of the agreement until he was advised that it was a tenancy agreement by his solicitor.[49] He said he never paid attention to the agreement until he spoke to his brother.[50] He said the agreement was written out and signed on 20 January 2012.[51] He said he first signed the agreement and then his brother took the document to Manners, who signed after him.[52] He said his brother put the document “in the folder and I never paid attention to the document”.[53] I do not accept this evidence. The plaintiff gave no evidence about not having been able to access the file because it was locked up in the Southbank apartment of Orijal.
[49]T50
[50]T51
[51]T52
[52]T52
[53]T52
33 The plaintiff gave evidence the writing on exhibit E is his brother’s writing. He said his brother obtained the form.[54] He said he did not pay too much attention to what exactly the form was for.[55] The plaintiff denied the document exhibit E was a forgery brought into existence to advance his claim on the insurer. His evidence was the form existed at all times after 20 January 2012. “I just didn’t know the document is any good for what they were asking.” I do not accept this evidence.
[54]T53
[55]T56
34 In re-examination, the plaintiff said he first found out there was an agreement with the tenant when told by his brother. “He said there is an agreement and then he showed it to me.” Asked when he found out, he said “I think it was after I came back from overseas. … I went overseas about July, was there for about two months, so about September sometime maybe,”[56] The plaintiff went overseas at the end of July, after Orijal. Again, there is no mention here of the plaintiff having been advised by Orijal, in a telephone call from Orijal whilst he (Orijal) was overseas, that the tenancy agreement was in existence and was located in a folder in the Southbank apartment of Orijal and that Orijal would produce it when he returned from overseas.
[56]T74
35 Orijal Rukaj gave evidence. On some important issues his evidence differed from his brother, the plaintiff. I do not accept his evidence.
36 Orijal said that he inspected the property with a valuer from the bank prior to settlement.[57] He said he was more involved with the property than was his brother near the settlement date because his brother was getting married.[58] Orijal gave evidence he discussed the tenant with the agent, Cakir, and he (Orijal) told Cakir he would prefer to manage the tenant himself to save money in agent’s expenses. He said the agent sent him to get a form, which he said he got from a building at the end of Lonsdale Street.[59] He identified the document as exhibit E. He said the writing on the document was his writing. He was asked:
[57]T77
[58]T78
[59]T78
Q:“At this stage did you know what this document was for?---
A:It was between the tenant and the landlord.
Q:Anything else?---
A:Nothing else.
Q:When you have gone to get the document did you know what you were getting or were you told to just pick something up?---
A:No, the real estate told me if you want to go private to deal with the tenant, you get this – I don’t know how it’s called back in those days.[60]”
[60]T79
37 He said he went and picked up the pro-forma exhibit E in the first or second week of January 2012, straight after his brother’s wedding on 7 January.[61]
[61]T79
38 At this point, I pause to note that when the agent, Cakir, gave evidence, he did not give any evidence about the conversations which Orijal Rukaj claimed to have had with him. Cakir was called to give evidence by the defendant. He was not cross-examined at all by counsel for the plaintiff, at which time I would have expected the conversations which Orijal gave evidence about to have been put to him but that was not done.[62] Indeed, as the evidence transpired, Cakir gave evidence of discussions not with Orijal Rukaj but with the plaintiff. Cakir said that he raised with the plaintiff the fact the tenant was in arrears of rent and he (Cakir) wanted to take action. The plaintiff advised him he wanted to develop the site “and he believed that he could offer some patience to the tenant and that’s it”.[63]
[62]T269
[63]T267
39 Cakir also said he had discussions with the plaintiff about the bond. He said that once the plaintiff decided to manage the property himself, he had to transfer the bond over to him as landlord. He thought those discussions were in about May 2012.[64] The transfer of the bond is confirmed by exhibit 11 which is a Residential Tenancy Bond Authority Agent/Landlord Transfer dated 25 May 2012. It records the transfer of the bond money relating to the original lease from the former agents, Evolve Real Estate, to the plaintiff. I am satisfied the bond was not transferred to the plaintiff until after 25 May 2012 at the earliest.
[64]T267
40 Orijal Rukaj gave evidence about the circumstances of exhibit E being signed. He said the plaintiff signed the document first and he then went and spoke with Manners and collected the first month’s rent which he said was paid in cash.[65] He said exhibit E was signed in a chemist shop in Pascoe Vale. He said he and Manners went to the chemist shop which was nearby to photocopy some documents which Manners had produced as photo identification.[66]
[65]T79
[66]Exhibit F. T80
41 Orijal was asked what he did with the tenancy agreement once it was signed. He said he put it in a folder with other files from the house, “the lease agreement, section 32, all the paperworks I had from 16 Bristol”.[67] He was then asked this by counsel for the plaintiff:
[67]T81
Q:“When was it next raised with you that there might be some interest or need to show this residential tenancy agreement?---
A:We spoke about it when I was overseas.
Q:When you say ‘we spoke’, who spoke?---
A:Me and my brother. When I was overseas he called me.
Q:Do you recall what time of the year this was?---
A:I was overseas between May and August 2012. I can’t remember what - - -
Q:What did your brother tell you?---
A:He asked me the claim because they are asking for some, what do you call it, agreement, lease, tenancy and I said, ‘The one you signed I have got it in my apartment’ and I said, ‘Wait until I come back and I will produce the form’ because it was already signed and he didn’t understand what I was talking about even.
Q:You were overseas and he says to you there is this problem and you say, ‘No, there isn’t. There is an agreement somewhere’?---
A:Yes
Q:And the agreement was where?---
A:In my apartment.
Q:Then you told him to wait until you got home, is that right?---
A:Until I come back because he was in Australia and I was overseas. We spoke over the phone.
Q:In August you come back?---
A:Yes.
Q:What did you do?---
A:Just went through the paperworks. I got that document. We went and contacted this lawyer in city.
Q:That’s Brand Partners?---
A:Yes.”[68]
[68]T81
42 I do not accept this evidence. Had there in fact been a conversation whereby Orijal advised the plaintiff whilst he was away that there was a tenancy agreement in existence and, that it was locked away in his apartment and it would be produced when Orijal returned from overseas, I would have expected the plaintiff to have given similar evidence. That he did not, suggests to me the evidence is not credible.
43 Further, given that this conversation between the plaintiff and his brother is said to have taken place whilst Orijal was overseas between May and August, had the telephone conversation in fact occurred, I would have expected the plaintiff to have advised the defendant or, its representatives, of what he had been informed about the existence and whereabouts of the document by his brother. The plaintiff had been asked by a representative of the defendant to produce the tenancy agreement in a telephone conversation on 10 May 2012.[69] There was no mention by the plaintiff of any telephone conversation with Orijal in that conversation. Indeed, at that time, it is most probable Orijal was still in the country and could have produced the tenancy agreement if asked. There is no evidence he was asked to do so.
[69]Exhibit 5
44 Mr Williams had been at pains to give the plaintiff every opportunity to produce the tenancy agreement. The plaintiff had conversations and, a meeting with Mr Williams in June and July of 2012, yet the plaintiff did not tell Mr Williams what he had been advised by his brother in the supposed telephone conversation which Orijal said had been initiated by the plaintiff. According to Orijal, the plaintiff was in Melbourne when the telephone conversation took place. Having been alerted by Orijal as to the existence of the tenancy agreement and why it could not be produced immediately, I would have expected the plaintiff to have informed the defendant or its representatives of what he then knew. That he did not do so in the circumstances strongly suggests to me no such telephone conversation between Orijal (whilst overseas) and the plaintiff (whilst in Melbourne) occurred and, this evidence from Orijal is contrived for the purpose of explaining why exhibit E was only produced through the solicitors as late as November 2012.
45 During the course of the cross-examination of Orijal Rukaj, I asked him where the date “23/6/09” as it appears in exhibit E came from.[70] This matter was then taken up by counsel for the defendant. In two long drawn-out answers, Orijal said he was advised by the estate agent, Cakir, to put the date in. I do not accept this evidence. The matter was not put to Cakir when he later gave evidence.
[70]T89
46 The original of the document “Residential Tenancies Bond Authority Bond Lodgement” was produced and tendered.[71] That bears the signature of John Manners and, the date “23/06/2009”. When I asked Orijal where the date of “23/06/2009” as it appears in exhibit E came from, he said “We got the paper from the real estate agent when they sent the bond. They sent the bond to my brother, transferred the bond, and I asked him because he helped me to fill out”.[72] When Orijal was later asked about what was to become exhibit 18, he denied having seen it before.[73] His evidence in denial was very unimpressive. He was anxious to distance himself from the bond documents.[74] As I have said, I do not accept the evidence of Orijal that the date “23/06/2009” was put into exhibit E on the instructions of the estate agent, Cahir. In my opinion, it is highly likely the date “23/06/2009”, as it appears in exhibit E, in fact came from exhibit 18 or, a copy of it, which, on any view of the evidence, could not have been in possession of either the plaintiff or Orijal Rukaj before May 2012 at the earliest. If that is correct, exhibit E could not have been prepared and signed in January 2012 and it was not in existence at the time of the occurrence of the damage to the property or at the time when the tenant vacated the property.
[71]Exhibit 18
[72]T89
[73]T114
[74]T113
47 Orijal Rukaj gave evidence that at settlement, there was an adjustment of the rent between the vendor and the purchaser to take into account the rent being paid up to 20 January 2012.[75] I do not accept that evidence, which is contrary to the evidence in the settlement statement which shows there was no adjustment for rent.[76]
[75]T90
[76]Exhibit G
48 Both the plaintiff and his brother, Orijal, were unimpressive witnesses and on any important issue, I do not accept the evidence of either of them. There are too many inconsistences between their respective accounts and they are not corroborated by the documents. I do not accept the plaintiff’s evidence that exhibit E was in existence in January but he just did not realise the significance of it or where it was. I formed the strong view that what he told the representative of the defendant in the telephone conversation on 10 May 2012[77], namely, “I completely forgot to make the new contract” is more likely to be the truth. In my view, the plaintiff was clearly referring in this conversation to the tenancy agreement, not a new agreement for the agent to manage the property because it was never his intention to have an agent manage the property.
[77]CB 430
49 Neither the plaintiff nor his brother, Orijal, are inexperienced in matters of property. Both tried to create the impression they did not understand but only when it suited the plaintiff’s case. Evidence was led on the issue of the plaintiff’s credit that he had pleaded guilty to dishonesty offences, the offences having occurred during 2012. The plaintiff admitted the conviction but tried to convince me he played a minor role in the offending and that he really had not committed the offences charged after all. I do not accept what I was told in that regard.
50 In my judgment, neither the plaintiff nor his brother, Orijal, was a witness of truth. In my opinion, each fabricated the evidence before me, and I do not accept the evidence of either of them. I am comfortably satisfied the evidence shows exhibit E was not in existence at the time the property was damaged. I am comfortably satisfied by the evidence that whoever it was that occupied the property at settlement, did so as an over holding tenant on a month to month basis. I find the plaintiff was content with this situation and did not enter into the terms of a residential tenancy agreement in writing with the tenant.
51 I am further comfortably satisfied that it was only after the plaintiff lodged the claim on the defendant under the policy in April 2012 and he was asked to produce a tenancy agreement in writing, that he and his brother, Orijal, took steps to create such an agreement. By the time they did this, the occupier of the property had vacated the property and vanished. He was not around to sign the document. I am satisfied the plaintiff and Orijal probably created exhibit E after the end of August 2012 and after the plaintiff returned from his overseas trip. Orijal had in fact returned from his overseas trip in July. Even though he now asserts he had exhibit E in his possession and he knew the defendant wanted it, the document was not produced until November 2012. In my opinion, the whole story is simply unbelievable and I do not accept it.
52 Trevor Joyce, a document examiner, gave evidence of having examined exhibit E and other documents. He was called as an expert witness by the defendant. He concluded the purported signature of John Manners in exhibit E was not made by the person who signed as John Manners on other documents used as a standard.[78]
[78]His report is Exhibit 14, CB 798 et seq
53 The plaintiff also called a document examiner as an expert witness. John Ganis also produced a report.[79] Mr Ganis concluded that although the signature of John Manners on exhibit E had variations in it when compared to proven standards, no proper conclusions could be drawn because it was his opinion there were insufficient standards and over a limited period of time to enable any proper conclusions to be drawn.
[79]His report is Exhibit K, CB 830
54 Being thoroughly dissatisfied with the evidence of the plaintiff and his brother, I do not have to decide whether exhibit E was actually signed by John Manners on the basis of the expert witnesses. I am satisfied John Manners did not sign exhibit E at all on the basis of the poor evidence of the plaintiff and his brother which I have detailed above. However, I do prefer the evidence of Mr Joyce to that of Mr Ganis in this case. Mr Joyce seemed to me to have carried out a much more thorough analysis of all of the available documents.
55 Having found that exhibit E did not exist at the time of the occurrence of the loss, that alone means the plaintiff’s claim must be dismissed. That is because the defendant is entitled to the full benefit of the exemption which I have referred to above. The terms of the policy itself mean the defendant is entitled to reject the claim.
56 However, the defendant also pleads s56 of the Act. Here, without exhibit E, there could be no claim because the policy excluded a claim where there was no written tenancy agreement. I am satisfied the plaintiff and his brother acted dishonestly in creating exhibit E, because they both realised that without such a document being given to the insurer, it was properly entitled to reject the claim, as it did. I infer the plaintiff and his brother, Orijal, acted dishonestly from all of the evidence and circumstances that relate to their dealings with the defendant concerning the claim. In my opinion, the defendant, as insurer, was entitled to refuse the claim on the basis that it had been made fraudulently within s56(1) of the Act.
57 Because the fraud of the plaintiff and his brother goes to a critical exemption in the policy and thus the whole of the claim, there is no basis for the Court to exercise the discretion in s56(2) of the Act, and I do not do so.
58 For these reasons, the plaintiff’s claim is dismissed and judgment will be entered for the defendant.
59 There is no reason for me to decide the questions of quantum of damage.
60 I will hear the parties on costs.
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