Sachin Sharma v Insurance Australia Limited trading as NRMA Insurance

[2017] NSWDC 10

District Court

New South Wales

Medium Neutral Citation:	Sachin Sharma v Insurance Australia Limited trading as NRMA Insurance [2017] NSWDC 10
Hearing dates:	19, 20, 21, 22, 23, 26, 27, 28, 29 September 2016
Date of orders:	03 February 2017
Decision date:	03 February 2017
Jurisdiction:	Civil
Before:	Montgomery DCJ
Decision:	(1)   Judgment for the defendant (2)   Plaintiff to pay the defendant’s costs
Catchwords:	Insurance – landlord and tenant cover – construction of contract – exclusion clause – fraud – arson – circumstantial evidence – inference – evidence of mobile phone account records – whether damage arising from intentional act or omission of insured or by third party with insured’s consent – s 56 Insurance Contracts Act – whether claim made fraudulently
Legislation Cited:	Insurance Contracts Act (1984) (Cth) Evidence Act 1995 (NSW) Civil Procedure Act 2005
Cases Cited:	McLennan v Insurance Australia Ltd [2014] NSWCA 300; (2014) 313 ALR 173; (2014) FLR 453 McCann v Switzerland Insurance Australia Ltd. [2000] HCA 65; (2000) 203 CLR 579 CGU Insurance Ltd. v Porthouse [2008] HCA 30; (2008) 235 CLR 103 Darlington Futures Ltd. v Delco Australia Pty. Ltd. [1986] HCA 82; (1986) 161 CLR 500 Secure Funding Pty Ltd v Insurance Australia Ltd [2010] FCA 1094 Briginshaw v Briginshaw (1938) 60 CLR 336 Perpetual Trustees Victoria Limited v Cox [2014] NSWCA 328 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Mutual Community General Insurance Pty Ltd v Khatchmanian (2013) 17 ANZ Insurance Cases 61-974; [2013] VSCA 144 Gould & Birbeck & Bacon v Mount Oxide Mines Limited (in liquidation) [1916] 22 CLR 490 Banque Commerciale S.A. (en liquidation) v Akhil Holdings Limited [1990] HCA 11; (1990) 169 CLR 279 Insurance Commissioner v Joyce (1948) 77 CLR 39; [1948] HCA 17 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Payne v Parker [1976] 1 NSWLR 191 Kuhl v Zurich Financial Services Australia Limited [2011] HCA 11; (2011) 243 CLR 361 Luxton v Vines (1952) 85 CLR 352 Holloway v McFeeters (1956) 94 CLR 470 Qantas Airways Limited v SS Pharmaceutical Co. Ltd. (Unreported, New South Wales Court of Appeal, 20 July 1990; reported sub nom in SS Pharmaceutical Co. Ltd. v Qantas Airways Limited (1991) 1 Lloyds Rep 288 Tobin v Ezekiel [2012] NSWCA 285; (2012) 83 NSWLR 757 Manly Council v Byrne [2004] NSWCA 123 Walton v Colonial Mutual Life Assurance Society Ltd. [2004] NSWSC 616; (2004) 13 ANZ Ins. Cas. 61-620 Sgro v Australian Associated Motor Insurers Ltd. [2015] NSWCA 262; (2015) 299 FLR 92; (2015) 72 MVR 320 Raso v NRMA (Unreported, 14 December 1992, New South Wales Court of Appeal) Kenwright v IAL [2013] NSWDC 255 Browne v Dunn (1893) 6 R 67 Allied Pastoral Holdings Pty. Ltd. v Commissioner of Taxation [1983] 1 NSWLR 1; (1983) 44 ALR 607
Texts Cited:	Kelly & Ball, “Principles of Insurance Law”
Category:	Principal judgment
Parties:	Sachin Sharma (Plaintiff) Insurance Australia Limited trading as NRMA Insurance (Defendant)
Representation:	Counsel: R Potter / D Woods (Plaintiff) M B J Lee SC / B Tronson (Defendant)   Solicitors: Marsdens Law Group (Plaintiff) William Roberts Lawyers (Defendant)
File Number(s):	2014/00277890
Publication restriction:	None

Judgment

Introduction

1. The plaintiff sues his insurer the defendant for payment under a Landlord Building and Contents Insurance contract (the Policy). The event of loss was a fire on 12 June 2012 which rendered uninhabitable the plaintiff’s investment property at 113 Fields Road Ingleburn, NSW (the Property) and destroyed the contents within. At the time of the fire the Property was untenanted.

2. The defendant denies the claim on two bases:

1. firstly, alleging that the fire was deliberately lit with the intention of causing the damage by Mr Jai Sen, who entered the Property with the consent of the plaintiff or that the plaintiff consented to Sen’s deliberate lighting of the fire; and

2. secondly, that statements made by the plaintiff in the course of his making the claim rendered the claim fraudulently made permitting the defendant to refuse payment pursuant to s 56 Insurance Contracts Act (1984) (Cth) (ICA).

3. The real question is whether the wholly circumstantial evidence upon which the defendant relies proves that Mr Sen started the fire whilst at the Property with the plaintiff’s consent.

4. Whether the plaintiff’s statements and denials in the course of making the claim were fraudulently made, permitting the defendant to avoid paying the claim pursuant to s 56 ICA, is best considered after determination of the cause of the fire and the roles of Mr Sen and of the plaintiff alleged in the defendant’s first case.

5. In the course of the hearing, the defendant relinquished its defences that the plaintiff failed to make truthful and frank statements and breached his duty of utmost good faith. The defendant chose not to contest the plaintiff Reply which pleaded s 54 ICA relief to those asserted defences.

6. In closing written submissions, the defendant elected not to pursue its second/alternative defence involving the definition of “fire”.

Agreed and Otherwise Not Contested Facts

7. The parties agreed the following facts:

1. the Policy and its renewals were agreed such that the parties do not dispute the terms of the contract of insurance;

2. the plaintiff ‘s home at which he lived with his mother and sister, Hema, was at 160 Ingleburn Road, Ingleburn, New South Wales;

3. at the date of the fire the plaintiff owned the Property;

4. commencing 26 August 2010, the plaintiff by Residential Tenancy Agreement made with Mansour Mir rented the Property for a rent of $600.00 per week;

5. other tenants (Mansour Mir sub-let/shared with others) contributed rent to maintain the Property;

6. the tenants ceased paying rent from mid April 2012 protesting the plaintiff’s failure to maintain the Property;

7. on 30 May 2012, on the plaintiff’s application, the Consumer, Trader and Tenancy Tribunal of New South Wales issued a Warrant to the Sheriff to evict the tenants from the Property; and

8. on 31 May 2012, the Sheriff, pursuant to the Warrant, evicted the tenants from the Property;

8. The following further facts were not disputed:

1. the Property was vacant at the time of the fire, having not been tenanted after the eviction of the tenants;

2. neighbours reported the flames to 000 at 23:27 on 12 June 2012;

3. on 13 June 2012, the plaintiff made the claims under the Policy in relation to the fire;

4. on 26 October 2012, following an investigation, the defendant refused the claims;

5. on 6 November 2012, the defendant cancelled the Policy;

6. damage to the building upon the Property resulting from the fire required it to be demolished, which demolition occurred on about 9 July 2013 at a cost invoiced to the plaintiff in the sum of $12,980.00;

7. contents the subject of the claim were totally lost; and

8. on 22 June 2015, the plaintiff sold the Property as vacant land.

The Deliberate Starting of the Fire and Scene Phone Left at the Property

9. The plaintiff does not concede that the fire was deliberately started, but leads no evidence against that conclusion.

10. The defendant’s first witness was Mr Stuart Ritchie, a Commercial and Criminal Forensic Consultant, experienced and expert in investigating the cause of fire. His expert report is dated 26 August 2015. His affidavit made 27 August 2015 was read. Instructed by the defendant, he attended the Property on 25 June 2012, thirteen days after the fire. No challenge was made to Mr Ritchie’s expertise; indeed he has personally attended and reported upon his investigation in relation to over 3,000 fire scenes and over 30 years has engaged in education of fire investigation. He obtained a Bachelor of Science from Macquarie University. In 1988, he completed the New South Wales Police Crime Scene Examiners course. He was dux of that course.

11. In the course of his investigation, Mr Ritchie took 96 photographs. He examined the Property from its perimeter and through the house. He concluded that the fire was caused by ignition of flammable liquid which had been spread throughout the house. He opined that ignition appeared to have occurred at floor level, and that the exit trail appeared to be to the rear door. He thought it most likely that the fire was started in bedroom 1 of the house plan, translating to the foyer, the lounge, the internal hallway and to the rear of the Property.

12. Bedroom 1 and its occupant became the subject of cross-examination of Messrs Oudin and Victorsen, who were tenants of the Property until the eviction of tenants on 31 May 2012. Neither of them was sufficiently acquainted with the occupant as to be able to identify him. Neither of them was sufficiently acquainted with bedroom 1 such as to be able to contribute one way or the other to the plaintiff’s suggestion in cross-examination that a window of that bedroom could be manually removed from the window frame without requiring forcible entry.

13. That bedroom window was found by Police to be outside of its frame and on the ground exterior to the house.

14. Mr Ritchie in his report recorded that he did not identify overt physical evidence attributable to forcible entry damage to the window or the window frame. He did not know whether it was in situ preceding the fire or not. He could not say, if it had been in situ within the frame, whether or not significant force was required to remove it.

15. That the inflammable liquid used to start the fire was a petroleum hydrocarbon was confirmed by the evidence of Professor Stern whose affidavit was dated 1 September 2015. Professor Stern was not required for cross-examination. Professor Stern tested samples provided to him by Mr Ritchie.

16. Mr Ritchie concluded that the nature and character of the fire damage within the Property was indicative of a planned and targeted methodology associated with a person(s), moving throughout the house. He found no evidence of forcible entry by door or by window.

17. With Constable Apthorpe, on 13 June 2012 Det. Snr. Const. Graham Rogers ventured into the Property as far the front bedroom, but due to safety did not go further.

18. The inescapable conclusion, on the evidence, is that the house upon the Property was severely damaged by a fire which was deliberately started by a person or persons for that purpose a little before 11:27 pm 12 June 2012, when the Property was unoccupied. There is no evidence to the contrary.

19. The Property was open on each side of the house such that the rear of the Property could be accessed from the street. On one side there was a gate but Mr Ritchie was unable to tell whether it had been locked or unlocked at the time of the fire. On the other side there was no barrier impeding a person moving from the street to the back of the Property where the fire was lit.

20. A central fact in the case is that a mobile phone which during the hearing became known as “Scene Phone” was found by the police the morning after the fire. During the hearing the plaintiff conceded that Scene Phone was a falsely registered pre-paid phone operated by Mr Jai Sen.

21. The plaintiff did not concede that Mr Sen operated the Scene Phone at the time the fire was started. Determination of whether or not Mr Sen did then operate Scene Phone is a central question for determination in the case.

22. Evidence of the discovery of Scene Phone after the fire was given in the evidence of Det. Snr. Const. Rogers. At the time of the fire he was a Senior Constable. His affidavit was made 21 August 2015. He attended for cross-examination. Scene Phone became Exhibit 1.

23. Det. Snr. Const. Rogers attended the Property between 07:30 and 08:00 on Wednesday, 13 June 2012, the morning following the fire. Constable Apthorpe was at the Property when he arrived.

24. Det. Snr. Const. Rogers described that an accelerant which smelled like petrol had been used, with accelerant pour patterns being found in the bedrooms and in the lounge room. He was informed that the only possible point of forcible entry was the rear bedroom (Bedroom 1) window, which window was out of the frame and on the ground, all other points of entry being secured.

25. The uncontested evidence of Det. Snr. Const. Rogers was that Scene Phone was found in the backyard of the Property in the grass between 08:00 and 09:00 on 13 June 2016.

26. Det. Snr. Const. Rogers accessed Scene Phone (a Nokia mobile phone) using its unique identification number (IMEI) and on the police system found its number to be 0415 327 026.

27. On 13 June 2012, Det. Snr. Const. Rogers interviewed the plaintiff at his home. The plaintiff informed Det. Snr. Const. Rogers that Police had telephoned him informing him of the fire at 05:00, and that he had been home all night with his younger sister Hema. Hema corroborated to Police that the plaintiff had been home all night. There is no evidence that the plaintiff was present when the fire was started. The defendant does not submit that he was.

28. Photographs obtained from Scene Phone contained photographs of Mr Sen and a woman who on the evidence was referred to as “Honey” and as “Huni” in the contacts file of Mr Sen’s regular mobile phone (Mr Sen’s Phone). It was the plaintiff who identified Mr Sen as the man in those photographs (on Scene Phone) to the police.

The Defendant bears the Onus of Proof

29. The plaintiff relies on McLennan v Insurance Australia Ltd [2014] NSWCA 300; (2014) 286 FLR 453 at [6] and [28] as to which party bears the onus of proof.

30. The defendant accepts that the District Court of New South Wales is bound to follow McLennan v Insurance Australia Ltd [2014] NSWCA 300; (2014) 313 ALR 173; (2014) FLR 453, with the result that the defendant bears the onus of proving that the event falls within the Policy exceptions stated in the specific Fire exclusion clause and in the General exclusion clause.

31. The defendant formally reserved its position in relation to whether McLennan v Insurance Australia Ltd [2014] NSWCA 300; (2014) 313 ALR 173; (2014) FLR 453 was correctly decided. In closing written submissions, the defendant described its formal contention in the following terms:

“… that loss or damage caused with the connivance of the plaintiff was a general exception to the defendant’s promise to cover loss or damage caused by a fire because it qualified all of the circumstances in which that general promise applied. If that is correct (and McLennan is wrong), it follows that there are two logically distinct components to the case:

(a)   first, the plaintiff must dispense with his evidentiary and persuasive burden of establishing on the balance of probabilities that the defendant breached the terms of the Policy by failing to pay the Claims, and ought be put to proof without the defendant undertaking more than to displace his prima facie case;

(b)   secondly, the defendant may bring positive defences to negative the plaintiff’s case.

Each element rules out the other. Thus, in a case where, on the whole of the evidence, the probabilities were equal, a defendant insurer would succeed.”

32. The plaintiff puts his case on the basis that his prima facie case onus is only to prove four elements. The four elements are:

1. that the plaintiff was the owner of the Property;

2. that the Property was insured under the Policy;

3. that the fire caused the damage; and

4. that the plaintiff sustained the loss caused by the fire.

33. There is no dispute as those following facts. The plaintiff must therefore succeed unless the defendant satisfies its burden to prove its affirmative defences.

34. I proceed to determine whether the defendant has satisfied its onus.

The Policy – Relevant Clauses - Exclusion Clauses

35. The Policy relevantly provided as follows:

Policy, page 19:

“What you’re covered for

We cover you in certain situations. We describe what you’re covered for in:

The events cover

Other cover – Building Insurance

The events we cover –

We cover your rental property or contents when certain things happen. These are known as ‘Listed Events’. You can make a claim if a listed event takes place and causes loss or damage to your rental property or contents in the Period of Insurance.

In this section, we tell you what events you’re covered for and any specific exclusions and conditions that apply to the event. General exclusions may also apply – see Section 4. Also, if you don’t meet your responsibilities when you make a claim, you may put your claim or cover at risk – see page 39.

Table 3.1 – Listed Events

This table shows the listed events we cover under Buildings Insurance or Contents Insurance:

Listed events	Buildings Insurance	Contents Insurance
Fire	✓	✓

Policy, page 24:

“Fire

If loss or damage is caused by a fire:

Covered

Fire

Not Covered

if the fire was started with the intention to cause damage by:

you, or

someone who enters your rental property or site with your consent (this does not include a tenant or other guest)”.

Policy, page 28:

“Other cover – Buildings Insurance

If one of the listed events shown on pages 20 to 27 causes loss or damage to your rental property, then we also cover some other things.

Under the ‘other cover’ shown in this section, we tell you what additional things we cover and any specific exclusions and conditions that apply to the cover. General exclusions may also apply – see Section 4. Also, if you don’t meet your responsibilities when you make a claim you may put your claim or cover at risk –see page 39.

Table 3.2 – Other cover

This table shows other cover we give you.

For the first 2 covers shown in this table you can make a claim any time – that is, whenever a listed event that is covered takes place and causes loss or damage to these things on their own in the period of insurance.

Table 3.2 – Other cover

Other cover	When you can claim for cover	Costs paid as part of the sum insured?	Buildings Insurance	Contents Insurance
Building materials	Any time	Yes	✓	X
Furniture and furnishings – non-strata scheme	Any time	Yes	✓	X
Loss of rent during repairs	With other damage	On top of buildings sum insured	✓	X
Keys and locks	With other damage	Yes	✓	X
Demolishing and removing debris	With other damage	Yes	✓	X
Rebuilding fees	With other damage	Yes	✓	X
Meeting building regulations	With other damage	Yes	✓	X

Policy, page 30:

“Loss of rent during repairs

If a listed event causes loss or damage to your rental property and we agree your tenants cannot live in it and need to move out while it is being repaired or rebuilt.

Covered under Building Insurance

the rent you lose during the reasonable time it should take to repair or rebuild your rental property.

We pay these costs for up to 12 months. We pay this on top of the buildings sum insured.

Not Covered

loss of rent during any time you live in the building

if you also make a claim for rent default and we pay your claim

loss of rent as a direct result of a claim under these listed events:

theft or attempted theft by a tenant or their guest, or

vandalism or a malicious or an intentional act by a tenant or their guest.

Conditions

You must have a rental agreement that states the:

term of the rental period, and

amount of rent and bond your tenant needs to pay.”

Policy, page 36:

“4.   General exclusions that apply to your policy

There are certain situations when we won’t provide cover under your policy. This section outlines the general exclusions that apply to all cover we provide under your policy including liability cover.

Other exclusions and conditions

There are specific exclusions, conditions and limits that apply to some parts of your cover. These are described throughout this PDS with the information they relate to.

…

Your responsibilities when you are insured with us and make a claim are shown on page 39. You may put your insurance claim or cover at risk if you do not meet your obligation to us.”

Policy, page 37:

“General exclusions

The exclusions shown in this section apply to all cover under your policy.

What we don’t cover

Loss, damage, … arising from:

…

any intentional act or omission by:

you

someone who acts with your consent.”

Policy, page 38:

“5.   Claims and what we pay

This section provides information about our claims process and what we pay when you make a claim:”

Policy, page 39:

“What happens when you make a claim

When you make a claim, we will:

ask you some questions over the phone

tell you if you need to pay any excess and how to pay it.

We may organise help through our preferred repairers and suppliers.

Your responsibilities

When you make a claim, you have certain responsibilities. These responsibilities also apply to any person that is covered by your policy.

If you don’t meet these responsibilities, then we may not pay a claim in full, or we may decide not to pay it at all.

Co-operate

You must co-operate fully with us, even if we have already paid your claim. This may include:

providing us with all the information, documents and help we need to deal with your claim

…

being interviewed by us.

You must be truthful and frank in any statement you make to us.

Prevent further loss or damage

You must:

do everything reasonable to prevent further loss or damage to your rental property or contents

take all reasonable steps that are available to re-let your property, and/or legally terminate the rental agreement and evict your tenant when you become aware that your tenant’s behaviour may cause you to make a claim under:

rent default.”

Policy, page 43:

“What we pay for – Buildings Insurance

If we agree to cover your claim under Buildings Insurance, then we will:

pay the cost to repair or rebuild the part of your rental property that was damaged – we pay the lower of the cost to repair or rebuild your rental property

pay for other things we cover under ‘other cover’ – see pages 28 to 32.

The most we pay

The most we pay is the buildings sum insured. We may also pay some costs on top of the buildings sum insured – see ‘other cover’ in Table 5.1.

Table 5.1 – Costs paid on top of the buildings sum insured

Other cover

Loss of rent during repairs – see page 30.

How we settle your buildings claim

We will choose to settle your claim for loss or damage to your rental property or ‘other cover’ in one of the following ways:

1. …

2. Pay you the reasonable cost to repair or rebuild your rental property.

We can choose to:

pay you

pay your nominated repairer, supplier or builder or

provide you with store credits for one or more nominated suppliers.

For example, we may pay you directly when:

you decide not to repair or rebuild your rental property

you don’t start repairing or rebuilding your rental property within 6 months from when the damage takes place, or within any longer period we agreed to in writing.

1. Pay you the buildings sum insured

We may do this when we consider your rental property to be a total loss or when we choose to do so.

If we pay you the buildings sum insured, then your policy ends and you don’t get a refund of your premium.

…

4.   Paying for ‘other cover’

If we agree to pay you for other cover, we will choose the method of settlement.”

36. Policy page 19 terms promise cover for Listed Events. The words “In this section, we tell you what events, you are covered for and any specific exclusions and conditions that apply to the event” (Bold added) describe specific characteristics of the event, but for which, the promise of cover applies. Likewise, Policy Page 24 terms promised cover for the event of loss or damage caused by a fire. The following “specified conditions loss or damage caused by fire not covered” further define the risk covered.

37. The policy does not cover the risk of fire started with the intention to cause fire by the plaintiff or by someone who entered the Property with the plaintiff’s consent and who is not a tenant or other guest.

38. The Policy is to be construed as a commercial contract, and in my view, the specific Fire clause affects the object of the contract for promised landlord/tenant cover, by containing the field of cover to that risk, and excluding risk arising from the owner’s retained responsibility to secure the property from damage caused intentionally by persons with the owner’s consent entering it other than in association with the agreement for tenancy: McCann v Switzerland Insurance Australia Ltd. (2000) 203 CLR 579 at [22]; CGU Insurance Ltd. v Porthouse (2008) 235 CLR 103 at 116 per Gleeson CJ at [43]; Darlington Futures Ltd. v Delco Australia Pty. Ltd. (1986) 161 CLR 500 at 510-511.

39. Every policy of insurance must be construed on its own wording but, in my opinion, support for this construction is found in the decision of Middleton J in Secure Funding Pty Ltd v Insurance Australia Ltd [2010] FCA 1094 at [13].

40. The Policy, page 37, General exclusion, applies to all cover under the contract of insurance. It excludes, as beyond cover, loss or damage arising from an intentional act or omission of the plaintiff or someone acting with his consent.

41. I note the following:

1. In relation to building, the nature of recovery to which the plaintiff might be entitled is disputed and is subject to a Policy construction issue. Assessment is to be referred out.

2. Assessment of the Contents claim falls well within the quantum limits of the Policy.

3. Assessment of the Loss of Rent claim falls well within the quantum limits of the Policy.

The Central Dispute – The Defendant’s First Case

42. The fire was deliberately started with the intention to cause damage and in the absence of any suggestion that the plaintiff started the fire. The specific fire exclusion clause will apply to exclude liability in the defendant in the event that the fire was started by Mr Sen, who was not a tenant, entering the Property with the plaintiff’s consent whether or not Mr Sen started the fire with the plaintiff’s consent.

43. The whole of the evidence in the defendant case was circumstantial.

44. The plaintiff did not read affidavit evidence or give oral evidence in his case in chief. The plaintiff put the defendant to proof.

45. The plaintiff did give oral evidence in his case in reply. The defendant expressly did not require the Court to consider the question of whether the plaintiff was splitting his case. His evidence was given in this order in the running of the case by consent.

What is the standard of proof required for the defendant to satisfy its onus?

46. In order to satisfy its onus of proof, the defendant seeks to prove that Mr Sen was upon the Property with the intention of starting the fire to cause damage, that Mr Sen entered the Property at the time that he started the fire with the consent of the plaintiff and/or that when Mr Sen started the fire he was acting with the plaintiff’s consent. Each of the first and last of these three elements require proof of a case of fraud and high level civil wrongdoing. Following from my construction of the specific Fire exclusion clause, the second element of consent does not require that the plaintiff consented to Mr Sen’s entry for the purpose of Mr Sen starting the fire.

47. Accordingly, on my construction of the exclusion clause, whether the plaintiff consented to Mr Sen’s entry upon the Property does not require proof that the plaintiff engaged in fraud or high level civil wrongdoing. It does however require proof that Mr Sen intentionally started the fire in order to cause damage and therefore requires proof of Mr Sen’s high level civil wrong.

48. The parties agree that gravity of the civil wrong alleged in the defendant case requires that in order for the defendant to succeed in its onus of proof, its evidence must provide clear or cogent proof satisfying the balance of probabilities reflecting the conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct. A court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. Albeit Mr Sen is not a party to the proceedings, the element of the defendant’s case that Mr Sen intentionally started the fire also requires that quality of proof, in my opinion: s 140(2)(c) Evidence Act; Briginshaw v Briginshaw (1938) 60 CLR 336 at [361] to [362]; Perpetual Trustees Victoria Limited v Cox [2014] NSWCA 328 per Leeming JA (Macfarlane and Emmett JJA agreeing) at [105].

49. The case being circumstantial and direct evidence being not available of Mr Sen’s activity what is required is evidence giving rise to a reasonable and definite inference; meaning evidence that does more than give rise to conflicting inferences of equal degrees of probability. For the defendant to succeed, it is not necessary that the proof achieve a level of entire satisfaction of the court of the fact to be found: Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1; Mutual Community General Insurance Pty Ltd v Khatchmanian (2013) 17 ANZ Insurance Cases 61-974; [2013] VSCA 144.

The Plaintiff and Mr Sen

50. The defendant seeks to make its case through the fact that Mr Sen’s Scene Phone was found at the location of the fire.

51. The defendant alleges that Mr Sen started the fire with the use of petrol. Reference was made to credit card records of the plaintiff recording the purchase of petrol in the days leading up to the fire. I considered that evidence to be so imprecise in tying the petrol purchased to Mr Sen as to be of little weight, if not equivocal and therefore not to be of assistance in my determination of the question whether the circumstantial evidence gave rise to the positive inferences for which the defendant pressed.

52. There was some evidence that the tenants had periodically burnt off rubbish in a large drum at the rear of the Property and may have used petrol to ignite that burn off. There was evidence about a red petrol container with a spout kept about the Property. The plaintiff cross-examined each of the tenants, Messrs Oudin and Victorsen, as well as Mr Ritchie, the defendant’s Commercial and Criminal Forensic Consultant, who investigated the fire about that petrol container.

53. I did not find that that evidence sufficiently connected use of the petrol container with the fire for it to be of assistance. If Mr Sen or anyone else lit the fire using petrol; there is no reason why he or she would not have brought it to the Property and then taken away any container he or she used.

54. A fact of significance is the relationship between Mr Sen and the plaintiff at the time of the fire. A substantial part of the evidence, particularly cross-examination of the plaintiff, went to the closeness of that relationship. The plaintiff was pressed as to whether or not Mr Sen was his “best friend”. In my view, the terminology “best friend” is not of such precision as to be conclusive. The plaintiff acknowledged that he and Mr Sen grew up in the same village in Fiji albeit Mr Sen was older than himself. Their business relations in Sydney involved Mr Sen being both the plumber used by the plaintiff when required for work at the subject rented premises, and also at the plaintiff’s home and a client of the plaintiff’s financial services business. At the time of the fire Mr Sen was working at the plaintiff’s home building an outdoor kitchen. In cross-examination, the plaintiff acknowledged that at the time of the fire he and Mr Sen were “close friends”. As will be seen, they were in frequent contact, daily by mobile phone. The relationship was close and their interpersonal engagement frequent.

The Defendant’s First Case – the Lighting of the Fire

55. A substantial factual platform of the defendant case was to prove that the plaintiff operated an illicit telephone being a pre-paid Optus mobile, identified in the proceedings as Phone X. The importance of that component of the defendant case was to prove that Phone X was contacted by Mr Sen when the fire was started, using the illicit pre-paid Vodafone mobile Scene Phone. If the plaintiff was the user of Phone X, then he and Mr Sen communicated when the fire was started. The subject call was made at 23:23:49 and lasted 90 seconds.

56. Neighbours reported the fire to 000 only 3 minutes and 11 seconds after the commencement of that subject call and 1 min and 41 seconds after the end of the call.

57. Counsel for the defendant identified on the first day of the hearing its case on the significance of Phone X’s use in these terms:

“Your Honour will be satisfied that they were numbers that were called by Mr Sen, including a number four minutes before we say the fire started. He lost that phone, and then he lied about it.

We say that Mr Sen and the plaintiff had a large number of dealings, including on the day leading up to the fire, including Mr Sen calling a false telephone number, false mobile phone, held in a false name by the plaintiff. Your Honour will be taken through a series of telephone records that link up those phones.”

(The reference to the phone “lost” is a reference to the Scene Phone. The “false mobile phone” referred to is Phone X)

58. Paragraph [29] of Plaintiff Closing Submissions points to the defendant case on the use of Phone X by the plaintiff as being a “new (and previously unparticularised) element to its fraud case”. The plaintiff did not seek an adjournment of the hearing, nor did the plaintiff object to the defendant’s amendment of its pleading to include that particular. In closing, the plaintiff does not put that the defendant is not entitled to move on its case that the plaintiff did use Phone X, and gave false answers in that regard to Mr O’Mullane, the insurer’s investigator. It is accordingly unclear to me what gravity, if any, the plaintiff ascribes to the submission.

59. In oral evidence, the plaintiff denied use of Phone X. In my view, the “general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him” which requires pleadings to state with sufficient clarity the case of the party whose averments they are; was not breached here both because it was raised early on and aware that he would have to face it, the plaintiff elected to participate in the hearing relying upon his denials: Gould & Birbeck & Bacon v Mount Oxide Mines Limited (in liquidation) [1916] 22 CLR 490 at 517 per Isaacs and Rich JJ; Banque Commerciale S.A. (en liquidation) v Akhil Holdings Limited [1990] HCA 11; (1990) 169 CLR 279 at 287 per Mason CJ and Gaudron J.

The Defendant’s Second Case – Section 56 ICA

60. The allegation that the plaintiff operated Phone X is also a substantial factual platform to the defendant’s case of fraudulently made claim under s 56 ICA (amended particulars of Defence filed with leave during the hearing under “The Third Defence – Fraud”, paragraph 23, particulars (a) (v) and (b) (vi)), including that the plaintiff told the defendant insurer’s investigator, Mr O’Mullane, that he only used the mobile phone registered to his business and referred to in the proceedings as Sharma Mobile no. 0415 595 966, and denied using the second mobile phone, Phone X, no. 0415 043 531.

61. If I find that the plaintiff did use Phone X, then those were “false statements”, “knowingly made”, in connection with the claims for the purpose of inducing the defendant to meet the claims.

Plaintiff Alternative Hypothesis – Starting the Fire

62. The plaintiff attempted through cross-examination of the defendant forensic fire expert, Mr Ritchie, and past tenants Messrs Oudin and Victorsen, to found hypotheses alternative to Mr Sen having lit the fire. The hypotheses for which the plaintiff contends are:

1. that the fire was started by an unknown person, perhaps a tenant, who forcibly gained entry by removal of the window to Bedroom 1; or

2. that the fire was started by a person such as a disgruntled tenant whose association with the Property made them aware that petrol was available, it being kept in a red container for the purpose of burning off rubbish in a drum at the rear of the Property.

63. As already observed, the rear of the Property was not secured from the street. This is not a case where persons identifiable with access to the Property narrow the field of possible arsonists. Over the several years of its rental to Mr Mir, sub-tenants had come and gone.

64. When the tenants were evicted on 31 May 2012, the underlying dispute was that they had refused to pay rent because, in their view, the plaintiff had failed or refused to maintain the hygiene of the Property and to perform repairs. Mr Oudin listed those issues as:

1. rats had chewed holes in the walls;

2. the garage ceiling had started to collapse;

3. the kitchen ceiling had started to collapse;

4. the bathroom tiles started falling off;

5. the Property was infested with cockroaches; and

6. the washing machine broke.

65. In his affidavit evidence, Mr Victorsen made similar complaints.

66. The evidence of Messrs Oudin and Victorsen was that previously cordial and open dealings between the several sub-tenants, including themselves and the plaintiff, had broken down. Whereas previously the plaintiff had come to the Property and spoken with them and other sub-tenants, the point was reached where, when the plaintiff came to the Property, only the contracted tenant, Mr Mir, dealt with him.

67. Following the Sheriff evicting the tenants on 31 May 2012, arrangements were made for Messrs Oudin, Victorsen and tenant Geoffrey Markham to return at 4.00 p.m. so that they could collect the remainder of their belongings. In the conduct of this arrangement, Mr Sharma sought the presence of police. There was some evidence of strong words being used by Mr Oudin to the plaintiff at that time. Mr Victorsen was not cross-examined in regard to it, nor as to whether any confrontation occurred at the time of their returning to the Property to pick up belongings.

68. Part of Mr Oudin’s affidavit evidence, in regard to which he was strongly cross-examined, included his recollection of conversations with the plaintiff which occurred at the end of 2011 or early 2012, in which, among other things, the plaintiff said words to the following effect:

Mr Sharma:   “This property is paid off now and heavily insured, so if anything happened to it, like if it was burnt down, I would get the insurance money.”

Mr Oudin:   “That’s your business, I don’t want anything to do with it.”

69. In cross-examination, the plaintiff put to Mr Oudin that his anger with Mr Sharma, arising from the tenancy dispute and eviction, was so extreme that he had included that conversation in his affidavit, but that it had never occurred.

70. I accept Mr Oudin as a witness of truth, having observed him in the witness box. In particular, he did not impress as a witness attempting to cause the plaintiff harm by his evidence. One instance when this was apparent was when it was put to Mr Oudin that in the event of such a conversation, the plaintiff may have been joking. Mr Oudin’s answer was “It’s a long time ago. I can’t really remember”. Whilst Mr Oudin was adamant that the words were spoken to him, had he been giving false evidence with the intent of harming the plaintiff; then, he would most likely have been equally adamant that the plaintiff spoke the words seriously, rather than make the concession, which he did that the plaintiff might have been joking. I accept Mr Oudin’s evidence.

71. I accept Mr Oudin’s account of that conversation.

72. There is no evidence identifying any tenant of the Property with a disposition toward the plaintiff as to commit the extreme and criminal act of setting fire to the Property. That an individual would destroy the Property by fire in retribution for a simple tenancy dispute is, in my opinion, an unlikely hypothesis.

73. Naturally, it is possible that any person such as a vandal may have deliberately started the fire in the unoccupied Property. In my view, having observed Messrs Oudin and Victorsen give oral evidence, I am satisfied that neither of them had anything to do with or knew anything about the deliberate lighting of the fire. My assessment of them, having observed them give their evidence, is that whilst they may have been angry with the plaintiff, they did not bear him such malice as to commit such a serious criminal act.

69. Nothing from their evidence as a whole raises to a level beyond a mere possibility that the fire was started by a disgruntled tenant or a stranger.

70. The defendant case relies on inferences it submits should be found to arise on the evidence of contacts between mobile telephones. The evidence is selected from records of inter-phone contacts shown in account records of charges for (outgoing) communications obtained from telephone service providers.

71. The records of accounts of the mobile phone providers did not record incoming contact except for voicemail deposits. The evidence relied upon did not expose the content of the communications, but only that it was SMS, voice call or voicemail. The locations recorded for the subject mobile phones when making the contacts were approximate only being the attributions ascribed to the network facilities with which the sending phone connected. Duration of contacts was recorded.

Was the Plaintiff the User of Phone X?

77. The plaintiff’s acknowledged mobile phone, known in the proceedings as Sharma Mobile, used Optus as provider. Mr Sharma maintained the number 0415 595 966 from 2001 and it remained his Sharma Mobile contact at the date of hearing. Over that period, he had replaced his mobile phone from time to time. The plaintiff’s sister, who lives with he and his wife, is named Hema. The plaintiff gave evidence that within the home, he, his wife and Hema, use each other’s mobile phones on the basis that they might use whichever phone they picked up. Hema’s phone used Optus as provider, and its number was 0421 576 067.

78. Phone X was a phone using pre-paid Optus services, and its number was 0415 043 531. Phone X was registered in the name of Mr Hayden Thompson.

79. Mr Thompson had been a tenant of the Property until some time during the second half of 2011. Therefore, Mr Thompson had not been a tenant of the Property for between six and twelve months preceding the fire. He was not a tenant of the Property during the dispute between tenants and the plaintiff. Mr Thompson subsequently lived at 5 Tallowood Crescent, Bradbury, the address used to register Phone X. Messrs Oudin and Victorsen were well acquainted with Mr Thompson. They too lived at that address. By knowing the plaintiff, Mr Thompson had some limited exposure to the Sydney Fijian/Indian community. Mr Thompson was not a member of or active participant in that community. The evidence did not identify him as a person associated with persons in Fiji.

80. That Phone X was registered to Mr Thompson is some evidence of it being his phone. But there is no evidence before me showing what proof of identity was required to register the mobile phone number account. For instance, the evidence is that Scene Phone was falsely registered to a named person and address.

81. Mr Thompson was not called in evidence. Det. Snr. Const. Rogers, as he then was, did attend Mr Thompson for interview, but the content of that interview was objected to and not admitted into evidence.

82. Having considered the evidence of use of Phone X to communicate with persons of Fijian derivation, which follows, I find it to be very unlikely that Mr Hayden Thompson was the user of Phone X. Accordingly, I find that the registration details for Phone X do not assist in identifying its user. I find that Phone X was falsely registered.

83. The defendant’s approach was to show that analysis of the account records of use of Sharma Mobile and of Phone X showed a common user. The defendant relies on evidence of patterns of use of the two mobile phones as evidence which infers that they had a common user.

84. The defendant produced schedules showing that common use of each of those phones to communicate with the contacts (1) to (12) below. The defendant cross-examined the plaintiff with use of those schedules (as MFIs 5 and 6).

85. Accuracy of the defendant’s schedules was broadly accepted and, in any event, I am satisfied as to that accuracy. Having been taken, where relevant, by counsel to the voluminous account records contained within the Tender Bundle Exhibit 4, I am aware that numbers in the right hand margin of pages within the schedules refer to pages of Exhibit 4.

86. For convenience, I attach the schedules analysing common Sharma Mobile and Phone X contact, being Annexures E to P to Defendant’s Closing Submissions.

87. The plaintiff was not permitted mobile phone use after 14 August 2012 due to his being remanded in jail on charges unrelated to the matters the subject of these proceedings.

88. The identified telephone numbers of the common contacts were:

1. Navau (aka Ashwini Navau) – Fiji [phone];

2. Unnamed User – Fiji [phone];

3. Unnamed User – Fiji [phone];

4. Unnamed User – Fiji [phone];

5. Unnamed User – Fiji [phone];

6. Unnamed User – Fiji [phone];

7. Unnamed User – Fiji [phone];

8. Archana – New Zealand [phone];

9. Anshu – Fiji [phone];

10. Unnamed User – India [phone];

11. Priya Teacher – Fiji [phone];

12. Unnamed User – New Zealand [phone];

13. Ambika Asthana – Australia 0431 729 560; and

14. Shayal Prestons – Australia 0435 618 252.

89. Names identified for contacts (1), (8), (9), (11), (13) and (14) were as appeared in the contacts file of the plaintiff’s Sharma Mobile.

90. It is not suggested that the persons using the common contact phones were actively involved in the issues in these proceedings.

91. For efficiency, where in these reasons I refer to the contacts, I will refer to the name ascribed to the contact (where that is in evidence), to the country of its location, and to the last three digits of the number. In this way, for example, the first of the number will be referred to as “Navau - Fiji 439”.

Annexure E – Contacts from Phone X and Sharma Mobile to Navau - Fiji 439

92. Between 30 April 2012 at 18:45 and 3 May 2012 at 5:14, a period of 2.5 days, Sharma Mobile was used to text Navau – Fiji 439, 19 times. Phone X was not used to contact Navau - Fiji 439 over the same period.

93. Between 3 May 2012 at 19:45 and 12 June 2012 at 12:30, a period of 13 days, Phone X was used to text Navau - Fiji 439, 203 times. Over the same period, Sharma Mobile was not used to contact Navau - Fiji 439.

94. Between 13 June 2012 and 7 July 2012, neither Sharma Mobile nor Phone X was used to contact Navau – Fiji 439.

95. Between 8 July 2012 at 8:58 and 12 August 2012 at 00:51, Sharma Mobile was used to text Navau - Fiji 439, 31 times. Over the same period, Phone X was not used to contact Navau - Fiji 439.

96. In summary, between 30 April 2012 and 12 August 2012, Sharma Mobile and Phone X were used to contact Navau – Fiji 439, but not simultaneously.

Annexure F – Contacts from Phone X and Sharma Mobile to Unnamed User - Fiji 766

97. Between 1 May 2012 and 3 May 2012 at 5:07, Sharma Mobile was used to text Unnamed User – Fiji 766, 7 times.

98. Between 1 May 2012 and 3 May 2012 at 5:07, Phone X was not used to contact Unnamed User – Fiji 766.

99. On 3 May 2012 at 5:10, Phone X was used to make two short voice contacts with unnamed User – Fiji 766 of 13 seconds and 19 seconds respectively.

100. On 3 May 2012 at 5:14, Sharma Mobile was used to text Unnamed User – Fiji 766. On 3 May 2012 at 5:55, Phone X was used to make a voice contact lasting a little over 4 minutes with Unnamed User – Fiji 766.

101. Between 3 May 2012 at 6:06 and 6 May 2012 at 8:18, Phone X was used to text Unnamed User – Fiji 766, 5 times, and then on 6 May 2012 at 8:39, Phone X was used to make an (attempted?) voice contact with Unnamed User – Fiji 766 for one second.

102. On 6 May 2012 at 9:05, Sharma Mobile was used to text Unnamed User – Fiji 766.

103. Between 6 May 2012 at 9:55 and 12 June 2012 at 8:30, Phone X was used to text Unnamed User – Fiji 766, 112 times, and to voice contact Unnamed User – Fiji 766 on 6 May 2012 at 18:06 for a little over 8 minutes.

104. In summary, between 1 May 2012 and 12 June 2012, Sharma Mobile and Phone X were used to contact Unnamed User – Fiji 766, but not simultaneously.

Annexure G – Contacts from Phone X and Sharma Mobile to Unnamed User – Fiji 831

105. On each of 7 January 2012, 8 January 2012, 21 January 2012, 3 February 2012 and 21 February 2012, Sharma Mobile texted Unnamed User – Fiji 831 once.

106. Between 7 January 2012 and 21 February 2012, Phone X was not used to contact Unnamed User – Fiji 831.

107. Between 22 February 2012 and 29 April 2012, Sharma Mobile and Phone X were not used to contact Unnamed User – Fiji 831.

108. Between 30 April 2012 and 12 June 2012, Phone X was used to text Unnamed User – Fiji 831, 26 times.

109. Between 30 April 2012 and 12 June 2012, Sharma Mobile was not used to contact Unnamed User – Fiji 831.

110. In summary, over the whole of the period 7 January 2012 to 12 June 2012, Sharma Mobile and Phone X were used to contact Unnamed User – Fiji 831, but not simultaneously.

Annexure H – Contacts from Phone X and Sharma Mobile to Unnamed User - Fiji 096

111. On each of 5 January 2012, 27 January 2012, 3 February 2012, 4 February 2012, 5 February 2012 and 21 February 2012, Sharma Mobile was used to text Unnamed User – Fiji 096 once.

112. Over the period 5 January 2012 to 21 February 2012, Phone X was not used to contact Unnamed User – Fiji 096.

113. Between 22 February 2012 and 29 April 2012, Sharma Mobile and Phone X were not used to contact Unnamed User – Fiji 096.

114. Between 30 April 2012 and 20 May 2012, Phone X texted Unnamed User – Fiji 096, 11 times, and voice contacted Unnamed User – Fiji 096 once.

115. Between 30 April 2012 and 20 May 2012, Sharma Mobile was not used to contact Unnamed User – Fiji 096.

116. In summary, between 5 January 2012 and 20 May 2012, Sharma Mobile and Phone X were used to contact Unnamed User – Fiji 096, but not simultaneously.

Annexure I – Contacts from Phone X and Sharma Mobile to Unnamed User – Fiji 352

117. Between 1 May 2012 and 3 May 2012 at 5:14, Sharma Mobile was used to text Unnamed User – Fiji 352, 6 times.

118. Between 1 May 2012 at 4:15 and 3 May 2012 at 19:44, Phone X was not used to contact Unnamed User – Fiji 352.

119. Between 3 May 2012 at 19:45 and 12 June 2012, Phone X was used to text Unnamed User – Fiji 352, 43 times.

120. Between 3 May 2012 at 5:15 and 12 June 2012, Sharma Mobile was not used to contact Unnamed User – Fiji 352.

121. In summary, between 1 May 2012 and 12 June 2012, Sharma Mobile and Phone X were used to contact Unnamed User – Fiji 352, but not simultaneously.

Annexure J – Contacts from Phone X and Sharma Mobile to Unnamed User – Fiji 391

122. On each of 1 May 2012 and 3 May 2012, Sharma Mobile was used to text Unnamed User – Fiji 391 once.

123. Between 4 May 2012 and 27 May 2012, Phone X and Sharma Mobile were not used to contact Unnamed User – Fiji 391.

124. On 28 May 2012 at 20:12 and at 20:13, Phone X was used for voice contact with Unnamed User – Fiji 391 for 11 seconds and 21 seconds respectively.

125. Between 29 May 2012 and 2 June 2012, Sharma Mobile was used to text Unnamed User – Fiji 391, 25 times.

126. Between 29 May 2012 and 2 June 2012, Phone X was not used to contact Unnamed User – Fiji 391.

127. In summary, between 1 May 2012 and 2 June 2012, Sharma Mobile and Phone X were used to contact Unnamed User – Fiji 391, but not simultaneously.

Annexure K – Contacts from Phone X and Sharma Mobile to Unnamed User – Fiji 638

128. On 10 February 2012, Sharma Mobile was used to text Unnamed User – Fiji 638 once. Phone X was not used to contact Unnamed User – Fiji 638 on 10 February 2012.

129. Between 11 February 2012 and 5 May 2012, Sharma Mobile and Phone X were not used to contact Unnamed User – Fiji 638.

130. Between 6 May 2012 and 10 June 2012, Phone X was used to text Unnamed User – Fiji 638, 18 times.

131. Between 6 May 2012 and 10 June 2012, Sharma Mobile was not used to contact Unnamed User – Fiji 638.

132. In summary, between 10 February 2012 and 10 June 2012, Sharma Mobile and Phone X were used to contact Unnamed User – Fiji 638, but not simultaneously.

Annexure L – Contacts from Phone X and Sharma Mobile to Archana – New Zealand 333

133. Between 6 May 2012 and 10 August 2012, Sharma Mobile was used to text Archana – New Zealand 333, 61 times.

134. Between 6 May 2012 and 10 August 2012, Phone X was used for voice contact with Archana – New Zealand 333 once, for nearly 6 minutes, and not at the same time that Sharma Mobile was used to text Archana – New Zealand 333.

135. In summary, between 6 May 2012 and 10 August 2012, Sharma Mobile and Phone X were used to contact Archana – New Zealand 333, but not simultaneously.

Annexure M – Contacts from Phone X and Sharma Mobile to Anshu – Fiji 027

136. Between 10 May 2012 and 16 May 2012, Sharma Mobile was used to text Anshu – Fiji 027 twice.

137. Between 10 May 2012 and 16 May 2012, Phone X was not used to contact Anshu – Fiji 027.

138. Between 17 May 2012 and 21 May 2012, Sharma Mobile and Phone X were not used to contact Anshu – Fiji 027.

139. On 22 May 2012, Phone X was used to voice call Anshu – Fiji 027 for just over 9 minutes. Sharma Mobile was not used to contact Anshu – Fiji 027 on 22 May 2012.

140. Between 23 May 2012 and 25 May 2012, Sharma Mobile and Phone X were not used to contact Anshu – Fiji 027.

141. Between 26 May 2012 and 3 August 2012, Sharma Mobile was used to text Anshu – Fiji 027, 21 times.

142. Between 26 May 2012 and 3 August 2012, Phone X was not used to contact Anshu – Fiji 027.

143. In summary, between 10 May 2012 and 3 August 2012, Sharma Mobile and Phone X were used to contact Anshu – Fiji 027, but not simultaneously.

Annexure N – Contacts from Phone X and Sharma Mobile to Unnamed User – India 800

144. Between 11 May 2012 and 22 May 2012 at 14:32, Sharma Mobile was used to text and to voice call Unnamed User – India 800 a total of 8 times.

145. Between 11 May 2012 and 22 May 2012 at 14:32, Phone X was not used to contact Unnamed User – India 800.

146. On 22 May 2012 at 21:10, Phone X was used to voice contact Unnamed User – India 800 once for 5 minutes.

147. Between 23 May 2012 and 29 May 2012, Sharma Mobile and Phone X were not used to contact Unnamed User – India 800.

148. Between 30 May 2012 and 26 July 2012, Sharma Mobile was used to text and voice contact Unnamed User – India 800 a total of 10 times.

149. Between 30 May 2012 and 26 July 2012, Phone X was not used to contact Unnamed User – India 800.

150. In summary, between 11 May 2012 and 26 July 2012, Sharma Mobile and Phone X were used to contact Unnamed User – India 800, but not simultaneously.

Annexure O – Contacts from Phone X and Sharma Mobile to Priya Teacher – Fiji 777

151. Between 12 May 2012 and 20 May 2012, Sharma Mobile was used to text and voice contact Priya Teacher – Fiji 777 12 times.

152. Between 12 May 2012 and 20 May 2012, Phone X was not used to contact Priya Teacher – Fiji 777.

153. On 21 and 22 May 2012, neither Sharma Mobile nor Phone X were used to contact Priya Teacher – Fiji 777.

154. On 23 May 2012 at 15:09, Phone X was used to voice contact Priya Teacher – Fiji 777 for 27 seconds.

155. On 23 May 2012 at 15:10, Sharma Mobile was used to text Priya Teacher – Fiji 777.

156. Between 23 May 2012 at 15:12 and 23 May 2012 at 17:13, Phone X was used to voice contact Priya Teacher – Fiji 777, 4 times of varying duration between 7 seconds and 15.5 minutes.

157. On 23 May 2012 between 15:12 and 17:13, Sharma Mobile was not used to contact Priya Teacher – Fiji 777.

158. Between 24 May 2012 and 29 May 2012, Sharma Mobile was used to text Priya Teacher – Fiji 777 on 5 occasions.

159. Between 24 May 2012 and 29 May 2012, Phone X was not used to contact Priya Teacher – Fiji 777.

160. On 30 May 2012, Sharma Mobile and Phone X were not used to contact Priya Teacher – Fiji 777.

161. On 31 May 2012 at 18:03, Phone X was used to voice contact Priya Teacher – Fiji 777 for just less than 45 minutes.

162. On 31 May 2012 between 18:03 and 18:48 (18:03 + 45 minutes for duration of Phone X voice contact), Sharma Mobile was not used to contact Priya Teacher – Fiji 777.

163. Between 31 May 2012 at 18:53 and 3 June 2012 at 14:49, Sharma Mobile was used to text and to voice contact Priya Teacher – Fiji 777, 30 times.

164. Between 31 May 2012 at 18:53 and 3 June 2012 at 14:49, Phone X was not used to contact Priya Teacher – Fiji 777.

165. On 3 June 2012 at 17:13, Phone X was used to voice contact Priya Teacher – Fiji 777 once for duration of 12 seconds.

166. On 3 June 2012 at 17:13, Sharma Mobile was used to text Priya Teacher – Fiji 777 once.

167. The account records being in minutes and the Phone X voice contact being for only 12 seconds, the evidence is equivocal as to whether or not on 3 June 2012 at 17:13 Sharma Mobile and Phone X were used to contact Priya Teacher – Fiji 777 simultaneously. The voice contact from Phone X being for only 0.2 of a minute; mathematically it is more likely than not that the contact was not simultaneously transmitted. Time is taken for a user to type a text message and because a user can voice contact on one phone whilst typing a text on the other. The evidence of use at 17:13 is not likely to be of simultaneous use, or be proof against finding the fact of common user.

168. On 4 June 2012, Sharma Mobile was used to text Priya Teacher – Fiji 777 once.

169. On 4 June 2012, Phone X was not used to contact Priya Teacher – Fiji 777.

170. On 5 June 2012, Phone X was used once to voice contact Priya Teacher – Fiji 777 for a duration of .75 minutes.

171. On 5 June 2012, Sharma Mobile was not used to contact Priya Teacher – Fiji 777.

172. Between 6 June 2012 and 8 June 2012, Sharma Mobile was used to text Priya Teacher – Fiji 777, 3 times.

173. Between 6 June 2012 and 8 June 2012, Phone X was not used to contact Priya Teacher – Fiji 777.

174. On 9 June 2012 at 16:51, Phone X was used to voice contact Priya Teacher – Fiji 777 for duration of just less than 18 minutes.

175. On 9 June 2012 between 16:51 and 17:09 (16:51 + 18 minutes duration of Phone X voice contact), Sharma Mobile was not used to contact Priya Teacher – Fiji 777.

176. On 9 June 2012 at 19:54, Sharma Mobile was used to text Priya Teacher – Fiji 777.

177. On 9 June 2012 at 19:56, Phone X was used to voice contact Priya Teacher – Fiji 777 for duration of just less than 6 minutes.

178. On 10 June 2012, Phone X was used to voice contact Priya Teacher – Fiji 777.

179. On 10 June 2012, Sharma Mobile was not used to contact Priya Teacher – Fiji 777.

180. Between 11 June 2012 and 9 July 2012, Sharma Mobile was used to text Priya Teacher – Fiji 777, 14 times.

181. Between 11 June 2012 and 9 July 2012, Phone X was not used to contact Priya Teacher – Fiji 777.

182. In summary, between 12 May 2012 and 9 July 2012, Sharma Mobile and Phone X were used to contact Priya Teacher – Fiji 777, but not simultaneously.

Annexure P – Contacts from Phone X and Sharma Mobile to Unnamed User – New Zealand 666

183. On 11 June 2012 at 19:00, Phone X was used to voice contact Unnamed User – New Zealand 666 for duration of 43 seconds.

184. On 11 June 2012 at 19:01, Sharma Mobile was used to voice contact Unnamed User – New Zealand 666 for duration of 20 minutes 4 seconds.

185. Between 12 June 2012 and 22 July 2012, Sharma Mobile and Phone X were not used to contact Unnamed User – New Zealand 666.

186. On 23 July 2012, Sharma Mobile was used to text Unnamed User – New Zealand 666 once.

187. In summary, between 11 June 2012 and 23 July 2012, Sharma Mobile and Phone X were used to contact Unnamed User – New Zealand 666, but not simultaneously.

Do the Service Provider Records Prove the Plaintiff used Phone X?

188. Only outgoing use of Sharma Mobile and Phone X and incoming deposits to voicemail are recorded in the evidence.

189. Over the period 5 January 2012 to 12 August 2012 Sharma Mobile, and over the period 30 April 2012 to 13 June 2012 Phone X, were used in excess of 700 times in total to communicate with the 12 common international contacts.

190. Sharma Mobile and Phone X were not used to contact each other.

191. I was informed by counsel that Optus account records recorded use of Sharma Mobile to the second but Vodafone account records for Phone X only timed use to the minute.

192. The parties were unable to find a single instance of simultaneous use of Phone X and Sharma Mobile in total phone use records in Exhibit 4. Pages 1785 to 1909 contain in excess of 3,500 instances of use of Phone X between 30 April 2012 and 20 June 2012. Pages 1049 to 1757 contain in excess of 4,000 instances of use of Sharma Mobile between the same dates. Accordingly, records of the combined heavy 51 day use of each phone did not find them to be simultaneously used across a field of in excess of 7,500 instances of use.

188. On 31 May 2012, from 18:03 for about 44 minutes, whilst Phone X was being used to voice contact Priya Teacher – Fiji 777, Sharma Mobile received 11 contacts which all went to voicemail deposits, and was not used to make any contact (Exhibit 4, Tender Bundle, Volume 7, page 1,674X).

189. Also on 31 May 2012, use of Phone X included texts to:

1. the common contact Navau – Fiji 439 between 7:48 and 10:33, 7 times; and

2. texts to Fiji [phone] at 10: 34 and again at 17:58, immediately preceding the 44 minute call to Priya Teacher – Fiji 777. This shows Phone X being used to contact Fiji [phone], in proximity of time to its user communicating with the common Sharma Mobile and Phone X contact numbers.

195. Phone X also texted Fiji [phone] on 19 June 2012 and on 20 June 2012. Sharma Mobile texted the common contact Priya Teacher – Fiji 777 on 11, 18, 20 and 24 June 2012. The plaintiff was out of Sydney and travelling in India between 18 June 2012 and 4 July 2012. In that period, Sharma Mobile was also used to contact Unnamed User – India 800. Accordingly, the evidence shows use of both Sharma Mobile and Phone X of a pattern not dissimilar to use of both phones whilst the plaintiff was in Sydney.

196. Whereas Plaintiff Closing Submission [85] was that the “most telling proof” that the plaintiff was not the user of Phone X was the evidence that Phone X did make calls on 19 and 20 June 2012 when the plaintiff was in India; that submission was based upon the proposition which the plaintiff subsequently conceded was wrong, that being a pre-paid Australian mobile phone, Phone X could not make international calls whilst overseas. Indeed, on each of those days whilst the plaintiff was in India, Phone X was used to call a Fijian number.

197. Both Phone X and Sharma Mobile were used to communicate with contacts consistent with their user being a member of the Fijian-Indian community in Sydney. Defendant Closing Submissions Annexures E to P, present their combined use to communicate with 10 Fijian persons, one Indian person and one New Zealand person in common. Phone X was used to contact a number of additional Fijian numbers which were not contacted by Sharma Mobile.

198. That the two phones were not of entirely congruent use is not inconsistent with their being operated by a single user; whereas, the extent of their common pattern of use shown in the defendant’s Annexures is, on balance, evidence supporting the positive inference of single user.

199. Phone X was first registered on 19 April 2012, used frequently up to 3:16 on 13 June 2012, less than 4 hours after the start of the fire, and then not used to make calls for one week.

200. In oral submissions, counsel for the plaintiff conceded “we simply cannot respond to all of the coincidences that have been thrown up by this extraordinarily detailed analysis by the defendant” of the service provider account records for Sharma Mobile, Phone X, Mr Sen’s Phone, Scene Phone and Hema’s mobile.

201. The question for determination is whether the expansive circumstantial evidence of mobile phone activity is merely coincidental as the plaintiff’s submission characterises it, or is of detail which fairly and laboriously analysed, supports the positive inferences upon which the defendant seeks to make its case?

Does the Account Record Evidence Infer the Plaintiff used Phone X?

202. In Closing Written Submissions, the plaintiff, in substance, put that the defendant’s analysis of phone records fell short of establishing a link between the plaintiff and Phone X, and in some sequences “tend to suggest” that Phone X was operated by a third person, not the plaintiff. Those submissions were:

1. The plaintiff pointed to the fact that there could be other individuals who might have operated Phone X. Specifically, the plaintiff referred to the fact that Phone X was registered to Hayden Thompson at his address 5 Tallowood Crescent, Bradbury. The plaintiff referred to the fact that Messrs Hayden Thompson, Oudin and Markham, who were all ex-sub-tenants of the principal tenant Mansur Mir, were living at that address when police investigated after the fire. The plaintiff also pointed to the fact that Phone X was registered on 19 April 2012 at about the same time as the rent and maintenance dispute was in its currency. Messrs Oudin and Mir lived at the Property at the time of that dispute and were evicted by the sheriff on the action of the plaintiff on 31 May 2012. On these facts, the plaintiff hypothesised that Phone X and the fire could be associated with persons disgruntled with the plaintiff.

Consideration:

(1.1)   The plaintiff did not put the topic of Phone X to Messrs Oudin or Victorsen at all during the cross-examination, as was its obligation in order to propose the hypothesis in relation to them, Hayden Thompson and Markham. One might expect that as housemates, they might be aware of each other’s mobile phone numbers. There was no evidence that Mir knew Hayden Thompson’s address. There was no evidence of grievance, friction or poor interpersonal relations between the plaintiff and Mir.

(1.2)   That Optus records of registration of the Phone X account 0415043531 ascribe it to Hayden Thompson at his address is, in my opinion, of little persuasion in the absence of evidence of his participation in or knowledge of that registration and in the absence of any particulars of his dealing with Optus or with Phone X. It was a prepaid phone, so it is not to be assumed that there was dealing between Optus and Hayden Thompson bringing to his notice that Phone X was registered to his particulars.

(1.3)   The circumstances relating to Scene Phone infer that registration particulars of covert pre-paid mobile phones are not reliable evidence of identity of user. The uncontested evidence is that Scene Phone was registered covertly to Raj Kunwar at Unit 15, 48 Ingleburn Road, Ingleburn. Det. Snr. Const. Rogers searched that name, and address, on the internal COPS system, the Roads and Maritime Services system and the Department of Immigration’s system and could not locate a person of the name Raj Kunwar. Having misread the address as 1548 Ingleburn Road, Ingleburn, he did not make inquiries at the correct property. Having misread the address as 154B Ingleburn Road, the insurance investigator, Mr O’Mullane, did not make inquiries at the correct property. Nevertheless, the Police search, whilst not conclusive, is persuasive that an adult person of that name was not living in Sydney.

(1.4)   The evidence supports an inference that registration of the prepaid Phone X to Hayden Thompson or the 5 Tallowood address, could be achieved illicitly without Hayden’s Thompson’s knowledge.

Phone X against the factual evidence of availability of false registration and without evidence of Optus dealing with Hayden Thompson, invites substitution of suspicion for inference, or invites intuition over ratiocination. The evidence does not, as the plaintiff further submits, prove inferences requiring the defendant to call Hayden Thompson or Mir in rebuttal: Insurance Commissioner v Joyce (1948) 77 CLR 39; [1948] HCA 17 per Dixon J (as His Honour then was) at 61; Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 at 320 to 321: in Payne v Parker [1976] 1 NSWLR 191 Glass JA at 202D said:

“Unless, upon the evidence, the tribunal of fact is entitled to conclude that [the witness] probably would have knowledge, there would seem to be no basis for any adverse deduction from the failure to call him.”

(1.6)   Most tellingly, the evidence of the Optus registration of Phone X is far less persuasive than analysis of the records of its use in determination of the identity of its user. As set out above, that common use with Sharma Mobile predominately involved contacts of Fijian/Indian names, and communication with persons in Fiji. The evidence does not support Hayden Thompson having associations fitting those use patterns.

(1.7)   Further, because the plaintiff only tendered evidence in his case in Reply; that the plaintiff sought to prove Hayden Thompson, Oudin or Mir was the user of Phone X, meant that the onus to call them fell upon him. In addition, Hayden Thompson and Mir were equally available to both parties. Mir was well known to the plaintiff since 2005, having originally lived at the Property when it was the plaintiff’s residence. These factors also weigh against the plaintiff’s suggestion of a onus upon the defendant to call Hayden Thompson and Mr Mir as witnesses in its case.

2. The plaintiff pointed to the pattern of phone use in Defendant Closing Submissions, Annexures J, L, M, N and O to show that Sharma Mobile was used more for texting, whilst Phone X was used more for what the plaintiff described as “one or a few isolated voice calls”. The plaintiff put that this suggests separate operators who favoured different modes of contact.

Consideration:

(2.1)   This submission omits reference to Defendant Closing Submissions Annexures E, F, G, H, I and K. When they are included in the consideration, a difference of mode of use between Phone X and Sharma Mobile is not made out. The annexures E and I record hundreds of communications by both Sharma Mobile and Phone X. They are all texts. Annexure F shows Phone X voice contacts, whereas Sharma Mobile was only used to text. In total, the Annexures show a common mode of use being preference for texting.

3. The plaintiff suggested that Defendant Closing Submissions Annexure K was of little probative value in the proof of Unnamed User – Fiji 638 being a common contact of the user of Sharma Mobile and of Phone X because it records only one Sharma Mobile text.

Consideration:

(3.1) Logic does not support the plaintiff’s submission. The single use of Sharma Mobile established the fact of use of that phone to contact Unnamed User – Fiji 638. A greater number of uses would evidence not more than more use of Sharma Mobile in accordance with that fact but the single communication is not less than proof that Sharma Mobile contacted unnamed user Fiji 638.

4. The plaintiff submitted that the fact that Sharma Mobile and Phone X (as shown in the Defendant Closing Submission Annexures) were used to contact common people is unremarkable and consistent with Sharma Mobile being the only phone used by the plaintiff in the context of his large network of contacts through his financial planning business, his significant involvement in the Sydney Fijian Indian community, the involvement of members of his family in the Sydney Fijian Indian community, and that he has retained the same mobile phone number since 2001.

Consideration:

(4.1)   That the contact list in the plaintiff’s mobile phone was of extraordinary dimension was not the subject of evidence. Even assuming a contact list as expansive as might be deserved of his business and community contacts; the plaintiff submission is of little persuasion against the far more remarkable fact of no simultaneous use by Sharma Mobile and Phone X in contacting the 13 common contacts and over 51 days of prolific use totalling more than 7,400 communications between 30 April and 20 June 2012.

(4.2) The submission is of little persuasion against the analysis in Defendant Closing Submission Annexures E to P showing the remarkable feature of the activity of communicating with 13 common contacts over a period of only about 8 months in Australia, New Zealand, Fiji and India.

203. The plaintiff properly submits that the defendant’s statistical analysis of phone use from account records which do not show the content of the communication made, should be limited to statistical value and not permitted to encourage speculation and guess work.

204. In my view, the Defendant Closing Submission Annexures portraying use of Phone X and of Sharma Mobile to contact common contacts is persuasive evidence that those phones were operated by a common user.

205. In particular, I consider it most significant that beyond those common contacts across that vast statistical evidence of use, the phones were not used simultaneously as, on the probabilities, would likely be the case but for their being operated by a common user.

206. The contacts are strongly consistent with a Fijian/Indian Sydney association of the user, and therefore consistent with the plaintiff’s active business and social associations with persons of that cultural and Fijian-derived connection.

207. The evidence does not support Mr Hayden Thompson being of that cultural association, either in business or socially, and as exposed above, in my opinion, not much weight can be attributed to evidence that Phone X was registered to Hayden Thompson.

208. The statistics of use proved from the account records are particularly persuasive because of the significant volume not only of there being the large number of 13 common phone contacts and of the number of those contacts identifiable by place or by name as Fijian/Indian-derived; but perhaps more importantly by the large volume of calls fitting a pattern of use consistent with a single user across thousands of communications over an eight month period spanning the date of the fire.

209. In order for the defendant to satisfy its burden of proof, the statistical analysis of account records of mobile phone use must provide positive and cogent evidence supporting the clear inference that Sharma Mobile and Phone X were operated by a common person, that person being the plaintiff.

210. In my opinion, the evidence does positively support finding the inference of a common user of Sharma Mobile and of Phone X. It is objective evidence fairly described, on analysis, as all pointing in the direction of finding that positive inference. The next question is whether the plaintiff’s own oral evidence was successful in contradicting that inference.

Reliability of the Plaintiff’s Oral Evidence Denying Use of Phone X

211. The plaintiff denied that he was the user of Phone X and any knowledge of Phone X.

212. The plaintiff informed the hearing that he would not give evidence in chief.

213. The defendant opened explaining that it would prove by circumstantial evidence in the form of analysis of mobile phone account records, that:

1. the plaintiff was the user of Phone X;

2. Mr Sen was the user of Scene Phone which was found at the Property the morning after the fire; and

3. that the plaintiff connived with Mr Sen who deliberately destroyed the Property by fire.

214. The plaintiff sat in Court and heard counsel for the defendant explaining its case and the evidence before he entered the witness box to give oral evidence in his case in Reply.

215. The plaintiff’s oral evidence is to be considered as given when he understood the substance of the case against him, and specifically, the use which the defendant sought to make of the mobile phone evidence.

216. Before giving his evidence, the plaintiff had listened to the defendant expert witness, Mr Ritchie, the ex-tenants, Messrs Oudin and Victorsen, and Det. Snr. Const. Rogers. He heard Mr Oudin cross-examined on his affidavit evidence that on two or three occasions the plaintiff had spoken to him in words to the effect that if the Property was burnt down, the plaintiff was well insured.

217. I formed the view that the plaintiff’s approach to the giving of his oral evidence is fairly described as an exercise in obfuscation, fed with an understanding of the case which the defendant sought to prove by circumstantial evidence.

218. The plaintiff denied an ability to recall any phone number whatsoever except that of his own Sharma Mobile. He claimed that he could not even recall the landline telephone number for his own home. He claimed to be not able to recall who any of the seven Indian, New Zealand and Fijian persons named in the contacts file of his Sharma Mobile and identified in the defendant’s case as the common numbers contacted by Phone X and Sharma Mobile were.

219. He proffered that persons in his office, his wife and sister, and when he was overseas, his girlfriend, a friend and members of travelling groups, as well as his website designer; all had access to Sharma Mobile such that he could not concede whatever be the specific instance of its use to make a contact being put to him in cross-examination. He conceded virtually nothing.

220. On the sixth question in cross-examination, the plaintiff was asked to identify Fiji telephone number [phone]. His answer was:

“Sir, apart from my mobile number, I don’t remember any number by heart.”

221. In the context that the plaintiff was being cross-examined on mobile phone use four years past (at about the time of the fire), and the reality that some persons are unable to remember telephone numbers, I was cautious to not readily take the view that he was obfuscating rather than being cautious of making admissions in regard to phone use which he did not recall. His claim that he was very liberal with access to his phone in that his office workers, sister, wife and visiting friends would use it was a further basis for caution against attributing to obfuscation, his claimed inability to recall any of the history of communication between his Sharma Mobile and the contacted numbers and persons, upon which the defendant sought to rely through cross-examination. The defendant proceeded by cross-examination employing the Schedules attached to these reasons from Defendant Closing Submission, Annexures D to P (which were MFI-5).

222. His performance over the course of the cross-examination, however, caused me to consider the plaintiff to be deliberately refusing to concede and thereby disclose his knowledge of the identity of persons and mobile phone numbers commonly contacted by his Sharma Mobile and by Phone X.

223. These reasons will go into some detail of how the plaintiff gave his evidence displaying his refusal to concede and disclose. It is required that I do so because of the determination of the plaintiff’s obfuscation which I make.

224. Quite startling is the evidence as it developed following the plaintiff’s denial of knowledge of mobile phone number Fiji [phone] on Day 4 of the hearing.

225. Immediately after giving the above quoted answer, counsel for the defendant required the plaintiff to produce his Sharma Mobile. It was marked for identification, and between 4.00 p.m. and 4.40 p.m., counsel for the parties together had access to its contacts file. In the plaintiff’s Sharma Mobile contacts file, the number Fiji [phone] was shown to belong to Rohini Mami. The evidence showed that the plaintiff’s sister, Hema, using her own mobile phone (Hema’s Mobile), also contacted Rohini Mami.

226. The plaintiff was taken to Exhibit 4, Phone X account records obtained before the hearing (Exhibit 4, Tender Bundle, page 1842) showing that on 18 May 2012 at 15:58, a call from Phone X to Rohini Mami Fiji [phone] (Rohini Mami Fiji 423) lasted over 20 minutes, and that Hema’s mobile was used to contact Rohini Mami Fiji 423 on 14 June 2012 at 13:16 and again at 19:21, and on 20 June 2012 at 21:08 (Exhibit 4, Tender Bundle, page 793). The plaintiff denied being able to identify anyone of that name.

227. It was then discovered that overnight between Days 4 and 5 of the hearing, whilst Sharma Mobile was in the plaintiff’s possession, common contacts communicated with by Phone X and Sharma Mobile, about which the plaintiff was cross-examined on Day 4, had been deleted. On Day 5, the plaintiff was asked to produce his phone during the luncheon adjournment for expert forensic analysis.

228. In relation to Rohini Mami Fiji 423, expert forensic analysis by Mr Michael Khoury (affidavit dated 26 September 2016) found that the plaintiff’s current iPhone 5 Sharma Mobile last activated (commenced operation) 2015, had been used to contact Rohini Mami Fiji 423 16 times, including several times in February, March and May 2016. This objective evidence is plainly inconsistent with the plaintiff’s claim that he could not remember the contact Rohini Mami Fiji 423 on the basis, as claimed by him, of lapse of memory over four years.

229. Further, on 13 October 2013, Sharma Mobile had texted to Rohini Mami Fiji 423 the plaintiff’s email address, [email protected], and on 11 May 2013, had texted a “Happy Mother’s Day” greeting to Rohini Mami Fiji 423. Mr Khoury’s affidavit explained that the contacts “deleted” from the phone were recovered by forensic investigative techniques.

317. That there was a substantial windfall payment in play, in the absence of there being any other rational basis for Mr Sen to have started the fire, applying the above referred to principles for finding adverse inferences, permits the objective evidence to persuade me of the plaintiff’s motivation and his connivance with Mr Sen in Mr Sen starting the fire. In other words, that the plaintiff knowingly consented to Mr Sen starting the fire.

Plaintiff Submission of Adverse inference Against Defendant

331. As we have seen, the high point of the defendant case to prove the plaintiff’s connivance with Mr Sen in regard to the lighting of the fire and, independently of that, the plaintiff’s consent to Mr Sen being at the Property is the 90 second phone call from Mr Sen using Scene Phone to the plaintiff on his Phone X at 23:23:49, being the time of the activity of starting the fire.

The plaintiff’s denial of participation in all of the facts associated with that phone call was as follows: Day 4, page 238, line 20, down to page 239, line 36]

Q.   So at 11.23 - that is, four minutes before the neighbours call the authorities in respect of the fire - there's a telephone call between two false phones, the scene phone, I want to suggest to you, controlled by Mr Sen, and the phone controlled by you, being phone X. Do you see that?

A.    Yes, sir.

Q.    Then there's apparently another call a minute later that I don't need to trouble you about. Then there's the fire called in. So I want to suggest to you the fire had been, obviously enough, likely to have been going for at least some time prior to the neighbours calling the authorities. That stands to reason, do you agree? Then there's—

HIS HONOUR: Was there an answer to that?

WITNESS: Yes, yes, sir.

LEE

Q.    Then, at 11:48:01, there's a succession of telephone calls after that time. One thing you will note from that last call at 11:24:31, immediately prior to the fire, there is not another call or text message from the scene phone.

A.    There's none?

Q.   None, entirely consistent, I want to suggest to you, with Mr Sen leaving the scene phone at the scene, where it was found the next morning by the New South Wales Police. Do you understand?

A.    Yes, sir.

Q.   But what Mr Sen then does, I want to suggest to you, is at 11:53:19, when he gets home, he calls Huni. Do you see that?

A.    Yes, sir.

Q.    Then, at 3.16am the next morning, phone X is calling a number. Do you see that?

A.    Yes, sir.

Q.    And you'll see various other communications which occur on the 13th. What I want to suggest to you is that the only rational explanation of that series of communications was that Mr Sen was controlling the scene phone, that the scene phone was at the location of the fire with Mr Sen, that he was in regular communication with you through the night. You were controlling phone X, which was falsely in the name of an ex-tenant of yours. Do you understand what I'm putting to you?

A.    Yes, yep.

Q.    You deny that totally?

A.    Yes, sir.

Q.    But you can think of no explanation at all which explains those phone records.

A.    Yes, sir, because I haven't been controlling other phones, so I can't explain everything that you've just talked about.

Q.    But for the fact that Mr Sen inadvertently dropped his phone at the scene, you would have got away with it, I want to suggest to you, because there would have been nothing linking phone X to the scene phone. Have you got any reaction to that proposition being put to you?

A.    No, because, as I said - I mean, I don't know anything the scene phone. The only time I came to know is when the photograph was saying that it's linking Jai Sen, and that's it.

Q.    You say you don't know anything about phone X, you don't know anything about the scene phone, correct?

A.    I mean, I can't give an explanation for phone X or the scene phone, so - yep.

332. The plaintiff submits that I should accept the adverse Jones v Dunkel inference against the defendant because the defendant failed to call Mr Sen in its case and it bore the onus of proof.

333. The defendant relied on the affidavit of its solicitor, Mr Pan, which evidence described attempts to contact Mr Sen by use of Mr Sen’s mobile phone number, but when the person answering learned it was the insurer’s solicitor calling, that person gave their name as “Andrew”, and said that Mr Sen was beyond reach but that a message would be passed on. The defendant says that he tried to obtain his evidence but that Mr Sen was an unwilling witness in its case.

334. The defendant’s submission is that it was for the plaintiff to call Mr Sen in order to rebut the inference otherwise available on the evidence.

335. There is no evidence, nor does either party submit, that Mr Sen was an unavailable witness as defined in Clause 4, Part 2 of the Dictionary to the Evidence Act.

336. In my view, in the circumstances of evidence inferring that he started the fire in the nature of an activity of the offence of arson, Mr Sen is not a witness assumed to be willingly available for either party.

337. Those facts place Mr Sen’s knowledge within the “camp” of the plaintiff in the sense described by Campbell J in Manly Council v Byrne [2004] NSWCA 123 at [53], and by Glass JA in Payne v Parker [1976] 1 NSWLR 191 at 201-202. In my opinion, the defendant was not obliged to call Mr Sen, and accordingly the defendant is entitled to submit as it does for the adverse inferences which I have found.

The Plaintiff’s Consent to Mr Sen Entering the Property

338. I would only add that the gravity of the case of the plaintiff’s connivance with Mr Sen in the arson of the Property is not equally a gravity guiding (in the s140(2)(c) Evidence Act sense) determination of the separate question purely of whether Mr Sen entered the Property with the consent of the plaintiff at the time of the fire. Determination of this question does not include whether or not the plaintiff gave consent knowing Mr Sen intended to start the fire.

339. Mr Sen was the plaintiff’s close friend in a relationship in which they were in regular contact with each other regarding day-to-day events of their lives. Mr Sen and the plaintiff remained contacting each other for weeks after the fire in circumstances of the plaintiff having on 13 June 2012 identified to police that the photographs on Scene Phone were of Mr Sen. I have determined the plaintiff knew Mr Sen to have operated Scene Phone. These are facts which strongly infer that the plaintiff had no objection to Mr Sen being at the Property at the time of the fire. Other evidence was that Mr Sen, as the plaintiff’s plumbing tradesperson, was permitted access to the Property for the carrying out of his work, and that, in the plaintiff’s oral testimony, Mr Sen was never upon the Property without the plaintiff’s consent.

340. In my opinion, it would be an extraordinary proposition to suggest on those facts that the plaintiff would have refused consent to his close friend to enter into the vacant Property.

Application of the Exclusion Clauses to the Facts

That Mr Sen deliberately started the fire with the intention of causing harm to the Property

341. I have found that the plaintiff’s close friend, Mr Sen, deliberately started the fire with the intention of causing damage to the Property at a time when there was no other reason for him to be at the Property but for that purpose.

342. I have found that the plaintiff received Mr Sen’s convert telephone communicated report of his having started the fire, conveyed at the time of him committing that arson. There is no evidence contrary to the inference which necessarily arises from those facts, that Mr Sen was at the Property with the plaintiff’s consent to commit that act of arson.

343. Accordingly, I find that the defendant has satisfied its burden of proof upon the basis of cogent evidence that the event of the fire falls within the General Exclusion on page 37 of the Policy in that the loss arises from the plaintiff’s intentional act, or by Mr Sen, acting with the plaintiff’s consent.

344. If I am wrong in that and the plaintiff did not consent to Mr Sen starting the fire with the intention to cause damage to the Property; then, I find that the defendant has satisfied its burden of proof on cogent evidence that Mr Sen was upon the Property with the plaintiff’s consent when he started the fire with the intention of causing damage within the terms of the application of the Fire Exclusion clause on page 24 of the Policy.

345. On the whole of the evidence, the plaintiff consented to Mr Sen being on the Property, just as he had permitted Mr Sen to remain on the Property on 8 June 2012 after the plaintiff left him there for the purpose of performing plumbing work.

346. As I explained when dealing with the specific Fire Exclusion clause; the work which it is intended to do is to place at the responsibility of the owner and outside of the cover for damage either accidental or deliberate caused by tenants, that damage intentionally caused by other persons whose entry to the Property was with the consent of the plaintiff.

347. In my opinion, the evidence supports the finding of the fact of the plaintiff’s consent to Mr Sen being upon the Property, and that whilst upon the Property, Mr Sen intentionally started the fire.

Section 56 ICA – the Defendant’s Second Case

348. Section 56 permits the insurer to avoid paying a claim made fraudulently It provides relevantly as follows:

“(1)   Where a claim under a contract of insurance, …, is made fraudulently, the insurer may not avoid the contract but may refuse to pay the claim.

(2)   In any proceedings in relation to such a claim, the Court may, if only a minimal or insignificant part of the claim is made fraudulently and non-payment of the remainder of the claim would be harsh and unfair, order the insurer to pay, in relation to the claim, such amount (if any) as is just and equitable in the circumstances.

(3)   In the exercise of the power conferred in sub-section (2), the Court shall have regard to the need to deter fraudulent conduct in relation to insurance, but may have regard to any other relevant matter”.

349. The defendant relies on statements falsely made by the plaintiff in connection with the claim. Those statements were:    

1. that someone acting with the plaintiff’s consent was not responsible for the fire;

2. that the plaintiff did not know who started the fire;

3. that the plaintiff did not know about the phone call made to his Sharma Mobile from Scene Phone on the morning of 12 June 2012;

4. that the plaintiff did not know anything about the Scene Phone, and that he did not know who owed it;

5. that the plaintiff did not tell a former tenant that “he should burn the house down for the insurance money”; and

6. that, at the time of the fire, the plaintiff used only his Sharma Mobile.

350. In these reasons, I have already found each of the above statements to have been false. On the facts which I have found, the plaintiff must have known them to be false. There is no issue that he made those statements to Mr O’Mullane, the defendant insurer’s investigator. The plaintiff does not submit that in the event that I find the statements to have been falsely made, as I have, that they were not intended to induce the defendant to make payment to him in response to the claim. Indeed, there is no other rational reason why the plaintiff would have made those false statements.

351. Plainly, each of those statements had the potential to seriously affect the investigation of the loss.

352. In my opinion, each of the statements was a part of the claim. They were individually and cumulatively significant components of the plaintiff’s structure of fraudulently making his claim. Accordingly, this is not a case in which there was part of a claim which it would be harsh and unfair not to order the insurer to pay pursuant to the just and equitable consideration in s 56 (2). This is a case encompassing consideration of the need to deter fraudulent conduct in relation to insurance provided for in s 56 (3).

353. In Walton v Colonial Mutual Life Assurance Society Ltd. [2004] NSWSC 616; (2004) 13 ANZ Ins. Cas. 61-620 (at 144), Einstein J explained:

“The operation of s 56 of the Act has been considered in a number of cases. Relevant principles include the following:

The test for fraud is satisfied if the insured has a dishonest intent to induce a false belief in the insurer for the purpose of obtaining payment or some other benefit under the policy. As such, where the insured makes a false statement with knowledge in a claim to induce the insurer to meet the claim, the claim is made fraudulently. The fraudulent statement need not be material to the insured’s claim, nor is the insured absolved of any responsibility by asserting that he considered his claim to be valid. (See Tiep Thi To v Australian Associated Motor Insurers Ltd. (2001) 3 VR 279; Naomi Marble & Granite Pty. Ltd. v FAI General Insurance Co. Ltd. (No. 1) [1999] 1 Qd R 501, and Mourad v NRMA Insurance Limited (2003) 12 ANZ Ins. Cas. 61-560).

It is not necessary to show prejudice as having been suffered by the insurer for s 56 to be relied upon. The only restriction upon an insurer’s right to refuse payment of the claim is the discretion granted within s 56 (2) of the Insurance Contracts Act (see Tiep Thi To v Australian Associated Motor Insurers Ltd. (2001) 3 VR 279).”

354. Consistent with the principle so described, the plaintiff made each of the above statements with dishonest intent to induced a false belief in the insurer for the purpose of obtaining payment under the Policy, and therefore fraudulently within the meaning of s 56 (1) ICA: see also Sgro v Australian Associated Motor Insurers Ltd. [2015] NSWCA 262; (2015) 299 FLR 92; (2015) 72 MVR 320 per Beazley P at [47].

355. I find that the defendant must succeed on its second case, and is entitled to refuse payment of the claim under the Policy.

Liability Result – Conclusion

356. The defendant did not breach the contract of insurance expressed within the Policy because:

1. the loss arose from the intentional act of Mr Sen starting the fire with the consent of the plaintiff within the meaning of the General Exclusion (Policy page 37), and the specific Fire Exclusion (Policy, page 24);

2. the fire was started by Mr Sen with the intention of causing damage to the Property, he having entered the Property with the plaintiff’s consent within the meaning of the Fire Exclusion (Policy, page 24); and

3. the claim was made fraudulently within the meaning of s 56 (1) ICA entitling the defendant to refuse to pay it.

Damages

357. As the parties agreed that damages were to be assessed by a referee on the Court’s referral, dependant on my determination of the question of liability; given my determination; no order for referral is required and there will be no award of damages.

358. If I am wrong in my findings of liability, or in the event that I had determined liability in favour of the plaintiff, I would not have been able to assess damages because the parties elected to proceed on evidence of the question of liability only.

359. Nevertheless, in the course of the evidence concerning the fire, the parties sensibly agreed a list of contents which were in the house at the time of the fire and that the total value of those contents lost was $21,157. Had the plaintiff succeeded on liability, he would have been entitled to damages in this sum for the contents loss component.

360. The plaintiff points to the provisions of the Policy, quoted in these reasons, promising Buildings Insurance and Contents Insurance in the event of fire to “pay the cost to repair or rebuild the part of your rental property that was damaged – we pay the lower of the cost to repair or rebuild your rental property”: Policy, page 43. I repeat, the parties agreed that the house required demolition and therefore, assumedly, repair was not an option. The plaintiff has sold the Property.

361. By amendment of its pleading of Defence, made in the course of the proceedings, the defendant pleaded that damages should be properly assessed on a diminution of value of the Property basis. In accordance with what I have already said, there was no evidence before me as to whether the loss was less if assessed as the cost of reconstruction or of sale of the land free of a house.

362. That a policy of insurance is a contract promising indemnity is a principle supporting the proposition that notwithstanding the express contractual promise to pay the lower of the cost to repair or to rebuild in the Policy, the defendant can elect to ignore this provision and choose a different method of calculation of damages: Raso v NRMA (Unreported, 14 December 1992, New South Wales Court of Appeal). The plaintiff concedes this principle.

363. In Kenwright v IAL [2013] NSWDC 255, Taylor DCJ reviewed a number of authorities considering the application of this principle of insurance law, and at [47], said:

“The learned authors accept the words of Macrossan J in Spina v Mutual Acceptance (Insurance) Ltd. (1984) 3 ANZ Ins. Cas. 60-554 at 78 and 345, the words of Forbes J in Reynolds v Phoenix Assurance Co. Ltd. [1978] 2 Lloyds Rep. 440, and the decision in Roumeh Food Stores (NSW) Pty. Ltd. v New India Insurance Co. Ltd. [1972] 1 NSWLR 227 at 237, and conclude that generally the insured loss is measured by the cost of repair or replacement”.

364. His Honour also referred to the text Kelly & Ball, “Principles of Insurance Law”, to identify three exceptions to the general rule, they being:

1. where the insured property has no particular value to the insured;

2. where the insured does not intend to reinstate the insured property; and

3. where the insured’s desire to replace or reinstate the Property is unreasonable.

365. In my view, the evidence at the hearing does not permit me to adequately investigate these exceptions.

366. Had I found in favour of the plaintiff the preferred course would be for the question of basis of assessment to be determined either on a short hearing in this Court on further evidence prior to the order referring out, or at the reference.

367. In saying this, in my opinion, construction of the above quoted terms of the Policy does not involve a complex or difficult question of law. The task will evolve to a consideration of the facts. For instance, the Property had been the home of the plaintiff prior to him purchasing a home elsewhere and renting the Property. On those facts, it is not necessarily the case that purely because it was a rental property and that he sold it whilst the house was derelict, it was of no other particular value to the plaintiff other than as an investment.

A Final Procedural Issue

368. The plaintiff submitted that the defendant had not satisfied its obligation according to the “rule” in Browne v Dunn (1893) 6 R 67 in the conduct of its s56 ICA case. The submission was that the defendant had failed in its obligation to put to the plaintiff each false statement, that it was made with knowledge of falsity and that it was made expressly with the intention of inducing the insurer to meet the claim.

369. The plaintiff challenged that in light of its failure to meet its obligation in cross-examination, it was not open to the defendant to make the submission that the claim was falsely made. It was put by counsel for the plaintiff: [Transcript Day 8, page 458, line 9]

“… in the words of the Lord Chancellor in Browne v Dunn, if you're going to impeach a witness, you have to put those matters to him fairly because it's an allegation of fraud.”

370. In this case, each of the false statements was as to a matter of fact, which fact I have found to be proved, and according to my finding, the statement was known by the plaintiff to be false when made to the insurer.

371. The “rule” in Browne v Dunn (1893) 6 R 67 is one of procedural fairness. As was famously said by Hunt J in Allied Pastoral Holdings Pty. Ltd. v Commissioner of Taxation [1983] 1 NSWLR 1 at 16; (1983) 44 ALR 607 at 623:

“It has in my experience always been a rule of professional practice that, unless notice has already clearly been given of the cross-examiner’s intention to rely upon such matters, it is necessary to put to an opponent’s witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings. Such a rule of practice is necessary both to give the witness the opportunity to deal with that other evidence, or the inferences to be drawn from it, and to allow the other party the opportunity to call evidence either to corroborate that explanation or to contradict the inference sought to be drawn”.

372. Cross-examination in this case provided the plaintiff with the opportunity to deal with the evidence upon which the defendant relied to prove, on the basis of inference, the falsity of his claim and of each of the statements. That he made the statement concerning insurance cover in the event of fire to Mr Oudin was put to him. The whole of the evidence of mobile phone use was put to him. The inferences which the defendant sought to draw from the evidence was put to him. That his denials were deliberately false was put to him.

373. In this case, where Mr Sharma was not just a witness but the plaintiff, it is particularly relevant to the procedural fairness required at the heart of the rule in Browne v Dunn (1893) 6 R 67 that the defendant opened its case explaining how it proposed to prove that the plaintiff connived with Mr Sen in the start of the fire, or otherwise consented to the entry of Mr Sen who deliberately started the fire, and that its case was based upon the connection between Mr Sen’s illicit Scene Phone and the plaintiff’s illicit Phone X (Transcript Day 1, page 60, line 40 to page 62, line 29).

374. Particulars of the defendant’s s 56 case are set out in paragraph [23] of the Amended Defence to Further Amended Statement of Claim.

375. In my opinion, the plaintiff’s submission is misconceived in that it is voiced as if the rule in Browne v Dunn (1893) 6 R 67 is, at its essence, a rule of evidence rather than a rule of procedural fairness. In a case such as the present whereby pleading and by opening the contest brought by the defendant included that it would endeavour to prove the falsity of the factual substance of each of the statements which became identified in the defendant’s s 56 (1) ICA case, the concern for procedural fairness to which the rule is properly directed was not in play: Browne v Dunn (1893) 6 R 67 at 70-71. At 71, Lord Herschell LC, in his famous judgment, included the passage:

“Of course, I do not deny for a moment that there are cases in which that notice has been so distinctly and unmistakably given, and the point upon which he is impeached, and is to be impeached, is so manifest, that it is not necessary to waste time in putting questions to him upon it. All I am saying is that it will not do to impeach the credibility of a witness upon a matter in which he has not had an opportunity of giving an explanation by reason of there having been no suggestion whatsoever in the course of the case that his history is not accepted.”

376. The cross-examination fairly put:

1. the plaintiff was aware that the defendant case was to prove his claim was fraudulently made: (Transcript Day 4, page 224, lines 20 to 32);

2. that the plaintiff had falsely registered Phone X: (Transcript Day 4, page 217, lines 7 to 11);

3. that it was a lie that he did not know about the phone call to his mobile phone from Scene Phone on the morning of 12 June 2012: (Transcript Day 4, page 229, lines 35 to 49); and

4. that there was no rational explanation for communications between himself and Mr Sen whilst Mr Sen controlled Scene Phone and the plaintiff controlled Phone X which was falsely registered other than Mr Sen having dropped Scene Phone at the start of the fire: (Transcript Day 4, page 239, lines 8 to 36).

377. The plaintiff was challenged on the fact of his statement to Mr Oudin concerning insurance cover in the event of fire.

378. At the conclusion of the cross-examination, counsel for the defendant, in my view, after the many challenges put to the plaintiff of the falsity of his evidence in relation to each of the subjects of the statements falsely made to the insurer, provided a “blanket” opportunity for the plaintiff to respond to the case brought against him pursuant to s 56 (1) ICA as follows: [Transcript Day 5, page 327, line 26, down to page 328, line 6]

“Q.   Finally, Mr Sharma, I want to suggest to you that, through the course of your evidence, you have been persistently non‑responsive and that you have suit throughout your evidence to paint a false picture to his Honour of the truth whenever you thought it was in your interest to do so. And you did that repeatedly. What do you say to that proposition?

A.    That's wrong.

Q.    Finally, I want to suggest to you that the fire was started by Jai Sen, being a person who entered the property destroyed by the fire with your consent with the intention of causing the damage. What do you say to that?

A.    No, that's not correct.

Q.   His Honour can take it though that Jai Sen never went to the property insofar as you are aware without your consent. As far as you're aware?

A.    Yes.

Q.   Then I want to suggest to you that you have not been truthful and frank in the matters that you have conveyed to the insurer, including the following statements which I'll now identify and you can respond whether or not you agree with that proposition. You were not truthful and frank in saying that Mr Sen was not responsible for the fire. You were not truthful and frank in saying that you did not know who set the building alight. You were not truthful and frank in saying you did not know about the phone call made to the mobile number from the phone found at the backyard of the property, being the scene phone. And you were not truthful and frank in denying that you told a former tenant you should burn down the house for the insurance money. And finally, that you were not truthful and frank in saying that you only used one mobile phone number to the insurance investigator, being number 0415 595 966. Do you want to say anything to that?

A.   Don't agree.”

379. In my opinion not only is the plaintiff’s Browne v Dunn complaint misconceived, but the cross-examination did directly put the elements of the defendant’s s 56 ICA case.

Orders

1. Judgment for the defendant.

2. Plaintiff to pay the defendant’s costs.

Decision last updated: 03 February 2017