Nand v Dominion Insurance Ltd [2000] FJHC 167; HBC57.1996 (30 June 2000)

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The plaintiff seeks to recover from the defendant the sum of $55,000.00 (fifty five thousand dollars) under policies of fire insurance for damages caused by fire in early morning of 4 January 1994.

The plaintiff is a businessman who resides at Savusavu and was at all material times carrying on the business of spare parts and supermarket on premises which is a double storey building rented from one Brij Singh.

The defendant, a duly registered limited liability company under the Companies Act, is liable to be sued in and by its corporate name.

Between 3 January 1994 and early morning of 4 January at the material times the plaintiff’s spare parts and stock-in-trade of the supermarket (the "goods") were destroyed by fire.

The goods were insured with the defendant whereby the defendant agreed to indemnify the plaintiff against loss or damages occasioned to the goods by fire, lightening or explosion.

The defendant after being notified of the loss by fire, failed to pay the said claim of $55,000.00 being the alleged value of the goods. The plaintiff therefore brought these proceedings on 7 September 1995 by issuing this Writ of Summons against the defendant.

To get a picture of the building where the fire was I set out briefly its layout.

The ground floor of the building which is of concrete construction was occupied by the plaintiff for his business. The upstairs portion is of timber construction. Immediately above the plaintiff’s shop, the premises were let out as a bookshop run by a Church and behind that was a residence occupied by a Fijian family.

The plaintiff ran his business of spare parts from the rear section of the ground floor and his minimarket business was operated from the front section. This building is a unit on its own but there are neighbours on both sides with a passageway on each side separating the neighbours.

On or shortly after midnight of 4 January 1994 there was a fire in the plaintiff’s section of the building. Alarm was raised and the Savusavu Fire Brigade which was then under the jurisdiction of the Savusavu Town Council attended to the fire. The call was received by the Chief Fire Officer at 12.45 a.m.

The defendant’s Defence and Counterclaim are as follows (as stated in the plaintiff’s written submission):

The Defendant in its Amended Defence say that the Plaintiff has made a false or fraudulently exaggerated claim on account of his loss and thereby represented that his loss was $55,000.00. It says that:

It further says that the Plaintiff made false statements in support of his claim in that:

The matters in dispute are as to how the fire was caused; the defendant’s contention being that the plaintiff’s servants or agents had deliberately set fire to the premises whereas the plaintiff denies this. It is also in dispute as to the extent of the damage; the defendant’s contention being that the plaintiff exaggerated the loss suffered and in fact did not carry the stock he claims was destroyed by fire and also that the claim is fraudulent whereas the plaintiff says that he suffered total loss.

It was agreed that a Fire Insurance Policy was issued by the defendant covering total sum insured of $60,000.00. It is also not in dispute that on or around the morning of 4th January 1994 the plaintiff’s said premises caught fire thereby destroying the contents of his shop.

6) Whether there has been a breach of any condition of the Policy by the plaintiff as alleged by the defendant at all.

7) Whether the plaintiff is entitled to be indemnified for the losses suffered in all the circumstances and if so to what extent?

The Plaintiff says that he came to know of the fire at 4.30 a.m. when Sandra Banta a next door neighbour rang when his mother answered the call.. He denied he received a call from a Fong (the Mayor of Savusavu) at 1.15 am. He is his immediate neighbour. He went to the shop, lot of people were there; the firemen had put the fire off. Police took the keys from him; police were carrying a cash box which should have had cash $300 from Spareparts and $200 from Supermarket but no money was there. The Plaintiff went home but came back at 8.00 am. He said that fireman Mudu found a mosquito coil and some matches which were ‘taped’ in mosquito coil which he brought from next to place where it was burnt and left it on the shelf of spare parts. A photograph was taken of it. He said he was ‘shocked to see the mosquito coil, picked from floor in my presence’. He said that the coil was dry and there was no indication that it was close to fire.

The Plaintiff said when the shop closed the previous day he did not check the back door but the front door was closed by his brother. It was locked in the usual manner. He said that he did not find any break-in or forced entry.

The insurance assessor Rickman came on Wednesday; the fire was on Monday. He filled in the Claim Form. He said everything was damaged.

The Plaintiff did stock-taking after the fire and the prices he gave were wholesale as directed by insurance assessor Rickman. He says that he has lost stock worth $55,000.00 and he told Rickman that the left over stock had no value and the latter said he can take it. He said that the total addition in claim form came to $58,000. In the second or third week of the fire he made a sale worth $1000.00.

The Plaintiff said that his claim is not fraudulent; that he did not light the fire. He said that he had spare parts stock valued at $55,000. He said that some parts were looted. The Plaintiff admitted that he told the Defendant that there was no ‘salvage’.

He said that the stocks were there of the value claimed and the claim is not excessive.

As to his financial position the Plaintiff said that he was not in financial difficulties and that he was not being pressed for payment by the Banks.

In cross-examination the Plaintiff denied receiving a telephone call from Mr. Fong on the morning of the fire. When he got to the building the fire was already under control.

The day after the fire i.e. on Tuesday the Police and Fire people were there with camera. They found a mosquito coil.

The Plaintiff said that sales dockets were destroyed by fire; stock cards were burnt. The book of purchases is missing. He said he gave wholesale price of items to Police and Rickman.

He admitted that his 26 cheques were dishonoured and as far as his financial position with Banks is concerned he said it ‘wasn’t bad, just rolling’.

In cross-examination he admitted that he came to know of fire from Mrs. Banta at 1.30 am and not 4.30 a.m. as he previously stated. Also in regard to the keys to the premises at first he said that the Police had the keys after the fire but in the next breath when questioned said that he had the keys admitting that his earlier testimony was incorrect. He agreed that in his Statement to Police he did not tell them that the place was looted. He agreed that he is not entitled to retail price. He said that he should have given wholesale price and that is a mistake which he made.

The learned counsel for the plaintiff submitted that there is no evidence whatsoever that the fire was lit by the plaintiff or his servants or agents. The plaintiff, his wife and his brother were not even a suspect after police investigation into the fire. Even after finding the mosquito coil no action was taken by the police. He says that all this shows that the plaintiff did not have anything to do with the fire.

Mr. Kohli says that it is unbelievable that Inspector Mahendra Prasad (PW7) could not obtain information from the banks in Savusavu about the plaintiff’s financial position. He said that the police had ‘filed’ this case as there was no evidence whatsoever that the plaintiff had set fire to the shop. He has not been charged till today.

The mosquito coil is supposed to have been found on a plank. If one examines the photographs carefully one will see that there is absolutely nothing near the place where the coil is supposed to have been found. In fact the plank was according to Plaintiff covered with a wrapper and his evidence was supported by Raymond Fong and Peni Mudu. Both of these persons admitted that they were hosing the fire down. From the photographs it is obvious that damage by fire was caused to the wall near and above the plank. Both witnesses testified that they were hosing for some 10 to 15 minutes. There was plenty of smoke and heat. It is indeed surprising if the cover in the plank was disturbed either by the hosing or by heat how come the coil remained undisturbed.

Counsel submitted that the plaintiff was not in financial difficulties and he had a credit balance of $462.15 in his personal account.

Mr. Kohli submitted that his loss was $55,000.00 and on sale of damaged items be realized the sum of $1000.00. He said that the insurance company took no steps to take the damaged items away.

Counsel says that the defendant has not discharged its burden of proof and it failed to prove that the claim is fraudulent.

He says that the plaintiff has suffered total loss and even on the assessor’s own stock count the loss suffered by the plaintiff would be $37,150.70. He said that if the court decides that there were items which could be salvaged and sold then according to Mr. Rickman (PW8) the total loss at wholesale price would be $18,800. He agreed that if the insurance company was ‘held back to indemnify’ the plainfiff then the maximum liability would be $18,800.00.

The witnesses for the defendant were a businessman and a former mayor of Savusavu Raymond Fong (DWI), fireman Peni Mudu (DW2), F.E.A employee Bimal Chand (DW3), relieving Manager of ANZ Bank Lilo Joseph Foster Fox (DW4), an accountant with Westpac Vinod Kumar Raniga (DW5), Anita Devi Prakash (DW6) - Manager of defendant at Labasa, Inspector Mahendra Prasad (DW7) and Insurance Assessor Rickman (DW8).

The DW1 stated that after he heard Mr. Banta shouting about some fire so he rang the Plaintiff at 12.45 a.m. and told him that his shop is on fire and also alerted the Savusavu Fire Brigade. The Plaintiff said he "will be coming up". On the morning of 4 January 1994 the plaintiff, Fong, Firemen and Policemen were at the shop. They all went inside. The witness said that a fireman had a torch and with the light of the torch he came upon a mosquito coil and tied to it was matchstick which was located on the top of a portable shelf. The Police and firemen’s attention was drawn to this. Fong had a camera and he took photos of the mosquito coil and these were tendered to court as Exhibit D2 (e) (1-4)

The DW2 PENI MUDU, Chief Fire Officer testified that he received a call with reference to a fire in Savusavu Town at 12.45 am from Fong (PW1). He attended to the call at Gokul’s Spare Parts shop. They investigated the cause of fire. He said that a fireman showed him what he saw; it was a mosquito coil on the stand to hold the coil. He identified the coil that was tendered to Court. The witness said that there was no suggestion of electrical fault; no sign of forced entry. The witness further testified that on 19 March 1999 he met the plaintiff who asked him to help him by removing the ‘photos’ but the witness said that he cannot for by that time he had already given negative to Rickman the assessor.

The DW3 said that there was nothing to suggest on examination that there was an electrical fault before the fire.

The DW4 Lilo Joseph Foster Fox testified that the plaintiff had an overdraft account and a term deposit account with the Bank. On 9 September 1993 he had occasion to cause to be written to him for $270 arrears for repayment with a warning that legal action will be taken after 24 September. On 15 October 1993 the plaintiff called in and said his business is slack. He was told to lodge $100 per week to update but he did not keep up with that arrangement. He was written to again on 2 November 1993 and given another chance to pay $630 arrears. He did not honour that. Before the fire, demand notice was to have been served. The plaintiff has a history of default; "it was not a satisfactory account".

The DW5 Vinod Kumar Raniga an accountant with Westpac, Labasa testified that in 1994 the plaintiff had two accounts with them at Savusavu Branch of the Bank. Large amounts were outstanding in these accounts. Until July 1993 his cheques were dishonoured and on 14 December 1993 cheque was returned on personal account. He was written on 23 June 1993 and 22 July 1993 to reduce his debt. On 20 December 1993 he was written to threatening legal action to clear his excess. On 9 December 1993 the plaintiff told the Bank that the business is very low and that he might be arranging funds through National Bank of Fiji. He was advised to pay account as the position is not good and if this trend continues the Bank will commence legal action. The plaintiff was to call again on 20 October 1993 as the Bank had resolved to threaten legal action.

The Labasa Branch Manager of the defendant Anita Devi Prakash (DW6) testified that the plaintiff lodged a claim after the fire. He did not notify that there was going to be a sale of damaged articles.

Inspector Mahendra Prasad (DW7) was the investigating officer in this fire. He arrived at the scene at 2.45 am. He did not find any sign of breaking-in. On inspection he found the mosquito coil on a ‘portable wooden plank’ to which reference was made by fire Officer. He took in his possession a photograph of it which was taken with the Mayor Fong’s camera. He tendered the coil as exhibit (Exhibit D3). He testified that he did not see any pilfering nor did the plaintiff complain to him about pilfering and looting. He did not report to him about any cash missing. He said that he did see a small hole in exterior staircase but it was so small that his hands could not go through it. The plaintiff did not tell him that children threw candle and match through this hole. The witness took a plain statement on 7 Janaury 1994 (exhibit D4) from the Plaintiff. The loss was being ascertained and the Plaintiff gave retail prices for them. Another statement was recorded from him on 6 May 1994 (exhibit D5). In cross-examination when asked by Mr. Kohli: ‘As investigating Officer how you think fire started?’ he replied ‘had suspicion on plaintiff because no break in and item forced - it was plaintiff or his brother to do this’. He said that he did not find evidence to lay a charge.

The last witness was Ronald Thomas Rickman (PW8) a loss assessor. He testified that he provided a report relating to his first visit on 4 January 1994 and he went again on 24 January for stock count and he provided the report in respect of that as well. He also took photographs of inside the shop and tendered them to Court as exhibits. The plaintiff had claimed $58,498. He said that the total stock held at the time of the fire was $39,079.72 (being $37,075.39 for spare parts and $2004.33 for mini market). The claim that the plaintiff lodged with the defendant to be paid for loss was $59,496.00. He said that he appears to claim for stocks that he did not have. The witness said that he was not given any records by the plaintiff at all to substantiate his stock as he claimed that the records had been lost in the fire. The total loss assessed by the assessor is $18,800 for both the spare parts and the supermarket.

The learned counsel for the defendant submitted that the thrust of the defence case is that the defendant was entitled to decline the claim by virtue of the terms of the policy and the common law as being fraudulent and fraudulently exaggerated particulars whereof he has outlined and further the plaintiff had made false statements in support of his claim.

Counsel submits that the evidence supporting the defendant’s case is circumstantial. There was no direct evidence of the Plaintiff having set fire to the premises to recover the insurance monies. He said that such proof is very difficult if not impossible in most cases.

Counsel submitted that the discovery of the mosquito coil set up as an incendiary device is conclusive of deliberateness of the fire as reported by Rickman (DW8) an Insurance Assessor at page 71 of Exhibit D1 where he says:

"It is our opinion due to the location of the fire and the evidence found by the Chief Officer that a number of incendiary devices may have been set with the one found by the Fire Chief to ignite or be consumed by the flames".

On the evidence, counsel asks the Court to draw the inference in the absence of any credible or cogent explanation to the contrary that the plaintiff either by himself or others under his control and direction set fire to the premises and that there would have been more than one incendiary device placed in the premises prior to it being set alight which either contributed to or caused the fire.

It is further submitted that in the absence of a break-in or forced entry into the premises the only person who could have had access to the premises was the Plaintiff and he asks the Court to draw that inference. He was the person who secured the premises for the night.

The Counsel dealt at great length with the plaintiff’s financial position about which he says the plaintiff had not told the whole truth. He said that he told too many lies. The plaintiff’s financial position with his Bankers is not simply that he had outstanding loans but his ability to service them. Counsel submitted that the financial pressure provided a strong motive to set fire.

Counsel then dealt with other evidence on which the defendant relies. He said that the plaintiff told lies about the keys to the shop in that he conceded that his earlier testimony that the police took the keys off him was not correct. He questioned why the Plaintiff did not rush to the fire when he had been informed at 12.45 am by Fong.

The insurance premium was paid on the eve of the fire. Counsel submitted that the plaintiff’s enthusiasm in wishing to make payment on that date is ‘all revealing of the plaintiff’s plot.’ He said in plaintiff’s own word is that he ‘ran’ to pay this.

Counsel said that the plaintiff told lies about the amount of cash found in the shop. He did not complain to DW7 about the missing money when he made statements to the police. Both DW1 and DW7 said that there was no looting reported to the assessor; or that a lot of items had been stolen. The plaintiff told lies about salvage as he told the defendant that there was no salvage when in cross-examination he admitted that he had a sale after the fire realizing $1000.00. Counsel submits that the claim is fraudulent and the plaintiff loses the right to recover anything under the terms of the policies.

On value of loss, counsel said that the plaintiff gave conflicting reasons. The plaintiff said that his total loss is $58,000 but his claim is $55,000.00. He was unable to produce any records of his sales and purchase. He did not call his accountant inspite of the opportunity being offered to do so. The total spare parts loss is given in the police statement was $34,554.04. The supermarket loss came to $2,004.33. Counsel said that the plaintiff’s fraudulent intent is clear in that he wanted to recover much in excess of his actual loss.

Counsel submits that the plaintiff has failed to prove his loss by any satisfactory evidence. The onus of proof is on the plaintiff and in the absence of any such evidence his claim is liable to be dismissed.

On the question of "wholesale and retail price" the plaintiff stated in his evidence in chief that the total figures that he gave to the defendant through the assessor was based on the wholesale prices. In his statement to police he agreed he told DW7 that the figures were retail. Then he said he made a mistake. Counsel submitted that in view of the plaintiff’s plain statement to the police and the evidence of DW7 and DW8 the prices given were retail is an attempt by the plaintiff to recover amounts in excess of his loss which is fraudulent; such conduct is deliberate and wilful.

The plaintiff’s claim for loss is made under the provisions of the two fire policies which were current on the day of the fire. He was entitled to make the claim under, inter alia, the following provisions of the policies (as stated in the defendant’s written submission):

The insurance in respect of the minimarket was first taken out on 27/7/1990 and was subsequently renewed from time to time. The total sum insured was $12,000.00 which was later increased to $22,000.00 in 1992. The last premium paid in respect of this policy was on 3rd January 1994. The Policy number is 321281FCPOO1 exhibited in Plaintiff’s list of documents on page 41. This policy was in existence at the time of the fire.

The insurance in respect of the spare parts was first taken out on 12/12/91. The sum insured was $60,000.00. This policy was renewed from time to time and was in existence at the time of the fire. This policy Number is 326546FCP001 and is exhibited in Plaintiffs list of documents on page 31.

"On the happening of any destruction or damage the Insured shall forthwith give notice thereof to the Company and shall within thirty days after such destruction or damage or such further time as the Company may allow, at his own expense deliver to the company a claim in writing containing as particular an account as may be reasonably practicable of the several articles or portions of property destroyed or damaged and of the amount of destruction or damage thereto respectively having regard to their value at the time of the destruction or damage together with details of any other Insurances on any property hereby insured. The Insured shall also give to the Company all such proofs and information with respect to the claim as may reasonably be required together with (if demanded) a statutory declaration of the truth of the claim and of any matters connected therewith. No claim under the Policy shall be payable unless the terms of this condition have been complied with.

"If the claim be in respect of fraudulent or if any fraudulent means or devices be used by the Insured or anyone acting on his behalf to obtain any benefit under this Policy or if any destruction or damage be occasioned by the wilful act or with the connivance of the Insured, all benefit under this Policy shall be forfeited.

The policies (exhibit P1) issued herein were ‘indemnity’ policies and the maximum liability of the defendant under the policies are the sum insured. [Roumeli Food Stores (NSW) Pty Ltd v The New India Assurance Co. Ltd (1972) 1 NSWLR 227 at 237, Leppard v Excess Insurance Co. Ltd (1979) 2 All E.R. 668].

On the subject of indemnity the following quotation from the judgment of Megaw L.J. in Leppard (supra) at 673 is apt:

"Ever since the decision of this Court in CASTELLAIN v PRESTON, [1883] UKLawRpKQB 69; (1883 11 QBD 380) the general principle has been beyond dispute. Indeed, I think it was beyond dispute long before CASTELLAIN v PRESTON. The insured may recover his actual loss, subject, of course, to any provision in the policy as to the maximum amount recoverable. The insured may not recover more than his actual loss."

"In order to give my opinion upon this case, I feel obliged to revert to the very foundation of every rule which has been promulgated and acted on by the Courts with regard to insurance law. The very foundation in my opinion, of every rule which has been applied to insurance law is this, namely that the contract of insurance contained in a marine or fire policy is a contract of indemnity, and of indemnity only, and that this contract means that the assured, because of a loss against which the policy has been made, shall be fully indemnified but shall never be more than fully indemnified. That is the fundamental principle of insurance, and if ever a proposition is brought forward which is at variance with it, that is to say which either will prevent the assured from obtaining a full indemnity, or which will give to the assured more than a full indemnity, that proposition must certainly be wrong." (emphasis added)

The amount payable must be the amount of the plaintiff’s loss. The amount of an insured’s loss is not necessarily measured by reference to the cost of replacement or repair of the property destroyed or damaged and may be measured in other ways. "In the case of chattels, the measure may be the cost of the chattel destroyed, its market value, its value to the owner as part of a going concern, or the cost of repair of the damage .... [Vintix Pty Ltd v Lumley General Insurance Ltd, (1992) 24 NSW LR 627 at 633, Giles J]. The policy states:

"In consideration of the insured, the company will pay to the insured the value of the property at the time of the happening of its destruction or the amount of such damage or at its option re-instate or replace such property or any part thereof.

Provided that the liability of the company shall in no case exceed in respect of each item the sum expressed in the schedule to be insured thereon or in the whole the total sum insured thereby....."

The defendant is alleging arson on the part of the plaintiff, his servants or agents. The onus and standard of proof is on the defendant to prove the defence of arson.

In Hornal v Neuberger Products Ltd [1957] 1 Q,B. 247 Denning L.J said at 258:

"The more serious the allegation the higher the degree of probability that is required; but it need not, in a civil case, reach the very high standard required by the criminal law".

On standard of proof I refer also to the following passage from the judgment of the Full court in Sheldon v Sun Alliance Australia Limited (1988-1990) 53 SASR at 133-134:

"The standard of proof imposed on the respondent is proof on the balance of probabilities. In considering whether that standard has been met the court must, when a crime or quasi-criminal conduct is suggested, remember and take into account the gravity of the offence. There is no doubt about that. In my respectful opinion it has never been better stated than it was by Walters J in Lemmer v Bertram (1971) 2 SASR 397-400. Walter J said:

"Before canvassing the evidence, I propose to deal with the burden which the plaintiff must accept in proving a claim in a case such as this, where the facts alleged involve an element of criminal or quasi-criminal conduct on the part of the defendant. Although conduct of such kind is really in direct issue on the proceedings, it seems to me that I am bound by authority to hold that the ordinary civil rule as to sufficiency of proof is the proper rule to apply namely, that the plaintiff must prove his case to my satisfaction on the balance of probabilities: cf HELTON v ALLEN [1940] HCA 20; (1940) 63 CLR 691; REJFEK v MCELROY [1965] HCA 46; (1965) 112 CLR 517. Nevertheless, the standard of proof required to tilt the scales in favour of the plaintiff 'may vary according to the gravity of the fact to be proved". This matter was discussed by Dixon J (as he then was) in BRIGINSHAW v BRINGINSHAW [1938] HCA 34; (1938) 60 CLR 336 at 362, where the learned judge said:

"But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether issue has been proved to the reasonable satisfaction of the tribunal."

In determining the issues before me, I have been assisted by useful written submissions from both counsel. I have also carefully scrutinized all the evidence adduced in this case. The facts pertaining to the Plaintiff and his shop premises, and the circumstances surrounding the fire have already been outlined hereabove and I do not wish to reiterate them. However, in considering the issues I shall now deal with the salient features of the case to ascertain the cause of the fire.

It is perfectly clear that there is no direct evidence as to who and how the fire was lit which caused damage to the plaintiff’s Supermarket and Spare Parts. The defendant is relying on circumstantial evidence in regard to the setting of fire which it says points to the Plaintiff or his servants or agents.

There is no doubt that the firemen found a mosquito coil with candles to which match sticks were cello-taped together, which the defendant suggested to be the likely cause of the fire. The plaintiff’s assertion that there was a hole in the wall through which children were dropping matches and candles was not told by him to the Investigation Officer (DW7). The DW7 said that the hole was so small that he could not get his hand through. I agree it would not be possible to put a mosquito coil through such a hole. The plaintiff could not say how the mosquito coil decorated in that manner came to be there. A lot was made of the coil by the counsel for the defendant. On the evidence I am in grave doubts that it could by any stretch of imagination be the cause. The finding of the coil giving rise to the setting of fire could not be more than a suspicion on the plaintiff. Even Mr. Rickman made his statement in this regard on an assumption. On a proper analysis of the evidence in this connection I am inclined to agree with Mr. Kohli’s comments in his written submission which I have quoted hereabove. Despite the constant hosing with water for 15 minutes when everything else around the coil was affected with water and became wet, how is it that the coil was undistrubed and was still dry. Even if the coil was found where it was, it does not establish that it was the plaintiff who planted it there. It does not establish the guilt in the plaintiff.

The plaintiff told the Police and the insurance assessor that a likely cause of the fire was electrical fault. He said that in the past there was a small electrical fault and there was a fire. There is no evidence of any report having been made on this or any evidence was adduced by him in this regard. A qualified electrician Bimal Chand (DW3), an Electrical Supervisor with FEA, at the time in Savusavu found that there was no electrical fault. I am of the view that here the plaintiff thought merely that it was an electrical fault but it was found otherwise. The finding in this regard by the electrician merely eliminated this as a possible cause. It does not establish guilt in the plaintiff.

There were a number of instances in which the plaintiff’s evidence was unsatisfactory and threw doubt on his truthfulness. These instances were about the keys to the premises. At first he said that the police took the keys from him but then later admitted that he kept them after the front door was closed and conceded that his earlier testimony that the Police took the keys was not correct. Also it turned out that there was no looting and pilfering as alleged. He even hid the fact that there was salvage of the damaged goods but he admitted that he realized the sum of $1000 from the sale he conducted. All these go his credibility but they do not go to the root of the matter to establish the cause of the fire looking at all the other evidence.

Although on these and some other matters I do not regard the plaintiff as a witness of truth but to use the words of Robertson J in Luscombe (supra) at page 19 the defendant still has to discharge its onus:

"the fact that I do not accept the plaintiff’s evidence does not mean that the defendant has discharged its onus. The defendant is still required to establish that the plaintiff lit the fire according to the standard of proof to which I already referred."

The defendant through lengthy cross-examination of the plaintiff attempted to show that because the plaintiff was in financial difficulties this could be one of the motives to set fire and claim for loss from the defendant. No doubt there are certain unsatisfactory features in the plaintiff’s evidence when he tried to paint a rosy picture of his financial position at the time of the fire but that was not what he made it out to be. However, like most businessman, I find that he had debts to pay and he had his ups and downs. I find that on the evidence before me from the bank officers who testified the scale tips in his favour to show that he was not in that dire straits to force him to set fire as alleged. There was no actual or concrete action taken by any bank against him. The nature of evidence in regard to his financial situation is not such as to establish that this would have led the plaintiff to set fire to his own goods. On the evidence in regard to his financial position it can only be said that there is some evidence of a possible motive if one accepts that the plaintiff’s business had greatly deteriorated.

The Counsel for the defendant suggested that one of the motives to set fire could have been to claim under the fire insurance policies. But then as stated by Judge Robertson in Luscombe v QBE Group (Investments) Limited No. DC CIV-96-463 (1998) (District Court of South Australia) at page19:

"The absence of a clear motive is not fatal to the defendant’s case. In other words the defendant does not need to establish a motive in order that the onus of proof is discharged. At times there may be difficulties in identifying a specific motive."

And as Tadgell JA said in Transport Industries Insurance Co. Ltd v Longmuir (1997) 1VR 125 at 136:-

"The operations of the mind being invisible and intangible, there may be motives, which no human being but the party can divine: Wills, Principles of Circumstantial Evidence 7th Edition (1937) page 65."

The onus of proof as stated earlier rests on the defendant. The defendant asserts that the fire was lit by the plaintiff or his servants or agents.

On the evidence before me I find that the defendant has not discharged the burden of proof that lay upon it to satisfy the court that the plaintiff had anything to do with the fire in his premises.

A very high degree of proof is required in a case of this nature where arson is alleged. The evidence must be clear and convincing but it is not the case here. I have already stated the law on this aspect hereabove. Further authorities on the subject talk of a higher degree of probability where, as in this case, there is allegation of a fraudulent claims. In Bater v Bater [1950] 2 All E.R.458 at 459 Lord Denning said:

"A civil court, when considering a charge of fraud, will naturally require a higher degree of probability than that which it would require if considering whether negligence was established. If does not adopt so high a degree as a criminal court, even when it is considering a charge of criminal nature, but still it does require a degree of probability which is commensurate with the occasion."

Since the defendant is relying on circumstantial evidence in regard to the cause of fire it is important that one should bear in mind the law as to circumstantial evidence which has been so succinctly put and is so apt by His honour Judge Robertson in Luscombe (supra) that I ought to state it here. There at pages 19-20 he said:

In this case the defendant relies entirely upon circumstantial evidence to establish its case. The defendant submits that, taking into account the gravity of the assertion it makes, on the whole of the evidence the conclusion can be drawn on the balance of probabilities that it was the plaintiff who lit the fire. Assistance may be gained in dealing with a case based upon circumstantial evidence from the observations of Tadgell JA in Transport Industries at page 141:-

"As will be seen, I respectfully differ from the learned judge upon several of the individual conclusions of fact which he drew from the evidence and which he considered to preclude a finding that the respondent was responsible for the fire That aside, it should be said that, to assess the evidence in a case like this by reference to various individually-pleaded particulars, as though running through items on a check list, is apt to mislead. The evidence is to be evaluated as a whole in order fairly to consider whether the party bearing the onus of proof has established what is ultimately sought to be proved. The object of the exercise of evaluation is to discover whether the evidence paints a picture reflecting real life, rather than to place a tick or a cross against paragraph after paragraph of torpid pleading. A true picture is to be derived from an accumulation of detail. The overall effect of the detailed picture can sometimes be best appreciated by standing back and viewing it from a distance, making an informed, considered, qualitative appreciation of the whole. The overall effect of the detail is not necessarily the same as the sum total of the individual details: cf Hall (Inspector of Taxes) v Lorrimer [1992] 1 WLR 939 at 944 Sherpherd v R [1990] HCA 56; (1990) 170 CLR 573 at 579-80.

In a civil case like this, where there is no direct evidence of a fact that a party bearing the onus of proof seeks to prove, "it is not possible to attain entire satisfaction as to the true state of affairs" Girlock (Sales) Pty Ltd v Hurrell [1982] HCA 15; (1982) 149 CLR 155 at 169, per Mason J. In such a case, however, the law does not require proof to the "entire satisfaction" of the tribunal of fact. A definition of the sufficiency of circumstantial evidence in a civil case to support proof by inference from the directly proved facts was given by the High Court in the unreported case of Bradshaw v McEwans Pty Ltd (27 April 1951) in a passage since repeatedly adopted: e.g. Luxton v Vines [1952] HCA 19; (1952) 85 CLR 352 at 358; Holloway v McFeeters [1956] HCA 25; (1956) 94 CLR 470 at 480-I: Jones v Dunkel at 304; Girlock’s case, at 161 and 168. The relevant passage in Bradshaw’ case is that is:

‘Of course as far as logical consistency goes many hypotheses may be put which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence, while in the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort, where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees or probability so that the choice between them is mere matter of conjecture; see per Lord Robson, Richard Evans & Co Ltd v Astley [1911] UKLawRpAC 47; [1911] AC 674, at p.687]. But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then, though the conclusion may fall short of certainty, it is not to be regarded as a mere conjecture or surmise..." (emphasis added)

On the authorities, I find that on the whole of the evidence the defendant has not established that the circumstantial evidence is such that the Court can come to no other conclusion but that the plaintiff, his servants or agents are guilty of setting fire to the goods.

The defendant has alleged that the plaintiff’s claim is false and fraudulently made and hence his claim should be dismissed altogether under the terms of the fire insurance policies. In this regard the intent to defraud must be established (Sampson v Gold Star Insurance Co. Ltd [1980] 2 NZLR 742 at 746-7 where Barker J said:

"However, the statement in the claim form went beyond error or carelessness; it was a deliberate falsehood and struck at the good faith which is still at the heart of all insurance contracts".

Here I am not satisfied on evidence that the statements regarding the loss were made with a view to defrauding the defendant insurer nor has fraud been established to enable me to consider dismissing the claim altogether. One has to look at the whole of the circumstances under which the amount in the claim has been calculated.

I have carefully analyzed the whole of the evidence in this regard. It is clear from the evidence that after the fire the plaintiff was not able to produce any relevant invoice books and books of account to prove his claim as most of his records were destroyed. However, his accountant could have thrown some light on the plaintiff’s business and the stock he carried had he been called; but he did not call him despite opportunity having been given to him. He rested his case on his own evidence. However, since he lost his books and papers in the fire he had to rely entirely on some record which were not affected by fire. In these circumstances it is quite possible that the amount claimed by him is not entirely correct and could give rise to an exaggerated claim.

In the absence of a proper basis for his calculation I am not satisfied entirely with the amount claimed and therefore I am not convinced that he is entitled to the full amount.

The insurance assessor Rickman assessed the loss from whatever he saw and from information supplied to him by the plaintiff. The prices of items given by the plaintiff were retail whereas they should have been wholesale.

The plaintiff made the claim for total loss in the sum of $55,000.00, that is, for the entire stock he had before the fire as none of the items he says could be sold due to either water or smoke damage. However, the plaintiff also gave police a different amount in his written statement of 7 January 1994 thus:

Total value of stock damaged by water in the spare parts section $9,380.61. Total value of spare parts and accessories damage by fire 25,173.43

The above figures were arrived at after each item was checked and record made by policman Kush Ram.

All the above makes the total loss at $36,558.37 (made up of $2004.33 + $9380.61 + $25,173.43). Mr. Kohli submitted that the stock count after fire would not reflect value of items that would be completely destroyed by fire and therefore could not be counted.

In his writ of summons the plaintiff claims the sum of $55,000 being for both the supermarket and spare parts loss. The claim lodged with the defendant is as follows (as per exhibit D7):

Parts	$55,400.98
Mini Supermarket	$ 4,095.30

Total	$59,496.28

The insurance assessor’s evidence on loss is also reflected in exhibit D7 thus:

Total parts Stock at Retail	$30,044.40
Plus 15% Error	4,506.66
	*$34,550.70*
Estimate of Mini Supermarket	$ 2,600.00
*TOTAL STOCK*	*$37,150.70*
Parts Loss Retail	$18,428.68
Mini Market Loss	$ 1,750.00
*TOTAL LOSS RETAIL*	*$20,178.68*

In the light of the evidence before me and the documentary evidence including statement to police on 7 January 1994 by the plaintiff in relation to the loss, I have to ascertain the value of the loss.

Conflicting loss figures have been given by the Plaintiff and they are retail prices. In his statement of 7 January he said that his ‘stock in mini supermarket’ was $2004.33; that the ‘total value of stock damaged by water in the spare parts section’ was $9,380.61; that the ‘total value of spare parts and accessories damaged by fire’ was $25,173.43. This makes the total loss in spare parts the sum of $34,554.04. This figure was arrived at in the presence of the police officers. Although Rickman has given a different figure on 28 January 1994 when he did the assessment on 24 January I prefer to accept the figure of $34,554.04 as loss at retail price and this figure was arrived at in the presence of the police. However, the price should have been at wholesale price to get the correct value of the loss in this type of case. So that after allowing 25% reduction on $34,554.04 it comes to $25,915 which is the same percentage rate that Rickman allowed. In this type of industry profit margins on spare parts etc. are quite high. The plaintiff has also accepted that the prices should have been at wholesale price. The claim of $55,000 in the writ is I would say an exaggerated claim.

Now, as to loss in the Mini Market the plaintiff has himself stated in his said statement of 7 January that a ‘total value of stock in Mini Supermarket’ was $2004.33. However, Rickman has given his estimate of the loss in his report as the ‘true net loss in the Mini Market at no more than $1750.00'. I accept this figure of $1750.00.

Now, as for defendant’s Counterclaim, the agreed figure is $1240.38. But because the plaintiff has succeeded in his claim the counterclaim will be dismissed.

There was a sale of damaged articles which realized the sum of $1000 and this amount is still with the plaintiff. This has to be deducted from the amount of the loss that I have estimated.

In the outcome, the total sum I would award for the loss claimed, based on my above findings and estimation is $26,665.00 made up of $25,915 for spare parts loss and $1750 for mini market loss making a total sum of $27,665 and deducting therefrom the said sum of $1000 being the proceeds from the sale of damaged parts.

To conclude, after evaluating the evidence as a whole I have reached the conclusion on the balance of probabilities, for the reasons given above and bearing in mind the gravity of the assertion made by the defendant, that the defendant has not discharged the onus of proof that lay upon it that the fire was lit by either the plaintiff or his servants or agents as a result whereof loss resulted to the plaintiff’s goods in the fire.

The answers to the said issues in this case therefore are that (1) the plaintiff had lawful claim to the losses suffered, (2) there has not been a breach of any condition of the policies by the plaintiff as alleged by the defendant and (3) the plaintiff is entitled to be indemnified for the losses suffered although not in the full amount claimed.

Accordingly the plaintiff succeeds partially on his claim. There will therefore be judgment for the plaintiff in the sum of $26,665.00. The defendant’s counter-claim is dismissed. In the circumstances of this case I order that each party bear his or its own costs.

High Court of Fiji

Nand v Dominion Insurance Ltd [2000] FJHC 167; HBC57.1996 (30 June 2000)