No proven motive, but factory fire deliberate

By Kate Tilley, Resolve Editor

The director of a bed manufacturing business deliberately burnt down the factory and lodged a fraudulent insurance claim, a Queensland Supreme Court judge has found.

Despite that, Justice Martin Burns found the insurer had not sufficiently proved motive by Cassa Bedding Pty Ltd’s sole director, John Cassimatis, although the insurer had argued Mr Cassimatis stood to gain financially.

Justice Burns said: “There is a difference between a case where there is an absence of proven motive and a case where there is a proven absence of motive.”

Cassa Bedding operated from leased factory premises at Yeerongpilly, a Brisbane suburb. On Saturday evening, 29 August 2015, the factory burnt to the ground and all contents, including Cassa’s equipment, manufacturing supplies and completed stock, were incinerated.

Cassa promptly claimed on its policy with IAG (Insurance Australia Ltd, formerly CGU). After a lengthy investigation, IAG refused to pay the claim, alleging Mr Cassimatis had deliberately started the fire. It relied on an exclusion for loss or damage caused by a wilful act by the insured and argued the claim was fraudulent, contravening the Insurance Contracts Act 1984.

The policy limits were:
(a) contents (excluding stock) $2.31 million
(b) stock $695,000
(c) business interruption $3.5 million (gross income)
(d) payroll $520,000
(e) increased cost of working $550,000
(f) claim preparation $25,000
(g) rewriting records $25,000.
 

Director alone

IAG argued there were various circumstances from which arson could be inferred, including:

• Mr Cassimatis was alone in the factory before the fire started
• There were two separate fires, one outside the factory in a skip bin and at least one inside the building
• Mr Cassimatis drove away from the factory in darkness without his headlights illuminated to avoid detection
• He again switched the car lights off as he passed the Yeerongpilly Railway Station to avoid detection
• He misled investigators about the time he left the factory
• He had a financial motive to burn the factory.

Justice Burns said “clear and cogent proof” was required “to induce, on the balance of probabilities, an actual persuasion of the mind as to the fire having been started by Mr Cassimatis and that he (through Cassa) knowingly advanced a fraudulent claim on the policy of insurance”.

“The facts proved must give rise to a reasonable and definite inference the fire was deliberately lit and the claim fraudulently made. If the facts proved merely give rise to conflicting inferences of equal degrees of probabilities, the choice between them will be mere conjecture and could never sustain a finding of wrongdoing”.

Justice Burns said there was voluminous evidence about financial motives for arson, but that alleged motive could not be satisfactorily proved.

“While the existence of opportunity and motive may bolster an insurer’s case, proof of either or both can never be determinative, especially where evidence connecting the insured with the fire is weak. On the other hand, the absence of any motive may be a powerful consideration against a finding of wrongdoing.

“Of course, it must steadfastly be kept in mind that the insured has no onus to prove an absence of motive but where the evidence adduced is such that the tribunal of fact can conclude an insured had no motive to, for example, destroy insured property to make a fraudulent claim on a policy, that will be a strong factor weighing against an inference to the contrary effect.”
 

Common sense conclusion

However, Justice Burns found there was insufficient time for a fire in the area of the skip to radiate to inside the factory and then cause a fire of the magnitude observed by a Qld Fire and Emergency Services officer who gave evidence and from other onlookers who saw the fire.

He said once nearby CCTV footage and fire experts and onlookers’ observations were heard and seen, arson was the only common sense conclusion.

Mr Cassimatis’s suggestion he did not notice the fire in the skip bin when he left, while callers to 000 only minutes later reported a “building on fire, fully on fire”; “everything is fully ablaze”; “flames coming out of the windows” was “simply preposterous”.

Justice Burns said Mr Cassimatis’s account was “a shameless concoction”.

“Mr Cassimatis repeatedly lied under oath and, while there can be no doubting his intelligence or ability to parry under cross-examination, he left me with the firm impression he had given a great deal of thought to how he might explain away any aspect of the evidence he believed might implicate him in starting the fire, and … he had ample time to do so.”

IAG argued the business, while growing, was undercapitalised; unable to pay liabilities, such as employees’ superannuation; Mr Cassimatis and his wife could not inject further capital because of their “high levels of personal debt”; and Mr Cassimatis knew a major customer, accounting for 25% of sales, was “in serious financial difficulty and likely to fail”.
 

Evidence not clear

Justice Burns was not satisfied IAG had clearly identified and proved to the standard required the existence of a motive to burn down the factory. However, he couldn’t conclude there was no motive, “only that the evidence could not be sufficiently disentangled to draw a conclusion one way or the other”.

The evidence established there was insufficient time for a fire in the skip to cause a fire inside the factory, so at least one other fire must have been started inside the factory at about the same time.

“Mr Cassimatis was alone in the factory when the fires were set. He was the only person with the opportunity to access the skip through the adjacent door, return inside, light the fire or fires inside, set the alarm, secure the building and then make good that escape.

“After doing so, Mr Cassimatis endeavoured to avoid detection by switching off the headlights to his vehicle at different times and lying to investigators about the time he left the factory,” Justice Burns said.

He was “mindful of the gravity of such a conclusion and the consequences to Cassa and Mr Cassimatis in reaching it. I was also cognizant of the evidence that Mr Cassimatis was widely respected within the bedding industry and I took account of the inherent unlikelihood that someone like him would commit arson and attempted fraud”.

“However, as a measure of human behaviour, logic is an imprecise ruler, and that is especially so where criminal conduct is concerned. Such conduct is not infrequently illogical, if not irrational, and often times inexplicable,” Justice Burns said.

Cassa Bedding Pty Ltd v Insurance Australia Ltd [2022] QSC 1 judgement 18/1/22