Proceedings in the Local Court
7 In the Local Court proceedings, the plaintiff pleaded that on 28 May 1999 at about 2.30 am his 1996 Holden Commodore motor vehicle was set on fire by a person or persons unknown to him. A claim was made by the plaintiff under the contract of insurance, and the defendant refused to pay the claim. The plaintiff sought damages in the amount of $23,625 (being the agreed value less salvage value of $1,000 and excess $375), interest and costs, for breach of contract of insurance.
8 It is common ground that the contract of insurance contained, firstly, an exclusion clause, namely that the policy did not include "loss or damage intentionally caused by you or a person acting with your express or implied consent"; and secondly, a provision which stated "We may refuse a claim or cancel the policy or both if you are not truthful and frank in any statement you make in a claim or in connection with a claim", and this was pleaded in the defence. I shall refer to it as the first ground of defence. There were further defences raised, namely, that the plaintiff failed to comply with his duty of disclosure when he entered into the policy and fraud.
9 The Magistrate in her reasons for judgment stated:
"It is time for a decision in terms of this general division civil claims matter that is brought by the plaintiff Erdal Ayteniz against the defendant in this matter, the NRMA Insurance Limited.
It is the plaintiff's contention that under the terms of his insurance contract the defendant, the NRMA, is contractually obliged to pay out his fire written-off car at an agreed value.
The defence contend that they are not under any obligation to pay out Mr Ayteniz's claim because the damage arose from an act intentionally caused by Mr Ayteniz, or occurred with his consent, for which the defendant is specifically not liable under their policy.
I have heard a grant deal of evidence on this particular point, regarding the events and circumstances of the very late evening of 27 May and the very crucial first three hours of the morning of 28 May, back in 1999. I have also heard a great deal about Mr Ayteniz's, and his brother-in-law, Mr Ant's movements that night and what happens when they leave the eventually fire burnt-out car at Clifton Gardens and they go fishing some 100 to 200 metres away on the wharf at Clifton Gardens.
It is Mr Ayteniz's claim that his car was damaged otherwise than with his involvement or consent, and he is obliged to prove that to me on the civil standard, on the balance of probabilities, that is, as a proposition it is more likely than not that on balance the damage was caused by someone else.
The grave and serious problem with accepting the plaintiff's contention is that the car was locked, the windows are up, the bonnet is down, the petrol flap is shut, when the plaintiff leave the car in the Clifton Gardens carpark, and he walks with his brother-in-law the 100 to 200 metres or so down the Clifton Gardens wharf and sat fishing for somewhere between half an hour, on Mr Ant's evidence, an hour on Mr Ayteniz's evidence - nothing turned on that - and they still have a direct sight line back to the car. They do not hear any sound and no alarm goes off in the car.
The bonnet of the car has clearly, on balance, been opened. Normally that would trigger the car alarm. On balance, accelerant has been put over the engine in the engine bay and the bonnet has been closed again. The damage is major to the engine bay much more so, according to Mr Simpson, than would be expected if fuel was simply poured over the car from the outside, bonnet closed, and flowed down the usual rain water exits, through the engine bay to exit beneath the car.
There were no signs of forced entry into the car or the bonnet. There arose an inescapable inference from that, and the fact that the petrol flap had been released, which is only releasable from a lever near the driver's seat, inside the car, and it was an inference pointing to the involvement of a person with key access. That sole person, on his own admission, is Mr Ayteniz.
Clearly, at first blush, there is a circumstantial case that pointed to Mr Ayteniz's involvement in damaging his own car. Two people are there witnessing, and they gave evidence to me today -well over the last two days - about how, as witnesses, how they became aware that Mr Ayteniz's car was on fire. Those two witnesses differed markedly. That was Mr Ant and Mr Ayteniz. That, to me, was rather crucial. Mr Ant says the flames drew his attention up to the burning car. Mr Ayteniz says fishing, facing the harbour, there's a loud explosion, made them turn around, they looked up, they could see the burning. Whether Mr Ant and Mr Ayteniz were in fact fishing, given that the police make a note that the lines are dry and tied off with no hooks or sinkers, at first blush again, that was a minor point. But Mr Ayteniz says that Mr Ant did all the tidying up of the rods, and tying off of the lines, the taking off of the hooks and the sinkers while he, Mr Ayteniz, is talking to the police. Mr Ant says that no such thing happened. Well Mr Ant said no such thing.
In two days the car's registration is going to run out, but there is no green slip for reinsurance obtained at that point.
There is no evidence at all that the damage arose from an independent criminally motivated car burner. The only partial explanation that Mr Ayteniz can give for the damage is that someone has poured petrol from the outside, all over the car and lit it. But that is against Mr Simpson's evidence and the evidence of my own observations of the damage to the engine bay, here in exhibit 8.
This person has no access under the bonnet to place accelerant on the engine. But even if this independent criminally minded person could have forced their way under the bonnet, they have done so in complete silence, and replaced the bonnet down such that signs of forced entry were not evidence (sic). There are no noised (sic) heard by Mr Ant or Mr Ayteniz. If this independent criminally motivated car burner brought a hose with him to siphon from the petrol from the accidentally open tank, he took that hose with him, but he left his petrol can. It makes no sense that you torch a car for no motive, other than entertainment, and you do not stay to watch it or enjoy it, when there are clearly four people in view who are going to prevent your enjoyment of that fire as soon as the flames become apparent.
The idea that someone completely unrelated to Mr Ayteniz burnt this car is so inherently unbelievable that it merely serves to throw suspicion back on Mr Ayteniz.
I am not satisfied, on the balance of probabilities, that this damage to Mr Ayteniz's car was inflicted by someone unconnected to him and on balance it appears quite the reverse.
THERE IS A VERDICT FOR THE DEFENDANT, BEING ENTERED AND THIS BEING A CIVIL JURISDICTION, COSTS FOLLOW THE CAUSE."
10 The portions that are in bold are those that the plaintiff's counsel referred to as the critical passages.
11 It is common ground that the passage below correctly reflects the law in relation to wilful misconduct. In Craig v Associated National Insurance Co Ltd (1983) 71 FLR 455 Carter J posited at 456:
"In respect of the defence of wilful misconduct the question is whether it is for the plaintiff to disprove the allegation that he deliberately set fire to the vessel as well as proving the facts necessary to entitle him to be indemnified, or whether the onus is on the insurer to prove the allegation of wilful misconduct as particularised."