Worth v HDI Global Specialty SE

Solicitors: LMI Legal (Appellant) McInnes Wilson (Respondent) File Number(s): 2020/112258 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Citation: [2020] NSWSC 249 Date of Decision: 19 March 2020 Before: Parker J File Number(s): 2016/326625

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] On 1 September 2015, the appellant's home was substantially destroyed by fire. She also operated a childcare business from the ground floor of the two-level property. The appellant spent the evening of 31 August 2015 caring for her elderly parents at their home. On that evening when she left her home she switched on an electric screen displaying pictures of Tahiti. She returned to the house at 9am and remained until 9:28am, during which time she did not switch off the Tahiti screen but did turn on a cooktop element on the kitchen stove to boil an egg. At 9:36am a passing driver telephoned the police and reported that smoke and flames could be seen coming from the windows on the first floor balcony of the house. The forensic evidence established that there were two independent sources of ignition of the fire. The first was in or around the eastern end of the living room on the first floor and was responsible for all of the damage to the house. The second was on the cooktop in the kitchen, as a result of the element being left on and burning a 200-page 'game guide' book, part of which was found on the cooktop surface. The house and business were insured under the respondent's Home Based Business Property Insurance policy. The policy was for 12 months from 20 August 2015. The building was insured for $500,000, the contents for $80,000 and the business for 12 months of business interruption losses up to a limit of $132,000. By a Deed of Release dated 16 December 2015, and whilst the cause of the fire remained under investigation, the respondent granted a "conditional indemnity", under which it agreed to pay the appellant in accordance with the policy. In turn, she agreed to repay those moneys in the event that a "police force" found that she had deliberately caused the fire. The respondent made preliminary payments totalling $98,000. On 23 September 2016, the respondent advised the appellant that it denied her claim, relying in part on a police forensic report concluding that the fire had been deliberately lit. The appellant commenced proceedings in November 2016. She sought the following: the costs of reinstating her home; 12 months of business interruption losses; damages for consequential loss of business revenue for the period after the expiry of that 12 months and continuing; and damages for personal inconvenience arising from the respondent's failure to meet her claim and alleged breaches of its obligation to act with utmost good faith under Insurance Contracts Act 1984 (Cth), s 14(1). Those claims as formulated were made under the Deed of Release as distinct from the insurance policy. The respondent by cross-claim sought to recover the payments made to the appellant and damages for her breach of the duty of utmost good faith in making an allegedly false claim. The primary judge dismissed the appellant's claims, finding that she deliberately lit the fires in the kitchen and the living room. On 17 April 2020, judgment was entered for the respondent on its cross-claim for $194,505 plus interest. The principal issues in the appeal were: (i) whether the primary judge erred in finding that the appellant had deliberately lit the kitchen fire; (ii) whether, having made that finding, the primary judge erred in finding that the appellant had deliberately lit the living room fire; (iii) in the event that those questions are answered in the affirmative, the relief to which the appellant was entitled. The Court held (per Macfarlan and McCallum JJA, Meagher JA dissenting), allowing the appeal, that the primary judge erred in concluding that the fire had been deliberately lit. In relation to issue (i):

1. Per Macfarlan and McCallum JJA: The primary judge failed to exclude the hypothesis identified by the appellant's expert as to how the kitchen fire may have started without human intervention as a reasonable possibility. The respondent's hypothesis rested on "impermissible speculation": at [3] (Macfarlan JA); [235], [270]-[271], [275] (McCallum JA).
2. Per Meagher JA, dissenting: The evidence disclosed no plausible explanation for how the game guide could have ended up positioned on the cooktop without human intervention: at [92] (Meagher JA). In relation to issue (ii):
3. Per Macfarlan and McCallum JJA: The primary judge erred in rejecting as fanciful the possibility that an electrical fire originating in the Tahiti screen caused the living room fire. The evidence did not allow any reliable inference to be drawn about the materials from which the screen was made, how it might have responded to electrical malfunction, or the manner in which it might have fallen: at [4] (Macfarlan JA); [277]-[279] (McCallum J).
4. Per Meagher JA, dissenting: The possibility that the Tahiti screen had caused the living room fire was "fanciful" and was apt to be disregarded: at [67] (Meagher JA). In relation to issue (iii) (relief) (per Meagher JA, Macfarlan and McCallum JJA agreeing):
5. The amount payable to the appellant for property damage was to be calculated on an indemnity basis rather than a reinstatement basis. The appellant failed to commence reinstatement "with reasonable despatch". That position under the policy was not altered by the existence of the Deed of Release, under which the promise was to make payments "in accordance with the Policy" including the "basis of settlement" proviso: at [6] (Macfarlan JA), [171]-[176] (Meagher JA), [207] (McCallum JA). CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2, applied.
6. Under the policy the appellant was entitled to 12 months of business interruption losses. Her claim for such losses after that date was not to an indemnity under the contract but to damages for consequential losses arising from the insurer's breach of its promise to indemnify. That claim was not maintainable under the policy because, according to the analysis in Globe Church Incorporated v Allianz Australia Insurance Ltd (2019) 99 NSWLR 470; [2019] NSWCA 27, it was a claim to damages for late payment of damages. Nor was it maintainable under the Deed of Release, which did not extinguish or supersede her claims under the policy. Accordingly, that Deed did not substitute any promise to pay money for the appellant's claims to unliquidated damages for breach of the insurer's obligation under the policy: at [6] (Macfarlan JA), [179]-[191], [192]-[195] (Meagher JA), [207] (McCallum JA). Globe Church Incorporated v Allianz Australia Insurance Ltd (2019) 99 NSWLR 470; [2019] NSWCA 27, applied; Brescia Furniture Pty Ltd v QBE Insurance (Australia) Ltd (2007) 14 ANZ Ins Cas 61-740; [2007] NSWSC 598; Maxwell v Highway Hauliers Pty Ltd (2013) 45 WAR 296; [2013] WASCA 115; Hungerfords v Walker (1989) 171 CLR 125, considered.

Judgment

1. MACFARLAN JA: I have had the advantage of reading in draft the thorough judgments of Meagher JA and McCallum JA on this difficult appeal. I agree with the orders proposed by McCallum JA and with her Honour's reasons. I add the following observations.
2. For good reason, both their Honours focus on the expert evidence. Unless that evidence is concluded to provide strong support for the respondent insurer's case, that case must fail as the remaining evidence falls well short of making out a case of arson on the part of Ms Worth. As Meagher JA accepts, Ms Worth appears to have conducted "a happy and well-provisioned childcare business" from the home in which she lived with her 12 year old son ([139]). Moreover the evidence of a financial motive of Ms Worth to destroy her home could not be described as strong (see [135]).
3. As to the expert evidence, I agree with McCallum JA that the hypothesis identified by Ms Worth's expert, Mr Gardner, as to how the kitchen fire may have started without human intervention was not excluded as a reasonable possibility ([271]). Moreover the contrary theory leaves unexplained a number of puzzling questions identified by McCallum JA at [272]-[274], including: if Ms Worth intended to commit arson, why would she have placed the game guide on only half of the activated cooking element and not on the whole; and if she had had that intent, why would she have moved the smouldering game guide off the hot element but left it still partially on the cooktop, and proceeded to start a fire elsewhere in the house (that is, in the living room).
4. As to the other topic of expert evidence, I agree with McCallum JA that if, as was the case, the occurrence of an electrical fire in the Tahiti wall screen was not excluded, the possibility of the living room fire occurring without human intervention could not be excluded without reliance on impermissible conjecture ([280]).
5. In these circumstances, I do not consider that the evidence gave rise to "a reasonable and definite inference" that Ms Worth intentionally caused the fire that destroyed her home (Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5). The appeal should therefore be allowed.
6. On the issues on the appeal concerning damages, I agree with Meagher JA.
7. MEAGHER JA: On 1 September 2015 the appellant Ms Worth's home, from which she also operated a childcare business, was destroyed by fire. She made a claim upon her property insurance, which was rejected on the basis that she had deliberately lit the fire. That defence was upheld (Worth v International Insurance Company of Hannover SE [2020] NSWSC 249). Ms Worth appeals from the orders giving effect to that judgment.
8. The home, in Tweed Heads, was substantially destroyed by a fire on the morning of Tuesday 1 September 2015. Ms Worth lived in that two level house with her son Joshua, then aged 12. She operated the childcare business from the ground floor.
9. The property and business were insured by the respondent insurer, Interhannover, under a Home Based Business Property Insurance policy - the building for $500,000, contents for $80,000, and the business for a 12 month period during which its results were affected, up to a limit of $132,000.
10. As at December 2015, and as between the parties, the cause of the fire remained "to be determined". By a Deed of Release dated 16 December 2015, the insurer granted a "conditional indemnity" to Ms Worth, the relevant condition requiring repayment of any moneys paid in the event of a finding by a "police force" that she had deliberately caused the fire. Preliminary payments totalling about $98,000 were made. On 23 September 2016, Interhannover formally advised Ms Worth that it denied her claim, relying in part on a police forensic report that the fire had been deliberately lit.
11. The appellant commenced the underlying proceedings in November 2016. As finally formulated her claim was for the cost of reinstating the home ($495,000, rather than its "indemnity basis" value of $400,000), for contents at an agreed value of $80,000, and for business interruption loss. In this Court the business interruption claim is to an amount of $54,292, or alternatively $45,708. All of these claims were made under the Deed of Release, which is said to have "superseded" the policy and to constitute an enforceable agreement that the insurer would make payments in accordance with the terms of the policy.
12. Two further claims were made. Each was for breach of the insurer's statutory obligation to act with the utmost good faith (Insurance Contracts Act 1984 (Cth), s 13) and alternatively for breach of its obligation to indemnify within a reasonable time, which it is agreed would have resulted in the rebuilding of the home and place of business within 9 months. The first of these claims was for consequential loss, being the business revenue that would have been received had the business operated during the period of delay, said to be continuing. The second was for "personal inconvenience" suffered by Ms Worth. An amount of $50,000 was claimed as general damages for that inconvenience and its consequences.
13. The primary judge (Parker J) dismissed Ms Worth's claim, finding that she deliberately lit the fire. Having done so, on 17 April 2020 his Honour entered judgment for Interhannover for $194,505 plus interest on its cross-claim to recover payments made to Ms Worth under the policy and Deed of Release, and by way of damages, additional expenses incurred in investigating her claim prior to the commencement of proceedings.

The circumstances of the fire

1. On the evening before the fire Ms Worth and her son stayed with her parents, who lived nearby. They had just returned from an ocean cruise and were unwell. Ms Worth checked on her parents' condition regularly throughout the night of 31 August. Prior to leaving her home on that evening, she had turned on a "portable radio" in the dining room and an electronic "Tahiti picture" screen, which was on the north-facing wall of the stairwell from the ground floor to the living room (the Tahiti screen).
2. By the early morning, her father's condition had worsened and an ambulance was called. It arrived at about 8:15 am and took him to Tweed Heads Hospital. Shortly afterwards, she drove her son to school, arriving at about 8:25 am. She then delivered crockery, tablecloths, sandwiches and other "party supplies" to the home of a friend of her mother who was having her 80th birthday that day. Having done so, Ms Worth drove home, arriving at about 9 am.
3. She remained in the house between 9 and 9:28 am, and then left to visit her father in hospital. She did not turn off the radio or picture screen. She did, however, turn on a hotplate on the kitchen stove because she had decided to boil an egg. At about 9:36 am, eight or so minutes after she had left the house, a passing driver telephoned the police to report that smoke and flames were coming from the area of or above the windows which looked onto the first floor balcony on the eastern and street side of the house. Below is a plan of the first floor area of the home.
4. The balcony is shown adjacent to the living room. The position of the kitchen cooktop is indicated by four small circles above the word "Kitchen". The configuration of the living room, and in particular the position of the "Tahiti picture", is shown in the sketch reproduced in [34] below.
5. The expert evidence was held to establish that the point of origin of the fire was on or near the eastern end of the L-shaped lounge in the living area on the first floor, where "there was no electrical source" (Judgment [291]). The primary judge also found that a separate fire had occurred on the cooktop as a result of the leftmost cooktop element, which had been left on, burning the underside of a 'Lego Marvel Superheroes' game guide lying directly on top of the element. A photograph (E150, being part of exhibit E) of an undamaged copy of that game guide (back cover facing up) beside the mostly charred remaining part of the game book recovered from the cooktop surface appears below. Also below is a photograph (E64) of the cooktop surface, taken on 2 September 2015 before it was cleaned, which shows the charred remains of the game book in the position in which it was first found, partly on the left side of the cooktop surface (but not on any part of the element). Photo E74 (at [75] below) is a close up picture of the remains of the game guide in that position. Photo E150 Photo E64
6. The back cover as shown in photo E150 is face down on the cooktop surface in photos E64 and E74. The facing page is page 101, as shown in photo E158 below, which shows the remains of the game guide facing up and beside an undamaged copy of the book. Photo E158 The balance of the book - the cover page through to page 100 - is not present in photos E64 and E74, which were taken by Mr Forbes.
7. An understanding of the issues concerning the remains of the game guide found in the corner of the cooktop is assisted at this point by reference to the primary judge's reasons at J [141]-[144]: As already mentioned, the charred remains of the game guide which were found on the side of the cooktop were missing the first one hundred pages and the front cover. The back of the game guide had semi-circular burn marks which corresponded to the shape of the cooktop, but the book itself was found resting partially on and partially off the left hand side of the cooktop so that the back was not actually on the element. The tests which were done at Londonderry in October 2015 [the experiments were conducted at the NSW Fire and Rescue Fire Research Facility at Londonderry by Mr Forbes and Detective Wilcox] were directed towards understanding how this could have happened. One hypothesis was that the game guide had been left open with the first one hundred pages draped over the top of the cooktop; the thought was that those pages could have been ignited and wholly consumed, and the roughly semi-circular burn mark could have been created by fire spreading from the front pages to the bottom of the back of the game guide. But the test results did not support this hypothesis. Opening the game guide with the first one hundred pages over the cooktop did not result in the complete destruction of the first hundred pages or the semi-circular burn mark on the back. The only way in which that burn mark could be achieved was by placing the back of the game guide directly on the element. As a result, both Officer Forbes and Mr Nash concluded that the first hundred pages had been torn off the game guide; the rest of the book had been placed on the cooktop on the element; and it had later been moved off to one side. This obviously could only have been the result of human intervention.
8. Ultimately, the primary judge held that there was "no credible explanation for the kitchen fire apart from human intervention", that it was "impossible to see how the game guide could innocently have ended up on the cooktop element" and that in the absence of any evidence from Ms Worth as to how the game guide came to be on the cooktop with the element turned on, "the compelling scientific evidence of human intervention" was unanswered, in circumstances where the only person who could possibly have intervened was Ms Worth (J [293], [294], [296]).
9. Although the cooktop fire did not cause the fire in the living room, which spread throughout the house (including to the kitchen), the primary judge held that Ms Worth had deliberately started the fire in the living room. His Honour's reasoning is dealt with in more detail below. The objective circumstances on which he necessarily relied included: that there was no realistic suggestion that that fire could have been lit by a third party intruder (J [92]); that flames and smoke from the fire were first seen and reported to police within 7 or 8 minutes of Ms Worth leaving the house (J [290]); that the fire broke out in the living room in the area of the north-south part of the lounge where there was no electrical source (J [291]); that Ms Worth had placed the game guide on the energised cooktop element; that at some later stage she had moved the game guide to the side of the cooktop, where it was later found (J [143], [144], [164]); and that in doing so Ms Worth must have been attempting to start a fire on the cooktop element. The exact means by which she started the living room fire, on or under the lounge, was not the subject of specific findings.

Grounds of appeal

1. Ms Worth appeals from the judgment dismissing her claim and the judgment for the respondent on its cross-claim. The conclusion that she deliberately lit the fire is challenged by grounds 1 to 9. Grounds 1, 2 and 8 are directed to the primary judge's reasoning to that conclusion, taking account of the relevant circumstances as found. It is contended that the ultimate conclusion was "glaringly improbable" in circumstances which included: that attempting to use the cooktop and game guide to start a fire in the kitchen was an extraordinarily ineffective way of going about it; that there was no evidence of Ms Worth having engaged in any preparation or planning for the fire; and that it was unlikely that someone in Ms Worth's position would have wished to burn down the place where she lived and carried on her business.
2. Grounds 3 and 4 for the most part concern the findings as to the possible cause or causes of the living room fire, and ground 6 the circumstances of the fire in the kitchen. Grounds 5 and 7 are directed to findings as to the appellant's motive and conduct immediately after she left the house on the day of the fire. Ground 9 is directed to the findings as to the appellant's credibility. Grounds 10 and 11 press the appellant's claims to "damages" for breach of the Deed of Release. Those claims are to an indemnity for the property damage and business interruption loss and to damages for consequential loss and inconvenience. Ground 12 challenges the judgment on the cross-claim, and depends on the outcome of grounds 1 to 9.

General principles

1. The insurer has the onus of proving that Ms Worth deliberately lit the fire on the balance of probabilities, but taking into account the matters required to be considered by Evidence Act 1995 (NSW), s 140(2), including the gravity of the matters alleged. Where, as here, that question depends on the consideration of circumstantial evidence, the approach to be taken in a civil case was described in Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5 (Dixon, Williams, Webb, Fullagar and Kitto JJ) as follows: 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 hypothesis consistence 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 the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture [citations omitted]. 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.
2. In Palmer v Dolman [2005] NSWCA 361 at [41], Ipp JA (with the agreement of Tobias and Basten JJA) described the following principles as having "become well-established in determining, in a civil case, whether circumstantial evidence leads to an inference of fraud": (a) The jury [i.e. fact-finder] must consider "the weight which is to be given to the united force of all the circumstances put together" [Belhaven & Stenton Peerage (1875) 1 App Cas 278 at 279 (Lord Cairns), quoted with approval in Chamberlain v R (No 2) (1984) 153 CLR 521 at 535 (Gibbs CJ and Mason J)]. (b) The onus of proof is only to be applied at the final stage of the reasoning process: "[i]t is erroneous to divide the process into stages and, at each stage, apply some particular standard of proof. To do so destroys the integrity of [a] circumstantial case" [Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 at 129 (Winneke P)]. (c) The inference drawn from the proved facts must be weighed against realistic possibilities as distinct from possibilities that might be regarded as fanciful. (d) Where the competing possibilities are of equal likelihood, or the choice between them can only be resolved by conjecture, the allegation is not proved: Bradshaw.
3. Approaching the insurer's circumstantial evidence case in this way, it is necessary first to address the challenges to the findings with respect to the source and origin of the living room and cooktop fires (other than his Honour's ultimate conclusion as to the former); Ms Worth's motive and financial circumstances; "psychological" considerations bearing on the likelihood that she would have started the fire; and her conduct after leaving the house on 1 September 2015. Finally, I will address the overarching grounds 1 and 8, and in doing so also deal with the remaining grounds 2, 6(a) and 9(a).

Overview of finding that the appellant deliberately lit the fire

1. The primary judge's reasons set out much that is not controversial. That part of the reasons includes a description of the property (J [17]-[21]) and the time sequence in which the fire occurred (J [23]-[35]), a description of the fire damage (J [36]-[53]), a summary of the investigations undertaken by Fire and Rescue NSW (FRNSW) and the NSW Police (J [54]-[60]), a statement of the factual issues with respect to the arson defence (J [92]-[98]), and a summary of the course of the oral evidence given at trial and issues as to the origin of the fire (J [108]-[110]). What follows assumes a familiarity with those parts of his Honour's reasons.
2. As already noted, the primary judge found that there were two separate and independent areas of ignition. The effective fire originated in or near the lounge area of the living room and initially developed below an intact ceiling. Following "flashover" in that living room - the point at which a room reaches the autoignition temperature of most or all flammable material and "a fire in the room" becomes "a room on fire" - the ceiling collapsed, allowing the fire to spread into the roof and from there into other areas, including the kitchen. It did not, however, cause the fire on the cooktop. That was the result of an energised cooktop element causing flames and the burning of part of the game guide on the cooktop. His Honour found that there was no plausible explanation in the evidence for how that book ended up on the cooktop element without human intervention.
3. Ms Worth's evidence was that she had turned the hotplate on after she returned to the house, planning to boil herself an egg. She had then decided not to do so. As to the game guide, she did not remember seeing it when she was in the kitchen. At the same time she accepted that it could have been with papers she kept on the bench top to the left of the cooktop. She denied ever putting the book on the cooktop and could not recall having seen it in the kitchen on or before 1 September 2015.
4. What remained significantly controversial was how the main fire in the living room was started and whether the cooktop fire was deliberately lit. That question in turn directed attention to how the game guide (or part of it) came to be on the cooktop element, and whether at some stage it was moved, before or during the fire.
5. The expert witnesses retained by the parties were Mr Gardner for Ms Worth and Mr Nash for Interhannover. Neither of those witnesses attended the scene of the fire on or shortly after 1 September 2015. Oral evidence as to the circumstances of the fire was given in the insurer's case by Ms Rampling, a police crime scene officer, and Mr Forbes, a senior officer of FRNSW. Affidavit evidence of Mr Perrin, the FRNSW officer in charge who attended the fire, and of Senior Constable Wilcox, one of the joint leaders of the police investigation into the fire, was also read. On 2 September 2015, police crime scene and FRNSW officers inspected the fire damaged premises. On that occasion a number of photographs were taken by Mr Forbes and Ms Rampling. Those photographs, as well as photographs taken during the course of the tests undertaken at Londonderry (J [62], [142]) and miscellaneous other photographs, became exhibit E.

The living room fire (grounds 3(a)-(c) and 4(a)-(d))

The potential sources of ignition

1. It was ultimately accepted by Messrs Forbes, Nash and Gardner that the living room fire commenced in or near the lounge area on the eastern side of that room, below an intact ceiling (J [113], [114]). This fire was responsible for all of the fire damage to the appellant's home. The critical question is what can be said about its probable cause if the fact of the cooktop fire is put to one side.
2. The configuration of the living room immediately before the fire appears from the following sketch, which was prepared by Ms Worth and is consistent with her other evidence. The sketch plan runs south to north from top to bottom, so that the eastern side of the house (and balcony) is on the left. The position of the Tahiti screen is shown on the southern wall of the internal stairwell and a cane and wooden shelving unit, which had audio speakers on the floor at each end of the unit, is shown against the eastern sliding door leading to the balcony and facing the back of the lounge:
3. The photograph below, taken a few years before the fire and facing in a northeast direction, shows the lounge, the "television on an entertainment unit" along the north wall, and the top of the internal stairwell (J [36]-[37]). Neither the cane and wooden shelving unit behind the lounge nor the Tahiti screen can be seen.
4. The appellant's case described the two potential electrical sources of the living room fire as being the set of speakers situated on the floor on either side of the low shelving unit on the eastern side of the lounge area and the "plasma or ... LCD screen" mounted on the southern wall above the stairs, which displayed a "moving picture of a Tahiti beach scene with lights" when turned on. As has been mentioned, the appellant's unchallenged evidence was that she turned the Tahiti screen and portable radio (in the dining room) on when she left the house on the evening before, expecting to return later that night, and that it remained on when she left the house on the morning of the fire. She did not recall any other occasion on which the screen had been left on overnight.

The findings of the primary judge

1. The primary judge described the evidence for the view of Mr Forbes and Ms Rampling, that the fire originated "on or near the [eastern] north-south part of the lounge", as "strong" (J [139], [291]). But his Honour was not prepared to reject Mr Nash's opinion that the fire might have had a point of origin anywhere "generally within the eastern section of the lounge room" (J [120]). Accordingly, he found that an electrical fire in the speakers was a "possible" explanation for the living room fire, considered alone, albeit one for which there was no affirmative evidence (J [140]). He rejected the theory that the fire was caused by an electrical fire in the Tahiti screen as depending on possibilities "so remote and apparently improbable as to be fanciful" (J [138]).
2. The appellant accepts that the primary judge was entitled to disregard "fanciful" possibilities when considering whether to draw an inference from all of the circumstances that the fire was deliberately started: see Sharma v Insurance Australia Ltd [2017] NSWCA 307 at [66]. However, she contends that his Honour erred in favouring the view of Mr Forbes and Ms Rampling as to the point of origin of the living room fire, as well as in failing to find that the Tahiti screen was a "realistic possible cause" of the fire (grounds 3(a), (c), 4(b), (c) and (d)). She also submits that the fact the living room fire reached "flashover" at 9.46 am suggests the fire began well after she had left the house, at about 9.28 am, making it unlikely that she could have started it (grounds 3(b), 4(a)).

The point of origin of the fire

1. Mr Gardner first inspected the fire scene some three years after the fire, by which point, in his words, "there was no actual evidence of an area of origin".
2. On the other hand, Mr Forbes and Ms Rampling inspected the property on 2 September 2015, the day after the fire, and formed the view that the point of origin of the fire was in the "north-south part" of the lounge (or sofa), immediately to the west of (to the viewer, in front of) marker "D" in the following photograph (E104) taken by Mr Forbes after the removal of debris on that day: Photo E104 This photograph also shows the heavily charred remains of the southern part of the lounge (running east-west). The remains of the speakers are the small circular objects immediately to the right of marker "D" and on the opposite side of the remains of the stereo system to the left of that marker.
3. Mr Forbes and Ms Rampling referred inter alia to the following features of the fire scene as evidence for their favoured point of origin: (1) there was "a 'V' pattern of burning" on the northern wall "with its base under the middle of the window", shown in the photograph in [35] above; (2) the timber entertainment unit along that wall, and to the left of that window as shown in that photograph, had been damaged most extensively at its end closest to that window; (3) there were "clean burn" patterns on the underside of the metal roof over the eastern half of the lounge room; (4) the damage to the lounge was most severe at its eastern end of the lounge; (5) the floating timber floorboards were "heavily charred and completely consumed" towards the centre of the room in an area bounded on its northern and eastern edges by markers "C" and "D" respectively; (6) the floorboards were intact under "the stereo system which incorporated the speakers", suggesting that they were not the source of the fire; (7) the distribution of fire damage to the lounge suggested "a direction of fire travel from north to south" across the eastern part of the lounge; and (8) the floorboards under the remains of the lounge nearest to the stairwell also remained intact, "which indicated that these chairs had not been burning the longest time". At the time they examined the fire scene, neither of Mr Forbes nor Ms Rampling knew of the Tahiti screen, which it seems was completely destroyed by the fire.
4. Mr Nash inspected the fire scene on 4 September 2015 and prepared an initial report dated 10 September 2015. He concluded that the fire "had originated in the eastern section of the lounge room, including the internal stairwell" but could not identify a more precise point of origin within that area, because only a "limited scene examination" was "possible on the day of [his] inspection" and the lounge room "had been significantly disturbed during a previous examination". Unlike Mr Forbes and Ms Rampling, Mr Nash had been informed before his inspection of the presence of the "stereo system" along the eastern side of the room and of the Tahiti screen on the southern wall above the stairwell. Based on his conclusion about the point of origin, he regarded an "electrical malfunction" in either device as a "possible accidental cause of ignition". By the time of his second report dated 30 August 2016, Mr Nash had excluded an electrical fault in either device as a possible cause of the fire because of his views about the cooktop fire. However, as he accepted in cross-examination at trial, he continued to regard an electrical fire in the speakers or the Tahiti screen as possible causes of the living room fire, if attention was confined to that fire alone.
5. In his second report, Mr Nash explained that he did not accept the conclusion of Mr Forbes and Ms Rampling as to the fire's point of origin because: ... the fire damage was too severe within the lounge room for me to reliably conclude such a localised point of fire origin. The fuel load provided by the lounge chairs and the ventilation provided by the internal stairs and the balcony sliding doors upon failure would have significantly influenced the degree of post-flashover damage sustained within the lounge room. Hence, the localised area of greatest damage on the floor did not necessarily represent the area of fire origin. (emphasis added)
6. He gave essentially the same evidence at trial, explaining that there was "a substantial fuel load in the lounge chair ... that would dominate the damage that's been sustained" and that: You can have a small fire start reasonably remote, like several metres away from the area where the fire develops from predominantly, but you won't necessarily get physical evidence remaining to allow you to come back to the original origin.
7. When the gist of Mr Nash's view was put to Ms Rampling, she accepted that the location of the most severe and (by height) the lowest fire damage might be the location of the greatest fuel load, or reflect where timbers had fallen during the fire. But she did not abandon her view as to the likely point of origin of the fire: Q. [A] fire may originate in one point, but because of flashover and falling timbers, the intensity of the fire may actually be in a different point to the point of origin? A. Yes, but generally the, the amount of time it takes to reach that flashover, the, the area of origin [of] the fire will have been continually burning in that location, which is generally why the, the area of the most severe damage tends to point sort of towards that area of origin.
8. Mr Nash's opinion is plausible and, as Ms Rampling's evidence accepts, it cannot be conclusively rejected: as the primary judge put it, his "opinion was not challenged and there is nothing in the evidence to shake it" (J [139]). However, Mr Nash's emphasis on the "substantial fuel load" provided by the lounge does not explain the pattern of damage to the lounge and the floorboards underneath it, which suggested that the southern part of the lounge (running east-west) was not "burning [for] the longest time" and that the fire spread "from north to south" along the eastern part of the lounge, in the direction of, rather than from, the stairwell. Ms Rampling accepted that falling timber could theoretically have provided an additional fuel load, but there was no evidence as to the likelihood of that possibility.
9. Dealing specifically with the speakers, in his evidence at trial Mr Forbes maintained (see above at [41]) that the fact the floorboards underneath them had not been consumed by the fire suggested they were not its cause. Mr Nash's response in his second report was that "the stereo system" appeared from his inspection to have occupied "a level of the cabinet that was well above floor level", and that the floorboards would accordingly "be expected to survive a fire" in the stereo system. This response is directed only to the stereo, and not the speakers, which the appellant contends were a realistic possible source of the fire. The speakers were located on the floor, at the base of a "cane and wood unit with two shelves" containing the stereo (apparently on the upper shelf). On the hypothesis that the living room fire began in the speakers, the absence of serious damage to the floorboards under and immediately adjacent to that shelving unit remains unexplained.
10. For these reasons (which principally address ground 4(b)), as well as those which follow in relation to the Tahiti screen, the primary judge was right to find that the evidence "favours" the view of Mr Forbes and Ms Rampling as to the likely point of origin of the fire (J [291]). That likely point of origin did not contain any electrical source. However, as his Honour also found, it is "not possible" to be certain that the fire did not start within the larger area of origin identified by Mr Nash, which included the location of the speakers and the internal stairwell (J [139]-[140]). (Contrary to what is suggested by ground 4(b), there is no inconsistency between his Honour's findings at J [139]-[140] and [291].) An electrical fire starting in the speakers therefore remains a possible cause of the fire, but not one for which the evidence provides any affirmative support.
11. As those findings suggest, and as Mr Nash opined, there remains the possibility that the fire began in the internal stairwell. The Tahiti screen was the only possible source of fire in that area of the house.

The Tahiti screen

1. Ms Worth purchased the Tahiti screen from a pop-up store in Tweed Heads some time between 2008 and 2010, and had it mounted on the southern wall above the internal stairwell by an electrician. In photograph E47, part of the mounting and cabling, together with some surviving plasterboard - described by counsel for Ms Worth as in the shape of a "map of India with Sri Lanka at the bottom" - can be seen in the location formerly occupied by the screen itself: Photo E47
2. Two theories, at least partly distinct, were advanced as to how the Tahiti screen might have caused a fire on or under the lounge in the eastern end of the living room. (Counsel for Ms Worth put forward a third theory in cross-examining Mr Forbes, namely that flames coming from the mounted Tahiti screen produced a fire in the ceiling. This theory is inconsistent with the expert consensus that the fire developed in the living room below an intact ceiling.)
3. The first of these theories, put forward by Mr Gardner, was that an electrical fire in the device produced "burning plastic embers" which floated across the stairwell and into the living room before falling and setting fire to the lounge. This theory received no support from Mr Nash, as the primary judge observed at J [137], and it was contradicted by Mr Forbes, who stated, it must be thought uncontroversially, that "burning plastic from any electrical device would melt and drip".
4. The second, put forward by Mr Nash, was that the device ignited, fell from its mounting on the southern wall of the stairwell to rest against the lower wall on the northern side of that stairwell, and there produced flames of roughly a metre in height which crept up the stairwell wall to ignite the southern side of the lounge. Mr Nash described this as a possibility "that I can't eliminate". However, he was "not saying that's likely to have happened", or that it was positively supported by the state of the fire scene. In this respect, as he volunteered, to say that the fire scene was "consistent [with the fire having started there] is probably too positive a term".
5. The appellant contends that the primary judge erred in excluding both of these possibilities from consideration as being "fanciful" (ground 4(c)), although her submissions deal primarily with the second. She submits that theory is positively supported by the evidence, particularly the damage to the stairwell. (It should be noted immediately that Mr Nash's opinion did not go anywhere near so far.) Three aspects of the evidence and the primary judge's reasons are relevant to the Tahiti screen theory: first, the state of the wall behind the screen; secondly, the likelihood of the screen falling to rest against the opposite wall of the stairwell rather than down the stairs; and thirdly, the fire damage to the stairwell, or the lack thereof. Each is addressed in turn.
6. As can be seen in photograph E47, the surviving plasterboard and cornice behind and immediately above where the screen was mounted did not show extensive fire damage. However, that is not itself surprising. Mr Nash explained that small marks or patterns produced by a fire in the screen might well have been obliterated in the later stages of the living room fire, during which there was "a substantial fire and hot gases at ceiling level and down in the upper sections of the walls in that whole area". This appears to presume that the screen fell from its mounting fairly quickly after catching fire, as parts of its plastic softened or melted. Both Mr Nash and Mr Gardner suggested that could well have been the case, depending on how the screen was attached to the wall.
7. None of that raises a problem for Mr Nash's theory. It does seem to raise a further difficulty for Mr Gardner's, which requires the screen to have remained mounted while emitting burning plastic embers of sufficient size and force to reach and ignite the lounge but to have fallen from its mounting before doing substantial damage to the plasterboard and cornice.
8. As the primary judge observed at J [135], Mr Nash's theory "required the picture unit to have come to rest on the northern side of the stairs close enough to the top that flames emitted from the unit could reach the lounge". Treating the likelihood of that event as a question for "the science of mechanics" (in relatively simple applications a matter of "general knowledge") rather than "fire expertise" (J [136]), his Honour stated that (J [132]): I must say I found this somewhat implausible. ... It seemed to me that a picture unit falling from that height would have fallen down the stairs rather than staying where it fell; and even if it somehow did come to rest on the staircase it would have come to rest on the southern rather than the northern side of the stairwell.
9. The appellant's criticism of this reasoning as involving "impermissible speculation" (ground 4(d)) about matters the subject of unchallenged evidence is not justified. Mr Nash's evidence was tentatively expressed and acknowledged the possibility, suggested to him by both counsel for the respondent and the primary judge, that the screen was likely to have fallen all the way down the stairs. It remained for his Honour to form a view about the relative likelihood of the relevant possibilities.
10. As can be seen from photograph E47 and the sketch plan at [34] above, the Tahiti screen was mounted at a significant height roughly above the midpoint of the staircase. Accepting, as Mr Nash suggested, that the falling screen could have struck the southern balustrade and been deflected towards the northern side of the stairwell, it does not appear likely that the screen would then have come immediately to rest.
11. When asked whether the screen was not more likely to "have bounced down the stairs", Mr Nash emphasised that the screen was "not a television" and said that he was not sure how it would behave. Mr Nash appears to have proceeded on the wrong assumption that the Tahiti screen was "just a photograph with a light mechanism ... which causes the appearance of the picture to move" and which "could be largely plastic; it could be largely paper with a timber frame" (cf J [133]). For that reason he was unsure whether the screen was likely to bounce down the stairs or "melt and stay largely in situ and just drop down to the ground". (The second theory, of course, depends on the screen staying largely in situ but being deflected by the southern balustrade to rest against the opposite wall.) In fact, the Tahiti screen was, as Ms Worth described it, a plasma or LCD screen akin to a television, in other words what Mr Nash thought it was not.
12. Most of the balustrade along the top of the northern side of the stairwell was completely incinerated. But the bases of a few of the smaller balusters remained intact, to a height of roughly 200mm above the floor of the living room, and the larger and westernmost baluster was charred but entirely intact. That is not at all inconsistent with the view of Mr Forbes and Ms Rampling that the fire began in the north-south area of the lounge. Indeed, that the bases of several of those balusters survived flashover and the incineration of the lounge might be thought to suggest that the fire did not begin by creeping up the northern wall of the stairwell, through the balustrade, to the lounge.
13. Turning to the damage to the stairwell itself, the damage to the plasterboard on the northern wall of the stairwell, where (ex hypothesi) the screen fell to rest, was not extensive. As photograph E263 below shows, the "paint [was] burnt off and ... the plasterboard [was] thermally degraded": Photo E263
14. When asked whether that damage was consistent with a fire producing flames high enough to set the lounge alight, Mr Nash noted that he did not suggest it was "likely to have happened". The stairwell treads themselves suffered only minimal damage. Although the northern face of the balustrade on the southern side of the stairwell was blackened significantly by some combination of charring and soot deposition, the theory is that the screen fell to rest against the northern wall of the stairwell. The extent of the damage to the southern balustrade was explained by Ms Rampling as due to "radiant heat and fire" resulting from a fire starting in the centre of the living room and burning material falling from the ceiling and roof cavity.
15. The damage to the stairwell does not itself exclude the Tahiti screen theory. It remains possible, though it would seem not very likely, that the degradation of the plasterboard on the northern wall of the stairwell was the result of an intense but brief fire in the Tahiti screen which produced roughly metre-high flames and set fire to the back of the lounge but died out before doing any further damage. But the damage to the stairwell is quite naturally explained by the effects of flashover and the collapse of the ceiling over the living room.
16. There remains one further matter, which is the subject of ground 3(c). The smoke first observed by a passing driver at about 9:35 am was "predominantly black in colour". The appellant submits that "electronic monitors produce black smoke on ignition, and that the smoke corresponded to the location in the house of the Tahiti Screen" (footnotes omitted). The evidence that fires in flat screen monitors produce black smoke was given by Mr Forbes, who also emphasised that "[a]ll fires produce black smoke, generally". That statement was neither challenged nor contradicted by other evidence. What could be proven by the approximate location of the smoke, in circumstances where the likely point of origin was only a few metres from the screen, is not clear.
17. The appellant does not seriously contend for the first theory, which is fanciful having regard to Mr Forbes' evidence. The second, Mr Nash's theory, requires the screen to have fallen from a significant height but come immediately to rest against the northern wall of the stairwell, and to have produced flames tall enough to set the northern balustrade structure and the lounge alight but without consuming any substantial fuel source or causing extensive damage to the northern wall. It is also inconsistent with the pattern of damage to the lounge and the floorboards under it, which suggests (but does not conclusively prove) that the fire burnt the lounge from north to south.
18. In the circumstances, the possibility that the Tahiti screen was the cause of the fire was not "realistic" and "might be regarded as fanciful": Sharma at [66], citing Palmer v Dolman [2005] NSWCA 361 at [41]. In my opinion the primary judge did not err in disregarding it when considering whether to draw an inference that the fire was deliberately lit (cf ground 4(c)). And in any event, if the description of that possibility as "fanciful" was erroneous, it was not far off the mark. In circumstances where the Tahiti screen had been on since the previous evening, the occurrence of an electrical fault causing a fire at or very shortly after the time the appellant left the home on the following day (9.28 am) is a remote and speculative possibility.

The timing of flashover

1. The final point made on behalf of Ms Worth as to the likely cause of the living room fire, and in support of grounds 3(b) and 4(a), relates to the time at which flashover took place, accepted to be 9.46 am. The premise of the appellant's argument is that flashover "occurs within 5-11 minutes of ignition inside a house". It is said to follow that ignition likely occurred "well after" she left the house at or shortly before 9.28 am.
2. In support of that proposition, the appellant relies on the evidence of Mr Forbes (both in his initial report and in cross-examination) and what is described as a "leading expert text", Kirk's Fire Investigations (Prentice Hall, 5th ed, 2002), which Mr Forbes accepted was "a standard handbook used by fire investigators".
3. The relevant excerpt of Kirk's Fire Investigations commences with the observation that the "length of time each state [of fire development] takes will vary (dramatically in some cases) with the circumstances of ignition, fuel, and ventilation". It includes a series of photographs showing the development of a "well-ventilated, non-accelerated fire in a furnished room ... set in papers in a wastebasket", which took 10.75 minutes to reach flashover. But it provides no support for the appellant's claim that house fires usually reach flashover in 5-11 minutes.
4. In his initial report, Mr Forbes observed that flashover "would have occurred within 5-10 minutes of ignition", a statement necessarily qualified by his earlier observation that a fire ignited by a cigarette might smoulder for 30 minutes before producing flames. He then qualified that opinion further in an affidavit dated 19 April 2018, explaining that it was a "generalised statement" and that "trying to estimate a time to flashover is very difficult, impossible if one does not observe it or know what materials were used as fuel". He went on to note that if slower-burning material (such as the game guide or an encyclopedia) was the cause of the lounge room fire, time to flashover "would have been significantly longer than 10 minutes". When the issue was briefly raised in cross-examination, Mr Forbes' response was in substantially the same terms.
5. Mr Nash also commented on the timing of ignition. Noting that flames were first observed at or just after 9.35 am, in his second report he stated that if the living room fire had its origins in an electrical malfunction, it "would have taken some time" to engage the lounge and produce "sufficient fire development ... for the witness to observe flames coming from the front of the house". Acknowledging that "[a]ccurate, reliable timeframes would ... be very difficult to determine" because they would depend on the location of any electrical malfunction, its position relative to the lounge, and the combustibility of the relevant items, he thought it "highly likely that the timeframe would exceed the 3 minutes reported between the departure of the owner and the observation of flames". (In fact, the primary judge found that Ms Worth left the house at or around 9.28 am, earlier than Mr Nash presumed.)
6. The premise of the appellant's argument is not established. The evidence points uniformly to the conclusion that the time to flashover varies significantly with "the circumstances of ignition, fuel, and ventilation". It is not necessary to address the respondent's submission that the time to flashover would also depend "quite evidently [on] the geometry of the space", which proceeds by reference to the fact that the living and dining rooms were part of a single open space.

The findings as to the cause of the cooktop fire

1. The cooktop fire is dealt with by the primary judge at J [141]-[164], where his Honour commenced at [141] (extracted again for convenience): As already mentioned, the charred remains of the game guide which were found on the side of the cooktop were missing the first one hundred pages and the front cover. The back of the game guide had semi-circular burn marks which corresponded to the shape of the cooktop, but the book itself was found resting partially on and partially off the left hand side of the cooktop so that the back was not actually on the element.
2. The primary judge reasoned and found as follows: 1. Mr Gardner's hypothesis that the game guide was knocked from where it was on the windowsill when the blind fell, so that it came to rest open with its pages facing up, partly on the bench top and partly on the cooktop, was for all "practical purposes" to be discounted because "the scientific evidence indicates very strongly that the burning of the game guide was the result of human intervention" (J [164]), "there is no credible explanation for the kitchen fire apart from human intervention" (J [293]), and "it is impossible to see how the game guide could innocently have ended up on the cook top element" (J [294]). 2. There were three "difficulties" for Mr Gardner's theory. First, it did not directly explain what happened to the first 100 pages of the book, nor why the guide was found with a semicircular burn mark on its back cover which matched the shape of the circular cooktop element, although no part of that back cover was resting on any part of that element when the book was found, as is shown in photograph E64 at [18] above and in close up in photograph E74 below. Mr Gardner's suggestion was that when the book fell onto the cooktop surface it came to rest partly on and partly off it, lying open with its front cover and first 100 pages resting in part on the element which had been left on. They then caught fire, and the heat from the element spread or "crept" across a semicircular area of the underside of the back cover, which was partly on the cooktop surface but not over the heated element (J [152]-[154]). Secondly, it was not likely that (or "hard to see how") the window blind could have propelled the book onto the cooktop surface from a position on the windowsill leaning against the glass of the window, because that window was "set back some distance behind the blind". That meant that the blind would have fallen in a vertical plane in front of the book (J [155], [156]). Thirdly (and most significantly), the kitchen photographs showed that the area of the bench top under the game guide had no soot or debris on it, indicating that the book had "protected" that part of the bench from the hot air, smoke and soot circulated with the spread of the living room fire into the kitchen. If the guide had only come to rest on the cooktop after the fall of the blind, when the heat and smoke had already invaded the kitchen, that area of the bench would not have been protected. The primary judge observed that "it seemed an extraordinary coincidence" that only that part of the bench top would have been cleaned (J [157]-[159]). (As will be seen, that suggestion was not made or adopted by Mr Gardner (cf J [159]), was inconsistent with Mr Forbes' unchallenged evidence, and was wholly consistent with what was put to Ms Rampling as to the extent of the cleaning which occurred when she was present.) Photo E74 1. The Londonderry tests in which a game guide was placed directly on the element produced a pattern of damage similar to, but not quite as extensive as, that on the back cover of the book recovered from the fire scene. The relevant tests were numbers 4 and 5, the former using a new copy of the game guide with pages 1 to 100 removed and the remaining pages 101 to the back cover positioned with part of the back cover sitting on a semicircular area of the heating element. Test 4 lasted for 35 minutes, after which the "scorching pattern" on the back cover was similar to that observed on the back cover of the "seized game guide". Had the game guide only fallen onto the cooktop after the kitchen blind had fallen, it would have been on a heated cooktop for about 15 minutes at the most. That is because shortly after "flashover" occurred, the electricity to the house was turned off and the cooktop would have retained heat capable of igniting or charring the book for less than 10 minutes.

The "protected area" under the game guide

1. The position of the remaining part of the game guide, partially covering the corner of the cooktop, but not any part of the cooktop element (as shown in photo E74), was first observed by Ms Rampling in her inspection on the morning of 2 September 2015. Mr Forbes, Mr Perrin and Detective Wilcox also appear to have been present. There was a further inspection after 2 pm on 2 September 2015 at which at least Messrs Wilcox, King, Forbes, Perrin and Ms Rampling were present. At that time the position of the game guide was photographed by Mr Forbes and Ms Rampling. It was then moved, it would seem by Mr Wilcox, so that the bench top and cooktop under the book could be inspected, as well as the underside of the book (see photo E150 at [18] above). Before this was done the hotplate area was cleaned with cloths. The cloths are shown in photo E611, which is not reproduced. Photos were taken by Mr Forbes showing the "protected area" as well as position to which the book was first moved. At some later stage the book was "replaced in the position in which it was found", although not exactly, as Mr Forbes noted and as is shown in photograph E83: Photo E83
2. Mr Forbes described the bench top area under the game guide when it was found as "protected by [the book] during the fire and therefore not covered in soot", as shown in photo E80, reproduced below: Photo E80
3. In cross-examination Mr Forbes said, based on what he had seen after the book was first moved, that there was "no soot underneath in that rectangular shape", from which he concluded that the book was in that position "before the main fire started". It was not suggested to Mr Forbes in cross-examination that the so-called "protection area" had been scrubbed clean or that there was soot in that area when the book was first lifted and moved. Both Mr Nash and Mr Gardner, neither of whom was present on 2 September 2015, rejected any suggestion that there might have been any good reason for the fire or investigative officers present on that day to have cleaned, let alone scrubbed, the "protected area" to remove signs of soot.

Theories as to how the game guide came to be on the cooktop

1. Ms Worth's evidence did not offer any explanation for why the game guide was in the kitchen and in a position where it could have ended up on or near the cooktop. Her evidence was that she did not recall seeing it in the kitchen on the day of the fire. That evidence left open the possibility that her son and his friends may have been using the microwave in the kitchen on the afternoon of 31 August 2015 to make popcorn. The primary judge, having referred to that evidence (J [255]), noted that whilst it was possible that her son had taken the game guide into the kitchen, no one actually said that he did. At the time of the hearing, Joshua was 16 years old. He was not called to give evidence (J [106], [238]).
2. Ms Worth's evidence remained that when she turned the hot plate on and then returned the saucepan to the kitchen cupboard, she did not see the book on the cooktop. If the game guide was where it was found at the time she turned the element on, it is most unlikely that she would not have seen it. There remains to be considered the fact that when found pages 1 to 100 of the game guide were not attached. Mr Forbes' evidence, based on his observations of the book and cooktop on 2 September 2015, was that it "had been torn in approximately half along the spine which was originally glued together".
3. Mr Gardner proffered several possibilities as to how the game guide ended up on the cooktop. If one was facing the cooktop, immediately to the left was a microwave oven. To the right of that microwave, and sitting on the benchtop, was a small box about the size of a wide shoebox. The microwave and the top of that box can be seen in photograph E76 below: Photo E76
4. Initially, Mr Gardner suggested that magazines (and the game guide) stacked in the space around the microwave may have slipped from that position, or from their position on top of the lower cardboard box, and onto the cooktop surface. In his responsive report, Mr Nash said that significant external lateral force would have been required to move any book or magazine which had slipped from either of those positions to the back corner of the cooktop where the game guide was found.
5. Their joint report recorded that there was no "direct physical evidence" explaining how the game guide came to be on the cooktop by the end of the fire. In his second report Mr Gardner put forward two scenarios, the first involving three possibilities, one of which is dealt with in the primary judge's analysis above. Those scenarios were: (1) that the book was upright on the window ledge behind the cooktop or on the kitchen bench leaning against the windowsill, or on the recipe holder to the left of the cooktop (visible in photo E83), and in each case fell forward onto the cooktop during the fire; or (2) that the book had fallen onto the floor and was picked up by Ms Worth and hurriedly thrown in the direction of the kitchen bench, where it landed on the cooktop. As the primary judge noted at J [149], Ms Worth gave no evidence in support of this second scenario, which was not seriously pursued.
6. As to the first scenario, three mechanisms were proposed by Mr Gardner as having potentially caused the book to end up on the cooktop. They were: impact from the roller blind falling to the window ledge; turbulence created when the glass in the window behind the right side of the cooktop was shattered by heat; or turbulence created by heat from the lounge room causing the magazine to fall onto the cooktop surface (open with its front and back covers facing the bench or cooktop surface). Mr Nash's response to the first mechanism is summarised by the primary judge at J [155]. At the end of the discussion of this subject in the joint evidence Mr Gardner said that having regard to the "bit of weight in the game guide book" what "I was putting together is possibilities not probabilities ... I can agree it's probably not quite as likely that the curtain rod, the blind rod would have [knocked the book] off the window ledge given its size and its weight".
7. Mr Nash's response to the second of these mechanisms was that because the exterior shutter which covered the kitchen windows, including the window which "thermally cracked", was closed, there was no opportunity for movement of air outwards from inside the house, causing turbulence, when that cracking occurred. The absence of significant staining to the exterior bricks, which was otherwise likely to have occurred, indicated that the window had been effectively sealed. That left the third mechanism, namely the prospect of fire-induced turbulence within that closed space. Mr Nash's considered view was that the risk of turbulence in the kitchen sufficient to cause the game guide to fall over was "negligible". None of this was contradicted by further evidence of Mr Gardner.
8. The more significant difficulty for these mechanisms was that each was itself the result of events only likely to have happened after the fire was well advanced - the melting of the plastic mountings holding the blind in place, the possible ignition of the blind material prior to its falling, the thermal fracture of the windowpane produced by a "temperature differential", and fire induced turbulence in the kitchen area. That being the position raised the question whether the soot deposition and staining observed elsewhere on the benchtop happened before or after the plastic mountings might have melted or these other events occurred. Mr Nash and Mr Gardner agreed that it would have happened beforehand, Mr Gardner describing the sequence of events as being - "smoke staining all the way down to the floor level in the kitchen... covering the windows and other surfaces... the smoke has happened first and we've got a hot gas layer coming in, that's melted the plastic on the blind... and also, we've had enough heat to crack the glass".
9. The following matters concerning the so-called "protected area" and the theories as to how the game guide came to be on the cooktop require some further elaboration.
10. In his affidavit of 4 December 2019, Mr Forbes said that he had taken photo E77 (below) when he examined the fire scene with Ms Rampling after 2pm on 2 September 2015. At that time he removed the game guide from where it was first seen and "partially cleaned the cooktop to expose the location of the hotplate". There was no reference to his also cleaning the bench top. He then described repositioning the game guide "by aligning it with the part of the bench top that had been protected by the game guide during the fire and [which] was therefore not covered in soot". He described that area "as shown" in photo E78 (also below). Photo E77 Photo E78
11. Ms Rampling gave oral evidence before Mr Forbes and it was plain from his affidavit evidence that she was present when the game guide was first removed from the cooktop surface. The photos of the game guide before that occurred (such as photo E77) plainly showed that the cooktop surface had not been interfered with. In cross-examination Ms Rampling agreed that she was present when "the game guide was removed from the cooktop and the cooktop was scrubbed". The choice of words of the cross-examiner was precise. Ms Rampling was not asked whether the particular part of the bench top which had been covered by the game guide was also scrubbed. That would have been a curious thing to have done as the two independent experts later commented in their joint evidence. Mr Forbes was shown photo E78 and in the course of questioning about it described the rectangular shape on the bench top as a "protection mark" because there was "no soot underneath in that rectangular shape" which told him that the book was "there before the main fire started". Notwithstanding that he in a later answer again referred to that "area of protection", it was not suggested to Mr Forbes that he had scrubbed or cleaned the bench top or that area of the bench top so as to show where the book had been found.
12. When asked to comment on photo E80 (see [77] above) which was described by the appellant's counsel as showing "some cleaning has been done of the cooktop", Mr Gardner's response included that "you've got some - a protected area, as indicated by Mr Forbes earlier, where the, the bulk of the magazine was between, it was on the bench top, but also partly on the cooktop". Later counsel suggested in cross-examination of Mr Nash that someone may have "had a brush and swept away the area said to have been underneath the bottom of the magazine". Mr Nash accepted that without "seeing it and turning my mind to it, at that time of the examination" it was difficult to comment. Nevertheless he observed that "soot tends to be quite sticky" and that to "clean a triangular section of the bench top" in the exact location where the magazine was positioned "just seems very unlikely. I would never do something like that, and I can't see a reason for doing something like that." Mr Gardner added that photos E77 and E78 showed "a clear patch on the bench top" and that having "scrubbed the surface of the cooktop" he could not see "that there'd be any reason to [do additional cleaning on the bench top]". The primary judge's observation at J [159] is wrong if it suggests that Mr Gardner provided any support for the suggestion that on 2 September 2015 Mr Forbes, in the presence of Ms Rampling and others, also cleaned the bench top but only in the "protected area", when neither he nor Ms Rampling had said that he had done so.
13. Finally, Mr Nash and Mr Gardner were not engaging in speculation in suggesting that in the course of the living room fire, smoke from that fire would have filled the kitchen, resulting first in the depositing of soot before the arrival of a hot layer of gas which would have melted plastic and cracked glass. In their joint report, they agreed that the main fire originated in the lounge area and initially developed below an intact ceiling, and that it spread through the house into the kitchen, before spreading into the roof space and causing the damage observed. They also agreed that the fire at the cooktop was negligible in size and did not develop and spread to other areas in the property. There was no issue between them that the mechanisms described by Mr Gardner explaining how the game guide might have ended up on the cooktop had to have occurred after any significant soot and debris from the lounge room fire was deposited on the bench top.
14. By way of summary, the evidence provided a sound basis for finding that the game guide was in the position on the kitchen bench top where it was found from a point in time before any significant soot and debris from the lounge room fire was deposited on the bench top. The evidence does not suggest any plausible explanation for how the book could have got into that position before that time without some human intervention (cf ground 6(e)).

The position of the game guide on the cooktop and whether it had been moved

1. When first observed after the fire (as shown in photos E64 and E74) the game guide was lying open, its back cover face down. Its front cover and pages 1 to 100 were "missing". It was positioned at an angle with the bottom of its facing page (page 101) closest to the windowsill. As can also be seen in photo E74, the top left hand corner of the charred facing page is positioned very close to the edge of the cooktop at the point where there is a black and orange mark. Mr Forbes' evidence was that the "orangey brown colour" burn mark in that photograph, which followed the line of the spine of the book (or where that spine would have been) was the result of flames in that area. Mr Nash and Mr Gardner agreed, the latter adding that the mark could have been produced by glue from the binding which burnt or melted onto the top of the bench top.
2. There was a question as to what had happened to the front cover and pages 1 to 100 of the game guide (ground 6(d)). At J [144], the primary judge noted that the evidence of "both Officer Forbes and Mr Nash" was that it was likely the front cover and first 100 pages had been torn off before the game guide came to be on the hot plate. The reference to Mr Nash appears to have been an error. It is likely that his Honour intended to refer to Detective Wilcox, who observed that the guide "appeared to have been torn in approximately half along the spine". Whether it was not open to his Honour to find that the appellant had likely torn off the front cover and first hundred pages because that proposition was not put to her in cross-examination is addressed separately below.
3. Mr Forbes' observation that those pages had been removed by tearing along the spine was tested in cross-examination. Ultimately, on the basis of his observations and the Londonderry tests, he rejected as a possibility that the 100 pages had been totally consumed by fire. There was no cross-examination directed to the relevant photographs (including photos E64, 74 and 77) which suggested that there were any identifiable remains of those pages on the cooktop, which Mr Forbes said he expected he would have found. He did accept that there was at least a "theoretical" possibility that the 100 pages were resting on the top of the hot plate and as a result were totally consumed by fire. That possibility was addressed by test 3 of the Londonderry tests.
4. Test 3 involved placing an intact game guide, opened to page 101, with its back cover in the same position as found after the fire - in other words, that cover was not in contact with the element, whereas the front cover and first 100 pages were "draped" over the cooktop element. The test produced flames which consumed the binding joining the first 100 pages, but did not result in all of those pages being burnt, much less consumed, in the 26 minutes of the test. It was suggested to Mr Forbes that this result could have been different if the other heat sources applying in the kitchen at the time of the fire - the general heat due to the main fire and the heat and flames from falling debris - were taken into account. He rejected that suggestion.
5. The remaining controversies were whether the semicircular burn pattern on the back cover of the game guide (as shown in photo E150) could have been caused whilst the game guide was in the position in which it was found, with no part of the back cover on the cooktop element, and (alternatively) whether that burn pattern could have been produced in the period that Ms Worth was in the house and before the game guide was moved to the position in which it was found. The evidence of Mr Forbes and Mr Nash was that the burn pattern could not have been caused other than by direct exposure of the back cover to the cooktop element.
6. The first of these controversies was addressed by tests 2 and 3. In each case the back cover of the guide book was placed in an equivalent position to that where it was found. Test 3 is described above. In test 2 pages 1 to 100 had been torn off, rather than draped over the element. (It should be recorded, although it is not material, that Mr Forbes misdescribes these tests in one of his affidavits but otherwise describes them correctly. Test 2 proceeded for 10 minutes and 22 seconds. At the end of that period there was no damage to the underside of the game guide. Test 3 proceeded for 26 minutes, at the end of which there was no damage to the back cover. It is true, as counsel for the appellant submitted in this Court, that the bench surface in the kitchen beyond the cooktop (on which part of the back cover of the original game guide had rested) was not replicated in the Londonderry tests, in which the cooktop was elevated above its surrounding surface. However, the position remains that in each test part of the back cover was on the cooktop surface, and accordingly in a comparable position to that part of the original. In each test that part of the back cover sustained no apparent damage.
7. The second of these controversies was addressed principally by test 4, in which pages 101 to the back cover of a game guide were placed so that the charred area as found at the fire scene (see photo E150) was over a semicircular area of the cooktop element. That test was conducted for 35 minutes, at the end of which there was "a scorching pattern similar to that observed on the seized game guide" albeit one which, as Mr Forbes accepted in cross-examination, "didn't burn as much". Test 5 involved the use of an intact game guide, opened at page 101 with the back cover in the same position as in test 4, and lasted for 45 minutes. At the end of that time pages 1 to 100 were charred but largely intact and the burning pattern on the back cover was "not exactly" the same as, but similar to, that on the original guide. Mr Forbes ultimately described the replication as "close".
8. None of the Londonderry tests precisely replicated all of the relevant circumstances or provides a complete explanation for the damage to the game guide. If the intact game guide had fallen to rest on the cooktop as it was positioned during test 3 (which, as explained, could only have occurred after flashover), it is conceivable, though it would seem unlikely, that the ambient temperature of the kitchen could explain the complete consumption of the front cover and first 100 pages during the relatively short period - likely less than 15 minutes - in which the cooktop would have retained significant heat. The damage to the back cover produced by tests 4 and 5 was somewhat less extensive than that actually observed, even though the original game guide could only have been on the hotplate for less than a half hour (assuming it to have been moved before the appellant left the house). The critical point is that the shape and extent of the damage to the back cover is explicable only on the basis that it was exposed directly to the element for an extended period. The cause of the damage to the back cover proposed by the appellant - that heat from the element, as well as flame produced by the burning of the first 100 pages, "crept" beyond the front cover and spine to produce a circular charring pattern on the back cover, which was face down partly on the cooktop surface - is not a realistic possibility.
9. Taking account of these tests, Mr Forbes concluded that "the part Game Guide was directly exposed to the heat from the hot plate for a considerable period of time and ... then moved to the position in which it was found prior to the kitchen being exposed to the effects of the fire in the lounge room". There were two possible ways in which the book could have moved laterally across the cooktop. The first was by human intervention. The second was by "forces other than a human", which Mr Forbes rejected as not possible. Mr Nash's evidence was to the same effect. And even if it were otherwise possible for the book to have been moved by turbulence produced by the main fire, there is the difficulty that the "protected area" on the bench top requires the game guide to have been moved before the fire in the kitchen was well advanced.

Whether a finding that the appellant tore the game guide was open

1. There remains the question whether, as is contended by ground 6(d), the primary judge was foreclosed from finding that any human intervention in placing the game guide on the cooktop included the tearing off of the first 100 pages by Ms Worth (see J [141]-[144], [152]) because that proposition was not put to her in cross-examination. The answer to this contention is that the "rule" in Browne v Dunn (1893) 6 R 67 (HL) - and accordingly the related principle recognised in Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 at [67]-[73] - is not absolute or inflexible. That rule is concerned with practical injustice, and in the circumstances the making of that finding involved no unfairness to Ms Worth: see Vines v Australian Securities and Investments Commission (2007) 73 NSWLR 451; [2007] NSWCA 75 at [61].
2. Mr Forbes described the game guide as having been torn in half along the spine in his affidavit of 19 April 2018. Detective Wilcox's observation to the same effect was made in his affidavit of 8 May 2018. In his second affidavit of 4 December 2019, Mr Forbes referred to the "part of the Game Guide, which I found on the plaintiff's cooktop" and concluded that the "the part Game Guide" was directly exposed to heat from the cooktop element and then moved laterally. In her subsequent affidavit dated 6 December 2019, Ms Worth "identified the book as the Game Guide" and explained that she had "seen [it] before the Fire" but had not brought it into the kitchen or seen it there, on or before 1 September 2015. In circumstances where she denied that she had anything to do with the presence of the game guide in the kitchen, Ms Worth did not attempt to speculate as to, or explain, why the hundred pages might have been torn off or removed.
3. It is clear that at least by the time the trial began both parties were conscious of the need to explain the missing hundred pages. In an exchange with counsel for Ms Worth during the cross-examination of Mr Forbes, the primary judge identified the two possibilities as being that "the first 100 pages were torn off" or that the game guide "was open and the other pages were [initially] there" but consumed by fire. Mr Forbes was cross-examined at some length as to whether, as he maintained, test 3 excluded the latter possibility.
4. Whilst it was not put directly to Ms Worth that she was responsible for the tearing of the game guide, she was asked whether it was consistent with her "usual practices in relation to housekeeping" to have left "pages of a torn magazine on or adjacent to the cooktop", a question which she answered in the negative. That question appears to have been directed to the game guide, rather than to the magazine visible in photos E64 and E83. The game guide was infelicitously described as a "magazine" in Mr Forbes' initial report, in the joint report of Messrs Nash and Gardner, and by Ms Worth herself, slightly earlier in her cross-examination, when it was put to her that she attempted to use it to start a fire. That same proposition was put on at least two other occasions.
5. The appellant was aware (or at least her legal representatives were aware) that the evidence the game guide appeared to have been torn was an indicator of human intervention supporting the respondent's case that she had used the guide to start the cooktop fire. She had an opportunity to provide any further explanation for the missing pages. She did not take it, no doubt because on her case she would have been speculating about something as to which she had knowledge. Ground 6(d) must be dismissed.

Motive, financial circumstances and "psychological" considerations (grounds 3(d)-(e), 5 and 9(c))

1. The primary judge's finding that the appellant had a "substantial motive" for burning down her home turned on his finding that Ms Worth's financial position at the time of the fire was not "sound" but "dire" (J [287], [297]). Having regard to the objective evidence "that the fire was deliberately lit", and Ms Worth's financial position, his Honour gave little weight to "suppositions about Ms Worth's individual psychology" (J [309]).
2. Ms Worth challenges the finding of motive on the basis of her financial position and contends that the primary judge erred in disregarding "psychological" considerations, which, she submits, point strongly against her having decided to burn down her home (grounds 3(d) and 9(c)). She submits that his Honour erred in finding that she was in serious financial difficulties in circumstances where at the time of the fire she had $32,000 in her bank account and equity in her home, as well as investment properties which she would be able to rent or sell once renovations were completed (ground 5(b)); in not considering the evidence of the respondent's investigator, Mr Bob King, who concluded shortly after the fire that the appellant was in a stable financial position (ground 3(e)); and in not accepting her unchallenged evidence that she could have sought financial assistance from her brother or parents (ground 5(a)). The latter is described as a "Kuhl error" (referring to Kuhl v Zurich Financial Services Australia Ltd at [69]-[77]).
3. Before considering Ms Worth's arguments, it is necessary to explain the evidence as to her financial position and any financial motive for starting the fire. The evidence relates to three issues: her income, which came largely from her childcare business; her assets and liabilities, principally the home, two investment properties she was renovating in order to re-sell, and a loan of $919,000 taken out to fund those renovations and refinance an earlier loan for the purchase of the two properties; and her insurance policy, which provided cover for business interruption loss of up to $132,000 per year ($11,000 per month). Each is addressed in turn.

Income

1. Ms Worth conducted her childcare business as a sole trader but received "business and administrative support" from a larger organisation (J [189]). That organisation was known as "Newtrain" until some point in the 2013-14 financial year, when its operations were taken over by an organisation known as "Multitask". For convenience, in what follows the two organisations are treated as one and referred to as Multitask.
2. All or most of the parents of the children for whom Ms Worth cared were entitled to receive a Commonwealth childcare rebate, which would cover some percentage of the amounts payable to Ms Worth for her childcare services. When parents booked their children in with Ms Worth, they would specify the number of hours of childcare required. Ms Worth would then report those "contract hours" to Multitask, which would collect the rebates payable for those hours of childcare services and remit them to Ms Worth after deducting its "administration fees and other charges". The balance owing from parents was, "at least in theory", to be collected by Ms Worth (J [190]-[191]).
3. Multitask provided statements to Ms Worth on a fortnightly basis, but annual statements were also in evidence for the financial years ending 2012, 2013 and 2015. Those annual statements set out the total number of "contract hours", the amount of the "government rebate" collected and remitted to Ms Worth, and the balance owing from parents for the hours specified. Ms Worth's stated total income was the sum of the Commonwealth payment, net of Multitask's administration fees, and the balance owing from parents.
4. For the financial years ending 2012 and 2013, the balance shown as owing from parents in the Multitask annual statements was $25,699 and $13,561, respectively. The statement for the 2015 financial year showed that the amount paid by Multitask to Ms Worth was similar to that in earlier years ($52,739), but the balance said to be owing from parents was much higher ($78,487). The Multitask statements for the four fortnights before the fire in the 2016 financial year reflected an even larger amount owing from parents, an average of $4,200 per fortnight.
5. Ms Worth's tax return for the financial year ending in July 2015 was lodged in January 2016, well after the fire (J [186]), but it was consistent with the Multitask statement for that year. It stated a gross business income of $131,361 and claimed deductions of $109,787 (including $40,000 for "materials and supplies" consisting largely of children's toys: J [197]), producing a net business income of $21,574 and, taking account of Centrelink benefits, a total income of $28,575. Her disposable income would have been slightly higher than those figures suggest, assuming them to be otherwise accurate, because she was able to claim some of her living expenses as deductions against the business income (J [204]).
6. Ms Worth's evidence, consistent with her tax return, was that she was collecting essentially all of the amounts stated as owing from parents. However, while her bank statements "contained some receipts which were, or might have been, referable to parents' contributions for the childcare business", those receipts made up only a very small fraction of the amounts said to be owing (in the two month period from 1 July 2015 to the date of the fire, approximately 3%) (J [200]). Ms Worth claimed to have been receiving very substantial payments in cash from parents which she either used to pay living expenses or kept at home to fund the renovation of her investment properties (J [273], [274]).
7. The primary judge did not accept the truth of this evidence. In brief, there was no evidence that parents undertook to pay for a specified number of hours, and the attendance records for the period from 1 July 2015 showed that the number of hours of care actually provided was "significantly" less than the number of hours reported by Ms Worth to Multitask, which formed the basis of the claims for the childcare rebate (J [201], [202], [277]); Ms Worth's evidence was inconsistent with statements she made in interviews with police and the insurer in September and November 2015 (J [270]-[272], [276]); and there was no evidence either of Ms Worth's receipt book or from parents to suggest they were paying her "significant amounts in cash" (J [273], [278], [279]). In the face of his Honour's advantage in assessing Ms Worth's demeanour and credibility in giving evidence, the finding that she was not receiving substantial cash payments is not challenged.
8. It follows that Ms Worth's gross business income at the time of the fire was in the order of a thousand dollars a week (J [276]). She also received child support payments from her ex-husband ($110 per week) and variable Centrelink benefits of about $250 per week. None of this addresses her living expenses or ongoing interest repayments obligations, which are dealt with below.

Assets and liabilities

1. Ms Worth operated two bank accounts, one in her name and one in the name of her son. In 2015, neither had a significant credit balance for any substantial length of time and the account in her name was overdrawn on several occasions (J [210]) (on some, quite substantially). She had a small shareholding worth less than $3,000 (J [211]) and a credit card debt which fluctuated around $10,000 and on which interest was payable at 19.7% per annum (J [207]). In 2015, she was also making regular repayments on three other credit card or personal loan facilities (J [208]).
2. On 20 April 2015, Ms Worth contracted to purchase two units in Tweed Heads for $595,000. The deposit of $30,000 was paid by her parents (J [212]). To complete the purchase and refinance her existing ANZ home loan she took two loans from a financier, RAMS, which totalled $820,000 and were drawn down on 1 June 2015 (J [213], [214]). The first monthly repayment of $2,599, due on 1 July, was paid by a loan from her parents (J [218]). The second, on 1 August, was not paid because there were insufficient funds in her account (J [224]).
3. Within a few weeks of the RAMS loans, Ms Worth was seeking to borrow more money to fund the renovations of the investment properties. On 7 July 2015 she wrote to an accountant, Ms West, asking that she certify Ms Worth's income as $226,000 and stating that "we desperately need a loan of $50,000 to complete renovations, we have workers we need to pay ... or we could lose everything!!" (J [219]). She ultimately obtained further refinancing through a loan of $919,000 from another lender, Resimac. In her application for that loan she estimated that her "declared net profit before tax" was $193,570 (J [221], [224]). On the primary judge's unchallenged findings her statement was false (J [222]).
4. The Resimac loan was drawn down on 18 August 2015. On settlement, after repayment of the RAMS loans and "significant broker and lender fees", Ms Worth was left with $70,000 in her bank account. By 30 August, the day before the fire, the balance in her account was $32,000; most of the money paid out went to pay renovation costs (J [225]). By 9 September 2015, a short period after the fire, the balance in her account was $16,000 (J [227]). The monthly repayments due to Resimac were $4,664.
5. Each party relied on expert accounting evidence. The opinion of Mr Ehlers, the insurer's expert, was that Ms Worth was insolvent as at 1 September 2015 (J [230]). The primary judge observed that the experts' disagreement on the point principally concerned the amounts supposedly collected from parents by Ms Worth, and that "it was not suggested that if Mr Ehlers' assumption about there being no parents' contribution was correct, his conclusion of insolvency was incorrect" (J [231]). By Mr Ehlers' calculations, not including any moneys paid or owing in respect of renovation costs, Ms Worth's income fell short of her expenses by approximately $4,000 per month.
6. The two investment properties were ultimately sold in March and April 2016 for a total sum of $900,000, producing "a capital gain of $305,000, without taking into account stamp duty, other acquisition costs and renovation costs" (J [228]).
7. At some point in late 2015 the insurer made an interim payment of $10,000 for four months' business interruption, as well as of amounts totalling $3,750 for alternative accommodation for the same period. On 26 February 2016, Ms Worth received another payment of $51,000 for business interruption loss over the preceding six months, calculated on an increased assessment of the monthly loss (J [83]). The primary judge noted that the $61,000 paid for business interruption "may well have assisted her in completing the Ducat Street renovations" (J [297]). This remark is said to neglect that the properties were on the market by late November 2015 and sold shortly after the February payment, the first in mid-March, and to have involved another Kuhl error.

Business interruption insurance

1. The insurance policy between Ms Worth and the respondent insurer was for a period of one year from 20 August 2015. Ms Worth had taken out home and contents insurance in previous years, but none of the earlier policies included cover for business interruption loss. In opening submissions at trial, counsel for the insurer suggested that her having taken out the policy "was itself suspicious" because the fire took place only weeks later. However, it was ultimately accepted that her decision to take out insurance for business interruption loss was prompted by the requirement or suggestion of the lender (RAMS) then refinancing her home loan, and not itself suspect (J [97]).
2. The relevant clause of the insurance policy provides that the insurer will indemnify Ms Worth for gross income lost as a result of property damage "up to the limits specified in the Policy Schedule". The limit specified in the policy schedule is $132,000, an amount approximately equal to Ms Worth's total income for the 2015 financial year according to the Multitask statements for that period.
3. Ms Worth was cross-examined extensively about her understanding of how the limit on her business interruption cover operated. It is instructive to set out her evidence at length: Q. So you asked her [Ms Worth's insurance broker] to obtain a quote in June 2015 and you asked her to obtain another quote in August 2015, correct? A. That's correct. Q. Did you make any inquiry about the wording of the business interruption cover? A. The wording? No. Q. Yes, the precise terms of the cover for business interruption? A. I think she explained the cover. ... Q. Did you have an understanding what it meant to say a limit of $132,000? A. Well because my, my business was 135,000, then I think with admin fees, I calculated it to approximately 132. Q. So you thought the $132,000 was a limit on the annual amount of the cover you'd be paid? A. Correct. ... Q. So you thought if your house burned down and you couldn't get back into it for a year, they'd pay you $132,000 to replace the revenue for that year. A. Probably, yes. Q. Or about $11,000 a month? A. Maybe. Q. A payment of $11,000 a month, I suggest to you, under this policy, would have put you in a far more secure financial position that the profit that you were earning from your business at the time you took out this policy? A. I don't think so. Q. A payment of $11,000 a month would have enabled you to finance your mortgage commitment to Resimac, wouldn't it? A. But I was already making that money on my business ... ... Q. If your business was interrupted by a fire or a flood and you were paid $132,000 a year, you would have been a lot better off than you were at the time? A. I definitely don't think so, losing every single thing that I possibly owned.
4. The primary judge found Ms Worth "thought that a successful claim [for business interruption loss] would result in her being paid $132,000" and expected as much when she took out the policy (J [297], [282]). That level of income was significantly more than the amount justified by his Honour's findings (not much more than $50,000 per year).

Whether the appellant had a financial motive

1. The appellant gave oral and affidavit evidence of her belief that if "at any time" she needed money she could have borrowed from her parents or her brother (who made a "good income" from his "senior management role" at Coca-Cola Amatil). That evidence was consistent with the fact that her parents paid the $30,000 deposit for the two investment properties and deposited money into her account for the first RAMS repayment. No suggestion was made in cross-examination that her evidence of that belief was untrue. The appellant contends that it would not have been open to counsel for the respondent to submit that this evidence should be disbelieved (Browne v Dunn at 70-71) and that it was accordingly not open to his Honour to decline to accept it, as he did at J [284]: see Kuhl v Zurich at [69]-[72]. The respondent makes no submission against that contention, which should be accepted.
2. On the other hand, it was not an error of fact or law for the primary judge not to refer in his reasons to the report of Mr Bob King. Mr King's conclusion as to the appellant's financial position was stated cursorily and based on her tax return for the financial year ending 30 June 2014. Given his Honour's other findings, the likelihood was that the gross income stated in that tax return was not accurate.
3. Turning to the overall assessment of the appellant's financial position at the time of the fire, her liabilities were substantial, her income was much lower than she contended, and she was unable from her own income to afford the repayments on the RAMS loan, still less the much larger repayments due to Resimac. Whilst she did have assets of real value - her home and the two investment properties - the difficulty she faced in arranging the Resimac loan, which was made on the basis of a very significant overstatement of her income, suggests she had limited capacity to raise funds on the security of those assets in the short term. Over half of the proceeds of the Resimac loan were paid away in less than two weeks, and a further $16,000 came out of the appellant's account between the date of the fire and 9 September 2015. The appellant emphasises that she was not receiving any income from her business during that latter period, and she may well also have incurred expenses relocating or replacing possessions after the fire. As she was not given the opportunity in cross-examination to explain why that $16,000 was paid away, little can be made of the fact that it was. It is nevertheless clear that the $32,000 in her account on the day before the fire was unlikely to last very long.
4. The evidence does not disclose when the renovations to the investment properties were concluded, what the renovation costs were, or how they were financed, save that the majority of the moneys paid between 18 and 30 August 2015 from the proceeds of the Resimac loan went to pay costs of renovation work that the appellant had already incurred. As was mentioned above, at J [297] the primary judge noted the possibility that some of the renovation costs were paid out of the interim business interruption payments totalling $61,000 made by the respondent. Another possibility is that they were paid out of the proceeds of sale of the two properties. Each of these possibilities presumes that the renovation costs remained unpaid for an extended period. Neither possibility was put to the appellant or the subject of other evidence, and they must be put to one side, unresolved. (I do not understand his Honour to have made any finding about the matter.) Ultimately, the position is that despite the loss of her business income, a not insubstantial sum, the appellant was able to complete the renovations and realise a very significant capital gain on the sale of the properties in March and April 2016. It is again unclear how the appellant managed to afford the monthly repayments due to Resimac, but much of the principal would have been repaid on the sale of the properties.
5. In the circumstances, it is tolerably clear that the appellant was not "in a financially sound position" at the time of the fire. It is significant that her primary response to the doubts raised by the respondent as to her financial position, that she was in fact receiving very large cash payments for childcare services, was false. But the evidence does not show that from her perspective the financial difficulties she faced must have appeared insuperable, and indeed tends to suggest the contrary. Particularly is that so once it is accepted that the appellant believed her parents and brother would be willing to lend her money, though it is not clear how much and how readily she believed she could borrow.
6. On appeal, the respondent's case on motive was limited to the proposition that the appellant believed she was substantially overinsured. That proposition was never in terms put to her, but what did emerge from the cross-examination set out at [127] above was that she believed she would "probably" be paid $132,000 for business interruption loss if her home burned down or was otherwise damaged. As the conditional mood of that question necessarily implied, that cross-examination was directed to her state of mind when the insurance policy was being arranged, and before the fire. The appellant denied that the payment of $11,000 per month under the policy would have benefited her financially by enabling her to service the Resimac loan, on the basis that she "was already making that money on [her] business". In fact she was not. Her receipt of substantial cash payments for her childcare services is not a matter about which she was likely to have had a wrong but genuine belief, and her evidence was in terms directed to the fact of those payments, not any belief she had about them. The only inference to be drawn is that she believed she was overinsured, although it is only fair also to note that her denial that she would be "a lot better off" claiming under the policy was emphatic.
7. By way of summary, ground 3(e) should be dismissed. Ground 5(a) is made out, as, largely consequently, is ground 5(b). The appellant's financial position at the time of the fire was not "sound" (J [287]), but nor was it "dire" (cf J [297]). Whilst her belief that she was overinsured provides a conceivable motive, it is not correct to describe that motive as "substantial" (cf J [297]) or the evidence of motive as "strong" (cf J [309]).

Whether error in not having regard to "psychological" considerations in treatment of motive

1. The primary judge dealt with the submission that the respondent's case did not make "psychological sense" at J [299] to [309], and by reference to "three points". The second and third points, which are also emphasised on the appeal, relate to the absence of evidence of planning and the apparent inefficacy of the game guide as a means of starting a fire. Those issues, and the related evidence - including text messages sent by Ms Worth on the evening before and the morning of the fire - are addressed below in dealing with grounds 1, 2, 8 and 9. His Honour described the first point as concerned with "the unlikelihood that anyone would wish to burn his or her own home" and "the resulting loss of Ms Worth's diamond ring and other items of sentimental value from the house". As to the latter, he reasoned at J [303]: The difficulty with counsel's first point is that it rests exclusively on Ms Worth's own account of events. There is no independent evidence that the diamond ring and the other items of sentimental value later claimed to be missing were in the house at the time of the fire. Ms Worth had ample opportunity to remove them. In fact I found Ms Worth's attempts to explain why she did not try to get the ring on 4 September, if, as she claimed, she thought it was still in the house, very unconvincing. In my view, this point tends to support [the respondent's] case rather than detract from it.
2. It is contended that in dealing with that submission his Honour failed to understand and address the appellant's arguments as to the significance of her business and family commitments to an assessment of the likelihood that she would "burn down her home". Ground 3(d) concerns the primary judge's failure to address evidence of the appellant's commitment to her business and the strength of her relationships with the children she cared for and their parents, primarily in the form of Facebook posts on the "Kim's Family Day Care" Facebook page. Ground 9(c) is directed to what is said to be the unlikelihood that the appellant would choose to destroy her home, possessions and childcare business - essentially, as it was put, "her life" - for the uncertain prospect of an insurance payment.
3. The primary judge was not obliged to address every piece of evidence tendered in support of the appellant's case. But it must be accepted that his Honour's reasons for rejecting the "first point" do not involve any consideration of the appellant's dedication to her childcare business and the strength of the relationships she had developed through it. Those matters form part of the relevant circumstances and are to be taken into account in considering the ultimate question, raised in particular by grounds 1 and 8. The primary judge did not specifically deal with them, although his Honour did make clear that in the face of what was described as "powerful objective evidence", suppositions about Ms Worth's "mental processes" and "individual psychology" may have little weight (J [305], [309]).
4. The Facebook posts consist largely of pictures of the children for whom Ms Worth cared, sometimes accompanied by advertisements of "Vacancies" or "spaces available". They appear to have been made semi-regularly until the fire (those in evidence date from August 2013 to August 2015). They suggest that Ms Worth ran a happy and well-provisioned childcare business. Also in evidence are a small number of Facebook posts made within a few months of the fire in which she states, for example, "Looking at these photos miss my little day care & kids so sad xx". All of that is consistent with Ms Worth's affidavit evidence that she "obtained great personal satisfaction" from that business and had "close relationships" with "a number" of the parents of children in her care, which may be accepted in the general terms in which it was given. There remains the question whether this evidence significantly bolsters the inherent unlikelihood of the case against her.
5. The "inherent unlikelihood" of a person choosing to commit insurance fraud by burning down her home is a matter to be taken into account when determining whether to draw that inference in all the circumstances, including through the application of the principles in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 (see J [313]). The primary judge had regard to that unlikelihood but found, albeit without adverting to the evidence just described, that the arguments based on the appellant's "individual psychology" were suppositious and could have only "little weight". I am inclined to agree. The case against the appellant turns on the presence of objective evidence that the fire was deliberately lit in circumstances where it said that she was the only person who had the opportunity to do so. It is not that it was at all likely, without more, that a person in her position would have wanted to burn down her home. If the appellant did decide deliberately to burn down her home, whether impulsively or with a degree of premeditation, she was plainly not proceeding as any right thinking and rational person should. But that is likely to be true of any person who decides to burn down his or her home. Nevertheless, in weighing all of the circumstantial evidence there is to be taken into account whether the appellant's position as a single mother running a childcare business from her home made her even less likely to do so.
6. In the result, it may be accepted that ground 3(d) identifies error in the decision of the primary judge. To the extent that it can be considered separately from the ultimate question raised by this appeal, ground 9(c) does not. As has already been explained, the matters raised by these grounds must be taken into account in considering the inference to be drawn from all the relevant circumstances.

Ms Worth's conduct after leaving her home (ground 7)

1. Ms Worth left her home at roughly 9:28 am and arrived in her car at Tweed Heads Hospital at 9:36, as CCTV footage obtained from the hospital demonstrated (J [290]). She entered the reception area of that hospital at 9:39, made a call to her mother, was informed that her father was at a different hospital (the John Flynn Hospital), and left at 9:43 am (J [173]). External CCTV footage obtained from the John Flynn Hospital records Ms Worth arriving at 9:50 and parking her car at 9:53, after which she remained in the car for about two minutes before getting out and entering the hospital (J [174]). At some point after 10:02 she entered intensive care to visit her father and either turned her phone off or put it on silent (J [31]).
2. Ms Worth left intensive care at some time after 10:30. On her evidence, that was when she realised that she had missed several calls (J [261]), including several from her neighbour, Mr Yip. At 10:47 she called Mr Yip and spoke to one of the police officers at the scene on his phone (J [56], [181]). One of those officers, Detective Wilcox, drove to John Flynn Hospital to speak to Ms Worth, but she was no longer at the hospital by the time he arrived. She left the detective a message that she would meet him at the fire scene and arrived there at about 12:00 pm (on her evidence, which the primary judge was not prepared to disbelieve) (J [265]).
3. Mr Yip first called Ms Worth at 9:41:07, at which time, as CCTV footage demonstrated, "the phone appeared to be in her hand, with her looking at it" (J [264]). He called again at 9:41:47, just after Ms Worth had called her mother at 9:41:41 (J [177]). Mr Yip made further calls at 9:43:53, 9:47:51, and 9:54:11 (J [178]). The last of these was made during the two minute period in which Ms Worth sat in her car after having parked at John Flynn Hospital. Another friend or neighbour called repeatedly between 9:57 and 10:07 (J [180]). Mr Yip made five further calls between 10:07 and 10:41 (J [181]). None was answered and, although each missed call would have generated a text message from Ms Worth's service provider, she did not respond to any of these attempts to contact her until 10:47.
4. When pressed in cross-examination, Ms Worth's response was essentially that the volume on her phone was low, and that she did not hear the calls or notice any missed call text messages: Q. If Mr Yip was calling you while the phone was in your hand and you were looking at it, you'd know he was calling you, wouldn't you? A. Probably, but the unfortunately (sic) thing is that my phone had been dropped by my son and the little piece of the side kept turning phone so yeah, the volume's low. I do not recall Mr Yip calling me but - ... Q. You don't recall any time where you had to search some function on your phone to identify whether you'd had a missed call. When you picked up your phone, it was there displayed on your screen, wasn't it? A. I think so. Q. Can you offer his Honour any explanation as to how you managed to not observe eight missed calls from the number that I've attributed to [the neighbour] and five missed calls from Mr Yip in the period between 9.41am and 10.07am? A. Well, I would have been driving from Tweed to John Flynn and I would have put my phone away in my bag. The other ones I just didn't hear and I wasn't interested in talking to anyone, because I wanted to get to the hospital and I wanted to then see my dad. Q. Yes, but [you] haven't told us that you ignored these calls because you weren't interested, you said you didn't see them? A. I didn't see them. I don't recall hearing them. (emphasis added)
5. Ms Worth did respond to a missed call around the same time. She had previously arranged to help a friend, Donna Campbell, with preparation for a party on the afternoon of 1 September 2015 to which Joshua was invited. Ms Campbell called Ms Worth twice, at 9:57:30 and 9:58:29. Each call went unanswered but, either because she heard one or both calls or saw the missed call messages - Ms Worth was unsure which - at 10:02 she sent a text message to Ms Campbell saying that she and Joshua would be unable to attend the party because her father was in hospital (J [179]).
6. The primary judge rejected as "highly improbable" the possibility that Ms Worth was not aware of any of the calls made to her between 9:41 and 10:02, reasoning that the "phone was actually in her hand when Mr Yip's first call came in at 9:41:07, and when his second call came in (during Ms Worth's call to her mother) at 9:41:47. On her own account Ms Worth must have looked at her phone before 10:02 to pick up the missed call from Ms Campbell" (J [268]). His Honour accepted that why she chose not to answer "does not emerge clearly from the evidence" (J [298]). However, he went on: ... the important point is that, having failed to answer the calls, Ms Worth tried to deny that she had done so and relied on explanations which were shown to be false or inapplicable. Clearly, Ms Worth thought her own actions must have appeared suspicious and in that way the false stories suggest a consciousness of guilt.

Whether error in finding that false explanations for failure to answer calls suggested "a consciousness of guilt"

1. In terms, ground 7 is directed to a "finding that the appellant's failure to answer telephone calls ... [was] indicative of a consciousness of guilt". That statement of the ground, and most of the written and oral submissions made in support of it, does not engage with the primary judge's actual reasons. His Honour observed that it was not clear why the appellant failed to answer any of the phone calls made to her between 9:41 and 10:02 am, with the exception of the two calls from Ms Campbell. He did not engage in unprofitable speculation about whether that behaviour was or was not consistent with the appellant being an arsonist. Instead he reasoned that the appellant's explanations for her conduct were "false or inapplicable" and that she must have thought her conduct - and, presumably, its true explanation - was "suspicious". Only "in that way" did her "false stories suggest a consciousness of guilt".
2. None of that involved any impermissible reasoning. As Heydon, Crennan and Bell JJ explained in Kuhl v Zurich at [64]: Depending on the circumstances, when a party lies, or destroys or conceals evidence, or attempts to destroy or conceal evidence, or suborns witnesses, or calls testimony known to be false, or fails to comply with court orders for the production of evidence (like subpoenas or orders to answer interrogatories), or misleads persons in authority about who the party is, or flees, the conduct can be variously described as an implied admission or circumstantial evidence permitting an adverse inference [that success in the litigation would be rendered impossible or less likely if the material withheld were revealed]. The position must be the same where there is a failure of a party-witness to comply with the duty of a witness to tell the whole truth.
3. There remains the argument that the appellant's explanations were not false or inapplicable. As it was made, this argument largely failed to engage with the appellant's evidence. That she wanted to find her sick father in the ICU was not her primary explanation for failing to respond to any messages and would not, in any event, explain her decisions to wait in the car for two minutes after arriving at John Flynn Hospital (during which time she received another unanswered call from Mr Yip) and to reply to Ms Campbell. Her primary explanation for why she did not take or reply to the calls was that she did not hear any of them or see any missed call messages. Granted that her phone's volume may have been low, that provides no explanation for not noticing the fact of the calls from Mr Yip which she received while looking at her phone (at 9:41:07) and whilst on the phone to her mother (at 9:41:47). And it is not clear how she could have noticed the missed calls from Ms Campbell but not those from Mr Yip or the other caller.
4. An adverse inference drawn from the fact the appellant gave false or inapplicable explanations for her failure to answer phone calls is, of course, hardly determinative of whether she lit the fire. It is simply a matter to be taken into account when addressing the ultimate question raised by grounds 1 and 8. Ground 7 should be dismissed.

The finding that the living room fire was deliberately lit by Ms Worth (grounds 1, 2 and 8)

1. The appellant submits that the primary judge erred in finding that she lit the living room fire, and in being satisfied that the insurer had discharged its onus of proof (ground 1). Specifically, it is contended by ground 8 that the finding Ms Worth lit the fire was "glaringly improbable" in circumstances where - there was no evidence of pre-planning (J [304]); it was accepted that starting a fire by placing the game guide on the cooktop was an "extraordinarily ineffective way of going about it", "not a good choice" and, in retrospect, to have acted stupidly (J [302], [306], [308]); the house was home to the appellant and her son and also the place of her business, the principal source of her livelihood (J [300]); and the appellant otherwise acted in a sensible and rational way on the day of the fire. By ground 2, it is said that the primary judge erred in not making specific findings in support of that conclusion as to Ms Worth's involvement in starting the cooktop and living room fires.
2. In addressing these grounds it is convenient to start with the objective circumstances of the cooktop fire. On the basis of that evidence and the coincidence of two fires starting at the same time, the primary judge concluded that Ms Worth had deliberately lit the living room fire (J [289]-[296]). This Court is in as good a position as the primary judge to decide whether that evidence provides a sound, cogent and reasonable basis for the conclusion that the cooktop fire was started by Ms Worth, and before the living room fire. Doing so does not require consideration of his Honour's findings as to Ms Worth's credibility in relation to the peripheral matters which are the subject of grounds 9(a) and (b).
3. At the conclusion of the main fire, part of the game guide, from pages 101 to the back cover, was found. It was positioned partly on and partly off the cooktop surface with no part of its back cover on the circular heating element (photos E84, E74). The guide had been in that position since before the living room fire had spread to the kitchen. That was established by the shape of the "protected area" found under it on 2 September 2015. At that time the back cover of the game guide was seen to have a semicircular burn mark corresponding to the shape of the cooktop element (photo E150). The element nearest to where it was found had been turned on by Ms Worth when she returned to the home at or shortly after 9 am. The knob used to turn that element "on" is shown in photo E83 in that position. If the intact book was in that position when the knob was turned on, it must have been seen by Ms Worth, as she acknowledged (J [257]).
4. None of Mr Gardner's scenarios provides a plausible explanation for how the game guide could have come to be on the cooktop if it was not there when Ms Worth turned on the element. All of those scenarios assumed that the game guide ended up on the cooktop after the main fire had started and soot and debris had been deposited on the bench top. However, that was not consistent with there being no soot or debris in the "protected area". The evidence offers no sensible explanation for how the game guide could have come to be on the bench top before the soot and debris was deposited and not have been placed there or seen by Ms Worth when the cooking element was turned on. There was no one else in the house at that time, or after she had left and the living room fire started. This evidence provides a clear and cogent basis for being affirmatively satisfied that the game guide was placed on the cooktop by Ms Worth before or after she turned the cooking element on. Leaving the game guide on the cooking element would undoubtedly have caused it to catch fire, at least to some extent. Ms Worth's evidence that she did not do so (see [30] above) was wholly inconsistent with that objective evidence and rightly rejected (J [312]).
5. There is a question as to whether the game guide was moved to its position as found. The position of the semicircular burn marks on its back cover (when found) did not correspond with the equivalent semicircular part of the cooking element on which the front cover of the intact and open game guide would have been resting. As photo E74 (considered with photos E80 and E83) shows, 'as found' there was a space between the nearest part of that energised element and the position of the spine of the game guide. Could the "scorching pattern" on the back cover have happened if the guide had not been moved to its 'as found' position at some time before the main fire spread to the kitchen? There was only one scenario consistent with there having been no such movement (and, accordingly, no further human intervention). It was that in its 'as found' position the book was lying open with its front pages facing up, partly off and on the cooktop surface. In that position its spine and back cover were not over the element, whereas the front cover (facing down) was either in direct contact with or draped over that element.
6. Mr Gardner's suggested explanation for the damage to the back cover of the game guide in this position was that the front cover and pages over the element caught fire and that the heat (and flames) produced spread or "migrated" outwards and towards the back cover of the book in a semicircular shape resulting in the pattern seen in photo E150. The immediate difficulty for this theory is that the spine, and the glue binding its pages, was between the two opened halves of the book, making it unlikely that heat or flames would continue to radiate in a semicircular shape beyond the spine, rather than burn along it. In this respect Mr Forbes' evidence was that "the only way that [the pattern on the back cover] has been created is because the heat source was in a circular, circular radiant heat coming in a circular motion or a circular manner impacting on that magazine. It came from the cooktop." That was also Mr Nash's evidence.
7. Test 3 addressed the possibility that the game guide was always in the position where it was found (and intact), and in that experiment the back cover sustained no apparent damage (see [98] above). Notwithstanding that the bench surface in the kitchen beyond the cooktop was not replicated in this test, part of the back cover (being that part in the lower right corner, as shown in photo E150) was on the cooktop surface and in a comparable position to that part of the original. Mr Nash's evidence was that the part of the back cover of the guide book that had sustained the "deep charring" was in direct contact with the cooktop in test 3, making that test a "fair representation" of the position at the time of the fire of that part of the magazine. Mr Gardner was more sceptical, noting that it was "really hard to simulate fire conditions in the experimental environment".
8. Having concluded, as I have, that there was no plausible explanation for how the game guide came to be on the cooktop other than by the intervention of Ms Worth (J [164], [294]), the primary judge did not make findings resolving the question whether it had been moved to its final position and at some stage the first hundred pages torn off (J [307]); or the question whether the "scorching pattern" on its back cover could have been caused when it was in the position from which it was moved. It would seem that he did not do so on the basis that he considered the resolution of those questions to be "neutral" to his critical conclusion that Ms Worth had engaged in conduct consistent only with her attempting to start a fire (J [163], [164]). This particular aspect of his Honour's reasoning is challenged by ground 2.
9. In my view each of these questions had to be addressed in testing the hypothesis that Ms Worth had placed the game guide on the cooktop. The starting point was that at least the remaining part of the game guide had come to be on the cooktop in the position where it was found before the main fire spread to the kitchen. However, the scorching pattern on the back cover indicated that at some earlier point at least that part of the game guide had been sitting on the heated element. The related question was whether that burn pattern could have been produced in the period Ms Worth was in the house and before the game guide was moved, being less than half an hour. As the analysis above shows (at [99], [100]), Londonderry tests 4 and 5 replicated, although "not exactly", the scorching pattern observed on the game guide, the former in a period of 35 minutes. In the result, the primary judge was right to proceed on the basis that the burn pattern on the back cover was wholly consistent with his finding of intervention by Ms Worth. The evidence justified findings that the guide was moved, from a position where its back cover was on the heated element to where it was found; and that the burn pattern was produced whilst it was in that position.
10. There remains the question whether the cover page and first 100 pages were torn off, either before or whilst the game guide was in the position from which it was moved. That was the opinion of Mr Forbes and Detective Wilcox as a result of their inspection of the remaining pages of the game guide (photo E74). It is not necessary to resolve this question, because whether the book was torn in half along its spine or the first 100 pages totally consumed by fire, the remaining part was moved to the position where it was found.
11. The circumstances to be considered in deciding whether Ms Worth deliberately lit the living room fire include: that within seven or eight minutes of her leaving the house, smoke and flames could be seen coming from the first floor balcony; that the living room fire was likely to have commenced in or near the lounge area on the eastern side of that room, in a location where there was no electrical source of that fire, and in circumstances where the evidence provided no affirmative support for such a cause of the fire; and that the occurrence of "flashover" in the living room at 9.46 am was consistent with a fire having been started in the living room very shortly before Ms Worth left the house at about 9.28 am. Most significantly, those circumstances include that in the half hour period whilst she was in the house Ms Worth attempted to start a fire on the kitchen cooktop by placing the game guide on an energised heating element.
12. The fact of two fires starting in the house in separate locations at the same time, one without any apparent or likely cause or explanation other than human involvement and the other deliberately started by Ms Worth, gives rise to the compelling inference that she was also responsible for lighting the living room fire. Some of the remaining circumstances provide support for that finding. Others raise questions as to why Ms Worth would have acted in that way. None raise any real doubt as to the correctness of the underlying finding that she attempted to start a fire in the kitchen using the game guide or the inference from that fact that she deliberately started the living room fire.
13. As the analysis above shows, Ms Worth's financial position was not "sound" and her business interruption insurance was for an amount that was more than twice what she was found to be earning from her childcare business. That provided a conceivable motive for her burning down the house, although it may not answer the primary judge's description as "substantial".
14. As the appellant emphasises, there was no evidence of pre-planning, in the sense that she did not conduct herself on the day of or before the fire consistently with her having contemplated and made preparation for that course of action. The primary judge accepted that to be the position (J [304]). Ms Worth's involvement in coming to the aid of her parents with their health problems, and in dealing with its immediate consequences for her childcare business, does not reveal any suggestion of what was to come, as is apparent in the following text exchanges with other parents at the time. The first was sent at 6:53 pm on the evening of 31 August and the second and third on the morning and afternoon of 1 September 2015: [31 August 2015, 6.53 pm] Hi Sam sorry lily not com again Tom & I've got my mum & dad very sick so josh & I staying night do u mind if I have Breanna wed & thurs if that suits [1 September 2015, 8.02 am] Jose dad very bad & mum sick dad going in ambulance can your mum get bay today if not ok I will get him x [1 September 2015, 3.50 pm] Sam been with dad at john Flynn he went by ambulance hope work phoned u I had a fire in my house !!
15. On the other hand, the primary judge was justified in being sceptical about the appellant's evidence concerning her reasons for not answering or responding to phone calls made to her after leaving her home on the morning of the fire (see [150], [151] above). Nevertheless, the appellant's having given unsatisfactory explanations for her failure to answer or respond to those calls ultimately raises questions without providing any real support for the drawing of the inference that she had deliberately started the fire.
16. Finally, there is the consideration whether someone in Ms Worth's position was likely to "burn down her home". The considerations emphasised by the appellant - referred to in argument as "psychological considerations" - invite the supposition that a person in her position would be particularly unlikely do so. Those considerations, and the apparent absence of planning, make it difficult to give a full and rational explanation for a decision by Ms Worth to burn down her home. The absence of such an explanation is a relevant circumstance, albeit one which depends for its force on the assumption that she would not have acted irrationally or impulsively. Against that, and the other circumstances to which reference has been made, must be weighed the objective evidence pointing firmly to her involvement in the cooktop fire and her opportunity to light the living room fire, which within 8 or so minutes of her leaving the home produced smoke and flames visible from the street. That objective evidence is much more readily reconciled with the other relevant circumstances on the basis that Ms Worth's behaviour and state of mind may not have been rational and sensible.

Conclusion on liability

1. In the result, I am satisfied that the primary judge did not err in finding that the appellant started the fire. Her appeal should be dismissed with costs.
2. In what follows I deal with the three issues which arise as to the relief to which the appellant would be entitled, if the appeal were allowed.

The three issues as to relief

1. The first issue concerns the basis on which to assess the indemnity payable for property damage. The second relates to the appellant's claim for compensation for business interruption loss in the period commencing on the date of the fire and continuing until 9 months after the delivery of judgment by this Court. (The parties are agreed that it would take 9 months to reinstate the appellant's home.) That claim is made in part as a claim for indemnity under the policy, which provided cover for 12 months of business interruption loss, and in part as a claim for damages for the respondent's refusal to grant indemnity, said to be a breach of the deed of release. The relevant provisions of that deed are set out at [192] below. The third issue is whether the appellant is entitled to damages for inconvenience and distress caused by the same breach.

The indemnity for property damage

1. The insurance policy provides that for claims in respect of property damage, the "basis of settlement" is "Reinstatement or Replacement and extra costs", the latter being additional costs of demolishing or dismantling a damaged building where necessary. The promise to settle claims on a reinstatement basis is subject to the following proviso: The work of rebuilding, replacing, repairing or restoring as the case may be, must be commenced and carried out with reasonable despatch, failing which We will not pay more than the cost of replacement, repair or rebuilding on an indemnity basis.
2. The promise to pay "extra costs" is subject to an equivalent condition. The parties are agreed that Ms Worth is entitled to be paid $495,000 on a reinstatement basis and $400,000 on an indemnity basis.
3. It is now over five years after the fire destroyed Ms Worth's home, and reinstatement has not commenced. CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 403-404; [1997] HCA 2 forecloses the submission that her failure to commence reinstatement is "reasonable" having regard to the respondent's refusal to grant an indemnity, and in this Court Ms Worth in effect acknowledges that the argument she has failed to carry out the work of reinstatement "with reasonable despatch" is not directly answerable. She makes two arguments that seek to circumvent that result.
4. The first is that the deed of release "superseded" the policy and requires the respondent to pay the reinstatement value of the house. It suffices to observe that the promise in the deed, to the extent it has any independent operation, was to make payments "in accordance with the Policy", including the proviso to which the "basis of settlement" was subject.
5. The second argument is that the insurer's reliance on the proviso is inconsistent with its duty of utmost good faith, and therefore contrary to Insurance Contracts Act 1984 (Cth), s 14(1). The mere fact that an insurer's non-payment is in a loose sense the cause of an insured's inability to reinstate cannot preclude the insurer from relying on the proviso: the proviso is available in such circumstances by the terms of their contract. That its operation may be harsh does not, without more, produce any inconsistency with the duty of utmost good faith. There is nothing to suggest that the insurer's delay in granting an indemnity to Ms Worth was prompted by a desire to prevent her from commencing reinstatement so as to enliven the proviso. Nor, in view of the outcome of this dispute at first instance, can it seriously be maintained that the insurer's refusal to indemnify was so unreasonable as to be itself a breach of its obligation of utmost good faith.
6. For those reasons, if the appeal were allowed Ms Worth would be entitled to an award of $400,000 by way of indemnity for property damage together with interest on that amount calculated in accordance with Insurance Contracts Act, s 57.

The claims for business interruption loss

1. The appellant's claims to recover moneys for the business interruption loss caused by her inability to operate her childcare business after the fire raise three distinct issues. The first is the basis on which those claims are made. There is no dispute that the insurance policy provided for up to 12 months' cover for gross income lost as a consequence of property damage (up to a limit of $132,000). In relation to the balance of the period from the date of the fire until 9 months after the delivery of judgment by this Court, her claim is to damages for breach of the deed of release, relevantly of what is said to have been the respondent's obligation to make a payment in accordance with the terms of the policy. The second and third concern whether the appellant has provided sufficient evidence of loss to enable the Court to assess the quantum of the indemnity and damages for consequential loss, having regard to the rejection of her evidence that she was receiving substantial cash payments from parents for her childcare services and what is said to be uncertainty as to her business expenses and present income.
2. Ms Worth's claim (other than in relation to the 12 month period covered by the policy) is to damages for breach of cl 1.1.2 of the deed of release. But that promise, and the damages available for its breach, can only be understood by reference to the provisions of the policy itself.

Availability of damages for loss consequential on a wrongful failure to indemnify

1. In Globe Church Incorporated v Allianz Australia Insurance Ltd (2019) 99 NSWLR 470; [2019] NSWCA 27, this Court (Bathurst CJ, Beazley P and Ward JA; Meagher and Leeming JJA dissenting) held that an insurer's promise to indemnify is to be understood as a promise "to hold harmless against loss" rather than as a promise on the happening of the insured event to make a payment reflecting the damage suffered as a result of that event, in accordance with the policy and within a reasonable time. An insured's claim, in the judgment of the majority in Globe Church, is accordingly a claim to unliquidated damages which arises immediately on the happening of the insured event, "albeit that the amount necessary to make good the loss is to be calculated in accordance with the basis of settlement clause in the policy" (at [209]). That reflects the position in England at common law: see eg Sprung v Real Insurance (UK) Ltd [1999] 1 Lloyd's IR 111; Versloot Dredging BV v HDI Gerling Industrie Versicherung AG [2017] AC 1; [2016] UKSC 45.
2. The issue in Globe Church was whether the plaintiff insured's action had been commenced outside of the relevant limitation period. The relevance of Globe Church to this case is as raising the question whether the conception of an insurer's obligation preferred by the majority is inconsistent with the recovery of damages for loss consequential on the insurer's failure to make payment in accordance with the policy. On the majority view, an insurer is liable in damages the instant the loss is suffered, and any payment made in accordance with the policy is in satisfaction of that liability for damages. The English authorities have accordingly refused to countenance claims to damages for loss caused by an insurer's late or non-payment on the basis that the common law does not recognise claims to "damages for late payment of damages": President of India v Lips Maritime Corp [1988] AC 395 at 425 (Lord Brandon), applied in eg Apostolos Konstantine Ventouris v Trevor Rex Mountain (The Italia Express (No 2)) [1992] 2 Lloyd's Rep 281 at 292; Sprung v Real Insurance at 115; Mandrake Holdings Ltd v Countrywide Assured Groud Plc [2005] EWCA Civ 840 at [7]-[14]. The effect of those authorities was overcome only by Enterprise Act 2016 (UK), s 28, which implies into every contract of insurance a term requiring payment within a reasonable time and provides that a claim to damages for breach of that term is "in addition to and distinct from ... any right to enforce payment of the sums due".
3. The Australian authorities concerning the recovery of damages for consequential loss are not uniform. Several are concerned with a distinction between a claim to an indemnity calculated in accordance with the provisions of the relevant insurance policy and a claim for unliquidated damages made after an election to accept an insured's repudiation of that policy, although the significance of that distinction to the availability of damages for consequential loss has been doubted, in my view rightly. None addresses the English authorities or adopts what is, on the approach of the majority in Globe Church, the proper characterisation of the obligation of an insurer.
4. In Russell Young Abalone Pty Ltd v Traders Prudent Insurance Co Ltd (1993) 7 ANZ Ins Cas 61-182, the Full Court of the Supreme Court of Tasmania dismissed an appeal against the refusal of a trial judge to award damages to the plaintiff insured "for diminution in capital value and loss of rent between the date of the fire and trial" on the basis that the insured had not accepted the insurer's wrongful repudiation of the insurance policy. Underwood J (with whom Green CJ agreed) stated: If an insured elects to accept the insurer's wrongful repudiation, the damages are measured in accordance with the principles laid down in Hadley v Baxendale [(1854) 9 Exch 341]. If an insured does not accept the repudiation the contract remains on foot entitling him or her to recover only in accordance with its terms. ... The nature of a claim against an insurer who fails to pay but does not repudiate the policy is discussed in F and K Jabbour v Custodian of Israeli Absentee Property [1954] 1 WLR 139 at 143 et seq. Pearson J examined a large number of authorities and concluded that such a claim is one for damages but that the expression has a different meaning in claims for a failure to indemnify under a policy of insurance, for the only wrong has been a failure to pay a sum due under a contract. The method of calculating this sum is usually provided for in the contract itself.
5. It is not, with respect, clear that this reasoning establishes that an insured who makes a claim for indemnity calculated in accordance with the terms of an insurance policy cannot also claim damages for loss consequential on the insurer's wrongful refusal to pay it. But in any event, the view that damages for consequential loss are recoverable only if the insured accepts a repudiation of the insurance policy and sues to recover damages for loss of bargain was consistent with the decision of Carter J in Judd & Judd v Suncorp Insurance & Finance (1988) 5 ANZ Ins Cas 60-832, and was accepted by Powell JA, in dissent, in CIC Insurance Ltd v Bankstown Football Ltd [1994] NSWCA 359; (1995) 8 ANZ Ins Cas 61-232.
6. The trial judge in CIC, Cole J, had entered judgment for the plaintiff football club for in excess of $1.9 million, including an award of general damages for trading losses outside of the policy period. In the Court of Appeal, Kirby P and Priestley JA (Powell JA dissenting) upheld that award, the President reasoning that the insurer had "breached the contract of insurance by not paying within a reasonable time the monies properly payable under the insurance policy" and that the availability of damages for consequential loss "is to be ascertained by the application of general principles of contract law". Priestley JA's reasoning on the point was to similar effect. On appeal from that decision, the High Court noted (at 402) that the respondent had not framed its claim as one for damages flowing from an accepted repudiation of the insurance policy by CIC, but did not address the consequences of that fact and remitted the question of the availability of general damages for consequential loss to the Supreme Court: see at 414.
7. On the assumption that the obligation of an insurer is to acknowledge liability and make a payment in accordance with the policy within a reasonable time, it is difficult to see, as Hammerschlag J observed in Brescia Furniture Pty Ltd v QBE Insurance (Australia) Ltd (2007) 14 ANZ Ins Cas 61-740; [2007] NSWSC 598 at [507]-[511], why an accepted repudiation should be a prerequisite to an award of damages for loss consequential on an insurer's failure to pay the agreed indemnity. There does not appear to be any good reason why a breach of contract by an insurer should not be treated like any other breach.
8. The availability of damages for consequential loss has been recognised in a number of other Australian decisions, usually on the basis that the insurer had breached an implied obligation to make payment in accordance with the policy within a reasonable time: see eg Tropicus Orchids Flowers and Foliage Pty Ltd v Territory Insurance Office (1998) 148 FLR 441 at 488-489 (breach of implied obligation to make payment within a reasonable time); Moss v Sun Alliance Australia Ltd (1990) 55 SASR 145 at 154ff (failure to make payment within a reasonable time amounting to breach of obligation of utmost good faith in Insurance Contracts Act, s 13); Oakland Investments (Aus) Ltd v Certain Underwriters at Lloyd's [2012] QSC 6 at [44]-[58]; (2012) 17 ANZ Ins Cas 61-932 (breach of obligation to make payment for undisputed liability within a reasonable time). These damages are often referred to as damages for "late payment", although in some cases liability is never acknowledged and payment is never, rather than belatedly, made.
9. Most significantly, the Court of Appeal of Western Australia has accepted that damages for consequential loss may be payable where an insurer wrongly declines to pay an indemnity (in this case for property damage): Maxwell v Highway Hauliers Pty Ltd (2013) 45 WAR 296; [2013] WASCA 115 at [92]-[99] (McLure P, Pullin JA agreeing), [152]-[155] (Murphy JA). (An appeal on a separate issue to the High Court was dismissed.) McLure P reached that conclusion without express reference to authority. Murphy JA's reasoning commenced with the proposition, which his Honour took to have been established by CIC, that "[i]n the case of insurance policies against destruction or damage to property, subject to any express terms to the contrary, the implied nature of the promise is to acknowledge liability within a reasonable time and pay the sum for which the policy provides". He appears to have treated claims to indemnity calculated in accordance with the provisions of an insurance policy as sui generis, being neither "in debt or for a liquidated demand" nor, except in a loose sense, for "unliquidated damages": cf Globe Church at [232]-[233]. What is presently relevant is that he regarded the claim to indemnity as being "under the policy", rather than, as the English authorities presume (and the majority in Globe Church held), a claim to damages for breach of the policy.
10. The upshot is that whilst the balance of Australian authority supports the proposition that damages may be awarded for consequential loss, those decisions are premised on a view of the nature of an insurer's obligation which, although in my view wholly consistent with the decision in CIC, was rejected by the majority of this Court in Globe Church. On the other hand, none of the English insurance decisions concerning the unavailability of "damages for late payment of damages" has been followed in Australia.
11. On the assumption that Globe Church was correctly decided, that decision and the English authorities must be followed. It is true that in Australia the ambit of the principle that damages are not available for late payment of damages has been qualified by Hungerfords v Walker (1989) 171 CLR 125. That case is authority for the proposition that the loss of the use of money paid away or withheld may be so directly related to the wrong complained of, whether tortious or contractual, that "the loss cannot be classified simply as due to the late payment of damages": see at 145-149 (Mason CJ and Wilson J); and at 152 (Brennan and Deane JJ). But the position remains that no damages are payable for the late payment of damages as such.
12. There is a question whether the appellant's ongoing business interruption loss can be described as a directly foreseeable consequence of the respondent's breach of its obligation to hold her harmless against property damage. But the difficulty is more fundamental than that. The appellant's claim to unliquidated damages for breach of that obligation to hold her harmless is an unusual one, in that "the amount necessary to make good the loss is to be calculated in accordance with", or at least is limited by, the relevant provisions of the contract of insurance: Globe Church at [209]. That is, the amount of damages payable for breach of that obligation does not include any losses for which the appellant is not insured under the policy. In that context, a claim for compensation for any such consequential losses can only be a claim to damages for the late payment of damages: compare Hungerfords at 147 per Mason CJ and Wilson J ("[a] claim for interest on unpaid liquidated losses or damages is of necessity a claim for late payment of damages and one which goes beyond the measure of damages agreed between the parties").
13. The English authorities recognise that the limitation may be circumvented if the loss can be characterised as consequential on "some other and separate breach of contract": see Sprung at 116 (Evans LJ). I cannot see that it is necessary to imply a term obliging the respondent to satisfy within a reasonable time a liability to pay damages which arose immediately on the happening of the insured event, and the appellant does not suggest that the Court do so. Whilst the appellant pleaded in her statement of claim that the respondent's failure to grant an indemnity in a timely fashion was in breach of s 13, that contention is not and could not plausibly be maintained on appeal. (The appellant's more limited reliance on s 14 has already been addressed.) That leaves the appellant's claim to damages for breach of a freestanding obligation said to have arisen under the deed of release.

The claim to damages for breach of the deed

1. Having recited that Ms Worth held a policy of insurance with Interhannover (recital E), that a fire had occurred at her home allegedly causing damage and business interruption loss (collectively referred to as "Loss") (recital F), and that Interhannover had agreed "to grant conditional indemnity to Ms Worth, subject to the terms of this deed" (recital J), the deed of release relevantly provided: 1 Agreement 1.1 Without admission of liability, and in full and final settlement of all matters arising out of, or in any way connected with, the Fire or the Notifications [relating to the fire], the Parties agree: 1.1.1 [The insurer] grants conditional indemnity to Ms Worth for the Notifications; 1.1.2 [The insurer] will make payments to Ms Worth, in accordance with the Policy subject to the other provisions of this Deed; 1.1.3 Ms Worth will continue to cooperate fully with the Investigations [into the cause of the fire], including any new investigation commenced in connection with the subject matter of this deed, by any authority, or agent of [the insurer]. 1.1.4 Ms Worth will repay in full (Repayment) any amounts paid to her in connection with the granting of indemnity referred to at point 1.1.1 above, and the payments referred to at point 1.1.2 above, if a police force, state or federal authority, insurance company (subject to an acceptable evidentiary test), or court finds that she: a) Deliberately caused the Fire and/or Loss; ... 1.3 In exchange for the granting of indemnity, conditional upon the terms of this Deed, Ms Worth releases [the insurer] from any claim in connection with the Notifications and the Fire, other than for payments for the Loss under the Policy. For clarity this clause does not negate any requirement for Repayment under clause 1.1.4 above.
2. Ms Worth contends that cl 1.1.2 is to be construed as a freestanding promise to pay a sum calculated in accordance with the terms of the policy, and one which "superseded" the respondent's obligations under that policy. If her contention is correct, the deed places her in a better position than she would have occupied had the insurer simply made a formal acknowledgment of its liability. In my view the deed does not produce that surprising result.
3. The principal clause of the deed is cl 1.1.1, by which Interhannover "grants conditional indemnity to Ms Worth for the Notifications", defined in recital H as Ms Worth's claims to "indemnity under the Policy for the Loss associated with the Fire on the Policy". Viewed in isolation, that clause is naturally understood as a conditional acknowledgment of liability producing a promissory and contractual estoppel in relation to Ms Worth's claims under the policy. The acknowledgment is conditional in the sense that it is subject to cl 1.1.4 not being engaged. Clause 1.1.2 acknowledges as a matter of fact that payments will be made to Ms Worth as a consequence of the grant of indemnity and facilitates the provision in cl 1.1.4 for the repayment of any moneys so paid in the event that one of the relevant conditions is engaged. But it does not substitute a promise to pay money for Ms Worth's claims to unliquidated damages for breach of the insurer's obligation under the policy. That Ms Worth's claims under the policy were not extinguished or superseded by the deed of release is clear from cl 1.3, by which she agreed "[i]n exchange for the granting of indemnity" (and not any promise to make payment) to release the respondent "from any claim in connection with the Notifications and the Fire, other than for payment for the Loss under the Policy".
4. Accordingly, the appellant's claim to damages for her business interruption loss beyond the 12 month policy period is not maintainable.
5. The respondent does not take any point about causation and concedes that business interruption loss was "within the parties' reasonable contemplation as a likely result" of a refusal to indemnify the appellant for property damage. Accordingly, had the claim been maintainable, the only question would have been whether, having regard to the very limited evidence of her income and employment history subsequent to the fire, the Court is in a position to make an assessment of damages. In the circumstances it is not necessary to consider this question.

Quantification of the indemnity for business interruption loss

1. The respondent's promise was to indemnify Ms Worth for "the amount by which the Gross Income earned during the [12 month] indemnity period shall in consequence of the Damage fall short of the standard income" less "any sum saved during the Indemnity Period in respect of such charges and expenses of the Business as may cease or be reduced in consequence of the interruption or interference". There can be no difficulty about the reduction in Ms Worth's gross income caused by the property damage: it is clear that her gross income from Multitask fell to nil from approximately $1,000 per week. On the other hand, there is limited reliable evidence of Ms Worth's expenses. The deductions of $109,787 claimed in her tax return for the 2015 financial year, which included $40,000 for "materials and supplies", were clearly not accurate - on the findings of the primary judge, they significantly exceeded her actual business income for that year. The respondent's submission is that it is not possible to determine the level of Ms Worth's variable business expenses, and accordingly to be satisfied that she is entitled to any amount by way of indemnity for business interruption loss.
2. That submission should be rejected. The respondent's expert, Mr Ehlers, calculated Ms Worth's business interruption loss at $45,708 per year. His calculation was said to be based on the sources of income and level of expenses declared in Ms Worth's tax return for the 2015 financial year, but it in effect excluded substantial cash payments made to her by the parents (whose children she was caring for) by assuming "that any cash collected as part of the normal business activity (for which no evidence has been provided) would go towards paying for business expenses (for which no evidence has been provided and minimal ongoing business expenses are expected)" (emphasis added). Those assumptions constitute a reasonable basis on which to assess the indemnity payable in accordance with the policy. Having regard to the nature of Ms Worth's business, there is no reason to doubt Mr Ehlers' view that there would be "minimal ongoing business expenses", and the evidence does suggest that Ms Worth was receiving some cash payments from parents, albeit only a small fraction of what she claimed to be collecting (see at [115] above).
3. It follows that if the appeal were allowed, Ms Worth would be entitled to recover $45,708 for business interruption loss, as well as interest under the Insurance Contracts Act.

Damages for inconvenience and distress

1. As a claim to damages for a failure to pay damages, this claim is not sustainable for the same reasons as the consequential business loss claim. Furthermore, for the reasons which follow, it would not have been sustainable as a claim to damages for a failure to indemnify by making payment in accordance with the policy.
2. It is not controversial that damages for anxiety, distress and disappointment are ordinarily not recoverable in an action for breach of contract. The rule is subject to exceptions, including where the object of the contract is to provide pleasure, relaxation or freedom from molestation or "where the plaintiff has suffered physical inconvenience as a result of the defendant's breach of contract and the mental suffering is directly related to that physical inconvenience": Baltic Shipping Company v Dillon (1993) 176 CLR 344 at 363-364 (Mason CJ, Toohey and Gaudron JJ agreeing), 381 (Deane and Dawson JJ), 405 (McHugh J); [1993] HCA 4.
3. The first of these exceptions is most commonly engaged in "holiday cases": see eg Moore v Scenic Tours Pty Ltd (2020) 377 CLR 209; [2020] HCA 17. The appellant relies on the second. She contends that as a result of the insurer's refusal to indemnify, her house was not rebuilt and "she and her son [therefore] had to live with [her] parents for a number of years ... and she lost the capacity to live independently". (Reference is also made to the rebuilding of her home as the "object" of the deed of release, but even if that were correct, which I doubt, it would not bring her claim within the first exception.)
4. The typical case for the application of this exception is breach of a building contract: Archibald v Powlett (2017) 53 VR 645; [2017] VSCA 259 at [62]-[67]. Physical inconvenience may often be the direct and natural consequence of defective home construction, "whether by virtue of having to live with offensive odours or a leaking roof, or in unsanitary or dirty conditions, or being obliged to vacate the defective premises": Archibald at [63]. The appellant's claim is quite different. It is that because of the insurer's non-payment of indemnity for property damage she has been unable to rebuild (and live in) her home and operate her childcare business, and that she has consequently suffered mental distress due to her dissatisfaction with her alternative employment, the loss of "independence" attributable to living with her parents and the "cloud hanging over [her]" by reason of the insurer's allegations. None of those losses involves mental distress "directly related to" physical inconvenience caused by the insurer's refusal to pay money in accordance with the policy.
5. McCALLUM JA: I have had the benefit of reading the judgment of Meagher JA in draft. I am grateful for his Honour's careful and comprehensive analysis of the evidence, which enables me to be relatively brief in explaining why I have reached a different conclusion. I am not persuaded that Ms Worth lit the fire that destroyed her home.
6. The discussion that follows assumes familiarity with the judgment of Meagher JA (which in turn assumes familiarity with the judgment of the primary judge). I agree with much of what Meagher JA has written and with his conclusions regarding most of the grounds of appeal. The principal issues on which I disagree with his Honour are: 1. his conclusion that the primary judge was correct to hold that there was no plausible explanation for how the game guide came to be on the cooktop other than by the intervention of Ms Worth; and 2. his conclusion that the primary judge did not err in disregarding the possibility that the Tahiti screen caused the fire in the living room when considering whether to draw an inference that the fire was deliberately lit.
7. I also take a different view as to the weight to be given to the so-called "psychological" considerations and have reached a different conclusion on the issue of lies revealing a consciousness of guilt. My different conclusions on all of those issues have led me to a different conclusion on the issue of liability. I would allow the appeal.
8. Meagher JA has also dealt with the issues concerning damages. I am grateful for his Honour's careful analysis of those issues and agree with the conclusions he has reached.

The siren call of scientific evidence

1. Circumstantial cases present a singular challenge; more so when the tribunal of fact is invited to draw inferences from facts the proof of which rests on forensic "crime scene" evidence and especially where competing opinions as to the interpretation of such evidence have been offered by expert witnesses. As explained in the joint judgment of Gibbs CJ and Mason J in the Chamberlain case, the process of reasoning in a circumstantial case gives rise to two risks of error; error in finding the facts from which inferences are to be drawn and error in reasoning to a conclusion from the proved facts: Chamberlain v The Queen (No 2) (1984) 153 CLR 521; [1984] HCA 7 at 536 (16), citing Morrison v Jenkins (1949) 80 CLR 626 at 644.
2. The Court in Chamberlain endorsed the well-established proposition that the tribunal of fact in a circumstantial case must consider "the weight which is to be given to the united force of all the circumstances put together": at 535 (15), citing Belhaven and Stenton Peerage (1875) 1 App Cas 278 at 279. That principle applies equally in a civil case where the question is whether circumstantial evidence supports an inference of fraud: Palmer v Dolman [2005] NSWCA 361 at [41]. Meagher JA has set out the relevant principles summarised in Palmer v Dolman but I repeat them here for emphasis: the onus of proof is only to be applied at the final stage of the reasoning process; the inference drawn from the proved facts must be weighed against realistic possibilities as distinct from possibilities that might be regarded as fanciful and where the competing possibilities are of equal likelihood, or the choice between them can only be resolved by conjecture, the allegation is not proved.
3. There is an important aspect of the present case that informs the application of those principles. One of the relevant circumstances in the circumstantial case that Ms Worth deliberately lit the fire that destroyed her home (the fire in the living room) is the allegation that she first attempted to start a separate fire that did take off (the fire in the kitchen). As that is in itself a very serious allegation, in my view the Palmer v Dolman principles must be applied separately to the task of determining whether to draw the inference of arson in the case of the kitchen fire.

The arson fraud allegation

1. Before turning to the scientific evidence, it is convenient to begin with a summary of the events leading up to the fire and the acts the insurer sought to prove were committed by Ms Worth that day. Ms Worth was a single mother. The premises in question served as a home for her and her 12-year-old son as well as being the place from which she conducted a day care centre. She, her son and their cat had spent the previous night at her parents' house because both parents had arrived home from a cruise quite unwell. She told police that she was up with her parents "all night" and that she thought her father was going to die: "he had a very bad, like, death rattle".
2. The primary judge made a damning assessment of Ms Worth's credibility and did not accept propositions that rested on her evidence alone, but the circumstances of the father's illness were not in doubt. He was in fact collected by ambulance and admitted to hospital on the Tuesday morning. There was also objective evidence as to the arrangements made by Ms Worth concerning children due to be in her care on that and the previous day. Initially on the morning of the day before the fire (Monday 31 August 2015), Ms Worth was due to have the care of a child named Breana. She had a text exchange that morning with Breana's mother: Ms Worth: Sam Lily staying with nan today do you think brie be okay on her own Sam: Yeah she should be okay. If she gets upset I'll pick her up. I'll see you about 830 Ms Worth: Sam do you mind if she doesn't come my mum and dad just got home from Cruise and just rang very sick. Can she come Tom and wed or just Tom whatever you want hope you don't mind Sam: yeah that's fine I'll bring her 2morrow and Wednesday
3. Shortly before 7pm that evening she had a further exchange with Breana's mother: Ms Worth: Hi Sam sorry Lily not come again Tom & I've got my mum and dad very sick so Josh and I staying night do you mind if I have Breanna wed & thurs if that suits Sam: yeah wed thurs is fine. hope ur parents are okay Ms Worth: Thanks hon they r hot & cold & have gastric
4. If she was planning by that stage to light a fire that would destroy the day care centre, there was artful deceit in those messages.
5. The following morning, after Ms Worth's father had been collected in an ambulance, Ms Worth dropped her son at school (spending some time consoling him as he was worried about his grandfather). She then dropped some things at a friend's house in preparation for an 80th birthday her mother was supposed to be attending that night. She then went to the house. The primary judge found that she arrived at about 9 am and left at about 9:28 am. The arrival time was based on the evidence of an independent witness (a neighbour, Mr Yip). The departure time was reckoned by reference to CCTV footage which established when she arrived at the hospital and the judge's finding as to how long it would have taken her to get there. She could not have been in the house for more than about half an hour.
6. The insurer's hypothesis, which rested heavily on the opinion of a single investigator, Mr Michael Forbes, is that during that period of less than half an hour between attending to her son, running an errand for her mother and attending to her father, Ms Worth took the opportunity to set her own home on fire in broad daylight for the purpose of defrauding the insurer. The investigator's hypothesis was that she first attempted to set fire to the kitchen by tearing the game guide (described as "dense and glossy") in half and placing the bottom half on the glass electric hotplate and that she later moved the smouldering game guide off the hotplate to the position in which it was found by investigators. This finding that the game guide had been placed on and then moved off the hotplate and that this could only have been the result of "human intervention" was a critical factual premise of the arson hypothesis. Mr Forbes defended it dogmatically. He was fortified in his conclusion by his outdoor experiments which departed from the most basic precept of scientific method in that they failed to replicate the very circumstances they sought to test. He would not countenance the alternative hypothesis that the whole game guide had fallen open onto the cooktop from an unknown position with half of its pages draping over the element, resulting in those pages and the spine of the game guide being consumed by fire and leaving the remaining pages smouldering where they were found.
7. As the human intervention hypothesis went on, the attempt to ignite the game guide in the kitchen having proved unsuccessful, and having inexplicably moved it off the heat source (why? So that it would not catch alight?), Ms Worth then moved to the living room where, using a source of fuel and a method of ignition that could not be identified after the fire (and which, again inexplicably, she had not used in the kitchen), she set fire to the living room before leaving the house to attend to her father in hospital, apparently without even pausing to collect clean clothes (other than underwear) for herself; or so she told police when she explained why she was wearing her mother's clothes to an interview at the police station the following day.
8. It was further posited that Ms Worth gave false explanations for her failure to answer a series of telephone calls between the time when she left the house and the time when she arrived at the hospital, supposedly indicating a consciousness of guilt of arson.
9. Finally, it was contended that Ms Worth had a financial motive for defrauding the insurer.
10. Meagher JA has provided a helpful overview of the findings of the primary judge on which the conclusion that Ms Worth deliberately lit the fire was based. Probably the most significant fact, which was not in dispute, was that there were two separate and independent areas of ignition (the kitchen and the living room) and the fact that the fire broke out not long after Ms Worth left the house. It was the fire in the living room that caused the destruction of the home. However, it was common ground that the fire in the living room did not cause the fire on the cooktop. That was the result of the element causing flames and burning part of the game guide on the cooktop. The primary judge concluded that there was no plausible explanation as to how the game guide ended up where it did without human intervention. Putting the cooktop fire to one side, it was postulated on behalf of Ms Worth that the fire in the living room may have been started by the Tahiti screen. The primary judge rejected that theory as fanciful.
11. The primary judge summarised his conclusions on factual issues at [288]-[313]. The principal findings to support the inference of arson were: 1. Ms Worth left the house at about 9:28 am, meaning that there was only a very short period of time for the fire to break out spontaneously after she left; 2. the evidence favoured the view that the fire in the living room broke out in the area of the part of the L-shaped sofa that ran North/South, where there was no electrical source; 3. the fact that there were two independent sources of fire; 4. the conclusion that there was no credible explanation for the kitchen fire apart from human intervention; 5. financial motive; 6. a finding that Ms Worth's explanations for failing to answer telephone calls between 9:41 and 10:02 were "false or inapplicable", indicating a consciousness of guilt; and 7. a rejection of the submissions put on behalf of Ms Worth that the arson allegation did not make "psychological sense".
12. The central features of the primary judge's analysis were the conclusion that human intervention was the only credible explanation for the fire in the kitchen and the rejection of the Tahiti screen theory as fanciful. In my respectful opinion, each of those aspects of his Honour's reasoning entailed error. Absent the conclusion that the fire in the kitchen can only be explained by human intervention and accepting the Tahiti screen theory as a plausible explanation for the fire in the living room, one is left with little more against Ms Worth than contested evidence of motive coupled with the suspicion that naturally attends coincidence. On my analysis of the whole of the evidence, the proved facts did not provide an adequate foundation for inferences of the seriousness of those the insurer invited the primary judge to draw.

The fire in the kitchen

1. As already explained, I take the view that the very serious allegation of deliberately lighting the kitchen fire cannot properly form part of the circumstantial case against Ms Worth unless separately proved. For that reason, I propose to consider the kitchen fire first. There is no doubt that one of the elements on the cooktop had been left on. The question was whether that was accidental or deliberate. Ms Worth's case was that she had started to make a boiled egg but had changed her mind and that she may have forgotten to turn the element off. She would not be the first person in the world to have left an element on accidentally, particularly on a chaotic day of the kind she faced that day.
2. The insurer's case that the Court should infer that the element was deliberately left on rested on the factual premise that the game guide could only have ended up in the position in which it was found as a result of "human intervention". It is necessary to explain that hypothesis and the competing innocent hypothesis suggested by Ms Worth.

The "human intervention" hypothesis

1. What were found by investigators were the remains of the game guide without the first 100 pages. The pages that remained were found resting flat with the back cover facing down, partly on the kitchen bench and partly on the cooktop but not directly on the element. The edge of the game guide where the spine had been (but no longer was) ran at a tangent to the curved edge of the element. It is difficult to tell whether, if the game guide reached that position intact, it would have been just off, or just touching, or slightly encroaching upon the activated element.
2. The human intervention hypothesis was that Ms Worth must have torn the first 100 pages off. The remaining part of the game guide was still quite thick. It is not obvious why a person seeking to set it alight would divide it in that way. The basis for the conclusion that the first 100 pages had been torn off deliberately was that they were missing. Mr Forbes would not countenance the possibility that they had been burned off by fire. He believed his Londonderry tests proved that that could not have happened.
3. It was posited that, after tearing the game guide in half, Ms Worth placed the bottom part of the game guide directly onto the element before later moving it to a different position adjacent to the element where it was found by investigators. The invitation to draw the inference that the game guide had been moved was based on the fact that there was charring in a roughly semi-circular pattern on the back cover said to match the shape of the element. The hypothesis assumed that such charring could only have been caused to the game guide as a result of being placed directly on top of the element. Mr Forbes would not countenance the possibility that the charring was caused by burning smouldering through the game guide in the position in which it was found.
4. It was not suggested that the game guide was placed so that it sat wholly over the hotplate. The charring is semi-circular. On any view of the evidence, the hypothesis had to be that Ms Worth attempted to light a fire by placing the bottom part of the game guide half on and half off the element.
5. The second aspect of the human intervention hypothesis went to the issue of sequencing. It was posited that the game guide must have been moved to the position in which it was found at some point before the fire in the living room spread into the kitchen. The reasoning for that aspect of the hypothesis evolved over time. In Mr Forbes' first affidavit, the reasoning appeared to be based on the appearance of the game guide - the fact that it was charred on the top but uncharred (apart from the circular mark) on the bottom, suggesting that the placement of the guide on the kitchen bench protected the bottom cover from the fire that later raged through the kitchen from the living room. In his evidence at the hearing, however, Mr Forbes' reasoning appeared to be based on the appearance of the benchtop when he described a rectangular-shaped "protection mark" where there was no soot.
6. The significance of the inference that the game guide was moved before the living room fire spread to the kitchen was that it was said to rebut the suggestion that the game guide could have been caused to land where it was found by forces caused by the living room fire, such as the falling of kitchen blind (when the fire melted its hinges) or turbulence caused by the failure of the kitchen window or turbulence caused by the fire itself.
7. Two preliminary observations may be made about Mr Forbes' conclusion that the game guide was moved by human hand. First, so far as the evidence before this Court reveals, there is no photograph of the area under the game guide at the point when it was first lifted. It appears the game guide was photographed in situ, then lifted and turned over; that at least part of the area in which it had been was then cleaned and that the cleaned area was then photographed. There was no mention of the protected area in Mr Forbes' first affidavit: "In front of the rest of us (Mr Forbes, DSC King, and the 2 Crime Scene Group officers), DSC Wilcox took a photo of the game guide that was on the hotplate which was on (the left side). He then moved the game guide aside so we could see the hotplate (this is depicted in photographs 56 and 57 of the photographs annexed to Kelly Rampling's Statement). DSC Scott Wilcox then picked up the Game Guide and we examined it. We also cleaned up the hotplate with some cloths (seen in photographs 60 to 62 annexed to Kelly Rampling's statement) to see the shape and size of the hotplate and compare it to the marks on the underside of the game guide. DSC Wilcox then put the game guide in an exhibit bag. I observed that the area with the burnt circular shape and otherwise uncharred (as shown in photograph 64 annexed to Kelly Rampling's Statement) was face down on the hotplate that was left on and the charred surface of the book was facing upwards. The burnt circular part of the face down side of the game guide appeared to correspond to the left hotplate."
8. As already noted, the sequencing reasoning based on the appearance of a protected area on the benchtop appears to have emerged only at the hearing. Meagher JA has noted that, in cross-examination Mr Forbes said, based on what he had seen after the game guide was first moved, that there was "no soot underneath in that rectangular shape", from which he concluded that the book was in that position "before the main fire started". His Honour notes that it was not suggested to Mr Forbes in cross-examination that the so-called "protection area" had been scrubbed clean or that there was soot in that area when the game guide was first lifted and moved. But it is not clear to me that anyone would have had a basis for putting that because the area was not photographed and the "protection area" hypothesis appears only to have emerged in Mr Forbes' oral evidence. He was not an expert witness qualified by either party; he was a fireman turned fire investigator who was invited by police to assist them in their investigation of any possible offence.
9. In the absence of a photograph, Mr Forbes seems to have relied on his recollection, five years after the date of the fire, of the appearance of the bench before it was cleaned. Ms Worth's expert suggested that the apparent protection pattern on the bench had actually been caused by the cleaning work done on the cooktop after the fire. The primary judge at [159] dismissed that as "an extraordinary coincidence". However, that is precisely what appears to be depicted in photograph E80 (reproduced in Meagher JA's judgment at [77]), which shows a line of soot ending at the edge of the area that has obviously been cleaned.
10. Secondly and in any event, the reasoning that either the bottom cover of the game guide or the benchtop was protected from "the main fire" by the placement of the game guide makes an unstated assumption as to the sequence, indeed that there was an orderly sequence, in which various effects of the two fires would have been present in the kitchen. In particular, it discounts the sequence "turbulence or falling blind, fallen game guide, deposit of soot".
11. The experts offered various views on those issues. In my view a hypothesis that rests on such matters introduces a level of impermissible speculation. If one was going to speculate about that, it might be thought that at least some settling of soot would occur after any turbulence. There are so many unknown variables in relation to these two fires, I do not see how anyone could reliably conclude, for example, that there could not have been any turbulence in the kitchen strong enough to knock the game guide over from an unknown position at any point before soot would have settled or smoke-damage would have been occasioned to other items on the bench.

The innocent hypothesis

1. The innocent hypothesis was that the game guide was never touched by Ms Worth; that it had been left in an unknown position in the kitchen by her son Joshua the previous day (possibly the recipe stand, which stood quite close to the hotplate) and that the whole magazine must have fallen onto the hotplate at some unknown point during the fire. The primary judge noted at [295] that "no one said" Joshua actually took the game guide into the kitchen. But it was not for Ms Worth to disprove the defence hypothesis; the critical inquiry is whether there are other reasonable possibilities. Besides, the only person who might have said Joshua took the game guide into the kitchen was Joshua. It is hardly surprising that he was not called as a witness. He was 12 at the time of the fire. The proceedings in the Equity Division were commenced over a year later. By the time it became clear that the presence of the game guide would be such an important issue in the trial, there is no reason to think Joshua would have remembered whether or where he placed the game guide the day before the fire that destroyed his home.
2. In any event, the innocent hypothesis continues that the game guide could have fallen from wherever it was left by a 12-year old boy and come to rest in an open position with the first 100 pages draping over the activated hot plate to the right of the spine (from the perspective of a person standing in the kitchen) and the remaining part to the left of the spine resting flat where it was found with the back cover partly on the cooktop and partly on the kitchen bench. That hypothesis rejected the assumption that the charring on the back cover could only have been caused as a result of being placed directly on the element and instead allowed for the possibility that it could have been caused by smouldering radiating from the spine after the pages on the right hand side caught fire. It was suggested that the ambient conditions in the kitchen at that time were conducive to the game guide continuing to smoulder after the right hand side pages and the spine had been consumed by fire because, unlike the circumstances of the Londonderry experiments, the space was contained and there was additional heat from the approaching fire in the living room.
3. There is photographic evidence as to where the game guide was found and the condition in which it was found. Meagher JA has reproduced photograph E150 showing the state it was in by the time it had been taken to Londonderry and tested against the element-shaped ring constructed by Detective Wilcox. The video footage shows that the game guide was not protected by any cover during the Londonderry experiments and was freely handled, for when it was carried by one officer and held next to one of the purchased copies of the game guide to show that test 3 was conducted with the pages in the correct orientation, example as the DVD footage shows.
4. It is informative to look at the photograph taken when the game guide was first turned over at the scene of the fire for inspection of its underside (E79): Photo E79
5. It is by no means clear to me why the charring shown in that photograph should be found to be consistent only with the possibility that the game guide was placed directly on top of half of the element and later moved. It is apparent from the photograph (and is confirmed by other evidence in the trial, considered below) that at least a good part of the glued spine was consumed by fire. There was evidence (also addressed below) which tended to establish that, at the time the spine burned, the game guide was in the position in which it was found by investigators. With respect, I do not think one can reject as a reasonable possibility the cause suggested by Ms Worth, namely, that the semi-circular charring of the back of the guide was the result of the fire continuing to smoulder through the bottom half of the game guide after the top 100 pages and most of the spine had been consumed by fire and while the remaining part of the game guide rested immediately adjacent to the activated element.

The course of the investigation

1. In weighing the inferences capable of being drawn from the proved facts it is helpful to understand how the "human intervention" hypothesis evolved. So far as the collection of forensic evidence is concerned, the first on scene was crime scene officer Kelly Rampling, a civilian employee of the New South Wales Police Force. Ms Rampling has a bachelor's degree in forensic science with honours, as well as a diploma and various certificates in forensic topics. She attended the house on 1 September 2015, the day of the fire, and again the following day. In her statement she classified the cause of the fire as "undetermined". She did not reach any different conclusion at any stage. Ms Rampling was the only expert witness other than Mr Forbes who saw the scene in the kitchen as it was after the fire. She was called as a witness by the insurer but no evidence was led from her as to the hypothesis that the game guide had been placed or moved by human intervention.
2. In cross examination, Ms Rampling agreed by reference to photograph E77 that what remained of the game guide was "a thick bunch of pages" with "the spine exposed". Based on what was depicted in that photograph, she agreed with the suggestion that the spine had been burnt off. She also agreed that there was discolouration of the bench beside the left-hand edge of the cooktop which would indicate that there had been some burning at that point. She agreed that the burn mark on the benchtop corresponded with the position of the spine of the game guide.
3. That burn mark together with a thick line of burnt residue on the cooktop can clearly be seen in photograph E80 reproduced by Meagher JA at [77]. The mark on the cooktop has the appearance of residue that could have been left by the burning of the glued spine of the game guide. The presence of a burn mark and burnt residue stretching from the cooktop onto the bench in alignment with the spine of the game guide indicates that the game guide was at some point alight in the position in which it was found by investigators. If that is right, Mr Forbes' hypothesis starts to look more tenuous, predicated as it is on the premise that the charring could only have happened by placing the game guide directly on the hotplate. Why could a fire in which the spine was consumed by flames hot enough to leave a burnt residue on the cooktop not continue to smoulder through the other half of the game guide?
4. It is not clear whether Mr Forbes turned his mind to the implications of the burnt spine. None of his reports discuss it. Mr Forbes was invited to join the investigation by one of the fire fighters who first attended the fire, Mr Perrin. Mr Perrin sought assistance from Mr Forbes because he (Mr Perrin) could not determine the cause of the fire. Mr Forbes was in the Fire Investigation and Research Unit of Fire and Rescue NSW. His curriculum vitae was attached to his statement but, if it went into evidence, it does not appear to have made its way into the appeal books. According to his statement, before becoming a fire investigator, Mr Forbes worked as a fire fighter for 24 years.
5. Mr Forbes first attended the scene the day after the fire, 2 September 2015. That afternoon, he inspected the area of the cooktop which included removing the game guide, cleaning the area underneath and replacing it where it had been. There is conflicting evidence as to whether Ms Rampling was present at that time. Mr Forbes requested police to disconnect and seize the cooktop, which they did. He later conducted the Londonderry tests using that cooktop.
6. In the meantime, the insurer retained its own expert, Mr Gary Nash. Mr Nash holds a bachelor's degree in applied science (chemistry) and is a "chartered chemist". He attended the scene two days after Mr Forbes, on 4 September 2015. He was briefed with information obtained from Ms Worth, including the existence of the Tahiti screen. Neither Ms Rampling nor Mr Forbes was aware of the existence of that item when they examined the scene. Mr Nash provided his first report on 10 September 2015. He noted that no ignitable liquid residues were detected in samples taken from the scene (Mr Forbes had also checked the site for the presence of accelerant with the assistance of a specially-trained K-9 agent, "Opal", who did not report anything suspicious).
7. Mr Nash reported his opinion that the fire had originated in the eastern section of the lounge room "including the internal stairwell". He said, "due to the degree of post-fire disturbance sustained within this area and the limited scene examination possible on the day of our inspection, a more precise area of fire origin was unable to be determined." He considered that an electrical malfunction within the Tahiti screen was a possible accidental cause of ignition.
8. As already noted, by the time Mr Nash attended the scene, the game guide and cooktop had been removed by police at the request of Mr Forbes. Mr Nash recorded information he had received from Ms Rampling that the cooktop element controller had been found in the "on" position but that there was no saucepan or other item confirmed to have been on the cooktop at the time of the fire. He concluded at that stage that there was no evidence to indicate that the fire had been deliberately lit.
9. Mr Forbes produced his first report on 17 September 2015. He expressed the opinion that the point of origin of the fire in the living room was "the area in front of the Eastern single lounge chair". As to the fire in the kitchen, he expressed the opinion that it required human intervention and could not have occurred accidentally. In his report, he recorded his reasoning as follows: "The paper magazine was deliberately put there to be ignited by the stove cooktop." That was a conclusion. So far as the report records, the only fact on which it was based was the fact that the game guide was found where it was, on the cooktop. There was no reference at that point to movement of the game guide.
10. As already noted, Mr Forbes also ventured a hypothesis as to the sequence of events. He said "the small fire to the magazine brochure in the kitchen was ignited first. Due to the thickness of the magazine it appears that this fire took some time for it to burn through the pages. Further testing of burning a similar magazine will provide a timestamp as to how long it would have taken to burn this."
11. After conducting the Londonderry tests, Mr Forbes provided an affidavit dated 19 April 2018 in which he explained those tests. I will return to discuss those tests. Mr Forbes concluded that "the circular burnt pattern of the original game guide removed from the hotplate at the fire scene" matched the shape of the hotplate. He said that, following the further testing, he maintained his initial view: "I could not find an accidental cause for the living room fire, the hotplate fire started before the living room fire, and the hotplate fire was deliberate (with the hotplate on and a magazine on top of it)."
12. On 30 August 2016, Mr Nash produced a further report responding to particular questions asked of him presumably arising from Mr Forbes' initial assessment. As to Mr Forbes' opinion identifying a relatively localised point of fire origin within the eastern section of the lounge room, Mr Nash commented that, based on his experience, the fire damage was too severe within the lounge room for him to reliably conclude such a localised point of fire origin. However, having considered Mr Forbes' theory about the kitchen fire, Mr Nash came around to the view that the cooktop fire was deliberately lit. He said: "the ignition of the magazine on the operating cooktop does not appear to have a natural explanation, given the known timings and development of the lounge room fire; hence, this action was considered to have been deliberate. It was considered extremely unlikely that an electrical malfunction occurred at essentially the time that the homeowner departed; having left a cooktop controller on high. Based on the above and that the fire had two areas of fire origin that were not connected, I am able to exclude an electrical malfunction as a possible cause of the fire."
13. The terms of that explanation indicate that Mr Nash's view as to the kitchen fire was not based on any forensic examination of the cooktop but was based rather on the unlikelihood of the coincidence of two fire events and the proximity of those events to Ms Worth's departure from the house. His exclusion of even the possibility of electrical malfunction was, similarly, not based on any observation or finding of fact concerning the appearance of the living room but rather on the apparent unlikelihood of coincidence in those events.
14. I accept that the "known timings" are such as to give rise to suspicion. There are two suspicious aspects of the timing; the concurrence of two separate fires at around the same time and their proximity in time to Ms Worth's departure from the house. That said, on the possibilities to be weighed against the insurer's hypothesis, it is not the case that there is a complete absence of any causal connection between those events. The Tahiti screen and the hotplate were both said to have been left on (in the case of the Tahiti screen, overnight for the first time) in circumstances where one can accept Ms Worth would have been discombobulated by the events of the previous 24 hours including having had little sleep, no breakfast and the worry of juggling her work and family commitments. The proximity of the kitchen fire to Ms Worth's departure is equivocal as to whether the hotplate was left on deliberately or accidentally since, either way, it is accepted that she is the one who left it on. I accept that the proximity of the fire in the living room to the time of her departure is more suspicious but that is only one of many circumstances in this complex circumstantial case.
15. Returning to the evolution of the "human intervention" hypothesis, the next report in the chronology was the report dated 22 August 2018 from Mr Gardner, an electrical engineer retained as an expert by Ms Worth. He initially expressed the opinion that the fire originated in the roof space above the living room but subsequently resiled from that opinion.
16. As to the alleged second seat of fire in the kitchen, Mr Gardner commented that, if there had been a deliberate attempt to ignite a thick glossy magazine by placing it on the cooktop, one would have expected it to have been placed so that it fully covered the hotplate. He said he could think of no reason why anyone would leave the magazine at the edge where it did not catch fire. On that basis, he concluded that there had not been a secondary seat of fire in the kitchen (presumably meaning a secondary deliberately-lit fire).
17. Mr Nash responded to Mr Gardner's report in a further report dated 30 November 2018. Much of that report addressed matters upon which the two engineers later agreed. They participated in a joint conclave and produced a joint report dated 4 October 2019. They agreed that there were two areas of ignition, one at the cooktop and one within the lounge area. They agreed that there was insufficient physical evidence to determine the origin and cause of that fire and, subject to one qualification on the part of Mr Nash, neither excluded electrical malfunction as a possible cause. The qualification was that Mr Nash repeated what I might call his "remarkable coincidence" reasoning. He said that, if the fire at the cooktop "cannot be explained as an accidental occurrence" then the kitchen fire would be considered to have been deliberately lit, in which case the loungeroom fire would also be considered to have been deliberately lit. However, if the kitchen cooktop fire was found to have been caused accidentally, the cause of the fire in the living room would be "undetermined", with electrical malfunction remaining a possibility.
18. After the conclave, Mr Gardner produced a supplementary report in which he postulated that the magazine may have been left upright on the window ledge above the cooktop or sitting on the kitchen bench behind the cooktop or on the bench leaning against the recipe holder beside the cooktop and that it fell forward onto the cooktop during the fire. Mr Gardner postulated three possible mechanisms by which the magazine may have been caused to fall from one or other of those positions: the falling window blind, turbulence caused by the failure of the windowpane or turbulence caused by the fire.
19. Mr Nash responded with a further report dated 4 December 2019 in which he rejected each of those possibilities. In addressing the suggestion that the game guide might have been knocked by the falling blind, he addressed only the possibility that the game guide had been left on the windowsill. Other possibilities had been suggested (the splashback or the recipe guide). Mr Nash's reasons for refuting the windowsill hypothesis did not apply to those. The recipe guide is close to the hotplate and seems an obvious place to put rest a magazine-style publication in the kitchen.
20. Mr Nash also refuted the turbulence hypothesis but in terms which, in my respectful opinion, were not convincing. As to the possibility that there was a rush of air when the windowpane cracked, he argued that there would not be an "in rush" or "out rush" of air because the external roller shutter over the window was closed. However, he acknowledged that the degree to which the roller shutter sealed the opening was not known. As to the possibility that hot gases produced by the fire would have created displacement of the air within the house, he argued that "significant turbulence would only have occurred close to the fire, with a generally stable hot gas layer above lower cooler air elsewhere". He said this was particularly the case in any "dead zones" and characterised the long narrow kitchen as such a zone. On that basis he considered the possibility of fire-induced turbulence causing the magazine to fall over as "negligible". But those observations articulated no assumption as to the degree of turbulence that would be necessary to disturb a magazine of the heavy, glossy composition of the game guide from an unknown position. One has only to consider the nature of such a magazine, which does not have hard covers and is comprised of glossy, heavy pages, to see that it would be difficult to position vertically and might easily slide from a vertical or propped position.
21. Without knowing how the game guide might have been propped up by a 12-year-old boy, it is impossible to make any reliable assumption as to how much force or turbulence would be needed to destabilise it. It is difficult to resist the conclusion that, once the fire experts had ventured into the territory of debating the likelihood of a magazine falling in a particular, they had perhaps become entrenched in their respective positions (I do not confine that criticism to the insurer's experts; Mr Gardner also made some ambitious claims on that topic).
22. Mr Forbes also provided a further affidavit, also dated 4 December 2019, responding to Mr Gardner's suggestion that the game guide may have fallen rather than being placed on the hotplate by Ms Worth. It was in that affidavit that he first explained (or at least that I first perceived) that his hypothesis was that Ms Worth must have moved the game guide at some point after she first placed it on top of the element. He gave his reasons for doubting that the magazine could have been knocked or blown onto the cooktop and further stated that, even if that was theoretically possible, his observations of the fire scene "demonstrate that neither of those events occurred".
23. On that issue, Mr Forbes drew support from the Londonderry tests which he asserted "demonstrated that the charring of the underside of the part game guide could not occur with the part game guide in the position in which it was found". In my respectful opinion, the Londonderry tests were at best unhelpful; they had the potential to lend an air of scientific authority to a hypothesis that was little more than conjecture. They certainly did not demonstrate that the charring of the underside of the part game guide could not occur with the part game guide in the position in which it was found. I say that because the Londonderry tests wholly failed to replicate the position and circumstances in which the game guide was found.
24. The important tests for present purposes were tests 2 and 3. Mr Forbes described those tests in his first affidavit as follows: 31. The second test commenced at 1:40pm and lasted for 10 minutes and 22 seconds. We placed the Game Guide adjacent to the hotplate where it was observed post fire. In this second test, no damage was occasioned to the magazine. The element heated up to 530 degrees. A thermometer placed under the magazine showed 84 degrees. (Six minutes and six seconds into this test a generator was started in an adjoining shed which compromises the audio quality of the digital recording). 32. One theory discussed between Detective Scott Wilcox, Sarah Southall and [me] was whether the magazine could have been opened at page 101 (the page it was found separated on) and the opened portion open over the hotplate. When we commenced the third test the portion of the magazine opened over the hotplate was barely in contact (due to the spine). About 9 minutes into the test the loose pages over the hotplate caught fire and the open portion dropped onto the hotplate. Those small flames were not enough to have caused the lounge room fire. Once the portion of the game guide dropped onto the hot plate, the fire smouldered and went out. This third test commenced at 2.26pm and lasted for 26 minutes"
25. Mr Gardner was sceptical as to the usefulness of the tests, noting that "it's really hard to simulate fire conditions in the experimental environment". I can only say that I share his scepticism. As Mr Gardner noted, the tests were conducted outside in an open area and with the cooktop elevated by about 50 millimetres whereas in Ms Worth's kitchen it was flush with the benchtop. The effect of those conditions was that the game guide used in the tests was ventilated underneath whereas in Ms Worth's kitchen it would have been resting flush on the benchtop with no ventilation. The DVD footage starkly demonstrates how freely the area under the game guide was ventilated in test 3. Ventilation was introduced in a different way in test 2 because, rather than having the part game guide sitting flush on the hotplate, it was placed on top of the thick wire thermometer used to measure the heat. A gap between the hotplate and the game guide caused by that wire can plainly be seen in the DVD footage. The DVD footage further shows that the tests were conducted in a breeze whereas the conditions inside the unit on the day of the fire were still and contained. As Mr Forbes himself observed, the kitchen was long and narrow. The hotplate was immediately surrounded on all sides by walls or surfaces of one kind or another. The DVD footage shows that, at the beginning of test 3, the breeze was strong enough to lift one of the pages of the game guide. During that test, the smoke from the smouldering and burning pages was blown away from the hotplate, at times strongly and in changing directions. During the fourth test, the breeze was strong enough to prompt one of the officers to place a small rock on the game guide to keep the fluttering pages in place.
26. In test 3, Mr Forbes sought to test the theory that the magazine could have fallen open at page 101 in the position in which it was found. He placed a copy of the magazine with the opened portion over the hotplate. About nine minutes into the test the loose pages over the hotplate caught fire and the opened portion dropped onto the hotplate. Mr Forbes noted that, once the portion of the game guide dropped onto the hotplate, the fire smouldered and went out. However, as already noted, that was outside in the open air, not in the confined space of Ms Worth's kitchen with another fire developing in the next room.
27. Further, it is clear from the photographs that, in the real fire, the spine of the game guide caught fire and was largely if not completely consumed. That did not happen in test 3. That does not prove that the game guide could not have burned in the manner suggested on behalf of Ms Worth; it proves that Mr Forbes failed to replicate the circumstances of the fire and so could not draw any reliable inference from the experiment. Again, I am not seeking here to play detective. I am simply explaining that I do not understand why that test was thought to discount the possibility that the game guide fell on the hotplate in the position in which it was ultimately found, without ever being moved, and that the pages draping over the hotplate were completely consumed by fire leaving the other half where it was later found, the underside having been charred as a result of smouldering radiating out from the fire in the spine.
28. It is not even clear to me that the game guide in test 3 was accurately placed in the position in which the game guide in the real fire was found. It was positioned adjacent to but not touching the edge of the element. The photographs taken after the real fire indicate that, when allowance is made for where the spine of the game guide would have been, it could well have been touching the element or even encroaching on it.
29. Mr Forbes agreed in cross-examination that the discolouration on the bench was a continuation of the line of the spine of the game guide (in the position in which it was found by investigators). He further agreed that in photograph E78 one could see more of that line of discolouration corresponding to the binding on the game guide and that this indicated that there was a flame along the binding of the game guide during the course of the fire that led to that burn mark being present.
30. It is difficult to reconcile that evidence with the hypothesis that the back of the game guide could only have become charred by being placed directly on top of the hotplate and later moved to the side. That would require the following sequence of events: Ms Worth tore the game guide in half and placed the bottom half with its back cover directly on the hotplate for long enough to char its underneath; she then moved the charred magazine to the side where it protected the surface of the bench; and the spine then caught alight and burned leaving the mark along the bench. If she was trying to burn the house down, it is difficult to think of a reason why she would move it off the hotplate once it had begun to smoulder.
31. It is also difficult to understand how the spine could have caught alight at that point. A hypothesis that is at least equally likely is that offered by Mr Gardner; that the game guide was not moved by human hand; it came to be situated where it was found by investigators diagonally adjacent to or touching the hotplate in an open position with its first 100 pages draping over the hotplate and the rest of the pages flat against the kitchen bench; the hotplate caused the draping pages to ignite (the one thing Mr Forbes' tests proved can happen); those pages were completely destroyed by fire; during that fire the glued spine also caught fire and left the mark along the cooktop that continued onto the bench; and the fire in the spine combined continued to burn slowly under the back of the game guide assisted by the heat from the hotplate with the result that it radiated out in a semi-circular pattern.

The weight to be given to psychological factors

1. I have summarised the relevant circumstances above. In my opinion, the arson hypothesis attributes Ms Worth with conduct that is quite bizarre. In addition to the matters raised by Ms Worth in her argument that the insurer's hypothesis does not make psychological sense, there are other aspects of the "human intervention" hypothesis that I find difficult to reconcile with the realistic probabilities. I have referred to some of these already. The bizarre choice of the game guide for fuel and the glass hotplate for ignition is even more bizarre weighed in the context that, if an electrical cause for the living room fire is excluded, the only realistic way to start a fire in that area would be with matches or a lighter. Why not do the same in the kitchen?
2. Secondly, the posited placement of the game guide on the hotplate according to Mr Forbes' hypothesis is bizarre. Why place it on half the element? Why not directly over the whole element?
3. Thirdly, Mr Forbes' hypothesis requires Ms Worth to have taken the inexplicable step of moving a smouldering game guide off the hotplate.

Conclusion as to the fire in the kitchen

1. For those reasons, I respectfully disagree with the conclusion reached by Meagher JA at [100] that the innocent hypothesis posited by Ms Worth is not a realistic possibility. It is not necessary for present purposes to be persuaded that the innocent hypothesis is what happened. In my assessment, it is a competing possibility of equal likelihood and the choice between it and the human intervention hypothesis can only be resolved by conjecture. It follows that the insurer's allegation that the fire in the kitchen was deliberately lit is not proved.

The fire in the living room

1. The evidence concerning the living room fire is discussed in detail in the judgment of Meagher JA. Leaving aside the question of the Tahiti screen, I do not disagree with his Honour's analysis of that evidence. Having regard to my different conclusion as to the kitchen fire, the point of significance for me concerning the living room fire is that, as both the primary judge and Meagher JA accept, one cannot exclude the possibility that the fire started within the larger area of origin identified by Mr Nash, which included the location of the speakers and the internal stairwell. As noted by Meagher JA, that leaves open the possibility that the fire was caused by an electrical fire starting in the speakers.
2. The larger area of origin identified by Mr Nash also leaves open the possibility that the fire began in the internal stairwell. However, the primary judge dismissed as fanciful the only possibility as to how the fire might have started accidentally in that area, the possibility of an electrical fire starting in the Tahiti screen. Meagher JA has concluded that the primary judge did not err in disregarding that possibility when considering whether to draw an inference that the fire was deliberately lit. I respectfully disagree.
3. My reasons are simple and can be stated briefly. Mr Nash hypothesised that the Tahiti screen could have come to rest on the northern side of the stairs (that is, the opposite side from the side on which it was hung) close enough to the top that flames emitted from the unit could reach the lounge. As Meagher JA has noted, the primary judge treated the likelihood of that event as a question for "the science of mechanics" (in relatively simple applications a matter of "general knowledge") rather than "fire expertise". His Honour found the Tahiti screen hypothesis implausible because he thought "a picture unit falling from that height would have fallen down the stairs rather than staying where it fell" and that even if it somehow did come to rest on the staircase it would have come to rest on the southern rather than the northern side of the stairwell.
4. Meagher JA considers that Ms Worth's criticism of this reasoning as involving "impermissible speculation" (ground 4(d)) about matters the subject of unchallenged evidence is not justified. With respect, I do not understand how the Tahiti screen hypothesis can be dismissed as fanciful other than by a process involving impermissible speculation. No one is in a position to make any assumptions as to the materials from which the screen was made, the materials with which it was hung, what might have happened to its various parts in the event of electrical malfunction, whether it included materials that might have exploded or caught alight and floated as embers, whether it included materials that might have softened so that they would rest where they sat if it dropped, whether it might have fallen at an angle so that it might slide from south to north and come to rest on the side of the stairs adjacent to the sofa, what other household items might have been near the point where it fell and so on. If the primary judge's hypothesis that "a picture unit falling from that height would have fallen down the stairs rather than staying where it fell" is right, why wasn't there either some remaining evidence of the unit or more fire damage at the bottom of that flight of stairs? The proposition that, if it rested where it fell, it would have would have come to rest on the southern rather than the northern side of the stairwell also entails a measure of speculation in which I am not prepared to engage. The evidence simply did not allow any reliable inference to be drawn about those matters.
5. In short, once it is accepted (as it was by the experts) that the possibility of electrical fire in the Tahiti screen could not be excluded, I do not understand how the possibility that it was the cause of the fire can be excluded without conjecture. The photograph reproduced by Meagher JA at [35] shows a blue blanket over the back of the sofa. Ms Worth said she thought it was made of wool but the shape and colour suggest the possibility that it was synthetic. Again, I do not seek here to play detective; only to explain why I do not understand, in the face of all of those kinds of imponderables, how the possibility that the Tahiti screen caused the fire could be dismissed as fanciful while the possibility that Ms Worth lit the fire, with all the bizarre features of that hypothesis, was accepted as a reasonable possibility. It is an approach which seems to me to place too much confidence in narrow suppositions as to the laws of mechanics in their application to unknown materials while failing to scrutinise bold suppositions as to how a single mother in straightened financial circumstances might behave.

Financial motive

1. It is appropriate to refer briefly to the contention that the motive for these acts was financial. Meagher JA has discussed this issue at length. I respectfully adopt his Honour's reasoning and agree with his conclusion that, whilst Ms Worth's belief that she was over-insured provides a conceivable motive, it is not correct to describe that motive as "substantial" or the evidence of motive as "strong".

Lies as consciousness of guilt

1. The primary judge accepted that it was not clear why Ms Worth in fact did not respond to those calls but nonetheless concluded that "she must have thought her own actions must have appeared suspicious and in that way the false stories suggest a consciousness of guilt". Meagher JA considers that did not involve any impermissible reasoning, relying on Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11 at [64]. I respectfully disagree. I note in passing that it is by no means clear to me that Ms Worth lied about those matters. But in any event, to tell a false story out of panic, based on the fear of an action appearing suspicious, is the paradigm example of a lie that might not demonstrate consciousness of guilt. Here, the action about which the primary judge found Ms Worth lied was her failure to respond to a series of telephone calls. In my view, to regard those as lies indicating a consciousness of guilt of the alleged arson indicates a failure to distinguish between lies going to credibility and those indicating guilt, as to which see generally Zoneff v R (2000) 200 CLR 234; [2000] HCA 28. I would uphold ground 7. However, as noted by Meagher JA, the primary judge's finding on that issue was not determinative of whether Ms Worth lit the fire; it was simply one matter taken into account.

Conclusion and orders

1. Accordingly, I would allow the appeal and make the following orders: 1. Allow the appeal. 2. Set aside Order (1) made on 19 March 2020 and Orders (1) to (4) made on 17 April 2020. 3. Judgment for the appellant against the respondent for the sum of $464,384, together with interest pursuant to Insurance Contracts Act 1984 (Cth) s 57, from 1 January 2016 to 26 August 2021 of $124,649, and $60.39 per day until the date of payment. 4. Dismiss the cross-claim. 5. Order the respondent to pay the appellant's costs at first instance and on appeal. 6. Direct the appellant within 14 days of today's date to file a written submission providing her calculation of the interest to be awarded to her, with the respondent to file any differing calculation within 7 days thereafter.

Amendments 06 September 2021 - Order (3) varied to correct judgment sum and include interest calculations. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 September 2021