Mrs Kathleen Mary Selena Mclean Or Toremar V. Cgu Bonus Limited
| Jurisdiction | Scotland |
| Judge | Lord Brodie |
| Neutral Citation | [2009] CSOH 78 |
| Court | Court of Session |
| Docket Number | A2759/02 |
| Published date | 02 June 2009 |
| Date | 02 June 2009 |
| Year | 2009 |
| OUTER HOUSE, COURT OF SESSION [2009] CSOH 78 | |
| A2759/02 | OPINION OF LORD BRODIE in the cause MRS KATHLEEN MARY SELENA McLEAN or TOREMAR Pursuer; against CGU BONUS LIMITED Defender: ________________ |
Pursuer: Party
Defender: Angus Stewart QC, Iain Armstrong QC, Peter Milligan; The Reid Cooper Partnership, Solicitors
2 June 2009
Introduction
[1] The pursuer is Kathleen Mary Selena McLean or Toremar. She was born on 20 August 1956. She and her husband, the late Christer Arne Toremar were joint proprietors of the Bunrannoch Hotel, Kinloch Rannoch, Perthshire (the "Hotel") in terms of disposition by Clifford Kenneth George, recorded GRS, Perth, on 20 August 1993. The spelling of the names of the pursuer and the late Mr Toremar that I have adopted in this opinion are taken from that disposition, a copy of which is 6/11of process. These are also the spellings in a statement revised and signed by the pursuer which is 7/7. Nothing turns on this but I observe that these spellings are not consistently adopted in the pleadings and in other productions. Christer Toremar died on 13 October 1996. The pursuer continued to run the hotel business. Between 22 March 1997 and 22 May 1998 she was married to one Michael Urquhart and on 4 July 1998 she married Gordon McLean.
[2] The defenders are CGU Bonus Limited. The defenders entered into a contract of insurance (policy number 41 HTL 504134) with the pursuer for the period from 16 August 1999 to 15 August 2000 in respect of risks including loss or destruction of or damage to the Hotel buildings, contents and current money. It is accepted by the defenders that the risks insured under the policy at the relevant time included loss of or damage to the heritage of the Hotel, its stock, business contents and money, by fire.
[3] Early in the morning of Saturday 27 May 2000 (not 28 May 2000 as is averred and admitted on record) a fire was seen to have broken out in the Hotel. In consequence the Hotel was very extensively damaged. At the time there were no residents or anyone else in the Hotel. It was not trading as a hotel, simply as a public house.
[4] The pursuer intimated a claim on the policy in respect of the damage caused by the fire. By letter dated 15 September 2000 the defenders' solicitors voided the policy with effect from 27 May 2000. The basis upon which the defenders claim to be entitled to void the policy is that the fire and consequent damage were the result of a deliberate act of setting fire to the premises either by or on behalf of or with the knowledge and concurrence of the pursuer. The pursuer denies that the fire was set by her or on her behalf or with her knowledge. It is her position that the fire was accidental.
[5] In the action the pursuer, suing as an individual and as executor-dative of her late husband, Christer Arne Toremar, seeks declarator, in terms of conclusion 1, that the defenders are under an obligation to indemnify the pursuer for the losses sustained by her as a result of the fire in terms of contract comprised in a renewal Schedule issued on 3 August 2001 and relative Policy Booklet. The date in conclusion 1 may be a typographical error. The matter was not explored. Nothing turns on it. There are also conclusions for payment to the pursuer as an individual (conclusion 2. (a) and conclusion 3.), and as executrix-dative of Christian Arne Toremar (conclusion 2. (b)) of sums of money by way of damages. No issue arises as to the pursuer's title to sue in respect of her interest as an individual or in respect of her interest as executrix-dative. There is no dispute but that both interests were insured by the policy. The issues between the parties are whether the defenders were entitled to void the policy (which, in turn, depends upon whether the defenders can establish that the pursuer set the fire) and, if not, what sum or sums should be paid to the pursuer as damages for breach of the contract to indemnify.
[6] I heard proof on 1 to 4 July and 18 to 21 November 2008. I heard submissions on the evidence on 17 and 18 December 2008. The pursuer represented herself (she had been represented by solicitors and counsel at earlier stages in the litigation). On 1 to 4 July 2008 the defenders were represented by Mr Angus Stewart QC and Mr Peter Milligan, Advocate. On 18 November 2008 the defenders were represented by Mr Iain Armstrong QC and, again, Mr Milligan. No order had been made prior to 1 July 2008 for the defenders to lead at the proof or for the proof to be split in the sense of different issues being allocated to different diets. At the beginning of the proof diet I canvassed with parties whether it might nevertheless be convenient for the defenders to lead their evidence first in that the fact that the pursuer had suffered loss by reason of an insured casualty did not appear to be disputed and that the defenders had the onus of establishing entitlement to avoid the policy. The pursuer was agreeable to this course, and at my suggestion so moved, but Mr Stewart, on behalf of the defenders, was not. Arrangements had been made on the assumption that the usual order of leading evidence would be followed. Given the position adopted on behalf of the defenders and the fact that the question was raised for the first time, by me, just before the beginning of the proof, I did not order the defenders to lead. The following witnesses were led for the pursuer: Mr Roger Smith, fire investigator and Managing Director and Principal Fire Consultant for BFRS Limited; Mr Gordon Morris, consulting mechanical and electrical engineer; and the pursuer. The following witnesses were led for the defenders: Mr James Smyth; Mrs Marion McNeil; Station Manager Colin Hannigan of Tayside Fire Brigade; Mr Douglas Grant, fire investigator of International Fire Investigators and Consultants ("IFIC"); Mr John Logie, electrical and fire risk engineer; and Dr James Lygate, fire investigator and Principal Consultant of IFIC.
[7] I have encountered different levels of difficulty in determining what has been proved by this evidence. Certain matters were essentially uncontroversial. They comprehend, at least in large part, what is narrated below under the headings: Background, Layout of the Hotel, The Events of 26 to 27 May 2000, Investigation of fire damage to the Hotel, Spread of fire and The Sauna heater. Similarly, I did not understand the factual basis for the assessment of damages, on the assumption that damages fell to be paid, to be controversial. As to the disputed and connected issues as to whether the source of ignition of the fire was a sauna heater and where was the area of origin of the fire, I have felt able to come to firm conclusions on the balance of probabilities by reference to the direct evidence of the findings of the fire investigation and the examination of the heater and the opinions of the expert witnesses. These issues and my conclusions on them are addressed separately under the relevant headings. The more difficult question has been whether it has been proved that the fire was set by or on behalf of the pursuer or with her knowledge and concurrence. That is addressed on the basis of the totality of the evidence, direct and indirect, looked at in the round with a view to determining where the balance of probabilities lies.
Background
[8] The pursuer has five children, four by her first husband, Christer Toremar: Thomas Olaf (18 years old at the time of the fire), Hannah (16), Magnus (11), and Stephen (9); and one child by her third husband, Gordon McLean: Struan (10 months).
[9] The pursuer and her late husband acquired the Hotel in 1993 when they moved to Kinloch Rannoch. Among her other activities the pursuer was a volunteer fire-fighter.
[10] A fire occurred in a Bedroom 10 of the Hotel around about midnight on 31 January 1999. Bed linen caught fire. No cause was identified. There were no guests in the Hotel at the time. Any members of staff and the pursuer's family were elsewhere participating in the celebration of the New Year. The pursuer made a claim against the insurers which was paid.
[11] In evidence the pursuer described her original profession as being that of foreign exchange treasurer specialising in Islamic investment in the third world. She spoke of having been a treasurer and vice-president of an Arab bank and a Scandinavian bank, working with her late husband. In the statement revised and signed by the pursuer, 7/7 of process, she is described as a "Self Employed Economist Specialising in Islamic Investments, Hotelier and Part Time Fire-fighter". In evidence she accepted that she did not have any academic qualifications as an economist but she explained that she was "just extremely clever." She claimed that as at May 2000 she had secured a binding contract of employment in the capacity of foreign exchange treasurer with an Arab-Russian bank in Bahrain and Barbados at an annual salary of $135,000 with associated benefits.
[12] In terms of letter of 10 January 2000 solicitors acting for Barry McNeill and his wife, Mrs Marion McNeill approached the pursuer's solicitors with proposal to purchase the Hotel at a price of £175,000 with entry on 6 June 2000. These terms were repeated in a missive of offer dated 10 April 2000. There had been a previous approach which the pursuer had declined in 1998. An offer to purchase had been made by a Mr and Mrs Edwards in December 1999 but that deal had fallen through. While there may not have been a binding contract, Mrs McNeill, who was at the time employed in hotel industry, confirmed in evidence that she very much wanted to acquire the Hotel and that there was an apparent agreement with the pursuer on the terms proposed. There was, however, the difficulty that the title in favour of the pursuer and her late husband had not included a survivorship provision and as at 28 May 2000 (and indeed thereafter) the pursuer had not taken steps to obtain confirmation as her late husband's...
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