Yeganeh v Zurich Plc and Another
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Mackie |
| Judgment Date | 24 May 2010 |
| Neutral Citation | [2010] EWHC 1185 (QB) |
| Docket Number | Claim No. 2009 Folio 244 |
| Court | Queen's Bench Division |
| Date | 24 May 2010 |
[2010] EWHC 1185 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LONDON MERCANTILE COURT
His Honour Judge Mackie QC
Claim No. 2009 Folio 244
Mr Ben Elkington (Instructed by Edwin Coe LLP) appeared for the Claimant
Mr James Maxwell-Scott (Instructed by Beachcroft LLP) appeared for the Second Defendant
to 25 March and 24 May 201
This is a claim under a buildings and contents insurance policy. The Claimant's house burned down and he seeks the cost of reinstating the building and of the contents which were lost and destroyed. The Defendant insurance company denies liability claiming that the Claimant deliberately caused the fire and made a fraudulent claim in respect of his losses.
Background
The Claimant is a property owner and developer. In August 2006 he purchased Whitefriars, Salthill Road, Fishbourne Village, Chichester, West Sussex, a large two storey house set in about one acre of land. On the night of 14 September 2007 there was a large fire at the property. The cost of reinstatement, including the expense of scaffolding is over £270,000.
On 28 September 2006 the Claimant entered into a policy of insurance with the Second Defendant ("Zurich") covering, in conventional terms, damage to property and contents caused by various perils including fire. The First Defendant has played no part in this case so I will refer to Zurich simply as the Defendant. It is agreed that the terms of the policy are as set out in the Notice of Renewal and in a written Home Solutions Insurance Policy. Among the " Conditions which apply to the whole of your Policy" are three provisions relied on by Zurich:—
• " You must do all you can to prevent and reduce any costs, damage, injury or loss".
• "If a claim is fraudulent or false in any way, we will not make any payment and all cover will end".
Among the "Exclusions which apply to the whole of your property" Zurich would not pay for " 7. Any claim resulting from deliberate or criminal acts by you or your family …"
The law
No point of law arises about the wording of the policy. Mr Maxwell-Scott for Zurich submits that the wording follows the general law which requires that as soon as there is any fraud in the claims process the whole insurance claim is fraudulent (see Axa General Insurance Ltd v Gottlieb [2005] EWCA Civ 112, CA). Mr Elkington for Mr Yeganeh accepts that that is the legal position. He emphasises, by reference to a passage from MacGillivray at 16–2 that fraud is " a serious allegation, which must be clearly substantiated, and must not be confused with carelessness, however gross that may be". He also emphasises that whilst the standard of proof for fraud is the balance of probabilities the more serious the allegation the less likely it is to have occurred and hence the stronger the evidence should be before the court concludes that the allegation is established. He relies upon observations by Stuart-Smith LJ, in an insurance context, in The Ikarian Reefer [1995] 1 Lloyd's Rep. 459. Mr Maxwell-Scott in turn submits by reference to The Captain Panagos DP [1989] 1 Lloyd's Rep. 33 at 43, CA that it is unlikely that there will be any documentary or other direct evidence of an insurance fraud and it is open to the court to draw appropriate inferences from the circumstantial evidence.
Facts agreed or not greatly in dispute
Mr Yeganeh owns over 50 properties as part of his business. He was 38 years old at the time of the fire on 14 September 2007. In October 2005 he was living in a flat in Southsea. He began a relationship with Ms Tina Courtnell who lived with her daughter in a house in Portsmouth. As Mr Yeganeh spent more time at Ms Courtnell's house he rented out his flat in May or June 2006 leaving some furniture behind and moving the rest to Ms Courtnell's house. Mr Yeganeh bought Whitefriars in August 2006.
Whitefriars is a detached two storey, four bedroom brick house with a hipped tiled roof and ground floor extensions to the east and west. There are two entrance doors to the ground floor. Behind one is a hallway with a timber staircase leading up to the first floor on the left hand side. From the hall there are doors leading off to the living room, to the dining room used as an office, and to a store room, to a second living room which leads in turn to a porch, the kitchen, the sun lounge and into the study. There is a cloakroom behind the stairs. On the first floor the stairs lead to a landing. This leads to a cloakroom above the one on the ground floor and then a bathroom, three bedrooms, one with an ensuite bathroom, and from there on to a balcony.
After the purchase Mr Yeganeh moved in to Whitefriars some of the furniture and belongings that he had kept at Ms Courtnell's house. This was so that he could stay there occasionally. But he continued to spend most of his time at Ms Courtnell's house. In September 2006 the Claimant sold his flat in Southsea and moved the furniture he had there to Whitefriars. On 29 September 2006 the Claimant received planning consent to build a single storey rear extension at Whitefriars. He apparently changed his mind about this work as in January 2007 he applied for permission for a different extension providing attic rooms and a new front porch and this was granted in March. On 19 March 2007 planners acting for Mr Yeganeh made a preliminary enquiry about subdividing the land at Whitefriars to enable him to build an additional house of similar size. On 30 March Chichester District Council replied making clear that for a series of reasons this further development would not be permitted. At about this time the Claimant and Ms Courtnell split up. The Claimant moved the belongings he had in her house to Whitefriars and says he began to live there on a more permanent basis. The Claimant says that he spent time in a hotel he owned in Portsmouth and also in London with a cousin. The Claimant and Ms Courtnell say that in May 2007 they got back together and decided to live at Whitefriars. They recall that they decided that before moving in and while considering what alterations to make to the house they would redecorate, stripping some rooms and painting others white.
It is unclear quite how much time Mr Yeganeh and Ms Courtnell spent at Whitefriars. Unfortunately, the Claimant made untruthful claims to Chichester District Council to evade Council tax. On 5 February 2007 he wrote:
" Building works are due to take place very soon on this property as it is currently uninhabitable, not just empty …"
Mr Yeganeh had become responsible for Council Tax on 8 August 2006. On 19 October he applied for empty property exemption with effect from 8 August. That exemption lasts for a maximum of six months. On 7 February the Claimant wrote to the Council. On 1 March 2007 the Claimant applied for exemption due to building works. This was to be carried out by a firm owned by Mr Yeganeh and /or his business partner Mr Chris Burt. He provided correspondence from the firm to confirm this on 22 March and was exempted from tax from the date the work was due to start on 22 April 2007. On 31 May 2007 the Council approved the structural design details for the proposed improvements. It was not until 17 October 2007 after investigations into the fire were well underway that Mr Yeganeh telephoned the Council to say that the works were never started and that he moved into the property on 30 April 2007 as sole occupier. At that point the Council were waiting for Mr Yeganeh to apply for single resident discount.
Ms Courtnell recollects that she often spent weekends at Whitefriars with Mr Yeganeh and her daughter, it being a pleasant place to visit particularly in the summer time. She recalled that he also spent time at Whitefriars during the week. There is no clear picture of how much time Mr Yeganeh spent at the property. He seems to have told the Fire Brigade that he only went there to collect the mail. He told Zurich that he was there 'most days'.
The decoration work was to have been done in July but the painter, Mr Cyril Burt, the father of Mr Yeganeh's business partner, was unable to attend to this because of his health. The Claimant arranged for the decoration to be carried out in September by Mr Steve Patrick. Preparations were made for this work. Some of the photographs confirm that before the redecoration started Mr Yeganeh placed some old furniture at the bottom of the garden to be burnt. He grouped other possessions together in the middle of rooms and covered them with old sheets and curtains. This exercise included placing clothes and other items on the double bed in the middle of the master bedroom. Mr Patrick, who did not give evidence for either party, started work. The Claimant says that he stayed at Ms Courtnell's house whilst the redecoration work was carried out. By 14 September the work was largely finished apart from some internal woodwork.
The Fire on 14 September 2007
The Claimant visited Whitefriars in the afternoon of 14 September in order to do some work which involved his computer. He recalls that when he left he inadvertently left his laptop behind and so he returned to fetch it that evening around 7pm.
At about 11.30pm a policeman in the area noticed smoke and called the fire brigade. There was a major fire. Four fire engines were needed before the fire was brought under control just before 5.00am. So much water was needed to put out the fire that the rear garden was found to be still saturated three days later. The police sergeant who called the fire brigade forced the front door open but did not go further because of the severity of the fire. He broke a pane of glass in the nearby French doors and also in the similar doors at the back....
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