The recent High Court case of Devcich v AMI Insurance
Limited provides an important reminder to insurers of how
difficult it is to prove that the insured has caused the damage
claimed.
This fire occurred shortly after Mr Devcich left home for work
on a weekday morning. AMI declined the claim because it believed it
had grounds to establish that Mr Devcich deliberately set the
fire.
Motive
Mr and Mrs Devcich had lived in their house for several years.
The house appeared to have weathertightness problems, which Mr
Devcich knew were going to be time-consuming and costly to put
right. Mr and Mrs Devcich had tried without success to sell the
property.
AMI said that Mrs Devcich was anxious to move and that Mr
Devcich was in a tight financial situation at the time of the fire.
The Judge accepted that the problems with the house provided Mr
Devcich with a motive for setting fire to it. He also accepted that
the problems he had encountered with his neighbours provided him
with further motivation to bring matters to a head.
Credibility
Mr Devcich did not follow his usual route into work on the day
of the fire. Instead he ran a series of errands (including going to
the petrol station). Eftpos receipts provided proof of where he was
at critical times.
On his way to work, Mr Devcich said he had had a near-miss when
another car had pulled out in front him. He said that when he
arrived at work he told his business partner about the near-miss
and said he needed a whisky. They went and got a cup of coffee
instead. The Judge considered it unusual that Mr Devcich had never
been able to provide any details about the circumstances of the
near miss at the intersection.
Mr Devcich bought five litres of petrol on the weekend before
the fire. He said that he had planned to hire a hedge trimmer that
weekend and had bought the petrol the previous weekend to save
time. AMI called evidence from the manager of the hire centre, who
said the particular hedge trimmers used two-stroke fuel, which they
always mixed themselves. They did not allow hirers to supply their
own fuel. Mr Devcich said that he did not want to pay the charge he
would have incurred had he not taken back the tank full. The Judge
thought this explanation was unsatisfactory and that this weakened
his credibility.
Interestingly, the Judge found that Mr Devcich was capable of
deciding that the destruction of his house by setting fire to it
would provide an answer to his problems. However, he said that he
could not give this factor substantial weight because it could
produce an unjust result.
Possibility that neighbours lit the fire
Mr Devcich had had an ongoing dispute with his neighbours and
their tenants. The Judge found that the facts available were not
sufficient to establish a realistic possibility that they were
responsible for starting the fire.
Timing
The respective experts disagreed on the timing of the fire.
AMI's expert thought ignition occurred at approximately 7.40 -
7.45am. Mr Devcich's expert thought it started at 8.05am.
Mr Devcich had a receipt which showed he paid for petrol at
7.57am. This meant he must have left home around 7.50am. The Judge
accepted that a timing device could have been used, but said there
was no evidence that one had been used in this case.
In the end, the Judge preferred Mr Devcich's expert
evidence. One factor which led to this result was that he thought
AMI's expert had a firm belief that Mr Devcich was the only
person who could have lit the fire and that this pre-judgment
affected his investigation.
Conclusion
Whilst the Judge found that Mr Devcich had both the motive and
the ability to plan and carry out such an act, he found that AMI
had not managed to establish to the appropriate standard that he
had in fact started the fire. This continues to be a substantial
hurdle for insurers where the police decide not to charge.
It is clear that the decision turned largely on the expert
evidence around timing. The Judge chose to believe the
insured's expert because of both his experience and apparent
impartiality. This case emphasises yet again how experts can
improve their credibility by being slow to reach conclusions and by
giving insureds the benefit of every doubt. An investigator who
does that, and still concludes that the insured was to blame, will
have a greater chance of being believed.
DLA Phillips Fox is one of the largest legal firms in
Australasia and a member of DLA Piper Group, an alliance of
independent legal practices. It is a separate and distinct legal
entity. For more information visit
www.dlaphillipsfox.com
This publication is intended as a first point of reference and
should not be relied on as a substitute for professional advice.
Specialist legal advice should always be sought in relation to any
particular circumstances.
Specific Questions relating to this article should be addressed directly to the author.
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