Genesisuk.Net Ltd v Allianz Insurance Ltd

The Claimant, Genesisuk.net Limited (“Genesis”), seeks to recover losses arising from a fire that occurred on 26/27 February 2011 (“the Fire”) at Genesis’ premises at 24a Pantglas Industrial Estate, Bedwas, Caerphilly, CF83 8DR (“the Unit”). Genesis was insured under a policy issued by the Defendant, Allianz Insurance Plc (“Allianz”). Allianz has avoided the policy claiming that Genesis’ director, Mr Roe, either deliberately set, or procured the setting of, the Fire. Genesis and Mr Roe strenuously deny this serious claim. This question of fact is the only real issue in the case apart from disagreements about quantum. The facts are however complex.

The Claim is for at most some £220,000 but it has been hard fought. The Court has 27 bundles and heard from 9 of the 12 factual witnesses for the Claimant whose statements have been put forward. These were Mr and Mrs Roe, Mr Alan Riegler, Mr Jon Osborne, Ms Claire Hopkins, DS Court, PC Rees, Mr Nathan Rees-Taylor and Mr Andrew Sargent. The Defendant had no factual witnesses.

The parties also had experts in four disciplines as follows:

Although the central issue is fiercely contested many of the facts are not in dispute. It is important, as I see it, to start with the facts directly relating to the Fire and to come to those relating to motive and circumstantial evidence later.

Genesis is a company owned and run by Dennis and Victoria Roe. Its business is the supply of alarm and security products. It is currently in a Creditors’ Voluntary Arrangement (“CVA”). Mr and Mrs Roe are equal shareholders. Mr Roe has worked in the security industry since 1996. According to Mr Roe, Genesis was incorporated on 26 September 2008 as a result of an approach made by him to Tyco Safety Products, described by its UK Sales Director Alan Riegler, a witness, as “the world’s largest fire and security company”. In November 2008 Genesis entered a distribution agreement with Tyco giving it exclusive distribution rights over Wales and Southern England in respect of Tyco products and in January 2009 it took a lease of Unit 1A (later renumbered Unit A, 24 Pantglas Estate by the local council). This is a conventional industrial estate unit. There is a useful plan which was used at trial. The workshop and storage areas are about 13 metres long from shutter doors at the front to the back wall. This area contained shelf units about 2 metres long and 0.6 metres wide. There was a gap of about 4.8 metres from the roller door to the nearest rack. To the side of the storage area as part of the Unit was a separate door.

There is dispute between the parties about the financial state of Genesis and its business at the time of the Fire to which I will refer later.

On 23 February 2011, following a review of insurance arrangements, the policy of insurance was incepted with Allianz. Section 1A on p.6 (Property Insurance), Section 2A on p.11 (Business Interruption), and General Condition 8 on p.29 (Fraud) are the relevant provisions but their effect is not in dispute. The sums insured were £122,000 on stock and £250,000 for Business Interruption with a 12 month indemnity period (reduced from 24 months cover for the previous year). It is common ground that if Mr Roe was involved in deliberately causing a fire there is no cover and I need not address the details of the policy.

On the Saturday night of 26/27 February 2011 a fire took place at the Unit caused by arson. At about 00.10 hours on 27 February 2011 a person shown on CCTV footage introduced what started the Fire underneath the roller shutter door at the front of the unit. The Fire Joint Statement records this and other common ground. The parties agree that diesel was the accelerant and that it was found on boxes and shelving within the Unit at the time of the Fire. The external CCTV cameras show a man outside the Unit from about 23:58 to 00:18. The Fire is recorded by the internal cameras as starting at about 00:20. The external cameras show the man, amongst other things, appearing to push a hose under the roller doors. This seems to have been how he set the Fire.

The Unit’s alarm receiving centre, EMCS, alerted the Roes to the alarm going off. The EMCS log records that Mrs Roe answered the telephone saying that Mr Roe was not there. The Fire Service was called and it soon extinguished the Fire. The six firemen on the scene were not aware of a smell of diesel at the Unit. Mr Roe also went to the Unit and took photographs at about 3am. These show diesel stains on cartons which could only have originated from inside the Unit but which had been taken outside by the Fire Service. The experts agree in the Joint Statement that the stains on the cartons photographed outside the Unit must have been present before the Fire occurred. More photographs were taken by Mr Gale (Genesis’ Loss Adjuster) of Allianz’s investigators on Monday 28 February. These show staining on some of the boxes still inside the Unit (some of those not taken out by the firemen) as well as on those outside.

Mr Robbins, the Defendant’s fire investigator and an expert witness, examined the scene on 4 and 7 March 2011. On 4 March he identified oily staining on the shelves and the boxes on those shelves as well as on the cardboard boxes outside the Unit. He took 4 samples, which confirmed that the stains were evidence of diesel. It is now agreed that all 4 samples evidence diesel but it is disputed whether one of these is from the same source as the other three. It is agreed that the staining patterns are consistent with pouring of diesel and that three are from the same source, being DAR2, DAR9, and DAR13. There is a disagreement as to the source of DAR12 and whether any difference to the other samples is material. It is agreed that the diesel is petroleum based, not bio-diesel, thus eliminating one reason put forward by Mr Roe at an earlier point for why diesel might be within the Unit. There is disagreement between the experts about the extent and significance of the diesel.

Mr and Mrs Roe were in the Unit on Saturday afternoon 26 February and I shall refer to that when dealing with the CCTV evidence below. The internal cameras show that Mr Roe and his wife had been present on two occasions at the Unit between 15:00 and 18:52 that day. During that time they brought items from home and were piling things near the roller door, where the Fire appears to have been set. As Genesis has accepted more recently the Roes also took things out of the Unit. The cameras do not cover the area at the middle/back of the workshop where the diesel was later discovered. The EMCS log shows no entry, exit or alarm between 18:52 and the Fire. There is no other evidence of any forced entry into the Unit or that anyone was inside from when Mr Roe left the Unit at 18:52 on 26 February and the occurrence of the Fire at or about 00:20 on 27 February.

There were four CCTV cameras; two external (Cameras 1 and 2), and two internal (Cameras 3 and 4). They were motion-activated, that is to say, they would respond and begin recording in the event of a sufficient degree of motion within their field of view. Once the motion stopped the camera would continue to display the scene as it stood. The cameras could also be set to run continuously and had been in this mode until changed by someone on 16 February 2011. There are unexplained gaps in the footage which Allianz says is consistent with someone deliberately interrupting it or, as Genesis contends, with defects or inadequacies in the equipment.

On Monday 28 February Mr Priest, Genesis’ landlord went to the Unit, found water escaping from a copper pipe and stopped this by shutting the stopcock. Both sides suggest that someone must have gone to the Unit and caused the water to start to escape. The experts agree that the pipe ruptured before or during the Fire but the stop cock was shut before the Fire. So someone opened it after the Fire and before Mr Priest went to the Unit, possibly to wash away evidence. Mr Roe says that the Unit was not secure after the Fire because the Fire Service cut the padlock to the shutter doors. There is no evidence of a further break in but on or around 2^nd or 3^rd of March there was minor pilfering amongst the debris outside the Unit. The police log records Mr Roe calling to say that the Fire Damaged Unit had been looted by people he believed to be travellers. The looters apparently drilled out the pedestrian shutter door locks rather than force open the main roller shutter.

Both the pedestrian door and the main roller shutter were shut and remained so when Mr Robbins visited on 4^th and 7^th March 2011. It was not possible to open the roller shutter as the chain pulley had apparently slipped. Mr Robbins says that he noticed this and that Mr Roe confirmed that this had happened. The roller shutter door was not opened until May 2011. An email of 4 May indicates that it was still firmly shut but one of 22 May that it was by then capable of being opened if only with the help of two men.

Next door to the Unit is a unit formerly used by a Biodiesel producer Green Intent. Mr Kemp, a witness from whom both sides have a statement is a compliance officer from the Environmental Agency. Both parties have served statements from him. Mr Roe recalled that an explosion occurred at Green Intent in February 2010. This was initially relevant as Mr Roe suggested that it could explain the presence of diesel within the Unit. The experts agree that the diesel within the Unit was a petroleum based diesel, not bio-diesel. Mr Kemp says that he did not identify evidence of an explosion when he looked into the incident. So the issue falls away.

In order to succeed in its claim Allianz has to prove that Mr Roe was involved in the arson. Genesis does not have to show who the arsonist was if it was not Mr Roe or someone put up to it by him. As part of its case however Genesis says that the arson was in some way the responsibility of a former employee. Genesis says that if there is a serious possibility that she was responsible then Allianz’s case must fail. The papers in this case and the evidence at trial named the lady whom the Roes hold responsible for the Fire. The lady was not a party. Neither side sought evidence from her. Serious allegations have been made against her which she has not had an opportunity to defend. I therefore consider that she should not be named in this judgment and that an order for anonymity may be appropriate. Of course I will not take that course finally without hearing the views of the parties but for the moment at least I shall refer to the lady as A.

Genesis was run by Mr Roe who was in charge overall and responsible for sales in particular. Mr Roe is clearly a talented sales person and his commitment to his work and his knowledge for his company’s products was warmly commended by Mr Riegler of Tyco. Mrs Roe was in charge of administration and often worked from home. Genesis also employed Claire Hopkins and Owain Bright, both of whom had come through a government work scheme. Claire Hopkins, a witness, continues to be employed by the alarm installation company now being operated by the Roes, Complete Fire & Security Solutions Ltd. (“CFSS”).

In October 2010, Genesis terminated the employment of the third employee A who had been with Genesis since August 2009 as an administrator and was also in also in charge when the Roes were out. This led to an unfair dismissal claim by A eventually settled for £1540 in May 2011 and to police investigations initiated by Mr Roe. Mr Roe alleged to the police that A had stolen keys and damaged a computer. After the Fire he also complained that A had made threatening telephone calls, directly or through an associate both in late 2010 and in February 2011.

Unpleasant nuisance telephone calls were made to Mr and Mrs Roe and to Genesis in February 2011. One call was made at the time of the Fire and from the location of the Unit. Genesis suggests that A or an associate of hers made the calls and caused the Fire. The insurers say that this is a distraction and that the Fire was the work of Mr Roe.

Allianz accepts that the burden of proving that Mr Roe, as director of the Claimant, caused the premises to be set alight is on it.(Slattery v Mance) [1962] 1 QB 676). The test is the civil test, i.e. the balance of probabilities but “commensurate with the gravity of the charge” (see National Justice Compania Naviera SA v Prudential Assurance Co Ltd (The Ikarian Reefer) (No.1) [1995] 1 Lloyds Rep 455, at 483 col 2 – 484 col 1). Proof of motive will not be conclusive, but will be persuasive (see Ikarian Reefer at 498 col 2). It is not necessary to produce a seamless proof or “smoking gun” as “…it is unlikely that there will be any documentary or other direct evidence of consent or connivance and that it is therefore necessary to consider what inferences, if any, can properly be drawn from the circumstantial evidence” (The Captain Panagos DP [1989] 1 Lloyd’s Rep 33, CA at 43 per Neill LJ).Inferences will be used to fill gaps, so long as there is some credible evidence; ambiguities are not fatal (see The Zinovia [1984] 2 Lloyds Rep 264 at 271 to 273, Bingham J). If there is sufficient unambiguous evidence the assertion regarding the insured’s “previous reputation and respectability will not save him from adverse judgment” (see The Zinovia at 273 col 1).

Genesis generally accepts these principles, with some legitimate caution about the shipping cases, but as to the standard of proof makes two points. First while the parties are agreed that the Fire is caused by arson, arson by an aggrieved third party with intent to cause damage to the property of another is inherently more likely than arson by a person on his own property. Second, although the standard remains the civil standard, Mr Butler submits that in practice there is little if any difference between that and the criminal standard in a case of this nature – see The Zinovia at p.272, The Ikarian Reefer at p.459. Mr Butler also emphasises that the case does not come down to a straight choice between competing theories– the question for the Court is whether the insurer’s theory is proved on a balance of probabilities (The Popi M [1985] 1 WLR 948). However, the existence of a substantial or substantiated alternative possibility is relevant, and has the effect of preventing the burden of proof from being discharged – The Ikarian Reefer at p.459.

There are a number of agreed facts that are important. The parties agree that diesel was found on boxes and shelving within the Unit. The photos taken by Mr Roe on the morning after the Fire show diesel stains on the cartons and these could only feasibly have originated from inside the Unit. The stains are consistent with the diesel being applied rather than splashed as Dr Jewell accepts. The experts agree in the joint statement that the stains on the cartons photographed outside the Unit must have been present before the Fire occurred. There are four samples taken by Mr Robbins. It is agreed that all four are petroleum based diesel and not bio-diesel. It is agreed that three are from the same source, being DAR2, DAR9, and DAR13. There is a disagreement as to the source of DAR12 and whether any difference to the other samples is material.

There is a disagreement as to whether the diesel identified inside the Unit was present before the Fire. Dr Jewell suggests that the cartons inside might have been doused with diesel at a different or later time. This would involve someone going to the Unit after the Fire and then dousing the cartons. This is possible but seems very unlikely for obvious reasons. The probability is that the stains both on the boxes later found inside and outside would have occurred at the same time and prior to the Fire.

Dr Jewell points to the apparent difference between one sample and the three others. Dr Jowett suggested that the perceived difference is easily explained by either the use by the arsonist of two containers, or of one container initially contaminated with petrol but then refilled with diesel. Dr Jewell accepted this as possible. Both sides have further theories which are speculative.

The main dispute is how and when these samples came to be laid down on the boxes and shelves within the Unit.

Allianz submits that Mr Roe laid down the diesel. If the diesel was present before the Fire and within the locked Unit then the only explanation must be that Mr Roe laid it there. He had the opportunity to do so given the skips in the CCTV evidence and the fact that the CCTV does not cover the whole of the racking in the workshop. It is highly likely that the Unit was secure at all material times on the Sunday and Monday following the Fire. This period is relevant because by Monday Mr Gale’s photos show the oil staining within the Unit. Mr Roe’s earlier photos show the oil staining to the boxes outside. If it was secure, then Mr Roe clearly could have entered the Unit (and turned on the water for example) but it is unlikely someone without keys (such as the alleged A conspirator) could or did. Mr Roe accepts that there was no sign of a break in until 2 or 3 of March 2011. Even then there was only evidence of minor pilfering amongst the debris outside. Mr Roe accepts that the pedestrian door and the main roller shutter were shut during that time. Dr Jewell is clear that the stains within the Unit that are shown on Mr Gale’s photos must have got there prior to Monday the photos were taken. Given what the experts agree the diesel identified on those boxes must have been laid down before the Roes left the Unit before 18.52, when the alarm was engaged. This is because the alarm did not go off prior to the Fire and there was no evidence of a break-in.

Allianz claims that its position is further strengthened by the evidence as to the diesel on boxes inside the Premises, which was identified a few days after the Fire. Mr Robbins on 4 March, only 5 days after the Fire, identified oily staining on the shelves inside the Unit, the boxes on those shelves and on cardboard boxes outside the Unit. His photos are consistent with those taken on the 28 February 2011 by Mr Gale. It is agreed that the staining patterns are consistent with pouring of diesel The simple explanation is that the diesel identified on the boxes inside was laid at the same time as it was laid on the boxes found outside, i.e. prior to the Fire.

Allianz says that the explanation put forward by Genesis relies on the unknown arsonist returning to the scene of his crime to lay down further diesel in addition to that already present on the boxes outside the Unit, being able to gain entry to the locked Unit and deciding to turn on the water.

Mr Butler makes several submissions about this. He submits that the quality of the scientific evidence is poor. Analysis was only undertaken on 6 of 14 samples recovered and 2 of those were control samples. There is no direct evidence as to the methodology utilised in that analysis or indeed as to the results of it. The data yielded by that analysis is agreed by the experts as being “poor quality data”. Only samples 1, 2, 3, 5, and 13 bore a hydrocarbon smell. Thus it seems the other samples (including 9 and 12, which were analysed) did not. There is thus some doubt whether diesel was discovered at the Unit at all. While these points are correctly made the first question in the case is essentially whether there was any diesel. No expert seriously doubted this and neither do I.

Genesis submits that a very substantial question remains as to whether the diesel was present at the time of the Fire and points to the provenance of the various samples set out in this helpful table.

Mr Butler says that the reason why Mr Robbins felt able to state that diesel must have been present in the Unit at the time of the Fire was that oily stains could be discerned on photographs of boxes outside the Unit taken by Mr Roe at around 02.55 hours on 27 February 2011, and DAR12 came from these boxes. But that evidence is very weak. None of the photographs taken by Mr Roe depict the staining on the box which was revealed at trial to have yielded sample DAR12. Although there clearly is staining on boxes photographed by Mr Roe, no scientific analysis was performed on those boxes, with the consequence that there is no evidence at all as to what was on them. Those boxes had been in a firefight in premises into which substantial quantities of an accelerant had, by that time, unquestionably been introduced. They had been carried outside either by firemen (who would surely not have carried diesel-stained boxes without noticing they were doing so) or by Mr Roe (who, if guilty, would be unlikely to have left them where he did). Furthermore it is very unlikely that Mr Roe not only failed to remove boxes showing clear markings of diesel which he himself had poured 7 hours previously (despite having every opportunity to do so) but in fact voluntarily photographed those boxes, made known the existence of the photographs to insurers (among others), and disclosed them.

Mr Butler submits that DAR12 itself is of limited assistance for several reasons which he sets out in his closing submissions. He says that it may afford some evidence of the effects of the firefight, it affords no evidence at all as to what was within the Unit at 6.53pm on Saturday evening when the Roes left for the last time. Absent DAR12, there is no forensic evidence which supports the view that there was diesel inside the Unit prior to the time of the Fire. Mr Quiney responds in detail in his closing submissions.

Mr Butler argues that there are also strong indications that there was no diesel present when the Roes left such as the absence of visual evidence from the CCTV footage at the time of the Fire. The fact that the Fire did not spread beyond the front area where it was lit, and where it is known that accelerant was introduced is of itself evidence that there was limited accelerant present.

Dr Jewell is highly qualified both academically and by her experience to give expert evidence on the scientific aspects of the investigation of fires, particularly chemistry. As it happens I accept most of her evidence on these scientific matters which, in contrast to her speculation and her evidence about other matters, was not much challenged. Unfortunately her report, perhaps as a result of inexperience and certainly not a lack of good faith, gave an impression that she might not be approaching her task in a detached way. It was unnecessary and unhelpful for her to volunteer views such as those set out in Paragraph 9.4 onwards of her report. She refers to her understanding of what evidence is available to the Gwent Police on issues wholly unrelated to her expertise and to her opinion on the CCTV footage as to which, despite acknowledging that she is not an expert in the field, she opines “it appears extremely unlikely that the person in the CCTV footage immediately prior to the fire is Mr Roe…”. Against that background I place no weight on Dr Jewell’s more speculative views.

Mr Robbins is by academic training a microbiologist, a discipline irrelevant to this fire but has immense experience of investigating fires- more than 1100 of them. Mr Butler is critical of his evidence and his lack of relevant academic qualifications. He points out that Mr Robbins inspected the Unit on 4 March (5 days after the Fire) and 7 March (8 days after the Fire). He was dealing with a seriously contaminated site. He says that Mr Robbins repeatedly strayed into matters of subjective interpretation which were far outside his expertise, such as, in CCTV and the weighing of allegedly inconsistent statements made by Mr Roe. Mr Butler says that Mr Robbins was reluctant to acknowledge the evidential matters which undermined his case and placed reliance, when in difficulties, on matters which were not contained in any of his three reports. He also points to the missing motherboard, a matter which I will deal with separately. Criticism of Mr Robbins’ academic qualifications is misplaced. He has a scientific training but relies not on this but on his great experience to establish his position as an expert. Fire investigators are to some extent a sub category of expert in that they tend to arrive on the scene well before conventional expert witnesses and form views which cause insurers to take decisions which may lead to litigation. Necessarily fire investigators apply a range of disciplines and it is not possible for them to be experts on all these. Further as part of their job they express conclusory views to their clients which, in litigation, are matters for the judge. Like Ms Jewell Mr Robbins relied on speculation to some degree and sometimes this was because, like Ms Jewell, he was drawn into it by Counsel. Similarly while I discount the speculation in Mr Robbins’ evidence and bear in mind that his starting point was his firm conviction that Mr Roe caused the Fire, I accept his good faith and all his evidence about the facts and matters which he himself observed and examined along with that of his colleague Mr Jowett.

Mr and Mrs Roe denied having anything to do with placing diesel in the Unit. Fire officers Sargent and Rees-Taylor gave evidence that they smelled no diesel. It is common ground that that factor is not determinative. I discount the speculation in the expert reports of Mr Robbins and Ms Jewell but have no reason to doubt evidence within their expertise. I have recorded above what is common ground on this issue and do not repeat it. Ms Hopkins confirmed that there was no diesel when she left on Friday. Some boxes were soaked in diesel after that. The blowpipe theory of Ms Jewell was entirely speculative and in practice would not, if tried, have accounted for the soaking of some of the boxes. One would in the normal way expect the only difference between the boxes inside and outside the Unit to be that the latter were carried out by the Fire Service but the former were not. It is very clear that diesel stains affected the boxes found outside the Unit and it is more likely than not, for the reasons given by Mr Quiney that those inside were in much the same condition. It is possible that they were not but unlikely. The idea that the boxes inside the Unit were soaked in diesel after the Fire but before they were photographed on 28 February is fanciful. It is possible that someone with a very elaborate and risky plan to frame Mr Roe would have done this but most unlikely. There are at least two plausible but entirely speculative cases that can be advanced about the significance of the burst pipe and the running tap. Mr Roe’s claim that he had such limited knowledge of the pipe, which is obviously visible in the toilet area is very surprising. There is however insufficient evidence for me to form a relevant conclusion based on that material. The submission that if Mr Roe were an arsonist he would never have provided the evidence by taking the photographs has some force but presupposes a degree of foresight and perhaps knowledge of what, if any, investigation would follow the Fire. Further Mr Roe is not an expert in diesel, as opposed to, for example CCTV.

If the diesel was spread before the Fire thus marking the boxes, as I find that it was, it is very likely that this was done by Mr Roe. Mr and Mrs Roe were in the Unit on the Saturday. No one else was. The alarm records show that no one else went into the Unit before the Fire. Both sides point to the CCTV evidence in support of what they say about the diesel or the lack of it and I turn to that next. I mention straightaway that I place little weight either on what Genesis says I should conclude from the pictures about the absence of diesel or on the allegations of siphoning made by Allianz, late in the day and not pleaded. This visual evidence is superficial and not reliable.

Overall, the evidence strongly suggests that Mr Roe was responsible for laying diesel before the Fire took place.

It will help first to set out the detail of what this shows at the relevant times. I take the following summary from Mr Quiney’s final submission. I have deleted some but not all the submissions within the chronology.

Wednesday 16 February 2011

Saturday 26 February 2011

Sunday 27 February 2011

Attention has focused first on the events in the Unit on the Saturday secondly on the alleged breaks in the footage and thirdly on the activities of the “unknown person”.

Allianz submits that the footage shows that the Roes not only brought equipment and stock back into the Unit, but also took significant quantities away. It says that this is important. First this was not Mr Roe’s original account. Second it is consistent with people planning to burn down their business and wanting to retain valuable items.

Allianz says that the footage shows the cars to be containing boxes and items when they leave. The car is noticeably lower on its suspension after the gap at 15:20:18 and 15:48:42. This lowering of the suspension can be seen to occur when one compares the stills at the end of that gap. Mr Robbins points this out in his supplemental report. Mr Roe’s third statement responds that he put some cabling in the back of his wife’s car. This does not explain the significant loading that occurred during the gap on the first visit with his car. The footage shows that Mr and Mrs Roe were stacking many items both in front of the main roller shutter and the nearest racking to that door. On their own evidence these were the more expensive items and the computer equipment. One can also see flammable items too, such as packing materials and boxes. This is consistent with Mr Roe preparing the area behind the roller shutter for the arson. Otherwise it was a very surprising coincidence that he chose the weekend of the arson to rearrange matters. Further, the circumstances beg the question as to why the arsonist would have chosen to introduce the accelerant under the roller shutter at all. The expectation would not be that there was a large amount of expensive and combustible material available to set the Fire. The expectation would be that the area was clear and ready for vehicles, as it had been during A’s time. Only Mr and Mrs Roe knew that there was this material on the other side of the roller shutter.

Genesis rejects that. Mr Butler says that the theory that the Roes loaded up their cars with stock before removing them does not work. The Roes have given a perfectly plausible explanation, namely that they were removing empty boxes and/or cabling for the work they were to undertake at home. The Roes have never stated that they took nothing away from the Premises. They were never asked about the material inside the vehicles prior to the trial. As the available CCTV shows no attempt is made by the Roes to conceal the material, either as the vehicles drive out, or when they are parked. There is no evidence about what weight of load would be necessary to have the apparent impact on the car suspension which Allianz points out. Mr Butler also points out that the Roes were openly engaged in much other activity in the Unit of a conventional kind wholly unrelated to preparation for arson.

It is striking that the Roe’s undertook this activity on the day the Fire happened but of course coincidences occur. It is unfortunate that the materials were placed where they were by the shutter doors. But for this it seems unlikely that the accelerant placed under the door by the arsonist would have had the effect which it did. It is very surprising that Mr Roe’s detailed witness statement made in September 2013 deals fully with what it was that he and his wife were taking into the Unit but makes no mention of them taking anything out. Mr Roe did not mention the cables until Allianz had drawn attention to this aspect. My impression from the footage is that the cars were indeed quite heavily laden when they left the Unit but there is no other evidence to suggest that one of them did not contain just the cable referred to by Mr Roe. There is no footage of the Roes loading the cars.

Allianz says that the footage between 15:02 and 15:50 shows evidence of oil having been siphoned from Mr Roe’s diesel car. This can be seen from comparison of the condition of the floor and the area around the fuel cap at various points and Mr Roe’s examination of a stain. The detail is developed in Mr Quiney’s closing submissions. Genesis responds that the theory about the Citroen was convincingly answered by the considerations that (a) the stain around the fuel cap was also clearly visible on the arrival of the vehicle; (b) the stain on the floor was not in the position one would have expected, if caused by fuel running down the side of the car; (c) the vehicle clearly left at least one further stain, consistent with the wet weather which had obviously occurred that day; and (d) the stain evaporated in a way which is also consistent with water. He also complains that other still more conclusive answers might have been available to Genesis with proper notice of the allegations.

I am cautious about making findings of fact by viewing the footage. My observations of it may be unreliable on points of detail. Further Genesis had little notice of the case that was going to be made. I will therefore disregard the evidence of alleged siphoning.

The unexplained gaps in the CCTV footage are the subject of three detailed reports from experts. Mr Graham Dunne is Allianz’s expert. He has worked for a specialist CCTV company for 15 years and as its Technical Manager for 9 years. He has wide experience of the installation and working of CCTV and the model installed at the Unit had been sold by his company for four years. In a lucid report he explains how the system works and forms the view that while there are several reasons why the time could have skipped in playback and several other reasons why cameras 2 and 3 stopped between 18.28 and 18.51 there are only two possibilities for both factors being in play simultaneously. One is Mr Roe disabling the machinery and the other is a fault. For convincing reasons he considers that the first reason is “far more likely”. He points out that when the anomalies occur Mr Roe is present at the Unit but never within the visual field of the cameras.

Mr Millar, the first expert for Genesis, is an expert in Imagery Analysis not CCTV. He has long experience in the Royal Signals and applies to CCTV and other footage facial mapping and height analysis techniques. Mr Millar (in contrast to Mr Dunne for Allianz) has no expertise in how this CCTV system works. His expertise is in analysing what is seen in the footage, not how the system works. He gave no evidence on the question of the identity of the arsonist shown on the CCTV. Mr Millar is relied on to support the suggestion that the “skips” on the footage can be accounted for by a number of coincidental faults rather than Mr Roe turning it off. But he does not have expertise in this area.

Mr Nash, a second expert for Genesis, is a Senior Forensic Investigator with 14 years computer experience. He suggests, but only in general terms, the possibility of the pause being due to a variety of possible faults, including a problem with the motherboard.

Allianz contends that the likely explanation for the fact that the CCTV has gaps in it is that Mr Roe turned off the recording. Mr Millar agrees that there are skips in the footage and they are consistent with Mr Roe pausing the CCTV. Mr Millar agrees that he is not expert in the technical matters as to the workings of the CCTV. Mr Nash was also in agreement that there was no evidence of a fault.

Genesis sought to develop arguments based on the absence of the original motherboard for the CCTV system. Mr Butler submits that the episode of the motherboard shows a serious disregard for fairness. The motherboard was, it turned out, in the crate of Genesis exhibits in the exhibits store at Mr Robbins’ office, just where it would have been expected to be. Mr Robbins’ search was obviously completely inadequate. Mr Quiney says that the absence of the motherboard was irrelevant. This is because Mr Dunne and Mr Nash agreed that it was inoperative and sheds no light on the issues.

Mr Butler first complains that this is an issue which has developed in an unsatisfactory way. He complains about the handling of the issue generally. In particular he objects to the fact that as late on 4 March 2014 it emerged that Mr Dunne did not agree with Mr Robbins’ theory as to how disabling had occurred (with the consequence that the extensive work undertaken by Mr Millar in disproving Mr Robbins’ theory was entirely wasted) and advanced a different theory instead. Later that month Mr Robbins developed the theory yet further, identifying further alleged occurrences of time skips earlier on in the afternoon. The upshot has been that Genesis only had approximately 6 weeks in which to digest and answer this complex technical issue. It should have had notice of the point on provision of the Defence in January 2012, if not before. Genesis’s ability to answer it has been further hampered by the non-production of the motherboard until midway through the trial. This is a startling failure, the impact of which was to deny Genesis any meaningful opportunity to investigate the alternative of the two theories which the experts regard as possible explanations, namely unit fault. It would be an affront for the Court to make findings adverse to Genesis based on the CCTV evidence.

Mr Butler advances a case to support a principle that the Court must have regard to the parties’ Article 6 rights and adopt a proportionate means of controlling the court’s process and deciding the case justly. In the present case, he submits that the combination of the two factors identified – late development of the point, and non-availability of the motherboard – mean that it would be unsafe and unjust to base any finding adverse to Genesis on the CCTV evidence.

Mr Butler says that in any event, scrutiny of the CCTV evidence identifies numerous issues which are not satisfactorily explained. Specifically, as regards the periods earlier in the afternoon during which Allianz says that the Roes deactivated the CCTV while loading up vehicles, there is compelling evidence that the cameras outside the Unit were also operating inconsistently and/or not at all. These periods of inactivity are not bordered by the skips in the clock and so cannot be explained by/related to those skips. Even if they had been, this would have been no more than the “exact symptoms” of a fault which Mr Dunne had seen in other models. Other problems with the CCTV include rogue frames, skips appearing on some recordings which are plainly not attributable to Mr and Mrs Roe and freezes – including on one occasion with Mr Roe in sight. Mr Butler says that Mr Dunne had explanations for these problems of varying degrees of conviction, but the real point is Genesis’ inability properly to inspect the unit and/or challenge those explanations. As Mr Millar said, devices of this type are peculiarly susceptible to developing random faults.

Mr Butler says that the theory that the Roes entered the menu and caused the recording to cease while deactivating the cameras loses much of its plausibility when it is considered that it was unnecessary for them to have done it. The same effect could have been achieved using the method of controlling the cameras which was favoured by the Roes (JS Software) without any skip having occurred. Further successful implementation of a plan to deactivate the cameras would depend on nothing having moved during the period of deactivation, and things did move; not just by being carelessly knocked over but (in the case of, for example, the Stanley knife/masking tape in Camera 3) being quite carefully placed in different positions.

The case on the gaps began with Genesis’ suggestion that there be CCTV expert evidence in response to a view formed by Mr Robbins about the cause of the gaps. Genesis prepared expert evidence on the issue on that basis but that was overtaken by the views formed by Mr Dunne. Genesis complains of the injustice of this and of the absence of the motherboard. Time, as it were, started running with the report of Mr Dunne in February. There was time to respond, in accordance with the usual timetable, for a trial in May. To the extent that costs were wasted by Allianz changing tack, if it did, that can be addressed. The loss of the motherboard was unfortunate and the delay in finding it an isolated but serious error but one caused by innocent if careless oversight not by bad faith or improper motive. Mr Butler fairly observed “The motherboard was, it turned out, in the crate of Genesis exhibits in the exhibits store at Mr Robbins’ office, so just where it would have been expected to be. Mr Robbins’ search was obviously completely inadequate.” In the event the absence of the motherboard caused no prejudice for the reasons given by Mr Quiney. Furthermore once the motherboard did come to light in May Genesis did nothing to examine it in the gap of almost three months (caused largely by Counsel’s commitments) between the end of evidence and final submissions. While this decision may have been taken for costs reasons, the expense of that further work, given the overall costs of this litigation, would have been modest had the matter been worth pursuing. So I do not accept that there is any reason to exclude this evidence from consideration.

As to the substance I accept the evidence of Mr Dunne. It is very likely that Mr Roe did pause the CCTV as alleged. There is no useful expert evidence to the contrary. Mr Butler’s points are mainly related to the lack of reason or motive for the pausing to take place. The problems with the reliability of CCTV systems and of this model identified by Mr Butler are factored into the opinions of Mr Dunne following cross examination. It would have taken an unlikely combination of faults to cause the pausing. The only evidence the other way is the evidence of Mr Roe, and to a lesser extent Mrs Roe. I will express a view about that question later in this judgment when I have dealt with each separate issue. Mr Roe was an expert in operating this equipment and, if he was to lay down diesel he needed to do it without the CCTV (the absence of footage from which would itself be very suspicious) revealing that this was being done. The ordinary business activities being shown would of course have been necessary for the CCTV to appear to be operating normally. Mr Roe was curiously vague about his involvement in changing the mode of the CCTV on 16 February and might not have been had he nothing to conceal.

Allianz says that this shows that Mr Roe is the arsonist. Whether the man in the footage is similar to Mr Roe is a matter of impression, but it is submitted that there are clear similarities. Genesis suggests the opposite. Looking at the footage it is clear that the arsonist is male and, like hundreds of thousands of other people, may be broadly of the same size as Mr Roe. It would, as I see it, be quite wrong for me to attempt some sort of identification exercise in the manner that juries are daily warned not to do.

Mr Quiney points to a number of oddities in the behaviour of the arsonist. One is his decision to disable the camera after he is seen trying to use the keys, when he plainly came equipped with spray paint for precisely this purpose. A second is that he does not arrive with a rucksack, but then goes off to get one and leaves with it. This suggests he had it stored somewhere, perhaps in a car. Third, his whole manner is too “pantomime” for a sneaking arsonist who must know there is a CCTV in place (as he has the spray paint ready). Mr Butler responds that it is not obvious why Mr Roe would choose to be filmed on his own CCTV – he of all people would be aware of the risk of identification other than by facial recognition. Furthermore had his intention been to implicate A he could just as easily have done this without appearing on camera at all (e.g. by disabling them from the rear without coming into view).

The sequence certainly shows odd behaviour. One would certainly expect the arsonist to use the spray paint at the outset before trying to use the keys. The behaviour is consistent with an arsonist approaching the job in a curiously disorganised fashion. It is equally consistent with Mr Roe or an associate using the keys to give an impression that this is an inside job committed by someone other than him. Reaching a conclusion on this material alone would be speculative. I refer to this further below.

Mr Butler says that timing eliminates Mr Roe. The established timings place the perpetrator at the scene at 00.17.58. Mrs Roe is known to have been at the Roes’ home at 60 Kyle Avenue, Rhibwina, Cardiff, at 00.26.17, when the call to EMCS finished. By 01.01am, the Roes are placed at the Unit. They are in a single vehicle, precluding Mrs Roe from having joined Mr Roe independently. The Roes’ homes, and the Unit, are approximately 7-10 miles apart (depending on route) and at least some of the journey involves going through urban areas. For Mr Roe to have set the Fire, and got back to the Premises by 1.01, he would have had to return to his car (wherever that was), drive to his home, collect Mrs Roe, and return to the site within the space of 43 minutes. It is notable that when doing the round trip in daylight in the afternoon it took 1 hour 4 minutes, the Roes having left at 4.22pm and returned at 5.26pm. It also took the fire service at Caerphilly 12 minutes (from 1.01 to 1.13) to get to the site from Caerphilly Fire Station.

Mr Quiney responds by pointing to the transcript of the telephone call between Mrs Roe and ECMS, the company that monitors the alarm. It is clear that when they rang Mr Roe was not home. Therefore all the arguments presented based on the time it takes to get to and from the Unit are irrelevant. The evidence points to Mr Roe not being home.

On the face of it Mr Roe was not at home. That is what Mrs Roe told ECMS when they called. In her evidence Mrs Roe said that she said this because there was an agreement that only one of them would deal with a call of this kind. The conversation was summarised and Mrs Roe’s recollection given during cross examination:

“the

16 operator asked to speak to Dennis Roe. You say,

17 "Can I help? " He says, "It's alarm monitoring centre,

18 I need to speak to Dennis."

19 "Oh, right, he's not here at the moment.

20 Can I help?"

21 "No, it's okay, if you just tell him that we have

22 called and we'll try again later."

23 "Can I help at all?"

24 "No, it's, er, it's regarding the alarm. We need to

25 speak to Dennis."

1 Depending on which property it is -- because I'm his

2 wife. So it's possible that I'm a key holder to some of

3 them."

4 "Are you? You're not listed as a key holder. It's

5 for Genesis UK."

6 "Well, I should be. I've been contacted before."

7 "Have you? Well, we've only got Dennis down as

8 a first key holder. What's your name?"

9 "Victoria Roe."

10 Right. Let's pause here. You plainly tell the

11 operator that Dennis is not there. So are you saying

12 that you actually basically lied to the operator? Is

13 that what you're saying?

14 A. Well, I don't class it as a lie.

15 Q. Then when he says you're not on the list, what you don't

16 say is: don't worry, Dennis is here, he's on the list,

17 I'll wake him up.

18 You don't say, that do you?

19 A. No.

20 Q. Then when we look at it further on, it says:

21 "Let me have a look. Oh, you are actually on the

22 list for this one, yeah, right at the bottom."

64.

23 "Yeah, I've definitely been contacted before."

The call continued :… "Is it -- how many detectors have gone off at the

1 moment?"

"Just one."

"The one, is it? Okay, no problem, because I have

said he is around on -- so what I'll do, yeah, we'll pop

up now and we'll have a look, see what's going on."

Mrs Roe described the agreement as follows:

I can understand that couples have arrangements by which if something happens in the night one will deal with it leaving the other to rest. That can apply to children as well as to business. It is more surprising for that arrangement to extend to denying that one’s partner is there at all. Mrs Roe explained that ECMS would insist on talking to the first-named key-holder even if asleep. There is no other evidence of what she described as ECMS’ “rigid procedure”. There would be nothing odd about explaining that one did not want to disturb one’s partner and one might expect the arrangement to permit one to wake him up if there was an alarm and the company wanted to speak to him. Against that I make allowances for the fact that we do not all think straight when called late at night. Nonetheless the starting point is to take what someone says at the time as the truth. The conversation as a whole suggests that Mr Roe is not there. I do not find Mrs Roe’s account, even supported though it is by Mr Roe’s recollection, sufficiently convincing to accept the timing points made by Mr Butler.

In Paragraph 7 of the Reply Genesis says “Furthermore he is smoking and wearing a watch neither of which are habits of Mr Roe”. So Genesis put this point in issue. The CCTV stills then showed that Mr Roe was wearing a watch not dissimilar to that worn by the arsonist. In his third witness statement dated 8 May served 4 days before the trial Mr Roe devoted two detailed paragraphs to the point. He said that the watch was one of a batch of cheap promotional items received from Tyco for him to give to customers. He explained why he might have been wearing one of these for a time when carrying out less installation work but would have given it a go before stopping wearing it because it was uncomfortable or he developed the “usual rash”. Late CCTV evidence from Genesis of A leaving the office on 4 October 2010, again showed Mr Roe wearing a watch some 4 months before the Fire. As I see it Mr Roe told an untruth to bolster his case. When this was put in doubt he, characteristically, produced an elaborately detailed explanation. This was in turn shown to be, at the least, inaccurate. This aspect casts no direct light on who was shown as the arsonist in the CCTV but it is relevant to Mr Roe’s credibility, a crucial aspect of this case.

The difference between the parties is stark. Genesis says that it was thriving and the last thing it wanted or needed was a fire and the amount of its claim reflects that. Allianz says that Genesis was beset by financial and business problems which gave it a strong motive to start the Fire and which would have led to its demise in the summer of 2011.

Genesis claims that it was in a small but rapidly improving way of business at the time of the Fire. Sales in the 12-month period leading up to the date of the fire (February 2010-11) stood at £211,929, as compared to £87,969 in the period February 2009-10 – a growth rate of 140.9%. Genesis’s last set of annual accounts – to 30 September 2010 – showed a gross profit of £65,269, representing a rate of 40.2% on turnover. This compares with corresponding figures of £8,193 at a rate of 14.7% for the preceding 12 month period. In the week before the Fire, Genesis’s bank balance had stood at just under £8000 in credit – its highest ever balance. Allianz’s expert Mr Harding calculates that in the 5-month period from 1 October 2010 to 25 February 2011 (the last working day before the Fire) Genesis’s net profits were £54,678 and, although he states that this is artificially high for certain reasons, he accepts that Genesis had made a net profit of £11,971 in that 5-month period – that is, 70% of the entire net profit of £17,091 which (on his calculations) it had made in its entire 28 month history. The period between 30 September 2010 and 26 February 2011 was one of unprecedented growth and profitability for Genesis. The company’s cash position had improved commensurately; between 8 December 2010 and 21 February 2011 it had been in overdraft only once, fleetingly between transactions on 1 February 2011. As at 15-17 February 2011, its cash reserves stood higher than they appear to have done at any time since early 2009, Genesis had stock with a sales value of at least £141,000 and had just ordered a significant further quantity of new Alexor stock. Business developments made the future look promising.

Allianz claims that Genesis was heavily indebted to both the bank and to suppliers. It was basically balance sheet insolvent and had been for years (see e.g. the accounts for the year ending 30 September 2010, which includes the balance sheet for 2009). Genesis had an extremely poor credit rating and was considered to be a financially fragile company. It had no real ready cash but had immediately payable debts. It had most of its assets tied up in stock, some of which was out of date. It had a County Court Judgment made against it by TNT for £6,212 and was unable to pay it. In January and February 2011 the Roes were seeking to re-mortgage their property to prop up the business and get more stock. During the same period Tyco was owed £30,539 (21 February 2011) and unlikely to give further credit.

Taken in isolation most of these claims by the parties are correct. Evaluation of this issue involves not just an accountancy exercise but the application of business common sense.

Genesis relied on the written evidence of Mr Evers, formerly of Tyco and of a Canadian competitor DSC but now working for an Italian company. He rated Mr Roe and Genesis highly based on his experience while working for DSC/Surgard. Genesis also called Mr Osborne who is close to Mr Roe and had provided consultancy services to Genesis. His evidence was useful background information but cast little light on the issues. Mr Riegler is Sales Director of Tyco. He is a senior executive of the company and was a straightforward and clearly honest witness. Mr Riegler is an admirer of Mr Roe both personally and for his knowledge, expertise and commitment in selling the products of Tyco and others. His company still has dealings with Mr Roe in his new business CFSS. Mr Riegler was confident that Mr Roe could, had Genesis survived, have sold substantial quantities of products, $500,000 or more, in particular the new Visonic range acquired by Tyco in December 2011. Mr Riegler was cross examined on the basis of Genesis’ past record and sales achievements and it seemed to me that his honest estimates about the future were speculative and over optimistic and perhaps affected by loyalty to a colleague in difficulties. Genesis had consistently failed to meet even 50% of the contractual sales targets prior to the Fire. Confidence in the future is a necessary part of the make up of any sales executive and I do not doubt Mr Riegler’s good faith but I do doubt his assessment.

The expert evidence on this point came from Mr Thompson for Genesis and from Mr Harding for Allianz, both experienced accountants at Grant Thornton and RGL respectively whose involvement in the case was primarily on the question of damages. Mr Thompson considered that Genesis was in a healthy financial position at the time of the Fire. Mr Harding considered that Genesis was in significant difficulties at the time of the Fire and would have failed regardless of it. Mr Harding presented a very detailed and, to me, convincing report.

Mr Thompson considers that the business was thriving because its net current assets were sufficient to meet its net current liabilities. He did not conduct analysis of the underlying financial documents. Much of the assets consisted of stock, which Mr Thompson accepted would probably take about 7 months to liquidate. Thus it is difficult to see how the company could meet debts immediately due. Mr Thompson did not answer convincingly the learning which indicates that stock should be excluded from a test of solvency. His concentration in cross examination on the literal aspects of the accounts rather than the business context led, as I see it, to an over optimistic picture.

The level of stock had built up. If it was readily realisable it would have been sold. The stock also included obsolete, older and end of line items stored at the back of the Unit – according to an email from Mr Roe in June 2011. Genesis wanted to invest in newer Alexor stock but lacked the finance to do so. The Roes were seeking a further loan, they say for a house improvement, Allianz suggests that it was or should have been for the business, but their application was turned down twice in early 2011.

Genesis owed some £42,000 to the Bank taking into account the credit balance on current account at the time of the Fire. Other debts were as stated by Mr Harding. There was an unpaid judgment in favour of TNT for £6,212 (which may well by itself as Mr Butler submits account for Genesis’s diminished credit rating). Tyco was owed £30,539 in February 2011 and unlikely to give further credit. It was plain that Tyco’s patience was being tested and was unlikely to continue. Mr Butler points out that the debt to Tyco by the time of the Fire had actually reduced from its level in September 2010 but the debt remained unpaid- although there was little immediate pressure because of the Surgard issue. Mr Bulter also points out that Mr Harding records Genesis as having been in debt to FedEx in the sum of £3,775 as at 30 September 2010 and the figure was unchanged at the time of the Fire. It was however still a debt of Genesis that had not been paid.

TNT obtained a default judgment against Genesis on 31 October 2010. Genesis presented this as a claim which it had good reason to dispute which should not be seen as an immediately payable debt. Genesis applied unsuccessfully to set aside the default judgment and a second application was pending at the time of the Fire and was dismissed on 28 March 2011. Mr Butler submits that while making a second application might have been procedurally suspect, the application records a legitimate dispute not only about a delivery of stock but also about an unjustified cessation of a payment plan. There is no evidence that the Roes knew that their application was doomed, or that TNT was in the process of enforcing their judgment. Mr Quiney suggests that the position was quite different. Mr and Mrs Roe played down the judgment for £6,212 on the basis that it had been entered in the face of a legitimate defence and that they had never received the Claim Form as TNT had got the wrong address for Genesis. This was plainly wrong. There were numerous TNT invoices that had been sent to “1A” rather than “24A” and disclosed by Genesis and had plainly been received notwithstanding the wrong address. By August 2010 TNT were using the correct address and were owed over £5,000. The Roes decided to change their courier without paying the bill. TNT in fact used the right address for the claim and the Roes never raised the issue of the address on their first application to set aside the claim. Mr Roe must have known that by presenting this aspect as he did he was seeking to mislead the court.

As I see it the picture presented by Mr Quiney is more accurate and it is disappointing that the Roes were less than candid about this issue. They may not have understood the difficulty of succeeding with a second application to set aside but they would have been aware of the lack of merit in their proposed defence. This was a clear debt payment of which they were trying to fend off.

There is a useful summary of the competing positions of the experts in the joint report between pages 954 and 959. The company was not making sales targets, its level of stock was not a true asset unless discounted to take account of the obsolete or unsaleable items, it was unable to finance expansion except by delaying payments of its debts. I prefer the analysis of Mr Harding to that of Mr Thompson. The assumptions about the future made by Mr Thompson were based on projections by Mr Riegler which were in cross examination shown to be unrealistic. It is true that the level of debt due to Tyco was at least temporarily reduced to the extent of the Surgard defective goods but there was still a significant unpaid debt. The later correspondence with Tyco, admittedly shaped by the aftermath of the Fire, shows that others at Tyco were less impressed by Mr Roe than Mr Riegler had been. The TNT debt was due. More fundamentally the Roes needed money to finance the business. In early 2011 the bank had twice declined to provide a loan. There is a lack of clarity about the purpose for which the loan was sought but even if it had been intended to pay for a loft conversion the business needed money and the bank was basing its decision on, amongst other things, the accounts of Genesis. I accept that the bank was otherwise not concerned about the current position as it understood it to be. The accounts of the company provide no measurable pay or remuneration to its two most senior members of staff, the directors Mr and Mrs Roe. I will reluctantly accept to some degree the submission that Mr and Mrs Roe’s annual joint declared income of £4,000 understated what they received because they were, improperly so far as tax is concerned, living off the company to a degree. This however makes no measurable difference to the overall picture. Genesis was not doing well and, for most of the reasons given by Mr Harding, faced considerable financial difficulties. Both Mr Butler and Mr Quiney set out other broader business reasons why the company was likely to flourish or wither but these are too nebulous for me to place much weight upon.

Mr Butler points out that when the financial position is being examined in the context of motive what matters is what the person concerned believed the position to be rather than what it was. That is a fair point but given such obvious matters as the volume of sales against target, the debts and the amount of unsold stock as well as more immediate matters such as the income the business was producing and the Roe’s inability to raise a loan against the business I believe that Mr Roe knew full well that Genesis faced real difficulties. At one point , perhaps unexpectedly, he said this:

“Q. It wasn't making you any money, was it?

8 A. If you are solely money driven, I can see you would be

9 annoyed with that. I'm not.

10 Q. But it wasn't making you any money, was it?

11 A. And if that was still the case today, I wouldn't be

12 bothered. I was building up a business.”

The evidence overall on this issue points more to Mr Roe having a motive to start the Fire than to him having confidence in a business which he would not wish to see harmed by such an incident.

It is not in doubt that relations between A and Mr and Mrs Roe broke down leading to the end of her employment when she left on 4 October 2010, after a dispute about wages being paid late. This led to her bringing a claim for unfair dismissal which was bitterly contested. On 18 October A signed an application to the Employment Tribunal. The application was received by the Tribunal on 1 November. The Roes say that A refused to return her set of keys and that they reported this to the police on 28 October 2010. A police record confirms that and an officer’s advice that this was really a civil matter. In the same calls Mr Roe complained that A had deleted data from the computer and changed passwords causing damage to Genesis.

The Roes say that, in the months prior to the Fire, they received calls, initially silent and eventually more threatening and abusive from a mobile telephone. They say that initially the number was anonymous but on occasion it would appear as 07922 055702 (“the 702 number”). They say they repeatedly attempted to contact PC Rees to complain about this and there is some support for that – PC Rees says that a number of messages from the Roes were taken by a PC Simon White but there is no evidence of what these calls were about beyond the matters already reported to the police. There is no police record of a complaint about the alleged calls. Genesis’s response to the unfair dismissal claim lists, over three closely typed pages, many complaints about A and how she and her parents had acted. There is nothing said about unpleasant calls. In his statement to the police on 11 November Mr Roe said nothing about such calls and does not appear to have made this allegation until after the Fire. A was interviewed by the police but no further action was taken against her at that point.

Messages on 16 February between Mr Roe and Answering4U, Genesis’s phone message service, confirm that there were two calls that afternoon from the 702 number. They say in part :

“... caller phoned from 07922055702. Looking at the previous calls from this number, we had one just a number of minutes earlier from someone named Andy Jones which we transferred to Claire. Cheers, Anthony. He also gave Claire an earful and then hung up. I have no idea who he is. Bloody prank caller.”

Ms Hopkins’ evidence was that the caller made a threat that she was going to burn and that the name “Jones” showed up on her screen.

Mr and Mrs Roe recalled that the calls included threats that unless the charges against A were dropped and compensation was paid to A they would burn or die. Phone records show that on the same day at around the same time 702 called Mrs Roe’s mobile seven times and Mr Roe’s three times. The phone with the 702 number was apparently topped up in Newport – at a shop just around the corner from A’s house – at 14.43 on that day. There were four further calls to Mrs Roe and one to Mr Roe on 22 February.

On 25 February the Tribunal refused Genesis a stay, made directions and, according to a note from the Tribunal, “warned the respondent of the consequences of the unreasonable conduct of a response”. A, the claimant, would have seen herself as having done better than Genesis. It is not obvious why she would want, within a day or so, to have the Unit which generated money to fund her claim burned down. In the correspondence she claims that the business was in financial trouble. There were no “charges” for her to face and no likelihood of there being any.

Call records show that Mrs Roe received a telephone call from 702 made from the area of the warehouse at the precise time of the Fire. The number was on a pay as you go untraceable phone. According to the statement of PC Rees 702 was found stored on A’s telephone under the entry ‘Luke’.

Mr Butler says that it is clear from this that A was responsible for the calls. A had denied all knowledge of the number to the police before it was found. The telephone was topped up close to A’s house. So on 16.2.11 somebody close to A topped up the phone from a shop near her house and made abusive calls to Claire Hopkins and Answering4U. In the call to Ms Hopkins he also threatened arson. Mr Butler submits that the call on the night of the Fire was made by an associate of A, the arsonist, in order to leave the Roes in no doubt that the Fire was his work. It is suspicious that A knew about and referred to the Fire when writing to the Employment Tribunal on 10 March.

Mr Quiney submits otherwise. A breakdown in the relationship between the Roes and A is not a motive to burn down the Unit in February 2011. The Roes’ complaint to the police had plainly stalled by that stage and A was making progress in seeking compensation for unfair dismissal. It would be very odd for the alleged arsonist to make nuisance calls whether in the run up to the Fire or within 5 minutes of it occurring. It is highly unlikely that the arsonist would make threats in the period before the arson that expressly linked the forthcoming arson to A’s complaints. The 16 February calls allegedly referred to both burning and the dispute with A. There is little point in the third party arsonist making an anonymous phone call if he is going to link the proposed arson with A. Why would the alleged third party arsonist give his name to Genesis’ phone messaging company as “Andy Jones”? Why would the arsonist and A not wish to remain anonymous and avoid detection? Why are the Roes claiming that there were also calls in the autumn when the evidence suggests that there were none? Why would the arsonist have decided to phone the Roes just at the point that the alarm went off (and the alarm company phoned)?

Police evidence. It is no criticism of Genesis’s solicitors that they sought evidence from the police. I would have done the same. The starting point is that it is common ground that the police investigation of the fire was inadequate. The police officers gave evidence voluntarily for Genesis and in terms which were unconventional. Some of the evidence, mainly of an undisputed factual kind was helpful. Much of the rest was largely hearsay and contained inappropriate, and as it turns out, ill informed opinions about who caused the fire. DS Court, who became involved only in September 2011 after Mr Roe had complained to his MP, sets out as fact (“it was found”) the contents of an anonymous phone call to Mr and Mrs Roe when the words are simply what they say was said. He sets out in his statement as his understanding simply what Mr Roe records in his own statement. He records that it was “disappointing” that the CPS (inevitably given the remarkably thin evidence he had put forward to them) had declined to prosecute A and explains why he formed that view, again by reference only to the telephone calls. He is critical of Mr Robbins for urging investigation of the Roes but gives no reason for dismissing out of hand the categories of evidence heard in this case. Yet the investigation by Mr Robbins, unlike that of the police, had been thorough and professional. DS Court concludes that the fire was “more likely than not” connected to A.

The evidence of PC Rees is similar in tone and content. I allowed PC Rees to give evidence in a 9 page statement even though it was served very late on 2 May 2014. I thought it just to do that but its lateness made it difficult for Allianz to respond. PC Rees was at least around at the relevant time. She too thought it helpful to say who she considered responsible for the Fire. This was without the benefit of her own investigations into the Fire or reviewing the alarm logs or viewing a complete set of CCTV footage or even visiting the Unit. She had been on lengthy sick leave and in 2014 had no reliable recollection of these comparatively minor events in 2010 and 2011. Ms Rees recalled from her notes that there was a link between A and 702. Apparently the number was on A’s phone stored to “Luke”. Luke was apparently eliminated from further inquiries. One of the vices of evidence of this low quality (in the sense of lack of documentary or other support not the honesty of the police officer) is that it leads to further unhelpful speculation about routes that cannot now be explored. Of course the material is consistent with the allegations of Mr Roe. Against that the fact that the number was stored on A’s phone may mean only that she received a text from 702 (as the police confirm that she did) or possibly that it came from “Luke” and she stored it as such. There could also be innocent reasons why the number ended as being shown, if it was, as that of Luke.

The alleged crimes of A about which the Roes complained to the police were very minor in the context of the criminal law (and certainly compared with the serious crime of arson) and it is understandable that they were not taken very far. Many employers would not have made complaints to the police about the minor matters and many forces would not have committed resources to their investigation. The allegations were made around the time that A was claiming unfair dismissal and were no doubt part of the bitter dispute. The evidence, other than the recollection of the Roes, gives no support to what they say about calls in the later part of 2010. If they occurred it is surprising that they were not mentioned until after the Fire. Someone made a series of calls on the afternoon of 16 February. Ms Hopkins was an honest and straightforward witness and I reject the suggestion that she may have exaggerated her evidence because she is dependent on the Roes for her continued employment. I accept her evidence that someone called and referred to burning. It is curious that this person left the name of Andy Jones or any name if he were the arsonist and unclear why anyone would want to give advance notice of an intention to commit a serious crime and risk detection. If the purpose of the threats was to persuade Genesis to withdraw a complaint to the police and concede an unfair dismissal claim it is odd that the threat was carried out before Genesis had had much time to yield.

The fact that the phone was topped up near the home of A is open to three interpretations. First the phone is linked to A, secondly it is coincidence, and thirdly she was being ‘framed’ in some way. The last explanation is improbable as the investigation to discover this fact was a sophisticated one albeit in an area of expertise where Mr Roe might have some knowledge. The evidence tying the 702 number to A is the recollection of PC Rees from her notes.

In the light of all the material referred to above I do not believe that any calls were made before February. A’s lack of motive, when the facts are examined closely, and the improbability of such explicit threats being made when they allegedly were suggest that, even when set against the evidence of the top up and the link between A and 702 identified by the police, the full story of which remains unclear, that it is unlikely that the calls in February were made on her behalf. Furthermore the calls are one thing and the Fire is another.

Another difficulty with attributing blame for the arson to A on the basis of the phone calls or an accomplice is the evidence about the diesel and what happened at the Unit before and after the Fire. There would need to have been a very improbable chain of events both before and after the fire to enable A or an accomplice to carry out the arson. Further the evidence has to be set against that pointing to Mr Roe.

The other link between A and the Fire is the attempted use by the arsonist of keys to get into the Unit. The court is presumably expected to infer that these were the keys that A had allegedly not handed back at the time of her dismissal. The problems with that are several. First one has to believe that the arsonist would not think that the locks had been changed many months after a set went missing. Secondly one has to accept the account of the Roe’s not A of what happened to the keys- in events where it is now accepted that A was unfairly dismissed and entitled to £1540 in compensation. Thirdly one has to accept as a genuine record of real events a sequence showing the following. First there is an attempt to open the doors with keys made by someone who is aware of the CCTV and is even carrying spray paint with which to cover it up. Secondly once this event is on the CCTV record the arsonist then duly uses the paint to prevent the camera showing anything else. Mr Quiney suggests that the sequence looks like pantomime. I agree with him. The episode seems more like a convoluted attempt to “frame” A than real evidence against her.

Mr Butler identifies general factors which he submits mean that it is unlikely that Genesis would deliberately start a fire. He points to the good character of Mr and Mrs Roe. On 22 February 2011, Mr Roe ordered $31,000-worth of stock, which he would have needed to put somewhere, if he ever really expected it to arrive. On 23 February 2011, the Roes renewed Genesis’s insurance but reduced the duration of C’s Business Interruption cover from 24 months to 12 months. Genesis also claims to have remained significantly underinsured as regards contents. The Roes communicated in a way which did not suggest disaffection with the business or concern about its financial direction and Mr Butler refers to the tone of their e-mails in February. On the afternoon of the Fire the Roes are engaged in numerous activities which are inconsistent with it- to which Mr Quiney responds that these are for the benefit of the CCTV. Mr Roe conducted himself at the scene of the Fire as a concerned property owner who was according to the fire officers “genuine and helpful” and at one point “burst into tears”. Mr Roe created and preserved photographic evidence which Allianz says incriminates him. Mr Butler says that Mr Roe has cooperated fully with the investigation. Above all, he has pursued this claim to trial in circumstances where he stands to obtain no benefit from doing so apart from the possibility that it will stave off the mortgagee bank from taking possession of his home. If Genesis is successful, all the proceeds will go into the CVA and stand to the benefit of the company’s creditors, including Lloyds Bank. Had Mr Roe been responsible, it would have been the easiest thing not to pursue the claim.

Allianz contrasts the absence of documents, e-mails and records about central issues with the large quantity of irrelevant documents within the bundles. Mr Quiney disputes the degree of co-operation shown by Mr Roe and suggests that the displays of emotion could be due to a variety of possible events that night. He points to other signs of alleged lack of probity such as the details of the claim including children’s toys and games consoles.

Mrs Roe’s evidence supported that of Mr Roe who was clearly the dominant partner in Genesis. Mrs Roe did not always grasp some of the business detail in the questions put to her. Mr and Mrs Roe are a close married couple with children, they are now in another business but face financial difficulties. Mrs Roe has faced many pressures. It is unsurprising that loyalty sometimes appeared to overtake her recollection of detail. Against the background of the clear record of the telephone conversation she had with EMCS, the surrounding circumstances and probabilities and the view I form of the evidence of Mr Roe, I believe that what she told ECMS was correct and that, as she said at the time, Mr Roe was not next to her or at home.

Mr Roe is articulate and intelligent and clearly an excellent salesman. He has a charm, a persuasive manner and a force of character that instills confidence in able businessmen such as Mr Riegler and which quickly brought the police onto his side. I sensed from his evidence that his intelligence is quick rather than deep and that he may feel that he is abler than he is. I have in this judgment referred to the individual issues where I do not accept his evidence. I now refer to what I find to be other limitations in his evidence which overall persuade me that he is not telling the truth about the central issues.

Mr Roe’s first statement is an important document setting out his account in detail over 31 pages before he has an opportunity to address specific challenges to his account set out in the evidence of Allianz. Mr Roe’s evidence contained statements which he must have known to be untrue. At the outset of his oral evidence he withdrew a claim in his first witness statement that the loss of Genesis’ exclusivity agreement had been caused by Allianz’ failure to pay this claim. He must have known this to be incorrect when he wrote it. At paragraph 76 he said in a sentence which, if true, would be highly prejudicial to A “After being questioned by the police (A) brought a claim for unfair dismissal ….”. This was untrue and Mr Roe must have known it to be untrue. Pages 6 to 12 of this statement deal with A and the Roe’s disputes with her which are at the forefront of Genesis’ case but the records are thin and much of the CCTV which he says demonstrated his case at the time is not available. The statement gives a detailed account of the Roe’s visits to the Unit the day before the Fire, as one would expect. It records in detail why the Roe’s were taking things to the Unit. It says not a word about the apparently substantial amounts of material that the Roes were taking out of the Unit (Allianz claims, without any other evidence, that this would have been material of value being removed from the Unit before the Fire). The matter is addressed only in response to the findings of the investigators. By the time of cross examination the recollection was this:

“So we have got cabling and empty boxes in Mrs Roe's car.

15 We have something in your car that brings the suspension

16 down that you can't recall.

17 But what essentially we have here is you and Mrs Roe

18 taking a large amount of equipment and stock out of the

19 warehouse, when ostensibly you are saying you are trying

20 to clear out your loft and home office?

21 A. Yes.

22 Q. That's not consistent, is it? If you were seriously

23 saying that you were clearing out your loft and your

24 home office, you wouldn't be bringing back enough stock,

25 material, whatever it is, to take your car down

Page 140

1 seriously on its suspension, and also to fill the back

2 of Mrs Roe's car?

3 A. Not correct. We were taking boxes away, because this

4 wasn't going to be the only trips to our warehouse.

5 There was more equipment to be taken up at a later

6 stage. We needed boxes in order to pack that material.

7 In addition, I was going to be doing a lot of the

8 work on the loft conversion myself, including the -- all

9 the electrical work. Hence I needed cable. But

10 I didn't want all the surplus tools, equipment,

11 et cetera, that I had at home. So I think that's

12 perfectly consistent with what I was doing.”

If this was a truthful account I would have expected to have seen it at least referred to in Mr Roe’s thirty one page statement not in later responsive ones.

Mr Roe had on the one hand a very detailed and convenient recollection of some matters but in contrast an unconvincingly vague lack of recall of others. For example he was asked about changing the CCTV system on 16 February, which one might expect to be uncontroversial, incontrovertible and also memorable because it was close to the date of the Fire:

“A. I have no recollection of this.

2 Q. But that's what this shows, doesn't it? Someone has

3 switched it from continuous to motion.

4 A. If that's what you say.

5 JUDGE MACKIE: No, you are asked to give your best

6 recollection.

7 A. I have no recollection of that change.

8 MR QUINEY: You were the person who was in charge of the

9 CCTV system, weren't you?

10 A. Yes, that would be reasonable.

11 Q. In fact you were the person who knew how to use it?

12 A. Yes.

13 Q. So if there was a change, even if you can't recollect,

14 out of all the people in the building, you are the

15 person who had responsibility for that change?

16 A. Not necessarily. I mean if a change was done that

17 I didn't know about, unless I happened to observe that

18 there was an icon missing on a system that I didn't use

19 very often, I would be unaware of this. So if I'd made

20 the change, because I was the main operator of the

21 system, yes, I would be aware of it.

22 Q. But we can see, if you turn over the page, at 4.45, come

23 out of the building -- that's your van, isn't it?

24 A. The car, yes.

25 Q. The car. Inside is your motorcyc A. Yes.

2 Q. There's no one else shown on the CCTV footage, is there?

3 A. Not within this (inaudible) view.

4 Q. No. So what is likely to have happened, I put to you,

5 is that in fact you changed it from continuous to motion

6 detecting on 16 February?

7 A. I cannot comment on that because I don't recall that”

Mr Roe was wrong and surprisingly vague about wearing a watch in a context where his case in the Reply had attached significance to the fact that the arsonist had one:

The fact that Mr Roe did not give reliable evidence and was untruthful about certain matters does not of course mean that he caused the Fire. It does however cause me to doubt the truth of what he says about the central issues. My conclusion about the quality of his evidence is part of but also reinforces the conclusions I have formed about the individual aspects of this case. Mr Roe changed the mode of the CCTV on 16 February but was not candid in evidence about it. He took materials away on the Saturday but was not candid about it and he paused the CCTV as the expert evidence proves. The only purpose in doing this was to conceal something, the spreading of diesel which the expert evidence demonstrates was put onto the boxes and shelves. In reality no one else could have done this. I do not know what happened with the water pipe but Mr Roe’s evidence about it was unsatisfactory. I decline to try to identify the arsonist visually and what I get from that episode is that Mr Roe was untruthful about the watch. Mr Roe’s evidence about financial matters and about his dealings with A was in part demonstrably untrue. This lack of truthfulness about some matters means that I am cautious about giving Mr Roe the benefit of the doubt about others. I conclude overall that Allianz has clearly shown to the high standard identified at the outset of this judgment that Mr Roe, or someone acting on his behalf, deliberately caused the Fire and that therefore the claim of Genesis fails.

It is therefore unnecessary for me to consider the case on quantum and it would not be useful either. My findings of fact in this judgment would colour my approach to quantum and damages will not have to be considered unless those findings are established to be wrong.

The claim fails. I shall be grateful if Counsel will let me have, not less than 72 hours before hand down of this judgment, a list of corrections of the usual kind and a draft order, both preferably agreed and a note of any matters they wish to raise at the hearing. If no matters arise Counsel and solicitors need not attend the hand down.

I am most grateful to Counsel and solicitors on both sides for the admirable way in which this case was prepared and presented.