Savash v CIS General Insurance Ltd

These proceedings involve a claim by Mr Sozem Savash (Mr Savash Junior) against his household insurers, CIS General Insurance Ltd (“CIS”), in relation to an alleged burglary which took place on 29 May 2009 at premises at 30, Minchenden Crescent, London N14 (No. 30) which he had acquired from his father, Mr Savash Yorganci (Mr Savash Senior), in about 2000. The Claim, whilst not a large one by the standards of the TCC, was transferred to the High Court from the County Court because, apart from issues about proof of loss, allegations of fraud and dishonesty are made against Mr Savash Junior in and about the Claim as presented both before and during the proceedings. Certain it is that at least there are serious discrepancies and deficiencies in the Claimant’s evidence.

Mr Savash Junior entered into a contract for the provision of household insurance by CIS in relation to No. 30 waiver cover effective from 20 October 2008. Relevant provisions were as follows:

Mr Savash Senior bought No. 30 with his former wife (and the mother of Mr Savash Junior) in 1981, when Mr Savash Junior was about 3 years old. The family as a whole lived there for over 20 years. In June 2000, because Mr Savash Senior was being pursued for Council Tax, business rates and rents, he decided to sell No. 30 and, because Mr Savash Junior, then aged about 22, was looking for a property to buy, he bought it from his father. However, his parents and sister continued to live there. Between 2002 and 2006 Mr Savash Junior divided his time between No. 30 and his partner’s flat; he bought a property in South Croydon in 2006 and went to live full-time with his partner and their children. He did not live at No. 30 at all in any event in the 2006 to 2008 period. Meanwhile, Mr Savash Senior’s marriage broke down and he left in 2003, 2004 or 2005 (all three years were suggested in the evidence); there followed an extremely bitter divorce between him and his wife. His wife and daughter continued to live there. It is clear that the relationship between Mr Savash Junior and his mother (and possibly his sister also) broke down and she and her daughter eventually were evicted from No. 30 by a court order in July 2008 obtained by her son. Mr Savash Senior by 2008 had entered into a relationship with a Polish lady, Ms Kalinowska, with whom he lived at 9, Plane Tree House, Etta St, London SE1 (“Etta St”). What happened in terms of the extent of the furnishing at and who if anyone was living at or occupying No. 30 is in issue to which I will return later in the judgment.

No. 30 is a four bedroom semi-detached house with garage and garden. There is a bathroom on the first floor. The ground floor comprises two reception rooms, a kitchen and a shower room and wc. The house is slightly set back from the road and pavement; there is a short drive away leading up to the garage which had two wooden doors opening outwards. There is no ready physical access from the front of house to the rear garden, except through the house.

On 29 May 2009, there was a burglary at No. 30 which occurred between 10 and 11 am and about 4 pm. Mr Savash Senior arrived at No. 30 to find that the front door was open and he called the police who attended at 4.45 pm. WPC Simkin discussed the matter with him and they walked around the property. It is clear that the entry by the burglars (and I infer that there were more than one) was relatively sophisticated. They had some mechanical equipment to cut around and drill out the garage door lock; they went through the garage into the rear garden and then with drilling equipment drilled through the UPVC kitchen door to secure access into the kitchen. Inside, as she recorded in her unchallenged statement, she found water was pouring through a hole in the ceiling, a fridge freezer had been tipped over, dishwasher and washing machines had also been tipped over and a kitchen unit door was smashed. She noted that the kitchen floor "looked like it was half tiled some of it still not laid"; she was not told that any tiles had been taken. They then looked around the entire house and the impression which she had was that "all the rooms were smashed up". She noted what items she was told by Mr Savash Senior were stolen. He told her that he was living at No. 30 with Ms Kalinowska. She was surprised at the extent of the damage which had occurred and in relation to some of the things said to have been stolen in the incident (which included a large amount of heavy furniture). She was also surprised that no one had seen any vehicle parked outside the front given the size, volume and weight of items said to have been stolen, it being her view that it would have taken at least two people to carry some of the items out and frequent trips would need to have been made to and from the house. Her colleague went into the loft and told her that the that pipes had been cut (from which the escaping water emanated). Her colleague did some house-to-house enquiries: the owner of No. 28 had been in between 1pm and 3 pm and had not seen anything, the owner of No. 32 had seen nothing suspicious but had been out between 12.30 and 1.30 pm, but later heard banging from No. 30 which she thought might be home improvements, and the owners of Nos. 21 and 36 who were in the whole time did not see anything.

Mr Savash Junior notified CIS of the burglary reasonably promptly and CIS instructed loss adjusters, Cunningham Lindsey. They were told by Mr Savash Junior that the claim was not worth more than £25,000 and that his father was living at No. 30 rent free. Mr Taylor, of the loss adjusters, initially attended on 10 June 2009 to be met by Mr Savash Senior, who remained calm throughout his visit (which he felt was unusual). He noted the large-scale damage to each of the rooms and was of the view that this damage was more consistent with malicious damage rather than theft or burglary; he had never seen a property with damage on this scale for either burglary or malicious damage. He had understood that the police had thought that it might be squatters but in his extensive experience of investigating burglaries involving squatters he had never seen malicious damage to the scale which occurred here. He considered that the theft and damage were unusual. He was told that marble tiles had been removed from the kitchen and stolen which was something he had never previously come across, similar considerations applying to spindles said to have been stolen from the staircase. As he only had authority to deal with claims involving loss or damage up to £25,000 he knew that he would not be dealing with this claim any more. He wrote up notes which recorded his many concerns which included the fact that the thieves would have needed a very large lorry to take away all property said to have been stolen, and that the whole criminal enterprise would have taken at least 1 to 2 days.

A more senior and experienced loss adjuster, Mr Smith, attended a meeting on 22 July 2009 at No. 30 with Mr Savash Junior, although his father was also present. He looked round the house in some detail and received from Mr Savash Junior a list of items said to have been stolen. He inspected the loft noting that the ball valve in the water tank had been removed. He took a detailed statement from Mr Savash Junior over a period of 3½ hours which I am satisfied he read, understood and agreed with, signing it as true. Mr Savash Junior produced two lists of stolen and damaged contents totalling in value £39,255 and £18,445 respectively and a list of building damage. He said that he obtained estimates from DDC Building and Decorating (a Dragos Colbernu) £38,500 and a separate quotation from him for complete replacement of the kitchen albeit that the only damage was to two cupboard doors (£15,500). He said that he had obtained other written quotations from a Mr Covaci, Home Restoration Ltd and Turgon Hardwood Flooring. He said that as "part of the kitchen renovations we were proposing to replace the existing worktops" and these had been purchased and were in the side passageway. He said that his father had rented a flat "owned by a private landlord Monica Kalinowska" at 9 Plane Tree House, Etta St, paying £900 a month which was “cheaper than renting around here”. Humidifiers had been hired at the cost of £659.31, he said.

After this meeting, CIS declined cover on the basis of what was said to be material non-disclosure by Mr Savash Junior, namely an alleged failure to disclose a criminal conviction relating to the fraudulent use of a Disabled Parking blue badge. He complained to the Financial Ombudsman about this in October 2009 and by about February 2010 his complaint had been upheld. The claim was therefore revived.

At some stage in the autumn and winter of 2009 going into the spring of 2010, it is probable that remedial works were carried out at No.30 to repair the consequences of the burglary and flooding. It is likely that much of the cost of the remedial work was paid for in cash, although a few of the materials were paid for by credit card by Mr Savash Senior. It is likely that in addition works which do not relate to the damage caused by altering the burglary was carried out also. Attempts were made in the summer of 2010 to sell the property, estate agents producing appropriate particulars. It was not in fact sold.

In June 2010, CIS through its loss adjusters again declined cover on various grounds including the assertion that the "entire event has been staged by your insured and father to enable the property to be renovated" and on the grounds that the property had been "unoccupied" at the time of the alleged burglary. Mr Savash Junior instructed solicitors who put forward their client’s claim in the total sum of £142,507.98. This claim included stolen and damaged contents, as listed, for £35,745 and £18,445 respectively, claims for building costs (which included C&B Builders, Omega Building Services, C&M Carpets and replacement kitchen units in the sums of £40,900, £9200, £1,245 and £15,800 respectively, with invoices for the first two items attached). Accommodation costs were claimed from May to mid-August 2009 at £900 per month and from mid-August 2009 to April 2010 at £10,080 per month. The solicitors said that the final cost of the works turned out to be higher than originally estimated in particular because their client recalled "that the boiler was found to be damaged and the internal doors warped". The accommodation costs were claimed for Mr Savash Senior with the first period relating to his staying "with a friend" and the later period when he "moved into rented accommodation". The damaged contents included a "dining room suite, dining table + 5 chairs, side cupboard and glass display" at £8,000. The stolen contents included a “VI spring king size divan mattress, quilt, pillows" for £10,000, three cupboard drawers at £500 each, a "Dudley safe" and £500 cash, a three seater sofa and three armchairs at £8,000 and from an outbuilding garden furniture comprising a steel oblong table, seven chairs and two sun beds at £2,000. Both the C&B and Omega invoices contained signatures which suggested that all amounts had been paid to those firms.

The loss adjusters asked on 6 August 2010 for further information relating to a number of the items. This was responded to by Mr Savash’s solicitors on 20 September 2010 and, in relation to the accommodation claim, they explained that the property at Etta St was owned by Mr Savash Senior’s "former partner" but that this "relationship had problems as a result of which [he] returned to live at" No. 30; the accommodation at that address had been "a short term solution whilst the claim was dealt with”. The correspondence continued with no resolution.

Mr Savash Junior was and is obviously a successful person in business. He has run for some years a dry-cleaning business in Brixton and told the Court that he owned 6 or 7 properties, most of which he let out. He was educated in this country and gave the strong impression of being astute and level-headed. His father had run a successful sandwich bar as well as the Brixton business, selling the latter to his son in 1998; the sandwich bar business premises were compulsorily acquired in January 2009, for which he was paid £180,000. Both were well off albeit that the son may well have been wealthier by the time of the burglary. Although he only completed his education in England, his English was good and he was equally astute as his son. Mr Savash Junior’s explanation (given several times under cross-examination) for clear discrepancies between his oral evidence and what he told insurers or what was in the pleadings or in his witness statement, namely that he was emotionally shocked and continued to be so for over 4 years until the trial, came over as unbelievable.

One of the matters which creates difficulties in this case is the fact (which I accept) that both father and son seem to have done much of their business by cash. The father said that he frequently carried around on his person thousands of pounds of cash, £10,000 to £15,000 he said in evidence. That is not illegal, even if foolhardy. However, he gave evidence that he gave his son a cheque for £24,000 or £20,000 or £28,000 for the son to cash because it was easier for the son to do it than for him to go his own branch of Barclays. This was inherently unlikely but what was surprising was that on 29 April and 12 May 2009 his bank statement showed cheques for £65,000 and £50,000 being paid to someone, which in re-examination he said was his son and in effect one of these was the cheque which he was referring to. It is then true that the son’s bank account shows £65,000 and £50,000 coming in on 27 April and 8 May 2009, which despite the date differences I assume is the same money; £24,000 is shown going out possibly by way of cash from a related account. However, it is most likely that the £65,000 was to go to help the son pay off a mortgage, which appears on his statements as £64,916.97 on 19 May 2009. There is no corroborative evidence to show that this £24,000 went to the father; he suggested that it was for the purchase of a property in Turkey but it seems an extraordinarily convoluted way of securing funds for such an enterprise, assuming that the transaction was open and above board. He then said that the money had to be re-allocated to the remedial work at No.10 which would mean that £24,000 in cash would have been in his pocket or otherwise to hand for at least four months, which all seems unlikely. The fact that he wrongly said that the cheque that he gave his son to cash was £20,000, £24,000 or £28,000 when in fact it could only have been £50,000 or £65,000 suggests that the story about the cheque to cash was simply untrue and provided to explain why and how he paid for the remedial work and materials in cash. The difficulty which this creates both for the Claimant and the Court is that there is little or no “paper trail” for much if the alleged expenditure, almost all of which was said to have been in cash.

Mr Savash Junior issued proceedings in the Central London County Court or 25 October 2012. The Particulars of Claim dated 10 October 2012 are in relatively short form, pleading at Paragraph 3, that Mr Savash Senior in "February 2009…moved into a property following the property being vacated by the Claimants mother". The break-in on 29 May 2009 was then pleaded and the pleading then addressed a number of points likely to be made by CIS including at Paragraph 8 as follows:

“The Defendant sought to repudiate the claim on the basis that:

a)

The property had been unoccupied by a family member or any other person with the family’s permission for a period of more than 60 days at the time of loss.

i.

However the Claimant’s father was in residence in the property as of the 29^th of May 2009 as averred above.

ii.

He gave the address of the property for the purpose of obtaining a driving licence.

iii.

He gave the address of the property for the purpose of registering a vehicle.

iv.

He changed the address details of his motor insurance policy to update it to include the 30 Minchenden Crescent address and received insurer correspondence at that address…"

The money claim was quantified at £136,177.98 with the building costs being the same as earlier, the damaged contents the same with a somewhat altered stolen contents list and humidifiers and cash stolen from the safe also claimed. The accommodation costs claims were no longer pursued. The pleading was supported by a Statement of Truth signed by Mr Savash Junior. He acknowledged in evidence the need for accuracy and honesty in documents so signed by him.

CIS served its original Defence in December 2012 but this was somewhat amended in December 2013. No Reply was served. However an 83 paragraph Request for Further Information was responded to by Mr Savash Junior on 20 March 2013, also supported by a Statement of Truth signed by him. There were a number of discrepancies between the answers given by him in evidence and the answers which he made into his responses to which I will return later in this judgment. Additionally a Scott Schedule was prepared which listed the various claims and the remedial works. This was not responded to specifically by CIS but it did so by way of its "Counter Schedule/Response” on 20 December 2013, which effectively put Mr Savash Junior to proof.

The Claimant provided witness statements from himself, his father, Mr Martin of Omega and Mr Osman of C&B. The Defendant provided statements from WPC Simkin, the mother of Mr Martin (Omega), Mr Smith and Mr Taylor and Mr Osman.

Essentially, apart from issues of proof of causation and quantum, the following issues arise which are helpfully listed in Mr O'Sullivan’s opening submissions:

“(1)

“Occupancy issues”:

(a)

The proper construction of the policy condition requiring the property not to be “unoccupied”.

(b)

Whether or not, as a matter of fact, the property was occupied (so as to meet the policy condition requiring occupancy) on and prior to 29^th May 2009.

(c)

If not, the consequences of such breach of condition.

(2)

The state of the property: what was the state of the property on 29^th May 2009? Was it furnished and occupied as alleged by C or was it in the process of renovation (as raised in the Defence)

(3)

The burglary:

(a)

Was the property burgled by unknown 3^rd parties on 29^th May 2009? In particular how did they gain entry to the premises?

(b)

Did the burglars carry out the vandalism/ “criminal damage” (including- in particular- damage to the water system allowing the escape of water into the property) alleged to the property by C?

(c)

Did the burglars remove the large number of items (including fixtures and fittings) alleged by C?

(4)

“The contents claim”: alleged expenditure by C on items stolen or damaged:

(a)

Has C proven that he suffered the lost or stolen items claimed by him in attachment D and in his Scott Schedule?

(b)

Has C proven the basis of his claim: (i) did C actually expend the sums claimed in replacing the items (including fixtures and fittings) he claims were stolen or damaged in or as a result of the burglary and/or (ii) did the items lost or stolen have the value/replacement value claimed by C and/or (iii) is C entitled (under the policy) to the sums claimed in respect of the items claimed to have been lost or stolen?

(c)

Was there material exaggeration by C in his claim for these items?

(d)

Was/is the claim made by C in respect of such alleged expenditure or losses fraudulent to a material extent?

(5)

“The buildings claim”: alleged expenditure by C on building works and alleged works relating to or arising from the alleged damage to the property (including carpet replacement, bedroom works, fireplace replacement and replacement kitchen):

(a)

Did C expend the sums claimed by him (£75,328 in total including £40,900 paid in cash to C & B Builders and £9,200 in cash to Omega Building Services) in repairing damage to the property as a result of the burglary?

(b)

Subsidiary issues within this include: (i) are the invoices submitted by C to D (purportedly from C & B and Omega) genuine invoices? (ii) did C pay both C & B and Omega the sums identified in the invoices? (iii) to whom did C pay such sums? (iv) when did C pay C & B and Omega such cash sums? (v) were the works purportedly carried out actually carried out? (vi) were the works (if carried out) by C & B and Omega due to the burglary or were they part of the renovation of the property (which had commenced prior to the burglary or was unconnected with the burglary)?

(c)

Is this element of the claim fraudulent or does it involve the use of fraudulent devices?

(6)

Was the claim made fraudulent or supported by fraudulent devices in any other manner? An issue arises in relation to a claim made (but not pursued) for alternative accommodation for C’s father (the person alleged to be occupying the property at the material time).

(7)

Construction of the Claims Settlement Provisions of the policy and indemnity limits of the policy.

I will only deal with such of these issues as are necessary.

Because issues of fraud and fraudulent devices arise in this case, the Court needs to remind itself that, although these are civil proceedings and the standard of proof is balance of probabilities, the Court needs to be confident in its findings of any such behaviour as such charges albeit in a civil context are serious ones. Lord Nicholls said in Re H and Others (Minors) [1996] AC 563 at Page 586 in the context of allegations of fraud being serious:

Some helpful guidance was provided by Lord Justice Robert Goff as he then was in The Ocean Frost [1985] 1 Lloyd's Rep. 1 at Page 57:

The authorities on fraud are well-known. Lord Herschell’s dictum in Derry v Peek (1889) 14 A.C. 337, 374 was clear:

Mance LJ as he then was also provided important guidance on fraud and fraudulent devices in an insurance context in Agapitos v Agnew [2002] 1 Lloyd's Law Reports 573:

It is often and rightly said that the fraud must be material. Mance LJ saying in the Agapitos case:

“20.

The view could, in this situation, be taken that, where fraudulent devices or means have been used to promote a claim, that by itself is sufficient to justify the application of the sanction of forfeiture. The insured’s own perception of the value of the lie would suffice. Probably, however, some limited objective element is also required. The requirement, where a claim includes a non-existent or exaggerated element of loss, that that element must be not immaterial, “unsubstantial” or insignificant in itself offers a parallel. In the context of use of a fraudulent device or means, one can contemplate the possibility of an obviously irrelevant lie – one which, whatever the insured may have thought, could not sensibly have had any significant impact on any insurer or judge. Tentatively, I would suggest that the courts should only apply the fraudulent claim rule to the use of fraudulent devices or means which would, if believed, have tended, objectively but prior to any final determination at trial of the parties’ rights, to yield a not insignificant improvement in the insured’s prospects – whether they be prospects of obtaining a settlement, or a better settlement, or of winning at trial. Courts are used enough to considering prospects, e.g. when assessing damages for failure by a solicitor to issue a claim form within a limitation period.”

It is well established that fraud or the use of a fraudulent device by an insured will result in the claim being unenforceable. Lord Hobhouse said in The Star Sea [2003] 1 AC 469, at Paragraph 62:

It was accepted by Mr Menzies, for Mr Savash that the burden of proof in establishing that No. 30 was not "unoccupied" was on his client. It was therefore necessary for him to establish on the balance of probabilities that No. 30 was not "insufficiently furnished for full habitation, or not lived in by the Family, or any other person with a Family’s permission, for more than 60 consecutive days" prior to the burglary on 29 May 2009. It is common ground that "Family" in this context would include Mr Savash Senior, his father.

I preface this part of the judgement with the observation that I found the evidence of both father and son extremely unconvincing on much of he contentious parts of the evidence. It was contradictory and discrepant with what had been said before and they were both not credible on contentious issues when actually giving evidence. Mr Savash produced on the first day of the trial some photographs taken of him, his father and Ms Kalinowska at No. 30 and on the third day of the trial, at my request, the Order of the Central London County Court by which his mother was ordered to leave the premises. There was no good reason why these documents had not been produced before and, indeed, no excuse was proffered. These documents in fact materially undermined his case:

Mr Savash Senior’s evidence was not believable on this issue, in particular in relation to when and why he moved in:

The only firm evidence however is a number of contemporary documents which demonstrate that he probably moved into the premises at least on a temporary basis in May 2009. His car insurance policy and certificate were sent to No. 30 on 27 May 2009. His vehicle registration document dated 6 May 2009 gives his address as No. 30. He had his driving licence issued (valid from 9 May 2009) showing the same address. He had contacted British Gas in mid-May 2009 about the electricity supply to No. 30. This is supportive of him staying at No. 30 but it demonstrates only that he was intending to stay as from some date in May and not earlier. He was particularly unconvincing as to the letters from British Gas dated 13 and 16 May 2009 about the new “Pay as you Go” electricity arrangement which had been discussed, in trying to suggest that he had got in touch with them up to 3 months before and British Gas had taken that long to respond. He started, as his bank statements recorded, to pay monthly mortgage payments for No. 30 on 15 May 2009. He remained however on the electoral roll in the area of the Plane Tree flat throughout 2009 going into 2010. His address for his Barclays Bank account court statements and the like was the same address. He gave to a branch of Ikea on the day of the burglary Etta Street (and not No. 30) as his address.

Some attempt to justify the explanation about moving in from the February 2009 stage was a reference to Mr Sovash Senior’s bank statements to support the proposition that he must have been in and about the area of No.30. For instance, he had a card purchase for £91.94 on 13 March 2009 from a builders merchant (Builder Depot N11, at Southgate about 1½ miles away from No. 30); this isolated example does not prove much if anything. There are several cash withdrawals from Barclays Bank at Southgate in mid-April 2009 but there are equally cash withdrawals from other banks not in the area. In any event, it demonstrates no more than he was not far away from No. 30 and may even have been dropping in there from time to time, perhaps to do the odd chore.

Belatedly, Mr Savash Junior sought to explain that he was in effect living at No. 30. Giving oral evidence, he ran through the gamut of saying both that he was living there and that he was not. He said variously that he was staying there midweek or 3, 4 or 5 nights a week. He said in evidence that, whilst his mother and sister were living at No. 30 after he and his partner had bought a dwelling in South Croydon in 2006, he was not living at No. 30 although he may have stayed there for the odd night. However, he told Mr Smith in his signed statement in July 2009 that he lived “between” the two properties and that his mail was split between two properties although most of it came to No. 30. That was simply wrong and untrue. There is no mention in his pleadings that he was living or occupying No.30 in the 3-4 month period leading up to the burglary in May 2009, although there is a clear assertion that his father was in residence; that is an odd omission when he knew at the time of the service of the Particulars of Claim that there was an issue as to whether No. 30 had been occupied in the 60 day period prior to the burglary. He then sought to embellish his evidence by saying that he wanted to keep his father company and did not want him to be at No. 30 on his own and later that his partner's mother was staying at the time in South Croydon and would keep her company whilst he was away and that it was almost as easy to get to No.30 or South Croydon from his place of work. There was little of this in his witness statement, which merely said that he stayed "mid-week" at No. 30. Response 1 to the Further Information request expressly said that it was his case that he was not living at No.30 at the material time. He gave the impression almost of making this up as he went along under cross-examination.

Whilst I would not be surprised and indeed can accept that he visited No. 30 from time to time after the date when his mother and sister moved out and the burglary, his evidence about his staying frequently and often in the 2-3 month period before the burglary is not credible. I am satisfied that he can not begin to be described as having been in occupation or as living at No. 30.

What however is clear is that at some stage in the early part of 2009 father and son decided that it would be sensible to renovate No. 30 after Mr Savash Junior’s mother and sister moved out. It is clear, and I find, that they intended at the very least substantially to renovate the kitchen and redecorate all or most of the house. It is unclear to me why he and his father when giving evidence appeared so reluctant to accept that this was the case, although it may well be that they feared that, if they admitted this, there might be some inference that they had either engineered the burglary themselves or immediately following the burglary created extra damage to property and contents in effect to fund a full renovation through an insurance claim. He expressly referred to the "kitchen renovations" in his statement to Mr Smith in July 2009; there were new marble worktops which had been delivered to the house and were not taken by the burglars and a significant number of tiles from the floor had been taken up in the period immediately before the burglary (indeed he told Mr Smith that all these tiles had been taken up). However, Mr Savash Junior was not believable when he said that he regarded in particular the work being done to the kitchen as merely decoration. He had also, supposedly truthfully, responded to the Request for Further Information to the effect that prior to 29 May 2009 he was not intending to carry out renovation work at the property but "just decorating". This was clearly untrue. What this does support is a finding that it is unlikely that No. 30 was being lived in if, as was the case, the property was in the process of being substantially renovated and decorated.

The issue of occupancy of the premises is tied in with what was actually stolen on 29 May 2009, because the term “Unoccupied” in the policy also means “insufficiently furnished for full habitation”. There are many features of this burglary which are, on the evidence, extremely unusual and indeed in the experience of the very experienced loss adjusters and indeed on the police evidence unprecedented. These include the following factors, which need to be considered in combination as unusual:

The first issue to consider is whether or not there was actually a burglary at all. Just on balance and accounting for the fact that CIS did not press any argument or clearly put to the Claimant or his father that the burglary had been engineered by one or other of them, I accept that there was on 29 May 2009 a burglary during the day at No. 30. I do not accept that a large part of the goods said to have been stolen were actually present at No. 30 on that day or that they were taken by the burglars. It is positively unlikely that the very bulky items had been there or were taken; I include in this the king size double bed, the two other mattresses, the sofa and armchairs, the safe, the garden furniture, the two statues, the six stools, the painted cupboard with its marble top, the three cupboard drawers, the fireplace surround and hearth, the safe or any freezer contents. I prefer not to speculate about whether these items as described by the Claimant ever actually existed at or were present at No. 30 throughout the 3 to 4 months before the burglary but it would not have surprised me, particularly if Mr Savash Junior had disclosed all the documentation relating to the departure of his mother and sister following the Court Order evicting them from the property, if a number of the items at least had been taken out of premises at that time either by them or for their benefit. It was said that the safe contained £500 and all or most of the paperwork relating to the goods said to have been stolen. This is unlikely: there is no obvious good reason to store all this relatively valueless paperwork in the safe, Furthermore, both father and son said that they habitually carried large quantities of cash on them (Mr Savash Senior saying that he often carried £10,000-£15,000 on him) and there was no good reason therefore why a “mere” £500 was stored in the safe.

In making the finding that these items were neither at No. 30 nor stolen, I have particularly taken into account the very clear view which I have formed of both Mr Savash Junior and his father. I found them to be unreliable witnesses who were at best careless with the truth on key issues and at worst dishonest in the giving of their evidence. I have addressed above and will set out below some prime examples of their lack of candour with the court during the giving of their oral evidence.

I am not prepared to find on the evidence that the physical malicious damage to the fixtures, furnishings and fittings was probably caused by the burglars as this is inherently unlikely and a bit too convenient but I am, again only just on balance, able to find on a fine balance of probabilities that the water damage was caused by the burglar or burglars, possibly to cover their tracks or possibly, having gone to see if there was anything worth stealing in the loft, involving some wanton or frustrated damage. So far as the physical malicious damage is concerned, that is not inconsistent with either the damage being done immediately after the burglary but before the police were called or it having been done some months previously following the enforced departure of the Claimant’s mother and sister; I can not decide on the evidence before me who caused the damage or precisely when.

An interesting feature relating to the main rear bedroom is the fact that cupboards and drawers had no handles or knobs on them which suggests that they were not being used; the same applies to another cupboard in another bedroom.

It follows from the above that, although there was some furniture in the house, there was little and certainly insufficient to enable full occupation of No. 30. It therefore follows that the Claimant has failed to establish that the premises were not "Unoccupied" as at the date of the burglary. I find that no-one had been living at No. 30 for 60 days prior to the burglary; at best, Mr Savash Senior had been staying there for no more than 3 to 4 weeks in May 2009, immediately before the burglary.

It is in the story of the remedial work, clearly ultimately done by one or more people or firms, that the Claimant’s case as presented both before and during the trial became extremely murky. The pleaded case was that the main remedial works were done by "C&B Builders" at a cost of £40,900 and Omega Building Services for £9,200 based on attached invoices. C&B was a firm of which the sole proprietor was a Mr Ozan Osman who, as emerged for the first time during the trial, was the cousin of Mr Savash Junior and the nephew of Mr Savash Senior; neither thought that it was relevant to mention that in their statements or beforehand to the insurers. The written evidence from Mr Osman (obtained for the Claimant) and Mr Savash Senior was to the effect that Mr Osman was working on a property in the area and Mr Savash Senior came to have a look and, having formed the view that Mr Osman was doing a good job there, asked him to provide a quotation for No. 30 and that quotation when provided was accepted; the quotation was for labour and materials, Mr Osman was rarely on site “due to other commitments” and the whole bill was paid in cash with £20,000 paid by way of deposit and the balance when the job was completed.

This was amplified in the Further Information provided by Mr Savash Junior and signed by him with a Statement of Truth; this stated that:

Much of this turned out under cross-examination to be substantially untrue. It only emerged during the trial that Mr Osman was closely related to Mr Savash Senior and Junior. It also emerged through a witness statement obtained from Mr Osman by CIS’ solicitors that he had been in prison (for causing death by dangerous driving) from 1 June to 30 December 2009; this was incontrovertibly supported by documents obtained from the Crown Court and the Ministry of Justice. This statement expressly stated that he had nothing to do with the repair work at No. 30, that he knew nothing of work undertaken at the property except initial enquiries made before he was sent to prison and that he did not receive any payment for the undertaking of this work. When he gave evidence, Mr Osman said that he began occasional daily releases from prison in September 2009 and later some weekend releases before his final release of 30 December 2009.

Mr Savash Senior was simply unbelievable in almost every aspect of the evidence which he gave about the involvement of C&B and Mr Osman, for example:

Equally and seriously untrue evidence went to other related matters:

One then needs to factor in what Mr Osman said in evidence. Much of his evidence was not credible. For instance he gave evidence in chief (which was led in the old-fashioned way) that he was first contacted by Mr Savash Senior when he was working at another job, he was asked to come to No. 30, they had each other's telephone numbers, he went later to No. 30 to look at what needed to be done, he went away and produced a written estimate about one week later, he sent his colleagues to do the work, Mr Savash Senior gave cash to them and he went to site about twice or once. He accepted under cross-examination that none of the first contact, initial visit to No. 30 and provision of estimate could have taken place between the date of the burglary, Friday, 29 May 2009 and his being sent to prison on 1 June 2009 the following Monday. Given that he was only on day release and later on weekend release once a month before he was final release at the end of December 2009, it is simply implausible that the story he told in chief about initial contact, visit and estimate took place at all. I am satisfied that there was no estimate at all, oral or in writing from Mr Osman and the invoice signed by him was made up after the work was done by others and not by C&B. He did however completely contradict the evidence of Mr Savash Senior who said that there was no written estimate and also that he went through the materials invoices with him when the final payment was said to have been made. Critically, he was emphatic that he did not receive a penny from Mr Savash Senior or anyone else in relation to the work done at No.30. He said that the last sentence in his first witness statement that he "ended up paying the workmen the entire balance" was a misprint.

Mr Savash Senior’s evidence was given in two sessions because Mr Osman could only be present on the first day. He said that he did give him the first £20,000 and that he put their cash on the table; he then speculated as to whether Mr Osman "put the money in front of his" workers because he was on weekend leave from prison and could not in effect take the money back. From my observations, he was simply floundering around when giving evidence trying to find some explanation, however implausible, to reconcile his evidence that he had given the cash to Mr Osman and Mr Osman’s evidence that he had not been given a penny. The truth is, I am afraid, is that, as Mr Osman said, he had absolutely nothing to do with this project, he knew nothing of the work undertaken and was paid not a penny. It may be, and I can make no findings one way or the other, that one or more of the workmen with whom Mr Osman had worked in the past were involved in some of the work (indeed Mr Osman refers to this in his second witness statement in passing).

The overwhelming inference from the above is that the Claimant and his father procured the carrying out of the remedial work by using un-named and un-identified people in relation to the work said to have been done by C&B and by purchasing materials, almost all by cash, that they felt that they needed to have some paper trail to convince the insurers about what had been paid out, that they felt able to use the “C&B” name to give credence to their claim and because Mr Osman as a close relative could be relied on to assist in this regard and that they presented it through solicitors to insurers to add weight to the insurance claim. I also infer that the likely cost of the insurance related remedial work was much less than the £40,900, these largely because there would have been no need to do anything other than tell the truth about who did the work and also because by February 2010 they would have known that the insurers would probably want a paper trail; there should have been no difficulty asking whoever did the work to provide receipts if the costs were as suggested.

There were some other small but telling parts of Mr Savash Senior’s evidence which rang untrue. An example was his evidence that, although he apparently knew where to go to find Mr Osman at where he happened to be working, he wrote down the address and telephone number of Mr Osman on the back of a piece of paper “ripped from a bag of thistle plaster”. This piece of paper was disclosed. However, Mr Osman said convincingly that they each had the other’s number on their phones (which is unsurprising given the relationship) and there would be no need for this to have been written down. This was just an untrue embellishment by Mr Savash Senior included in his witness statement at a time when the close family relationship had not been disclosed. There was no reason to do this other than to bolster up a case that the relationship between him and his son on the one hand and Mr Osman and C&B on the other was a real one and one entered in at arm’s length.

It follows from the above that the evidence about the involvement of C&B as an entity or of Mr Osman put forward by Mr Savash Senior is simply untrue as the latter must have known. What I can not make a finding one way or another is whether the invoice apparently from C&B was prepared by Mr Osman or by someone else. The unchallenged evidence of a handwriting expert (Mr Handy) was that whilst the C&B invoice and one of the Omega invoices was the same paper he could not positively associate the two pieces of paper.

I turn to the involvement of Omega. Mr Martin was, relatively speaking, the most honest of all the witnesses put forward by the Claimant, which does not mean that I accept all his evidence. He explained that he had dyslexia and rarely kept paperwork or was particularly good with it. He explained that his daily rate was £150 per day and that he worked for about three weeks on removing and replacing as necessary the oak parquet flooring which had been damaged by the water at No. 30. There were two invoices in the documents disclosed by the Claimant, one being an invoice addressed to Mr Savash Senior dated 3 April 2000 for £9,200; on the back of this document was a document downloaded online April 2010 which contained some Internet information about contraception. They were probably both prepared by Mr Savash Senior or at his direction; although he accepted that only one was prepared by him, the fact that there were two and given Mr Martin’s problems with paperwork, I infer that both were prepared by or at the direction of Mr Savash Senior. The second invoice also dated 3 April 2010 purported to be from Omega but was addressed to Mr Savash Junior; this was also for £9,200. It was signed with Mr Martin’s signature but the hand written words below the signature "I received the full amount in cash" were not his. I accept Mr Martin’s clear evidence that these words were not written by him. It follows that someone must have written on it afterwards and that can only have been either father or son.

However, this document was clearly, obviously and intentionally misleading because it was intended to show that Mr Martin received £9,200. It is clear now on all the evidence that he received only £2,250. There is some common ground on the evidence that Mr Martin did not have responsibility and it was never agreed that he should be responsible for the provision of or payment for the necessary materials such as the new oak parquet flooring. These were probably purchased by Mr Savash Senior but there are no records to suggest what the materials cost as the receipts or invoices are no longer available. It was said that he gave them to Mr Martin who has since lost them. I do not accept that they were given to Mr Martin because there was no reason for him to have them because he was never going to be responsible for paying for them; he was on a daily rate. In my view, a proper inference to draw is that the invoices for £9,200 were created by father and son to justify a claim against the insurer for such sum. I would have expected that, if the materials invoices had been truly lost, some evidence could easily have been deployed as to what the materials would probably have cost (say for instance 60m² of parquet flooring, adhesive and varnish) to corroborate their likely cost of just about £7,000; there was no such evidence. I infer that the materials costs were significantly less than £7,000, particularly given the deception in putting forward the signed invoice from Omega..

Mr Savash Junior’s case and evidence on the cost of Mr Martin’s involvement is also unbelievable. He said in the responses in the Further Information that the money was handed over to Mr Martin at No. 30, all in cash and that Mr Martin wrote the handwritten words himself. That was clearly untrue. It is worth considering what was pleaded in the Further Information relating to the C&B and the Omega invoices. In relation to the first, it was positively pleaded (Response 24) that the materials cost was deducted before payment was made to Mr Osman. No such pleading was made in relation to the payment made to Mr Martin. It is not a trite observation that a truly honest pleading and indeed presentation of such information to the insurer would have explained that what was paid to the invoicing contractor involved the cost of materials having been deducted.

A smaller but still important matter relates to the provision of fitted carpets to all 4 bedrooms. It had to be accepted in cross-examination that there was no such carpet in the front bedroom; photos showed merely rugs which were never claimed as damaged and from the photos were not damaged. Additionally, the carpet in the main rear bedroom was not fitted either: one of the lately disclosed photos shows a rug of some sort but apparently bare wooden boards by the window radiator. Notwithstanding this, an invoice dated 1 June 2010, (from C&M Carpets), which is probably genuine, shows all 4 bedrooms having new fitted carpets. That would not be a recoverable claim at least for the two rooms which did not have fitted carpets damaged by the water escape. That must have been known by father and son. Mr Savash Senior accepted in cross-examination that the claim for fitted carpets to the front bedroom was false. The fact that the written estimates actually obtained in June 2009 did not identify three of the bedrooms as needing any work at all gives rise to the clearest inference that there was no justification for claiming for any but the main rear bedroom.

A similar claim albeit for work not yet done gives rise to similar difficulties; this is the claim for the provision of fitted cupboards, chests of drawers, dressing table and “double overbed unit” covering three walls. There is an undated quote from James Allen for £5,951 with a proposed layout but there is little or no evidence about this and whether this was a competitive quote. The room in question must be the front or rear main bedroom, albeit probably the rear. In fact, the sale particulars show that some fitted cupboards and storage above a double bed space have since the burglary been provided in the main rear bedroom but no details have been given as to the cost of that; from the sale particulars, rather less than quoted for by James Allen has been provided because there is no hint that there is fitted furniture on all three walls. There was no and no reliable evidence that what was present in the rear bedroom by way of fitted cupboards before was actually materially damaged by the water or otherwise. This is another false or recklessly exaggerated claim

The remainder of the money claims in these proceedings is largely unsupported by any reliable evidence. Examples are:

Mr Menzies submitted that the Court would, in the face of all these difficulties, have to do the best that it could on quantum and make the best assessment which it could. This something which courts do and must do where there is evidence that there is a more than insignificant loss or financial entitlement. I have to say that, if I had to do this exercise on the evidence before the Court, the total claim which I would have allowed by way of assessment would not have exceeded £30,000 to £35,000 for all the items and work claimed for.

I have no doubt that this claim was fraudulent and fraudulently exaggerated. Whilst I have accepted, on balance, that there was a burglary and that there was water damage created during the burglary, the claims as presented both originally and through solicitors correspondence were grossly exaggerated in circumstances in which both Mr Savash Junior and his father did know that the presented list of items stolen contained items that had not been stolen as such but were simply not present at the premises when the burglary took place and where the invoices presented in relation to C&B, Omega and C&M misrepresented the cost or recoverable cost of the work and services listed. In my judgment, although Mr Savash Senior was probably more involved with the detail of the remedial works, the purchasing of materials, the organisation of the various workers and trades who must have done the work and with putting values to many of the items said to have been stolen, I have absolutely no doubt that Mr Savash Junior knew what was going on both in terms of who was being retained to do the works and of what had been stolen on 29 May 2009. He must have known that neither Mr Osman nor his firm as such were doing the work and, particularly given his responses in the Further Information, that in truth no money had actually been paid to Mr Osman, contrary to the invoice, presented to the insurers, said to have been "paid in full". Similarly, since he knew Mr Martin (who had done some work for him at his business address), he must have known that he had not been paid the full sum of £9,200 which appeared on the Omega signed bill, because Mr Martin only charged for his time and not for materials: the bill on its face represented that Omega and Mr Martin had received the "full amount in cash", namely £9,200. He must have known in any event and his father must have told him that the materials had been paid for by someone else. Both bills were therefore presented to the insurers, through solicitors, as representing payments made to the invoicing organisations (C&B and Omega) which, simply had not been paid in C&B's case at all and in Omega's case only some £2,250 had actually being paid to Omega.

In relation to the goods which were said to have been stolen, but which I have found were not stolen or taken by burglars on 29 May 2009, the fraudulent device was the repeated representation by or on behalf of Mr Savash Junior that such goods had been stolen at all, in circumstances in which he must have known that they had not been stolen; at least £25,000’s worth of goods fall into this category. Additionally, he must have known the claim for fitted carpet replacement was overstated by about half in respect of two rooms which had no fitted carpet in at the time of the burglary.

It is only in one area that I feel unable to find that Mr Savash Junior was consciously or personally involved in any fraud or fraudulent device and that relates to the physical or apparently malicious damage to contents, fixtures and fittings. I am certainly not satisfied that this damage was done by the burglars on 29 May 2009 and indeed I am satisfied that it was not so caused; it or most of it is inherently unlikely, particularly since it was systematic involving some physical damage within virtually every room. What I find difficult in terms of probability to choose between is whether Mr Savash Senior took the opportunity, opportunistically, before calling the police but upon his return to No. 30, to make matters worse to enable a full refurbishment to take place at the expense of the insurers or whether the damage had in fact been done beforehand, possibly at the time or since his wife and daughter left when evicted by court order. Mr Savash Senior would and must have known about both but I could not be satisfied that his son necessarily knew, if, as I have found, he hardly ever visited, if at all, before the burglary.

I raised with Counsel the possibility of a finding that Mr Savash Junior simply innocently passed on to his insurer fraudulent claims created by his father. In the result, this matter is not relevant because I am satisfied that on important and material parts of the claims made on the insurers he was and must have been aware that they were false and falsely represented. I received additional legal submissions on this point from Counsel. Both Counsel, rightly, accept that, if the son in those circumstances recklessly adopted and pursued deliberately exaggerated claims, he would be "guilty" of fraudulent devices because recklessness also amounts to civil fraud. I prefer the submission of Mr O'Sullivan for CIS. He quotes from Colinvaux’s Law of Insurance 9^th Ed at 9.024:

“A claim can only be fraudulent if the assured is dishonest or at the very least culpably reckless. Mere negligence on the part of the assured will not suffice. The fraud must be that of the assured himself and not that of a third party for whom the assured is not responsible. Within an organisation this principle will raise a question of imputation of knowledge. An assured is, however, responsible for the fraud of an agent acting within the scope of his authority."

Applying the principle to this case, Mr Savash Junior on his evidence (which I did not wholly accept in this regard) authorises his father to organise remedial works and to provide the relevant information on which the insurance claim is to be based. His father deliberately, consciously and materially exaggerates the claim so that it is overstated by a very substantial amount; he will have acted within his authority as such and the claim which his son presents to the insurer is therefore in reality a fraudulent one which the insurance company should not have to pay out on. The principal, the son, is fixed with the consequences of the fraud of the agent, the father, because he acts within his authority, albeit in a fraudulent manner. This applies to all respects in which either he or his father must have known that there was no good claim against the insurer. It follows from my earlier findings that this approach applies to the damaged contents and fixture and fittings claims.

The Claimant’s claim is dismissed. The property was “unoccupied” on the day of the burglary and therefore under the policy terms the insurers have no liability under it. His insurance claim, as presented before the proceedings to the Defendant and as pursued in the proceedings was in large measure fraudulent. I do not suggest in any way that his solicitors and Counsel were in any way involved in this aspect; indeed, they presented their client’s position and represented his interests properly, professionally and as effectively as they could.