Warning: This article contains details about suicide which may be upsetting for some readers. Reader discretion is advised.
In this case, the Supreme Court of Queensland assessed an arson defence without clear proof of how the fire started, placing weight on the insured’s financial position, pre‑loss actions and post‑event behaviour when considered together.
In issue
- Proof of civil fraud relying on circumstantial evidence and the role of motive in insurance cases where arson is raised as an exclusion to policy response.
The background
Mr Richardson was the directing mind of PBR Properties Limited (PBR) and its sibling company, Project Gas Services Pty Limited (PGS). PBR owned a luxury property, 'Wirraway', valued at approximately $10M, purchased and extensively renovated with funds sourced by inter-company loans exceeding $14M from PGS. Wirraway was mortgaged to NAB to secure $8M of a $10,879,734 facility advanced by NAB to PGS. PGS also carried significant unsecured debt, some of which had been obtained by Mr Richardson misrepresenting the financial position of PGS.
On 15 May 2016, PBR entered into a policy of insurance for Wirraway, with a predecessor company to Chubb Insurance Australia Limited (Chubb), including fire coverage with a buildings sum insured of $10,024,000.
By August 2016, PGS’s financial position was so dire, NAB had only agreed to forbear enforcement against PGS on condition Wirraway be marketed and sold by March 2017 and the sale proceeds be paid in satisfaction of PGS’s debt. It became apparent at trial that sale of Wirraway would not have realised sufficient proceeds to satisfy PGS’s and PBR’s debts to unrelated creditors including NAB.
Early in the morning of 28 December 2016, when Mr Richardson was the only person at Wirraway, a fire destroyed the residential buildings on the property. The fire damage was so significant, expert evidence was unable to determine the exact physical cause or ignition location of the fire, and it was not possible to identify whether the fire was deliberately instigated.
In the days immediately prior to the fire, Mr Richardson bought 80L of isopropanol (used as a floor cleaner but also a possible accelerant), arranged for personal items and some furniture to be removed from the house, and told his insurance broker he thought the property was underinsured. Mr Richardson later gave materially inconsistent accounts of the events of the fire, relied upon by Chubb as consciousness of guilt rather than going only to credit.
Mr Richardson died by suicide prior to trial.
The decision at trial
Sullivan J found the circumstantial evidence supported a finding Mr Richardson deliberately lit the fire. He was satisfied Mr Richardson had obvious opportunity and a reasonably strong motive. In relation to motive, Sullivan J cited the observations of Burns J in Cassa Bedding Pty Ltd v Insurance Australia Limited [2022] QSC 1 at [70] as apposite:
In considering whether Mr Richardson had motive to burn down Wirraway, Sullivan J considered the existence of substantial concern about his, PBR’s and PGS’s financial positions was only one part of a potential motive equation, the other being what Mr Richardson thought the fire would achieve in terms of recovered insurance proceeds and his overall position.
The principles to be applied in civil cases where circumstantial evidence is sought to be relied upon to produce a finding of fraud by way of inference are well established, and relevantly include '..the inference drawn from the proved facts must be weighed against realistic possibilities as distinct from possibilities that might be regarded as fanciful. Where the competing possibilities are of equal likelihood, or the choice between them can only be resolved by conjecture, the allegation is not proved' (Palmer v Dolman [2005] NSWCA 361 per Ipp JA at [41], citations omitted). The evidence is to be evaluated as a whole, having regard to the Briginshaw principle.
Sullivan J found the expert evidence did not establish the fire could only have been started by human instigation. There were other possible innocent modes of fire instigation which had not been excluded as being fanciful, but the fact the expert evidence could not exclude these innocent instigation modes did not mean the circumstantial case must fail. Whilst Mr Richardson had innocent explanations for his purchase of the isopropanol and movement of furniture and personal items, Sulivan J found Mr Richardson had formed an intention to instigate the fire and some of his post-fire conduct evinced consciousness of guilt. Sullivan J ultimately concluded the weight to be given to the united force of all the circumstances taken together satisfied him, to the high degree required by Briginshaw, those circumstances gave rise to a reasonable and definite inference of arson by Mr Richardson.
Implications for you
Sullivan J’s decision highlights the importance of evaluating the evidence as a whole in order to fairly consider whether the party bearing the onus of proof has established what is ultimately sought to be proved. It is necessary to consider whether the evidence derived from an accumulation of detail paints a picture reflecting real life.
PBR Properties Pty Ltd v Chubb Insurance Australia Ltd [2026] QSC 47
