It seemed like the perfect alibi. While his bedding products factory was ablaze, John Cassimatis said he was at home with his family, watching television.
Unfortunately, the alibi did not hold up because of a different type of television – Closed Circuit Television (CCTV) showed he was not at home.
As Justice Burns said, the alibi “was from almost start to finish a shameless concoction” in reasons given in Cassa Bedding Pty Ltd v Insurance Australia Ltd [2022] QSC 1 (18 January 2022), a decision of the Supreme Court of Queensland.
In this article, we examine the decision –
The Fire
At 9:25 pm on a rainy Saturday evening (29 August 2015), a CCTV camera on a neighbour’s building in the industrial park at Yeerongpilly (on Brisbane’s south-side) recorded a ‘glow’ (the first sign of fire) from a skip bin next to the Cassa factory. It ‘dramatically increased in size and illumination’ and a second fire was blazing inside the factory soon afterwards.
At 9:28 pm a passer-by took a photograph on her mobile phone (Figure 1 below) which showed the fire was well ablaze. Two minutes later a zoomed shot showed that the factory building was also ablaze (Figure 2 below).
The factory and its contents, including all equipment and stock, were completely destroyed.
Figure 1 (Left) Figure 2 (Right) - photos from judgement.
The state of the business and the financial motive
Mr Cassimatis was the sole director of Cassa Bedding Pty Ltd. The shares in Cassa were owned by his family trust. He been involved in bed manufacture and sales since 199, in various roles, and had been employed by several national bedding businesses.
In early 2014, he registered Cassa and used it to purchase a mattress manufacturing business in financial difficulty for ‘about $190,000’. He took over the equipment leases and premises lease. He rapidly expanded the operations. He leased additional manufacturing premises nearby and at the time of the fire was manufacturing around 80 to 120 mattresses per day, and also bed bases and headboards. In February 2015, he leased a warehouse in Victoria. He was investigating relocating the manufacturing to Vietnam, with new equipment.
His forensic accountant estimated that had there not been a fire, the business revenue would have been $10,700,000, and that the profit would have been $633,096 over the next 12 months from September 2015.
Mr Cassimatis said he had “nothing to gain and everything to lose” by burning down the factory.
Insurance Australia (IAG) was not able to prove a financial motive for ‘Mr Cassimatis to set fire to the building’, such as ‘Cassa was insolvent at the time of the fire’
This was despite the facts that Cassa was undercapitalised; had a debt factoring facility with FactorOne with a recently increased limit of $1.2 million (personally guaranteed); that its best customer, accounting for 25% of its sales was a Beds N Dreams franchise in which Mr Cassimatis’ family was a ‘silent partner’ and which he knew was “in serious financial difficulty and likely to fail”; and that a successful claim on the policy of insurance would fund new plant to replace the ‘existing plant which was quite old’.
The Court concluded that “the absence of any proven motive” assumes less importance in this case because “the evidence connecting Mr Cassimatis to the act of destruction is so potent”.
The policy of insurance
The IAG policy covered loss or destruction of property and lost income. The agreed limits were: contents - $2.31 million; stock - $695,000; business interruption $3.4 million (gross income), payroll, increased cost of working, claim preparation and re-writing of records.
The policy was current. The claim made was $7.6 million.
IAG refused to pay the claim, alleging that the fire had been deliberately lit by Mr Cassimatis.
Did Mr Cassimatis light the fire and make a fraudulent claim?
The proceedings were civil proceedings for orders that IAG indemnify Cassa for its losses under the policy.
The evidence presented by IAG was wholly circumstantial. It consisted of CCTV evidence, eye witness evidence from the Fire Officers and the public and forensic evidence by fire investigation experts. The factory was completely destroyed, making investigations to identify the source of the fire impossible. The hearing took 11 days.
From this evidence, the Court made these findings and drew these conclusions:
"
- Mr Cassimatis was the only person in the factory from about 6:30 pm until about 9:25 pm;
- Prior to about 9:25 pm, Mr Cassimatis lit at least two fires; one outside the factory in the area of the skip and the other or others inside the building [the fact that there were two fires at the same time pointed to arson, if it were one fire it might have been caused by accident];
- Both fires were probably fuelled by an accelerant such as petrol and that was almost certainly the case for the fire in the area of the skip where the fuel load must have been dampened by the rain [because the fire increased dramatically instead of building up gradually over time];
- A delay mechanism was likely employed, at least for the fire in the area of the skip [to allow Mr Cassimatis time to leave the scene];
- The fire or fires Mr Cassimatis lit inside the factory quickly took hold and reached flashover within a short matter of minutes from ignition [pointing to an accelerant];
- In consequence of the fire or fires inside the factory, the factory and all contents were destroyed;
- After lighting the fires, Mr Cassimatis set the alarm, secured the factory and drove from the precinct to his home at Mount Ommaney. When driving through the [industrial] precinct, he kept the headlights for his vehicle switched off to avoid detection [switched them back on again]and, as he approached the Yeerongpilly Railway Station, he did the same thing and for the same purpose [for 13 seconds – his explanation was that he was “engaging in some motor vehicle diagnostics said to have been necessary because a traction warning light inexplicably illuminated on the dashboard of his vehicle on his trip to the factory earlier” – it was a Mercedes sedan – the Court dismissed this as ‘fanciful’];
- Mr Cassimatis later lied to investigators about the time he left the factory [he said he left the factory between 8:30pm to 9:00 pm - half an hour before the fire started at 9:25 pm];
- Mr Cassimatis subsequently caused a claim to be advanced on the policy of insurance on behalf of Cassa for the loss caused by the fire. At the time when he did so Mr Cassimatis knew that, he having deliberately burned down the factory, Cassa had no entitlement to advance such a claim. His intention was to induce a false belief on the part of IAG as to Cassa’s entitlement to make a claim for the purpose of obtaining the benefits payable under the policy for such a loss.
It follows that, the fire (and resultant loss) was caused by the wilful conduct of Mr Cassimatis with the knowledge and consent of Cassa and, as such, its claim is expressly excluded from cover under the policy.
It is also a claim that was made fraudulently within the meaning of s 56 of the Insurance Contracts Act 1984 (Cth).
IAG was therefore entitled to refuse payment of the claim on the policy of insurance and is now entitled to judgment on the whole of the claim made by Cassa in this proceeding.
”
[judgment, paragraphs 156 to 159]
Comments
Although there were a number of CCTV cameras in the factory, even if they were working at the time of the fire (it was alleged they were not), the footage was stored on a hard drive on the premises which was destroyed in the fire. The neighbour’s CCTV was therefore vital evidence because the Cassa factory was in its field of view.
These days, there are too many CCTV surveillance cameras, too many witnesses with mobile phones with cameras, and too many experienced forensic investigators for an alibi such as not being at the premises to start the fire to succeed.
Although the evidence was circumstantial, it was enough. The police did not lay criminal charges because of “insufficient evidence”.
For a similar ‘factory fire’ case where the circumstantial evidence was sufficient to support a conviction for arson see