Proving arson in fire insurance claims

Insurers and other role players in the insurance market will be interested in the recent Supreme Court of Queensland judgment dated March 2026, PBR Properties v Chubb Insurance Australia Limited [2026] QSC 47 which discussed the proof of arson in a fire insurance claim by circumstantial evidence. The judgment dealt with an insured’s claim for property loss occasioned by a fire. The insurer denied liability, alleging the fire was deliberately lit.

It was not possible from the remaining physical evidence to identify what had been the cause of the fire and exactly where the fire had ignited. Because the fire damage was so extensive, it was also not possible to identify through physical examination and testing whether the fire had been deliberately lit.

The question was whether the circumstantial evidence relied upon to establish criminal conduct permitted the court to be reasonably satisfied, on the probabilities, that the fire was deliberately set. The persons behind the insured company were a married couple, Mr and Mrs Richardson.

After the fire, Mr Richardson caused the insured company to make a claim under the policy. At the time of the fire, Mr Richardson was the only person still living at the property. Mr and Mrs Richardson had effectively separated, and she and the children had left the property prior to the date of the fire. The question was whether Mr Richardson had deliberately set the fire. Subsequent to making the claim, Mr Richardson committed suicide and was therefore not available to give evidence or be cross?examined.

If the evidence established that Mr Richardson had set fire to the property, it was common cause between the parties that the policy exclusion would apply, and the claim would not be payable. It was accepted that the onus lay on the insurer to prove on the probabilities that Mr Richardson deliberately lit the fire.

The court was mindful that in discharging the onus the Australia Briginshaw principle (from the Briginshaw v Briginshaw (1938) 60 CLR 336 case) would be applicable due to the seriousness of the finding which the insurer asked the court to make. The principle dictates that in civil cases more serious allegations such as fraud or misconduct require stronger, more convincing evidence to satisfy the balance of probabilities. Although it does not create a higher standard of proof it demands greater care and “actual persuasion”. A court must feel a genuine, actual persuasion that the event occurred rather than a mere mechanical calculation of a possibility. The standard of proof remains on the balance of probabilities. The strength of evidence needed to reach that balance varies with the gravity of the allegations.

The court reviewed well-established Australian legal principles on the application of circumstantial evidence relied upon to produce a finding or an inference of fraud.

The court referred to Palmer v Dolman [2005] NSWCA 361 which, it noted, had identified principles which were well established in civil cases where circumstantial evidence was sought to be relied upon to establish fraud. That included a consideration of “the weight to be given to the united force of all the circumstances put together” (per Belhaven & Stenton Peerage (1871) 1 App Cas 278). The issue of onus of proof is only to be considered and applied at the end of the reasoning process after all aspects of the evidence have been considered.

The court referred to a definition of the sufficiency of circumstantial evidence in civil cases required to support proof by inference from directly proved facts, in Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1:

“Of course as far as logical consistency goes many hypotheses may be put which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence, while in the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort, where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference: they must do more than given rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture: see per Lord Robson, Richard Evans & Co Ltd v. Astley [(1911) AC 674 at p. 687]. But if circumstances are proved in which it is reasonable to find on a balance of probabilities in favour of the conclusion sought then, though the conclusion may fall short of certainty, it is not to be regarded as a mere conjecture or surmise…” (the court’s emphasis)

The court said, in applying the Briginshaw principle and the “reasonable satisfaction” which a court needs to reach in order to make the serious finding, that inexact proofs, indefinite testimony, or indirect inferences should not be produced.

The court referenced the judgment of Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170:

“[T]he strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary “where so serious a matter as fraud is to be found”.

Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct.”

The court also considered the situation where the circumstantial case made out relies on lies which are said to exhibit consciousness of guilt and said:

“21. In such a situation, the decision-maker must first consider whether, in fact, the person has lied about the matters alleged. Even if a false story has been given, consideration then needs to be given as to whether there may be other reasons why a person may have given a false story, including the giving of a false story out of panic, based on the fear of an action appearing suspicious. This example of an explanation for a false story has been described as the paradigm example of a lie that might not demonstrate a consciousness of guilt.

22. In Worth v HDI Global Speciality SE (2021) 393 ALR 93, this point was emphasised by McCallum JA (with whom Macfarlan JA agreed). In that appeal, the learned trial judge was found to have engaged in impermissible reasoning in relation to what was said to be a lie in respect of a consciousness of guilt, by reason of failing to follow this process. For completeness, I note that Meagher JA dissented on this issue.”

In dealing with the role of motive and opportunity in insurance cases where arson is raised as an exclusion to the policy answering for a fire event, the court said:

“26. More recently in Cassa Bedding Pty Ltd v Insurance Australia Limited [2022] QSC 1, Burns J made the following observations in relation to opportunity and motive in respect of an insurance claim where arson was raised as an exclusion to the policy answering for a fire event:

“[70] While the existence of opportunity and motive may bolster an insurer’s case, proof of either or both can never be determinative, especially where the evidence connecting the insured with the fire is weak.[5] On the other hand, the absence of any motive may be a powerful consideration against a finding of wrongdoing. Of course, it must steadfastly be kept in mind that the insured has no onus to prove an absence of motive but where the evidence adduced in the case is such that the tribunal of fact can conclude that an insured had no motive to, for example, destroy insured property in order to make a fraudulent claim on a policy of insurance, that will be a strong factor weighing against to the contrary effect.

[71] In this regard, there is of course a difference between a case where there is an absence of proven motive and a case where there is a proven absence of motive. As to this, and although a criminal case, the following observations made by Gaudron, McHugh and Hayne JJ in De Gruchy v The Queen[6] are apposite:

“Motive, if proven, is a matter from which a jury might properly infer intention, if that is in issue, and, in every case is relevant to the question whether the accused committed the offence charged. As was observed by Lord Atkinson in R v Ball [1911] AC 47: ‘Evidence of motive necessarily goes to prove the fact of the homicide by the accused … inasmuch as it is more probable that men are killed by those who have some motive for killing them than by those who have not.’[7]

So, too, absence of motive is equally relevant to the question whether the accused committed the offence charged and, as observed by Menzies J in Plomp v The Queen, ‘…is commonly relied upon as a circumstance tending in favour of … a person accused of a crime’.

Although absence of motive is relevant, the appellant’s argument overlooks a critical distinction between absence of proven or apparent motive, on the one hand, and proven absence of motive, on the other. In the present case, there was no evidence of motive, which is not the same thing as proven absence of motive. And although the character evidence called on behalf of the appellant tended to negate possible motive, it by no means established the absence of motive.

The absence of evidence of possible motive is clearly a matter to be taken into account by a jury, particularly in a case based on circumstantial evidence. However, if, as in the present case, the prosecution does not have to establish motive, it is difficult to say that the absence of evidence in that regard is a matter of ‘positive significance’, either in the sense that it is a weakness in the prosecution case or a strength in the defence case. It might be otherwise if there were positive evidence that the accused lacked motive. However, that would be a most unusual case. The present is not a case of that kind. It is simply a case where there was no evidence of motive.[9]”

The judgment in PBR Properties v Chubb, in a substantial portion of its 87 pages, contains a detailed review and analysis of the competing evidence and application of the foregoing principles to the determined facts.

It is notable that Mr Richardson, who was alleged to have started the fire, had committed suicide and obviously had not provided evidence. The court on a conspectus of all the evidence, concluded that the circumstantial evidence supported a finding that Mr Richardson deliberately lit the fire and that the fire caused the loss which the insured claimed for.

The court in finding unfavourably against Mr Richardson said:

“I simply pause to note in this case that I have found Mr Richardson to have been a self-centred and narcissistic man who, in his commercial dealings, was prepared at times to act dishonestly and engage in misleading and deceptive conduct. He was a strong user of illicit drugs and was, at times, a violent man. In the period leading up to the fire, his wife (together with the children) had left him, he was at times exhibiting significant aggression and hostility, he was expressing sadness and loneliness and, at times, was making statements consistent with suicidal ideation.”

In dealing with the expert evidence, the court also said:

“489. Put shortly, that expert evidence did not, in my view, establish that 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. They were:

(a) a fire in the roof space via a hot joint;
(b) a fire in the ESC by a hot joint; or
(c) a fire instigated by mechanical damage to a sconce light in the hallway, possibly creating a hot joint or other heat source.

490. The fact that the expert evidence could not exclude these innocent instigation modes does not mean that the circumstantial case must fail.”

The court referenced numerous material inconsistencies in Mr Richardson’s version of events which said constituted lies and showed a consciousness of guilt:

“495. The lies told by Mr Richardson in the subsequent versions were, in effect, the fabricating or concealing of evidence. Of course, Mr Richardson’s lies did not prove the opposite of his untruthful evidence. But they are capable of being probative of the critical issue as they may show that Mr Richardson lied because he knew that the truth of the matter would implicate him in the offending conduct in question.”

496. In this case, if Mr Richardson had lit the fire in the hallway, there would have been good reason for him to alter his version of events such that he was no longer identifying having seen flames. As I have explained above, the identification of flames would likely have been in respect of flames in the hallway area, and would have supported ignition in an area Mr Richardson could easily access and where a fuel load existed.

497. I take into account that I must consider whether there is an alternative explanation for the lies which I have found were made. In particular, it is said by the applicant that Mr Richardson would have been exhausted at this time after having worked for many days and being woken up in the early hours of the morning to be presented with a fire event and all the confusion that might be associated with such a discovery.

498. I do not accept that contention in the circumstances of this case.

…

501. In relation to any suggestion of panic, I do not accept that if Mr Richardson had not started the fire that he would have panicked and given the different subsequent versions.

502. If Mr Richardson was innocent, he would not have known what the cause of the fire was, and I think it unlikely he would have gone through some panicked reasoning process that he should construct such a significantly different and detailed version.
…

505. Fifthly, I do find that the text message sent by Mr Richardson in early January 2017 where he asked his wife to destroy the photo which showed a container of isopropanol so that the photo would not be given to the fire investigator, was conduct which showed a consciousness of guilt. It is akin both to the destruction of evidence and the concealing of evidence.
…

508. This conduct, in my view, evinced a consciousness of guilt and I treat it in this way. I can think of no innocent explanation for this conduct.

509. Sixthly, I refer to the conversation between Mr Richardson and Mr Brook near the tractor, which occurred after Mr Richardson had received a call from his lawyer.

510. Again, that conversation was to the effect that Mr Richardson said:[72]

[72] Affidavit of CM Brook dated 13 October 2017 at [55]-[59].

“I just got off the phone to my lawyer, Bill Potts. He reckons they are going to charge one of us. He says we have to be careful because our phones will be tapped. You do the time and I’ll look after you. I’ll visit you every day…I’ve got the kids. I can’t go to jail, I need to be there for them.”

511. I also take this evidence as evincing a consciousness of guilt on the part of Mr Richardson.”

And finally, at paragraph 546, the court concluded that Mr Richardson intentionally instigated the fire in order to burn it down for insurance proceeds and the relevant exclusion within the policy was met and the claim had to fail. The court stated that “a consideration of the weight to be given to the united force of all the circumstances put together is such that I am satisfied they give rise to a reasonable and definite inference of arson on the part of Mr Richardson and that he instigated the fire …. I am satisfied of this to the high degree which the Briginshaw principle demands.”

The Briginshaw principle is an Australian common law doctrine, but its reasoning is applied in South African law where the courts require stronger, more cogent evidence to prove serious allegations like fraud bearing in mind that the standard of balance of probabilities remains. Insurers ought to be aware of the requirement to meet such higher requirements regarding evidence.

The test in South Africa for proof by inference is that the reference sought must be consistent with all the proved facts and must be the more natural or plausible conclusion from several conceivable ones.

A similar result would have followed on the same facts in South African insurance law.

[PBR Properties v Chubb Insurance Australia Limited - [2026] QSC 47]