Case No: HT-13-191
Neutral Citation Number: [2014] EWHC 375 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION 
TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 20th February 2014 

Before:

MR JUSTICE AKENHEAD
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Between:

	SOZEM SAVASH	Claimant	
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	CIS GENERAL INSURANCE LIMITED	Defendant	

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Gordon Menzies (instructed by Bryan O’Connor & Co) for the Claimant
Derek O’ Sullivan (instructed by Keoghs LLP) for the Defendant

Hearing dates: 10-12 February 2014
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Judgment
Mr Justice Akenhead: 
1.	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.
The Insurance Policy
2.	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:
A. “Definition of Terms
Contents: means household goods, personal effects and fixtures and fittings…owned by all the legal responsibility of the Family…
Family: means you or any member of your family permanently living with you…
Unoccupied: means insufficiently furnished for full habitation, or not lived in by the Family, or any other person with the Family’s permission, for more than 60 consecutive days.”
B. The Buildings Section of the policy identified that what was insured was materially "loss of or damage to the Buildings caused by…6. Escape or water…from any fixed water or heating system or fixed domestic appliance...8. Theft or attempted theft." What was expressly not insured was "loss or damage…occurring while the Buildings are Unoccupied".
C. The Contents Section of the policy contained similar provisions in relation to loss or damage to the Contents.
D. The Claims Settlement provisions for the Buildings Section were as follows:
“A.1. We will settle a claim the court for loss of or damage to property by payment or, at our option, by repair or replacement on the following basis, subject to any relevant monetary limit specified in this Section.
(i) If the repair or replacement is carried out the cost… necessarily incurred in repairing or replacing that part of the property which is lost or damaged. No deduction will be made for any depreciation and wear and tear unless at the time for loss or damage
(a) that part of the property which is the subject of the claim is not in a good state of repair…
(ii) If the repair or replacement is not carried out
(a) what it would cost to settle the claim in the terms of (i) above but with a deduction for any depreciation and wear and tear…
2. We will settle other claims by payment of the costs incurred, subject to any relevant monetary limit specified in this Section…
D. We will not pay for the replacement of all work on any undamaged items or remaining parts solely because they form part of a set, suite, group or collection of articles of a similar nature, colour, pattern or design."
E. The Claims Settlement provisions for the Contents Section were as follows:
“A.1. We will settle a claim the court for loss of or damage to property by payment or, at our option, by repair or replacement on the basis of the cost of repair or replacement as new if an article is totally lost or destroyed, subject to any relevant monetary limit specified in this Section. An allowance for any depreciation and wear and tear will be made only
(i) In respect of clothing and household linen…
D. For the purpose of any claims settlement, repair or replacement as near as is reasonably practicable will be sufficient even though the former appearance or condition of the property may not be precisely restored.
E. We will not pay for the replacement of all work on
(i) any undamaged items or remaining parts solely because they form part of a set, suite, group or collection of articles of a similar nature, colour, pattern or design
(ii) an undamaged carpet or floor covering not in the room or area in which the damage occurred, solely because the undamaged carpet or floor covering matches the damaged carpet or floor covering in colour, pattern or design….”
The History and the Facts
3.	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.
4.	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.
5.	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.
6.	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.
7.	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. 
8.	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.
9.	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.
10.	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.
11.	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.
12.	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.
13.	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. 
The Proceedings
14.	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 29th 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.
15.	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.
16.	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.
17.	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 29th 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 29th 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 3rd parties on 29th 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.
	   The Law
18.	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: 
"…hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probabilities…"
19.	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:
"Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth."
Since 1985, practice has moved on, for instance in relation to the requirement for Statements of Truth not only at the foot of pleadings but also at the end of witness statements which are now exchanged as a matter of course. Where there are material departures by a party from his or her pleadings or exchanged witness statements or other recorded statements made contemporaneously with the events to which the evidence relates, that can be a strong, sometimes very strong, pointer as to whether there is or is not merely an honest mistake being made.
20.	The authorities on fraud are well-known. Lord Herschell’s dictum in Derry v Peek (1889) 14 A.C. 337, 374 was clear: 
"Having now drawn attention, I believe, to all the cases having a material bearing upon the question under consideration, I proceed to state briefly the conclusions to which I have been led. I think the authorities establish the following propositions: First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shown that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made."
21.	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:
"30…A fraudulent claim exists where the insured claims, knowing that he has suffered no loss, or only a lesser loss than that which he claims (or is reckless as to whether this is the case). A fraudulent device is used if the insured believes that he has suffered the loss claimed, but seeks to improve or embellish the facts surrounding the claim, by some lie. There may however be intermediate factual situations, where the lies become so significant that they may be viewed as changing the nature of the claim being advanced.
38. The fraud must of course be directly related to and intended to promote the claim…. Whenever that is so, the usual reason for the use of a fraudulent device will have been concern by the insured about prospects of success and a desire to improve them by presenting the claim on a false factual basis". 
22.	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.”
Materiality has been put in different ways in different cases:
(a) "sufficiently serious to justify stigmatising it as a breach of [the insured's] duty of good faith so as to avoid the policy".  (per Millett LJ in Galloway v GRE [1999] 1 Lloyd’s Rep 209)
(b) fraudulent “to a substantial extent” (Orakpo v Barclays Insurance Services [1995] LRLR 443, 451, 452, CA per Hoffman LJ and Sir Roger Parker)
23.	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: 
"The law is that the insured who has made a fraudulent claim may not recover the claim which could have been honestly made. The principle is well established and has certainly existed since the early 19th century: Halsbury's Laws of England, 4th ed reissue, vol 25 (1994), p 284, para 492, Welford & Otter-Barry, Fire Insurance, 4th ed (1948), p 289 et seq. This result is not dependent upon the inclusion in the contract of a term having that effect or the type of insurance; it is the consequence of a rule of law. Just as the law will not allow an insured to commit a crime and then use it as a basis for recovering an indemnity (Beresford v Royal Insurance Co Ltd [1937] 2 KB 197), so it will not allow an insured who has made a fraudulent claim to recover. The logic is simple. The fraudulent insured must not be allowed to think: if the fraud is successful, then I will gain; if it is unsuccessful, I will lose nothing."

Occupancy
24.	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.
25.	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:
(a) He said that these belatedly produced photographs were taken in February or March 2009, doubtless to bolster his case that his father had been in occupation for three months (from February 2009) all the way up to the burglary on 29 May. However one of the photographs shows an activated computer terminal (clearly connected to the Internet with Ebay showing up on the screen) and Ms Kalinowska standing beside the screen. However, a letter secured by his solicitors dated 4 September 2012 from Virgin Media shows that Mr Savash Senior only contacted Virgin Media on 11 May 2009 and the Internet service was installed on the 15 May 2009. It follows that the photographs must have been taken after 15 May.
(b) The Court Order required Mr Savash’s mother to leave the premises on or by 22 October 2008. His witness statement in the proceedings said simply that his mother and sister moved out of the property in January 2009, there having been no hint of suggestion that the parting was clearly acrimonious and enforced. None of the other court papers, let alone solicitor’s correspondence, was disclosed; he engaged the same solicitors for those proceedings as in these proceedings.	Precision could have been provided as to the timing of their departure and the conditions under which they left (for instance what they took with them in terms of furniture and other belongings, it being almost inconceivable that they were thrown out with only the clothes on their back).
26.	Mr Savash Senior’s evidence was not believable on this issue, in particular in relation to when and why he moved in:
(a) He said in his witness statement that, having lived with Ms Kalinowska at Etta St, their "relationship was going through a difficult period" and he "was under pressure to move out"; he therefore moved to No. 30, hoping that he would be joined by her. He wanted to redecorate the property. He said that he was “separated” from her at the time of the burglary.
(b) He told WPC Simkin on the day of the burglary that Ms Kalinowska was living at No.30. 
(c) He said in evidence at the trial that his idea in moving to No. 30 was that he would live there with her as she was planning for a child and he or they missed having a house with a garden; this explanation rather suggested that there was no problem with the relationship at all.
(d) He then went on to say that in fact she stayed at No. 30 with him 2 to 3 nights per week over a 2 to 3 month period. Again that is wholly inconsistent with him having moved out of their shared flat because there were difficulties in their relationship and with him being "separated" from her.
(e) What this is consistent with is however a person who was trying to provide a false reason why he wanted to move to No.30. 
(f) The photograph of Ms Kalinowska, probably taken in the second half of May 2009 if not after the burglary, shows her at No. 30, again demonstrating that there was no “separation”.
(g) A relatively final piece in the jigsaw is the fact that after an uncomplicated pregnancy Ms Kalinowska produced a healthy girl baby daughter for them almost exactly 9 months after the burglary, which again suggests that there was never anything materially wrong with the relationship.
(i) His bank statement shows that he paid £5,000 to her in early April 2009 which does not demonstrate any break in the relationship.
27.	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.
28.	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.
29.	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.
30.	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.
31.	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 Burglary
32.	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:
(a) The break-in was sophisticated in that doors or windows were not battered in but substantial mechanical equipment, which must have been brought by the burglars, was used both to gain entry through the garage and through the back kitchen door.
(b) None of the neighbours saw or noticed this or anything happening.
(c) What was said to have been taken was so bulky and expensive that it is not consistent with sophisticated burglars’ usual readily portable targets, such as jewellery, money, laptops and televisions.
(d) The sheer bulk and quantity of the items taken were such that a very substantial removal type lorry would have been needed to take it all away and it would have taken the burglars many hours to have taken loaded. Yet, not one of the four immediate neighbours who were in most or all of the relevant time seems to have noticed anything. The burglars would have had no idea how long it might be before anyone else came back to the house and to spend as long a time as they would have had to take would have been extremely stupid of them. Yet, of course if the house had been unoccupied for many months, it could have been targeted but it is the Claimant’s case that both he and his father had been there on a regular and frequent basis over the preceding three months.
(e) The type of things that were taken represented unlikely targets. A king size bed and divan, a substantial sofa and three armchairs, two mattresses, a substantial metal safe, three cupboard drawers, dining chairs, 6 high back stools, seven garden chairs and two sun beds, a fireplace and hearth, a metal table, and 2 substantial wooden statues as well as £500’s worth of freezer contents and numerous other items are said to have been taken. It is suggested that squatters could have come in to take these types of goods to furnish their "squat". That is inconsistent with the sophistication of the burglary and it is inconsistent with the exceptional malicious damage that was done inside the property. This was confirmed by Mr Taylor, Mr Smith and the police evidence. It is odd to say the least that three cupboard drawers were taken; they could have been of no use to the thieves.
(f) Although excluded from the pleaded claim, Mr Savash Junior told Mr Smith that 20m² of granite tiles taken up from the kitchen had been stolen. This adds to the bulk and weight of what was allegedly taken. The photographs of the few tiles to have been left at the property show them to be cement encrusted on the bottom side. It is wholly unclear what burglars would want with heavy second hand tiles encrusted with such residues, particularly since they left the rather more valuable new marble worktops. Much of what they are said to have taken would have little value or use. It is odd that if they thought that there was some value to them they did not take the tiles which were left.
(g) There is then the odd flooding of the house by one of the burglars supposedly going up into the roof loft, presumably after all or most of the stolen goods had been taken out of the house, and removing the ball off the ball valve in the water tank (and taking it away with them because it was never found) and disconnecting or slashing the overflow pipe so that the water would flow either through the overflow hole or over the top of the tank. Why the burglars would want to do this when they had already removed the goods that they wanted to steal is unclear. Why they took the ball away with them again defies logic. 
(h) Then there is also the wanton damage to the remaining contents and to various items of furniture and fixture. It would seem that the burglars (if indeed it was they) wanted to ensure that anything of possible value would need to be substantially repaired or replaced. For instance, the stoving in of two of the kitchen cabinet doors seems to have been pointless, as was the slashing of chair covers. There was extensive physical damage to internal doors and other furniture. Of course, it is possible that the burglars simply were enjoying the "thrill of destruction" as suggested by Mr Menzies for Mr Savash in closing submissions but this does not tie in with either the timing of the burglary, the sophistication of the entry, the time which must have been taken to remove all the allegedly stolen goods, the noise which would have been made by the damage making and the time taken to cause the damage in almost every room in the house.
(i) It is odd that some things were apparently not taken such as a microwave from the kitchen. It is even odder that a random number of or indeed any spindles were taken from the staircase.
33.	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.
34.	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.
35.	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.
36.	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.
37.	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. 
The Remedial Works
38.	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. 
39.	This was amplified in the Further Information provided by Mr Savash Junior and signed by him with a Statement of Truth; this stated that:
(a) C&B commenced work in "September or October 2009” (Response 16)
(b) The eventual invoice was "delivered by hand to his father” a couple of days after completion of the work which was in March or April 2010 (Responses 18 and 19).
(c) The deposit of £20,000 was personally handed over to Mr Osman by Mr Savash Senior within any few days of work commencing (Responses 20 and 21).
(d) The balance of £20,900 was paid in cash to Mr Osman (Responses 24 and 25).
(e) Mr Osman wrote “PAID IN FULL” or made invoice disclosed that Defendant (Response 28).
(f) In relation to the Omega’s invoice, Mr Martin of Omega had brought his laptop with him and his invoice was printed off from this and Mr Martin signed it (Response 35).
(g) The sum of £9,200 referred to on the invoice was handed over in cash by the Claimant at No. 30 to Mr Martin (Responses 36, 37 and 38).
40.	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.
41.	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:
(a) He said that Mr Osman came round in July or August 2009 to look at No. 30 for the purposes of giving an estimate; that can not be true because Mr Osman was in prison. However, it is likely that, whoever was doing the work, work had started in August 2009 because materials began to be bought by Mr Savash Senior in August 2009.
(b) He said that he saw him at another job to see what the quality of work; that can not be true, given his stay in prison.
(c) He said that he handed over the deposit to Mr Osman in September or October 2009; that is most probably untrue given Mr Osman’s limited availability then due to prison. He attempted to say that it must have been on one of Mr Osman’s day release days, that he put the cash on the table and he could not say that Mr Osman did not then hand it all over to “his boys” (his workers) who were on site; this was very unconvincing and was mentioned for the first time under cross-examination. He made the same suggestion in relation to the second payment said to have been made to Mr Osman in about April 2010 after the work is said to have been done; this was equally unconvincing. I accept Mr Osman’s clear and on this point logical evidence that he did not receive any payment at any time or on any basis.
(d) He was particularly unconvincing about issues relating to materials. He said in his statement that he “paid for most, if not all, the materials [used by C&B] as the work went along, usually by card”. This was also set out in Response 24 of the Further Information, which suggests that all the materials were paid for by Mr Savash Senior using his Barclay’s account. Referred to a list of materials, said by him to have been the materials in question, it was immediately clear that there were no documentary records of him having paid for anything like “most” of the materials. When one compared the list and the C&B invoice document, the very large part of the materials were not paid for by him; examples are some 7 doors or any paint. His bank statements which show card purchases do not support this assertion either and indeed show the contrary. 
(e) He had to accept that a significant part of the materials invoices relied on by him did not relate at all to the remedial work to the house attributable to the burglary, flooding and malicious damage. Examples are guttering (used on the outside), bricks and copings (for an external garden wall), ballast and block paving (for re-paving work to the garden patio), shower door (not affected by the burglary), roofing materials (for external use) and lintels (not necessary for any work associated with the burglary). If anything, the bulk of the invoiced materials had nothing to do with the burglary-related damage.
(f) One of the invoices relates to 25m² of lavender blue granite tiles and grey adhesive (invoice dated 24 September 2009, totalling £835). However, the colour photographs in the Particulars of Sale produced in the summer of 2010 show what look remarkably like marble tiles (and indeed Mr Savash Junior accepted that they were marble) of a predominantly reddish colour with no blue showing up. This would suggest that this invoice has nothing to do with this property. 
42.	Equally and seriously untrue evidence went to other related matters:
(a) Mr Savash Senior said that when the job was completed he went through the invoices for materials with Mr Osman, deducted the costs of materials which he said he had bought for the job and actually handed over cash of £16,200, being the balance of the supposedly agreed contract sum of £40,900 less the deposit and £4,700’s worth of material. The £4,700 was the rounded down total (£4,722.75) of the materials supported by the documentation referred to above. It was and must have been obvious then as it was during the trial that the large part of this sum for materials simply did not relate to the burglary related damage. It would have been pointless going through the invoices with Mr Osman who on any count had had nothing or at best virtually nothing to do with the work.
(b) The invoice that was said to have been signed by Mr Osman contained the handwritten words "PAID IN FULL”. Even if he did write those words (and I find that he did not), it was on its face a dishonest and misleading document. First of all, he was not paid in full: he was paid less the cost of certain materials. Secondly, well over half of the materials the cost of which was being deducted from the overall sum said to have been paid do not relate to the works carried out pursuant to the invoice which was being signed. Therefore the paid invoice was being presented later to the insurers on a false basis.
(c) There was an attempt by Mr Savash Senior to suggest that the workmen, whoever they were, were doing all the extra work in effect for free. That is not credible, particularly for instance if one compares the photographs of the state of the outside patio shortly after the burglary and the fine and pristine looking patio and incorporated flowerbed arrangement photographed for the Particulars of Sale. There would be no obvious good reason why so much additional work would be done for free. Even if the total figure had been paid out, which has not been proved, a significant element related to work which could not honestly be claimed for from CIS.
(d) One of the items or work claimed for involved substantial replacement of the boiler which was in the garage, the work and materials for which must have cost at least £1,000. As Mr Osman said, and I accept it as logical, the boiler was probably not damaged in any way during or as a result of the burglary; it was in the garage and would not have been affected by the water problems. However, it formed part of the C&B invoice which was said to have been paid for; it clearly could not have properly been claimed for as against the insurer.
 (e) Initially after the burglary, written estimates were obtained from other builders, albeit not accepted. There was no good reason for the Savashes not to get a written estimate from C&B if they were going to employ them. I find that no estimate, oral or in writing, was obtained from C&B at all.  It is noticeable also that the estimates actually obtained for £43,500 and £38,500 were actually significantly cheaper than the supposed C&B invoiced figure of £40,900 and the Omega sum of £9,200, because they allowed for fitting the new kitchen cabinets and other units and for the replacement of the parquet flooring. The £38,500 estimate on that basis was some substantially cheaper than the C&B and Omega invoices combined, particularly if one takes into account that the Moben estimate for the kitchen included for fitting the new kitchen, even allowing for a few things not covered in the earlier estimate. These early written estimates probably also identified the rooms which needed attention after the burglary and the flooding; they only included for the main rear bedroom and not the three others. Yet, the C&B invoice identifies the main front bedroom as being totally redecorated.
43.	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.
44.	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).
45.	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.   
46.	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.
47.	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.
48.	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.
49.	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..
50.	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.
Miscellaneous Matters
51.	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. 
52.	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 
53.	The remainder of the money claims in these proceedings is largely unsupported by any reliable evidence. Examples are:
(a) The supposedly stolen double bed (VI spring king sized divan [and mattress); this was said to have been acquired from Selfridge's in about 1990 and the replacement cost is quantified at £10,000. At first sight, this appears to be an absurdly high figure for a double bed, no matter how good the quality. On the first day of the trial however, the Claimant produced a downloaded fact sheet said to be from Selfridge's which suggested that with a 20% discount on a “VI-Spring Shetland Superb super king-size divan set upholstered in Shetland wool and Shetland wool filled mattress with 4,064 nested pocket spring” it could be acquired for a price of £9,830. Apart from the fact that, there was literally no evidence that this precise model of bed was the same as that said to have been taken, there is no good reason to base the replacement cost even on a discounted price from one of the most expensive department stores in London. Mr Savash Senior accepted that one could probably secure the requisite model from more modest discount stores which sell beds of this quality at substantially less than what was claimed for.
(b) For most of the rest of the stolen or damaged contents, Mr Savash Senior said that he had gone round to various shops and outlets (none of whose names he could remember) and been given what at best be described as off the cuff prices, which he noted down but even his notes have not been disclosed. There was literally no corroborating evidence as to any of the non-incurred costs of repair or replacement of items stolen or damaged. 
(c) For some of these items, there has been no attempt to explain by way of evidence what the individual items said to have been stolen or damaged are. Examples are £8,000 for both the sofa and three armchairs and the dining table, five chairs, side cupboard and glass display; without doubt, one could acquire a perfectly reasonable set of sofa and armchairs and dining room set for £2-£3,000, although one also could pay substantially more. Another example is the garden furniture for which £2,000 has been claimed; there are doubtless good quality garden centres around the country where one could acquire reasonable to good such garden furniture for a few hundred pounds.
(d) Mr Savash Senior said that much of the furniture was imported from Italy albeit purchased in this country from an outlet known as Euro Styles. Without some descriptive evidence as to what this furniture was and what it really will cost to replace, it becomes difficult for the Court to know where to start.
(e) A substantial claim relates to the replacement kitchen units, for which £15,800 is claimed as against an estimate dated in April 2010 from Moben Kitchens. The evidence demonstrates that in fact the damage to the existing kitchen units was relatively limited and there has been no and certainly no reliable evidence to suggest that they all needed to be replaced. At worst, all that obviously needed to be done was for some new kitchen unit doors to be replaced, at doubtless a fraction of the sum claimed. It is clear that the kitchen was, apparently at relatively minimal cost, made good for the purposes of putting the property on the market in mid-2010; the photographs in the Sale Particulars seem to show a reasonably attractive wooden fronted set of kitchen units. There is some tangential evidence in the Claimant' solicitors letter for 30 September 2013 which suggests that the breakfast bar and larder unit were removed with one door being salvaged for use but that was not directly supported by witness evidence.
(f) I would have allowed nothing in relation to the damaged contents claim as I am not satisfied on the balance of probability that this had anything to do with the burglary as such. 
54.	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.
Fraud and Fraudulent Devices
55.	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. 
56.	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.
57.	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. 
58.	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 9th 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."
This referred to the Court of Appeal’s decision in Direct Line v Khan [2002] 2 Lloyds Reports IR 369 in which Buxton LJ said at paragraph 41 referring to the earlier judgement of Lady Justice Arden:
"As my Lady has described, Mrs Khan cannot escape from the application to her case of the combination of two legal principles: (1) a principal is bound by fraudulent acts committed by his agent unless he can show that that fraud was outside the scope of the agency, which Mrs Khan cannot demonstrate; and (2), as provided by Galloway, a claim which is fraudulent in any sufficiently substantial part is invalid in respect of the whole of the claim, and all monies paid under the claim are thereby recoverable. That is all that the insurer in our case needs to establish in order to succeed. Its claim for return of the payments that it has made does not depend on showing that because of the fraud the contract was rendered void ab initio."
The Vice-Chancellor agreed, saying at Paragraph 44 that there was no answer to the first instance judge’s finding that a fraudulent claim made under an insurance policy by an agent within the scope of his authority as agent for the principal would fail on the "well-established principle" that the principal is fixed with the consequences of the agent’s actions. But this is also more apt in the case of fraud or fraudulent devices in connection with insurance because a primary object of what may be described as policy-based decisions of the courts in this context is to ensure that fraudulent or fraudulently exaggerated insurance claims do not succeed. 
59.	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.
Decision
60.	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.