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District Court 4 October 2023

R v Colquhoun

[2023] NSWDC 664

Fraud & dishonestyPublic order & justice offences
JUDGE ALONE TRIAL 2019/2020 BLACK SUMMER BUSH FIRES ELEMENTS OF OFFENCES CIRCUMSTANTIAL EVIDENCE LIES AS CONSCIOUSNESS OF GUILT LIES GOING ONLY TO CREDIT.

Citation: R v Colquhoun [2023] NSWDC 664
Court: District Court of New South Wales
Date: 4 October 2023
Judge: O'Brien AM DCJ

Background

During the catastrophic 2019–2020 Black Summer bushfires, the accused owned a rural property called "Calymea" near Barringella on the NSW south coast, approximately 11 km south-west of Nowra. The property included a three-bedroom house, sheds, livestock paddocks, and river cabins. In the early hours of 5 January 2020, the house was destroyed by fire; the accused, the only person present, called emergency services twice before firefighters arrived to find the house fully engulfed.

The accused subsequently made an insurance claim with NRMA, asserting the house had been destroyed by bushfire, and received $376,100. He then made a series of further claims to government agencies and charities, receiving a total of approximately $215,500 across those claims. Police later found $427,200 in cash in a safe at his property.

The Crown alleged the accused had deliberately set fire to his own house to fraudulently claim on his insurance, and that he had thereafter dishonestly obtained charitable and government disaster relief payments to which he was not entitled. The accused denied all allegations, maintaining throughout that the fire was caused by ember attack from the surrounding bushfires.

Legal Issues

  • Whether the Crown proved beyond reasonable doubt that the accused deliberately set fire to his house with a view to financial gain (arson: s 197(1)(b) Crimes Act 1900).
  • Whether the Crown proved beyond reasonable doubt that the accused obtained financial advantages by deception from various charities and government agencies (multiple counts: s 192E(1)(b) Crimes Act 1900).
  • Whether the accused attempted to dishonestly obtain a financial advantage by deception from NSW Government Disaster Welfare Services (s 192E(1)(b) and s 344A(1) Crimes Act 1900).
  • Whether the $427,200 in cash found in the accused's safe constituted proceeds of crime within the accused's knowledge (s 193B(2) Crimes Act 1900).
  • How competing expert evidence on the fire's cause should be assessed in a wholly circumstantial case.
  • Whether inconsistencies in the accused's accounts were explicable by acute stress disorder, and what weight to give to the accused's credibility.

Decision

Count 1 (Arson): The court rejected the accused's version that the fire was caused by ember attack. His expert, Timothy Cousins, advanced two hypotheses: long-distance ember dispersal from a collapsing pyrocumulonimbus cloud, and general ember attack from the escarpment immediately south of the property. The court found no evidence the pyrocumulonimbus event impacted the accused's property, and noted that Cousins himself, when pressed, said he was "not tied to" that theory (at [167]). Both of Cousins' hypotheses depended foundationally on accepting the accused's account of observing an orange glow in the roof cavity. The court rejected that account as untruthful, having regard to the totality of the evidence (at [169]–[170]). The court preferred the evidence of Crown expert Detective Senior Sgt Moon, whose analysis concluded the fire commenced in the bedroom and could not have begun otherwise (at [157]–[160]).

The court assessed seven strands of circumstantial evidence in combination, rather than individually. These included: the accused's extension of insurance cover just 13 days before the fire; his call to NRMA on the afternoon before the fire enquiring about building insurance; his statements to a police officer on 30 December 2019 that he would not mind or hoped his house burnt down; the contents of his 000 calls and the photograph he took at 5:25 AM depicting a backing fire on the ground; his false representations to police about when he had last spoken to NRMA; the absence of any observed external fire activity by independent witnesses in the area immediately before the fire; and the speed with which he called NRMA to make a claim within 90 minutes of the fire being extinguished (at [174]). The court was satisfied beyond reasonable doubt that no reasonable hypothesis consistent with the accused's innocence existed, and returned a verdict of guilty on Count 1 (at [173]–[175]).

Competing psychiatric evidence: Dr Simonelli (for the accused) opined that acute stress disorder could explain inconsistencies in the accused's interview with police on 6 January 2020. The court preferred the evidence of Dr Skinner (Crown), who had viewed the full interview and found no evidence of dissociation or confusion. The court's own observation of the interview, which extended over two hours and nine minutes and demonstrated close attention to detail throughout, was consistent with Dr Skinner's assessment (at [141]). The court declined to accept any psychiatric explanation for the inconsistencies in the accused's accounts.

Fraud counts (Counts 2–9): The court's findings on Count 1 directly resolved several fraud counts, because the accused's principal representation to most organisations was that his house had been destroyed by bushfire. The court was satisfied beyond reasonable doubt that false representations were made to the Australian Red Cross ($60,000, Count 2, guilty), St Vincent De Paul Society ($3,000, Count 4, guilty), the Salvation Army phase 1 ($3,500, Count 6, guilty), and the Salvation Army phase 2 ($8,000, Count 7, guilty) (at [181], [198], [264], [269]). For the attempt count (Count 3, NSW Government Disaster Welfare Services), the court found the accused had submitted an application falsely claiming he was uninsured, and that the application was declined only because a staff insurance check revealed he was in fact insured (at [188]–[189]).

The court conducted a granular, claim-by-claim assessment of the Rural Assistance Authority grant (Count 5, maximum $75,000). For several individual claim components, the court found documentary evidence had been altered: quotations from suppliers were converted into purported tax invoices, amounts were inflated, and items had not in fact been supplied. The court found the Crown's evidence insufficient on some components. The total amount of dishonest conduct proved to the requisite standard was $40,699.94 (at [259]–[260]). For Count 8 (Local Land Services, $15,000 for boundary fencing), the court was not satisfied beyond reasonable doubt that the claim was dishonest, noting the Crown's evidence was of lesser quality than on other counts and acquitting on that count (at [278]–[279]). For Count 9 (Services NSW, $50,000), the court was satisfied the claims regarding tools, office equipment, a fence energiser already funded elsewhere, and a replacement backhoe were each dishonest, returning a guilty verdict (at [291]).

Count 10 (Proceeds of crime): The court found that $200,000 of the cash in the safe derived from the NRMA insurance payment, based on bank slip dates closely matching the accused's withdrawal of $350,000 in February 2020 (at [298]). A further $55,000 was established by the accused's own admissions in a police interview about the Red Cross payments (at [304]–[305]). The court was unable to be satisfied beyond reasonable doubt as to the source of the remaining cash, in part because the evidence did not exclude the possibility that some funds pre-dated the offending. The quantum for which a verdict of guilty was entered was accordingly $255,000 (at [306]).

Orders Made

  • Count 1 (arson, 5 January 2020): Guilty
  • Count 2 (obtaining $60,000 from Australian Red Cross by deception): Guilty
  • Count 3 (attempted obtaining of financial advantage by deception from NSW Government Disaster Welfare Services): Guilty
  • Count 4 (obtaining $3,000 from St Vincent De Paul by deception): Guilty
  • Count 5 (obtaining financial advantage from Rural Assistance Authority by deception): Guilty, in the amount of $40,699.94
  • Count 6 (obtaining $3,500 from Salvation Army phase 1 by deception): Guilty
  • Count 7 (obtaining $8,000 from Salvation Army phase 2 by deception): Guilty
  • Count 8 (obtaining $15,000 from Local Land Services by deception): Not Guilty
  • Count 9 (obtaining $50,000 from Services NSW by deception): Guilty
  • Count 10 (dealing with proceeds of crime, $427,200): Guilty, in the amount of $255,000

Key Takeaways

  • In a wholly circumstantial arson case, the District Court confirmed the correct approach is to consider all established facts in combination, rather than testing each circumstance individually for an innocent explanation, consistent with the High Court's direction in R v Baden Clay (2016) 258 CLR 308 (at [57]–[59]).

  • Where competing expert opinions on the cause of a fire each depend foundationally on accepting the accused's own account of events, rejection of that account as untruthful can defeat both hypotheses; the court need not find the accused's version positively false before the Crown's case succeeds, but rejection of the accused's account may, in context, remove the factual foundation for the defence expert's opinion (at [168]–[170]).

  • A psychiatric diagnosis of acute stress disorder does not automatically provide an explanation for inconsistencies in a person's accounts. Where the psychiatrist offering that diagnosis had not viewed the very interview the diagnosis was meant to explain, and the Crown's expert had, the court was entitled to prefer the opinion of the expert who engaged with all the relevant material (at [134], [141]).

  • Fraudulent conversion of supplier quotations into purported paid invoices, and submission of false supporting documents to disaster relief programs, can sustain convictions for obtaining a financial advantage by deception even where some components of a larger composite claim are not proved to the required standard. Criminal liability attaches only to the components the Crown proves beyond reasonable doubt (at [259]–[260]).

  • For a proceeds of crime count under s 193B(2) of the Crimes Act 1900, the Crown must prove beyond reasonable doubt not merely possession of cash, but the quantum that was substantially derived from the commission of a serious offence and the accused's actual knowledge of that fact. Where evidence does not establish the precise source of all cash held, a finding of guilt is limited to the amount whose provenance is established to the requisite standard (at [302]–[306]).

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW)
- Criminal Procedure Act 1986 (NSW)
- Evidence Act 1995 (NSW)

Cases
- Chamberlain v R [No.2] [1984] HCA 7; (1984) 153 CLR 521
- De Silva v The Queen (2019) 268 CLR 57
- Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26
- Fox v Percy (2003) 214 CLR 118
- Jones v Hyde (1989) HCA 20; 63 ALJR 349
- Liberato v The Queen (1985) 159 CLR 507
- R v Baden Clay (2016) 258 CLR 308
- R v Dawson [2022] NSWSC 1131
- R v Glenister [1980] 2 NSWLR 597
- R v Lazarus [2017] NSWCCA 279
- R v Micallef (2002) 136 A Crim R 127
- State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (1999) 160 ALR 588.