THE MYTHS – Kilara Fire Investigation.

 

THE MYTHS

Kilara Fire Investigation.

IAG, their investigators and their lawyers relied and still rely on several MYTHS that they introduced to maintain the arson case against me.

Two critical MYTHS in this case were quoted endlessly by Judges summing up in various hearings right up to 2016, the first of these was that ‘Items had been removed from the property immediately prior to the fire’, the second being that we were in a ‘Dire Financial position’ prior to the fire. This was later expanded to ‘resulting from an unsuccessful property development business.’ These myths form the basis of the ‘Circumstantial’ case against me that IAG is now apparently relying on.

These myths started at the very first hearing, the Crown Prosecutor stated that valuable items had been removed from the house immediately prior to the fire, my barrister, Catherine Cull sat inert, she explained later that at that stage of the proceedings it was all just like a chat, setting the scene but that statement would be endlessly repeated by Judge MacDonald right up to 2015!

The claims originated from the interviews of our friends and financial investigations made by IAG’s ‘factual investigator’ Maurice Fletcher of Whangarei. On the night after the fire when we had returned to the scene, Craig Bain told us that Judy Hutton, a near neighbour and good friend had called around to see if we were alright, many locals wondered if we had died in the fire at that time.

Judy had offered us accommodation for the night if we needed it and we certainly needed a friendly face in those dreadful hours after we saw our beautiful home in total ruin with all our personal effects destroyed. Judy used to ride around our land on her horse and was very distressed by the fire. We sat, in shock, in her sitting room consuming the glasses of Scotch she generously supplied.

Jan Mcgregor came around to visit and we discussed what we could do next. At that time we hadn’t even tried to contact the insurance company but with the Fire Officer stating the fire had been caused by vandals, the image of the Forced entry they created is below, we expected them to cover the cost of our accommodation until the claim was sorted.

Jan and Judy with my daughter Ellie were however, more concerned about the welfare of our  horses. They had been in the paddock closest to the house when we left home before the fire, there was evidence they had escaped at some point. There were hoof prints of them running around on the lawn in front of the house but they had apparently been caught and put back in the large paddock where they had apparently settled, fortunately unharmed, far away from the fire.

Ellie was concerned about all her valuable saddles and tack that remained in the barn which contained the stables, tack area, along with all sorts of grounds maintenance equipment, chainsaw, mowers and tractor type kit.
It seemed to be a good plan, so we agreed and the next day moved everything we could, along with the horses, to Jan’s property a few miles away. These items included the chainsaw, some tools and a picnic hamper we brought from the UK and had taken with us in the back of the car to Hamilton, we used it regularly for picnics particularly at the horse shows and it lived in the garage ready to be put in the car for such events, it normally contained some nice china, inexpensive Minton, cutlery and a set of champagne flutes in a wicker cage along with a holder for two bottles of champagne with a silver plated wine cooler, the champagne related items had been left at home and were destroyed in the fire. These hampers are very common in UK, ours was quite nice and cost around £300 in 2002 from Debenhams, UK’s Farmers type store.

These items were the only items removed from the house near to the time of the fire, on the morning of the 11 September, 36 hours after the fire. It took years before we got disclosure of Jan’s statement but in it, she had confirmed this was the case. Maurice Fletcher had ‘mistakenly’ stated this removal occurred PRIOR to the fire.

We had been selling items we had bought to run the 5 Star lodge on ebay for several weeks to raise the funds required to pay for the bore, around $20,000 was in the secure floor safe in the garage when we left home, this was lost in the fire as were the items sold on ebay auctions that were due to finish that week, the previous sale had been over two weeks earlier.

Joseph purported to items being missing from the fire scene, clothes and valuables but nothing was ever found, our real fire investigator, Tony Café, stated in his report, clothes burn and in a fire of this magnitude it would be perfectly normal!

These claims biased Judge MacDonald against us since the first hearing!
The finances issue is just a reflection of the financial experience level of Maurice Fletcher and DC Dawson. They have no idea about Trusts, offshore accounts and other perfectly normal financial tools used by persons that were fortunate to have been in the position we were at that time.

Our financial position is very simple now but in 2004 when we applied to move to New Zealand it was complex. I had sold my group of computer companies to a US based conglomerate in 1988, the lawyers setting up the deal had agreed to making some of the consideration for the companies a US based pension fund which was administered by Price Waterhouse and controlled by our offshore family trust in the Isle of Man, Alpha Development.

One of our toys, owned by the Trust, was a yacht, Nautor Swan 53-047, Jakima, seen above, at 16.06 m length and over 5m beam she was a truly luxurious boat. We sailed her all over the World including the ARC transatlantic race in 2000, finishing 21st out of over 200 entrants, you can clearly see me in the yellow shirt as we crossed the finishing line in St. Lucia. We sold Jakima in 2002 for around £300,000 (NZ$900,000 at the 2003 exchange rate) when we decided to move to France. This revenue was returned to the Trust Fund.

 

We also owned and restored a Petite Chateau in France, Domaine de Villchaise 'petite' is a misleading description here, it was almost 2,000sq m, three houses, a massive garage, larger barns all in 10Ha of land. We sold Villechaise before moving to New Zealand, the Chateau was actually a trust asset but we had full powers to act as owner and sell it, the revenue from the sale was returned to our IOM Trust. The buyers now have it for sale once more – see the video above, it is almost unchanged since we sold it.

When we moved to New Zealand, the Pension fund had a value in excess of US$3,000,000 it was an interest paid fund, on which I could draw using my Credit Card with NO LIMIT, rarely used since leaving the interest in the fund generated a return of 10-12% after tax. Little did we know that this sort of fund would be at the root of the global financial crash in 2008.

Our IOM Trust, transferred the funds, NZ$1.8M, to ASB in New Zealand to allow us to satisfy the immigration investment requirements, this was covered, as is usual in such a transfer by a Debenture from the Trust for NZ$1.8M in 2005. It wasn’t actually a loan as such, since as beneficiaries of the Trust we controlled in IOM, we loaned the cash to the NZ company, Propdoc Limited that we were the directors of. It was a loan from us to us in reality just complicated by the legalities of Trust and Company Law.

Our personal wealth when we entered New Zealand was over NZ$7,000,000 and we had the possessions and lifestyle that one would expect with this level of wealth.

We purchased Killara for $1,600,000 within 10 days of arriving in New Zealand , not as stupid as it appears since I had previously lived in NZ in the 1970’s for three years and we had visited NZ for a month in 2004 to review the housing market.

We had deposited $1,000,000 in a savings account to satisfy NZ Immigration and took out a loan of $1,000,000 against the security of the deposit to buy Killara whilst leaving as much cash as possible in the Pension Fund. ASB for some reason advanced £$1.2M as a mortgage leaving us with over $600,000 in the NZ bank, we cleared the $200,000 a couple of months later when the final paperwork caught up with us. In effect, we had paid cash for Killara, the only borrowing after the sale was the $1,000,000 and this was set up to clear when the $100,000 deposit matured in 24 months which would clear the loan.

Our move was complex since we had three cats and two dogs arriving shortly after us and it was impossible to find a suitable rental property for the whole family including the pets. I took a few weeks to conclude the transfer of Killara’s ownership but everything went well as things normally do when well lubricated with cash.

There was no property development element in this plan whatsoever, we bought Killara expecting to live out our lives in what we thought was paradise, making a profit on our work wasn’t a consideration, we just bought the best available items that suited our lifestyle irrespective of the price or resale considerations.

Additional funds arrived in the next three months, my Porsche 911 GT3 finally sold in the UK for around NZ$160,000, (almost identical car shown above, my images were destroyed in the fire).

My father in law, Keith, had died shortly before we left UK after a long battle with cancer and my wife Alison was the main beneficiary in his will, NZ$200,000 or thereabouts. We spent around $500,000 upgrading the house, installed a swimming pool complex, olympic size ménage, stables, barn and landscaping after we finished the interior works.

In 2007 we transferred the property, Killara, by selling it to a newly formed NZ Trust, the Killara Trust. The transfer was funded by a reduction in the debenture from $1.8M to $1.3M but no cash actually changed hands, again we were both seller and buyer in the transaction, ASB were actively involved in this transaction along with our lawyers, Fortune Manning.

At this time we were all becoming constantly ill, our doctor suggested it could be due to the pollen from the windbreak trees, following his advice we decided to sell Killara and move into a house which we planned to build in Kerikeri to our specification. Ian Knox set the asking price at NZ$2.35M and expected to get a higher figure in the buoyant property market of 2007 but rumblings in the financial markets began to make buyers ultra cautious.

In late 2008, the Global Financial Crisis changed our position dramatically, Price Waterhouse had, for years, been advising us to leave as much of the interest in the pension fund as possible since it gave unmatched returns. Instead of drawing interest from the fund to cover our living costs we borrowed from ASB who were happy to give us a loan facility of $850,000 against the security of the house then valued at NZ$2.8M with the back up of personal guarantees based on confirmation from Price Waterhouse of our US Pension Fund valued at US5.5M (NZ$8M). ASB were charging us 5.5% average on the loan whilst the pension fund was earning 11.2% average, after tax in 2007-08 a net gain to us of almost NZ$460,000 income per year, tax paid.

We were not aware that the pension fund had heavily invested in US mortgage bonds specifically in the subprime mortgage market which generated the very large returns but at high risk, we trusted Price Waterhouse and looked no further as did millions of other investors around the World.

The fund was frozen in December 2008, Price Waterhouse advised it was a temporary position but this didn't prove to be the case, in 2009 we were informed the fund was bankrupt, we received a final pay out of 1% of our investment being NZ$95,000, this transaction led to our closing of the IOM Trust, all the assets held transferred back to us. The Debenture to Propdoc Limited was deemed to have matured, a paper only transaction in the Isle of Man, nothing was done in NZ.

At that time we had loans from ASB that totalled $750,000. Notional house values had remained high but there were no buyers at all in NZ or the World that were taking on the purchase of high value properties, we would have to just sit and wait until the recession ended and properties once again started to sell. We discussed this with our ASB manager, agreed a budget and kept to it at all times. The borrowing by September 2011 had only increased to just under $800,000 mainly due to our selling assets.

We had spent our available resources on two projects, the first started in 2006 was the development of two large, 2.2Ha, sections of land subdivided off the 11.6Ha at Killara, these were stunning, situated outside the wind breaks that surrounded Killara, they had elevated building plots with fantastic 180 degree views of the Waipapa valley below, one even had a fantastic, natural swimming pool with crystal clear water formed by a turn in the Waipapa stream directly below the house site.

When the pollution issue arose we had discovered that these plots were on the river clay soil and not the volcanic soil of the rest of the property, they had never been orchards and were totally unpolluted so the sale was could go ahead.

The recession had hindered the sale but in early 2011 we had a buyer, it took several months to sort the legalities, they were buying both sections to use as one property with future potential to divide for an agreed price of NZ$675,000.

The final legal requirement for the sale was a land survey to map out the accurate boundaries that had taken several months to agree, the surveyors had confirmed that they would conclude the survey on the 15 September 2011 and the buyer had agreed to sign the final purchase paperwork as soon as the survey was completed. This would pay off the majority of the ASB loan at completion a few months later when land titles were issued by the Council.

In 2009, when the fund crashed we immediately reviewed our position, Killara had been advertised as an ideal property to operate as a luxury lodge, a business we had run with great success in France at Villechaise so we converted two of the bedrooms and the library into two suites, it took all our resources, covered by the sale of some assets, it was finally completed at a Qualmark 5 Star level in late 2010. A third bedroom was to be upgraded in 2011 to give a projected total income in excess of $200,000 p.a.

We were listed on loads of agency sites through Tourism NZ and bookings flooded in from all over the World, the suites let at $495 and $395 a night and by November 2010 we were almost solidly booked for December right through to the end of March 2011, we held over $25,000 in deposits and the agencies held far more.

We had a few early bookings and these went brilliantly, the guests were delighted by Killara and our service but then the next bombshell hit us, we discovered the water was polluted by Arsenic and Lead to levels well above the acceptable risk quota.

We called Tourism NZ, most of our bookings were from the US, Japan with a few from Europe. Some were due just weeks ahead and we didn’t want to risk destroying the NZ tourist industry by possibly poisoning a guest, particularly when the evidence would show we knew about the position. We discussed putting bottled water in the rooms but Arsenic can kill you if it gets to the wrong place in your body with just a few molecules consumed and that could happen cleaning teeth or even getting a shower.

We suspended the Lodge operation, refunded the deposits and
stared blankly at the wall.

The pollution issue itself was covered in detail in my New Zealand - What They Don't Want the World To Know! Post earlier.

We looked at how to remediate the land, the Council were not helpful, one of the officers came and explained why, they had no funds at all to assist us and the scale of the job would be incredible! He said the usual solution to pollution issues such as ours was to remove one metre of soil from the whole site, dump it at a registered toxic dumpsite, the nearest was in Whangarei, almost a two hours’ drive away by truck in our case and then to replace it with clean topsoil purchased from a verified clean supply.

The problem was that with around 7Ha of volcanic land which was possibly contaminated, removing a one metre thick layer would result in the disposal of 70,000 cu metres of contaminated soil, 7,000 massive truck loads each doing a four hour round trip to dump the load and then the same volume of soil being brought back, the estimated cost was $30,000,000 and under New Zealand’s strangest law, the owner of the property is responsible for the clean-up not the polluter that caused the issue, we would have to fund the whole exercise.

This drove me to issue High Court cases against the Estate Agent who sold us the land knowing it was polluted, the lawyer he recommended we use and the NZ Government who had marketed NZ as 100% Pure whilst they had directly contaminated our land by using it as a toxic waste dump! Our estimation of the value of the property, AT THAT TIME, was ZERO! A fact IAG would play heavily on in the final Court hearing we ever attended on the matter, it was irrelevant in any case since the policy was for the replacement cost of the building not the valuation of the property.

Fortunately, everything was being posted on my blog and one of the operatives that had done the soil and water testing for contamination came to see us offering a solution, the land was contaminated at a very low level and you do not eat soil. The problem was that the water system, collected rainwater off the roof which got covered with the dust off the land. That dust actually contained all the contamination since the volcanic soil is basically inert glass type globules with a small percentage of this absorbent fine dust. He told us that just changing the water supply to the house would be solve the entire problem, the estimated cost was around $25,000 a little better than $30,000,000 and our house would then be back at it’s previous valuation of $2,995,000 a figure based on an actual offer to purchase in mid 2010 from a buyer introduced by Ray White Estate Agents, the sale failed due to the mortgage crunch at that time.

I wrote to ASB in detail on this topic, our resources were all gone, ASB was increasing the loan each month by charging the interest to the account whilst we tried to establish an income but the conditions made it impossible, we were all ill, too ill to work full time and our health was decaying rapidly.

I asked them to suspend the interest so we could spend the money in the account on solving the issue by reinstalling a bore water supply, we were selling the items we had purchased to reach the Qualmark 5 Star rating, the bore was going to cost $25,000 to install and with the mortgage interest payments it was a struggle to get this cash so we could have clean, safe water and resume the highly profitable Lodge business at a 3 Star level that would be more acceptable after the financial crash, this would solve our cash flow issues.

ASB however, had agreed the loan on the basis the house would be on the market to sell at the earliest possible time to pay off the loan, when we asked them to suspend the interest they discovered we had taken it off the market, we had no choice, Kiwi’s may be happy selling a contaminated property without disclosure, after all that was how we got it but we would not agree to doing this.

After just two months of suspended interest ASB issued IPL Notices on us, the amount was trivial, just $8,000 and we had that in cash as part of the $22,000 we had got towards the $25,000 quote for the bore, catch 22!

Troy Hemmings served the IPL notices on us, he was confused, most of the people he served IPL notices on had left a derelict property or the place was a total dump but our house was, in his words, 'The finest he had ever been in.' He told us most people would burn their property down just to let the insurance meet their mortgage requirements. We pointed out that the house was worth millions and we had very few debts. I spent a few minutes searching insurance fraud fires on the internet checking out what he had said but little was reported so we thought he was just exaggerating. We never considered following his suggestion for a single moment.

We stalled, the section sale document would probably satisfy them and it was due to be sorted before the 23 September deadline of the IPL notices and the bore may have been installed before that too and if that supplied clean water we could put the house back on the market without hesitation.

Sadly, the locals were very upset about the publicity we were generating affecting their property values, they threatened to drive us out of New Zealand, we ignored the threat to our peril.

The house was attacked and destroyed totally on 9/10 September 2011, we do not know if the ‘Vandals’ were local people, others employed by the defendants in the High Court cases or just ‘tall poppy’ vandals destroying our house because they couldn’t have it. I guess we will never know.

The problem with the Fire investigation was the lack of financial understanding of Fletcher and Dawson, neither understood how our complex finances worked or what our background was. They just looked at a few numbers and didn’t ask us anything, their reports stated we had bought Killara with a huge mortgage, we had massive debts from UK, the debenture, and had zero income at all times just living off loans from the bank. They never discussed it with us, when it came up in the blackmail interview Dawson just wouldn’t listen, we were in dire financial straights and that was the cause of everything, FULL STOP!

Everything I have stated above could easily be verified, ASB statements show the transactions. UK funding of Jakima and Villechaise are all easily verified, evidence of the Trust fund itself was supplied to ASB in 2005 and could have been updated if requested. IAG didn’t bother checking any of this at all, it was far better to say that they had circumstantial evidence, based on the idea that we were desperately needed the money and therefore burnt the house down in an attempt to get it!

ASB made us Bankrupt in 2014, we had no income, no home and were seriously ill so it was inevitable, only two creditors registered a claim against us, ASB for $450,000 and Law NZ who had prepared the sale documents for Killara at $2,995,000 on the instructions of estate agent Ian Knox at a cost of $900, we had not approved this, nor would we, prior to the sale going unconditional so we had told them to chase Ian Knox not us.

 

Contrary to the claims made by Fletcher and Dawson supporting IAG's position the lack of debtors in the bankruptcy shows that we did not owe anybody else any money, our only credit cards were with ASB and part of the settlement. It is therefore simple to see that our equity in the property at the time of the fire was over $2.3M, in addition our contents were valued at $600,000 but we had suspended the Innsure policy when the Lodge operation was suspended and not transferred the cover to the IAG policy leaving us $500,000 under insured, the two cars destroyed had values of $35,000 and $8,000 agreed with AMI.

Our total equity destroyed by the fire was almost $3,000,000 and in addition the fire destroyed the sale of the section costing us a further $675,000 and our business that potentially would have earned us $200,000 p.a.

Clearly, this is a very strange definition of a dire financial position
and it is certainly NOT a motive for us to destroy the property to claim
on the insurance policy.

The initial claim against the Insurance company was for the rebuild cost, estimated at $2.1M at that time, contents ($100,000), cars ($43,000) and accommodation as per the policies ($20,000) totalling around $2,263,000 which at best would have been a loss to us of over $1,400,000 if you include the section sale or over $700,000 without including it.

In the same way that there is no real evidence to show we had anything to do with the fire itself there is no real circumstantial evidence either.

Nothing was ever produced in Court, had it been, it would have been seriously challenged and shown to be utterly false as the above clearly shows.

Our dire financial state started when the house was destroyed and IAG declined the claim based not on evidence but a callous and vindictive decision not to meet the perfectly valid claim.

There is no valid circumstantial evidence, IAG had over 3 years trying to produce any physical evidence just to get the case to trial without success but they are still not willing to talk to us to end this on-going tragedy. 

We are no longer seeking a vast payout with huge amounts of damages and interest that the Courts would award, we just want a basic,  fair settlement that would allow us to resume our lives with dignity rather than continuing to be a burden on the State!

2 comments

  1. Sean O'Cromtha says:

    No real evidence, no tested circumstantial evidence to base their refusal to accept the claims and a massive attempted cover up exposed by you.
    The whole event casts a dark shadow over State, AMI and IAG, there can be no doubt reading this account that they are just refusing to pay out with no justification and if they continue to do this the publicity you are creating will destroy them.
    Keep going, never give up!

    • cjrob224 says:

      We intend to keep going, this blog is set up to renew for 10 years, it is mirrored on two other servers in foreign jurisdictions so legal action to have it taken down will not kill it and it is backed up to Dropbox weekly so can be reinstated, as is, on a new server if IAG do manage to attack it in the Courts.
      The story is incredible, the lengths they have gone to and the risks they have taken are unbelievable, it will cost them may millions of dollars over time and may even close them down but it doesn’t help us since they will not talk to us at all.
      We thought it was all over when we got the Settlement offer but IAG lawyer Hlavac incredibly denied sending it even when it had his digital fingerprints indelibly stamped all over it!

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