R. v. Folland Date:, 2012 BCPC 367

Citation: R. v. Folland Date: 20120720 2012 BCPC 0367 File No: 92632-1 Registry: Kamloops IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. ROBERT JOHN FOLLAND REASONS FOR SENTENCE OF THE HONOURABLE JUDGE S.D. FRAME Counsel for the Crown: Mr. John R. Neal Counsel for the Accused: Mr. Richard Begin Place of Hearing: Kamloops , B.C. Date of Hearing: June 18, 2012 Date of Judgment: July 20, 2012

[1] Mr. Folland has pleaded guilty to Count 2 being that he provided to the Insurance Corporation of British Columbia (I.C.B.C.)or its representatives information material to a claim he knew or ought to have known was false or misleading contrary to s. 42.1(2)(

a) ofthe Insurance (Vehicle) Act. The Crown seeks a $2,000 fine and a restitution order pursuant to s. 42.1(6) of the Insurance (Vehicle) Actin the sum of $4,872.55. [2] The facts of the case are not in dispute in this guilty plea. Mr. Folland was driving Sharon Craig’s vehicle. She is hisgirlfriend’s mother. He rear-ended a pick-up truck owned by a Mr. Martin. Mr. Folland fled the scene of the accident. Both he and Mr.Martin reported that they were victims of a hit and run.

The vehicles were examined and through the various investigations undertakenby I.C.B.C., it became apparent that they were involved in the same accident. [3] Not only did Mr. Folland provide a false statement initially when the accident occurred, but he also provided that same falsestatement some weeks later. This is important because of a number of factors. First, he is not the person who made the claim. Ms.Craig made the claim. He also has Tourette Syndrome and a number of other anxiety disorders which caused him to panic when theaccident occurred.

The Crown argues that anxiety may have been the cause of this poor judgment on the day of the accident but does notexplain the false or misleading statements he gave on two occasions following the accident. To be clear, these were statements in supportof Ms. Craig’s claim. Ms. Craig was not aware of the subterfuge. [4] As a result of the claim made by Ms. Craig and Mr. Martin, damages were paid by I.C.B.C. Mr. Martin received $3,505.75 forhis damages and Ms. Craig received $1,452. She was also credited with $86 for her salvage. I.C.B.C. paid out pursuant to s. 24 of theInsurance (Vehicle) Act. Mr.

Martin had to pay a $500 deductible and Ms. Craig had to pay a $300 deductible. Neither of theirpremiums were affected by this claim. Subsequently, I.C.B.C. determined that Ms. Craig’s insurance ought to pay for the accident. Ms.Craig’s premiums have increased but the deductibles have been adjusted accordingly. Ironically, Mr. Folland would have been coveredunder Ms. Craig’s insurance but, because he lied about the cause of the accident, his coverage is voided by s. 75. [5] Under s. 42.1(6) of the Insurance (Vehicle) Act, the relevant sections are as follows: 42.1(2) a person commits an offence who (

a) provides or causes another to provide to the corporation or its representatives information material to a claim that the person knew orought to have known is false or misleading, whether the information is required under this Act or is volunteered ...

(4) An individual who commits an offence under subsection (2) is liable, (

a) on a first conviction, to a fine of not more than $25 000 or to imprisonment for not more than 2 years, or to both, and (

b) on each subsequent conviction, to a fine of not more than $50000 or to imprisonment for not more than 2 years, or to both.

(6) At the time of sentencing a person convicted of an offence under this section, the court may order that, in addition to any otherpenalty, the offender must pay compensation or make restitution to the corporation for the actual loss or damage caused by or arising outof the commission of the offence including, without limitation, compensation or restitution for (

a) any money paid by the corporation as a result of the commission of the offence, including, without limitation, any money paid to oron behalf of the offender.

(8) Nothing in this

section precludes the corporation or any other person from taking any civil action or exercising any right ofrecovery against a person who commits an offence under this section. [6] The point of pursuing a restitution order in this

section is to avoid a civil trial by pursuing the rights of subrogation under s.42.1(8). [7] The parties have provided me with a number of cases: R. v. Eurosport Auto Co. Ltd., 2003 BCCA 281 , 2003B.C.C.A. 281; R. v. Greenwood, (July 2002) (Vancouver Registry No. 120367-2) (Prov Court); R. v. Ramsbottom, (July 5, 2004) (SurreyRegistry No. 136583-1) (Prov Court), and R. v. Dunning, 2001 Carswell B.C.1660 (Prov Court). [8] In R. v. Eurosport, the court was dealing with

section 42.1(2)(

b) of the Insurance (Motor Vehicle) Act R.S.B.C. 1996 (as it thenwas) with respect to payment for goods and services. That case dealt with whether the legislation itself was ultra vires the Province. The court upheld the validity of the legislation and specifically addresses the purpose of the legislation at paragraphs 26 and 27: 26 The insurance fund established by the Province is for the benefit of all persons who have legitimate claims under the scheme. Theimportance of accurate, honest, and good faith conduct to the integrity of the insurance plan is obvious.

The plan must of necessity relyon the honesty and integrity of the persons who participate in it through the provision of goods and services or the making of a claim. Iam of the opinion that the

section was enacted in relation to this program, namely, to provide a penalty that would assist in thefurtherance of a valid provincial purpose. Both the penalty and the repayment provisions of this

section are integral parts of the insurancescheme. The respondent auto body shop applied for and was granted a vendor number to bring itself under the scheme and is subject toit. 27 The deleterious effect of insurance fraud on the program established by the Province has been noted in several contexts. For

example, in a civil action for fraud, Proudfoot J. (as she then was), in considering an award of punitive damages stated: The defendants have committed a fraud on the Insurance Corporation of British Columbia. They have attempted to extract sums of money from an insurance program that is in place for the benefit of all of the people of British Columbia. As I said in my original judgment [Sanghera v. Thind, [1987] B.C.J. No. 62 ] "nothing can destroy such a scheme more easily and more rapidly than abuse of that system, particularly when it is as artfully attempted as it was in the case at bar".

Not only must this type of claim be discouraged but it must be stopped if the system is to survive. (Sanghera v. Thind, [1989] B.C.J. No. 1244 at page 4 ; varied on appeal: [1991] B.C.J. No. 766 (punitive dam ages of $25,000 reduced to $15,000.) [ 9 ] The difficulty in this case is not whether Mr. Folland falls under s. 42.1(2)(a). He has pleaded guilty to that offence. The issue is the wording of (6): “the actual loss or damage caused by or arising out of the commission of the offence”. In this case, there is no such loss.

The reference is not to the loss arising from the accident, but the loss arising from the offence. Mr. Folland got no benefit from his lie. I.C.B.C. has suffered no loss. It has paid out in accordance with the insurance policies. There will be adjustments made and Ms. Craig will have to pay a different deductible. However, there has been no loss as a result of the lie. [ 10 ] In R. v. Greenwood , the driver failed to remain at the scene of an accident. He then provided the Insurance Corporation of British Columbia false and misleading information material to a claim. In that case, Mr.

Greenwood was not the owner of the vehicle but made some egregious and repeated avoidance tactics. A considerable sum of money was paid out by I.C.B.C. as a result of the claim. In that case, Mr. Greenwood did not dispute the payment of restitution but was opposed to the fine the Crown sought. In short, the facts are nothing like this case. Mr. Greenwood was the direct recipient of the benefits of this false or misleading statement. In that case, the appropriate fine imposed by the court was $3,000 based upon a range of cases before the court of $3,000 to $4,000.

The order for restitution was also made and it was considerable. [ 11 ] In R. v. Ramsbottom , the accused person contacted the Insurance Corporation of British Columbia to advise them that he was in fact the driver and at fault at the time of the accident after having first made a false and misleading statement. He was employed as a cook earning a gross income of about $1,500 per month. A restitution order was made at that time in the sum of $3,686.36.

It seems that his father may have been the owner of the vehicle as a restitution order was made in favour of his father as well as the Insurance Corporation of British Columbia for other payments made. The court also considered the series of cases where the range of fine was between $1,000 and $4,000. The court considered the limited financial ability of Mr. Ramsbottom and the resultant estrangement from his family in imposing a $2,000 fine. [ 12 ] That case did not consider the issue before me. In R. v. Dunning , Mr. Dunning was also not the registered owner. The vehicle belonged to his common-law spouse.

He rear-ended a vehicle making an improper left-hand turn but then left the scene of the accident. Both he and his partner made a false claim that the vehicle was stolen. It was only after the investigation uncovered the lie that both the accused and his spouse admitted they made up the story. They had made up the story because, as a result of his injuries, the accused was unsure of what had occurred in the accident. In that case, the court found that, while the accused made a false statement, it was not for personal gain.

He was confused after the accident which led him to leave the scene but panicked the next day when he realized his actions were wrong. I.C.B.C. was not defrauded of any funds. The court ordered that the appropriate disposition was a fine of $3,000. The court declined to make an order for restitution but there was an outstanding civil action and the amount to be paid out by I.C.B.C. was uncertain. The court did not address, therefore, the definition of “loss” as I am now asked to do. [ 13 ] In this case, it is not alleged that Ms. Craig made any false statement herself or participated in Mr.

Folland’s false statements to I.C.B.C. No one has suffered an actual loss as a result of the lie. In fact, I.C.B.C. had to readjust deductibles in order to reflect the actual outcome. Mr. Folland stood to gain nothing either way. [ 14 ] The offence

section has two functions. It provides for a fine for the act of lying. It also provides for restitution where that lie has resulted in a loss. Where there has been no loss, the court can only impose a fine. There can be no other

interpretation on the plain reading of this section. Even if there were any ambiguity – and I find there is not – this is a penal

section and

interpretation would have to be resolved in favour of Mr. Folland. [ 15 ] The question then becomes what is the appropriate fine in this case. The fine must be proportionate to the loss. This was not a serious accident. Mr. Folland lives with his parents and suffers from the anxiety disorders I have referenced. He is on a disability pension and earns $800 per month. He pays room and board of $500 per month. Mr. Begin submits that the appropriate fine would be in the neighbourhood of $500 to $1,000 as a proper deterrent. The Crown seeks a fine of $2,000.

Certainly a fine of $2,000 is on the lower end of the scale provided for in the Act . It is also a significant deterrent to those who might otherwise lie in order to avoid whatever embarrassment or censure from their families and friends they may have incurred. It is, in my view, the upper end of a fine range for those who are in Mr. Folland’s circumstances where no actual loss has occurred. However, the $1,000 fine is equally as deterrent in these circumstances as a $2,000 fine. Such a fine will be of significant impact to Mr. Folland. [ 16 ] I impose a fine of $1,000. There is a victim fine surcharge as well.

Mr. Folland will have one year to pay both. ________________________ S.D. Frame Provincial Court Judge