Slawter v. ICBC Date:, 2011 BCPC 419

Citation: Slawter v. ICBC Date: 20110902 2011 BCPC 0419 File No: C10398 Registry: Port Coquitlam IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: COLIN SLAWTER CLAIMANT AND: INSURANCE CORPORATION OF BRITISH COLUMBIA DEFENDANT ORAL REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE ST. PIERRE Counsel for the Claimant: J.M. Sarophim Counsel for the Defendant: K. Powar Place of Hearing: Port Coquitlam , B.C.

Date of Hearing: September 2, 2011 Date of Judgment: September 2, 2011 [1] THE COURT: In this lawsuit the claimant, Colin Slawter, maintains that the Insurance Corporation of British Columbia (which I shall call "ICBC" from now on) wrongfully denied his claim to be compensated.

This followed after his vehicle, he says, was stolen on July 19th, 2009. [2] ICBC asserts that the denial was warranted as their investigation revealed that there were some inconsistencies in his reporting on certain items, such as the location of his keys, and that the circumstances of the alleged theft and subsequent destruction of that vehicle by fire leads one to the conclusion that Mr.

Slawter has some responsibility for that theft and that loss, and that they were warranted in denying the claim. [3] There are two aspects of the denial under s. 75 of the Insurance (Vehicle) Act , R.S.B.C. 1996, c. 231 which governs circumstances in which an insured's right to insurance money is forfeited. In that

section all claims by, or in respect of, the applicant, in this case Mr. Slawter, are invalid, and the right of an applicant claiming money under the plan is forfeited if under subsection(

b) of that

section the insured violates a term or condition, or commits a fraud in relation to the plan or the optional insurance contract, or subsection (

c) the insured makes a wilfully false statement in respect to the claim. [4] That is what is being relied upon by ICBC, so the defendant's position is twofold and it is set out in their written submissions being first that the alleged theft of Mr. Slawter's vehicle did not in fact occur on a balance of probabilities, and second, that the claimant made wilfully false statements regarding his claim and that invalidated his claim for indemnity under s. 75 of the Insurance (Vehicle) Act . [5] The burden of proof is not really in dispute here.

The parties are agreed that the claimant must establish his loss on a balance of probabilities and that he was covered as a first step. An evidentiary burden is then on the defendant, ICBC, to establish any affirmative defences like those found in s. 75 (

b) and (c). [6] The dispute really comes as to the applicable standard of proof at these two stages of the claim, where a claimant seeks to prove

loss and a right of indemnity, and the insurer is raising affirmative defences like fraud or wilful false statements. [7] The claimant says that at the first stage, Mr. Slawter only needs to show that he has made an assertion under oath with respect tohis loss and coverage and that that is enough to meet the standard of proof under stage 1. They rely on the law represented by para. 21 ofKolesnykov v. Insurance Corporation of British Columbia, 2004 BCSC 173 a decision of Justice Martinson as she tried to sort out theconfusion surrounding the standard of proof.

Paragraph 21 reads. [21] I note that in 1993, Chief Judge Baird Ellan correctly described what the claimant must do to meet the onus upon him or her atstep one. A simple assertion under oath or affirmation that the vehicle is taken without the claimant's consent is sufficient to prove thatthe claim comes within the coverage [this was on a theft allegation]. In Wong v. ICBC, [1993] B.C.J. No. 2941, Judge Baird Ellan said: … The onus with respect to establishing the theft would be satisfied by his mere assertion that the vehicle went missing without hisconsent.

Clearly, this would establish a prima facie case for a criminal purpose. [Then Judge Baird Ellan refers to a case called Boyle v. Yorkshire Insurance.] [8] That statement has been said to outline what the standard of proof is of stage one. [9] For the second stage, the claimant asserts that because ICBC is alleging a serious fraud, the Court should carefully scrutinize theevidence tending to show that and that the evidence required is clearer and more cogent than otherwise would be in order to meet thebalance of probability test in para. 44 of the Bevacqua v. ICBC, 1999 BCCA 553 case. Mr.

Justice Finch says in para. 44: [44] It must be remembered that allegations of fraud against an insured are quasi-criminal in nature, and if proven could affect theinsured's life well beyond the outcome of his insurance claim. Such serious allegations call for heightened scrutiny of the evidence by atrial judge, before being satisfied that an allegation of fraud has been proven on a balance of probabilities: see Continental InsuranceCo. v. Dalton Cartage Co., supra and Hanes v.

Wawanesa Mutual Insurance Company, (SCC), [1963] S.C.R. 154. [10] Justice Finch there refers to heightened scrutiny of evidence by a trial judge before an allegation of fraud can be proved on thebalance of probabilities when raised by the defendant insurer. [11] That passage has been characterized by some of the cases as equating to a higher standard of proof than mere tipping of thescales, I believe.

That statement was clearly consistent with the law at the time regarding the degree of standard of proof required in sucha case. [12] The authorities seem to be to the effect that what is required as proof on a balance of probabilities in those circumstances wasevidence heavily weighted in favour of the proposition asserted although not requiring that it go as far as proof beyond a reasonabledoubt as the test is in a criminal case. [13] That particular proposition goes way back and I refer to a case called Dunn v.

Darbyson (1960), (BC SC), 31W.W.R. 422 where they actually referred to an old 1956 case called Hornal v. Neuberger Products Ltd., [1956] 3 W.L.R. 1034, [1956]3 All ER 970. That case refers to the Court of Appeal in England and the words of His Lordship Judge Denning where he said: The more serious the allegation, the higher degree of probability that is required but it need not in a civil case, reach the very highstandard required by the criminal law. [14] That caused confusion obviously. Confusion abounded: was there or was there not a shifting standard of proof in these kinds ofcases?

Did proof on a balance of probabilities mean different things depending on who had the burden and depending on the stage theywere at? [15] The defence argues that F.H. v. McDougall, 2008 SCC 53 has essentially overruled previous cases that seemed to suggest thisvariable standard of proof in cases where indemnification is being sought.

That case was a sexual assault case where the Court ofAppeal overturned the decision of the trial judge with respect to a sexual assault and whether it was proved or not because they said thetrial judge failed to consider the serious inconsistencies in the plaintiff's testimony in determining whether the sex assaults had beenproven to the standard of proof that was "commensurate with the allegation" and had failed to scrutinize the evidence in the mannerrequired.

That suggested that there was a different or higher standard when something serious is alleged; that a higher standard of proofis required. [16] The Supreme Court of Canada said in response to that that there is only one standard of proof in a civil case and that is proof on abalance of probabilities.

The Court said that there is only one legal rule that applies in all cases and that the evidence must be scrutinizedwith care by the trial judge in deciding whether it is more likely than not that an alleged event has occurred. [17] In other words, what the Supreme Court of Canada is saying is that trial judges are responsible for scrutinizing evidencecarefully regardless of whether there is a serious allegation of fraud or sex assault or something else. [18] That argument is best represented in my mind by the decision of Judge Woods in Hughes v. ICBC, [2010] B.C.J. No. 1771provided by counsel for the defendant.

At para. 13 Judge Woods said: [13] This review of Bevacqua and the authorities that have applied it -- as refracted through the lens recently held up by the SupremeCourt of Canada in its decision in McDougall -- compels two legal conclusions concerning the case at bar. They are that: (

a) Mr. Hughes must tender evidence sufficient to prove, on a balance of probabilities and nothing less, that his alleged losses anddamage fall within the scope of his policy coverage. If he succeeds in discharging that onus, then; (b) [This is the second stage that we talked about] ICBC must tender evidence sufficient to prove, on a balance of probabilities and

nothing more, that Mr. Hughes made wilfully false statements and misrepresentations in connection with his indemnity Claims in orderto have its affirmative defences succeed. [19] Counsel for the claimant referred to King v. ICBC, 2010 BCSC 1740 as superseding Hughes, supra, in time and level of court, asapproving of Bevacqua, supra, and Kolesnykoff, supra, and that line of cases.

Justice Pearlman in that case at para. 9 and onwardssummarizes the law: [9] As the insured, the plaintiff bears the initial burden of proof to show, on the balance of probabilities, that he has proven a losswithin the coverage alleged: Kolesnykov v. Insurance Corporation of British Columbia, 2004 BCSC 173, at para. 8. [10] The burden then shifts to the defendant insurer to establish, on a balance of probabilities, that the insured was in breach of thepolicy by driving his vehicle when not qualified and authorized to do so, and that he made a wilfully false statement to the defendant:Bevacqua v.

The Insurance Corporation of British Columbia, 1999 BCCA 553, at para. 24. [20] Justice Pearlman goes on as well to say: [11] There is a single standard of proof in all civil cases, proof on a balance of probabilities.

In all civil cases the trial judge mustcarefully scrutinize the relevant evidence to determine whether it is more likely than not that an alleged event occurred: F.H. v.McDougall, 2008 SCC 53 , [2008] 3 S.C.R. 41, at paras. 40 and 41. [21] By referring to Bevacqua, supra, and Kolesnykov, supra, in that context, it does not mean obviously that the Court adopts theentirety of those cases in those passages.

Those passages are really consistent with McDougall, supra, and Hughes, supra and I find thatthey are not in conflict with those cases. [22] Justice Pearlman also commented on false statements at paras. 109 and 110. [23] Justice Pearlman refers to Petersen v. Bannon, (BC CA), [1993] B.C.J. No. 2357, 84 B.C.L.R. (2d) 350(B.C.C.A.) and quotes two paragraphs from that case about wilful acts and how a wilful act is one done intentionally, knowingly, andpurposely, without justifiable excuse. A wilful act is to be distinguished from

an act done carelessly, thoughtlessly, heedlessly, orinadvertently. A wilful act differs essentially from one done negligently, and he also quotes from Petersen v. Bannon that: "The onus ison the insurer to prove on a balance of probabilities that the statements in question were wilfully false".

The next sentence is whatcauses again all the controversy and he says "Because the allegations are serious, the judge is justified in scrutinizing the evidencecarefully and cogent evidence will be required to support an allegation of dishonesty". [24] Due to what I have already said about the singular standard of proof, the instruction to scrutinize evidence carefully in my mindapplies in all civil cases and that is what McDougall, supra, says and it only goes to the extent of whether the assertion has beenestablished on the balance of probabilities. Every judge in every case should scrutinize evidence carefully.

Every judge in every caseshould be cognizant of the burden that has to be established. [25] That takes us to the issues in this case. I have heard evidence from Mr. Slawter and from his common-law spouse. For thedefence, I have heard evidence from Mr. Slawter's sister Theresa, the investigator in this case, and also the adjuster in this case, Mr.Craig and Mr. Forsythe. The Court has reports from a locksmith, from a fire expert, and a number of admissions have been made. [26] I will review portions of the relevant evidence, but not all of it. [27] In this case, Mr.

Slawter says that he had a vehicle, a 2002 Chrysler 300M, and he says that the car did not pass AirCaresometime before the loss, so he was having to buy temporary permits for it from time to time. [28] On the date in question, July 19th, 2009, the car was covered by a temporary permit. He says that on that day he went to pick uphis brother, Mr. Izzard, and went to a friend's house named Dolan in Surrey. They stayed there for some time, arriving home aroundsupper time which was somewhere around 6:00 p.m. or 7:00 p.m. [29] He parked the vehicle in an underground garage, using his fob to open the garage.

He could not remember whether the door wasclosed or not on that occasion, but in any event he parked in the underground garage, and he was sure when he got out of the vehicle helocked the car with his key fob. He has two of them because he had a factory alarm and one that he had installed himself. In any event,he locked the vehicle, made sure it was secure, and had to do that quickly because he ran inside as he had to go to the washroom verybadly he said. [30] Later on in the evening he said he casually noted that his keys were not where he normally places them by his wallet.

Theevidence is somewhat vague about what happened at that time, but essentially he had a cursory look around for the keys, could not seethem, but was not worried about the fact that they were not immediately visible because he said his children, particularly one child atwo-year-old at the time, used to grab the keys and play with them. So he was not particularly concerned that they were not visible atthat time. [31] Later on in the evening around 11:00 o'clock he got a call from the police asking him if he knew where his car was and tellinghim his car was on fire.

He said he knew he had parked it in the underground parkade, went to check on it, and sure enough it was notthere. [32] He asserts he did not give anyone permission to drive the vehicle; that when he found out it was missing it was only by a callfrom the police, and that in trying to retrace his movements that evening and the whereabouts of his keys, he came to the conclusion inhis mind it was at least possible that he had dropped the keys on his way from the car to the house.

In any event, he just could not findthe keys after a certain time that evening, and after he got a call from the police it is clear that he did a more extensive search for thosekeys and he could not find them. To this day, he cannot find them.

[33] After considering all the evidence in determining whether he has satisfied the Court on a balance of probabilities that he suffered a loss, that is, a stolen vehicle, it is necessary to consider the evidence that was led as well by the defence.

The Court must look at all of the evidence. [34] The submission of the defendant is that Theresa Slawter's evidence at least raises an inference that the vehicle was stolen sometime before he said it was stolen and that he only alleges it was July 19th because that is when he had insurance coverage. [35] The defendant asserts that he drove the vehicle on July 19th and that he said he spent the day with Izzard at Dolan's house; that neither individual was ever called to testify to corroborate that story and I am asked to draw an adverse inference from the lack of evidence presented. [36] There are inconsistencies within Mr.

Slawter's version of the events to ICBC and to the police later acknowledged and the whereabouts of the keys. ICBC says that is an indication that Mr. Slawter has been complicit in the theft of his vehicle. [37] In considering all of the evidence, I have to say there is no evidence to refute or to contradict Mr. Slawter's claim that he was driving the vehicle on July 19th and that he was home that evening and that his vehicle was missing later. [38] There is suspicion; there are facts that were brought out by the defence and inconsistencies within the story and version of Mr.

Slawter and various witnesses that could lead one to conclude that there is suspicion about how this vehicle went missing, but in my mind he has led enough evidence to prove that he has established on the balance of probabilities that he was covered that day and that he suffered a loss. [39] I am convinced that Mr. Slawter had a valid policy of automobile insurance on July 19th, 2009, that he suffered a loss on that day.

There is only speculation to suggest otherwise. [40] I come to this conclusion not simply because he testified under oath that he suffered a loss, in fact if those earlier cases stood for the proposition that that was enough, then they are wrong. The Court must consider all of the evidence. I have to be convinced on a balance of probabilities that Colin Slawter suffered a loss and is entitled to compensation under his policy on the date of the loss. [41] In this case the question comes down to whether the defendant has met, on a balance of probabilities, that there was a breach in terms of a policy of insurance.

Again in my mind looking at all of the evidence that the defence has pointed to with respect to this matter, what it all boils down to is there is lots of speculation involved, there are lots of reasons to be suspicious, but the evidence has to meet a clear standard and that is the standard of balance of probabilities that under s. 75 (b)and (

c) of the Insurance (Vehicle) Act it has been established that there was fraud, that there was misleading and wilfully false statements that was material and capable of affecting the insurer's model. [42] With respect to the fraud, I do not think that any evidence has established that. There is certainly evidence capable again of raising a suspicion, but there is no clear and cogent evidence that meets the standard of a balance of probabilities.

By using those words "clear and cogent" again I do not mean to say that that is some kind of different standard; the evidence has to be clear and cogent in any case where a standard of proof has to be met on a balance of probability. [43] Whether Mr. Slawter made wilfully false statements that were material, I find the statements that he did make that were vague and perhaps inaccurate have not been proved to have been made wilfully. Memories suffer from passage of time.

They suffer from a number of different human foibles and weaknesses, but in this case I listened carefully to all of the evidence and I could not conclude at all on the balance of probabilities that Mr. Slawter made in the course of this claim and its investigation any wilfully false statements to the Insurance Corporation of British Columbia, and on that basis I have to find in his favour, that he is entitled to be indemnified for his losses. [44] The issue comes down to the relief sought. It is agreed that $8,256.80 is the value of the vehicle and it includes deductible and applicable taxes.

That is to be awarded to Mr. Slawter. [45] I had some difficulty with the cost of the rental vehicle, but in light of the fact that I found he was improperly denied coverage, he is entitled to any reasonable costs that were in mitigation of his loss since the denial led directly to the loss of money that he had to spend on a vehicle rental. [46] The only difficult part about that is there is no receipt but there is evidence that he paid $2,427.54 to Hertz Corporation during that period of time. Mr. Forsythe of ICBC told him that he could get a rental vehicle from Hertz.

In fact, Hertz was the company that was talked about. He said he told Mr. Slawter about a policy limit, but again it seems clear that in light of the improper denial he should be entitled to the reasonable cost of the rental vehicle in the amount of $2,427.54 [47] As well, I have looked at the list of costs filed by the claimant and I think these fall under reasonable costs in a Provincial Court civil jurisdiction. As you know, not all costs are awarded in these kinds of cases, but unless I have some submissions from Ms. Powar, they look reasonable to me with respect to the costs.

Do you have any submissions on the disbursements? [48] MS. POWAR: Your Honour, we would just argue that per Rule 22, the claimant is entitled to fees and expenses, so any photocopies, fax, those types of fees we would request be excluded and have this just restricted to fees and expenses, filing and service fees. [49] THE COURT: Okay, what do you say about that Ms. Sarophim? [50] MS. SAROPHIM: Your Honour, that

section you referred to actually also includes any reasonable expenses incurred in the cost of bringing this matter to trial. I would argue that any-- sorry, I meant that any -- all the expenses put forth to you are reasonable with the expectation that such matter being brought to trial in the instance of fact couriering things back and forth between counsel, photocopying, those are all necessary costs generally.

[51] THE COURT: Okay. All right. I think I have to agree with that that the reasonable costs, in other words disbursements that are outside of things like lawyer's fees, seem reasonable under the circumstances. I think the disbursements should be granted as well in the sum of $911.38. There will be Court ordered interest from the date of filing which the Registry will calculate. [ORAL REASONS FOR JUDGMENT CONCLUDED]