Library:
Wilfully False Statement Voids Insurance Claim
Published in the February 2008 issue of Litigation Notes - View Article
Summary: Denial of coverage on basis of fraud. While fraud not proven, coverage denial upheld due to false statement by insured
Jasjot Gill was the owner of a 1996 Ford Mustang. On the evening of February 13, 2004 it was stolen from in front of his house. It was found by the police at about 10:20 p.m. and it had been gutted and destroyed by fire.
Mr. Gill made a claim with the Insurance Corporation of British Columbia (ICBC), He was interviewed by an ICBC representative and he told her that he had spent the evening of the theft with friends at Boston Pizza watching the hockey game. He was asked to produce a receipt from Boston Pizza. He claimed that he looked for it at home but couldn’t find it so he went to Boston Pizza where he spoke to the manager, Mandeep Gill who was a good friend of his. Mandeep provided him with a copy of a receipt but told him that he was not entirely sure that it was the receipt for the meal consumed by Gill. Nevertheless Gill sent it to ICBC.
The ICBC representative advised Gill that the receipt disclosed that all purchases had taken place between 12:45 a.m. and 1:19 a.m. so it did not cover the period of time during which the car was stolen and destroyed. Gill claimed that this was the wrong receipt, because it showed that payment had been by Visa, whereas he and his friends had paid cash
Gill obtained a second receipt from Mandeep. On this occasion Mandeep faxed it directly to the ICBC. The second receipt wasn’t much better, as it also didn’t cover the period before midnight and didn’t mention the pitchers of beer that Gill claimed he and his friends had consumed.
ICBC appointed an investigator who uncovered other suspicious circumstances in connection with this theft. For one thing, the car was equipped with an immobilizer which would have had to have been by-passed for the car to have been stolen. There were a number of methods by which this could have been done but all of them were extremely complicated. The investigator ultimately concluded that the immobilizer was probably bypassed using a key and Gill was in possession of the only key. The investigator interviewed a number of Gill’s friends who were somewhat sketchy with respect to the details of that evening. No one seemed to be able to remember who was playing in the hockey game or what the final score was. Ultimately the investigator concluded that coverage should be denied on the basis of fraud.
In a case such as this, the claimant has the legal burden of proving that the loss falls within the terms of the insurance coverage. However, that burden is easily met. All that is required to establish a prima facie case is an assertion under oath that the vehicle was stolen. Gill was therefore able to discharge this burden.
Thereafter, the burden is on the insurer to establish fraud. Because fraud is a quasi- criminal allegation the burden is high. The Court concluded that the evidence produced by the ICBC was all circumstantial and was not sufficient to establish actual complicity by Gill in the theft.
However, the ICBC also relied on Section 19(1)(e) of the Insurance (Motor Vehicle) Act , which provides that an insured’s right to benefits is forfeited if the insured makes a “wilfully false statement with respect to a claim”. The Court cited caselaw which has held that there is deceit when a false representation has been made knowingly or without belief in its truth or recklessly, without caring if it is true or false. The Court found that Gill had made a wilfully false statement with respect to the first receipt. The Court did not accept his assertion that it was mere carelessness, because he knew its significance and went to considerable trouble to get it. In the circumstances, it was not plausible that he would not have looked at it carefully before submitting it. The Court also found that the false statement was material in the sense that it was capable of influencing the insurer regarding the handling of the claim.
Gill v. Insurance Corp. of British Columbia, [2008] B.C.J. No. 75