ICBC Law

Useful reasons for judgement were released this week by the BC Court of Appeal addressing the circumstances when a motorcycle learner will be held in breach of insurance for not being supervised by a qualified driver.

In today’s case (Hagen v. ICBC) the Plaintiff had a valid 6L learner’s licence.  One requirement of a learner’s motorcycle licence is for the learner to be supervised while riding by a fully licenced motorcyclist.  The Plaintiff was being supervised by his wife who had a valid motorcycle licence.   While riding in Vancouver in 2008 the Plaintiff was momentarily out of the view of his wife.  At this time he was struck by a truck making a u-turn and was seriously injured.

The Plaintiff applied to ICBC for no-fault benefits but ICBC refused to pay these arguing that the Plaintiff was in breach of his insurance for failing to comply with section 30.06 of the Motor Vehicle Act Regulations which read in part as follows:

Section 30.06 of the Motor Vehicle Act Regulations provides:

(4)        A person to whom a Class 6L licence is issued, … must not operate a motorcycle unless the person is under the direct supervision of another person who

(a) is at least 19 years of age, and

(b) holds a valid and subsisting driver’s licence, other than a learner’s licence … of a class that permits him or her to operate a motorcycle.

…

(5)        For the purposes of subsections (4) … direct supervision means that the person supervising can, at all times, see the other person while the other person is operating the motorcycle.

ICBC argued that “however momentary the separation of the vehicles may and consequent loss of sight may be, such loss of sight…negates eligibility for Part 7 Benefits“.  The trial judge disagreed with ICBC and ordered them to pay the Plaintiff no-fault benefits finding that ICBC’s interpretation would impose “financially devastating consequences on a person as a result of events over which he or she had no control”

ICBC appealed and failed.  In dismissing ICBC’s arguments the BC Court of Appeal provided the following useful reasons addressing the requirement of learner motorcyclists to be supervised:

[21]         One may ask whether it was intended that a learner motorcyclist would be in breach of the supervision requirement when, having arranged for supervision, the supervisor acted contrary to agreement and took another route? In my view the answer is no.

[22]         This discussion is akin to the discussion of “due diligence” urged upon us by the appellant in saying we need not concern ourselves with the “offence” consequences of the interpretation it advocates. It says Mr. Hagen could answer a charge of breaching the supervision requirement by saying that he demonstrated due diligence in his attempt to comply, and that his non-compliance was outside of his control. In other words, it says a charge of breaching s. 30.06(4) would be treated as a strict liability offence. If that is the case, why, then, should other consequences, perhaps more grave, adhere to Mr. Hagen in a civil context because his supervision failed in spite of his reasonable efforts to comply with the section?

[23]         Section 30.06(4) is directed entirely to the behaviour of the learner, and in my view s. 30.06(5), in articulating the requirement of observation at all times, must be read as focusing upon the behaviour for which the learner can be responsible. Taking this approach, s. 30.06 of the Regulations, read in context, requires the learner to take all reasonable steps to ensure he (or she) is being supervised in compliance with the Regulations. This requires the learner to arrange for supervision by a person who commits to keeping him in sight at all times, and requires the learner to refrain from driving where it is not reasonable for him (or her) to think such supervision is occurring. I readily acknowledge that there will be circumstances in which a supervisor who fails to follow may nullify the learner’s Part 7 benefits, as in a failure to keep sight of the learner for such a period of time or distance that the learner, acting reasonably, should have become aware the plan for supervision had been compromised. Thus there will be a factual question: did the learner take all reasonable steps to ensure he was being supervised? In this case that translates to the question: should the learner have been aware he was not in sight of the supervisor?

[24]         This is a case in which the supervisor, not the learner, made a mistake, a mistake which was so near in time and distance to the accident it was open to conclude Mr. Hagen could not be faulted for failing to detect his loss of supervision. The judge described the lack of supervision as momentary. He referred to evidence that Mr. Hagen had seen the supervisor behind him at the previous intersection. The judge considered the evidence of the street design and the evidence that the many stop signs had permitted some vehicles to fall in between Mr. Hagen and his supervisor. I consider it was open to him on the evidence to conclude that this was a case of loss of contact that did not put Mr. Hagen in breach of the Regulations.

[25]         It follows I would dismiss the appeal.

Reasons for judgement were released today demonstrating some of the real world consequences drivers with a learner’s licence could face if they are found to be in breach of their policy of insurance.

In today’s case (King v. ICBC) the Plaintiff was involved in a 2007 BC motor vehicle collision.  4 vehicles were involved in the crash.  The Plaintiff was insured with ICBC and they paid out over $36,000 with respect to the claims made from the crash.  At the time of the collision the Plaintiff had a Class 5L learners licence and was operating his vehicle “without a qualified accompanying passenger“.   As a result he was found in breach of his insurance.   He was found to be the at fault motorist and ICBC asked that he pay them back the over $36,000.

The Plaintiff sued ICBC arguing that he was not at fault and that he was not in breach of his insurance.  ICBC counterclaimed for $36,613.33.  Prior to trial ICBC made an offer to settle their claim against the Plaintiff for $33,000.  The Plaintiff declined this offer and proceeded to trial.  Ultimately Mr. Justice Pearlman found the plaintiff was the at fault motorist and that he was in breach of his policy of insurance.  He ordered that he pay back ICBC the funds they paid out with respect to the collision claims.

The Court went further and ordered that the Plaintiff pay ICBC double costs for failing to accept their pre trial offer.  In reaching this judgement Mr. Justice Pearlman provided the following reasons:

[30]         The plaintiff’s claim failed as a result of the court finding that neither his testimony, nor that of his witness, Ms. Gromova, was credible.  The court found that the plaintiff had wilfully made a false statement respecting Ms. Gromova’s presence in the vehicle at the time of the accident.

[31]          The over-riding principle is whether, if the Offer to Settle had been accepted, there would have been significant, or any savings in litigation costs to the parties or to the court: LeFler v. Anderson, 2008 BCSC 1563, at para. 18. Here, acceptance of the offer would have spared both parties the significant costs of a four day trial where the amount in dispute was, exclusive of court order interest, less than forty thousand dollars.

[32]         Taking all these factors into consideration, I conclude that an award of double costs should be made in this case, and is consistent with the objective of deterring unreasonable conduct in litigation.  I find that the plaintiff was entitled to a reasonable time to consider the defendant’s Offer to Settle, following its delivery on September 24, 2010.  Taking into account the disclosure of the will say statements of the defendant’s witnesses on September 29, and allowing Mr. King a reasonable time to consider his position, and the defendant’s Offer following the delivery of the will say statements, I find that the defendant is entitled to an award of double costs  commencing October 7, 2010.

RESULT

[33]         The defendant will recover its costs and disbursements of this action from its commencement until October 7, 2010.  Those costs will be at Scale B.

[34]         The defendant is entitled double costs commencing October 7, 2010 and to disbursements incurred after October 7, 2010.  Disbursements will be allowed in the amount incurred, rather than at a double rate.

Reasons for judgement were released this week by the BC Supreme Court awarding a Plaintiff just over $415,000 in total damages as a result of serious injuries occurring in a motor vehicle collision.

In this week’s case (Eggleston v. Watson) the pedestrian Plaintiff was struck by a vehicle driven by the Defendant.  The Defendant had just left a pub and had a blood alcohol level well over the legal limit.  the Defendant was criminally convicted for driving with an unlawful blood alcohol limit.

As a result of this criminal conviction the Defendant was in breach of his ICBC insurance.  He defended the lawsuit personally and ICBC defended as a statutory third party.

The Defendant never saw the Plaintiff (who was walking in the Defendant’s lane of travel in the same direction) prior to hitting him.   Despite this, and despite the criminal conviction, both the Defendant and ICBC argued that the Plaintiff was mostly at fault for this incident.  Mr. Justice Davies disagreed and found that the defendant was at fault holding that “(his) ability to operate a motor vehicle at the time that he struck (the Plaintiff) was so impaired by his consumption  of alcohol that his actions in so doing were not only negligent, but grossly negligent“.

The Court went on to find that while the Plaintiff was in violation of s. 182 of the Motor Vehicle Act at the time of the crash for not walking on the roadway facing oncoming traffic, he was not partially to blame for this crash.  In reaching this conclusion Mr. Justice Davies reasoned as follows:

[70]        The question is whether Mr. Eggleston’s own conduct in placing himself at some risk that a severely impaired driver would not see him in time to apply his vehicle’s brakes or otherwise avoid a collision requires an apportionment of some liability to him for his injuries.

[71]        In all of the circumstances I find, as did Kirkpatrick J. in Laface, that Mr. Watson’s conduct was so unforeseeable, and the risk of injury from Mr. Eggleston’s failure to take more care so unlikely that “it is simply not appropriate” to find that Mr. Eggleston was contributorily negligent.

[72]        If I am wrong in that conclusion, based upon the analysis and conclusions of Esson J.A. in Giuliani, I would assess Mr. Eggleston’s fault in failing to avoid the collision to be no more than 5%.

The Court then awarded the Plaintiff $170,000 for his non-pecuniary damages (money for pain and suffering and loss of enjoyment of life) for his serious injuries which included a mild traumatic brain injury (MTBI).  In arriving at this figure the Court provided the following reasons:

[145]     After considering the totality of the evidence in this trial including the medical evidence adduced by the parties, I have concluded that Mr. Eggleston has proven that it is more likely than not that he suffered a mild traumatic brain injury in the collision of June 9, 2009.

[146]     I also find that the mild traumatic brain injury he suffered is the primary cause of the emotional, social and cognitive difficulties he has exhibited and endured over the more than three years between the date of the accident and the start of the trial, and which will continue to impact his future suffering and enjoyment of life…

[157]     In addition to the mild traumatic brain injury that I find has been the primary cause of Mr. Eggleston’s past social, emotional, and cognitive problems as well his as continuing problems with serious headaches, all of which will likely continue to impact his future, as well as the balance difficulties that I find were caused by the collision, I also find that the evidence establishes on a balance of probabilities that Mr. Watson’s negligence caused the following physical injuries which Mr. Eggleston has suffered and from some of which continues to suffer:

1)        Significant soft tissue injuries and bruising which were ongoing until at least January of 2007 when he was seen by Dr. Travlos.

2)        A traumatic umbilical hernia which was successfully operated upon on May 29, 2007.

3)        Injuries to his right shoulder including a torn biceps tendon, impingement syndrome and a rotator cuff tear which were operated on without success on December 5, 2007, and which in the opinion of Dr. Leith, require further surgery.

4)        Injuries to his lower back which aggravated existing back problems from which he had largely recovered prior to the collision. Those lower back injuries have impacted on his ability to drive the water truck in his work for Mr. Palfi and in respect of which I accept Dr. Leith’s opinion of June 2, 2009.

[158]     In addition to those specific physical injuries, I accept the evidence of Dr. Travlos, Dr. Cameron, Dr. Smith and Dr. Bishop that Mr. Eggleston has suffered and continues to suffer from psychological problems arising from his brain injuries and the pain associated with the physical injuries suffered in the collision. That pain was chronic until at least June of 2009 but was relieved to a large extent by narcotic and other medications thereafter until Mr. Eggleston determined to wean himself off Dilaudid. He now again has more pain and is also likely suffering the continuing effects of withdrawal. However, his present work history convinces me that within the neurological and cognitive limits that may still compromise his recovery, his future suffering from chronic pain will likely be capable of amelioration with psychological counselling and pain management assistance without narcotic intervention.

[159]     In determining the appropriate award to compensate Mr. Eggleston for the injuries suffered in the collision, I have considered all of the injuries suffered by him that were caused by Mr. Watson’s negligence, their devastating effect upon his ability to enjoy the active life involving horses and his relationship with friends and family surrounding that lifestyle that he formerly enjoyed.

[160]     I have also considered the pain Mr. Eggleston has endured and will likely continue to endure at least at some level, the compromise of his role as the leader of his family and the loss of his self-esteem, the length of time over which he has already suffered those losses, the prospect of the continuation of those losses into the future, albeit at a less intense level than in the past, and the fact that he will again have to undergo surgery in an attempt to repair his shoulder injuries.

[161]     In addition, I have considered the situation that has existed since March of 2008 when Mr. Eggleston returned to work, in that the work he does drains him of energy so that his life has become somewhat one-dimensional, centering upon work and recovery from its daily effects upon him to the continued detriment of his ability to enjoy life.

[162]     Finally, I have considered all of the authorities which have been provided to me by counsel and which offer some guidance as to the appropriate range of damages for injuries such as those suffered by Mr. Eggleston but which are of course dependent on their unique fact situations.

[163]     I have concluded that in the totality of the circumstances an award of non-pecuniary damages in the amount of $170,000 will appropriately compensate Mr. Eggleston for his pain and suffering and loss of enjoyment of life caused by Mr. Watson’s negligence.

As I’ve previously written, when a lawsuit for damages is brought in the BC Supreme Court, the parties are required to make disclosure of certain relevant documents even if such disclosure is harmful to their interests.

In order to strike a balance between fulsome disclosure and privacy rights, the Courts have developed a law known as the “implied undertaking of confidentiality” which prohibits a party who receives this forced disclosure from making use of the documents/information outside of the lawsuit without consent of the other parties or a court order.  Reasons for judgement were released today by the BC Supreme Court, Kelowna Registry, dealing with this area of the law.

In today’s case (ICBC v. Titanich) the Defendant was involved in a motor vehicle accident and apparently injured another party named Swan.  Swan sued the Defendant.  ICBC apparently held that the Defendant was in breach of his policy of insurance and defended the lawsuit as a ‘statutory third party‘.  ICBC obtained a Court Order for disclosure of the RCMP records relating to the accident and then settled the Plaintiff’s personal injury lawsuit for some $346,000.  ICBC then sued the Defendant to recover the $346,000 on the basis that they alleged he was in breach of his insurance.

ICBC apparently relied on some of the information obtained in the RCMP files to base their decision to pursue the Defendant for repayment of the $346,000.  The Defendant brought a motion to dismiss the lawsuit arguing that ICBC “breached its implied undertaking of confidentiality in relation to the documents it obtained from the RCMP“:.

The Court ultimately dismissed the motion holding that while ICBC did indeed breach their implied undertaking, no remedy was necessary since ICBC would be granted judicial permission to use the RCMP records in the current lawsuit had they brought a motion seeking such an order.  In reaching this conclusion Mr. Justice Barrow summarized and applied the law of the “implied undertaking” as follows:

[13]        In Juman v. Doucette, [2008] 1 S.C.R. 157, 2008 SCC 8, Binnie J. addressed the scope of the implied undertaking and its underlying rationale. At para. 4, he wrote:

[4]        Thus the rule is that both documentary and oral information obtained on discovery, including information thought by one of the parties to disclose some sort of criminal conduct, is subject to the implied undertaking. It is not to be used by the other parties except for the purpose of that litigation, unless and until the scope of the undertaking is varied by a court order or other judicial order or a situation of immediate and serious danger emerges.

[Emphasis in the original]

[14]        The rationale for the rule is, in part, to promote complete and candid oral and documentary discovery which, in turn, advances the orderly and effective administration of justice. It does that by providing the litigant making discovery with some confidence that the material produced will be used only for the purpose of securing justice in that proceeding.

[15]        Given this rationale, it is worthy of note that the discovery in issue in the matter at hand did not emanate from a party to the litigation. It does not consist of either oral or documentary discovery produced by Mr. Spinks. It is, rather, information gathered by the police in a process entirely independent of this litigation. I note this not because it necessarily follows that documents produced by third parties are not subject to the implied undertaking but rather because it is a factor that may be taken into account in determining whether a remedy ought to be granted…

[17]        The next issue is whether the plaintiff has used the discovery. The “use” that the plaintiff has made of the information is limited to listing those documents in a list of documents. That constitutes “use” within the meaning of the rule (Chonn v. DCFS Canada Corp. dba Mercedez-Benz Credit Canada, 2009 BCSC 1474 at paras. 47‑52).

[18]        Assuming that the undertaking extends to documents produced by third parties to earlier litigation but relating to the conduct or affairs of a party to that litigation, I am satisfied that the plaintiff breached the implied undertaking.

[19]        In Juman, Binnie J. wrote this about the range of available remedies for breach of the implied undertaking:

[29]      Breach of the undertaking may be remedied by a variety of means including a stay or dismissal of the proceeding, or striking a defence, or, in the absence of a less drastic remedy, contempt proceedings for breach of the undertaking owed to the court…

Further, it may be that the breach can be remedied by precluding the party in breach from using the evidence in question. That was the remedy applied in Edgeworth Construction Ltd. v. Thurber Consultants Ltd., 2000 BCCA 453, 78 B.C.L.R. (3d) 200.

[20]        Another possible remedy, and the one sought in Chonn is removal of counsel of record for the party in breach…Voith J. concluded that the defendant was in breach of the implied undertaking but declined to grant a remedy. In doing so, he made four points. First, he noted that the documents were relevant. Second, he observed that had the defendant applied to obtain the court’s leave to make use of the documents, leave would have been granted. Third, he noted that although counsel ought to have made an application, his error was not, in all the circumstances, serious. Finally, and largely as a result of the above, there was no prejudice to the plaintiff. As a result, he ordered that the plaintiff produce the documents and that the defendants were at liberty to use them.

[21]        The same four observations apply in the case at bar. The documents are relevant. The outcome of an application to be relieved of the implied undertaking, had it been made, is predictable. Binnie J. commented on the manner in which a court’s discretion might be exercised when faced with such an application. At para. 35, he wrote:

[35]      The case law provides some guidance to the exercise of the court’s discretion. For example, where discovery material in one action is sought to be used in another action with the same or similar parties and the same or similar issues, the prejudice to the examinee is virtually non-existent and leave will generally be granted…

The example posited is this case. Next counsel’s conduct in this case is, if anything, less serious than that in Chonn. As in Chonn, plaintiff’s counsel in the present case raised the issue of the implied undertaking in his first conversation with Mr. Titanich’s lawyer. In doing so, he noted that he was of the view that he required the consent of the plaintiff in the previous action before disclosing the documents. He did not suggest that he needed Mr. Titanich’s consent presumably because Mr. Titanich was not a party of record in the earlier action. Mr. Titanich’s counsel did not suggest otherwise. She simply asked that the documents be forwarded to her. The understanding that Mr. Spinks had from the conversation with Ms. Roy was that they would each list the documents and that all he needed to do was obtain the consent of the plaintiff in the previous action. He obtained that consent and listed the documents.

[22]        Although for the reasons indicated, I think Mr. Spinks was required to obtain the consent of Mr. Titanich, in concluding otherwise, he was not acting in a cavalier manner but was rather proceeding carefully and on the basis of an analysis that appeared to have been shared Mr. Titanich’s own lawyer.

[23]        In all of these circumstances, there is, in my judgment, no need for any remedy.

While ICBC was not penalized for breaching the implied undertaking this case serves as a reminder that lawyers must respect the limits the law imposes on the use of documents which come within their possession through the compelled disclosure of the BC Rules of Court.  Failing to heed these restrictions can result in severe consequences as outlined in today’s case including removal from the case, exclusion of evidence or even dismissal of a lawsuit or a defence

Reasons for judgement were released today by the BC Supreme Court discussing whether a motorist has to stay at the scene of a single vehicle accident in British Columbia.

In today’s case (ICBC v. Pariah Productions Inc.) the Defendant vehicle was involved in a single vehicle collision when its driver struck the wall of a Wendy’s restaurant.   The motorist drove home after the collision without notifying anyone of what happened.

ICBC paid out the property damage claim and then sued the Defendant for their money back claiming that the motorist was in breach of an obligation to remain at the scene of the accident.  The trial judge disagreed and dismissed ICBC’s claim.  ICBC appealed and today’s case dealt with this.

Section 68(1)(a) of the BC Motor Vehicle Act in part requires “the driver or operator or any other person in charge of a vehicle that is, directly or indirectly, involved in an accident on a highway to remain at or immediately return to the scene of the accident“.

ICBC argued that the Defendant was in breach of this obligation.  The trial judge disagreed.  On Appeal, Mr. Justice Silverman found that “the trial judge did correctly decided this issue…I endorse the correctness of his analysis in paragraphs 16-19 of this Reasons for Judgement.”

The Trial Judge’s reasons which were upheld were as follows:

[16]      It is to be questioned whether or not s. 68(1) and then 68(3) are sections that deal with the same type of accident or whether they are distinctly two different types of accidents. Section 68(3) provides the duty of a driver in an accident is as follows:…

[17]      It is my view that 68(1) and 68(3) of the Motor Vehicle Act involve two different situations: … Sixty-eight (1) involves the situation where there is a car accident involving another vehicle and there is injury or loss to another person, be it the other driver or someone else. Section 68(3) however, involves a situation where there is only a single-vehicle accident, no persons are injured but there is damage to property only. So, the two sections are quite distinct from one another and the obligations on the driver involved in a 68(1) situation or a 68(3) situation are quite different.

[18] For 68(1) of the Motor Vehicle Act to apply in this case,it is my view that there had to be a situation where not onlywas there damage to or loss or injury to some other person, but there also had to be another driver involved. The reason I say that is that 68(1)(c) says that the driver involved in the accident must: produce in writing to any other driver involved in the accident and to anyone sustaining loss or injury, and, on request [to a peace officer or] to a witness … the information.  In my view, that section presupposes that he, the driver, has obeyed his obligation to remain at or immediately return to the scene of the accident. So 68(1), in my view, involves twocars and a situation additionally of someone sustaining lossor injury, be it that other driver or some third party,

whereas s. 68(3) in my view, only applies to a situation where

one driver is involved and he/she has caused damages to property on or adjacent to the highway, other than another vehicle. He then must take reasonable steps to locate and notify in writing the owner or person in charge of the property and send them the facts of the accident and provide other details.

[19]      In s. 68(1), there is a mandatory requirement that the driver involved in the accident remain at the scene or immediately return to the scene and he must produce in writing to the other driver and anyone sustaining loss, various pieces of information, whereas under s. 68(3), there is no provision that he must remain or that he must immediately return to the accident. Rather, it says that he must take reasonable steps to locate and notify in writing the owner or person in charge, of the fact that an accident has taken place. The fact that he is required under 68(3) to take reasonable steps to locate and notify in writing the owner or person in charge of the property, in my mind, means that it is not something that he is required necessarily to do “immediately”, whereas under 68(1), when he has an accident with another car and the other driver or the other driver’s property or even somebody else’s property, is damaged or lost, in that two-car accident, he has to stay there and “immediately” give the information.

I’ve written many times about the potentially steep financial consequences of being in breach of an ICBC Policy when an injury claim is made.

A frequent type of breach relates to misrepresenting who the principal operator of a vehicle is.   Reasons for judgement were released today demonstrating some of the consequences that occur when this type of a misrepresentation is knowingly made.

In today’s case (Deters v. Totovic) the Plaintiff was involved in a 2003 BC Car Crash.  She sued the owner and driver of the other vehicle involved (a mother and daughter respectively).  ICBC refused to provide coverage to the defendants claiming that they misrepresented who the principle operator of the vehicle was when they purchased their policy of insurance.  A Motion was brought before the BC Supreme Court asking the judge to decide if there was a misrepresentation at the time and therefore a breach of insurance.

Mr. Justice Smith decided that the Defendants did knowingly misrepresent who the principal operator of the vehicle was when purchasing insurance from ICBC.  A a result he held that the Defendants lost their right to indemnity from ICBC.

Mr. Justice Smith succinctly summarized the law relating to breach of insurance for principal operation misrepresentation as follows:

[5] Section 19(1)(b) and (e) of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231 [Act], as it was in force in 2003, said:

19 (1) If…

(b) an applicant for an owner’s certificate or driver’s certificate knowingly misrepresents or fails to disclose in the application a fact required to be stated in it,…

(e) an insured makes a willfully false statement with respect to a claim under a plan,

all claims by or in respect of the applicant or the insured are rendered invalid, and his or her right and the right of a person claiming through or on behalf of or as a dependant of the applicant or the insured to benefits and insurance money is forfeited.

[6] The regulations to the Act (now called the Insurance (Vehicle) Act) define the principal operator as “the person who will operate the vehicle described in an application for a certificate for the majority of the time the vehicle is operated during the term of the certificate.”

[7] The burden of proving that the insured knowingly misrepresented a material fact is on the insurer. The standard of proof is the civil standard of balance of probabilities. The question of whether or not there has been a knowing misrepresentation is to be determined on the basis of the circumstances that existed at the time the policy of insurance was issued:  Booth v. ICBC, 2009 BCSC 1346 at paras. 7-9.

Mr. Justice Smith pointed out that if the vehicle was insured with the daughter as the principal operator “the insurance would have cost approximately four times what was actually paid”.

The Court went on to make the following finding:

[28] In short, all of the evidence supports the inference, on the balance of probabilities, that (the Daughter) was, in fact, the principal operator of the vehicle during the period covered by the insurance certificate and was using it extensively for work purposes. That finding in itself does not necessarily mean that there was a breach of the insurance coverage because the question is whether or not there was a knowing misrepresentation at the time the policy of insurance was issued.

[29] At the time the policy of insurance was issued on June 25, 2003, (The Daughter) had been working in the T&F Sales job for approximately two months. The circumstances around the time the insurance policy was issued indicate that (the Mother) had to have known that (the Daughter) would be the principal operator of the Mazda—she needed it on a daily basis for her job. Therefore, I find that on the balance of probabilities, Smilja made a misrepresentation when she declared herself to be the principal operator in June 2003…

[31] I therefore find that there was a misrepresentation within the meaning of the Act and therefore the defendants’ right to indemnity for the plaintiff’s claim is forfeited pursuant to s. 19 of the Act. ICBC is also entitled to costs of this action.

What this ruling means, in practical terms, is that if the Plaintiff is successful in her lawsuit, ICBC would pay the judgement to the Plaintiff and then come after the Defendants personally for the damages they had to pay.  Depending on the severity of the claim the consequences could be anywhere from thousands to millions of dollars.  This case shows yet again that the short term financial advantages that can come with principal operator misrepresentation are far outweighed by the financial consequences of being in breach of a policy of insurance.

I’ve previously written about the significant financial consequences that can come with being in breach of your ICBC Insurance and reasons for judgement were released today by the BC Supreme Court, Penticton Registry, demonstrating the consequences of ‘breach’ in action.

In today’s case (Booth v. ICBC) the Plaintiff was the registered owner of a Camaro.   When purchasing her insurance with ICBC she declared that she was the principle operator.  In 2004 her son was driving the Camaro and was involved in an accident.  He injured a passenger in another vehicle in this collision.  ICBC payed out over $37,000 in settlement of the passenger’s injury claim.

ICBC came to the conclusion that the Plaintiff misrepresented who the principle operator was when she purchased insurance and concluded that the Plaintiff’s son was in fact the principle operator of the Camaro.  ICBC told the Plaintiff she was in breach of her insurance and demanded repayment of the $37,000.  The Plaintiff sued ICBC for a declaration that she was not in breach of her insurance.

Mr. Justice Barrow sided with ICBC and concluded that the son in fact was the principle operator.  In so concluding he summarized the law relating to principle operator misrepresentations as follows:

[5] The phrase “principal operator” is defined in s. 1 of the Insurance (Motor Vehicle) Regulation, B.C. Reg. 447/83, as follows:

“principal operator” means the person who will operate the vehicle described in an application for a certificate for the majority of the time the vehicle is operated during the term of the certificate;

[6] Section 19 of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231, deals with forfeiture of claims. It provides, in part, as follows:

19(1) If

…

(b) an applicant for an owner’s certificate or driver’s certificate knowingly misrepresents or fails to disclose in the application a fact required to be stated in it…

all claims by or in respect of the applicant or the insured are rendered invalid…

[7] It is common ground that an applicant for an owner’s certificate by which insurance is acquired under the Act is required to identify the principal operator of the insured vehicle. It is also common ground that the defendant bears the burden of proving, on a balance of probabilities, that the insured knowingly misrepresented a fact contemplated by s. 19(1)(b). (See generally Gill v. Insurance Corp. of British Columbia, 2006 BCSC 1397 at para. 20, and Rai v. ICBC, 2005 BCSC 92 at para. 3.)

[8] Because an assertion that an insured knowingly misrepresented a material fact is tantamount to a claim of fraud, until the Supreme Court of Canada’s decision in F.H. v. McDougall, 2008 SCC 53, it was thought that in order to establish such a claim, it was necessary that it be proven on something more than a mere balance of probabilities and/or that the evidence said to support it be subjected to a heightened scrutiny (see Bevacqua v. I.C.B.C., 1999 BCCA 553 at para. 44). In F.H., the court concluded at para. 40 that:

…it is time to say, once and for all in Canada, that there is only one civil standard of proof at common law and that is proof on a balance of probabilities. Of course, context is all important and a judge should not be unmindful, where appropriate, of inherent probabilities or improbabilities or the seriousness of the allegations or consequences.

[9] Finally, whether an insured has knowingly misrepresented a material fact is to be determined on the basis of the circumstances at the time the policy of insurance was issued (see s. 19(1)(b) and Rai at para. 14).

He went on to conclude that the son was the likely principle operator.  This case is worth reviewing in full for anyone interested in the types of considerations the courts make when making such a determination and in seeing the evidence that ICBC can lead in proving who the principle operator of a vehicle is.

Misrepresenting the principle operator of a vehicle may save a few bucks but this case gives over 37,000 reasons why doing so is not a good idea.

When you purchase a contract of insurance with ICBC one of the things that must be disclosed is who the principal operator of the vehicle will be.  Depending on the answer the rate of insurance may vary.

If a consumer misrepresents who the principal operator is this can result in a breach of insurance and if this occurs ICBC will not be responsible to honour the policy of insurance if a claim is made.

Reasons for judgement were released today by the BC Supreme Court (Lexis Holdings International Ltd. v. ICBC) demonstrating the potential consequences that can flow from a principal operator misrepresentation.

In today’s case the Plaintiff company leased a BMW.  When purchasing insurance from ICBC the company’;s representative declared that ‘there was no principal operator of the BMW’.

The vehicle was subsequently vandalized and under the policy of insurance ICBC would have been expected to pay $33,090.35 for the damages.  When the Plaintiff claimed payment from ICBC under the policy of insurance ICBC declined to pay claiming that the Plaintiff ‘knowingly misrepresented a material fact regarding the principal operator’.

Madam Justice Arnold-Bailey of the BC Supreme Court agreed with ICBC and found that the Plaintiff’s representative knowingly misrepresented who the principal operator of the vehicle was at the time the insurance was purchased.  As a result of this the Plaintiff’s claim was dismissed and ICBC were awarded their costs for trial.

In reaching this conclusion Madam Justice Arnold-Bailey summarized the law as follows:

[16]            The general rule in insurance claims, stated at ¶24 of Bevacqua v. I.C.B.C., 1999 BCCA 553, is that once an insured has shown that the loss alleged falls within the perils insured against under the terms of the policy coverage, the onus falls on the insurer to prove any affirmative defences, including fraud.  In Kruska v. Manufacturers Life Insurance Co., [1984] B.C.J. No. 2812 (S.C.), Finch J., as he then was, stated the test for fraud in civil cases at ¶41:

41        The accepted test of actual fraud in a civil case derives from Derry v. Peek (1889), 14 A.C. 337. There must be a false representation, made knowingly, without belief in its truth, or recklessly, without care whether it is true or false. Nothing less than this will suffice for the defendant to succeed in this case.

[Emphasis added]

It is clear from this test for fraud that knowingly making a misrepresentation (per s. 19(1)(b) of the Act) is a form of fraud.  It is therefore ICBC that bears the burden of proving that Mr. Teap knowingly made a false representation in the matter of the principal operator of the vehicle without belief in its truth, or reckless as to its truth, as all parties have agreed that Lexis Holdings has shown that its loss falls within the policy coverage.

[17]            The standard of proof in this case, as with all civil cases, is on a balance of probabilities (F.H. v. McDougall, 2008 SCC 53 at ¶49).  However, because an allegation of fraud, or a misrepresentation amounting to a form of fraud, against an insured is quasi-criminal in nature, and, if proven, could “affect the insured’s life well beyond the outcome” of his claim, the court must be mindful that a careful scrutiny of the evidence is necessary before finding that such an allegation has been proven (Bevacqua at ¶44; Leon v. ICBC, 2002 BCSC 794 at ¶29).  As always, clear and cogent evidence is required (Bevacqua at ¶48).

[18]            The usual first step in such cases, as set out in Rai v. Insurance Corp. of British Columbia, 2005 BCSC 92, and followed by Madam Justice Smith in Deol v. Insurance Corporation of British Columbia, 2007 BCSC 1307 at ¶28, is to determine who the principal operator of the vehicle was at the time of the incident giving rise to the claim, based on who drove the vehicle most during the term of the owner’s certificate.  To “operate” and what constitutes a “principal operator” are defined in Part 1 of the Revised Regulation (1984) Under the Insurance (Motor Vehicle) Act, B.C. Reg. 447/83, as follows:

“operate”, in the case of a vehicle, includes to have care, custody or control of the vehicle;

“principal operator” means the person who will operate the vehicle described in an application for a certificate for the majority of the time the vehicle is operated during the term of the certificate;

[19]            Plaintiff’s counsel submits in the present case it is not necessary for the Court to determine who the principal operator of the BMW was during most of the term of the owner’s certificate of insurance because there is no issue as to other possible principal operators.

[20]            Counsel for ICBC disagrees and submits that the first step of the analysis as to whether there has been a breach of the policy based on a misrepresentation as to the insured’s declaration of principal operator is as articulated in Rai:  the Court must determine who drove the vehicle most during the term of the owner’s certificate in order to determine who was the principal operator of the vehicle at the time of the accident (or loss).  That being the case, counsel for the defendant submits that evidence as to Mr. Teap’s regular use of the BMW and his accessorizing and customizing it to his own taste is relevant to who was, in fact, the principal operator at the time of loss.

[21]            In the present case I find in relation to the first principle drawn by D. Smith J. in Deol from the judgment of Preston J. in Rai that there is no meaningful distinction to be drawn between a party allegedly misrepresenting that there was no principal operator for a vehicle and misrepresenting the principal operator to be a person other than himself.  I find evidence as to who was, in fact, the principal operator of the BMW between March 2, 2005, when it was insured, to the date of loss on November 10, 2005, to be relevant to alleged misrepresentation by Mr. Teap on March 2, 2005 that there was no principal operator.

[22]            Therefore, in terms of the first step in the analysis as set out in Rai, the evidence (including Mr. Teap’s November 15, 2005, statement to the adjuster and the bills for various modifications to the BMW) clearly shows, and Mr. Teap eventually admitted in his testimony, that he was the person who regularly operated the BMW and had the care, custody, or control of it for the majority of the term of the insured period.

[23]            The next step is to note that the appropriate time period the Court must consider in determining whether a misrepresentation was made is “the date the claimant applied for the insurance” (Deol at ¶28; Rai at ¶14).  There is no obligation for the insured to go back to an insurance broker to have this aspect of the contract changed at some later date should the principal operator of the vehicle change (Bolen v. ICBC, 2006 BCSC 1749 at ¶44-45).  That it is clear in hindsight that Mr. Teap was the principal operator of the BMW is hence not determinative of the issue.  Rather, the defendant must show on a balance of probabilities that Mr. Teap knew on March 2, 2005, at the time he entered into the contract of insurance with ICBC, that he was in fact going to be the principal operator of the vehicle (Deol at ¶28; Rai at ¶14).  This is the point where the parties disagree.

[24]            If this Court finds that Mr. Teap knew that he was to be the principal operator of the BMW on March 2, 2005, then the final and related step will be to determine whether Mr. Teap made the misrepresentation knowingly, pursuant to s. 19(1)(b) of the Act, which at the relevant time stated:

Forfeiture of claims

19(1) If

b)         an applicant for an owner’s certificate knowingly misrepresents or fails to disclose in the application a fact required to be stated in it,

all claims by or in respect of the applicant or the insured are rendered invalid, and his or her right and the right of a person claiming through or on behalf of or as a dependent of the applicant or the insured to benefits and insurance money is forfeited.

[Emphasis added]

[25]            In Whitelaw v. Ransom and Wellington Fire Insurance Co., [1958] B.C.J. No. 135, 15 D.L.R. (2d) 504, the Court of Appeal dealt with s. 169 of the Insurance Act, R.S.B.C. 1948, c. 164, which used the similar wording:  “Where an applicant for a contract … knowingly misrepresents or fails to disclose in the application any fact required to be stated therein … a claim by the Insured shall be invalid and the right of the Insured to recover indemnity shall be forfeited” (¶25).  In separate majority reasons, Davey J.A. noted that both Sleigh v. Stevenson, [1943] 4 D.L.R. 433, O.W.N. 465, and General Accident Ass’ce Co. v. Button, [1954] 3 D.L.R. 352, 34 M.P.R. 25, articulated that “knowingly” is used in that section in the sense that the applicant is in “possession of information that what is in fact stated in the application is untrue or does not disclose the truth” (¶30-31).  This definition was also relied on by the majority of the Supreme Court of Canada in Turgeon v. Atlas Assurance Co. (1968), 13 D.L.R. (3d) 308 at 314.

[26]            To find that the plaintiff knowingly misrepresented the material fact in question, I must therefore be satisfied on a balance of probabilities, after careful scrutiny of the evidence, that on March 2, 2005, Mr. Teap was in possession of information such that what was stated in the insurance contract was untrue or did not disclose the truth:  namely that he knew he was to be the principal operator of the BMW, contrary to the statement in the contract that there was no principal operator of the vehicle.

[27]            In assessing whether this test has been met, the Court will be mindful that mere speculation of fraud will not be sufficient:  Swales v. I.C.B.C., 1999 BCCA 767.

[28]            A number of cases were provided by counsel to illustrate instances where even very strong speculation and circumstantial evidence were not sufficient to establish fraud.

[29]            In Swales, for example, the Court of Appeal allowed an appeal and entered judgment in favour of a plaintiff whose insurance claim had been dismissed at trial.  The plaintiff claimed that his vehicle was stolen from a public parking lot while he was in a movie theatre.  The defendant ICBC became suspicious after engaging in an investigation of the claim and declined to pay the plaintiff, alleging that he was involved in the theft of his own vehicle.  At trial, the judge instructed the jury that the plaintiff had the burden of proving that the vehicle was taken without his knowledge, consent, or approval.  This was an error in law since it effectively reversed the onus of proof.

[30]            Furthermore, the defence counsel in Swales conceded at trial that there was no direct evidence of the plaintiff’s involvement in the theft, and so ultimately, “[t]he case was left to the jury solely on the basis of the plaintiff’s credibility and the suspicious circumstances on which I.C.B.C. chose to deny the claim” (¶6).  The Court of Appeal stated that the jury’s finding of fraud amounted to “nothing more than speculation” and that overall, the case “came down to showing that the plaintiff may have had a motive for wanting to have his vehicle stolen” (¶7).  Therefore, Finch J.A., as he then was, for the Court, concluded that there was no foundation from which a properly instructed jury could have reasonably inferred fraud on the plaintiff’s part.

[31]            In Yeterian v. I.C.B.C., 2004 BCSC 404, the defendant ICBC resisted the plaintiff’s insurance claim for the theft of his motorcycle.  ICBC alleged that the plaintiff himself was involved in staging the theft and relied primarily on the fact that when the police found the motorcycle abandoned and damaged some distance from where the plaintiff had parked it, the ignition and locking mechanisms were not damaged.  ICBC was also suspicious because the plaintiff swore that he was “almost certain” that he had locked the steering lock, in which case the motorcycle would only have been able to move in a circle.  Despite these points, the court was not convinced that ICBC had proven fraud on a balance of probabilities:  “The evidence discloses little but speculation to support I.C.B.C.’s position that he falsely reported a theft” (¶27).

[32]            In Johl v. ICBC, 2005 BCPC 0121, the claimant’s vehicle was involved in a hit and run accident.  The claimant claimed that his vehicle was stolen and that he was not the driver involved in the incident.  The defendant ICBC investigated the claim and, suspecting fraud, refused to pay his claim.  At ¶56, V. Romilly P.C.J. set out the circumstances that ICBC viewed as suspicious:

     Viewing the evidence, it seems that the defence views the following circumstances as casting suspicions on the Claimant:

1. The vehicle was involved in a hit and run some distance away from where the Claimant said he parked his vehicle and according to Constable Reimer individuals have been known to report their vehicle as stolen when they are involved in a hit and run, and that that immediately arouses his suspicion.

2. The Locksmith’s report.

3. The Security Alarm Expert report.

4. The supposed lack of cooperation by the Claimant in dealing with Constable Reimer.

5. The Claimant’s alleged deceit in passing off his cousin, (who I found looks very much like him) as himself in dealing with Constable Reimer, which indicates deceit on his part, which was continued in his evidence at trial.

6. The fact that his car was parked some thirty feet away from where he slept and no one was awakened by an alarm going off.

The claimant argued that these points amounted to “mere speculation” and did not constitute clear and cogent evidence.  The Provincial Court Judge agreed:  “The above in my opinion without any direct evidence of the Claimant’s involvement in the theft, amounts to mere speculation on the defence’s part” (¶60).

[33]            In Bolen, finally, the plaintiffs’ truck was stolen and, as in the previous examples, ICBC refused to pay for the claim due to a suspicion of fraud.  Unlike the previous examples, ICBC did not suspect that Mr. and Mrs. Bolen had actually participated in the theft.  Rather, ICBC alleged that they made misrepresentations in relation to a number of matters, including the principal operator of the truck, their use of the truck, and its value.  Fisher J. found at ¶42 that ICBC had not met its burden of proof in establishing that Mr. Bolen had misrepresented the principal operator aspect of the insurance contract:

     […] Despite my concerns about the reliability of the plaintiffs’ evidence on this issue, there is no evidence that contradicts Mr. Bolen’s testimony that he was working for his union in 2000, and did not need the truck for shift work until October 2002. Considering this, along with the rest of the circumstantial evidence about Mr. Bolen’s connection with the truck, I am not satisfied that ICBC has proved to the requisite standard that the plaintiffs misrepresented the principal operator designation in any application for an owner’s certificate before November 2002.

[34]            It is clear from the foregoing cases that speculation, suspicion or potentially unreliable evidence from a plaintiff who sustains a loss, constitute an insufficient basis upon which an insurer may deny a claim based on fraud or a type of fraudulent misrepresentation.

If you are insured with ICBC and are making a claim for benefits you have a duty to act in good faith in your communications with ICBC.   Similarly, ICBC has a duty to process your first party insurance claim in good faith.

What happens if you make a false statement to ICBC?  Can this cause a breach of your insurance?  The answer is yes, depending on whether the statement is willful and if it was material in processing the claim.

Reasons for judgement were released today by the BC Supreme Court addressing this issue.  The Plaintiff owned a 2000 Porshe Boxter which was allegedly stolen in 2005.  The Plaintiff purchased the vehicle in 2004 and paid $38,000.

After the vehicle went missing the Plaintiff reported the theft to ICBC and the police.  He told the police that the vehicle was worth $45,000.  When filling out a form titled ‘Report of Automobile” to ICBC the Plaintiff he filled out the box asking ‘amount paid’ with the sun of $44,000.

ICBC refused to pay the Plaintiff for the value of the vehicle.  The Plaintiff sued.   The claim was dismissed because the court found that the Plaintiff ‘inflated’ the value of the vehicle when reporting the loss to ICBC and doing so was ‘material to (ICBC’s) assessment of the claim), thus holding the Plaintiff in breach of section 19 of the Insurance (Motor Vehicle) Act Regulations.

The court summarized the law starting at paragraph 114.  I reproduce this below:

Forfeiture Pursuant to the Provisions of the Insurance (Motor Vehicle) Act Regulations, R.S.B.C. 1996, c. 231, S. 19(1)(e)

[114]        The section reads:

19(1)    If …

(e)        an insured makes a wilfully false statement with respect to a claim under a plan,

all claims by or in respect of the applicant of the insured are rendered invalid, and his or her right and the right of a person claiming through or on behalf of or as a dependant of the applicant or the insured to benefits and insurance money is forfeited.

[115]        The leading statement of law in this matter was enunciated by McEachern C.J.B.C. in Inland Kenworth Limited v. Commonwealth Insurance Company, (1990) 48 B.C.L.R. 2d 305 at pages 309 – 311, and cited by Rowles J.A. in Brown v. Insurance Corp. of British Columbia, 2004 BCCA 254 at paras. 10-11:

10.       In Inland Kenworth, in which s. 231(1) of the Insurance Act, R.S.B.C. 1979, c. 200 was under consideration, McEachern C.J.B.C. said, at 309-311 (B.C.L.R.):

I agree that a wilfully false statement which is not material may not usually be relied upon by the insurer. Materiality is, however, one of the fundamental principles of insurance law and it manifests itself in many ways. The classic test of materiality in insurance law is whether a statement is capable of affecting the mind of the insurer.

* * *

It is sufficient, in my view, if the fraud or wilfully false statement is capable of affecting the mind of the insurer either in the management of the claim or in deciding to pay it. It is unnecessary to speculate about what the insurer would have done if the fraud had not occurred but I point out that the insurer may have waived appraisal and decided to pay Blue Book value. On the other hand, the insurer may have done exactly what it did in this case, that is submit the question to appraisal.

A contract of insurance is one of utmost good faith and one cannot commit frauds or make wilfully false statements about the subject matter of the claim for any purpose without risking the loss of the right to indemnity if it turns out to be material on any issue.

* * *

I do not say that any wilfully false statement will be sufficient to vitiate coverage. It must be material. I think the wilfully false statement about the subject matter of the insurance, intended to comply with the warranty, but which also related to the question of value, and was capable of affecting the mind of the insurer, destroyed the integrity of the claim, and was material at least to the latter question. Under the Act, and at law, this forfeits the right of the insured to indemnity.

11.       In Peterson v. Bannon , supra, s. 18(1)(e), which is now s. 19(1)(e) of the Act, was under consideration,.  In that case, Finch J.A., as he then was, said at para. 59:

Inland Kenworth therefore affirmed that if an insured makes a wilfully false statement about the subject matter of his or her claim, that person risks forfeiture if the statement is material to any issue arising in the claim. Although the respondent argued otherwise, there is no real distinction between the language of s. 231(1) and s. 18(1)(e). I consider myself bound by Inland Kenworth, a judgment with which I respectfully agree. A wilfully false statement will invalidate an insured’s claim only if the statement is material to the claim at risk of forfeiture.

[Underlining added

[116]        Mr. Chahal correctly argues that there has to be a wilfully false statement and secondly that it was material to the processing of the claim.

[117]        As well, he relied on the decision of Cullen J. in DeCastro v. I.C.B.C., oral reasons given October 2, 2006, which had some similarities in a central issue arising from the effectiveness of the immobilizer in a BMW that had been apparently taken from outside a pub on March 31, 2004, and subsequently found without tires and wheels, various front-end components and destroyed by fire.

[118]        Cullen J. noted the initial burden falls on the plaintiff to show that loss falls within the coverage but that is not onerous and that secondly, the onus then shifts to the defendant to prove on a balance of probabilities intentional material conduct by the plaintiff that is in breach of one of the sub-sections of s. 19(1).

[119]        The principal arguments about representations made with respect to the claim are: (1) the statement made as to the price paid; (2) the number of keys provided by Mr. Leach.

[120]        Mr. Chahal paid $38,000 to Mr. Leach by official cheque on November 10, 2004.

[121]        From the outset of Mr. Chahal’s report to the Delta police, through the reports of loss to I.C.B.C., the initial recorded statement of August 31, 2005 and the statement on oath in December 2005, Mr. Chahal spoke of the price paid or value as $44,000 or $45,000.  Only in the case of the Proof of Loss form sworn on November 8, 2005, did he say he had researched the value.

[122]        I am unable to accept that he would not have known precisely the amount he paid as reflected in the official cheque.

[123]        I accept the reported value of the vehicle was material to the insurance corporation’s assessment of the claim and that the plaintiff sought to inflate the value of the vehicle.  Further, no evidence was led by Mr. Chahal to support the alleged value.

When you purchase a contract of insurance with ICBC they want to know who the principal operator is going to be. The insurance premiums may vary based on the person’s driving record. It is unfortunately all too common of a problem for people to misrepresent who the principal operator of their vehicle is when insuring the vehicle with ICBC. Doing so is a breach of section 75 of the Insurance (Vehicle) Act which reads as follows:

I have unfortunately seen too many examples of people getting into trouble for misrepresenting the principal operator to ICBC. Parents say they are the principal operator when really their kids are or friends claiming they are the principal operator when really their buddy with a few too many speeding tickets is. All this to save a few hundred bucks. This ‘misrepresentation’ can lead to a loss of coverage. This loss of coverage could result in hundreds of thousands of dollars of debt not only to the driver but to the registered owner who claimed they were the principal operator.

The following are a few examples of the potential consequences of breaching a policy of insurance by lying about who the principal operator is:

a. If your car gets stolen ICBC would not have to pay you for this

b. If you are injured in a car crash that is not your fault ICBC will not have to pay you your ‘no-fault’ benefits

c. If you are at fault for a crash and injure someone else ICBC will not indemnify you for the losses you caused. Imagine that you are at fault for a crash that results in serious injury to another motorist. Imagine that the other motorists ICBC injury claim is worth $300,000. You could be on the hook personally for the value of that claim!

The consequences of breaching your ICBC insurance policy far outweigh the benefits of saving a friend or family member a few hundred bucks on their insurance premiums. Being in breach of insurance can have life-long financial consequences on motorists and I have seen these first hand. If you know of anyone who is trying to save a few bucks by misrepresenting who the principal operator of their vehicle is, do them a huge favour. Tell them the consequences before it is too late.