I’ve previously discussed how saving a few hundred bucks could cost you a few hundred thousand by misrepresenting the principle vehicle operator when purchasing ICBC insurance. Today reasons for judgement were released by the BC Supreme Court, New Westminster Registry, demonstrating breach of insurance consequences in action.
In today’s case (Lau v. ICBC) the Plaintiff was involved in a 2009 collision. At the time he was driving a two month old Subaru Impreza which was purchased for $41,287. The collision resulted in the vehicle being a total loss.
ICBC found the Plaintiff fully liable for the collision although the Plaintiff was disputing this finding. ICBC further denied coverage to the Plaintiff (meaning for starters they would not pay to replace the vehicle nor indemnify the Plaintiff for any claims brought by the occupants in the other vehicle) arguing that the vehicle owner made a ‘willfully false statement’ when the vehicle was purchased by not accurately declaring who the principle operator was going to be.
Mr. Justice Verhoeven agreed that the vehicle owner “knowingly misrepresented the identity of the vehicle’s intended principle operator” and therefore that the insurance coverage was forfeited. The Court provided the following valuable comments:
 For the reasons that follow, I conclude with considerable reluctance that Yu Jung Lau knowingly misrepresented the identity of the vehicle’s intended principal operator when he applied for the insurance, and therefore the insurance coverage was forfeited.
 The reason I reach the conclusion I do with reluctance is that in my view, the misrepresentation was made in order to save a relatively modest amount of insurance premium, and almost certainly without any real appreciation that forfeiture of the insurance could result, with dire financial consequences. The result is harsh for the plaintiffs.
 However, ICBC does not have to prove that the plaintiffs were aware of the consequences of a misrepresentation concerning the insurance. 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 without risking the loss of the right to indemnity: Inland Kenworth Ltd. v. Commonwealth Insurance Company (1990), 48 B.C.L.R. (2d) 305 (C.A.) at 310.
 Judging by the number of similar cases that have come before the courts, it seems likely the plaintiffs’ lack of understanding of the consequences of a false declaration as to the vehicle’s intended principal operator is shared with many members of the public. The result in this case should serve as a warning.
Reasons for judgement were released last week by the BC Supreme Court, Victoria Registry, ordering ICBC to provide particulars in support of an allegation that the Plaintiff provided a wilfully false statement.
In last week’s case (Biedermann v. ICBC) the Plaintiff was sued for damages following three motor vehicle collisions. ICBC refused to indemnify the Plaintiff arguing that he was in breach of his insurance by making a wilfully false statement.
The Plaintiff sued ICBC for coverage. ICBC denied liability and repeated the ‘willfully false statement‘ allegation in their pleadings. The Plaintiff asked for particulars of this allegation but ICBC refused to provide these. Ultimately the Plaintiff brought a successful application to compel ICBC to provide particulars. In making the order Master Bouck provided the following helpful reasons:
 The plaintiff relies on Rule 3-7(22) of the Supreme Court Civil Rules (“SCCR”) which provides that the court may order a party to serve further and better particulars of a matter stated in a pleading (my emphasis).
 In its response, the defendant helpfully outlines the legal principles relevant to the application and interpretation of this Rule.
 One of the stated purposes for ordering particulars is to ensure that the “real issues between the parties” are brought “fairly forward without surprise”: Cansulex Ltd. v. Perry, 1982 CarswellBC (C.A.) at para. 16. The six objectives of an order for particulars are said to be:
· to inform the other side of the nature of the case they have to meet as distinguished from the mode in which the case is to be proved;
· to prevent the other side from being taken by surprise at trial;
· to enable the other side to know what evidence they ought to be prepared with and to prepare for trial;
· to limit the generality of the pleadings;
· to limit and decide the issues to be tried, and as to which discovery is required; and
· to tie the hands of the party so that he cannot without leave go into any matters not included.
Cansulex Ltd. v. Perry at para. 15
 These factors are consistent with the present objectives of the SCCR in having a matter determined in a proportionate, just, speedy and inexpensive manner: Rule 1-3…
 After reviewing the pleadings and relevant authorities, I have concluded that the Response to Civil Claim does not provide sufficient particularity to meet the objectives of both the SCCRand those outlined by the court in Cansulex.
 Neither the Response to Civil Claim nor the response to this application identify the nature of the “wilfully false statement”. The Response separately pleads (and the defendant discloses in its affidavit material) that the plaintiff may have failed to update both the territory and rating for the Volkswagen Golf and also misrepresented the principal operator. Those details provide some information to the plaintiff as to the basis for denying the sought after insurance coverage. However, it is not at all clear from the Response whether these documents represent the “wilfully false statement” or whether the defence is relying on some other written or oral statement or representation given by the plaintiff.
 Nor does the Response address in any particularity the basis on which coverage is denied for the July 2008 accident. The Response simply says that Mr. Biedermann was no longer the legal owner of the vehicle involved in the accident.
 What is being sought by the plaintiff is not so much evidence which might support a finding that Mr. Biedermann made a statement or statements which were “wilfully false”, but rather identification of what that “statement or representation” might be. Is it an insurance application form; a post-accident statement or representation; or some other form of communication? Without these particulars, the plaintiff (and the court) is left to guess whether such a statement or representation even exists…
 The defence has separately pled s. 75 (a) (ii) with respect to the 2009 accidents. However, s. 75 (c) is so broadly worded that the plaintiff (and the court) is unable to identify the nature of the impugned statement of misrepresentation with respect to any of the accidents.
 Accordingly, the order sought by the plaintiff is granted. Costs of the application will be to the plaintiff in the cause.
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.