IN
THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20100205

Docket:
S092935

Registry: Vancouver

Between:

Insurance Corporation of British
Columbia

Appellant/Defendant

And:

Pariah Productions Inc.

Respondent/Claimant

Before: The Honourable Mr. Justice Silverman

On appeal from the
Provincial Court of British Columbia,

April
6, 2009, Small Claims Registry No. 07-17477

Reasons for Judgment

INTRODUCTION

[1]
This appeal is brought by the Insurance
Corporation of British Columbia (“ICBC”), the defendant to an action brought by
the respondent, Pariah Productions Inc. (“Pariah”), for indemnity for the cost
of repairing damages to its motor vehicle caused when Pariah’s principal, Mr.
Loree, drove into a wall while trying to enter a Wendy’s drive-through (the
“Accident”). 

[2]
In arriving at his decision, the learned trial
judge held as follows:

1.       that s. 68(1) of the Motor Vehicle Act,
R.S.B.C. 1996, c. 318 [Act] which, among other things, obliges a driver
to remain at the scene of the accident, is not applicable to single vehicle
accidents and therefore imposed no duty on Pariah;

2.       that Pariah did breach s. 68(3) of the Act,
when Mr. Loree failed to make an attempt to notify Wendy’s of the property
damage; and

3.       that
ICBC was not entitled to deny indemnity to Pariah pursuant to s. 136(b) of the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act, B.C. Reg.
447/83 [Regulation] because
it failed to prove prejudice flowing from Pariah’s breach of s. 68(3) of the Act.

[3]
ICBC argues that the trial judge erred in
finding s. 68(1) of the Act inapplicable to this case and therefore
erred in failing to examine whether the appellant was prejudiced as a result of
Pariah’s breach of s. 68(1).  Further, ICBC submits that the trial judge erred
in finding that ICBC failed to prove that it was prejudiced within the meaning
of s. 136(b) of the Regulation, as a result of Pariah’s breach of s.
68(3) of the Act.

BACKGROUND

[4]
ICBC appeals from the order of Judge Meyers made
after a three-day trial.  The action arose when Pariah sued ICBC in Small
Claims Court for indemnity under its “own damage” coverage for the cost of
repairs to its motor vehicle (the “vehicle”), arising from a single vehicle
accident. 

[5]
At trial, ICBC defended the claim on the basis
that Pariah, through its principal, Mr. Loree:

1.       breached s. 68(1) of the Act by
failing to remain at the scene of the accident;

2.       breached s. 68(3) of the Act when Mr.
Loree failed to notify Wendy’s of the property damage, either at the time of
the accident or subsequently; and

3.       did
not have reasonable cause for failing to comply with s. 68(1) or s. 68(3) of
the Act and that his failure to comply with those sections had
prejudiced ICBC, thereby entitling it to deny indemnity to Pariah pursuant to
s. 136(b) of the Regulation.

[6]
In his Reasons for Judgment, the trial judge
noted the following:

1.       Mr. Loree testified that prior to the
accident he had been watching a hockey game with another person and that he did
not consume any alcohol during that time.

2.       The person with whom he was watching also
gave evidence which confirmed that neither she nor he drank any alcohol during
that period.

3.       At around 10:00 p.m., Mr. Loree’s girlfriend
came over and he suggested they go get something to eat.  After having an
argument about the type of food, he testified that he left for Wendy’s alone in
his vehicle.

4.       There was no evidence of alcohol consumption
by Mr. Loree prior to him leaving for Wendy’s.

5.       The accident occurred between 10:00 p.m. and 11:00
p.m. while Mr. Loree was driving into the entrance of the Wendy’s parking lot
on his way to the drive-through window.

6.       Mr. Loree lost control of the car, banged
into a wall and knocked down a Wendy’s sign at the entrance to the parking lot.

7.       Mr. Loree testified that upon approaching
Wendy’s he “went to pull into the drive-through where [his] vehicle lost
traction and collided with this wall”.  He indicated that the parking lot was
wet and slippery.

8.       It was raining and slippery at the time of
the accident.

9.       Mr. Loree is a professional stunt man and has
been for many years.  His job involves professional stunt driving.

10.     Following impact with the wall, Mr. Loree did
not get out of his car, investigate the scene, or notify anyone of what had
happened.  Instead, he reversed back onto the road and drove immediately home
on residential streets rather than main highways.

11.     Mr. Loree testified that he felt stunned,
shocked, and upset.  He realized that there was no one to exchange information
with.  He just wanted to get his vehicle home where he could call the police
and ICBC from there.  He acknowledged that he was a little panicked and
traumatized. 

12.     He did not enter Wendy’s to notify anyone of
the damage or report the accident.  He said that he did not see the Wendy’s
sign located on the wall prior to or following the impact and that due to the
wall’s proximity to the sidewalk, he assumed that it belonged to the City,
rather than to Wendy’s.

13.     He had doubts that his vehicle would make it
home but he drove it home anyway. 

14.     While driving home, Mr. Loree was followed by
a person who did not know him, but who had witnessed the crash.  That person
phoned the police and provided Mr. Loree’s licence plate number.  That person
also described the vehicle as having significant damage.

15.     Upon returning home, Mr. Loree spoke to his
girlfriend and a roommate and made himself a drink because he wanted to “calm
[his] nerves”. 

16.     The Judge’s reasons state that Mr. Loree
testified that the only thing he had to drink that day was one vodka following
the accident.  In fact, the transcript indicates that Mr. Loree testified that upon
returning home he drank one lemonade and vodka and then “rather quickly” had a
beer as well.

17.     Approximately 20 to 25 minutes after Mr. Loree
arrived home the police came to his door.

18.     Mr. Loree’s girlfriend told him not to answer
the door because she thought there was a risk of him being charged with
impaired driving, due to the fact that he had consumed a drink upon returning
home.

19.     The officer who attended the residence that
night saw someone looking out the window on the main floor.  However, nobody
answered the door.

20.     Mr. Loree testified that after some argument
with his girlfriend, he decided not to answer the door because he was “too
stressed out to deal with [it]”.  He did not answer the door, finished his beer
and went to sleep.

21.     Mr. Loree testified that one of the reasons he
left the accident scene immediately was to report the accident upon returning
home.  However, he did not call the police before or after they came to his
house.  He believed that he had 24 hours in which to report the accident.

22.     The next morning, at approximately 9:00 a.m.
Mr. Loree called ICBC and the police to report the accident.

23.     He eventually received a ticket under s. 68(3)
of the Act.  He paid the fine.

24.     Some
months later, he was interviewed by a Special Provincial Constable with the
Solicitor-General’s office who was investigating the claim on behalf of ICBC.
He was cooperative and forthcoming in that interview.  In addition to other
topics discussed during that interview, Mr. Loree provided the interviewer with
the names of four witnesses who had been with him during the day and evening
prior to the accident.  The interviewer never contacted or spoke with any of
those four witnesses, nor did anyone else on behalf of ICBC.

[7]
Although not recorded in the Reasons, in direct
examination, the officer in attendance at the home testified that:

1.       if Mr. Loree had remained at the scene of the
accident and the police had arrived within 30 minutes, the police would have
determined whether there was a witness who could confirm that Mr. Loree was the
driver and observations would have been made of Mr. Loree to determine if he
was exhibiting signs of alcohol consumption; and

2.       if
Mr. Loree had shown indicia of alcohol consumption, the officer would
have had the option of issuing a 24-hour notice, performing an “ASD breath
sample”, or taking him to the police station for a breathalyzer test.

ISSUES ON
APPEAL

[8]
The grounds of appeal are as follows:

1. The
learned trial judge erred in concluding that s. 68(1) of the Act did not
apply to the facts of this case and thereby erred in failing to consider
whether s. 68(1) had been breached by Pariah without reasonable cause.  The
learned trial judge also erred by failing to consider whether ICBC had been
prejudiced such that there was a lawful basis upon which ICBC denied Pariah indemnity
pursuant to s. 136(b) of the Regulation; and

2.       The
learned trial judge erred in concluding that there was no evidentiary basis
upon which to conclude that Pariah’s failure to comply with the provisions of
s. 68(3) of the Act had caused prejudice to ICBC and therefore erred in
concluding that ICBC was not entitled to deny indemnity to Pariah pursuant to
s. 136(b) of the Regulation.

[9]
In general terms, ICBC expands upon the
following points in advancing its arguments with respect to the grounds of
appeal:

1.       The primary legal issues on appeal are:

(a)      the applicability of s. 68(1) of the Act
to single vehicle accidents; and

(b)      the test required to establish “prejudice” to
ICBC flowing from a breach of s. 68 of the Act by an insured.

2.        Counsel agree that the question
of whether or not s. 68(1) is restricted to multi-vehicle accidents is one
which has not been decided, on the merits, by the Supreme Court of British
Columbia.  There are a number of decisions where the section has been applied
to single vehicle accidents, but counsel are agreed that those are all cases
where different issues were being considered and there was no argument on the
merits with respect to the issue here.

3.        ICBC submits that the trial judge
erred:

(a)      in failing to follow authority from this
court applying s. 68(1) of the Act to single vehicle accidents (although
none where it was argued on the merits) and therefore erred in failing to
consider whether ICBC was prejudiced as a result of Pariah’s non-compliance
with s. 68(1); and

(b)      in
finding no prejudice to ICBC within the meaning of s. 136(b) of the Regulation
as a result of Pariah’s breach of s. 68(3).

STATUTORY CONSIDERATIONS

[10]
Both s. 68 of the Act and s. 136(b) of
the Regulation have been amended since the Accident.

[11]
At the time of the Accident, s. 68 Motor Vehicle Act, provided as
follows:

Duty of driver at accident

68 (1) 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 must do all of the following:

(a) remain
at or immediately return to the scene of the accident;

(b) render all
reasonable assistance;

(c) 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

(i) his or her
name and address,

(ii) the name and
address of the registered owner of the vehicle,

(iii) the licence
number of the vehicle, and

(iv) particulars
of the motor vehicle liability insurance card or financial responsibility card
for that vehicle,

or such of that
information as is requested.

(2) The driver or operator or any
other person in charge of a vehicle that collides with an unattended vehicle
must stop and must

(a) locate
and notify in writing the person in charge of or the owner of the
unattended vehicle of

(i) the name and
address of the driver, operator or other person in charge,

(ii) the name and
address of the registered owner, and

(iii) the licence
number

of the vehicle that struck the
unattended vehicle, or

(b) leave in a
conspicuous place in or on the vehicle collided with a notice in
writing giving the information referred to in paragraph (a).

(3) The driver or operator or any
other person in charge of a vehicle involved in an accident resulting in damage
to property on or adjacent to a highway, other than a vehicle under subsection
2, must take reasonable steps to locate and notify in writing the
owner or person in charge of the property of the fact of the accident
and of the following:

(a) the name and
address of the driver, operator or other person in charge of the vehicle;

(b) the name and
address of the registered owner;

(c) the licence
number of the vehicle.

[Emphasis added.]

[12]
At the time of the Accident, s. 136(b) of the Regulation provided
as follows:

Condition

136 The corporation is not liable under this
Division  [“Own Damage Division”]

…

(b) to an
insured who, without reasonable cause and to the prejudice of the corporation,
fails to comply with section 67 or 68 of the Motor Vehicle Act or with a
provision of the law of another jurisdiction in Canada or the United States of
America that is similar to either section.

[13]
Since the Accident, the following changes have been made to s. 68:

1.       There have been a number of minor amendments.

2.       Section 68(1)(a), which contains the
requirement to remain at the scene, has not been changed from its original
form.

3.       Section
68(1)(c) has been amended by deleting the words “to a peace officer or”.

[14]
Since the time of the accident, the wording of
s. 136(b) remains unchanged, but it has been “moved” to a different division of
the Regulation.  This has no bearing on the case at bar.

SECTION
68

[15]
The trial judge reviewed sections 68(1) and
68(3) of the Act and concluded that they involve different scenarios:

1.       Section 68(1), in his view, “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.”

[Emphasis added.]

2.       Section 68(2) involves a collision with an
unattended vehicle and consequently has no bearing on the case at bar.

3.       Section
68(3), on the other hand, “involves a situation where there is only a single-vehicle
accident, no persons are injured but there is damage to property only.”

[16]
The trial judge concluded that, on the facts of
this case, Mr. Loree had not breached s. 68(1) because there had not been an
accident “involving another vehicle”. 

[17]
He decided that Mr. Loree had breached s. 68(3),
but ICBC could not benefit from that finding for other reasons, discussed later
in this judgment.

SECTION 68(1)

[18]
The trial judge analyzed the wording of s. 68(1)
in its context together with sections 68(2) and 68(3).  He then concluded that s.
68(1) is not applicable to a situation involving a single vehicle accident.

[19]
The analysis appears in his Reasons for Judgment
at paras. 16-19:

[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 only

was 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 two

cars and a situation additionally of someone sustaining loss

or 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.

[20]
ICBC argues as follows:

1.       The trial judge erred in concluding that s.
68(1) is not applicable to a single-vehicle accident.

2.       The express wording of the s. 68(1) makes it
applicable to any “driver …” who is “directly or indirectly, involved in any
accident on a highway.”

3.       There is no definition of the word “accident”
in the Act. 

4.       In Hill v. The Queen, [1975] 2 S.C.R.
402, the Supreme Court of Canada considered the possible meaning of the word
“accident” in the context of a similar provision of the Ontario Highway
Traffic Act, R.S.O. 1970, c. 202, s. 140(1)(a).  While concluding that it
was not necessary to fix a definition in that case, it did note a number of
possibilities:

(a) “any chance mishap or unforeseen contingency or occurrence”;

 (b) a “chance occurrence resulting in a loss, injury, or damage”;

 (c) “any unintended and unexpected occurrence which produces hurt or
loss”;

 (d) “an unintended occurrence which has an adverse physical result”;
and

 (e) the moment two vehicles come into contact accidentally even
without damage.

5.       It is significant that of the five examples
of an “accident” suggested by the Supreme Court of Canada in Hill, only
the fifth one involves two vehicles.

6.       While it is true that no definition of
“accident” emerges from British Columbia case law, there are a number of decisions
from the British Columbia Supreme Court, which presume that s. 68(1) is
applicable to single vehicle accidents.  Counsel has provided me with a number
of these cases, which include collisions with hydro poles and fences, vehicles
landing in ditches with no apparent damage to the property of another, and
collisions with highway medians.

7.       Counsel are agreed that, in all of the cases
in which this has occurred, the Court was focused on a different issue than
whether or not s. 68(1) applied to single vehicle accidents.  The issue was not
argued in any of them and the issue has never been decided on the merits, as
far as counsel can determine by this Court.

8.       Nevertheless, the cases are British Columbia Supreme
Court decisions and they are binding on judges of the Provincial Court.  The
trial judge therefore erred by not following them.

9.       Further, the modern approach to statutory
interpretation is most consistent with the notion that s. 68(1) should apply to
single vehicle accidents:

(a) the modern approach entails one principle or approach, requiring
the reading of the words of the Act in their entire context and applying
common sense in pursuing the scheme, object, and intention of the Act;
and

(b) the objectives of s. 68 include the general attainment of public
safety, the orderly regulation of highway traffic, the efficient deployment of
emergency personnel, the orderly disposition of disputes (including insurance
issues) arising out of accidents, and the societal concern of ensuring
assistance to persons involved in accidents.  All of those objectives are best
served by requiring a person to remain at the scene, whether in a single or
multi-vehicle accident.

10.     The consequences of interpreting s. 68 as
suggested are not draconian.  The section imposes strict, not absolute,
liability on drivers.  Accordingly, a person who is charged with failure to
remain at the scene of an accident pursuant to s. 68(1) may raise the defence
of due diligence and the reasons for leaving the scene may be assessed.

11.     In
this case, Mr. Loree admitted that he did not remain at the scene of the
accident and immediately left; therefore, the learned trial judge was wrong in
not concluding that the evidence establishes a breach of s. 68(1)(a) by Pariah.

SECTION 68(3)

[21]
The trial judge found that Mr. Loree, without
reasonable cause, did not take reasonable steps to facilitate a notification to
the true owner of the property, presumably by advising or seeking information
from Wendy’s.

[22]
He therefore found that Pariah had breached s.
68(3) when Mr. Loree failed to take any reasonable steps to locate and notify
the owner of the property.  ICBC agrees with that conclusion.

PREJUDICE TO ICBC

General

[23]
It is not sufficient for ICBC to win this appeal
to successfully establish that Pariah breached s. 68(1) or s. 68(3).  In order
to be successful and not liable to Pariah, it must also establish, under s. 136(b)
of the Regulation, that the failure to comply with s. 68 was “…
without reasonable cause and to the prejudice of [ICBC]”.

[24]
In this case, because the trial judge concluded
that there was no breach of s. 68(1), he did not go on to consider the
question of whether or not any such breach might have met the requirements of
s. 136(b) of the Regulation.

[25]
ICBC argues that if the trial judge was wrong,
and Pariah did in fact breach s. 68(1), that this breach did cause
prejudice to ICBC such that it was lawfully entitled to deny indemnity to
Pariah pursuant to s. 136(b) of the Regulation .

[26]
With respect to s. 68(3), while the trial judge
found that there was a breach, he concluded that the evidence did not establish
prejudice to ICBC.  ICBC argues that this was an error.

Section
68(3)

[27]
Since the trial judge determined that there had
been a breach of s. 68(3), and conducted a consequent analysis with respect to
s. 136(b) of the Regulation, it is appropriate to consider s. 68(3)
before considering s. 68(1).

[28]
In his deliberations concerning s. 136(b) of the
Regulation, he determined that the evidence did not establish prejudice
to ICBC.

[29]
The trial judge found that there was no evidence
that had the police come to the scene (if Mr. Loree had reported the damage to
the property owner as the section required), they would have witnessed symptoms
of impairment or symptoms of alcohol consumption by Mr. Loree.

[30]
In his written reasons, the trial judge said the
following:

40.       In this particular case, though, I
have to look at what facts, they would have been able to ascertain, should they
have been called, that is the police or somebody at Wendy’s who maybe would
have called the police. What facts would they have been able to ascertain? Well,
if they had come to the scene, according to the evidence that we have from Mr.
Loree, Alexei, and the co-tenant, he had not consumed any liquor prior to the
accident.  So there is no evidence that had the police come to the scene, they
would have witnessed symptoms of impairment or even symptoms of ingestion of
alcohol by Mr. Loree. The facts that I have to look at are the facts that may
have been obtained should the police have come.  So I wonder, if the police had
been there and there is, on the factual evidence I have before me, nothing that
tells me he drank before the accident, then the police attendance at that time,
would not have resulted in seeing facts of him being impaired or having
ingested alcohol.  These were not facts that might have come to light because,
according to what I have heard here, the facts were that he did not ingest any
alcohol prior to the accident.

…

44.       The
end result is that I have found that Pariah has breached s. 68(3). I have
found, however, that there was no prejudice shown to ICBC by virtue of the
failure of Mr. Loree on behalf of Pariah, to advise the police right then and
there at the scene, of the accident or as soon as he got home. The reason again
is, there is no factual evidence and in fact the evidence is to the contrary,
that he was drunk or that he had consumed alcohol prior to the accident.

[31]
ICBC argues as follows:

1.       The trial judge was correct in concluding
that there was a breach of s. 68(3), but erred in concluding that the breach
did not prejudice ICBC.

2.       The
prejudice it suffered from the breach of s. 68 is loss of a potential denial
under s. 55(8) of the Regulations, which deems an insured to have
breached a condition when “he is under the influence of an intoxicating liquor
or drug or substance to such an extent that he is incapable of proper control
of the vehicle” or is convicted of certain drinking driving offences.

3.       The leading authority on the requirement of
prejudice in s. 136(b) of the Regulation is Fuson v. I.C.B.C.
(1993), 20 C.C.L.I. (2d) 71 (B.C.S.C.), aff’d, 5 B.C.L.R. (3d) 128 (C.A.).

4.       In Fuson, the trial judge (Lowry J.,
as he then was) set out the applicable test in the following passage:

[14] I do not consider that, on the wording of section 136 of the
Regulations, prejudice can be presumed: the insurer bears the burden of proving
that it has been prejudiced.  It must establish on some evidentiary basis – not
on the basis of mere speculation – that, because of the insured’s failure to
comply with section [68] of the Motor Vehicle Act, it has been denied an
opportunity to obtain factual information that may (not that would) have
been available and that, to some extent, would have constituted a defence to
the claim for indemnity that is made.  Whether information may or may not have
been available to the insurer must be determined on the strength of the
evidence adduced in any given case.  Where the evidence does not establish that
the insurer may have had a defence, no prejudice is proven.

5.       There is no presumption of prejudice under s.
136(b) of the Regulation.  However, ICBC is not required to show a causal
connection between the breach of the Act and the loss incurred: Fuson.

6.       In such cases, ICBC does not have to prove
what a complete investigation would have concluded about the insured’s alcohol
consumption prior to the accident.  The breach of s. 68 prejudices ICBC’s right
to complete that investigation: Tessier v. Insurance Corporation of British
Columbia, 2008 BCSC 722.

7.       Prejudice in the context of s. 136(b) of the Regulation
has been judicially defined to mean “detrimental to the interests of”.  In Porter
v. British Columbia (Insurance Corporation of British Columbia) (1986), 16 C.C.L.I.
163 (B.C.S.C.), Hardinge Co. Ct. J. said that “It is clearly detrimental to the
legal interests of the defendant to be deprived of the opportunity to obtain
facts which might prove the existence of an absolute defence to a claim.”

8.       There are a number of cases where prejudice
was found to arise as a result of possible intoxication by an insured.

9.       Of the many cases which considered breaches
of s. 68(1), Fuson “is one of the only, if not the only” case (based on
alcohol suspicion) in which prejudice to ICBC was not found to flow from a
breach of s. 68 of the Act.

10.     While it is clear that the test in Fuson
is the law in British Columbia, it is also clear that the question of whether
or not ICBC has been prejudiced within the meaning of s. 136(b) will depend on
the evidence of each case: Thornber v. Insurance Corporation of British
Columbia, 2003 BCSC 326, rev’d on other grounds 2005 BCCA 45.

11.     Although no positive evidence was adduced at
trial that Mr. Loree was intoxicated, it is at least a reasonable possibility
that such evidence is not present precisely because Mr. Loree breached s.
68(3).  This is the very prejudice that is at the heart of ICBC’s argument.  Mr.
Loree has breached the section.  Surely there is little prejudice to him, but
great prejudice to ICBC, if he is now able to rely upon that very breach to
avoid even the potential for the discovery of evidence which might establish
that he was intoxicated.

12.     The trial judge erred in concluding that there
was no evidence that had the police come to the scene, they would have
witnessed symptoms of impairment or symptoms of alcohol consumption by Mr.
Loree:

 (a) The foregoing is effectively a conclusion by the trial
judge that ICBC was required to adduce evidence that Mr. Loree had in fact
consumed alcohol prior to the accident in order to satisfy the test for
prejudice in Fuson.  This is an error in law.

 (b) On the trial judge’s interpretation of
s. 136(b), in order to establish prejudice with respect to a possible defence
under s. 55(8) (driving under the influence), ICBC would always have to have
actual evidence that the insured was under the influence of an intoxicating
substance, but presumably, not to the degree of certainty required to make an
actual denial of coverage on that basis.  This is setting the bar too high;
evidence that suggests that the insured may have been intoxicated is
sufficient under the Fuson test.

13.     There is a good deal of evidence in this case
about Mr. Loree’s conduct during and immediately following the accident which
suggests that he was avoiding being discovered at the scene of the accident,
and it was a plausible, not merely a speculative possibility, that he was
intoxicated.  Included in that evidence is the following:

(a)      he was a professional stunt man and stunt
driver, but collided with a stationary object;

(b)      he did not get out of the vehicle following
impact to assess the condition of his vehicle or the damage to property;

(c)      he made no attempt to enter the Wendy’s to
inquire whether the wall was their property and/or to notify them of the
damage;

(d)      he drove his vehicle home despite extensive
damage to it;

(e)      he entered his home through the rear entrance
upon arriving home;

(f)       he consumed alcohol upon arriving home;

(g)      he did not answer the door when police
attended his residence;

(h)      he made no attempt to phone ICBC or the
police until the next morning;

(i)       he did not see the Wendy’s sign;

(j)       he drove home by side streets;

(k)      he drove home in a vehicle which he had
doubts would even make it;

(l)       he told the police that he had a couple of
drinks;

(m)     he
testified in court that he had a vodka and a beer when he arrived home.

14.     The trial judge erred in concluding that the
test for prejudice as set out in Fuson was not met in this case.  The
totality of the evidence, including circumstantial evidence, rose above the
level of mere speculation and established that ICBC had been denied an
opportunity to obtain factual information that may have been available.

15.     In Nield v. Insurance Corp. of British
Columbia, 2003 BCSC 83 at para. 23, Barrow J., in noting the
evidentiary findings in Fuson made the following distinction when
reviewing the evidence of the case before him:

…This is a circumstance which a
trier of fact may conclude, in combination with the other circumstances, forms
a factual, as opposed to a speculative, basis upon which to find that the
defendant has indeed been prejudiced by the plaintiff’s failure to fulfill his
obligations under s. 68 of the Motor Vehicle Act.

16.     At trial, the only witness who was able to
give evidence that Mr. Loree did not consume any alcohol in the two hours
prior to the accident was Mr. Loree himself.  Precisely because Mr. Loree
failed to remain at the scene of the accident, other independent witnesses and
the police were not able to make any observations about Mr. Loree’s state of
sobriety and ICBC was not able to adduce any evidence at trial about Mr.
Loree’s alcohol consumption.

17.     It
is of course possible that had Mr. Loree remained at the scene of the accident,
no evidence of intoxication would have been discovered and ICBC would have had
no basis to deny indemnity to Pariah.  However, Mr. Loree’s actions indicate
that it is more than merely speculative that had he remained and the
authorities attended the scene, evidence of his intoxication might have been
found.

Section 68(1)

[32]
The trial judge determined that there had been
no breach under s. 68(1), and therefore did not conduct an analysis with
respect to whether or not ICBC had suffered prejudice pursuant to s. 136(b) of
the Regulation.

[33]
Since he determined that there was no prejudice
under s. 136(b) after his finding that there had been a breach under s. 68(3),
it is likely that he would have come to the same conclusion if there had been a
breach under s. 68(1).

[34]
ICBC argues that the same evidence leading to
the conclusion that Mr. Loree may have been intoxicated (and ICBC prejudiced),
as set out under the argument relating to s. 68(3) is applicable to the
argument relating to the breach of s. 68(1).

DECISION

[35]
Whether s. 68(1) is applicable to single-vehicle
accidents is a question of law.  The standard of review is therefore
correctness.  I am satisfied that the trial judge did correctly decide this
issue.  He correctly analyzed the wording of the section in the context of subsections
68(2) and (3).  I endorse the correctness of his analysis in paragraphs 16 – 19
of his Reasons for Judgment set out earlier in this judgment.

[36]
The question of prejudice (as a result of the
breach of s. 68(3)), pursuant to s. 136(b) of the Regulation raises
questions of mixed fact and law.  With respect to the issue of law, I am satisfied
that the trial judge’s analysis was correct.  With respect to issues of fact, I
am satisfied that the judge’s findings are supported by the evidence and not
unreasonable.  There is no palpable and overriding error and no clear and
manifest error in the appreciation of the evidence.

[37]
Therefore, I am satisfied that the judge’s
decision that ICBC was not prejudiced within the meaning of s. 136(b) of the Regulation
was correct and should not be interfered with.  My reasons are as follows:

1.       There was evidence for which the judge could
reasonably make the findings of fact that he did make.  I intend to give him
great deference in that regard.  In all the circumstances of this case, including
the evidence, his findings should not be interfered with.

2.       Further, ICBC has indicated in its written
argument that it is not seeking to disturb the trial judge’s findings of fact.

3.       The findings of fact form the basis for his
conclusion with respect to the question of prejudice.

4.       The trial judge correctly applied the law as
noted in the leading case of Fuson.

5.       He was correct in concluding that there was
no evidentiary basis upon which to conclude that Mr. Loree’s breach of s. 68(3)
of the Act had caused prejudice to the defendant, but that there was an
evidentiary basis upon which to conclude that such failure did not cause
prejudice to ICBC.

6. The
learned trial judge found instead that the uncontradicted evidence adduced by
and on behalf of Mr. Loree was conclusive on the issue of consumption of
alcohol, and implicitly, intoxication thereby.  It was proved that Mr. Loree
had not consumed alcohol during the day or evening prior to the accident
occurring. 

7.       While the evidence suggests poor driving,
perhaps even illegal driving, on the part of Mr. Loree, nothing about it
suggests alcohol consumption, unless one takes the view that all illegal
driving suggests alcohol consumption.

8.       The trial judge’s findings of fact are
remarkably similar to those in Fuson, where Lowry J. found that “… apart
from any inference that might be drawn from Mr. Fuson having fled the scene,
there has never been any evidentiary basis for the insurer’s speculation.”  He
found “… absolutely no positive evidence that even suggests his ability may
have been impaired.”  (Para. 7 of Fuson).

9.       It
is somewhat disingenuous for ICBC to claim prejudice by virtue of being unable
to complete its investigation when it did not contact the four witnesses whose
identities had been provided by Mr. Loree, and who may have also had
information to provide on the issue of consumption of alcohol.  ICBC claims
prejudice in being hampered in pursuing what might be incriminating evidence,
but seems content to not have pursued evidence which might have been
exculpatory.  In my view, this is an appropriate consideration for the trial
judge to have considered in determining whether or not there was the kind of
“prejudice” contemplated by s. 136(b) of the Regulation.  It is also an
appropriate consideration for this Court in determining that deference should
be granted to the trial judge and his findings of fact should not be interfered
with.

[38]
If I am wrong in my determination that the trial
judge was correct in concluding that s. 68(1) is inapplicable to single vehicle
accidents, then I would turn to an analysis of “prejudice” pursuant to s.
136(b) of the Regulation.  My analysis would be the same as that
relating to the breach under s. 68(3).  In other words, I would determine that
there was no “prejudice” within the meaning of the legislation.

[39]
It follows that the appeal is dismissed.

[40]
If counsel wish to address me on costs, they may
set the matter down.  Otherwise, costs will be in the cause.

“Silverman
J.”

______________________________

The Honourable Mr.
Justice Silverman