IN THE SUPREME
COURT OF BRITISH COLUMBIA

Date: 20100813

Docket: 36781

Registry:
Vernon

Between:

476605 B.C. Ltd.

Plaintiff

And

Insurance Corporation of British Columbia

Defendant

Before:
The Honourable Madam Justice Ross

On Appeal from the
Supreme Court of British Columbia, June 17, 2008, 476605 B.C. Ltd. v.
Insurance Corp. of British Columbia, Docket #36781 (Vernon Registry),

2008
BCSC 777.

Reasons for Judgment

Introduction

[1]          
This is an appeal from the decision of a Master dismissing the plaintiff’s
claim. The Reasons of the Master are indexed at 2008 BCSC 777. The plaintiff’s
truck was written off following an accident. The plaintiff contended that the
defendant corporation did not offer appropriate compensation. The Master
concluded that the claim was in substance a coverage dispute. As such, the
claim had to be pursued through the procedure provided in the Insurance (Motor
Vehicle) Act, R.S.B.C. 1996, c. 231. The court did not have jurisdiction.

Facts

[2]          
The plaintiff was the owner of a 1995 International highway truck
tractor that was involved in a single vehicle accident on May 20, 2004. The
Insurance Corporation of British Columbia (“ICBC”) declared it to be a write
off and offered the plaintiff $18,000 less deductible of $1,000 which it stated
represented the appraised actual cash value of the vehicle. As an alternative,
the defendant provided two trucks that it considered to be equivalent
replacements. The plaintiff did not agree with the valuation. In particular,
the plaintiff alleged that the valuation did not account for the fact that the
vehicle had a relatively new engine and a great deal of special equipment
including extra large gas tanks. In addition, the plaintiff did not accept
either of the two replacement trucks to be equivalent to his vehicle.

[3]          
ICBC then, by letter dated September 20, 2004, advised the plaintiff of
the procedure to be followed to resolve the dispute pursuant to s. 142 of
the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act. A
copy of the section was attached to the letter. The letter concluded:

The Insurance Corporation is
prepared to provide funds to you in the amount of the appraised value indicated
above, subject to any applicable deductible. The funds will be provided on the
basis that should an award under Section 142 exceed the amount of the appraised
value, further funds to that level will be provided. Should the award be less
than the appraised value, reimbursement to the Corporation in that amount shall
be required.

Payment was subsequently made on the basis set out in
the September 20, 2004 letter. The plaintiff did not commence a procedure
pursuant to s. 142.

[4]          
This action was commenced by Writ of Summons dated May 20, 2005. The
endorsement stated:

The plaintiff’s claim is in
regard to an accident occurring on or about May 20, 2004 with particulars to be
detailed in a Statement of Claim to follow.

No Statement of Claim was attached and the Writ of
Summons was never served on the defendant.

[5]          
The plaintiff filed a Statement of Claim on May 19, 2006 which alleged
in part:

7.         The Defendant, despite repeated demands to do so,
has failed to pay to the Plaintiff the fair replacement cost of the vehicle and
its accessories or alternatively to provide the plaintiff an equal replacement
vehicle and accessories.

….

The plaintiff claims as follows:

(a)        that this Honourable Court order the Defendant to
pay to the Plaintiff the fair replacement cost of the vehicle and its
accessories as damages for breach of its insurance contract with the Plaintiff.

[6]          
The Statement of Claim was served and the defendant filed an appearance
on May 30, 2006. The defendant applied by Notice of Motion dated November 23,
2007 to have the action dismissed on three grounds:

(a)        want of prosecution;

(b)        that
the claim is barred by virtue of s. 142 of the Insurance (Motor
Vehicle) Act; and

(c)        that the Writ of
Summons is a nullity.

[7]          
The Master concluded that the dispute related to coverage and
that, pursuant to s. 142, the courts do not have jurisdiction to deal with
the claim. Accordingly, the claim was dismissed. The plaintiff appealed.

Scope
of Review and Fresh Evidence

[8]          
As this is an appeal from a final order, the appeal took the form
of a re-hearing. In addition, the plaintiff applied for the production of fresh
evidence. The test for the introduction of fresh evidence in an appeal of a
decision of a Master was summarized by Gray J. in L.J.B. v. R.W.B., 2002
BCSC 1552, at paras. 13-14:

The ordinary rule
is that fresh evidence cannot be introduced on an appeal of a master’s order
unless the applicant demonstrates that the evidence was not available at the
time of hearing despite due diligence. It must also be evidence that might have
affected the ruling had it been put before the court of first instance. The
rule can be more relaxed on an interlocutory appeal. (See MacMillan Bloedel
v. Mullin (1985), 66 B.C.L.R. 258 (C.A.)).

The ultimate question is whether it is in
the interests of justice to introduce the fresh evidence. If so, this court is
entitled to rehear the matter. (See Culbert v. Agusti, [1993] B.C.J. No. 2238
(S.C.), Leggatt, J. and Abermin Corp. v. Granges Exploration Ltd. (1990),
45 B.C.L.R. (2d) 188 (S.C.)).

[9]          
The evidence consisted of Affidavits #3 and 4 of Stuart Meade who is the
principal of the plaintiff. The subject of Affidavit #3 is the circumstances
surrounding payment of the claim. Mr. Meade was under the impression that
the defendant was contending that the plaintiff was estopped from pursuing the
coverage dispute because he had accepted the payment. This however was not the
defendant’s position, which was set out in the letter of September 20, 2004. This
evidence was available at the time of the hearing. It would not have affected
the ruling. It is therefore not in the interest of justice to admit it. Accordingly,
Affidavit #3 is not admitted.

[10]       
Affidavit #4 exhibits documents and evidence that were before the Master,
although not attached to affidavits. In my view, it is appropriate that this
evidence be in the proper form, and accordingly, Affidavit #4 is admitted.

Discussion

[11]       
At the relevant time s. 142 of the Revised Regulation (1984) under the Insurance
(Motor Vehicle) Act provided:

Disputes about vehicle loss or damage

142 (1)     In this section and in sections 142.1 and 142.2,
“coverage dispute” means, in relation to a vehicle insured under this Division,
a dispute between the owner and the corporation as to

(a)            the
nature and extent of required repairs or replacement, or

(b)      the
amount payable in respect of direct loss of or damage to the vehicle,

but without limiting this, does not include a dispute between
the owner and the corporation as to the rights or liability of the corporation
under, or any decision made by the corporation under, section 117 (1) (a), (2),
(3) or (4).

(2)        Subject to subsection (3), a coverage dispute,
unless resolved voluntarily by the parties to it, must be settled in one of the
following manners:

(a)            the
dispute must be resolved by arbitration under section 142.2 if

(i)   the
corporation and the owner agree to arbitration, or

(ii)  section
142.1 (5) applies;

(b)      the dispute must be
submitted for evaluation under section 142.1 if

(i)   paragraph
(a) does not apply, and

(ii)  the
corporation or the owner requests evaluation by giving notice to the other.

(3)        A coverage dispute
must not be submitted for evaluation or arbitration more than 2 years after the
occurrence of the loss or damage.

[12]       
A number of cases have concluded that, where the dispute is with respect
to coverage as defined, the owner is restricted to the procedures set out in the
section and the courts do not have jurisdiction with respect to the claim, see
for example Goldie v. Grewal, [1988] B.C.J. No. 1035 (S.C.); Sidhu v. Insurance Corp. of British Columbia, [1993]
B.C.J. No. 1998 (P.C.); Suttie v. Insurance Corp. of British Columbia,
2001 BCPC 154, 34 C.C.L.I. (3d); and Ajvazi v. Insurance Corp. of British
Columbia, 2006 BCPC 87.

[13]       
In the present case, ICBC allowed the claim and made payment on the
terms set out in September 20, 2004 letter. The dispute between the parties was
with respect to the valuation of the loss.

[14]       
The plaintiff argued that the claim was not a coverage dispute within
the meaning of the section in that it related to a “dispute between the owner
and the corporation as to the rights of or liability of the corporation under,
or any decision made by the corporation under s. 117(1)(a), (2), or (3).” Section
117 provided:

Limit of liability

117(1)      Subject to sections 121, 122 and 131, the
liability of the corporation for payment of indemnity for loss or damage
described in section 116 is limited to the amount by which

(a)   the cost of repairing or
replacing the vehicle and its equipment or any part of it with material of a
similar kind or quality,

(b)   the declared value of the
vehicle and its equipment, where appropriate, or

(c)   the actual cash value of the
vehicle and its equipment,

whichever is least, exceeds the deductible amount set out in
the owner’s certificate for the vehicle, or each vehicle in a combination of
vehicles.

(2)        The corporation is not liable for that part of the
cost of repair or replacement that improves a vehicle beyond the condition in
which it was before the loss or damage occurred.

(3)        The corporation may determine

(a)   whether a vehicle and its
equipment or any part of it shall be repaired or replaced, and

(b)   whether to pay a garage service operator in respect
of a repair or replacement instead of making a payment to the insured.

[15]       
The Master concluded that s. 117 deals with decisions with respect to
liability and s. 142 deals with coverage or quantum. I agree with that
characterization. It follows that the present dispute is not a s. 117 exempted
dispute, but a quantum or coverage dispute as defined in s. 142.

[16]       
The plaintiff submitted that because the defendant had not given credit
for the new engine, it had in effect denied liability with respect to that
claim and therefore the claim was really one of liability. I do not agree with
that characterization. This is a single claim, the values of different
components contribute to the figure representing the total loss. The
plaintiff’s position is that $18,000 was not a proper value, in part because
the truck had a relatively new engine. If that assertion had been accepted, the
value of the claim would have been higher. However, the dispute remains a
dispute with respect to quantum.

[17]       
The plaintiff submitted that the conduct of ICBC amounted to bad faith or
a denial of coverage that took the dispute out of s. 142, citing Robinson v.
Insurance Corp. of British Columbia (1999), 9 C.C.L.I. (3d) 284 (B.C.S.C.);
Insurance Corp. of British Columbia v. Tabory, [1978] B.C.J. No. 79
(S.C.); Insurance Corp. of British Columbia v. West (1994), 96 B.C.L.R.
(2d) 188 (C.A.); Spence v. Insurance Corp. of British Columbia, 2005
BCSC 1838. In my view, those decisions are distinguishable. There has been no
denial of coverage in this case. On the evidence presently before the court,
there has been no conduct on the part of the defendant amounting to bad faith
or a de facto denial of coverage.

[18]       
The plaintiff contends that the defendant did not place any or an
appropriate value on the vehicle’s engine and specialized equipment. It may be
that his contention is correct. It contends further that the Master erred in
failing to give any or adequate consideration to the value of the equipment in
her analysis of the issue. However, the issue is not whether the valuation was
appropriate, but whether the court has jurisdiction. The Master concluded that
the court does not have jurisdiction and on re-hearing. I am satisfied that her
conclusion was correct.

[19]       
Accordingly, the appeal is dismissed.

“Ross J.”