IN THE SUPREME COURT OF BRITISH
COLUMBIA

Date: 20130305

Docket: S141257

Registry:
New Westminster

Between:

Streeper
Contracting Ltd.

Plaintiff

And

Insurance
Corporation of British Columbia

Defendant

– and –

Docket: M143252

Registry:
New Westminster

Between:

Insurance
Corporation of British Columbia

Plaintiff

And

Streeper
Contracting Ltd.

Defendant

Before:
The Honourable Madam Justice Fenlon

Reasons for Judgment

INTRODUCTION

[1]            
The plaintiff, Streeper Contracting Ltd., hauls oil rig equipment
between lease sites in the oil and gas fields of northeastern British
Columbia.  One of its heavy commercial trucks, Unit 50, collided head-on
with another vehicle in December 2005.  The accident caused serious injury to
the driver of Unit 50, the death of the third party driver, and the loss
of both commercial vehicles.  The defendant, ICBC, denies coverage on the basis
that Unit 50 was operating outside of its insurance coverage, and on the
basis of a misstatement made to ICBC by Streeper Contracting’s president.

[2]            
The plaintiff alleges breach of contract and sues to recover the cost of
Unit 50.  The defendant, in a separate action heard together with
Streeper’s claim, sues to recover the sums paid out to third parties on behalf
of the plaintiff.  The parties agree on the magnitude of their respective
claims:  Streeper Contracting’s loss is $120,000 (the $130,000 value of Unit 50
less $10,000 recovered from salvage); ICBC’s claim is for payments made to
affected parties of $172,495.

ISSUES

[3]            
The two actions raise two common issues:

1.              
Did Unit 50 have coverage at the time of the accident?

2.              
Did the plaintiff make a wilful misstatement to the defendant thereby
forfeiting its right to indemnity under the insurance policy?

[4]            
The plaintiff’s claim raises a third discrete issue, which it pleads in
the alternative if coverage is found to be unavailable:

3.              
Did ICBC act in bad faith in investigating this claim?

ANALYSIS

1.              
Did the plaintiff have insurance coverage for Unit 50?

[5]            
The parties agree on the following facts.  Unit 50 was insured for hauling
goods, including petroleum rig components, within a 160 km range.  On
December 28, Unit 50 picked up a load from an oil rig site near
Elmworth, Alberta, and was to travel north on the Alaska Highway to Fort
Nelson, spend the night there and then proceed to a site southeast of Fort
Nelson, a total distance of close to 700 km.  Although the accident
occurred 45 km from the pick-up site, the parties agree that the relevant
distance is that between the loading and unloading points of the trip.  They
also agree that Unit 50 was operating in excess of its insured range at
the time of the accident.

[6]            
The issue in dispute is whether Unit 50 was nonetheless insured through
one of the “saving” provisions in the Insurance (Motor Vehicle) Act
Regulation, B.C. Reg 447/83 (the “Regulation”) in force at the
time of the accident.

[7]            
Section 55(2)(a) of the Regulation is the general prohibition on
uses outside the coverage contracted for:

(2)        Subject to section 2 of Table 2 of Schedule 1,
except for statements regarding the location address of a vehicle an insured
shall not operate a vehicle for which coverage is provided under section 49,
Part 6 or Part 9 contrary to the statements contained in the application for
insurance for the vehicle, including, but not limited to,

(a)        the
use declared in the application for insurance for the vehicle,

(b)        a provision
relating to the time in which, and the territories within which, the vehicle
may be operated, or

(c)        a provision relating to the
kind of goods, or number or passengers, that may be carried in or on the
vehicle.

[8]            
The saving provision the plaintiff relies on is found in Schedule 1,
Table 2, s. 2(5) of the Regulation, which provides
that the coverage on a higher rated vehicle can be used to cover a lower rated
vehicle on six occasions in a calendar month as long as the higher rated
vehicle is not in use at the time that the lower rated vehicle is being used:

s.2(5)   Where

(a)        a
group of 2 or more vehicles is registered in the name of the same owner or
lessee or in the names of members of the same household, and

(b)        each
vehicle in the group is correctly rated according to its use,

the owner or lessee of any vehicle in the group or a member
of the household of either of them, may, without breaching a condition of
section 55(2)(a), use, on not more than 6 days in a calendar month, a lower
rated vehicle in the group in place of a higher rated vehicle in the group.

I note parenthetically that the Regulation has since
been amended.  The equivalent of s. 2(5) is now found in the Basic Insurance
Tariff issued by ICBC.

[9]            
The plaintiff’s position is that on the day of the accident Unit 50
was covered by the saving provision in s. 2(5) because Streeper had
substituted the higher rated insurance coverage on Unit 39, another
vehicle in its fleet, for the lower rated insurance coverage on Unit 50. 
That substitution was possible because Unit 39 had coverage for unlimited
distance and was not in use that day.

[10]        
The defendant’s position is that the plaintiff cannot bring itself within
the coverage afforded by s. 2(5) because Streeper failed to meet one of the
prerequisites for substituted coverage: each vehicle in the group must be “correctly
rated according to its use”.  ICBC submits that Streeper cannot meet this
requirement because Streeper admits it had other trucks on the same job that
day operating beyond the distance they were insured for—most were insured for distances
up to 550 km, but were engaged in the same 700 km haul.

[11]        
Determining whether Streeper can avail itself of the saving provision thus
turns on the meaning of the phrase “where each vehicle in the group is correctly
rated according to its use”.  Counsel for both parties agree that this is largely
a question of first impression.  Only one reported case, Morgenstern v. Insurance
Corporation of British Columbia (1992), 10 C.C.L.I. (2d) 103 (B.C.S.C.),
has considered this subsection of the regulation, and it was ultimately decided
on the basis of another subsection.

[12]        
What, then, does this phrase mean?  ICBC argues that on a plain and
purposive reading of the regulation, the provision permitting an owner to use
coverage from a higher rated vehicle to insure a lower rated vehicle where
“each vehicle in the group is correctly rated according to its use” requires that
all of the owner’s other vehicles on the day of the substitution have adequate
coverage for the way they are being operated.

[13]        
ICBC argues this must be the meaning because otherwise an owner could
operate several vehicles in excess of their rated uses, keeping one higher
rated vehicle idle to cover any accident that might occur among the fleet on a
particular day.  Further, because the substituted insurance provision is “automatic”
and does not require the filling out of a form or notification to ICBC of an
intention to use the provision, there would be no way to track which of the
many underinsured vehicles the owner actually intended to cover with the higher
rated vehicle’s insurance.  In short, says ICBC, the provision for substituting
insurance coverage from one vehicle to another is workable only if no more than
one vehicle in the fleet is operating outside of its coverage on the day a
substitution is made.  Since some trucks were not correctly rated for the
distance travelled, ICBC submits that none of the trucks in that group can use
s. 2(5).

[14]        
While there was some confusion about the number of trucks on the road on
the day of the accident, there is no dispute that four trucks used on the haul
were rated for distances over 550 km.  ICBC agrees they were operating
within their insurance coverage and, using ICBC’s interpretation, were
therefore “correctly rated according to their use”.  The parties also agree
that about seven trucks in use that day were rated for distances up to 550 km,
so were operating outside of their coverage.  It follows that if ICBC’s
interpretation is correct, those trucks were not “correctly rated according to
their use”, and Unit 50 did not qualify for substituted insurance coverage
unders.  2(5) of Schedule 1, Table 2 of the Regulation.

[15]        
I begin by taking note of the principles of construction to be applied in
interpreting s. 2(5).  First, although this case involves insurance
coverage, the contra poferentum rule does not apply.  Insurance
contracts are subject to that rule, but the Act and Regulations are
not: Squire v. Insurance Corp. of British Columbia (1990), 69 D.L.R.
(4th) 300 at 303-304, 44 B.C.L.R. (2d) 65 (C.A.).  That is so because the
underlying rationale for the contra proferentum rule (that contractual
ambiguity should be interpreted against the person who drafted it) has no
application when neither party can choose the language of the statutory
provisions that apply to the insurance relationship: Squire at
para. 9.

[16]        
Second, insurance regulations are to be interpreted using the normal
tools of statutory construction.  The words of the regulation are to be read in
their entire context, in their grammatical and ordinary sense, and harmoniously
with the scheme of the Act, the object of the Act, and the
intention of the legislature: Wormell v. Insurance Corporation of British
Columbia, 2011 BCCA 166 at para. 18, 16 B.C.L.R. (5th) 282.

[17]        
Third, the presumption against tautology applies: Wormell at
para. 19. This rule presumes that legislatures avoid superfluous or
meaningless words, and that every word in a statute has a specific role to play
in advancing the legislative purpose.

[18]        
With these principles in mind, I turn to the subsection in issue.  The
object of the Act is creation of a compulsory system of insurance.  The
rate class system set out in Schedule 1 ensures that owners of vehicles are
charged a premium for their coverage that reflects the level of risk associated
with their use of a vehicle: Triack Resources Ltd. v. Insurance Corp. of
B.C., 2010 BCSC 586 at para. 5, 84 C.C.L.I. (4th) 248.

[19]        
Section 55(2) of the Regulations relieves ICBC from
liability if the owner of the vehicle uses it in a way that is contrary to the
use declared in the insurance application.  This section, combined with
the rate tables, limits the degree to which ICBC is exposed to risks
resulting from unapproved uses of vehicles.

[20]        
In my view, the key to deciphering the meaning of the phrase in issue is
the word “each”.  Section 2(5) provides that substituted coverage is available
where:

a)         a
group of 2 or more vehicles is registered in the name of the same owner… and

(b) each vehicle in the
group is correctly rated according to its use,

[21]        
“Each vehicle” is equivalent to saying “every vehicle” in the group of
vehicles owned by the same owner, here Streeper.  This phrase encompasses not
only the rest of the fleet, but also the two vehicles involved in the
substitution, one of which by definition is not correctly rated for an intended
use and needs to “borrow” a higher rated vehicle’s insurance coverage.  Requiring
every vehicle to be “correctly rated according to its use” makes sense if the “use”
refers to the general use to which a vehicle is put.

[22]        
The question then becomes whether the owner has in place insurance on
its fleet of vehicles that is correctly rated for the way they are usually
operated.  In this case, Streeper established that its usual business was short
hauls within 100 km.  The contract Streeper was awarded for the long haul
for Encana on December 28 was “surprising”; a move of this distance was
very much out of the ordinary for Streeper.  There was no evidence to suggest
that Streeper’s trucks were not insured in accordance with their general use.

[23]        
This interpretation accords with the objective of managing risk through
compulsory insurance:  an owner of a group of vehicles who has them properly
insured for the way he uses them day-to-day gets the benefit of the substituted
coverage provision, whereas an insured who has been consistently operating
outside of the scope of his coverage would not.

[24]        
This interpretation is also consistent with the meaning proposed by ICBC
in Morgenstern, although as I have noted, the question was not decided
because that case was determined based on the wording of s. 2(2), the saving
provision applicable to pleasure and business use of vehicles.

[25]        
In addition, the interpretation is consistent with an earlier version of
subsection 2(5).  The Regulation in effect at the time of the accident
was enacted as B.C. Reg. 447/83.  It repealed B.C. Reg. 428/73.  Section 2(5)
of the earlier version read as follows:

(5)        Where an insured owns or leases 2 or more motor
vehicles or trailers, each of which is correctly rated according to the
principal use by the insured of the motor vehicle or trailer, the insured
may, without committing a breach of the insurance applicable to the lower rated
vehicle,

(a)  on not more than 4 days in a
calendar month, use a lower rated vehicle owned or leased by the insured in
place of a higher rated vehicle owned or leased by the insured, and

(b)  use a lower rated vehicle owned or
leased by the insured in place of the vehicle owned or leased by the insured
that is both principally used and insured in a rate class that requires
payment by the insured of a larger annual premium than for any other vehicle
owned or leased by the insured, if

(i)   the insured places the vehicle
that requires payment of the larger annual premium in the rate class that
covers the highest risk, and

(ii)  at any one time only one lower
rated vehicle is used by the insured for the higher rated purpose.

[26]        
While it could be argued that the amendment to the subsection was
intended to change its meaning, in my view the changes when read as a whole are
more consistent with an intention to preserve the meaning but simplify its
expression.

[27]        
Finally, I consider the purpose of the saving provision, which is to
permit owners to use their vehicles in ways that would ordinarily fall outside
of their coverage where the risk to the insurer is essentially the same because
one vehicle is being used in place of another.

[28]        
The various rate classes are designed to ensure that ICBC’s degree of
risk is reflected in an appropriate premium, with higher risks carrying higher
premiums.  Allowing substitution of one higher rated vehicle for one lower
rated vehicle, even where there are other vehicles in the fleet operating
outside of their coverage, does not increase that risk.  In the case at bar, Unit 50
was simply doing what Unit 39 could otherwise have done: that is, haul a
load of rig parts more than 550 km.  It makes no difference to the insurer
that it was Unit 50 rather than Unit 39 that actually lost control
and had an accident.  Many of Streeper’s other vehicles were operating that
night without valid insurance coverage and without benefit of a substitution. 
If they had been in an accident, they would not have been covered.  Again, ICBC
had no greater risk as a result:  that risk was borne by Streeper Contracting.

[29]        
I conclude that the use of some vehicles contrary to the terms of the
insurance contract does not invalidate the insurance of those vehicles that
were being operated within the terms of the policy.  If Unit 50 was being
used in substitution of Unit 39 on the day of the accident as Streeper
claims, the fact that some of its other vehicles were not covered would not nullify
the coverage on Unit 50.

[30]        
I do not find persuasive ICBC’s argument that the subsection should be
interpreted to mean that only one underinsured vehicle can be on the road at
one time because that is the only construction that prevents an owner from
using one idle higher rated vehicle to cover any number of lower rated vehicles.
It will always be a question of fact whether an insured has proved that a
proper one-to-one substitution was in place.  In cases such as this one, in
which multiple underinsured vehicles were on the road at the same time as the
vehicle the insured asserts was the one “borrowing” the higher rated vehicle’s
insurance, the owner will have to overcome a natural skepticism about what was
really going on.  I turn now to that question of fact.

[31]        
In order to prove that Unit 50 had insurance coverage under
s. 2(5), Streeper must establish that the insurance from a higher rated
vehicle had been substituted to cover Unit 50 and no other vehicle.  I
turn now to the evidence led by the plaintiff in this regard.

[32]        
Sheryl Streeper is employed by the plaintiff, and is married to Bill
Streeper, the founder and then-president of the plaintiff.  She was in charge
of ensuring that vehicles were properly covered for any given job.  Mrs. Streeper
was familiar with the substitution provision and had in 2001 obtained a copy of
the Schedule from ICBC and posted it on a bulletin board in the office.  She
also routinely put in place temporary change insurance to cover vehicles when
required.

[33]        
Mrs. Streeper was faced with a “short fuse job” that had to be
undertaken over the Christmas break during a tumultuous period when the company
was in the process of being sold.  While in general I found Mrs. Streeper
to be a forthright witness, her evidence was vague as to how she determined the
exact distance of the trip.  She claims to have determined the trip to be under
550 km based on misinformation received from the dispatcher that the trucks
would be turning east off the Alaska highway at the Klua Lakes Road, when in
fact they travelled farther north to the Andy Baily Road before turning east. 
The dispatcher, Mr. Trerice, denies he provided Mrs. Streeper with the
wrong route.  It is unlikely that he would have done so, given that he gave the
correct route to every driver on the job.

[34]        
It is more probable that Mrs. Streeper did not calculate the
precise distance of the route.  Instead, based on her knowledge that the trucks
were travelling to a site south of Fort Nelson, she simply assumed the route
was less than 550 km.  However, I am satisfied  that Mrs. Streeper considered
insurance coverage for the fleet and, knowing that Unit 50 had the lowest
distance rating of the vehicles to be used on the job, decided to substitute the
insurance from a higher rated vehicle to cover it.  While there were other
units on the job that were, like Unit 50, rated only for distances up to 160 km,
I find that they were to be used locally at the rig up site and were not going
to be hauling from the tear down site.  As a result, Mrs. Streeper
understood they would not have a coverage issue.

[35]        
As it turned out, the trip exceeded coverage on the 550 km rated
trucks as well, and they too were in fact underinsured.  I agree with ICBC that
the plaintiff let insurance “fall between the cracks” on this job.  However, I
find that Mrs. Streeper did not believe those trucks would be operating in
excess of their coverage, and did not intend to apply the substitution provision
to those vehicles.

[36]        
Whether a sufficiently higher rated vehicle was available to cover Unit 50
is a question of fact.  Mrs. Streeper knew that neither Unit 39
(unlimited distance) nor Unit 32 (up to 550 km) were being used by
Streeper that day and I find that she intended to substitute the higher
coverage from one of them to cover Unit 50.  The defendant points out that
Units 39 and 32 were sometimes described as “broken down” and sometimes described
as “parked”, but I do not find anything troubling about that inconsistency.  I
accept the evidence of Clayton Meyers, the driver primarily assigned to Unit 39,
that the vehicle was parked and unavailable at the time of the rig move because
of repairs.  Mrs. Streeper did not intend to use the coverage on either Unit 39
or Unit 32 on any other truck that day, because she did not believe any truck
other than Unit 50 was operating in excess of its coverage.

[37]        
In summary on this issue, I find that the plaintiff has proved that Unit 39’s
higher rated insurance was used to cover Unit 50 on the day of the
accident.

[38]        
Streeper also has the burden of proving that a lower rated vehicle was
not used in place of Unit 39 on more than 6 days in the last calendar
month before the substitution.  The documentary evidence is inconclusive on
this issue.  I am satisfied, however, that Mrs. Streeper’s testimony in
this regard should be accepted.  The shorter hauls normally undertaken by
Streeper make it probable that the need to substitute unlimited coverage onto a
lesser-rated vehicle was an uncommon occurrence.

[39]        
In summary on this issue, Unit 50 was covered under s.  2(5)
of Schedule 1, Table 2 of the Regulations at the time of the accident.  It
follows that ICBC must indemnify Streeper for its loss unless ICBC proves that
the plaintiff made a willful misstatement.  I turn now to that issue.

2.              
Did the plaintiff make a wilful misstatement thereby forfeiting its
right to indemnity under the policy of insurance?

[40]        
Under s. 75(b) of the Insurance (Vehicle) Act, R.S.B.C.
1996, c. 231, an insured’s right to payment under his insurance policy will
be forfeited if the insured makes a wilfully false statement with respect to
the claim.  Where, as in this case, the insurer has paid out by way of
settlement or otherwise, s. 77(2) provides that the insurer is entitled to
be reimbursed for those sums: King v. Insurance Corporation of British
Columbia, 2010 BCSC 1740, 93 C.C.L.I. (4th) 228.  ICBC’s right of recovery
for breach includes both property damage and payments in relation to personal
injury claims: Stone v. Insurance Corp. of British Columbia, 2009 BCPC
33, 72 C.C.L.I. (4th) 142.

[41]        
ICBC’s position is that Streeper forfeited its right to insurance
coverage on Unit 50 because Mr. Streeper wilfully made a false
statement to ICBC on March 2, 2006, and again on March 24, 2006, when
he provided route information that was incorrect.

[42]        
The plaintiff admits that Mr. Streeper made a misstatement to ICBC
about the route to be taken by Unit 50 and the other vehicles on the haul
that day.  But Streeper submits the misstatement was made in error and not
intentionally.  I begin with the statement.

[43]        
Mr. Streeper told ICBC’s adjuster that Unit 50 was travelling
from Elmworth to the rig up site southeast of Fort Nelson, a distance of 558
kilometres.  In particular, he advised that the planned route for Unit 50
was east from the Alaska Highway at a point near Prophet River, using a winter
access road known as the Klua Lakes Road.

[44]        
The actual route involved travelling north past Prophet River on the
Alaska Highway, turning east on the Andy Bailey Road, then using the Eskai Road
and finally the Klua Road to travel southeast to the rig up site.  Mr. Streeper
says that he made an honest mistake when he gave ICBC the wrong route initially
and did not intend to mislead the insurer.

[45]        
The question to be determined is, therefore, whether Mr. Streeper’s
statement was made wilfully or simply mistakenly.  The meaning of “wilfully
false statement” was addressed in Petersen v. Bannon (1993), 107 D.L.R.
(4th) 616, 84 B.C.L.R. (2d) 350 (C.A.), a case in which an insured gave two
statements to ICBC that were contradictory.  At 626, the Court of Appeal held:

A wilful act is one done intentionally, knowingly and
purposely, without justifiable excuse.  A wilful act is to be distinguished
from an act done carelessly, thoughtlessly, heedlessly or inadvertently.

The onus is on the insurer to
prove on a balance of probabilities that the statements in question were
wilfully false.  Because the allegations are serious, the judge is justified in
scrutinizing the evidence carefully, and cogent evidence will be required to
support an allegation of dishonesty.

[46]        
A wilfully false statement includes a statement that is made as a result
of wilful blindness as to the truth of the alleged facts: Skuratow v.
Commonwealth Insurance Co., 2005 BCCA 515 at para. 14, 259 D.L.R. (4th)
333.

[47]        
Mr. Streeper was on the stand for three days in total and under
cross-examination for more than one day.  Throughout his testimony he asserted
clearly, repeatedly, and with conviction that he did not intentionally mislead
ICBC.  Ultimately, the question of whether Mr. Streeper made a wilfully
false statement about the route to be travelled by Unit 50 turns on his
credibility.  I conclude that Mr. Streeper’s evidence in this regard
should be accepted for the following reasons.

[48]        
First, I find that Mr. Streeper was not aware of the actual route
planned by way of the Andy Bailey Road.  That route was determined by the truck
push on the job, Bill Streeper’s son John Streeper.  The truck push worked with
the dispatcher to ensure that the vehicles got to the teardown location of the
rig and then travelled along a route that would take them into the location of
the rig up site.  Bill Streeper, as president and CEO of Streeper Contracting,
was not involved in day-to-day operations at this level.  While John Streeper
agreed that his father was a “hands on” manager, I accept Mr. Streeper’s
evidence that this did not involve micromanaging every job undertaken by his
company.  John Streeper confirmed that he did not report to or get his father’s
approval for the route.  At the relevant time, Streeper Contracting had 84
employees, including 30 truck drivers, ten swampers, five mechanics, and four pilot
car drivers, as well as office staff.  It is not surprising that Mr. Streeper
would not be aware of every detail of every job.

[49]        
Second, the route described by Mr. Streeper was a “real route”
known to him and previously used by Streeper Contracting and other companies. 
The maps and photographs in evidence, as well as the testimony of many
witnesses for both the plaintiff and defendant, confirmed that Northeastern
British Columbia is criss-crossed with seismic lines.  Seismic lines are little
more than paths through the bush cleared by bulldozers, but in the winter they
are regularly used by large vehicles such as Unit 50 to travel off road to
drilling sites.

[50]        
The route described by Mr. Streeper, which I will refer to as the “Klua
Lakes Route”, followed a decommissioned logging road and then seismic lines to
the rig up site.  John Streeper, who had fallen out with his father over other
matters long before trial, said that he had seen the Klua Lakes Route open both
before and after the accident.  He confirmed that he was aware of other
companies using the Klua Lakes Route a couple of years before the accident. 
Ken Dewdney, a driver, also testified that he had been involved in an earlier
Streeper rig move using the Klua Lakes Route.

[51]        
The independent adjuster hired by ICBC to investigate this claim, James
Klassen, was not aware that vehicles of this size could travel on seismic
lines.  From the outset, having driven past the access point at Klua Lakes
Road, he assumed that such travel was impossible and that Mr. Streeper was
therefore blatantly lying.  The evidence from the men who performed the hauls
regularly, as well as from Peter Smith, an employee of the Oil and Gas
Commission who was very familiar with the area, was to the contrary.

[52]        
Third, the route Mr. Streeper described was a logical one.  It had
the trucks travelling east off of the Alaska Highway in almost a straight line
to the rig up site.  The actual route chosen by the truck push and dispatchers
went considerably farther north and then east and south to the rig up site.  In
other words, the route initially identified by Mr. Streeper was a much
more direct route.  Mr. Streeper, knowing that the Klua Lakes Route had
been used by Streeper Contracting in the past, assumed that it would be used on
this job as well.

[53]        
Fourth, the actual route off the Andy Bailey Road was a better road than
the Klua Lakes Route at the start, but it too consisted of low-grade seismic-line
trails.  Although ICBC understood that all of the Andy Bailey route was
developed and was a high grade road at the time of the haul, in fact the Eskai
Road, the last leg of the Andy Bailey route, was not completed until the year
following the accident.  Both John Streeper and driver Wallace Colp, who had
many years of experience in the industry, were not even aware of the existence
of the Eskai Road prior to this particular job.

[54]        
Mr. Colp confirmed that the drivers on the job that day were told
to call dispatch on their way to Fort Nelson for directions on where to go from
there.  His evidence suggests both that the route was neither well known nor
provided to those on the job in advance of the rig haul.  It was apparent from
the evidence given by many witnesses that the names of the roads also caused
confusion about the route.  The route mistakenly identified by Mr. Streeper
involved the Klua Lakes Road, while one portion of the actual route taken was known
as Klua Road.

[55]        
Fifth, ICBC submits that Mr. Streeper intentionally gave the wrong
route because he was concerned about Unit 50 exceeding its 160 km
coverage.  While ICBC understandably viewed the claim from this perspective, I
am satisfied that Mr. Streeper never thought distance was an issue.  A
review of what occurred between Mr. Streeper and ICBC as the investigation
unfolded confirms his lack of concern about the distance rating on Unit 50.

[56]        
Initially, ICBC assigned Glenn Walker to investigate the claim.  Norm Felix,
an ICBC employee, asked Mr. Walker to determine the distance involved.  Mr. Walker
spoke to Mr. Streeper and then informed Mr. Felix that it was 42 km
from the load up site to the accident.  That exchange occurred on February 1,
2006.  It is apparent that at first even ICBC’s internal adjuster thought the
relevant measurement was the distance from the start of the journey to the
accident.

[57]        
The next day, Mr. Felix informed Mr. Walker of the relevant
measurement and asked him to follow up with Mr. Streeper.  Mr. Streeper’s
response was to describe the endpoint as a site “near Fort Nelson”, a distance
of more than 160 km.  At that point Mr. Streeper believed that there
was substitute coverage available.  From Mr. Streeper’s point of view, Unit 50
would therefore have coverage for an unlimited distance.  On March 1,
2006, when ICBC again asked about the precise coordinates of the pick-up and
drop-off, Mr. Streeper sent Mr. Felix a Google map showing a route from
Elmworth to Fort Nelson, a distance of 568 km.  Again, it is apparent that
Mr. Streeper was not focussed on fabricating a distance of less than 160 km. 
When asked for detailed information about the route on March 2, 2006, Mr. Streeper,
within two hours of receiving the request, sent ICBC a map showing the Klua
Lakes Road.

[58]        
In an interview with Mr. Klassen on March 24, 2006, which was
taped and transcribed, Mr. Streeper again described the Klua Lakes Road. 
He was aware that the route was over 550 km, but knew that Unit 39,
which had an unlimited rating, was available to cover Unit 50.  Mr. Streeper
spent a good part of the interview explaining the transfer of coverage
available from Unit 39.  He said that to the best of his information the
distance was under the 550 km, and he expressed consternation over why
there was an issue when Streeper had an unlimited vehicle available.  Mr. Streeper
also pointed out that he had spoken to Dale Bumstead, a vice president of ICBC
in its North Vancouver office, about coverage being available under the Breach
Program even if there was a breach proper.

[59]        
The sixth reason I accept Mr. Streeper’s assertion that the misstatement
was not intentional is the fact that Mr. Streeper, in a second interview
with James Klassen on May 24, 2006, volunteered without prompting that he
had made a mistake about the route originally described to ICBC.  Mr. Streeper
told Mr. Klassen that he had discovered the trucks actually took the Andy
Bailey Road and that no one had used the Klua Lakes Road.  Mr. Streeper
said he had discovered that error in about mid-April 2006, but did not think it
was of particular importance given the unlimited distance rating on the
substitute insurance.  His lack of concern about the distance and the
corresponding lack of an incentive to lie about it is also apparent from his initial
suggestion to Mr. Klassen that Mr. Klassen speak to the drivers on
the job rather than to him.  It was Mr. Klassen who insisted on speaking
to the “man at the top”.

[60]        
ICBC argues that Mr. Streeper should not be believed when he says
he did not know the true route when he described the Klua Lakes Road route on
March 2 and March 24, 2006.  They point to Mrs. Streeper’s
evidence that she was aware of the correct route about a week after the
accident, that John Streeper knew in his capacity as truck push, and that Streeper’s
dispatcher knew too.  ICBC argues it is inconceivable that so many people close
to the move, including family members, would know the truth and yet somehow Mr. Streeper
would not know the correct route until two-and-a-half months after the accident.

[61]        
ICBC’s submission makes some sense if one looks at the situation in
hindsight with the awareness that ICBC was very much contesting the distance
rating and whether coverage was available.  But that was not the case from Mr. Streeper’s
perspective at the time.  He, having spoken initially to adjuster Glenn Walker
and to Vice President Dale Bumstead, assumed that there was not going to be an
issue about coverage.  He had no reason to investigate and confirm that the
route he logically assumed the trucks had used was in fact the route they had
taken.  In the circumstances, I do not find it surprising that Mr. Streeper
did not discuss the route with others in the office.  That reflects a degree of
carelessness, but I do not find his conduct amounts to wilfulness or wilful
blindness.

[62]        
ICBC also relies on Mr. Streeper’s  testimony in direct examination
that he knew the correct route “within weeks, about a month” after the
accident.  While that, if true, would mean that Mr. Streeper knew the true
route by January 28, 2006, before he made both statements to ICBC, I find
that Mr. Streeper simply misspoke.  He was asked when after the accident
he spoke to his son about the routing and realized that the rig had used a
different route.  Mr. Streeper said he did not know when the conversation
occurred.  He then said “I’d say a month.  It was when I got inquiries from
ICBC and I dug deeper to see what happened”.

[63]        
Mr. Streeper consistently gave evidence that he discovered the
truth between the two interviews with the independent adjuster, that is,
between March 24 and May 24, 2006.  He did not move from that
evidence.  The two pieces of evidence are incompatible if taken literally, but
I find that Mr. Streeper was underestimating the amount of time that
passed between the accident and his conversation with John Streeper about the
actual route.  It is not surprising that his evidence contained some inconsistencies
given that the events occurred seven years before trial.

[64]        
Next, ICBC argues that Mr. Streeper should not be believed because
he described discovering the actual route in a number of different ways.  In
the Klassen interview and at trial Mr. Streeper said that he learned by
going back through invoices and looking at drivers’ time sheets.  At the first
examination for discovery Mr. Streeper said that he spoke to the
dispatcher or Mr. Colp, and in cross-examination at trial he said he
learned the truth by reading the statement of the driver Mr. Northey. 
ICBC argues that the only reasonable conclusion is that none of the accounts of
how Mr. Streeper learned the truth should be believed and that most likely
he never “learned” the truth at all: he knew the truth all along.

[65]        
Some of the confusion stems from the fact Mr. Streeper discovered three
aspects of the haul that were inconsistent with the Klua Lakes Road.  First, he
discovered that the trucks had gone to Fort Nelson as the first leg of the
journey, before going back out on the road again to the drop-off site.  He appears
to have learned that from looking at invoices and records.  Second, he appears
to have discovered the information about the exact route by speaking to his
employees, including his son John Streeper.  Finally, he discovered, after
reading the driver’s statement, that Unit 50 had been dispatched to
proceed to Fort Nelson.

[66]        
Ultimately, as I stated at the outset of this section, my finding turns
on the overall credibility of Mr. Streeper, taking into account all of the
evidence.  While Mr. Streeper’s evidence was not entirely consistent over
the seven years in which he addressed questions put to him by ICBC, overall I
believe Mr. Streeper.  I find that he was careless in giving ICBC an
incorrect route, but did not intentionally or wilfully mislead the insurer.

[67]        
In summary on this issue, I find that the defendant has not proved that Mr. Streeper
made a wilfully false statement.  It follows that Streeper’s right to insurance
was not forfeited.

3.              
Did ICBC act in bad faith in investigating the plaintiff’s claim?

[68]        
As an alternative to its claim for insurance coverage under s. 2(5),
the plaintiff pleaded that Streeper should be awarded punitive damages equivalent
to the value of the vehicle lost because ICBC conducted its investigation in
bad faith.  The plaintiff made it clear that if it succeeded on the issue of
coverage, it did not seek any damages arising out of the bad faith claim. 
Having found coverage to be available to the plaintiff, it is accordingly not necessary
for me to address the issue of bad faith.

COSTS

[69]        
My preliminary view is that the plaintiff is entitled to its costs at
Scale B.  If the parties cannot agree on costs or the date from which
interest on the loss is payable, they may speak to the issue within three
months of the date of these reasons.

“The
Honourable Madam Justice L.A. Fenlon”