



COURT OF APPEAL
        FOR BRITISH COLUMBIA




Citation:



Thornber
                v. Insurance Corp. of British Columbia,









2005 BCCA
            45




Date: 20050126




Docket: CA030675

Between:

James Leigh
      Thornber

Respondent

(
Plaintiff
)

And

Insurance
      Corporation of British Columbia

Appellant

(
Defendant
)











Before:



The Honourable
            Chief Justice Finch





The Honourable
            Madam Justice Prowse





The Honourable
            Madam Justice Levine









D.A. Brindle,
            Q.C.



Counsel for the Appellant





J.L. Straith



Counsel for the Respondent





Place and
            Date of Hearing:



Vancouver, British Columbia





January 10, 2005





Place and
            Date of Judgment:



Vancouver, British Columbia





January 26, 2005









Written
              Reasons by
:





The Honourable
            Madam Justice Prowse





Concurred
              in by:





The Honourable
            Chief Justice Finch

The Honourable
            Madam Justice Levine





Reasons for Judgment of the Honourable Madam Justice
        Prowse:

OVERVIEW

[1]

The
      Insurance Corporation of British Columbia ("ICBC") is appealing
      from the decision of a trial judge, made March 4, 2003, finding that Mr.
      Thornber was entitled to be indemnified by ICBC under his policy of motor
      vehicle insurance for loss he incurred as a result of a single vehicle
      accident in which he was involved on March 29, 2002.  The trial judge awarded
      him damages of $34,560.59, plus costs of substitute transportation up to
      a maximum of $500, and costs of the action at Scale 3.  The trial judgment
      is reported at (2003), 14 B.C.L.R. (4th) 297.

[2]

The
      trial judge concluded that ICBC had acted in bad faith in relation to Mr.
      Thornber's claim and that its conduct in that regard precluded it from
      relying on s. 136(b) of the
Revised Regulation (1984) Under the Insurance
      (Motor Vehicle) Act
, B.C. Reg. 447/83 (the "Regulations"),
      to deny coverage for his loss.

[3]

At
      the hearing of the appeal, counsel for Mr. Thornber did not seek to uphold
      the trial judge's finding of bad faith (which had neither been pleaded,
      nor argued at trial), but submitted that the appeal should be dismissed
      on the basis that ICBC had not established that Mr. Thornber had acted
      to its prejudice in leaving the scene of the accident.

[4]

The
      only issue on appeal, therefore, is whether the evidence supports the conclusion,
      advocated by ICBC, that Mr. Thornber's actions in leaving the scene of
      the accident, contrary to s. 68 of the
Motor Vehicle Act
,
      R.S.B.C. 1996, c. 318 (the "MVA"), prejudiced ICBC within
      the meaning of s. 136(b) of the Regulations.

[5]

Although
      the trial judge did not make a finding with respect to the issue of prejudice,
      counsel for the parties agree that the necessary evidence is before this
      Court to determine that issue and to resolve the appeal without the necessity
      of referring the matter back to the trial court.

BACKGROUND

[6]

The
      accident giving rise to this action occurred near Mr. Thornber's home in
      Sechelt, B.C.  Mr. Thornber was driving home alone from a pub along a stretch
      of road he travelled frequently, when the tires of his truck caught in
      the gravel on a curve in the road, causing his truck to flip over and land
      upside down in a ditch.  Mr. Thornber was able to extricate himself from
      the vehicle and walk to his home, approximately 100 yards away.  He left
      the vehicle with the keys in the ignition and the engine running.  He entered
      his home through a back window, drank a few beers and then fell asleep.

[7]

A
      motorist who came upon the scene called the police.  Police and numerous
      fire personnel attended the scene, removed the truck and searched for bodies.  Eventually,
      Cst. Hill determined Mr. Thornber's address from the vehicle registration
      and he went to Mr. Thornber's home.  After speaking to Mr. Thornber, Cst.
      Hill concluded that Mr. Thornber's ability to drive was impaired and he
      detained him for an impaired driving investigation.  Mr. Thornber agreed
      to comply with a breathalyser demand and advised Cst. Hill that he had
      been drinking both before and after the accident.

[8]

Shortly
      thereafter, Cst. Hill consulted a senior officer who advised not to pursue
      the impaired driving investigation.  The evidence indicates that this advice
      related to the fact that Mr. Thornber had been drinking following the accident,
      and to a "manpower" shortage.  Cst. Hill issued Mr. Thornber
      a 24-hour driving suspension and a ticket for driving "without due
      care and attention" under s. 144(1)(a) of the MVA.

[9]

On
      April 19, 2002, Mr. Thornber gave a statement to an ICBC claims adjuster,
      Ms. Singbeil.  Ms. Singbeil gave Mr. Thornber a letter indicating that
      ICBC was conducting an investigation of the accident and that it would
      refuse to indemnify him if he were in breach of his policy.

[10]

On
      April 19, Ms. Singbeil also telephoned the RCMP to inquire whether Mr.
      Thorner had been given a ticket for failure to remain at the scene of an
      accident.  In speaking with Cst. Hill, she advised that ICBC would not
      provide coverage if Mr. Thornber were charged with impaired driving, failing
      to provide a breath sample, or failing to remain at the scene.  She testified
      that she discussed this issue with Cst. Hill to ascertain whether Mr. Thornber
      would be charged with any of those offences before paying out the claim,
      as she had run into problems in the past in paying out claims before the
      investigations were completed.

[11]

Cst.
      Hill testified that when Ms. Singbeil asked if he had charged Mr. Thornber
      with leaving the scene of an accident "a light bulb went on" in
      his head and he decided to issue a ticket for failure to remain at the
      scene contrary to s. 68(1)(a) of the MVA.  He issued the ticket on April
      28 and advised Mr. Singbeil of this fact on May 2.

[12]

Ms.
      Singbeil subsequently told Mr. Thornber's lawyer that ICBC would pay Mr.
      Thornber's claim only if he successfully disputed the s. 68 charge.  This
      Court was advised that the charge has never proceeded to trial.

RELEVANT LEGISLATION

[13]

The
      provision which ICBC relies on to deny coverage to Mr. Thornber is s. 136(b)
      of the Regulations, which provides:

136   The corporation
      is not liable under this 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
.
      . . .

[14]

Section
      68 of the MVA, in turn, provides, in part:

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;

THE TRIAL DECISION

[15]

The
      trial judge found that Mr. Thornber failed to remain at or immediately
      return to the scene of the accident and that his actions in leaving the
      scene were unreasonable.  These findings are not challenged on appeal.

[16]

The
      trial judge then embarked on an analysis of whether Mr. Thornber's actions
      in leaving the scene without reasonable cause resulted in prejudice to
      the corporation.  In that regard, she relied on the decision of this Court
      in
Fuson v. Insurance Corp. of British Columbia
(1995), 5
      B.C.L.R. (3d) 128, aff'g (1993), 20 C.C.L.I. (2d) 71, [1993] B.C.J. No.
      2084 (QL) (B.C.S.C.), for the proposition that there was no presumption
      of prejudice, but that the onus was on ICBC to prove prejudice.

[17]

Unfortunately,
      the trial judge never completed the prejudice analysis, but became side-tracked
      by a discussion of bad faith arising, in her view, from the conduct of
      Ms. Singbeil in discussing with Cst. Hill the circumstances in which ICBC
      would deny coverage to Mr. Thornber.  The trial judge reasoned that because
      ICBC had acted in bad faith, it could not deny coverage.

[18]

As
      earlier stated, counsel for Mr. Thornber does not seek to uphold the trial
      judge's finding of bad faith; nor, in my view, is a finding of bad faith
      justified on the evidence.

THE ISSUE OF PREJUDICE

[19]

It
      is common ground that the onus is on ICBC to establish that it suffered
      prejudice arising from Mr. Thornber's failure, without reasonable cause,
      to remain at the scene of the accident.  It is also common ground that
      the words, "to the prejudice of the corporation" in s. 136(b)
      of the Regulations, means "to the detriment of the legal interests
      of the corporation".

[20]

The
      formulation of the test for prejudice under s. 136(b) to which this Court
      was referred is that set out by Mr. Justice Lowry (as he then was) at para.
      13 of the trial judgment in
Fuson
,
supra
, as follows:

It [ICBC] must establish on some evidentiary basis  not on the basis
      of mere speculation  that, because of the insured's failure to comply
      with section 61 or 62 [now ss. 67 and 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.

[21]

Although
      this Court did not expressly adopt the test of prejudice set forth in the
      immediately preceding paragraph when it upheld Mr. Justice Lowry's decision
      in
Fuson
, I conclude that it is a useful statement of the
      onus which ICBC has to meet under s. 136(b).

[22]

Counsel
      for ICBC submits that it is apparent from Mr. Thornber's statements to
      the police and his evidence at trial that he had consumed between two and
      four beers over the course of approximately an hour prior to the accident.  He
      submits that Mr. Thornber's actions in leaving the scene precluded the
      police officers and others who attended at the scene following the accident
      from observing him and asking him questions to determine the extent to
      which his drinking may have been causative of the accident.  The police
      were also deprived of the opportunity to make a breathalyser demand at
      the scene before Mr. Thornber had a chance to return home and consume more
      alcohol, thereby compromising the results of any subsequent breath tests.

[23]

Counsel
      for Mr. Thornber submits that it was not the conduct of Mr. Thornber in
      leaving the scene which prejudiced ICBC, but the conduct of the police
      in deciding not to pursue the impaired driving investigation due, in part,
      to a "manpower" shortage.  In the alternative, counsel for Mr.
      Thornber submits that it was open to ICBC to deny coverage to Mr. Thornber
      on the basis that he was driving while impaired whether or not the police
      proceeded with their criminal investigation.  In that regard, counsel stated
      that ICBC could have called expert evidence to prove Mr. Thornber's level
      of impairment at the time of the accident.

[24]

The
      trial judge alluded to the problem presented by Mr. Thornber's failure
      to remain at the scene of the accident and his subsequent consumption of
      beer at para. 19 of her reasons:

As there is no explanation for the accident, it is certainly possible
      that it was caused or contributed to by the effect of alcohol on Mr. Thornber's
      driving at the material time.  [Counsel for ICBC's] submission that the
      insured knew that drinking after the accident would be a potential defence
      to an impaired driving charge has an air of reality although that proposition
      was not put to him.

[25]

Unfortunately,
      the trial judge did pursue her analysis of the evidence in relation to
      prejudice because of her view that the case should be resolved on the basis
      of bad faith.

[26]

The
      question of whether the corporation has been prejudiced within the meaning
      of s. 136(b) of the Regulations will depend on the evidence of each case.  In
Fuson
,
      for example, the plaintiff driver of a vehicle which had been involved
      in a two-car collision walked away from the accident without checking to
      see whether the other driver was injured, or otherwise complying with the
      requirements of s. 136 of the Regulations.  The driver reported the accident
      to the police five hours later and subsequently reported it to ICBC.  ICBC
      denied coverage on two bases, one of which was that the driver had failed
      to remain at the scene of the accident to the prejudice of the corporation.  ICBC
      submitted that it was prejudiced because, if the driver had remained at
      the scene of the accident, the police may have determined that his ability
      to drive was impaired by consumption of alcohol, thereby affording ICBC
      an absolute defence to his claim for coverage.  In rejecting that claim,
      Mr. Justice Lowry stated (at para. 6):

But, 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.  Mr. Fuson says that he consumed only two beers during the
      Friday evening, some hours before the accident.  There is absolutely no
      positive evidence that even suggests his ability may have been impaired.  The
      unchallenged testimony of his passenger is that it was not and the insurer
      led no evidence from others who are known to have been with Mr. Fuson before
      and very shortly after the accident.

[27]

In
      this case, however, there is evidence that Mr. Thornber had been drinking
      alcohol between 8:00 and 9:15 p.m., a short time before the accident occurred.  The
      evidence did not disclose any apparent reason for the accident, which occurred
      in good driving conditions on a road familiar to Mr. Thornber, who was
      a professional truck driver.  There was a reasonable basis on that evidence
      from which an inference could be drawn that Mr. Thornber's alcohol consumption
      may have been related to the accident.  But that evidence, standing alone,
      may not have been sufficient to permit ICBC to deny coverage.  Had Mr.
      Thornber remained at the scene, the police and others would have had the
      opportunity to observe Mr. Thornber and to speak with him.  Those observations
      could have enabled the police, in particular, to ascertain the extent to
      which the alcohol which Mr. Thornber had admittedly imbibed, had affected
      his ability to drive.

[28]

By
      the time Cst. Hill spoke with Mr. Thornber and formed the opinion that
      he was impaired by alcohol, Mr. Thornber had consumed more alcohol, thereby
      interfering with the probative value of any subsequent breathalyser reading.  Counsel's
      suggestion that the same problem would have arisen if Mr. Thornber had
      consumed more alcohol at the scene before the police arrived is pure speculation
      and does not assist in this analysis.

[29]

Nor
      is it an answer to say that ICBC was not prejudiced because it could have
      attempted to establish Mr. Thornber's level of intoxication at the time
      of the accident by the use of expert evidence.  In that regard, Mr. Thornber's
      departure from the scene made it difficult to accurately determine the
      time of the accident, a fact which is critical to an expert's analysis.  Further,
      the possibility that ICBC may have been able to establish Mr. Thornber's
      impairment through expert evidence does not detract from the fact that
      Mr. Thornber's actions deprived ICBC of potential evidence of impairment
      which could more readily have justified it in denying coverage.

[30]

In
      summary, unlike the situation in
Fuson
, the relationship
      between alcohol consumption and the accident in this case was not based
      on pure conjecture, but on a reasonable inference from the evidence.  The
      result of Mr. Thornber leaving the scene was to deprive the police, and,
      ultimately ICBC, of further 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."

[31]

In
      the result, I conclude that the evidence supports the conclusion that ICBC
      was prejudiced by Mr. Thornber failing, without reasonable cause, to remain
      at the scene of the accident.

CONCLUSION

[32]

I
      would allow the appeal, set aside the order under appeal, and dismiss Mr.
      Thornber's action.

[33]

I
      would also award the appellant its costs of the trial and of the appeal.



The Honourable
Madam Justice Prowse

I Agree:

The Honourable
Chief Justice Finch

I Agree:

The Honourable
Madam Justice Levine




