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Date: 19990512

Docket: 26054
Registry: Kamloops
IN THE SUPREME COURT OF BRITISH COLUMBIA
Oral Reasons for Judgment
Mr. Justice Blair
May 12, 1999
BETWEEN:
CHATTAN SEROWN
PLAINTIFF
AND:
INSURANCE CORPORATION OF BRITISH COLUMBIA
DEFENDANT

Counsel for the Plaintiff:

Andrew S. Berna

Counsel for the Defendant:

Elizabeth A. Harris

[1]

THE COURT:

The plaintiff, Chattan Singh Serown, claims

from his insurer, the defendant, The Insurance Corporation of


British Columbia, I.C.B.C., the sum of $23,197.00 being the
agreed upon value of a 1996 Mustang which Mr. Serown states
was stolen on June 14, 1997, and subsequently burned.
I.C.B.C. rejects Mr. Serown's claim, denying that the Mustang
was stolen or, if it was stolen, that material misstatements
made in connection with the insurance and the claim have
voided the insurance contract.

I.C.B.C. alleges Mr. Serown's

eldest son, Harpreet Serown, ("Mr. Serown Jr."), was the


actual owner of the Mustang as well as its principal operator

1999 CanLII 6446 (BC SC)

Oral Reasons for Judgment

Serown v. I.C.B.C.

Page: 2

about the number of keys for the Mustang.

[2]

The Mustang was purchased new from Dearborn Motors Ltd.

in Kamloops on March 16th, 1996, at a cost of $23,297.00 paid


for with a cheque for $5,000.00 written by Mr. Serown and the
balance borrowed from the Bank of Montreal.

Mr. Serown

testified that the Mustang was purchased for the family and
was an addition to the family's vehicles which consisted of a
1983 sedan and a 1989 pick-up truck.

The Mustang was

registered in Mr. Serown's name and he was also named in the


original insurance policy as the principal operator.

The

licence on the vehicle was changed in December 1996, but Mr.


Serown remained as the registered owner and, by inference,
the principal operator.

[3]

Mr. Serown Jr. testified that on June 14, 1997, at

about 7:30 p.m., he parked the Mustang at a friend's home


where it remained as he and a number of friends socialized
through the evening.

They spent several hours at a Kamloops

night spot until it closed at 2:00 a.m., the group then


proceeding to a pizza restaurant for a meal before returning
to where Mr. Serown Jr. had left the Mustang.

The vehicle

was gone and Mr. Serown Jr., suspecting that his younger
brother, Pritpal Serown, might have taken the Mustang,
accompanied his friends in an unsuccessful search for Pritpal
Serown and the missing Mustang before they dropped him off at
his home.

1999 CanLII 6446 (BC SC)

and that Mr. Serown Jr. made a willfully false statement

Serown v. I.C.B.C.

Pritpal Serown, twenty years of age, arrived home after

4:00 a.m. having been released at 3:58 a.m. from cells at the
Kamloops detachment of the R.C.M.P. where he had been
incarcerated following his arrest four hours earlier in an
intoxicated condition.

Both Pritpal and Harpreet Serown

denied any knowledge of the disappearance of the Mustang, the


remains of which were found later in an isolated area
northwest of Kamloops.

[5]

I.C.B.C. initially assigned Claims Examiner Marielle

Coray to review the theft of the Mustang after Mr. Serown Jr.
reported the loss on June 15, 1997.

Ms. Coray took

statements from Mr. Serown and his son Harpreet following


which, Ken Leibel of I.C.B.C.'s Special Investigations Unit
further reviewed the claim.

Mr. Leibel's investigation

included more interviews with Mr. Serown, his sons Harpreet


and Pritpal, as well as with a number of young men with whom
Harpreet and Pritpal Serown spent the evening of June 14,
1997.

[6]

As a result of its investigation, I.C.B.C. concluded

that Mr. Serown Jr., rather than his father, was the owner
and principal operator of the Mustang.

Although Mr. Serown

made the initial $5,000.00 deposit to purchase the Mustang,


the purchase agreement showed the purchasers as both Harpreet
Serown and Chattan Serown, with son and father signing as
purchaser and co-purchaser, respectively.

Although the

financing documents with the Bank of Montreal were not filed,

1999 CanLII 6446 (BC SC)

[4]

Page: 3

Serown v. I.C.B.C.

Page: 4

sum of $359.00 to be "Serown H." which is consistent with Mr.


Serown's evidence that his son Harpreet was responsible for
the monthly payments with the bank looking to him if his son
failed to make a payment.

Mr. Serown testified that upon his

son repaying to him the $5,000.00 deposit and any payments he


might make on the bank loan, he would then have transferred
the Mustang to his son Harpret.

[7]

However, on June 16, 1997, Mr. Serown Jr. made a tape-

recorded statement to I.C.B.C.'s Ms. Coray regarding the


circumstances under which the Mustang was registered in Mr.
Serown's name.

The exchange between Ms. Coray identified by

the initials MC and Harpreet Serown identified by the


initials HS is found at pages 9 and 10 of Exhibit 2, page 8:

MC
'Kay. You know if there's an extra
policy on it, uh, with like limited
depreciation or anything like that.
HS
Uh, my dad'll actually know all
that 'cause the insurance is under his name.
MC

Oh.

HS

He would know, actually.

MC

Does he drive the vehicle?

HS

Oh, sometimes.

MC

Does he?

HS

But he has his own truck, though.

MC
truck.

Okay.

Okay, he -- so he probably uses the

1999 CanLII 6446 (BC SC)

the bank's record of payments shows the payor of the monthly

Serown v. I.C.B.C.

Page: 5

MC
Okay. So how come it's registered
to him, then, if you're the -HS
Well, because his, uh -- 'cause I
couldn't afford the high high insurance.
MC

Oh, I see.

So --

HS

So he's like --

MC

Right, so --

HS
-- just put it under my name for
now. Then when you make more money, then
we'll switch it over.
MC
Right, 'cause he's got, like, a
really good discount.
HS

Yeah, he got, like, forty percent.

At page 12 of the same statement, Mr. Serown Jr. made the


further comment to Ms. Coray.
MC
vehicle?

Okay.

Does anyone else drive the

HS

No, just me.

MC

Just you?

HS

Yeah.

MC
Okay, unless someone asks you
basically.
HA
though.
[8]

M'hmm, that's my -- just family


No -- no friends.

In his Examination for Discovery when asked about the

purchase of the Mustang, Harpreet Serown, at page 10


acknowledged being asked and providing the following answers:

1999 CanLII 6446 (BC SC)

HS
Yeah, he goes from back to work in
the other truck.

092

093

094

[9]

Page: 6
Q.

Did you go with him to get it?

A.

Yes, I did.

Q.

You had some say in it?

A.

Yeah.

Q.

And he bought it for you?

A.

Yes.

I accept that Mr. Serown Jr. made the statement to Ms.

Coray and it accurately reflected the arrangement between Mr.


Sarown and Harpreet Serown regarding the ownership of the
Mustang and the reasons for it's registration in Mr. Serown's
name.

Had Mr. Serown Jr. been named as the principal

operator, a year's insurance coverage would have cost $235.00


more and, further, Mr. Serown Jr. also was ineligible for
I.C.B.C.'s Road Star package, a benefit enjoyed by Mr. Serown
because of his claim free record.

[10] The actual ownership of the Mustang appears to have


been reflected in the use of the vehicle by Mr. Serown Jr.
The latter refers to the Mustang as his vehicle and from the
evidence, Mr. Serown Jr. appears to have treated the Mustang
as his own.

He used the vehicle on a consistent basis and, I

find, more frequently than did Mr. Serown who regularly used
his pick-up truck.

Further, it was Mr. Serown Jr. who

retained one of the two original keys delivered with the


vehicle.

Mr. Serown Jr. also attended to warranty and

service work on the Mustang as well as arranging and paying

1999 CanLII 6446 (BC SC)

Serown v. I.C.B.C.

Serown v. I.C.B.C.

Page: 7

sporty appearance of this two-door, four-seat sedan.

[11] I conclude that Mr. Serown was in breach of his policy


of insurance with regard both to who owned the Mustang and
who was its principal operator and that these
misrepresentations were material to I.C.B.C. which, as a
result, properly denied coverage.

[12] I.C.B.C. further denies that a theft of the Mustang


actually occurred.

The insurer's denial rests on the

statements made by Mr. Serown Jr. after his report on June


15, 1997, that the Mustang had been stolen and, in
particular, Harpreet Serown's differing explanations
regarding the number and whereabouts of the keys to the
Mustang which I.C.B.C. submits goes to the credibility of Mr.
Serown Jr. as to whether a theft occurred as well as
constituting a materially false statement pertaining to the
claim.

[13] The plaintiff has the initial burden of proving that a


loss occurred which was covered by his insurance policy and,
if he does that, the onus changes to I.C.B.C. to show that he
made a willfully false statement material to the claim.
Bevacqua v. Insurance Corp. of British Columbia, (1998) BCJ
993, B.C.S.C.

Mr. Justice Brenner in Golden (1995)

International Trading Ltd. v. Insurance Corp. of British


Columbia (1998) BCJ 1643, at paragraph 29 offers an

1999 CanLII 6446 (BC SC)

for certain modifications to the vehicle to enhance the

Serown v. I.C.B.C.

Page: 8

dealing with an insurance claim where the plaintiff contends


that a motor vehicle was stolen, an analysis applicable in
the instant case.

[14] Mr. Serown Jr., prior to testifying at the trial, made


a number of statements during the course of the I.C.B.C.
claim investigation, those occurring on June 16, July 9 and
July 25, 1997, as well as giving evidence at an Examination
for Discovery, some of which was referred to during the
trial.

His statements and his evidence about his activities

on the night of June 14 and the early hours of June 15, 1997,
contained inconsistencies, contradictions and discrepancies,
including who he was with and what he did, particularly after
he discovered the Mustang was missing.

Some of these

evidentiary difficulties are not major and to some extent


might well be attributed to his alcohol consumption through
the course of the night.

However, in their totality, the

evidentiary difficulties I find in both his testimony and


previous statements impact negatively upon Harpreet Serown's
credibility.

Perhaps the most troubling aspect of Harpreet

Serown's evidence relates to the information he provided or


failed to provide, at least initially, regarding the keys to
the Mustang.

[15] When Mr. Serown and Mr. Serown Jr. took delivery of the
Mustang, they received two original keys with black plastic
caps from the dealer.

In his initial statement regarding the

1999 CanLII 6446 (BC SC)

insightful analysis of the principles to be applied when

Serown v. I.C.B.C.

Page: 9

that there were just two keys for the Mustang and that he had
one of the keys and his mother had the second key.

Mr.

Serown Jr. responded to a question about the keys from Mr.


Leibel of I.C.B.C. on July 9, 1997, by telling him that there
were just two keys to the Mustang, that none were hidden in
the car and indicated no duplicate keys had been made.

He

said he possessed one of the keys and his dad, Chattan


Serown, had the second key.

Mr. Serown Jr. later dropped off

two keys at I.C.B.C.'s office and in his statement of July


25, 1997, he told Mr. Leibel at page 4 that the two keys were
all that they had for the Mustang.

However, at page 6, he

said one other key had been cut because his mother lost one
of the original keys.

[16] The evidence regarding the number of keys becomes


significant when taken in the context of the evidence
provided by Terrance Martin, a locksmith and analyst of
vehicle anti-theft systems who, at I.C.B.C.'s request,
examined the Mustang's remains, particularly the ignition and
steering lock assembly which he found to be undamaged.

In

his report dated February 28, 1999, he concluded that the


duplicate key found in the Mustang was located in a position
consistent with it having been in the ignition when the
vehicle burned.

He further found that neither the duplicate

key discovered in the Mustang after the fire nor the original
and one duplicate key delivered to I.C.B.C. by Harpreet
Serown had been used to make duplicate keys, leading him to

1999 CanLII 6446 (BC SC)

vehicle lost to Ms. Coray of I.C.B.C., Mr. Serown Jr. advised

Serown v. I.C.B.C.

Page: 10

make the duplicate key found in the Mustang after the fire
and the duplicate key delivered to I.C.B.C. by Mr. Serown Jr.
No explanation was given to explain the existence of two
duplicate keys as Mr. Serown testified that he had only made
one duplicate key for the Mustang.

The keys themselves were

kept either by Harpreet Serown, Mr. or Mrs. Serown or, on


occasion, Pritpal Serown.

[17] The onus lies on the plaintiff to prove that a theft


occurred and in order to accept the plaintiff's claim, I
would have to find that Harpreet Serown's explanation is
believable and that he had nothing to do with the theft of
the Mustang.

[18] I am not satisfied, given the various difficulties with


his evidence and, in particular, his evidence relating to the
number of keys for the Mustang, that the plaintiff has
established, on a balance of probabilities, that a theft
occurred.

A key was apparently used to operate the Mustang

prior to it being burned and, given the evidence, such a key


would have to have been obtained by a member of Mr. Serown's
family and such loss, as a result, would not be covered by
the insurance policy.

Bhullar v. Insurance Corp. of British

Columbia (1996) BCJ 1401, paragraph 35.

Further, given the

report of Mr. Martin about the probable use of a key to


operate the Mustang prior to it being burned, I conclude that
the statements provided to I.C.B.C. regarding the number of

1999 CanLII 6446 (BC SC)

conclude that the missing original key was probably used to

Serown v. I.C.B.C.

Page: 11

willfully false statement which was material to the claim


advanced for indemnity under the insurance policy.

[19] In summary, I conclude that there were material


misrepresentations as to who was the owner and who was the
principal operator of the Mustang; that the plaintiff has
failed to establish, on a balance of probabilities, that the
Mustang was stolen; and that the information provided to
I.C.B.C. regarding the keys to the vehicle amounted to a
willfully false statement which was material to the
plaintiff's claim.

The action is dismissed.

[20] Unless counsel have submissions, I would direct that


the defendant have its costs on a Scale 3.

(SUBMISSIONS BY COUNSEL)

[21] I get the drift of your point, Mr. Berna, and I think
you clearly understood the intent and thrust of my judgment
and where it is directed, most importantly.

[22] What are your thoughts on this matter, Ms. Harris?

(SUBMISSIONS BY COUNSEL)

[23] You know, dads oftentimes do a lot of things for their


sons and I think this might be one of the cases.

1999 CanLII 6446 (BC SC)

keys for the vehicle amounted, in the circumstances, to a

Serown v. I.C.B.C.

Page: 12

Serown, I would do so.

But you know, Mr. Berna, I believe

that Mr. Chattan Serown will be looking to his son to repay


him for those costs and I believe that between the family
they will probably get it arranged.

I appreciate what you

have said in the submission you've made but I believe costs


ought to be directed against the plaintiff at Scale 3 and
I'll leave the family to work it out between themselves.

[25] Thank you, counsel, and thank you for the manner in
which you presented this case.

1999 CanLII 6446 (BC SC)

[24] Mr. Berna, if I could order costs against Harpreet