Sullivan v. Wawanesa Mutual Insurance Company

Sullivan v. Wawanesa Mutual Insurance Company Court Court of Appeal Date 1998-04-01 Citation 1998 NSCA 71 Docket CA 141444 Judge/Registrar/Adjudicator Cromwell, Thomas A. (Honourable Justice); Freeman, Gerald B. (Honourable Justice) (CA); Jones, Malachi C. (Honourable Justice) (CA) Document Type Decision Relations Library Sheet - Sullivan v. Wawanesa Mutual Insurance Company - 1998 NSCA 71 - 1998-04-01 - Library Sheet Decision Content Date: 19980401 Docket: C.A.141444 NOVA SCOTIA COURT OF APPEAL Cite as: Sullivan v. Wawanesa Mutual Insurance Company, 1998 NSCA 71 Freeman, Jones, Cromwell, JJ.A. BETWEEN: OSWALD SULLIVAN ) Jeffrey S. Moors ) for the Appellant Appellant ) ) - and - ) ) Robert M. Purdy, Q.C. ) Paul Morris, Article Clerk ) for the Respondent THE WAWANESA MUTUAL ) INSURANCE COMPANY ) ) ) Respondent ) Appeal Heard: ) March 17, 1998 ) ) ) Judgment Delivered: ) April 1, 1998 ) ) ) ) ) ) ) ) THE COURT: Appeal is dismissed with costs to the respondent fixed at $1,000 as per reasons for judgment of Freeman, J.A.; Jones and Cromwell concurring. Freeman, J.A.: The appellant Oswald Sullivan claimed that he left his 1990 Ford pickup truck in a parking lot in Glace Bay, N.S. where he and his wife Mary Sullivan were visiting at her father’s home on February 2, 1996. Mr. Sullivan spent much of the evening drinking with acquaintances, having called his wife to pick up the keys from him to remove the temptation to drive. Police discovered the truck overnight in a gravel pit some twenty minutes away where it had been destroyed by a fire. The vehicle was insured under a standard automobile policy issued by the respondent which included coverage for both fire and theft. The appellant filed a proof of loss claiming theft on April 10, 1996 and the respondent denied liability. The appellant brought action in the Supreme Court of Nova Scotia for $16,268 special damages alleging: The Plaintiff states that the Policy provided coverage for theft under subsection 4 of section C of the standard automobile policy and that this coverage was not honoured by the Defendant. This appeal is from the judgment of Associate Chief Justice Kennedy, who had found the respondent insurer was justified in denying the appellant’s claim because he made a fraudulent claim for theft and loss. The respondent insurer accepted the burden of establishing the defence of arson, which it submitted was expressed by a three-fold test stated by Justice MacAdam in Tait v. Royal Insurance of Canada (1988) (1997), 161 N.S.R. (2d) 333 (S.C.) after a review of authorities, at pp. 340-341: 1. Was the fire incendiary in nature? 2. Was there opportunity on the part of the plaintiff to set the fire? 3. Did the plaintiff have a motive? The trial judge’s finding that the fire was deliberately set was not challenged. Opportunity need not be exclusive opportunity. (See Rizzo v. Hanover Insurance Co. (1993), 14 O.R. (3d) 98 (C.A.)). The trial judge found the insurer had met the high standard of proof of fraud set in Bater v. Bater, [1950] 2 All E.R. 458 (C.A.) which was relied by the Supreme Court of Canada in Dalton Cartage Co. Limited v. Continental Insurance Co. et al., [1982] 1 S.C.R. 164 cited by Roscoe J. (as she then was) in Preshyon v. Co-Operators General Insurance Co. (1991), 103 N.S.R. (2d) 189 at p.192: There is necessarily a matter of judgment involved in weighing evidence that goes to the burden of proof, and a trial judge is justified in scrutinizing evidence with greater care if there are serious allegations to be established by the proof that is offered. There was no direct evidence about who was responsible for the destruction of the vehicle, but the trial judge considered circumstantial evidence including the appellant’s financial circumstances: “ownership of the truck made no financial sense.” The appellant advertised it for sale twice, once in December, 1995, a month after buying it, and once eight days before the fire. The trial judge found: What I find is that there is the strong probability that the plaintiff and his wife, having been unemployed at the time, and the plaintiff having advertised the truck for sale to no avail, that the plaintiff arranged to have it taken and destroyed. The circumstantial evidence of motive and opportunity, together with the significant evidence of how when and where the truck was found, has convinced this court that the defendant has met the standard set out in the Bater, supra. (Sic) The main arguments on appeal were that the trial judge failed to consider certain evidence as to the appellant’s whereabouts on the night in question and failed to properly assess evidence as to financial circumstances bearing on motive. The case turned on the trial judge’s assessment of the evidence and his findings of fact. This court has consistently relied in such matters on the judgment of McLachlin J. in Toneguzzo-Norvell et al. v. Savein and Burnaby Hospital, (1994), 162 N.R. 161 in which she stated at p. 167: It is by now well established that a court of appeal must not interfere with a trial judge’s conclusions on matters of fact unless there is palpable or overriding error. In principle, a Court of Appeal will only interfere if the judge has made a manifest error, has ignored conclusive or relevant evidence, has misunderstood the evidence, or has drawn erroneous conclusions from it. The test is not whether this court would have arrived at the same result on the evidence. While the evidence of fraud is not overwhelming, there was evidence before Kennedy A.C.J. on which he found that it had been proven to a strong probability. After reviewing the evidence and the submissions of counsel I am not persuaded that there were errors on the part of Kennedy A.C.J. that would justify interference by this court with this outcome. While the burden on the appellant to provide prima facie evidence of theft was not made an issue at trial, and the respondent did not rely on it on appeal, it is nevertheless a necessary element which this court is entitled to consider. A finding as to the appellant’s credibility by Kennedy A.C.J. is particularly significant in this light. The appellant had provided a false purchase price to the Registry of Motor Vehicles to reduce the amount of hospital tax payable when he bought the vehicle for $9,150 in December, 1995. He obtained two receipts from the vendor, one for $8,000 which he presented to the Registry, and another for the additional $1,150 which he did not present. His attempted explanations did not impress Associate Chief Justice Kennedy, who remarked: . . . The fact that he denied the obvious under oath compromises his credibility on all important issues herein. Having observed the plaintiff while testifying and listening to his explanation of events, I do not find him credible. His explanation of events leading up to the destruction of this vehicle, therefore, does not have evidentiary value. What I find is that there is the strong probability that the plaintiff . . . arranged to have it taken and destroyed. Findings of credibility are in the peculiar province of the trial judge and will rarely be interfered with on appeal. The appellant’s credibility is of particular importance in cases such as the present one in which the claimant may be the only one who knows the circumstances on which his claim against an insurer is based. The burden of proof was on the appellant to make out a prima facie case of insured loss before the burden shifted to the respondent to prove fraud. The only evidence that the truck was stolen before it was burned was that of the appellant. No other witnesses saw it between the time he drove it away from his father in law’s home and its discovery by the police burned in the gravel pit. Because of the finding that his evidence lacked evidentiary value there is no evidence of theft necessary to establish a prima facie claim against the insurer. In Preshyon, which also involved a claim against an insurer for the alleged theft and loss of a vehicle, Roscoe J. stated: In a case such as this, the credibility of the plaintiff is a crucial factor, not only because she is an interested party, but also because of the allegations of fraud. In Sawler v. Canadian General Insurance Co. (1980), 36 N.S.R. (2d) 15, (N.S.S.C.T.D), also an automobile insurance case in which theft and fire were alleged, Morrison J. stated: There is no doubt but that in dealing with the questions of whether the car was stolen and whether the plaintiff either by himself or through his agents set fire to the car both depend upon a finding as to the credibility of the plaintiff’s evidence. At pp. 16-17 he discussed the burden of proof as follows: The plaintiff alleges that his motor vehicle was stolen and the burden of proof in the first instance is upon him to show that it was stolen within the terms of the policy. The burden upon a plaintiff in this respect was discussed in the case of Yade v. Merit Insurance Co., 27 D.L.R. (2d) 374, by Currie, J. At page 375 of that decision, Currie J. said as follows: . . . The burden which the law imposes upon the plaintiff is that set forth in Evans & Co. v. Astley (1911), 80 L.J.K.B. 1177; it is proof upon a balance of probabilities. It is said in Appleman, Insurance Law & Practice, vol. 21, p. 441: The burden of proof has been held to be upon the insured to establish by a preponderance of evidence a theft of his vehicle within the policy terms. However, this requires only the quantum of evidence necessary in civil, and not that required in criminal, cases and circumstantial evidence may suffice. Proof that the automobile has disappeared, or was taken without the owners’ knowledge and consent, makes a prima facie case. And if a prima facie case is established, the insurer then has the burden of showing that the taking was without an intent, or such other defence as it may claim. In the present case, given the clear adverse finding as to credibility, and having regard to the applicable burden of proof, there is no basis for interference on appeal with the findings of the trial judge. I would dismiss the appeal with costs to the respondent which are fixed at $1,000 plus disbursements. Freeman, J.A. Concurred in: Jones, J.A. Cromwell, J.A. C.A. No. 141444 NOVA SCOTIA COURT OF APPEAL BETWEEN: OSWALD SULLIVAN ) Appellant ) - and - ) REASONS FOR ) JUDGMENT BY: THE WAWANESA MUTUAL ) ) ) FREEMAN, J.A. ) Respondent ) ) ) ) ) ) )