Tahir v. TD Insurance Direct Agency Inc., 2016 ABPC 126, is a recent decision from the Provincial Court of Alberta, discussing the burden and evidentiary requirements to make out a claim for automobile theft. The decision makes clear that Alberta follows the approach taken in British Columbia (friendlier to an insured person)- which diverges from the Ontario approach (better for insurance companies).
The Plaintiff, Mr. Al-Asadi, sued TD Insurance, for $23,000.00 (including $5,000.00 for “pain and suffering”) after he claimed his BMW was stolen and subsequently engulfed in flames. The issue for the Court was whether the car was stolen or the claim was fabricated. Secondary to this question, was the question of what party had the burden of proof and what evidence was required to discharge it.
The Plaintiff insured bears the onus of showing that on a balance of probabilities the vehicle falls within one of the perils insured against (i.e. theft/vandalism). Once the prima facie case is made out, the burden shifts to the Defendant insurer to show on a balance of probabilities the Plaintiff fabricated the loss. If the Defendant can show the individual who stole or vandalized the vehicle did so with knowledge and/or consent of the Plaintiff, the claim will fail.
The decision underscores that allegations of fraud against an insured are quasi-criminal and could have far-reaching consequences on the individual. Accordingly, careful scrutiny of the Defendant’s evidence (which rebuts theft by accusing the insured of fraud) is paramount. Proof “would require something substantially more than a mere tilting of the evidentiary scale. Clear and cogent proof would have been required.” Thus, the test is higher than the general civil test of a balance of probabilities, but is lower than ‘beyond a reasonable doubt’ in criminal cases.
In this case, the Plaintiff’s wife testified that the BMW would not start after she drove it to her son’s school to watch his soccer practice one evening. She stayed in the car the whole time listening to music. The Plaintiff showed up and unsuccessfully tried to start the vehicle. They left the BMW overnight (against their son’s protests) with the intention of returning the next day. A few hours later the police rapped on their door and advised the BMW was found in the High River – burned to a crisp.
The Plaintiff relied exclusively on lay witnesses and circumstantial evidence. Despite some minor flaws in their testimony, the Court emphasized that four witnesses testified on behalf of the Plaintiff in a consistent and straight-forward manner. Their evidence was “unwavering” and did not change under cross-examination.
The Defendant relied on expert evidence, including a representative from BMW and a locksmith, who spoke about the technical aspects of the ignition system. The Defendant also relied on statements given to the insurance company by the Plaintiff and his wife, a discovery transcript and a “Total Loss Affidavit” (which implicitly had minimal weight because it was not signed by the Plaintiff). The Defendant tried to amplify the fact the Plaintiff inputted the wrong date, and possibly misrepresented the number of sets of keys, on the affidavit. The Court was not swayed.
No evidence was tendered at trial implicating the Plaintiff with the theft or destruction of the BMW. The Defendant adduced evidence that the Plaintiff had a financial motivation to concoct a false claim. The Court shut this argument down on the basis that the nature of that evidence did not support a factual determination of theft.
The Defendant did not provide clear and cogent evidence to satisfy its burden of proof.
This decision does not bode well for insurance companies in theft cases – at least in Alberta. The Court minimized the argument of financial motivation (at least in the absence of any other cogent evidence), and was weary to make a finding that could open the floodgates to insurance companies alleging fraud against an insured. It will be interesting to see how Ontario courts grapples with this issue – and whether there will be westerly influence when a similar case makes it to the docket.