The appeal by an insured (“Kolesnykov”) under a motor vehicle policy was allowed where the court found that the trial judge wrongly placed the burden on Kolesnykov to disprove that he was involved in the theft of his own motor vehicle

Kolesnykov v. Insurance Corp. of British Columbia, [2004] B.C.J. No. 202, British Columbia Supreme Court

Kolesnykov brought a claim against his motor vehicle insurer (“ICBC”) for compensation based on the theft of his vehicle. At trial in the provincial court, a trial judge concluded that Kolesnykov had not proven that his car was stolen. Kolesnykov appealed this decision to the Supreme Court. Kolesnykov argued that the trial judge wrongly placed the burden on him to disprove his complicity in the theft. Kolesnykov relied primarily on the decisions of the British Columbia Court of Appeal in Bevacqua v. I.C.B.C. (1999), 68 B.C.L.R. (3d) 262 and Swales v. I.C.B.C. (1999), 14 C.C.L.I. (3d) 230.

The court reviewed the initial burden of proof on a claimant under the ICBC policy and noted that a simple assertion under oath or affirmation that the vehicle was taken without the claimant’s consent was sufficient to prove that the claim came within the coverage. No requirement existed that a claimant prove that he or she did not participate in the loss.

On the issue of the burden of proof on ICBC, the court noted that where ICBC alleges that a claimant participated in or procured the theft, that is an allegation of fraud and places the burden of proof on ICBC. This is a legal burden and not an evidentiary burden. This legal burden remains on ICBC and does not shift to the claimant. The court held that it was an error of law to conclude at the end of the case that the claimant had the burden of proving that the loss occurred without the claimant’s involvement.

The standard of proof in such cases is a balance of probabilities. Within this standard of proof there are different degrees of proof that may be required. In cases such as fraud, involving quasi-criminal allegations, the quality of evidence must be assessed, taking into account the degree of proof required. In these cases, scrutiny is heightened in the sense that the judge must determine whether the evidence is “clear and cogent enough to more than just tilt the scales”.

In this case, the court found that the trial judge merged the tests for theft and fraud and erred in placing the ultimate burden on Kolesnykov to prove that he was not implicated in the theft. The court specifically noted that counsel for ICBC failed to place before the trial judge the applicable Court of Appeal decisions in Bevacqua and Swales and noted that counsel for ICBC had an obligation to advise trial judges of the current law, particularly in the provincial court where parties are not required to be represented by a lawyer. The court reviewed the evidence and found that all the evidence relied on by ICBC was circumstantial. The evidence indicated that Kolesnykov was of good character and no evidence of financial need creating a motive was placed before the court. The court held that this was not the kind of “clear and cogent evidence” required to prove the serious allegation of fraud. In the result, judgment was granted against ICBC in the amount of $10,000 plus costs.

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