The Court of Appeal dismissed the appeal of an Insured who was found liable to ICBC for increased insurance premiums not initially charged due to a spelling error on its Certificate of Insurance because the vehicle insured under the new policy was not a substitute vehicle and the Insured was responsible for the misspelling

Insurance Corp. of British Columbia v. Pohl’s Bakery & Pastry, [2006] B.C.J. No. 205 British Columbia Court of Appeal

This was an appeal by Pohl’s Bakery & Pastry (“Pohl’s”) from a decision in which it was found liable to ICBC for increased insurance premiums not initially charged due to a spelling error on its Certificate of Insurance.

Pohl’s owned and operated vans to deliver its products. The vans were insured with ICBC and were involved in numerous accidents, resulting in chargeable claims payments over the years they were insured. Premiums were increased as a result of chargeable claims. In 1993, Pohl’s applied to insure a truck it had leased and purchased a policy from ICBC in the name “Pohls” rather than “Pohl’s.” Because the apostrophe was omitted from the name, ICBC’s computer system treated Pohl’s as a new customer and gave it a basic rate it would not have been entitled to with its prior history of chargeable claims. When ICBC realized the mistake and indicated to Pohl’s that it had a balance due on the policy of approximately $23,000, Pohl’s disputed the balance. When the policy came up for renewal, it was similarly renewed at the basic rate rather than the premium, resulting in an additional $20,000 owing for the period subsequent to the renewal.

ICBC sued Pohl’s to recover the balance for the premiums. At trial, the judge found Pohl’s liable to pay the premium balance due. This was because the truck was determined to be a replacement vehicle for the other vans, previously insured by Pohl’s and involved in several accidents and because Pohl’s was responsible for the spelling error.

The Court of Appeal found that the vehicle was merely a substitute and that the new policy was a renewal of the older policy. The Regulations therefore authorized the calculation of the premium by reference to the claim payment record in the older policy. The fact that ICBC did not do so was as a result of a mistake which was caused by the omission of the apostrophe in the owner’s Certificate of Insurance. The “mistake” in this case was the simple omission of the apostrophe in the Applicant’s name. The declaration in the owner’s Certificate of Insurance stated that Pohl’s was responsible for this inaccuracy howsoever caused. At the time that Pohl’s executed this Certificate of Insurance, it knew or ought to have known of the error. Accordingly, the Court found that it would be contrary both to the plain interpretation of the Regulation and accepted principles of equity to permit Pohl’s to avoid payment of the appropriate premium and the appeal was dismissed.

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