IN THE SUPREME COURT OF BRITISH COLUMBIA
Gosnell v. Insurance Corp. of British Columbia,
2008 BCSC 1143
Theodore Allen Gosnell
Insurance Corporation of British Columbia
Before: The Honourable Mr. Justice Masuhara
Oral Reasons for Judgment
June 26, 2008
Counsel for Plaintiff:
Counsel for Defendant:
D. Warner, Q.C.
Place of Trial/Hearing:
 THE COURT: On June 6, 2004, around 8:25 p.m., the plaintiff, Mr. Gosnell, drove his 2003 Ford Excursion SUV off the Nisga'a Highway. The SUV was totalled. Mr. Gosnell held an insurance policy with the defendant, (ICBC), that provided indemnity against loss of or damage to the SUV. The agreed amount of the loss in this case is in the order of $67,000.
 ICBC has refused to indemnify the plaintiff under the policy on the basis that Mr. Gosnell wilfully made a false statement in connection with his claim, thereby invalidating and forfeiting his claim under s. 19(1)(e) of the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231.
 The subject statement is in written form and was provided by Mr. Gosnell on July 2, 2004, reviewed for some days by him, and then brought back to ICBC at its Terrace office on July 12, 2004, where he signed the statement, initialled corrections he had made, and had it witnessed. The specific statement that ICBC bases its position reads as follows:
I had no alcohol to drink the day of the accident. I may have had one or two drinks in the twenty four hours prior to the accident. The drinks would have been regular size cans of beer. I drank the beer at a wedding dance in New Aiyansh the night before the accident. We got to the dance about midnight and stayed until about 1:30am. The dance was a licence event and sold alcohol there. I had nothing else alcoholic to drink prior to the dance for that whole day.
 Section 19(1)(e) of the Act states:
(e) an insured makes a wilfully false statement with respect to a claim under a plan,
all claims by or in respect of the applicant or the insured are rendered invalid, and his or her right and the right of a person claiming through or on behalf of or as a dependent of the applicant or the insured to benefits and insurance money is forfeited.
 The insured has the burden of proving prima facie that the alleged loss falls within the coverage of the policy. Once this is established, the onus then shifts to the party alleging deceit or a wilfully false statement to prove the defence on a balance of probabilities. It is not that any wilfully false statement will negate indemnity; rather, it must be material to the claim at risk of forfeiture. If the fraud or wilfully false statement is capable of affecting the mind of the insurer, either in the management of the claim or in deciding to pay it, it is unnecessary to speculate about what the insurer would have done if the fraud had not occurred.
 A contract of insurance is one of utmost good faith, and one cannot commit frauds or make wilfully false statements about the subject matter of the claim for any purpose without risking the loss of the right to indemnity if it turns out to be material on any issue.
 The party seeking forfeiture must establish intentional conduct on the part of the insured in making the false statement. An honest belief in the statement, albeit false, can rebut the allegation of a wilfully false statement. The evidence to support a finding of a wilfully false statement is to be clear and cogent.
 There is no question that the plaintiff's claim falls within the terms of coverage under the policy.
 The plaintiff concedes that the subject statement is false, that the statement is capable of affecting the mind of the insurer either in the management of the claim or in deciding to pay it, and that the statement was material to the claim. Therefore, the sole determination is whether Mr. Gosnell's statement regarding his consumption of alcohol was a wilfully false statement to his insurer.
 Mr. Gosnell is 46 years old and has been a resident of the Nass Valley from birth. He has lived there all of his life but for the years between 1996 to 1999 when he attended the University of Northern B.C. to earn his business degree. At the time of the accident, he was an accounting manager with the Nisga'a Lisims Government. He had worked for the Government since 2000. He is currently unemployed but is looking for work. He has a wife and four children.
 Mr. Gosnell is an educated, intelligent, and articulate man.
 Mr. Gosnell purchased his SUV in Terrace from a Ford dealership in July 2003. The sale price included a no-interest incentive; financing was provided by Ford Credit; and he purchased insurance coverage at that time.
 On the day before the accident, Mr. Gosnell, his wife, brother, and sister-in-law attended a wedding banquet from around 4 p.m. to around 10 p.m., and then later the wedding dance in New Aiyansh. They arrived at the dance around 11 p.m. and stayed there for some time. The event was licensed for the sale of alcohol. Alcohol was obtained by buying tickets at one station which one could then redeem for drinks at another. Mr. Gosnell's recollection is that he bought tickets for six beers when he arrived. He stated that he brought the beers back to the table at which he and his wife and brother and his wife were sitting. He recalls having two beers, and his wife had two. He recalls that the other two cans were left, or placed on the table, but does not know what happened to them.
 He recalled being at the dance for about one and a half hours. His recollection of events for the rest of the evening ends at this point and resumes the next morning when he awoke.
 He testified that he recalls awakening around 11 a.m. the next morning. He stated that he sat around most of the day with his family watching TV and relaxing. When it came to dinner plans, it was decided to order a takeout dinner from a restaurant located at Nass Camp, some 12 kilometres along the Nisga'a Highway from the Gosnell home in New Aiyansh.
 Mr. Gosnell went to pick up the order in his SUV. His son Jordan, then 10, went along for the ride. Mr. Gosnell believed his son, who was sitting in the back seat, was not seat-belted.
 About halfway to Nass Camp Mr. Gosnell testified that his SUV began to fishtail and swerve. He was not able to control the SUV, and it went across the road into a ditch area. He says that he heard a loud bang just before the SUV came to a rest. It was later learned that it had ended up resting on its side, driver's side down.
 It is admitted by the plaintiff that this accident occurred at approximately 8:30 p.m. He stated that he immediately began to see how his son was doing but could not see him in the vehicle, and then located him lying outside the vehicle. He released himself from the seat belt and somehow exited the SUV to get to his son. He found that his son was breathing, and then heard Jordan begin to groan lightly, and then to cry. He asked his son if he was hurt but did not get an answer. He said his son was not coherent. He told his son to lie still and not move.
 Mr. Gosnell then went to the highway to wave down a vehicle for assistance. He stated that he saw one vehicle which was white but was unable to get there in time to catch the occupant's attention. Eventually, a pickup came by, which was occupied by friends, Mr. and Mrs. Wright. He explained to them that he had been in an accident, that his son was injured, and that he needed to get to the clinic. At this point, Jordan appeared, crawling out of the woods to the highway. Jordan was put in the vehicle and the entire group went back to New Aiyansh.
 He recalled that the Wrights told him that they would have to go to the doctor's home first as the clinic was closed. After this, they went to the clinic where Jordan and Mr. Gosnell received care.
 The medical staff decided that Jordan had to be transported to Mills Memorial Hospital in Terrace that night. Mr. Gosnell, his wife, her parents, and Mr. Gosnell's parents drove to Terrace as well.
 Mr. Gosnell, after getting to the hospital, retired to the motel room in the Bear Country Inn in Terrace.
 While at the clinic, Mr. Gosnell was asked and provided a blood sample to the RCMP for blood analysis.
 It is admitted by the plaintiff that the blood of the plaintiff at 10:30 p.m. on June 6, 2004, contained 0.66 milligrams of alcohol in 100 millilitres of blood. It is admitted by the plaintiff that he had consumed no alcohol of any kind between the time of the accident, 8:25 p.m., and 10:30 p.m. on June 6, 2004. It is admitted that Mr. Gosnell weighed 185 pounds at the time of the accident. It is not contested that Mr. Gosnell, while at the hospital, stated to Constable Van De Pol of the RCMP that he had consumed six cans of beer the night before at the wedding dance.
 As a result of the accident, Mr. Gosnell went on leave from work and did not return for some eight months. He then returned on a graduated basis; however, he stated that he found his work difficult. He was terminated in March 2006. He remains unemployed but is seeking work and has an application with the Nisga'a Lisims Government at this point.
 In June 2004, letters were sent from ICBC to Mr. Gosnell stating that there was an indication that he had not met a condition under the policy and that the matter was being investigated. Later in June 2004, ICBC wrote advising of their need for a statement from Mr. Gosnell regarding the details of the incident.
 On July 2, 2004, he signed a release form in order for ICBC to obtain salvage value for the SUV. It appears on the same date Mr. Gosnell was interviewed by Mr. Goldsworthy of ICBC and provided a statement regarding the accident. Ms. Gosnell attended with Mr. Gosnell to assist her husband and was present in the interview and provided comments. Mr. Gosnell provided his comments to Mr. Goldsworthy's question, who then typed up the comments as they were made. A copy was provided to Mr. Gosnell to review. Mr. Gosnell took the statement home for his review.
 On July 12, 2004, Mr. Gosnell returned to the Terrace office of ICBC and provided his copy of the statement with many changes inserted to the version typed up by Mr. Goldsworthy.
 Ms. Fisher of ICBC received that statement. The corrections were initialled by Mr. Gosnell and Ms. Fisher, and Mr. Gosnell also signed the statement of which Ms. Fisher witnessed. There were no changes made to his statement regarding alcohol consumption.
 By letter dated August 23, 2004, ICBC advised Mr. Gosnell that it was denying coverage for his vehicle loss on the basis that he had provided a false statement regarding his alcohol consumption.
 An expert was retained by the defence. The expert report of Ms. Carolyn Kirkwood was admitted into evidence. The contents of the report were not challenged by the plaintiff. Based on the assumptions that at the time of the accident Mr. Gosnell weighed 185 pounds, that he had not consumed any alcohol between 8:25 p.m. and 10:30 p.m. on the day of the accident, that he had eliminated alcohol at a rate of 15 milligrams per hour between the time of the accident and the time the blood sample was taken at 10:30 p.m., and that the blood taken at 10:30 had a blood-alcohol reading of 66 milligrams of alcohol in 100 millilitres of blood taken, she concluded that Mr. Gosnell's blood-alcohol concentration would be approximately 31 milligrams higher, or 97 milligrams of alcohol in 100 millilitres of blood, at 8:25 p.m.
 She opined that:
Assuming that Mr. Gosnell consumed 2 regular beer (12 ounce bottles or cans [at] 5%/Volume alcohol) his maximum BAC [which I take as blood-alcohol concentration] would be 47 mg. of alcohol in 100 ml. of blood. Assuming that he consumed these 2 regular beer between 12:00 midnight June 5, 2004 and 1:30 am. June 6, 2004, Mr. Gosnell's BAC would be 0 mg. of alcohol . . . at 8:25 pm. June 6, 2004. This drinking scenario is inconsistent with the results of the blood sample analysis.
[Emphasis in original]
 She further calculated the minimum amounts of alcohol required for a 185-pound male to achieve a blood alcohol concentration of 97 milligrams of alcohol in 100 millilitres of blood at 8:25 p.m. on June 6, 2004, if drinking commenced at 12 midnight June 5, 2004. The calculation showed that a person would have to have consumed 24.9 ounces of hard liquor at 40 percent volume alcohol, or 17.4 bottles of beer, 12 ounces, at 5 percent volume of alcohol.
 Ms. Kirkwood noted that these amounts:
. . . are likely an under-estimation of consumption, the individual may need as much as one and one-half to two times the calculated amount of alcohol to achieve the stated BAC. Individuals who are heavy users of alcohol may eliminate alcohol at 20 mg. of alcohol in 100 ml. of blood per hour.
 The defendant points to the blood-alcohol concentration found present on the night of the accident, the evidence of the levels of alcohol that would have existed at the time Mr. Gosnell had the accident, the amount of alcohol consumed that would have had to have been consumed by him at the dance to have had the reading at the time of the accident and at the hospital, the statement to Constable Van De Pol at the hospital of having consumed six beers at the dance, Ms. Gosnell's testimony that she and her husband and her brother and wife attended her sister’s home after the dance where they stayed for several hours drinking vodka, and that he was drunk, as she was, when they left is a clear indication that Mr. Gosnell made a wilfully false statement.
 In response, the plaintiff advances the theory that Mr. Gosnell had suffered a concussion in the accident and that due to this, he suffered from post-concussion syndrome and would have had memory loss to explain the difference between what he said and the actual physical results.
 They obtained the opinion of Dr. Strangway, who in his report stated:
. . . it is quite possible that the post-concussive state could have blanked out his memory for several hours preceding the accident and it is quite possible therefore that he would not know whether or not he had been consuming alcohol before the accident . . .
. . . I would state that on the basis of a concussion it is probable that this was sufficient to blank out this man's memory for several hours prior to the accident.
 Dr. Strangway sat through a portion of the cross-examination of Mr. Gosnell and heard his evidence. Mr. Gosnell testified with considerable recall and detail as to the events at the accident site and both before and after the accident. They included that he recalled fishtailing on the road just prior to going off the road, that he tried to straighten out his vehicle but was unsuccessful, that he was able to recall that he was pretty sure that the vehicle did not roll. He was able to recall details of the condition of his son. He noticed that his son was breathing, then groaned, and noticing that he was crying. He was able to describe the nature of the crying, the groaning, and what he told his son at the time.
 He appears to have recalled the condition of the road at the time of the accident. He recalled what he had told his friends at the accident who stopped by. He recalled the route taken to the village. He recalled his observations of the doctors in the clinic. He recalled that X-rays were taken of him, what the doctors did in attendance upon attending his son in the clinic. He recalled the trip to Terrace, and he stayed overnight in Terrace with other members of his extended family.
 Under questioning by Mr. Warner, Dr. Strangway agreed that retrograde amnesia relates to events around the time of the blow to the head which caused the concussion both before and after the event. He agreed that it was extremely unusual to have amnesia of things 18 hours prior to the accident and then to have a period of less amnesia and clear recall up to the accident, then clear recall of events post-accident. He agreed that he was not aware that Mr. Gosnell has such significant recall of events before and after the accident.
 Dr. Strangway also stated that he had not performed any tests to determine whether Mr. Gosnell had suffered a concussion. He relied on the usual approach of an attending physician of a patient's self-reports. He agreed that he had not read the statement that Mr. Gosnell had provided to Constable Van De Pol, the statement that he had provided to ICBC, Mr. Gosnell's examination for discovery transcript, nor had he conducted a review with Mr. Gosnell of the details of the accident.
 After considering the evidence that he had heard, he was still of the view that Mr. Gosnell had suffered post-concussive syndrome but downgraded further his opinion that his finding would now be milder than the finding that he had made on the ICBC standard medical form. Thus, taking his more informed evidence at trial, Mr. Gosnell, he said, had suffered a “milder than mild” post-concussive state.
 Having heard the evidence and particularly of Dr. Strangway, I am not persuaded that Mr. Gosnell was in such a post-concussive state that he would have had the very specific loss of memory regarding the amount of alcohol that he had consumed prior to the accident.
 Mr. Gosnell and Ms. Gosnell testified to significant debilitation on the part of Mr. Gosnell subsequent to the accident and that he is only 75 percent recovered. Ms. Gosnell testified to Mr. Gosnell's being uncommunicative, that he was unable to walk, that he had other motor problems, that he could not process information, that he could not eat without prodding, had difficulty speaking, had painful headaches, and was irritable. However, I am not persuaded that this condition, which is not supported by independent medical reports, sufficiently supports a specific memory loss regarding his consumption of alcohol or negates the evidence relied upon by the defence.
 The plaintiff also submits other facts such as the medications that Mr. Gosnell was on at the time of the interview that could have caused his lack of recall. There is, again, little evidence to support this position.
 Ms. Gosnell also testified that she was not aware of the amount of alcohol her husband had consumed at the wedding dance, though he was only a short distance beside her at the same table. She stated she was talking to her sister-in-law and had turned away. She acknowledged that she and her husband were drinking beer. She also testified that about 1:30 a.m. they left the dance and went to the sister's home. She acknowledged that she was drunk or high at the time but not falling down drunk. Her husband and his brother and wife all went along to her sister's home. She stated that she did not know the state of her husband's sobriety at this point, even though she had spent the past hour and a half sitting apart only some three or four feet.
 At her sister's place, she stated that all drank vodka. She again did not know how much her husband drank. What she does recall is that she does not have a recall of getting home that night, though she did. She stated that at the time, however, that she left her sister's home, she was more drunk than when she arrived and at which time she stated that her husband was in the same state as herself. She acknowledged that her husband was drunk when they left her sister's home.
 It is surprising that they have never talked about the amount of alcohol Mr. Gosnell consumed that night. I say this in the context that Mr. Gosnell has been perplexed by the apparent conflict in this statement and the blood-alcohol analysis. My reservations are deepened by Mr. Gosnell's testimony when asked why he had not talked to any of the hundred or so people who had attended the dance, whom he knew, about his consumption. He said that his wife had tried to find out from others attending the wedding dance how much he had been drinking. He testified that he was with her when she made the phone calls. He said it was in the range of 2 and not less than 10 people that she attempted to contact.
 Ms. Gosnell testified that no such calls were made and, specifically, that she never talked to anyone about this question. Therefore, I am left with reservations as to the credibility of Mr. Gosnell.
 It is apparent to me that Mr. Gosnell was seriously intoxicated the night before the accident, and if he could not recall how much alcohol he had, he would have known that it was due to having consumed a fair amount of alcohol. He had a responsibility out of good faith to his insurer to disclose at least that he could not recall because of his drinking, instead of stating that he “may have had” one or two beers at the dance which can be taken as a statement of minimal consumption. He admitted in cross-examination that he was just guessing when he made that statement. Mr. Gosnell made no effort to find out the correct facts about his drinking, and yet took considerable time and effort to correct numerous other things in his statement in detail.
 Given all of the foregoing, I conclude, regrettably, that the evidence is clear and cogent that Mr. Gosnell did not have a belief in the truth of the statement he provided regarding his alcohol consumption. He made his statement recklessly without care as to the truth or falsity of it. Accordingly, I dismiss the action.
 That concludes my judgment.
 MR. WARNER: My Lord, there is one issue on costs, and that is that, well, of course, the defendant seeks costs, but on February 7, 2008, the defendant delivered an offer to settle to the plaintiff. It's in the amount of $1 plus costs in accordance with Rule 37, and I would be seeking, therefore, costs up to February 7, 2008, and double costs thereafter. I have authorities. I suspect Your Lordship is familiar with the authorities because I came across a decision, Catalyst Paper Corporation v. Companhia de Navegaçāo Norsul, in which you reviewed the cases. It is a 2007 decision. But my essential point on that is that there is no longer, if there ever was, any discretion in the court to not follow the mandated scheme in Rule 37(14), I think ‑‑ (24), and that the issue of whether the $1 offer was reasonable or not is not something that can be taken into consideration. I have those authorities with me if my friend wishes them.
 THE COURT: Mr. Crampton?
 MR. CRAMPTON: Well, this family has suffered enough, My Lord, as you know. You've heard the evidence on that. Perhaps the response to that is they brought it on ‑‑ Mr. Gosnell brought it on himself, but certainly he still has some significant effects from the injuries suffered in the accident, and if there's any discretion to be exercised it should be done so in their favour.
 THE COURT: I am just wondering whether you have any authority to support your position Mr. ‑‑
 MR. CRAMPTON: No. No, I don't.
 THE COURT: I regret that I am not going to be able to grant relief to your client. I know that they have had some difficulties, but I award costs as submitted by Mr. Warner.
The Honourable Mr. Justice D. Masuhara