IN THE SUPREME COURT OF BRITISH COLUMBIA
Chahal v. Insurance Corporation of British Columbia,
2008 BCSC 1797
Registry: New Westminster
Jasbir Singh Chahal
Insurance Corporation of British Columbia
Before: The Honourable Mr. Justice Crawford
Reasons for Judgment
Plaintiff, appearing on his own behalf:
Jasbir Singh Chahal
Counsel for the Defendant
Date and Place of Trial/Hearing:
June 18-19, 2008
New Westminster, B.C.
 Mr. Chahal claims damages for breach of contract against the defendant for the failure to indemnify him for the loss of his 2000 Porsche Boxter motor vehicle, which he alleged was stolen by persons unknown on August 26, 2005 at or near 11906 – 88th Avenue, Delta, B.C.
 The defendant denies the theft of the vehicle, and alternatively say Mr. Chahal made material misrepresentations during the defendant’s investigation of the insurance claim and are not therefore liable to indemnify Mr. Chahal for the loss of his vehicle.
 In reply, Mr. Chahal denied any misrepresentations and, in the alternative said if such representations were made, they were not made with intent to deceive or defraud the defendant with respect to the insurance claim.
 Mr. Chahal bought a 2000 Porsche Boxter on November 10, 2004.
 Mr. Chahal paid the vendor, Mr. Leach $38,000 by way of official cheque.
 Mr. Chahal completed the Transfer Tax Form stating the purchase price to be $25,000 and the tax payable $1,750.
 The Owners Certificate of Insurance issued in Mr. Chahal’s name gave his address as 4775 Bute Street, Port Alberni on Vancouver Island, and declared the motor vehicle use as:
VEHICLE DRIVEN TO OR FROM OR PART WAY TO OR FROM WORK OR SCHOOL A ONE WAY DISTANCE IN EXCESS OF 15KM AND ALSO FOR PLEASURE USE. VEHICLE MAY ALSO BE USED ON NOT MORE THAN 6 DAYS IN A CALENDAR MONTH FOR BUSINESS USE OR COMMERCIAL USE.
 Mr. Chahal is an articulate and intelligent young man.
 In his evidence, Mr. Chahal said he was completing courses at Fraser Valley College and working for Health Canada and Canada Safeway in their IT departments and was a part-time lecturer. He said he was living with his extended family in Vancouver. He planned to move to Port Alberni due to a romantic relationship, but his plans changed.
 He said he notified I.C.B.C. of his change in address in May 2005.
 In mid-2005 Mr. Chahal was chosen to participate in CISCO Systems Elite new hire program at Raleigh, North Carolina. On the night of August 26, 2005, Mr. Chahal said he went to celebrate with two of his friends at a pub in North Delta.
 He said at about 8:00 p.m. he parked his car opposite the main door of the pub in parking spaces the strip mall facing the pub.
 When he left the pub at around 10:45 p.m. the car was gone. He checked with the nearby stores to see if they had had the car towed and then he checked with the pub management and their towing company. They did not report any such event. He then reported it to the Delta police at 10:50 p.m. alleging theft. He told the police the value of the motor vehicle was $45,000.
 On August 29, 2005, Mr. Chahal attended an I.C.B.C. claims office for the automobile theft. He signed two documents, one titled Report of Automobile and the other, a short written statement.
 On the Report of Automobile, after giving his address on Kings Avenue, Vancouver, he noted his occupation as Corporate Accounts Manager with CISCO Systems. He described the 2000 Porsche Boxter as having being purchased in 2004. In the box entitled “Amount Paid”, is the amount of $44,000.
 He noted the vehicle was fitted with a “factory” alarm or anti-theft device and the servicing was done by MCL Porsche on 4th Avenue. The last service had been to a clutch in May 2005. He noted he had reported the matter to the Delta police.
 In answer to the question “Number of sets of keys”, the answer is 2, and no keys were missing.
 The more formal statement printed out in capital letters reads as follows:
M323251 1 STATEMENT - TAKEN ON 29AUG05
PRINTED FOR: ARIAS, LAURA
STATEMENT FROM: JASBIR CHAHAL - REGISTERED OWNER
I AM THE REGISTERED OWNER AND PRINCIPAL DRIVER OF A BLUE 2000 PORCHE BOXTER WITH PLATE NUMBER 25OKGD. I HOLD A VALID BC DRIVER’S LICENSE NUMBER 6345950. I LIVE AT 3098 KINGS AVENUE VANCOUVER. I WORK FOR CISCO SYSTEMS, I AM A CORPORATE ACCOUNT MANAGER. I BOUGHT THE CAR IN 2004, IT WAS A PRIVATE SALE, I PAID $44,000 FOR IT AND IT’S ALL PAID FOR. THERE ARE 2 KEYS TO THE CAR NONE ARE LOST OR MISSING. THE CAR HAS ABOUT 63,000KM. THE ENGINE CONDITION IS GREAT, CONDITION. I SERVICE IT AT MCL PORSCHE. THE WHEEL AND TIRES CAME WITH THE CAR. THERE IS NO AFTERMARKET EQUIPMENT ON THE CAR. I AM THE ONLY DRIVER TO THIS CAR, I DON’T LEND IT TO ANYBODY. ON AUGUST 26, 2005 AT ABOUT 8PM I WENT WITH MY FRIEND RAJ BAINS TO FINNINGAN’S PUB/RESTAURANT IN DELTA, WE WERE MEETING ANOTHER FRIEND, HIS NAME IS JASBIR LACHE, WE STAYED IN THE PUB UNTIL 10:45PM, WHEN I CAME OUT MY CAR WAS GONE. I PHONED THE DELTA POLICE AND REPORTED IT, THEY GAVE ME A POLICE REPORT NUMBER 05-20079. I HAVE READ THE ABOVE STATEMENT AND BELIEVE TO BE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE.
SIGNATURE [Jasbir Chahal] DATE [August 29/05]
PRINT NAME [JASBIR CHAHAL]
WITNESS [L. ARIAS] DATE [8/29/05]
PRINT NAME [LAURA ARIAS]
ADDRESS STATEMENT SIGNED AT: 999 KINGSWAY
VANCOUVER BC V5V 4Z7
 On August 31, 2005, a special investigation employee of the defendant interviewed Mr. Chahal, tape recorded the interview and had it transcribed.
 Mr. Chahal then went off to take training in North Carolina.
THE PREVIOUS OWNER
 Mr. Leach was the previous owner of the 2000 Porsche convertible. He operates a security company.
 He said he purchased the motor vehicle in 2003, taking over a lease from MCL. He was given two operating keys and a valet key. The valet key is much smaller and only opens the trunk and does not work with the car’s immobilizer system.
 Mr. Leach paid $39,000 for the motor vehicle and sold it to Mr. Chahal in November 2004 for $38,000.
 He said Mr. Chahal wanted to have the transfer document completed with the purchaser as Mr. Chahal’s mother and he refused to do that unless she was brought forward to sign the document. He also said Mr. Chahal wanted to put different numbers and he finished up simply signing the blank transfer document and then giving it to Mr. Chahal.
 He said Mr. Chahal told him he was in the course of a divorce and did not want his wife to get one-half of the car.
 He said while he owned the car in May 2004, someone attempted to steal the motor vehicle from his driveway. They broke a side-door lock and got into the car and then destroyed the ignition trying to get the vehicle to start and that had required the ignition, driver door lock, and keys being replaced.
 Exhibit 2 is the MCL repair order of July 6, 2004.
 He said with respect to the re-keying of the vehicle, he only took one of the two operating keys to MCL. The other key was held by his wife and that needed to be changed to work with the new ignition immobilizer system. MCL gave him a new plastic shank to have his wife’s key refitted but he did not do that.
 Mr. Leach said that he gave Mr. Chahal his own operating key, the valet key, the old key and the new shank and told him to take it to MCL to have the key reset and then he would have a second key. MCL said there would be no charge for the re-setting of the key.
 He was then shown the keys that had been turned in by Mr. Chahal to I.C.B.C. He said that the key that he was shown had obviously been repaired as there was glue on it and there had not been any glue on the key that he had.
 In cross-examination Mr. Leach agreed he had initially asked for $40,000 or $41,000 for the car in June of 2004, and then dropped the price.
 Mr. Leach agreed he spoke with the I.C.B.C. investigator, Mr. Huxley, and when shown I.C.B.C. correspondence dated September 21, 2005, he agreed that is when he would have communicated with Mr. Huxley. He agreed he had told Mr. Huxley the price was $39,000 in the sale to Mr. Chahal.
 With respect to Mr. Leach’s statement about Mr. Chahal saying he was getting a divorce, he was certain that person was Mr. Chahal.
 He agreed he did not hear people trying to get into his car at the time the door and ignition were damaged, although he does run an air-conditioner in his bedroom to create “white noise”.
 He agreed the car was in mint condition and that he would have shown Mr. Chahal how the top and other parts of the car worked.
 He was positive the key put in evidence looked different as there was glue showing on the plastic join.
 Exhibit 3 is the Transfer Tax Form which has Mr. Leach’s signature as seller.
 The balance of the Form I find was filled in by Mr. Chahal. Under the portion “Purchase to Complete: Social Service Tax Return”, the purchase price is stated as $25,000 and the tax payable $1,750. The Autoplan date stamp is November 10, 2004.
 Exhibit 4 is the Owner’s Certificate of Insurance and Vehicle Licence. Mr. Chahal gives his address in Port Alberni as at November 10, 2004.
 Exhibit 5 is a cheque dated November 10, 2004 with Vancouver City Savings Credit Union made out in the amount of $38,000 to Steve Leach.
INSURANCE CORPORATION OF BRITISH COLUMBIA INVESTIGATION
 The Insurance Corporation was immediately concerned about Mr. Chahal’s claim. Mr. Huxley, a special investigator asked Mr. Chahal to attend on him at a Claims centre on August 31, 2005. He did so because Mr. Chahal was soon to leave for Northern Carolina. The interview was recorded with Mr. Chahal’s consent. He reiterated his address and work history and the forthcoming trip to North Carolina.
 He repeated the circumstances of the car loss, the attempts to contact towing and the reporting of the matter to the police. He advised of the friends that had been with him and how he got home. He noted that a lady, with whom he had discussed the possible towing of the car, had come out of the pub when his car had gone and that her car was still there. He described the hotel’s name as Finnigan’s. He said he only was provided one key and the valet key from the vendor. He said he had contacted Porsche to get another operating key and said it was very expensive. He did not know how the anti-theft equipment worked on the car, save it was factory-installed and he had heard the alarm go off, making a honking noise. Mr. Huxley told him how an immobilizer worked.
 When he was asked what he paid for the car, his answer was “it was like 44”.
 He provided information about the clutch replacement, which he had done by Hardeep Auto Body in Surrey.
 He said he intended to keep the car in British Columbia while he was in North Carolina and it would stay in the garage at the house.
 He said he had changed his address in the past year, but the job he was going to take on Vancouver Island did not offer enough salary, so he changed his address to “down here”. He was asked if anyone had any grudges against him or whether he had been in any fights. He agreed going to the pub had been a random choice. Questions were asked about his telephone. There was an extended discussion with Mr. Huxley about key cloning and what might have happened to the car, and then discussions turned to the time he might be back from North Carolina.
 Towards the end of the discussion, Mr. Chahal noted that his friends did not leave the hotel, but they went to the washroom three times, and at all times his keys were in his pocket.
 Pictures of the site of Kennedy’s Sports Pub were filed by both parties. The strip mall has parking and there is a two-lane roadway of some 20 feet, and then five steps lead to the front door of the Kennedy Sports Pub.
 Mr. Chahal said that inside the door there is another set of doors and that when one is looking at the right-hand set of windows beside the door, that is part of the bar and the windows of some 12 to 16 feet on the left-hand side are part of the hallway to the washrooms.
 The next event appears to be the filing of an Automobile Proof of Loss (Form CL-37), which I.C.B.C. sent to Mr. Chahal to complete.
 Mr. Chahal said he had several discussions with his adjuster about completing the form.
 Under the heading “Declared Value”, he put $45,000 plus taxes. He said he got that information from internet searches and checking with MCL, but had kept no records.
 He also inserted the $45,000 figure under the total amount claimed under the terms of insurance and the authorization to pay.
 The last statement before Mr. Chahal completed his statutory declaration reads: The Insured agrees to indemnify the Corporation for any amounts of money which it may be required to pay by reason of any of the statements herein being false.
 Mr. Chahal declared the contents of the document true to the best of his knowledge, information and belief before a notary public on November 8, 2005.
 Mr. Chahal returned to British Columbia for Christmas 2005 and Mr. Huxley met with him again on December 29, 2005. Mr. Huxley took a recorded sworn statement from Mr. Chahal pursuant to Section 137(2) of the Insurance (Vehicle) Act, [R.S.B.C. 1996] c. 231 Revised Regulations.
 In essence, the sworn statement was consistent with the previous information provided by Mr. Chahal.
 One of the friends that he met at the pub came in his own car and parked beside Mr. Chahal, while the lady who was parked on the other side drove a green Mustang.
 With respect to the price of the car, Mr. Chahal was asked how much he had paid for the vehicle and he said “Altogether, like taxes, everything? I think it was 44,000, 45, something like that, with taxes and everything.”
 Mr. Chahal said he was at the time doing business in the United States but he only drove the car as far as Seattle. He said he had no other personal vehicle, but at the house he lived in there were about six cars, so there was usually a car available for him to take and he would take one of the other family vehicles to go down to the United States. He said he was not able to park the car in the garage as he brother’s car was not insured and was in the garage and he stored his car outside the house. He thought he did not drive the car in January or February, 2005 as he did not want to drive it in the snow.
 He said the house had a huge driveway, 75ft. wide by 50ft. long which could park 8 cars, and he planned to leave the car there under a tarpaulin. He said the garage was used for storage but his car was small and could be fitted in there.
 He said he was able to put the car in the garage in mid-January at the residence at 3098 Kings Avenue. He said he only got two keys at the time of the car purchase.
 He said he asked MCL at one time about getting another operating key and that it was “like $500 or something to get a key, plus the cost of cutting the other part of it or something like that”: page 19.
 He denied receiving anything more than the two keys, that he did not receive any bits or pieces, or half shanks or half remotes. He agreed the vendor told him that someone had tried to steal the car and the doors or keys were changed.
 When asked if this car had an alarm, he said he didn’t know, that the noise was the horn going off, which he had heard maybe once and he had not heard it go off at his house.
 With respect to insuring the car for use in Port Alberni, he said he was actually seeing someone up there and planning to stay with them but unfortunately things did not work out. Later he found out that the place of insurance could be trouble and he switched it back to Vancouver from Port Alberni. He agreed he did not have a job lined up on the Island.
 Late in the interview Mr. Huxley asked about the Tax Transfer Form, why Mr. Chahal had put $25,000 instead of $40,000 or $44,000. Mr. Chahal suggested that the person at the insurance office filled it in, or alternatively, the person who sold the car.
 On January 9, 2005, the claims representative for the insurance corporation notified Mr. Chahal that their investigation was complete.
 The file adjuster wrote to Mr. Chahal saying: “This letter is to notify you that our investigation into your above-noted claim is complete. Our investigation found insufficient evidence to support the theft of your vehicle. Based on this information, we are denying your claim for indemnification under your own damage policy.”
 Mr. Chahal issued his Supreme Court Writ of Summons on October 3, 2006.
 Both parties sought to introduce expert opinions. The plaintiff had retained Rob Painter, a forensic locksmith located in Wisconsin, who, when put on notice to attend the trial, advised the plaintiff he was unable to attend.
 His written opinion, which does not have an office address, was in large part argumentative. He took issue with the opinion provided by the defendant’s expert, Thomas Seroogy, a certified forensic locksmith.
 While I admitted the reports, I advised the parties that Mr. Painter’s opinion must necessarily be substantially cut down as I found the better part of the second, third, fourth and fifth pages either argumentative or of no assistance.
 Thus reduced, the two opinions were substantially similar in saying that the 2000 Porsche Boxter was fitted with an anti-theft system. It primarily comprises an immobilizer and alarm system and unless the key is inserted with the appropriate transplanted chip that can be read by the ignition module, the car simply will not start. Further, the 2000 Porsche Boxter has what is called a rolling code in which the electronic value on the key changes and therefore cannot be cloned save by a Porsche-authorized dealer.
 In sum, the experts were of the view the car either had to be towed or someone had to have an authorized key to move the vehicle.
MR. CHAHAL’S EVIDENCE AT TRIAL
 He acknowledged giving the statement of August 29, 2005. He said he was not focused on the issue of his car loss as he was busy getting his U.S. visa and going to CISCO Systems in North Carolina. He acknowledged attending again at I.C.B.C. offices on August 31, 2005, and again said he was not focused on the details regarding the car loss, but of his pending trip. He said he didn’t know how much he paid the vendor for the vehicle.
 He said he did provide I.C.B.C his telephone records and various contact information and that had he been asked the price he paid for the motor vehicle or the taxes he had paid, he would have given that information.
 He acknowledged returning to Vancouver for Christmas 2005 and meeting with the adjusters to provide a sworn statement. He said when he was asked about the $25,000 value on the Transfer Form, he acknowledged he did not know that.
 In June 2006 he sought counsel.
 On cross-examination he denied lying to I.C.B.C. about the purchase price.
 He said with respect to his original statement of August 29, 2005, he did not understand I.C.B.C. would rely on that information in processing his claim. He said $44,000 was an approximation and he believed the statement was true. He responded similarly to an enquiry about Exhibit 7, the Report of Automobile which states the amount paid at $44,000.
 He agreed he told Mr. Huxley he paid $44,000 during the interview on August 31, 2005. When asked why he did not check the accuracy of the price he had paid, he said he was packing for the United States and working on visa application issues.
 With respect to the Proof of Loss Form sworn November 8, 2005, it was put to him he knew the Insurance Corporation would rely on the statements he made. He responded by saying he discussed this several times with the adjuster and relied on her advice.
 He agreed he did not pay $45,000 for the car and said he was just told to research the value and he said he telephoned MCL and researched prices on the internet. He said when speaking with the adjuster she said to put what he believed the value was when he lost the motor vehicle.
 He agreed he paid $38,000.
 He agreed he did not check that until asked on examination for discovery in 2007.
 When asked if he thought the price must be relevant to the value on the Proof of Loss document, he said he filled it out as he was instructed.
 He was shown the Delta Police Occurrence report and said he did not recall telling the police the value of the car was $45,000.
 He agreed he wrote down $25,000 on the Vehicle Transfer Tax form. He agreed he previously denied filling in the form. He said he told Mr. Huxley he did not remember that and would look into it and get legal advice. He said he did that because he had not remembered writing $25,000, that it was a government document, and if he had written down the wrong amount he should check on it.
 He agreed he did not pay the difference in taxes to the government on $25,000 and the $38,000 paid.
 He agreed he had not kept any of his market value research. He did not think the information he provided to Mr. Huxley as to the price paid of $45,000 was similar to the $45,000 and taxes he had put as the value on the Proof of Loss form.
 He agreed he never lived in Port Alberni, nor did he work there. He said he told the insurance adjuster at the time he was planning to move to Port Alberni in a month. He denied putting in Port Alberni to obtain a lower insurance rate as he believed the whole province paid the same rates. He later found out that was not correct by talking to friends and changed the registration in May 2005.
 He agreed he met two friends at Kennedy Sports Pub and not Finnigan’s Pub at approximately 8:00 p.m. and left at approximately 10:30 p.m. He acknowledged the photographs of the site being accurate.
 He described the interior of the pub as seen from the outside with the bar area to the right, a second set of inner doors, and on the left side the hallway to the washrooms that have large windows facing out on to the parking lot.
 He said he knew the car had an immobilizer system and he heard it go off. His said his memory was more accurate on the initial statement he gave to Mr. Huxley than the second one.
 He agreed he had researched immobilizers and found even with an immobilizer the car could still be towed.
 He agreed he had been given a 24-hour suspension July 31, 2005, but he did not remember a letter from I.C.B.C in August 2005 giving him notice of suspension of his driver’s licence.
 He denied ever being married and he said he did not remember telling Mr. Leach he wanted to use his mother’s name because he was going through a divorce.
 He denied Mr. Leach refused to fill in the transfer form, or saying he should bring his mother to the house if she wanted to purchase the vehicle. He would not speculate on that matter.
 He denied being given an operating key, a valet key and old remote, an old key and a new shank. He said he only received two keys which he gave to I.C.B.C.
 He did not recall a discussion with Mr. Leach about a previous attempt to steal the vehicle which had broken the ignition and led to the keys being re-set and new locks put in the door. He denied Mr. Leach telling him to take the operating key and new shank to MCL to have them re-assemble a new key.
 He agreed he only disclosed two keys on his Report of Automobile: Exhibit 7.
 He denied there was a second operating key. He denied that the key marked as an exhibit with glue on it was not the operating key Mr. Leach had given him.
 Mr. Huxley has been an investigator for 11 years with I.C.B.C. and has a special constable status.
 He said the various matters which caused concerns on the claim led to him meeting with Mr. Chahal in late August 2005.
 He said an important issue was the immobilizer system which makes it very difficult for people to steal cars. He said the advice from Mr. Leach that he had given Mr. Chahal an operating key and the parts for another operating key concerned him. As well, when Mr. Leach advised him he had been paid $39,000 and there had been matters of discussion regarding the potential buyer and the incomplete tax form, and a check of the registration noted a Port Alberni address, he had further concerns.
 Mr. Chahal was admirably brief in argument. He submitted his car had been removed by persons unknown to him and without his consent. He said it had been taken from outside the pub before 10:45 p.m. on August 26, 2005 and he took all reasonable steps to alert the authorities and file his claim with I.C.B.C.
 He said the onus on him as to theft had been established and that therefore the onus shifted to I.C.B.C. He submitted I.C.B.C. had not established that the theft did not occur as stated.
 He said they had failed to prove that he had made a wilfully false statement on the two issues of what he had paid for the car and how many keys he had received. He made reference to Peterson v. Bannon (1993) 84 B.C.L.R. 2d 350 for the appropriate test. He referred to the decision of Cullen J. in DeCastro v. I.C.B.C., oral reasons given October 2, 2006, which had some similarities with a central issue arising as to the effectiveness of the immobilizer in a BMW that had been apparently taken from outside a pub on March 31, 2004, and subsequently found without tires and wheels, various front-end components and destroyed by fire
 The defendant painted with a broader brush focussing on the effect of the evidence on an immobilizer system, the number of keys provided by Mr. Leach to Mr. Chahal, the location outside a busy pub from which the motor vehicle was stolen, various inconsistencies in the evidence of the plaintiff, and the plaintiff’s wilful mis-statements as to the price paid for the vehicle, and the number of keys received from Mr. Leach. The defendant noted a number of cases regarding mis-statements of the purchase price of the vehicle, namely Hoang v. ICBC, (November 30, 2004), Prov. Ct., Mamertino v. ICBC, CarswellBC. 2660 (Prov. Ct.) and Allan v. ICBC,  CarswellBC 2628 (Prov. Ct.).
 Mr. Chahal denies he was complicit in the theft. The law requires that the defendant prove he was party to the theft. Principally the defendant relies on the missing key, the fact the vehicle was parked in a well-lit and small parking lot right in front of the main entrance to the pub, and submitted that if there had been any towing activity that would have excited the interest of the people inside the pub and would soon have alerted Mr. Chahal.
 As well, I would note that Mr. Chahal said he and his friends went to the washroom three or more times during the course of the evening and would have passed the windows that look out on the vehicle parked some 30 ft. to 50 ft. away. It might be expected that if the car was missing before they exited the pub, it would have come to their attention.
 However, I have no more than evidence of suspicion and I am unable to make a finding on balance that Mr. Chahal participated in the theft of his own vehicle. Nor might I add was there any evidence of motive.
Forfeiture Pursuant to the Provisions of the Insurance (Motor Vehicle) Act Regulations, R.S.B.C. 1996, c. 231, S. 19(1)(e)
 The section reads:
19(1) If ...
(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 of 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 dependant of the applicant or the insured to benefits and insurance money is forfeited.
 The leading statement of law in this matter was enunciated by McEachern C.J.B.C. in Inland Kenworth Limited v. Commonwealth Insurance Company, (1990) 48 B.C.L.R. 2d 305 at pages 309 – 311, and cited by Rowles J.A. in Brown v. Insurance Corp. of British Columbia, 2004 BCCA 254 at paras. 10-11:
10. In Inland Kenworth, in which s. 231(1) of the Insurance Act, R.S.B.C. 1979, c. 200 was under consideration, McEachern C.J.B.C. said, at 309-311 (B.C.L.R.):
I agree that a wilfully false statement which is not material may not usually be relied upon by the insurer. Materiality is, however, one of the fundamental principles of insurance law and it manifests itself in many ways. The classic test of materiality in insurance law is whether a statement is capable of affecting the mind of the insurer.
* * *
It is sufficient, in my view, 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 but I point out that the insurer may have waived appraisal and decided to pay Blue Book value. On the other hand, the insurer may have done exactly what it did in this case, that is submit the question to appraisal.
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.
* * *
I do not say that any wilfully false statement will be sufficient to vitiate coverage. It must be material. I think the wilfully false statement about the subject matter of the insurance, intended to comply with the warranty, but which also related to the question of value, and was capable of affecting the mind of the insurer, destroyed the integrity of the claim, and was material at least to the latter question. Under the Act, and at law, this forfeits the right of the insured to indemnity.
11. In Peterson v. Bannon , supra, s. 18(1)(e), which is now s. 19(1)(e) of the Act, was under consideration,. In that case, Finch J.A., as he then was, said at para. 59:
Inland Kenworth therefore affirmed that if an insured makes a wilfully false statement about the subject matter of his or her claim, that person risks forfeiture if the statement is material to any issue arising in the claim. Although the respondent argued otherwise, there is no real distinction between the language of s. 231(1) and s. 18(1)(e). I consider myself bound by Inland Kenworth, a judgment with which I respectfully agree. A wilfully false statement will invalidate an insured's claim only if the statement is material to the claim at risk of forfeiture.
 Mr. Chahal correctly argues that there has to be a wilfully false statement and secondly that it was material to the processing of the claim.
 As well, he relied on the decision of Cullen J. in DeCastro v. I.C.B.C., oral reasons given October 2, 2006, which had some similarities in a central issue arising from the effectiveness of the immobilizer in a BMW that had been apparently taken from outside a pub on March 31, 2004, and subsequently found without tires and wheels, various front-end components and destroyed by fire.
 Cullen J. noted the initial burden falls on the plaintiff to show that loss falls within the coverage but that is not onerous and that secondly, the onus then shifts to the defendant to prove on a balance of probabilities intentional material conduct by the plaintiff that is in breach of one of the sub-sections of s. 19(1).
 The principal arguments about representations made with respect to the claim are: (1) the statement made as to the price paid; (2) the number of keys provided by Mr. Leach.
 Mr. Chahal paid $38,000 to Mr. Leach by official cheque on November 10, 2004.
 From the outset of Mr. Chahal’s report to the Delta police, through the reports of loss to I.C.B.C., the initial recorded statement of August 31, 2005 and the statement on oath in December 2005, Mr. Chahal spoke of the price paid or value as $44,000 or $45,000. Only in the case of the Proof of Loss form sworn on November 8, 2005, did he say he had researched the value.
 I am unable to accept that he would not have known precisely the amount he paid as reflected in the official cheque.
 I accept the reported value of the vehicle was material to the insurance corporation’s assessment of the claim and that the plaintiff sought to inflate the value of the vehicle. Further, no evidence was led by Mr. Chahal to support the alleged value.
 Mr. Chahal said he only received one operating key and one valet key from Mr. Leach. Mr. Leach said he gave Mr. Chahal the operating key, a valet key, the old key and a new shank which he could take to MCL to have a second operating key completed.
 Mr. Leach was also clear in his evidence that the operating key he gave the plaintiff at the time of the sale did not have any glue on it.
 Given the importance of the immobilizer anti-theft system to the purchaser of a valuable foreign-made sports convertible, I accept Mr. Leach’s evidence over that of the plaintiff. In turn, I find the plaintiff’s statement that he only received an operating key and a valet key from Mr. Leach was not true, and that was a material matter for the insurance corporation’s assessment of the claim.
 In sum, I find the argument of the defendant as to material mis-statements made out and the plaintiff’s claim must be dismissed. The defendant is entitled to its costs.
“The Honourable Mr. Justice Crawford”