Executive Summary: Key Legal and Evidentiary Issues

• The court considered whether a Garage Policy Certificate qualifies as an "owner's certificate" under the Insurance (Vehicle) Act Regulation.
   
• Harris argued in the alternative that section 149(2) of the IVA Regulation deemed the Jeep to be covered as an "additional product certificate."
   
• ICBC maintained that the Jeep was never registered, licensed, or insured for operation on a highway.
   
• Justice Ross rejected Harris's plate-swap argument as foreclosed by the Court of Appeal's earlier ruling in the related tort action.
   
• Evidentiary findings from the underlying tort trial established that Harris, not the prospective purchaser, owned the Jeep at the time of the accident.
   
• Relief from forfeiture under section 19 of the IVA was denied because no coverage existed to be forfeited in the first place.
   

Facts of the case

On August 27, 2018, a Jeep driven by Mr. Anthony Thomas struck pedestrian Tracy Ann Ward, causing catastrophic injuries. In the resulting tort trial, Ward v. Thomas, 2022 BCSC 1147, Justice B. Brown found that Harris Victoria Chrysler Dodge Jeep Ram Ltd. ("Harris"), a Victoria car dealership, owned the Jeep, that Mr. Thomas had operated it with Harris's consent, and that Harris was therefore vicariously liable for damages totalling approximately $5 million. That finding turned on events at the dealership on August 18, 2018, when a customer, Ms. Aggatha Siah, negotiated to trade in her Cruze for the Jeep. Financing had not been finalized, and no Demonstration Plate was available, so Harris staff prepared a "cash bill of sale" as an interim measure and swapped Ms. Siah's Cruze plates onto the Jeep so she could drive it home. Justice Brown found this document was never intended to be a binding purchase agreement. Ms. Siah kept the Jeep for nine days without completing financing. During that period, Mr. Thomas, who had not driven the Jeep before, took it on a one-off errand for a family member while Ms. Siah napped; Justice Brown found Ms. Siah would not have consented to this use, but Harris had impliedly done so. Harris's appeal of the tort trial decision was dismissed in Harris Victoria Chrysler Dodge Jeep Ram Ltd. v. Ward, 2023 BCCA 478. After the tort trial, Harris sought indemnity from the Insurance Corporation of British Columbia ("ICBC") under its garage policy; ICBC denied coverage, taking the position that the Jeep was not insured for operation on a highway because it had no owner's certificate or Demonstration Plate attached and had been in Ms. Siah's possession for more than 48 hours. Harris then petitioned the Supreme Court of British Columbia for a declaration that the Jeep was insured and that ICBC was obliged to indemnify it.

Policy and legislative provisions at issue

The case turned on the interaction of several provisions of the Insurance (Vehicle) Act ("IVA") and the Insurance (Vehicle) Regulation ("IVA Regulation"), along with Harris's Garage Policy Certificate. Harris first argued that its Garage Vehicle Certificate met the definition of an "owner's certificate," relying on section 64 of the IVA Regulation, which requires the corporation to indemnify an insured for liability arising from a vehicle "described in an owner's certificate." Harris contended that, because the Jeep remained in its inventory (the purported sale to Ms. Siah having been found non-binding), the vehicle was "owned" by Harris and fell within that section. In the alternative, Harris argued that its Garage Policy Certificate was an "additional product certificate" under section 149(1)(k) of the IVA Regulation, and that section 149(2)—which states such a certificate "evidences coverage under Parts 6, 7 and 10"—operated to provide coverage regardless of whether the Jeep was named in an owner's certificate. As a further alternative, Harris submitted that any deficiency was a licensing problem rather than a coverage problem, pointing to R. v. Rashead, 2011 BCPC 94, and R. v. Reid, 2009 BCPC 0100. Harris's initial submission, since abandoned, also invoked the "plate swap" regime under section 3.08 of the Motor Vehicle Act Regulations. ICBC's position rested on section 3 of the Motor Vehicle Act, which requires that a vehicle be registered, licensed, and covered by an owner's certificate before operation on a highway, and on the IVA's definition of "owner" as the person in whose name a vehicle is registered and licensed. ICBC argued the Jeep met none of these requirements, and relied on Van Huizen v. Trisura Guarantee Insurance Company, 2020 ONCA 222, and Painter Motors Ltd. v. Insurance Corporation of British Columbia, 1982 CanLII 712 (B.C.S.C.), for the proposition that a certificate "evidencing" coverage is not the same as a certificate creating it.

Reasoning and analysis

Justice Ross rejected the plate-swap argument outright, noting that the Court of Appeal had already held in the tort appeal that section 3.08 of the Motor Vehicle Act Regulations did not apply to Ms. Siah's transaction, and that revisiting the issue would amount to a collateral attack on that decision; in any event, that regime could only have benefited Ms. Siah, not Harris. Turning to the "owner's certificate" argument, the court found it failed because the IVA's definition of "owner" requires the vehicle to be registered and licensed in the claimant's name, and the Jeep was never registered or licensed in Harris's name. An owner's certificate, the court held, can only be issued alongside a corresponding licence permitting highway operation, which the Garage Policy Certificate did not provide for inventory vehicles. On the section 149(2) argument, Justice Ross agreed with ICBC that Harris placed too much weight on the word "evidences," concluding that the Jeep was not being operated in accordance with the terms of the additional product certificate and that section 149 could not be relied upon selectively. The court also rejected the submission that this was purely a licensing issue, holding that licensing, registration, and insurance are integrated requirements under section 3 of the Motor Vehicle Act, and that the Rashead and Reid reasoning did not apply in this civil insurance context. On relief from forfeiture, Justice Ross accepted ICBC's position, drawing on DeGrasse v. Insurance Corp. of B.C., 1994 CanLII 1833 (B.C.S.C.), that a party cannot "violate" coverage that never existed, and that sections 19 and 75 of the IVA presuppose an existing coverage from which relief could be granted.

Ruling and overall outcome

Justice Ross dismissed Harris's petition, finding that the Jeep was not an "owned vehicle" described in an owner's certificate under sections 63 and 64 of the IVA Regulation, that section 149(2) did not independently create coverage, that the absence of coverage stemmed from a coverage failure rather than a mere licensing lapse, and that Harris was not entitled to relief from forfeiture because no coverage had ever come into force. ICBC, the successful party, therefore had no obligation to indemnify Harris for the damages awarded to Ms. Ward in the underlying tort action. The court did not hear submissions on costs; it indicated costs would ordinarily follow the event, and invited either party to make written submissions within 30 days of the release of the reasons if a different order was sought. No specific monetary amount was awarded to either party in this petition.