Don’t lie to your insurer – it doesn’t pay well

Insured lost right to indemnity pursuant to insurance contract by misrepresenting to the insurer that she was not the driver of her vehicle in a motor vehicle accident.

Insurance law – Automobile insurance – Fraud – Ownership of vehicle – Relief against forfeiture – Automobile insurance – Ownership, use or operation of motor vehicle – Policies and insurance contracts – Relief against forfeiture

Wong v. Aviva Insurance Co. of Canada, [2024] O.J. No. 765, Ontario Superior Court of Justice, February 22, 2024, S. Antoniani J.

Following a motor vehicle accident, the insured driver was found to have colluded with her mother and the driver of the other vehicle to misrepresent the insured’s mother as the driver rather than the insured because the insured believed her driver’s license had expired. In the personal injury lawsuit brought by the driver of the other vehicle, it came to light that the insured had been driver. The insurer denied coverage. The Court held that the insured’s right to indemnity was forfeited because she had failed her statutory duty, which required her to “whenever requested by the insurer, aid in securing information and evidence and the attendance of any witness” and to “co-operate with the insurer, except in a pecuniary way, in the defence of any action or proceeding or in the prosecution of any appeal.” The Court further found that the insured had committed civil fraud. The insurer’s position in the main action was irreparably impacted because the entire proceedings were of no use and the insured’s credibility was significantly impacted. The Court denied the insured’s claim to relief from forfeiture. Although the Court did find that the insured’s fraudulent behaviour was motivated by fear from a mistaken belief that her driver’s licence had expired and that the insured suffered from mental health issues that may have contributed to her decision, the Court noted that the fraud was not brief or insignificant and the court cannot condone lying in a court proceeding.

This case was digested by Dionne H. Liu and edited by Steven W. Abramson and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter.  If you would like to discuss this case further, please feel free to contact them directly at [email protected] or [email protected].