ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-11-1179-00

DATE: 20140627

B E T W E E N:

2068286 ONTARIO INC.

A.S. Nagpal, for the Plaintiff

Plaintiff

• and -

JEVCO INSURANCE COMPANY

G. Hearn and K. Newton, for the Defendant

Defendant

HEARD: December 16, 17, 18, 19 and 20, 2013

REASONS FOR JUDGMENT

Fragomeni J.

[1] The plaintiff, 2068286 Ontario Inc. (hereinafter referred to as the plaintiff) at all material times owned a 2009 Peterbilt tractor with an Ontario Plate No. 4166ZA. The defendant, Jevco Insurance Company (Jevco) insured the tractor.

[2] On or about the 12th day of December 2010 at about 5 p.m. the tractor was parked at 28 Finley Road in Brampton. The Officer of the Plaintiff company, Mr. Pargat Singh Brar parked the tractor in that location and took the keys with him. On or about the 14th day of December 2010, Pargat Brar returned to the said parking lot and found that the tractor was missing. As a result of not being able to locate the tractor he reported it as a theft to the Peel Regional Police.

[3] Pargat Brar also completed a Proof of Loss Form which was submitted to Jevco. Jevco conducted their own investigation and concluded that the claim would be denied. The results of the Jevco investigation indicated that the tractor required significant repairs at the time of the reported theft having previously been the subject of fire damage and a rollover accident while under the ownership of third parties.

[4] Jevco takes the position at this trial that the plaintiff is not entitled to a declaration that the plaintiff is entitled to claim for the loss and it has no duty to indemnify pursuant to the Policy.

[5] Jevco relies on section 233(1)(a)(i) of the Insurance Act R.S.O. 1990, c. 18 and submits that the plaintiff provided false particulars with respect to the tractor stating that the tractor had no unrepaired damage. In the alternative Jevco submits at this trial that the plaintiff’s claim is invalid as a result of the plaintiff knowingly misrepresenting or failing to disclose any fact required by the form.

[6] In the further alternative Jevco submits that the plaintiff’s claim is inflated and Jevco can only be liable for the actual cash value of the tractor at the time of loss.

[7] The plaintiff responds to Jevco’s position by submitting at this trial that the tractor was in perfect working condition when he bought it, it had been safety certified by a mechanic, and the tractor had a clean title with no accidents or losses ever registered. The plaintiff had no knowledge of any prior accidents.

SUMMARY OF THE TRIAL EVIDENCE

[8] The parties filed as a Joint Book of Documents, Exhibit 1 containing 39 Tabs.

Pargat Singh Brar

[9] Mr. Brar was the owner of the plaintiff company 2068286 Ontario Inc. The plaintiff owned a 2009 Peterbilt tractor bearing a vehicle identification number 1XPWDB9X39N771545 (the Peterbilt).

[10] The plaintiff purchased the Peterbilt from Farida Inc. on September 13, 2010 for $96,500 plus HST for a total of $109,045. The mileage at the time of purchase was stated on the bill of sale (Tab 1 of Exhibit 1) to be 94,833km. The Peterbilt was purchased by a line of credit taken out on Mr. Brar’s home. He obtained a safety certificate, annual inspection certificate, and emissions report and proceeded to obtain the plates for the vehicle.

[11] Mr. Brar gave evidence that he used a broker that worked for Jevco. The broker, Mr. Charlie Singh, came to his yard and had him sign insurance applications at Tabs 11 and 14 of Exhibit 1. Mr. Singh filled in the forms. Mr. Brar testified that he did not read the document before he signed it, but that Mr. Singh mentioned the major points such as what coverage was being provided, when the policy would expire, and the monthly charges. Mr. Singh communicated these major points to Pargat Brar in Punjabi. He did not recall if he discussed with Mr. Singh whether there was unrepaired damage to the Peterbilt.

[12] Later in his testimony Mr. Brar admitted that Mr. Singh was his representative to locate his insurance. He understood that Mr. Singh was dealing on his behalf to obtain insurance. He said that he expected the best quote and that Mr. Singh did not tell him what insurance companies he was going to approach about a quote. He then said he thought Mr. Singh could only go to Jevco, but that he was not concerned about that, only about price. Mr. Brar testified further on this point that Mr. Singh never actually told him he could only place the insurance with Jevco. Mr. Brar gave evidence that he relied on Mr. Singh to obtain the particular insurance coverage.

[13] The Peterbilt came to be insured by Jevco pursuant to policy number KGHOLH1002815 with a policy period of October 1, 2010 to October 1, 2011. The Peterbilt was stolen on or about December 12, 2010 and has not been seen again. Mr. Brar reported the claim to Jevco and reported the theft to police. He filled out a proof of loss form and provided it to Jevco.

[14] Mr. Brar gave evidence that he did not find out a lot about the Peterbilt before purchasing it because it was a new truck. He checked the ownership and it said “Brand – None” which meant there was no problem and the vehicle was in good condition. He gave evidence that when he bought the truck there was nothing much in terms of unrepaired damage to the truck. There were little scratches because it was being driven on the road and it worked hauling gravel on construction sites.

[15] Mr. Brar could not say if he negotiated the price of the Peterbilt based on the condition or state of repair of the Peterbilt. Mr. Brar said that he looked on Auto Trader and Kijiji for similar trucks and paid what he thought the truck was worth based on the fact it was a heavy spec truck with an 18 speed transmission, and normal tire condition.

[16] Mr. Brar gave evidence that there were no damages to be repaired because the safety mechanic had checked the Peterbilt and it was his responsibility. He further gave evidence that he did not know of any mechanical problems. Mr. Brar made no repairs to the vehicle during the time he owned it.

[17] Mr. Brar gave evidence that he is a certified mechanic, and that he has had that designation for approximately 4 or 5 years.

[18] Mr. Brar testified that he had purchased this unit as a one year old late model truck with mileage of approximately 94,000 km. He purchased it for what was for him a lot of money. Mr. Brar then gave evidence that he did not ask Gurjinder Brar, the person from whom he bought the Peterbilt, for any warranty information. He did not make it a condition of purchase that Gurjinder buy or transfer the warranty.

[19] Mr. Brar testified he was a partner in a company called B&B Truck Repair from approximately 2009 to 2010. B&B did truck repairs. He worked two to three times a week at B&B as its only certified mechanic. He was partners with Harry Brar and Gurjinder Brar. B&B did normal repairs at its facility. Mr. Brar reviewed four invoices provided in January 2010 (Exhibit 3) for certain parts shipped to B&B. He initially said he did not know if the parts were installed at B&B, then gave evidence that the parts on the invoices belong to a body shop and not a repair shop. B&B does not do body work.

[20] With respect to his involvement with B&B, at trial Mr. Brar stated that he was not the only mechanic at B&B. There were other mechanics there as well. At his examination for discovery Mr. Brar stated there were no other certified mechanics as long as he worked at B&B. He explained this apparent inconsistency by stating that he was the only certified mechanic there but there were other regular mechanics there too.

[21] When asked if he knew Gurjinder in any capacity other than at B&B, Mr. Brar responded that “if we go in these details, we will go very far”. He said roughly that he and Gurjinder worked together at Trans Four.

[22] Mr. Brar also gave evidence that he did not carry any cargo with the Peterbilt during his period of ownership. Mr. Brar attempted to explain why he bought a $109,045 tractor without any work for it, and said he needed his own trailer and a few other things to be fully set up. On the application for insurance he had stated he would be pulling non-owned trailers.

[23] In cross-examination Mr. Brar stated that the use of the truck would be to carry aggregate or construction material. To carry gravel he would need a special kind of trailer for the tractor. At the time he insured the tractor he did not have a trailer nor did he have any clients.

[24] In further cross-examination Mr. Brar was taken to Tab 11. At page 3 of the form it states that the Tractor would be carrying 100% produce, not aggregate or construction material. Mr. Brar explained this by faulting the Broker who filled out the form. Mr. Brar testified that he did talk to the Broker about this and Mr. Brar did not say it would be 100% produce. The Broker was not called by the plaintiff as a witness at the trial.

[25] Mr. Brar gave evidence that the 11 photographs at Tab 9 of Exhibit 1 were taken within a month of buying the Peterbilt. These photos reflect the condition of the unit at the time he applied for the insurance. There were no accidents involving the Peterbilt between the time that he applied for the insurance and when the photographs were taken. He gave evidence that he did not see the seam on the right side heat shield being pushed in at the top. He initially stated that he did not understand that the heat shields on the right and left sides were different. He then said that the left side was different because the driver has to enter and needs a handle. He did not agree that the heat shields on both sides of the vehicle normally match.

[26] Mr. Brar admitted that the bonnet of the air filter showed denting damage. He said that the bonnet is just like a net and that if you slightly push it, it will get pushed in because it has so many holes. (This was contradicted later by both Mr. Donovan and Mr. Evans).

[27] Mr. Brar gave evidence that it was not necessary that there be two backlights. He said that the loose seam at the back of the right side bunk was because the joint is done with rivets.

[28] Mr. Brar did not agree that the step on the left side was dented. His explanation was that because a driver has to go up and down so many times, it gets dented. (Mr. Donovan and Mr. Evans gave evidence that this is a heavy steel step and would only be damaged in a major impact event).

[29] Mr. Brar gave evidence that the hood being out of alignment was because the hood was open. He gave evidence that the holes in the bumper were normal in every bumper. (Mr. Donovan gave evidence that this was because it was drilled for a different type of vehicle). He did not agree that there was denting on the bumper, but rather that it was sunlight or over-tightened screws. (Mr. Donovan gave evidence the bumper is designed so that it does not dent from the bolts).

[30] Mr. Brar gave evidence that the right headlight had no big problem, and that it only had gaps because the driver tightened the bulb in. He agreed that the right side step was missing, but that the step can be easily removed. (Mr. Donovan gave evidence that the step is riveted on).

[31] Mr. Brar gave evidence that his English is weak and that he communicated with Mr. Singh in Punjabi. Mr. Brar denied writing to Mr. Singh in English (Mr. Brar was shown the cancellation request at Tab 22 of Exhibit 1 being written in Mr. Brar’s handwriting and signed by him in English).

[The judgment continues exactly as in the original decision.]

CONCLUSION

1. The plaintiff’s action is hereby dismissed;

2. The defendant Jevco shall serve and file written submissions on costs within 30 days;

3. The plaintiff shall serve and file its responding cost submissions within 30 days of receiving Jevco’s submissions;

4. Jevco shall have 15 days to reply to the plaintiff’s cost submissions.

Fragomeni J.

Released: June 27, 2014