[1]            LEVINE, J.A.: These appeals are from the judgment of a Supreme Court justice dismissing the appellants’ claim for insurance covering a house and contents destroyed in a fire and ordering that the respondent insurer, British Columbia Insurance Company, recover amounts paid under the policy of insurance.  CIBC Mortgage Corporation and the Canadian Imperial Bank of Commerce claimed the insurance monies as assignees of the owners, Hendrik and Sofia Sienema.  The Mortgage Corporation also claimed as the loss payee under the mortgage.  The trial judge found that BCIC properly denied coverage on the grounds that the Sienemas made wilfully false statements in the proof of loss filed in support of their claim.

[2]            The proof of loss was filed in purported compliance with statutory condition 6 included in the policy.  That condition required that the insured deliver to the insurer a proof of loss verified by a statutory declaration giving a complete inventory of the destroyed or damaged property and showing in detail quantities, costs, actual cash value and particulars of amount of loss claimed. Statutory condition 7 provides:

Any fraud or wilfully false statement in a statutory declaration in relation to any of the above particulars shall vitiate the claim of the person making the declaration.

[3]            The schedule attached to the proof of loss filed by the Sienemas was 198 pages long.  The trial judge found there were misstatements made as to each of five items in dispute.  In the case of four of the five items, the cost was overstated. In one case, the furniture was not purchased at the location stated in the proof of loss.

[4]            The schedule was prepared by Mr. Sienema with the assistance of an adjuster.  Mrs. Sienema provided information concerning replacement costs of certain of the items, including three of the five found to be false, but testified that she was not otherwise involved.

[5]            Mrs. Sienema went to a notary public to swear the statutory declaration verifying the proof of loss.  The notary public could not remember her, but testified that his invariable practice would have been to ask if she had both read and understood the document, and would not have asked her is she swore it to be true if she had said she had not read it.

[6]            When asked on examination for discovery whether she was “swearing the contents to be true”, Mrs. Sienema responded:

Well, I wouldn’t know because I didn’t read it. But I believed they were true because my husband had completed them. I mean, I didn’t have any part in them, so...maybe.

[7]            The trial judge (at paras. 62-3) reviewed the pertinent authorities on the meaning of “wilfully false” and “fraud”.  She cited Peterson v. Bannon (1993), 84 B.C.L.R. (2d) 350 (C.A.), in which Finch J.A. (as he then was) discussed (at para. 46) the requirements for proof that a statement is false -– careful scrutiny of the evidence is justified and cogent evidence is required to support an allegation of dishonesty.  She noted that, as to the meaning of “wilful”, Finch J.A. quoted from Gill v. Insurance Corporation of British Columbia, [1989] B.C.J. No. 1417 (S.C.)(QL), where Drost J. quoted the following definition from Black’s Law Dictionary, 5^th Ed. at p. 1434:

A wilful act may be described as one done intentionally, knowingly, and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.  A wilful act differs essentially from a negligent act.  The one is positive and the other negative.

[8]            The trial judge cited the test for the meaning of “fraud” as set out in by Finch J. (as he then was) in Kruska v. Manufacturers Life Insurance Co. (1984), 54 B.C.L.R. 343 (S.C.).  Finch J. referred to Derry v. Peek (1889), 14 A.C. 337 (at p. 374), defining fraud in a civil case as follows:

There must be a false representation made knowingly, without belief in its truth, or recklessly, without care whether it is true or false.

[9]            The trial judge concluded: “It is thus the absence of actual and honest belief which constitutes fraud.”

[10]        After discussing the evidence as it related to Mr. Sienema, the trial judge turned to Mrs. Sienema’s failure to read the proof of loss.  She quoted the first sentence of the passage from the examination for discovery of Mrs. Sienema, pointing out: “She commenced her response as follows: ‘Well, I couldn’t know because I didn’t read it.’” (The trial judge substituted “couldn’t” for “wouldn’t”, which appears in the transcript, but nothing turns on that.)  The trial judge concluded (at para. 77):

In essence, she acknowledged that she could not have had an actual and honest belief in the truth of a statement that she had never read.

[11]        The trial judge went on to consider whether Mrs. Sienema had made any “wilfully false statement”.  She quoted from Gill, including the definition of “wilful” quoted in Kruska and set out above.  She found (at para. 81) that Mrs. Sienema was aware of the nature of the information contained in the schedule of loss and had she read it and given any thought to its accuracy, she would likely have realized that some of the information was incorrect.  The trial judge concluded (at para. 82) that Mrs. Sienema made wilfully false statements in swearing that the value given for the contents was true.

[12]        The appellants raise no objection to the trial judge’s analysis of the relevant legal principles.  They argue, however, that the trial judge erred by failing to analyze the body of evidence relating to the question of whether Mrs. Sienema had an honest belief that the contents of the proof of loss were true and make a clear finding on that question.  They say it was a legal error for the trial judge to conclude that because Mrs. Sienema swore a document that she had not read, she could not have had an actual honest belief that the contents of the document were true, without adverting to Mrs. Sienema’s evidence that she believed the contents to be true.  They say the finding of a lack of honest belief, or a fraudulent intent, was crucial to a conclusion that Mrs. Sienema committed fraud or made wilfully false statements.

[13]        In effect, the appellants would have this Court review and reweigh the evidence on the grounds that the trial judge omitted to deal with some of it.  A similar argument was made in Housen v. Nikolaisen, [2002] 2 S.C.R. 235.  Iacobucci J. for the majority of the Supreme Court of Canada discussed whether an appellate court may reconsider the evidence on the ground that the trial judge failed to discuss a relevant factor in depth. He said (at para. 39):

As a starting point to the discussion of the ordinary or reasonable motorist, we emphasize that the failure to discuss a relevant factor in depth, or even at all, is not itself a sufficient basis for an appellate court to reconsider the evidence. This was made clear by the recent decision of Van de Perre, supra, where Bastarache J. says, at para. 15:

...omissions in the reasons will not necessarily mean that the appellate court has jurisdiction to review the evidence heard at trial. As stated in Van Mol (Guardian ad litem of) v. Ashmore (1999), 168 D.L.R. (4th) 637 (B.C.C.A.) leave to appeal ref’d [2000] 1 S.C.R. vi, an omission is only a material error if it gives rise to the reasoned belief that the trial judge must have forgotten, ignored, or misconceived the evidence in a way that affected his conclusion. Without this reasoned belief, the appellate court cannot reconsider the evidence.

[14]        The majority of the Court held that the failure of the trial judge to conduct a more in-depth analysis and relying on the evidence of some witnesses and not on the conflicting evidence of other witnesses was insufficient proof that she “forgot, ignored, or misconceived” the evidence.  Iacobucci J. said (at para. 46):

The full record was before the trial judge and we can presume that she reviewed all of it, absent further proof that the trial judge forgot, ignored, or misapprehended the evidence, leading to an error of law.

[15]        Those principles are applicable in this case.

[16]        If, as the appellants argued, the trial judge had proceeded from the fact that Mrs. Sienema had not read the document to the conclusion that she could not have an honest belief, I might be persuaded that she had erred.  It is possible to imagine a case where a person could have an honest belief that the contents of a document are true on the strength of assurances received from another person without having read through the document.

[17]        On reading the whole of the reasons for judgment, however, including the finding that Mrs. Sienema made wilfully false statements, it is clear to me that when the trial judge stated that Mrs. Sienema “could not have had an actual and honest belief in the truth of a statement that she had never read”, she made a factual finding and essentially rejected Mrs. Sienema’s evidence that she believed the document to be true because she relied on her husband.  That factual finding formed the underpinning for the implicit conclusion that Mrs. Sienema had committed fraud.

[18]        Though the trial judge did not explain her reasons for reaching that conclusion in depth, her summary of the relevant legal principles showed that she was cognizant of the importance of the element of honest belief, and the words she used in analyzing the evidence indicate that she did not forget, ignore or misapprehend Mrs. Sienema's evidence.   When she quoted Mrs. Sienema’s examination for discovery, she noted that Mrs. Sienema “commenced” her response as quoted, indicating that she was aware that Mrs. Sienema had said more.  She referred to Mrs. Sienema’s statement as an “acknowledgment”, in other words, an admission, that Mrs. Sienema did not have an actual and honest belief.  That was the crucial evidence.

[19]        The observation of Lord Herschell in Derry v. Peak (at pp. 375-6) on the process of reasoning to the conclusion that a person lacks an honest belief in the truth of a document is apt:

      At the same time I desire to say distinctly that when a false statement has been made the questions whether there were reasonable grounds for believing it, and what were the means of knowledge in the possession of the person making it, are the most weighty matters for consideration. The ground upon which an alleged belief was founded is a most important test of its reality. I can conceive many cases where the fact that an alleged belief was destitute of all reasonable foundation would suffice of itself to convince the Court that it was not really entertained, and that the representation was a fraudulent one. So, too, although means of knowledge, are, as was pointed out by Lord Blackburn in Brownlie v. Campbell [5 App. Cas. at p. 952], a very different thing from knowledge, if I thought that a person making a false statement had shut his eyes to the facts, or purposely abstained from inquiring into them, I should hold that honest belief was absent, and that he was just as fraudulent as if he had knowingly stated that which was false.

[20]        I therefore conclude that while there could have been a more in-depth analysis of the evidence on the question of honest belief, the trial judge did not forget, ignore or misapprehend the evidence, leading to an error of law, but made the crucial finding of fact on the full record before her and applied the correct principles of law.

[21]        I would dismiss the appeals.

[22]        RYAN, J.A.: I agree.

[23]        NEWBURY, J.A.: I agree.

[24]        RYAN, J.A.: The appeals are dismissed.

”The Honourable Madam Justice Levine”

CORRECTION: February 6, 2004

The Date of Judgment should be 20031127

Appearing on behalf of the Appellant CIBC, should be J. Krupa