This week on Legally Speaking with Michael Mulligan:
In August of 2015, Mr. Upton was attempting to straighten a bent metal plate from the steering mechanism of his 1955 Chevrolet Bel Air. He had removed it from the vehicle, placed it on a concrete step in his backyard, and was hitting it with a sledgehammer.
Mr. Sexsmith was visiting Mr. Upton and watching his car repair efforts.
Unfortunately, on the last occasion Mr. Upton struck the metal plate with the sledgehammer, the plate flew into the air and struck Mr. Sexsmith in the face causing significant injuries to his eye and face.
Mr. Sexsmith was a professional hockey goalie. In 2007 he was drafted by the San Jose Sharks.
The injuries Mr. Sexsmith suffered ended his hockey career.
Mr. Upton had a $1 million homeowners insurance policy from Wawanesa Mutual Insurance Company. This policy excluded claims arising from the “use or operation” of “any motorized vehicle”.
Mr. Upton also had $5 million in insurance on the 1955 Chevrolet Bel Air from ICBC. This policy does not cover any claim that is not a result of the “use or operation” of the Bel Air.
In addition to the duty to indemnify an insured for a covered loss, an insurance company has a duty to defend a claim. This required the insurance company to pay for a lawyer to defend the claim.
ICBC did not want to share the cost of defending the claim. They alleged that repairing the bent metal plate was not the “use or operation” of the car.
The duty to defend a claim is quite broad and is triggered when there is a possibility that the allegations could result in a loss that would be covered by a policy. As s result, the judge hearing the case concluded that ICBC did need to pay half the cost of defending the claim.
There are numerous cases that have concluded various other efforts to repair vehicles are included in the “use or operation” of a vehicle as long as the plan was to repair the vehicle so it could be driven again.
Also on the show, a case involving a man driving a courtesy car from the US to Canada, with 13 kg of heroin in the trunk of the car, is discussed.
In order to be convicted of importing or possessing drugs for the purpose of trafficking, the Crown must prove that the person knew they had the drugs.
In this case, none of the fingerprints on the drug packaging matched the man driving the car, and there was no drug residue on the gloves the man had with him.
The man driving the car testified that he did not know the drugs were in the trunk and, while the judge didn’t necessarily believe the man, he was unable to conclude that he wasn’t telling the truth and so found him not guilty.
Finally, on the show, a case involving a Chinese telephone scam is discussed.
The fraudsters were able to persuade a retired home care worker to send her life savings of $90,000 to a Chinese bank, via a third party, and through a small wire transfer company.
The funds were initially deposited into an account at CIBC. CIBC then provided a bank draft payable to the small wire transfer company.
Upon being presented with the bank draft the wire transfer company sent funds to the bank in China.
Before the bank draft had cleared CIBC became suspicious of the transaction and froze the money in the account.
Both the small wire transfer company and the retired home care worker wanted the $90,000 in the CIBC bank account.
Ultimately, the judge ordered that the funds be returned to the retired home care worker.
An automated transcript of the episode:
Legally Speaking April 8, 2021
Adam Stirling [00:00:00] It’s time for Legally Speaking on CFAX 1070, joined as always by Barrister and Solicitor with Mulligan Defence Lawyers Michael Mulligan. Hey Michael, how are you doing?
Michael T. Mulligan [00:00:09] I’m doing great. Another day in the pandemic, but at least is sunny outside.
Adam Stirling [00:00:13] Absolutely, we have that going for us for the moment. What is on the docket this week. I’m reading what is the duty to defend and what is that use of operation with respect to a motor vehicle.
Michael T. Mulligan [00:00:24] Yes indeed. So this first case involves a 1955 Chevy Bel Air, Bel Air. A professional hockey goalie and a series of unfortunate events involving a sledgehammer and a metal plate.
Adam Stirling [00:00:40] mmm.
Michael T. Mulligan [00:00:40] And so how these all come together is this. Back in nineteen or back in 2010 or 2013, a couple referred to as the Upton’s purchase, the 1955 Chevy Bel Air, apparently in good drivable condition. They purchased insurance for it from ICBC. A few years later in 2015, there was a problem with the steering mechanism for the 1955 Chevy Bel Air. And so, Mr. Upton decided to remove a piece of the steering mechanism described as a metal plate which had become bent. He was trying to straighten the metal plate by banging on it with a sledgehammer, and he in fact had some success after hitting it some 20 times. He took a break. Mr. Sexsmith, the NHL goalie, came over to visit the Upton’s and was watching Mr. Upton trying to straighten this metal plate. Mr. Upton struck the metal plate on three more occasions using the sledgehammer. But on the third occasion, a very unfortunate event occurred. The metal plate flew up in the air after being struck, came down and hit Mr. Sexsmith in the eye, injuring his eye.
Adam Stirling [00:01:52] Owe.
Michael T. Mulligan [00:01:53] and face and ending the professional hockey career of Mr. Sexsmith.
Adam Stirling [00:01:57] Oh, wow.
Michael T. Mulligan [00:01:57] Terrible, terrible day. Back in 2015.
Adam Stirling [00:02:00] Yeah.
Michael T. Mulligan [00:02:01] Now, happily, the Upton’s had home insurance from the Wawanesa Mutual insurance company. They had a million dollars in coverage.
Adam Stirling [00:02:10] mmhmm.
Michael T. Mulligan [00:02:10] They had five million dollars in coverage from ICBC. And so, Mr. Sexsmith, not surprisingly, started an action to try to recover his losses from, I guess, the end of his hockey career being caused by this very unfortunate event. He, in fact, had been drafted by the San Jose Sharks in 2007. He was a 91 draught pick and he had played a number of seasons with some success, including with the Vancouver Giants. So that was his background.
Adam Stirling [00:02:42] Hmm.
Michael T. Mulligan [00:02:43] And so on this matter goes until the judge, judge, give some credit to the experienced lawyer acting for the Upton’s. The lawyer for the Upton’s realizes that, hold on a minute, in addition to potential insurance coverage from the Wawanesa Mutual insurance company, the Upton’s might have additional coverage available to them under their ICBC policy. And notifies ICBC that, hey, you may be on the hook for this as well. And that’s what brings us to that concept of the duty to defend. And the way that works is that when you have insurance, it will usually include two elements. One would be the duty to indemnify you. Right, if you suffer a loss covered by your insurance policy.
Adam Stirling [00:03:34] mhmm.
Michael T. Mulligan [00:03:34] You have, you know, ICBC coverage and you accidentally run into somebody. Well, that’s why you have insurance,.
Adam Stirling [00:03:41] yes.
Michael T. Mulligan [00:03:43] But there’s an additional obligation on insurance companies and it’s referred to as the duty to defend.
Adam Stirling [00:03:50] hmm.
Michael T. Mulligan [00:03:50] And the way that works is that let’s say there’s a complicated accident and you wind up getting sued. And there’s an issue about, you know, were you responsible or how much responsibility was yours or, you know, how much loss to the other person suffer? There may be a court case over that. And an important element of insurance is that insurance companies have a duty to pay for and hire a lawyer to defend you so that they can get properly sorted out. And so here what was happening is that ICBC was saying, hey, this isn’t our problem. The person banging, Mr. Upton banging on the piece of metal to try to fix the steering mechanism of the Bel Air, that wasn’t part of the use or operation of the motor vehicle. We shouldn’t have to pay here, and we shouldn’t have to pay to help defend the case. And so, the decision that just came out was a decision that was a dispute between the Wawanesa Mutual Insurance company, they’re the ones who have the home insurance policy for the Upton’s.
Adam Stirling [00:04:55] mhmm.
Adam Stirling [00:04:55] And ICBC because the Wawanesa Mutual Insurance company naturally would be interested in having ICBC contribute to the legal costs of this case and potentially contribute to the amount of money that may have to be paid to poor Mr. Sexsmith as a result of his eye injury ending his hockey career, right. Yeah, and ICBC is positioned well. No, no, no. The person in their backyard hitting a metal plate with a sledgehammer. How can that be the use or operation of a motor vehicle? This isn’t car insurance. We shouldn’t have to pay for that, nor pay for the cost of the lawyer to defend it. And so that’s what this case was about. And the judge in this case concluded that the duty to defend is much broader than ultimately the duty to indemnify.
Adam Stirling [00:05:43] Hmm.
Michael T. Mulligan [00:05:44] And the idea there is that when you’re being sued, it can be unclear whether at the end of the day, the insurance policy would cover the actual loss. But the way it’s to be analyzed is if in the event if the particular claim could involve coverage under the insurance policy.
Adam Stirling [00:06:05] hmm.
Michael T. Mulligan [00:06:05]. And that’s a broad concept.
Adam Stirling [00:06:07] Yeah.
Michael T. Mulligan [00:06:07] Then the insurance company has to pay for the lawyer to defend the claim and find out what ultimately was there a loss and then was that loss covered by the policy, in which case then there would be that duty to indemnify or pay for it. And so here the judge looked at a whole series of cases involving various unfortunate events and that concept of the use or operation of a motor vehicle.
Adam Stirling [00:06:31] Yes.
Michael T. Mulligan [00:06:32] And the case law is that the use and operation of a motor vehicle, use or operation can include accidents that occur in the course of trying to fix the car. So, let’s imagine your car breaks down on the highway. You know, you’re on the side of the highway trying to, you know, jack it up and change the tire or something, right?
Adam Stirling [00:06:52] Yeah.
Michael T. Mulligan [00:06:52] That remains the use or operation of the motor vehicle. Right. If the car falls off the jack, rolls into the highway and hits somebody, well, you’re covered.
Adam Stirling [00:07:00] What if it hits you?
Michael T. Mulligan [00:07:02] That’s a good question.
Adam Stirling [00:07:03] Yeah, I was going to say.
Michael T. Mulligan [00:07:04] That will be a separate issue,.
Adam Stirling [00:07:05] Okay.
Michael T. Mulligan [00:07:06] I mean, because insurance, you can have insurance which would cover third party claims. That would be, you know, my car rolls and yours and wrecks your car.
Adam Stirling [00:07:13] Yeah.
Michael T. Mulligan [00:07:14] You can also purchase they would call it; I think ICBC calls it comprehensive coverage to deal with things that don’t involve your liability to somebody else, but things that might just sort of befall you or things you might do. Like, for example, or you think they call that collision.
Adam Stirling [00:07:30] Okay.
Michael T. Mulligan [00:07:31] Like, for example, you can choose to buy you’re not required to buy, but you can choose to buy insurance that would cover you if you know you’re not paying attention and you go back into a pole in a parking lot or something,.
Adam Stirling [00:07:42] yes.
Michael T. Mulligan [00:07:42] No one else’s fault but yours. And you can choose to buy that insurance, but it’s not required basically if you want to take your chances with damaging your own car. Well, that’s up to you. What we want to make sure is that there’s coverage for other people in case you do something careless and hurt them. Right.
Adam Stirling [00:08:00] hmm.
Michael T. Mulligan [00:08:00] That’s something that you’d be able to choose not to have.
Adam Stirling [00:08:03] Yeah.
Michael T. Mulligan [00:08:05] And so the starting point is that if you’re doing something to fix your car, right. That is included in that concept of use or operation and because that’s fairly broad and one of the critical elements being there has to be some intention to actually use the car again as a car, like putting a tire on it so you could drive it down the road or, you know, checking the oil or doing something on it. It wouldn’t cover you if you, for example, turned your, you know, burned out Camaro into a planter in your front yard. That’s no longer the user operation of a motor vehicle. Now it’s a, you know, planter in your front yard.
Adam Stirling [00:08:41] hmm.
Michael T. Mulligan [00:08:41] So because that concept of the duty to defend is a broad one, the judge concluded that, yes, indeed, it might ultimately be something that ICBC would be responsible to pay for. By all accounts, the 1955 Chevy Bel Air was in good condition. And other than sorting out the steering problem, you know, the Upton’s plan to continue to use it as a car. And so, the judge concluded that the use or operation does include those efforts to repair the vehicle in the back yard and may well include that unfortunate event of the piece of metal flying up and hitting the goaltender in the eye. And so, the result of this is that ICBC will be required to pay half the cost along with the Wawanesa Mutual insurance company of the lawyer to defend the case for the Upton’s. And then depending on what the judge finds in terms of liability and how that occurred, ICBC and the Wawanesa Mutual insurance company may need to share the cost of the ultimately the award if there is one. And that may be very important not only for Mr. Sexsmith, the unfortunate goaltender, but also for the Upton’s, because, of course, somebody who may have had a lucrative career as an NHL goalie could have suffered quite a substantial loss as a result of their eye being injured.
Adam Stirling [00:10:06] Yes.
Michael T. Mulligan [00:10:06] So the fact that there’s a larger amount of coverage under the ICBC policy may, at the end of the day, be quite important for both of them. So, there it is.
Adam Stirling [00:10:15] All right.
Michael T. Mulligan [00:10:16] Unfortunate goaltender and the 1955 Chevy Bel Air.
Adam Stirling [00:10:19] All right, let’s take our first break, Legally Speaking with Michael Mulligan from Mulligan Defence Lawyers continues right after this.
Adam Stirling [00:10:25] Back to Legally Speaking on CFAX 1070. Since every Michael Mulligan Barrister and Solicitor with Mulligan Defence Lawyers. Michael in the course of your duties as defence counsel, there is little doubt in my mind that you’ve come across any number of different situations that look absolutely awful in terms of what a person may have done. And yet, sometimes circumstances can combine with one another to make a person look guilty when in fact they’re not like, for example, what happens if you rent the car, you drive across the border and in the course of crossing the border it is revealed that there’s a large amount of, say, drugs in the car. And you didn’t put them there. You didn’t know. How do the courts deal with something like that?
Michael T. Mulligan [00:11:03] Well, I guess it depends on who you hire as a lawyer.
Adam Stirling [00:11:06] Good answer, good answer.
Michael T. Mulligan [00:11:07] That’s not too far off of what this case involves. Just last week, this was a fellow who was found driving across the border from the U.S. to Canada in a courtesy car from an auto body shop. And in the trunk of the car was discovered a suitcase in which there was 13 kilograms of heroin,.
Adam Stirling [00:11:32] Wow.
Michael T. Mulligan [00:11:32] Quite a bit of heroin.
Adam Stirling [00:11:33] Wow.
Michael T. Mulligan [00:11:34] Interestingly, the evidence came out that this was agreed upon at the time that this occurred 2017 when people were still able to drive across the border. Of course.
Adam Stirling [00:11:44] Yes.
Michael T. Mulligan [00:11:45] Heroin apparently was going for in California, at least $46,000 kilogram Canadian, but in the lower mainland was worth $80,000 kilogram.
Adam Stirling [00:11:56] (Indiscernible)
Michael T. Mulligan [00:11:58] you might imagine there’d be a pretty powerful incentive on the part of the number of people not concerned with the impact of heroin to try to get that amount across the border.
Adam Stirling [00:12:09] Yes.
Michael T. Mulligan [00:12:09] Speculation was that it would produce a profit of some $442,000.
Adam Stirling [00:12:13] Wow.
Michael T. Mulligan [00:12:13] So a suspicious circumstance for this fellow. And the issue is really this. Well, there are a couple of ways to look at it. First of all, he was charged with trafficking and possession, sorry importation, and possession for the purpose of trafficking. Now, both of those require proof that the person had knowledge of those things. Right. You’re only guilty of being in possession of something if you have knowledge that you’re in possession of the thing. Right.
Adam Stirling [00:12:41] mhhm.
Michael T. Mulligan [00:12:41] And come up and slip something into your back pocket you don’t know about, that’s illegal. You’re not guilty unless you’re aware that that’s there., and so the Crown needs to prove beyond a reasonable doubt, not just that there were drugs in the trunk of the car this fellow was driving, but they need to prove that he knew there were drugs in the trunk of the car, that he was driving across the border. And that’s where the challenge arose here. That was the analyze the drugs and the plastic packaging. And they found no fingerprints that match the driver of the car.
Adam Stirling [00:13:17] hmm.
Michael T. Mulligan [00:13:17] They also analyzed some gloves in the possession of the accused. There was no residue of drugs found on the gloves or on the accused. So, you’ve just got drugs in the trunk in a suitcase in the trunk of the car.
Adam Stirling [00:13:28] Yes.
Michael T. Mulligan [00:13:30] Interestingly, in this case, the man chose to testify and explain what happened and to say to the judge, I did not know that they were drugs in the trunk of my car. And the explanation that he provided was that he was a truck driver. And he says that an associate of his had called him and asked him to come and help as a result of a breakdown in the U.S. side of the border. So, he said, well, I got some tools together and drove down there and met this person in a rest stop on the U.S. side. And I engaged in changing a broken hose in the person’s truck so they would be able to carry on. And he says, while it’s possible somebody put this in the trunk of the car while I was engaged in fixing the broken truck at the truck stop. I just didn’t know those things were there. Now, the way that gets analyzed, this is, I think an important thing to know as well is, of course, in a criminal case, the Crown has to prove that you committed the offence beyond all reasonable doubt. And so how is the judge to approach it when they have a person who testifies and says, I didn’t know this was there, I’m innocent, right.
Adam Stirling [00:14:43] Yeah.
Michael T. Mulligan [00:14:44] The way that works is the judge needs to ask themselves, first of all, do I believe the person when they tell me I did not know the drugs were in the trunk of the car. If they believe them, obviously that’s the end of the matter. Right. Here, the judge says, I don’t necessarily believe him, but he’s saying that there are suspicious circumstances here. But the judge has to then move on and ask themselves, might the person be telling the truth, which is a different thing from do I believe them?
Adam Stirling [00:15:11] mmhmm. Yes.
Michael T. Mulligan [00:15:12] And the judge here was prepared to go that far and say, look, this man might be telling the truth when he says that he didn’t know the drugs were there. There are some suspicious circumstances. I don’t necessarily believe him, but I can’t reject his evidence. And so, on that basis, the judge wound up acquitting him. And I should say, even if a judge doesn’t get that far and says, look, I utterly reject the person’s evidence, that doesn’t mean that they’re guilty. The judge would at that point have to go on to analyze, are they satisfied beyond a reasonable doubt on the basis of whatever evidence they do accept. And so that’s why the case was analyzed. And I guess the takeaway is keep an open mind and bear in mind that the Crown needs to prove these things beyond reasonable doubt. And even though the circumstances looked suspicious, this fellow’s explanation and the lack of any forensic evidence which would connect him to the drugs was sufficient to raise a reasonable doubt. And so, he won’t be spending a very long time in prison, which would have been the alternative outcome here.
Adam Stirling [00:16:16] Wow. During our last conversation, Michael, we touched upon the matter of fraud in the many forms that it can take these days, especially during Covid-19. I’m reading here a case of telephone fraud, $90,000 dollars lost. And was it was, it retrieved?
Michael T. Mulligan [00:16:32] This was a rare occasion where, yes, it was retrieved. But I should say all of these things are stories worth listening to, so you don’t wind up the victim of one of these things.
Adam Stirling [00:16:42] Yes.
Michael T. Mulligan [00:16:43] This particular fraud involved a retired woman who had worked as a home care worker and lived in Canada for about 30 years. She had a life savings of some 90 thousand dollars. Fraud artists, telephone fraud artists contacted her and told her that she was being investigated for financial crimes in China. She was originally from China, although she lived in Canada for some 30 years,.
Adam Stirling [00:17:12] mmhmm.
Michael T. Mulligan [00:17:12] And managed to eventually persuade her that she needed to provide this money to a third party in order to allow the Chinese authorities to be satisfied of her innocence. It sounds farfetched, but she agreed to do that. And so, she wound up getting a bank draft payable to another person the fraudsters had engaged in the amount of $90,000. That person went and deposited the money into a CIBC bank account, but gave, I guess, some suspicious answers about where the money came from and what it was to be used for that were untrue.
Adam Stirling [00:17:53] hmm.
Michael T. Mulligan [00:17:53] The victim then went to a or the intermediary victim, this person who the first person, the retired person had given the money to went and pursuant to the instructions of the fraudsters, went to a currency transfer wire transfer company, a small one, and held them on the strength of a bank draft, transfer the money to a bank in China, presumably to the actual fraud artist. The money went to China. But unbeknown to either of the two intermediary victims, or at that time, the small wire transfer company, CIBC had realized this looks like an unlawful activity and froze the money in the account, so the fraudsters got their money. The person who was out money was the small wire transfer company, right? They sent the money to China on the strength of the bank draft from CIBC. CIBC froze the account. And so that’s where this litigation came about. The retired person who had been swindled into giving the $90,000 to the other victim was trying to get the money out of CIBC saying, Hey, that’s my money. The small wire transfer company’s position was, hey, that’s not fair. We sent this money to China, right?
Adam Stirling [00:19:22] Yeah.
Michael T. Mulligan [00:19:22] That’s our money.
Adam Stirling [00:19:22] Yeah.
Michael T. Mulligan [00:19:23] Why should we be out the money? Now, there are a couple of other unfortunate events. The person who owned the wire transfer company tried to persuade the victim to lie about the source of the money to get it released from CIBC.
Adam Stirling [00:19:35] Not a good that that’s.
Michael T. Mulligan [00:19:37] Not good. And also, it would appear the second victim was told, told some lies about the source of the money, which is what caused CIBC to freeze it.
Adam Stirling [00:19:46] Yeah.
Michael T. Mulligan [00:19:46] Here, ultimately, at the end of the day, the judge has ordered that the money frozen in the CIBC bank account go back to the poor retired woman who was out the $90,000 and the person who’s going to be left, no doubt holding the bag is going to be this small wire transfer company. And so good luck for the small wire transfer company ever trying to recover anything from the Chinese fraud artists. But I suppose if there’s any happy ending here, it’s at least that the poor retired woman who was swindled out of her life savings is going to get that back. But still an unfortunate series of events both for her and I’ve no doubt all the stress that produced and for this sole, one person owner of the small wire transfer company. So really dastardly activity trying to take money from a retired person in that way. But this would be, I suppose, one of the rare cases where at least that person is going to be able to get back what appeared to have been irreparably lost, thanks to, I suppose, diligence on the part of CIBC when this person showed up with the $90,000 bank draft and some suspicious explanations for where the money was going and where it came from. Good on them for being alert enough to stop that. And so at least there was some possibility of recovery for the original victim,
Adam Stirling [00:21:30] Legally Speaking, here on CFAC 1070. During the second half of our second hour every Thursday on the program, Michael Mulligan Barrister and Solicitor with Mulligan Defence Lawyers. Michael, a pleasure as always. Thank you for your time.
Michael T. Mulligan [00:21:41] Always, always a pleasure, Stay safe.
Adam Stirling [00:21:43] All right. Talk to you next week. Bye now.
Automatically Transcribed on April 8, 2021 – MULLIGAN DEFENCE LAWYERS