Case citation: Wong v. Aviva Insurance Company of Canada, 2024 ONSC 1111 

The recent ruling by the Ontario Supreme Court in Wong v. Aviva Insurance Company of Canada, 2024 ONSC 1111 carries significant implications for insurers and drivers alike. The decision, stemming from a motor vehicle accident in March 2019, underscores the importance for insurers to carefully navigate policy breaches discovered mid-litigation and highlights the severe repercussions for individuals who mislead their insurance providers. In this case, Aviva Insurance Company of Canada uncovered a collusion between their insured, her daughter, and the opposing driver to conceal the true identity of the at-fault party two years post-accident. The Court's ruling not only provides invaluable guidance for insurers grappling with similar policy violations uncovered after committing to defend their insured, but also issues a stark warning to motorists regarding the grave consequences of dishonesty with their insurance carriers.

The incident at the center of the legal proceedings involved a 2013 Toyota, registered under the ownership of Chang Tieu and driven by her daughter, Victoria Wong. At the time of the accident, both individuals were insured under the same policy with Aviva Insurance Company of Canada. Following the collision, Wong, under the mistaken belief that her driver's license had expired and fearing criminal ramifications, enlisted her mother, Tieu, to represent herself as the driver at the time of the collision. The two then persuaded the other involved party, Natalie Robertson, to corroborate their false narrative. Wong and Tieu reported the accident to both Aviva and law enforcement, falsely asserting to both that Tieu was behind the wheel of the Toyota at the time of the incident.

Following the collision, Robertson initiated legal action against both Wong and Tieu to seek compensation for injuries sustained as a result of the collision. Aviva, in accordance with the policy terms, undertook the defense on behalf of the defendants. The conspiracy came to light approximately two years later during the discovery under oath of Tieu and Robertson. Robertson's identification of the driver of the Toyota as a "young woman" during her deposition unveiled the fraudulent misrepresentation. Consequently, Aviva altered its stance, transitioning to an off-coverage position for Tieu due to the discovered misrepresentation. Wong and Tieu initiated separate applications seeking to compel Aviva to defend them or alternatively relief from forfeiture on the basis that the misrepresentations amounted to imperfect compliance for which Aviva suffered no prejudice.

Wong attempted to argue that she was not in breach of the policy on the grounds that  Aviva had not made a “request” to aid in the gathering of material evidence under Ontario’s Statutory Conditions – Automobile Insurance. Given neither Wong nor Tieu disputed the basic facts of the misrepresentation, or that Wong assisted Tieu in giving false testimony under oath at discovery, the Court quickly rejected this argument.

The Court then considered whether Wong was guilty of civil fraud. Wong conceded to the initial aspects of the civil fraud test, acknowledging that a false representation had been made with a degree of awareness regarding its falsehood. However, she contested the assertion that this misrepresentation prompted Aviva's actions and led to any resulting losses. Wong argued that the primary issue in Robertson's action was the assessment of damages, a question which was not impacted by the credibility of herself or Tieu. Aviva's argument, endorsed by the Court, contended that its reliance on the insured parties' testimony regarding Robertson's post-accident appearance and demeanour was pivotal in disputing the claimed damages. With the credibility of Wong and Tieu now severely compromised, their capacity to refute such claims was significantly undermined. Consequently, the Court found the elements of civil fraud to be substantiated.

Finally, the Court turned to the question of whether Wong was entitled to relief from forfeiture under Ontario’s Courts of Justice Act and Insurance Act. The specific provisions relied on provided:

Section 98 of the Courts of Justice Act:

A court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.

Section 129 of the Insurance Act:

Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just. 

Wong attempted to argue that her actions were merely "imperfect", a claim strongly dismissed by the Court. While acknowledging Wong's underlying fear of criminal prosecution motivated her deception, potentially exacerbated by mental health challenges, the Court emphasized that her dishonesty spanned a substantial two-year period, indicative of deliberate non-compliance rather than mere imperfection. The prolonged duration of the fraud, coupled with Wong's active participation in Tieu's perjury resulted in the Court, despite the severe consequences faced by Wong by being uninsured in the Robertson’s action, led to the dismissal of this defense. The irreparable damage to the credibility of both Wong and Tieu rendered it impossible for Aviva to revert to its original position in addressing Robertson's claim.

The decision of the Court in Wong highlights the importance of policy compliance, and the significant financial ramifications to motorists for making false statements to their insurers. For insurers, it serves as a lesson in the importance of thorough investigations. For counsel, it provides a helpful guide in responding to incidences where coverage must be denied due to false statements and navigating the remedy of relief from forfeiture.