Manitoba automobile insurance purchased by a non-resident of Manitoba is void ab initio, when it is purchased fraudulently by an out-of-province automobile owner in an attempt to obtain cheaper automobile insurance

Luangphasi v. Good, [2003] A.J. No. 1394, Alberta Court of Queen’s Bench

Until November 1998, Ryan Good (“Good”) was a resident of Manitoba, and insured his vehicle with the Manitoba Public Insurance Corporation (“MPIC”). After November 1998, Good obtained employment in Calgary, Alberta, moved, and took up residence there. In June 1999, Good travelled to Manitoba in order to retrieve his 1987 Trans Am from storage, and registered and insured the vehicle with MPIC. Upon insuring the vehicle with MPIC, Good did not advise MPIC that he was residing and working in Alberta, and provided a Manitoba address for insurance purposes. In July of 1999, Good was involved in an automobile collision with the Plaintiff, Mr. Luangphasi. Mr. Luangphasi commenced an action against Mr. Good and a Consent Judgment in the amount of $36,040.00 was entered.

The court was asked to determine whether the Judgment of the Plaintiff should be satisfied by MPIC, or the Motor Vehicle Accident Claim Fund, which provides third party insurance to uninsured motor vehicles in Alberta. The court found that Good had fraudulently misrepresented his place of residence to MPIC in order to obtain cheaper automobile insurance. It was admitted by counsel for the Motor Vehicle Accident Claim Fund that residency was a material factor to an Alberta insurer. Power J. determined that although MPIC was bound as a signatory to the Power of Attorney and Undertaking, this agreement did not intend to allow residents of one province to perpetrate fraud on insurers from other provinces; rather it was intended to provide uniform, reciprocal coverage throughout Canada. Therefore, the court determined, based on public policy and in keeping with the intent of the Power of Attorney and Undertakings, that the Motor Vehicle Accident Claim Fund should be responsible to pay the Plaintiff’s Judgment.

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