The plaintiffs refer to Ip v. Insurance Corporation of British Columbia (1994), 89 B.C.L.R. (2d) 251 (S.C.). The insurer denied coverage for theft of an automobile alleging that the plaintiff, with her son, had orchestrated the theft. The alleged fraud was not established at trial and there was no basis for the allegation of fraud. Special costs were awarded in this case where fraud was pleaded without foundation. The court said in ¶8: An allegation of fraud, wilful misstatements, or other such claims made against a person casts a serious pall over his or her reputation in the community. Very careful consideration must be given by the defendant before making such serious allegations. At the very least, a prima facie case must exist and if it does not then special costs by way of “chastisement” is a reminder to the defendant to exercise better care in the future.
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