Dawson City businessman Mike Palma was further vindicated in B.C. Supreme Court this month, when a judge awarded him special costs following a lengthy civil suit brought by that province's insurance corporation.

In the civil case, the Insurance Corporation of B.C. (ICBC) named Palma as one of the players in an insurance fraud scheme whereby a person would falsely report his vehicle stolen, collect the insurance, then either change the vehicle identification number and move the vehicle to another jurisdiction or dismantle it and install the parts on other vehicles.

Palma owns the property where many of the vehicles were stored and dismantled after being reported stolen, and ICBC claimed he was complicit in the scheme.

But Justice Christopher Hinkson found no evidence to show Palma, who lived in Dawson while the alleged fraud was happening, knew what was going on at his Surrey, B.C. property.

Palma's only fault, the judge found, was permitting Joe Suska – a former Dawsonite – to manage the property.

Suska was found responsible for fraud and ordered to pay more than $300,000 in damages to ICBC.

Of the two dozen people named in ICBC's suit, only seven were ordered to pay the insurer. All those not found responsible were invited by the judge to make submissions on legal costs, as was ICBC.

Palma claimed the ICBC should pay his legal fees because the corporation unjustly accused him of fraud, conspiracy and deceit.

He also argued the ICBC was guilty of misconduct because it pursued the claim in spite of the fact the RCMP never laid criminal charges in connection with their fraud investigation.

The judge dismissed the claim based on the unproven fraud allegations, saying: "While I found the evidence is sufficient to support a finding against the Palma defendants, I do not consider that it was unreasonable for ICBC to have alleged that Mr. Palma, by placing himself in the position he did with Mr. Suska, was likely involved in Mr. Suska's unlawful and fraudulent pursuits.

"... Having said this, I also appreciate that ICBC's interest in pursuing the Palma defendants was based, at least in part, on the fact that there was little hope of recovering on a judgment against any other the (other) defendants,” Hinkson added.

Speaking to the Star earlier this year, Palma's lawyer, Frank Calandra, said the only reason ICBC went after his client was because he had money, unlike most of the other defendants.

"I would assume ICBC's legal costs on this thing were well over a million dollars,” Calandra said. "(Palma) was there because he had the deep pockets.”

A further claim that the ICBC investigators accused Palma of having Mafia connections was also dismissed.

However, the ICBC's lawyers made a costly accusation in their final submissions.

In its claim for legal costs, the insurer accused Palma of tampering with witnesses during the trial – a claim that was never proved.

The accusation amounts to "reprehensible, scandalous or outrageous conduct,” the judge said.

He noted that because the ICBC included Palma in almost every element of the case, his lawyers were "obliged to defend almost every aspect of the complicated case.”

He ordered the ICBC to pay Palma's lawyer for all the days he attended court during the trial, as well as regular pre-trial costs.

Hinkson gave the ICBC an extra financial penalty – a percentage of all of Palma's legal costs – because of the unproven tampering accusation.

Actual figures were not available by press time this afternoon.