The plaintiff discovered significant structural defects and Building Code violations in his cottage years after purchasing it, rendering it unsafe to occupy.
He claimed coverage under his title insurance policy with the defendant.
The court, applying the Court of Appeal's framework in MacDonald v. Chicago Title, found that the structural defects flowed directly from the inadequacy of the building permit and inspection process, rendering the title unmarketable.
The court held that the loss fell within the covered title risks and was not caught by the policy's exclusions for governmental power or actual knowledge.
Partial judgment was granted in favour of the plaintiff on the issue of coverage, with damages bifurcated to a subsequent trial.
