The applicants sought a declaration that the respondent insurer had a duty to defend them in an underlying action alleging misappropriation of funds from syndicated mortgages.
The insurer had denied coverage, arguing the applicants made a material misrepresentation in their insurance application regarding their source of financing.
The court found that the email relied upon by the insurer lacked detail and precision, and the insurer failed to clarify the ambiguous answers.
The court concluded there was no misrepresentation and ordered the insurer to resume defending the applicants and pay their incurred defence costs on a full indemnity basis.
