Barry B. Papazian Q.C.

This endorsement determines costs following a trial involving two consolidated insurance claims: a Wall Collapse Claim and a Fire Loss Claim.

The plaintiffs (Lalani) succeeded on the Fire Loss Claim against Intact Insurance, being awarded substantial damages, while their Wall Collapse Claim was dismissed.

A negligence claim against the Broker (D.M. Edwards and CG&B) related to the Fire Loss Claim was also dismissed.

The court allocated costs 70% to the Fire Loss Claim and 30% to the Wall Collapse Claim.

Lalani was awarded partial and substantial indemnity costs against Intact for the Fire Loss Claim.

No costs were awarded for the dismissed claim against the Broker due to their adversarial position and the nature of their offer to settle.

Intact was awarded partial and substantial indemnity costs against Lalani for the dismissed Wall Collapse Claim, based on a public policy objective of promoting settlements.

The plaintiffs sought coverage under their commercial property insurance policies for a wall collapse and a subsequent arson fire that destroyed their heritage building.

The insurer denied coverage for both claims, relying on wear and tear exclusions for the wall collapse and a vacancy exclusion for the fire.

The court dismissed the wall collapse claim, finding the plaintiffs failed to prove it was caused by a fortuitous event.

However, the court granted the fire loss claim, holding that the insurer's unilateral amendments to the policy were void under s. 124 of the Insurance Act and that the insurer was estopped from relying on the vacancy exclusion because it renewed the policy and accepted increased premiums with full knowledge that the building was vacant.

The plaintiffs were awarded over $5.8 million in damages.

A concurrent negligence claim against the plaintiffs' insurance brokers was dismissed.