The respondents' property was damaged by an oil spill after a tenant bypassed the furnace thermostat, causing it to overheat and overflow.
The appellant insurer denied coverage, relying on pollution and mechanical breakdown exclusions, and later argued the respondents failed to file a proof of loss.
The trial judge found for the respondents, concluding the insurer waived the proof of loss requirement and that neither exclusion applied.
The Court of Appeal dismissed the insurer's appeal, upholding the findings that the adjuster's letter constituted a waiver, the mechanical breakdown was caused by external interference rather than an internal defect, and the pollution exclusion required another operative exclusion to apply.
