The defendant insurer brought a motion to amend its statement of defence to allege that the plaintiffs committed arson and fraud, eight years after the fire that destroyed the plaintiffs' business.
The insurer had originally only pleaded a lack of co-operation.
The court dismissed the motion, finding that the extreme and unexplained delay in seeking the amendment would cause non-compensable prejudice to the plaintiffs, who had lost the opportunity to properly investigate the allegations when the evidence was fresh.
The court also noted concerns regarding the insurer's duty of utmost good faith.
