The appellant insurer challenged a trial judgment awarding compensatory and punitive damages to the respondents for a stolen jewellery claim.
The insurer had denied the claim and defended the action by requiring the insureds to prove pre-policy ownership, despite having accepted their ownership at policy issuance and admitting no material misrepresentation.
The Court of Appeal upheld the trial judge's finding of bad faith warranting punitive damages, ruling that the insurer's conduct was an unreasonable and unfair interpretation of the policy.
The Court also affirmed the compensatory damages award based on appraised replacement value, as the insurer failed to provide evidence that actual cash value was lower.
