The respondent's home was destroyed by fire, and she claimed against her insurer, the appellant, for the loss of the home, contents, jewelry, and a large fine art collection.
The insurer denied coverage, alleging arson and material misrepresentation in both the application and the proof of loss.
The trial judge rejected the insurer's defences and awarded over $4.5 million in damages plus punitive damages.
On appeal, the Court of Appeal upheld the trial judge's findings on the application misrepresentation and the application of s. 124 of the Insurance Act to the insurance binder.
However, the Court allowed the appeal and ordered a new trial restricted to the proof of loss, finding that the trial judge committed reversible error by failing to explain how he resolved significant credibility issues regarding the respondent's evidence of her fine art losses.
