Dr. Ronald Pitblado

The insurer appealed a jury verdict awarding the insureds compensatory and punitive damages following a fire that destroyed a commercial building.

The insurer had denied the claims based on arson, misrepresentation, and fraud.

The Court of Appeal allowed the appeal and ordered a new trial, finding that the trial judge misdirected the jury on the law of misrepresentation and the interpretation of a 'shut down' exclusion clause.

The Court also set aside the jury's $1.2 million award for loss of profits as unsupported by evidence, and found the $2.5 million punitive damages award to be grossly excessive.

The applicants, neighbours of a mushroom composting facility, applied to the Normal Farm Practices Protection Board regarding severe odours emanating from the respondent's property.

The Board found that the odours constituted a disturbance under the Farming and Food Production Protection Act.

However, after hearing expert evidence, the Board concluded that the respondent's conventional Phase 1 composting process, while producing anaerobic odours, was consistent with current normal farm practices in Ontario.

The Board noted that while aerated floor technology could eliminate the odours, it remained experimental for mushroom production.

The application was dismissed, though the Board strongly urged the industry to develop better odour control technology.