The respondent lawyer was sued for fraud by a bank.
He sought a defence from his liability insurer.
The insurer denied the obligation to defend, relying on an exclusion clause for fraudulent acts.
The bank later discontinued the action, and the respondent sued the insurer for his unrecovered defence costs.
The Supreme Court of Canada held that the duty to defend is governed by the pleadings.
Since the pleadings only alleged fraud, which was excluded from coverage, the insurer had no duty to defend.
The appeal by the insurer was allowed.