The respondent owned a four-apartment building and leased one unit to a youth organization for social gatherings.
A fire subsequently destroyed the building.
The appellant insurer denied coverage on the basis that the policy only covered buildings occupied solely as private dwellings.
The Supreme Court of Canada held that the change in use transformed the subject-matter of the insurance, constituting an exclusion of risk rather than a mere aggravation of risk.
The insurer was therefore justified in refusing to compensate the respondent, and the appeal was allowed.
