Martin P. Forget

In an insurance coverage trial arising from an oil spill in a mixed-use commercial building, the court addressed policy exclusions, proof-of-loss compliance, waiver, and quantification of property and business interruption damages.

The court held the insurer could not rely on late-raised proof-of-loss and appraisal defences given waiver language in the adjuster correspondence and pleading conduct, and rejected reliance on exclusions for pollution and mechanical or electrical breakdown on the evidentiary record.

The court accepted that extensive structural remediation was reasonable and necessary, and assessed repair costs using expert-supported mid-range estimates.

The court also awarded limited relocation and rental loss damages under policy terms, while declining consequential damages beyond the pleaded contractual claim.

Total assessed damages were $68,485, subject to potential adjustment based on settlement terms with a former co-defendant.

The applicant sought a declaration that his home insurer owed both a duty to defend and indemnity exposure in an underlying Family Law Act action arising from a fatal drug overdose on his property.

Applying the three-step framework from Supreme Court of Canada authority, the court characterized the pleaded claims as genuinely grounded in negligence rather than merely relabelled intentional or criminal wrongdoing.

The court held the negligence claims were non-derivative and potentially within policy coverage for negligent acts.

The insurer was therefore required to provide a defence and coverage for non-excluded negligent claims in the underlying action.