The appellants held mortgages on a property that was destroyed by fire after being vacated by the owners.
The respondent insurer denied the appellants' claims under the standard mortgage clause, arguing that the vacancy was a material change to the risk under Statutory Condition 4 of which it was not notified.
The Supreme Court of Canada held that Statutory Condition 4 conflicts with the standard mortgage clause, which explicitly preserves coverage despite any act or neglect of the mortgagor, including vacancy.
The appeal was allowed, and the insurer was precluded from relying on the statutory condition to void the mortgagees' coverage.
