The appellants appealed a jury verdict dismissing their claim against their home insurer following a fire that destroyed their house and its contents.
The insurer denied coverage on the basis that the appellants failed to report a material change in risk (using space heaters instead of a wood stove) and made wilfully false statements in their Proof of Loss.
The Court of Appeal found errors in the trial judge's instructions regarding the material change in risk, but upheld the dismissal of the action because the jury's finding of 39 wilfully false statements vitiated the claim.
The court also upheld the refusal to grant relief from forfeiture due to the appellants' unreasonable conduct.
However, the court allowed the costs appeal, reducing the trial costs awarded to the insurer from $616,843.27 on a substantial indemnity basis to $430,000 on a partial indemnity basis, finding the appellants' conduct in pursuing bad faith claims was not reprehensible enough to warrant an elevated scale.