The respondents, who operated a horse farm, were sued by a horse trainer who sustained injuries after falling from a horse.
The trainer initially pleaded she was an employee, but later amended her claim to remove references to employment, as the respondents' farm liability insurance policy excluded coverage for employees.
The insurer refused to defend the action, arguing the pleadings were manipulated and seeking to introduce extrinsic evidence to prove the trainer was an employee.
The applications judge declared the insurer had a duty to defend and declined to consider the extrinsic evidence.
The Court of Appeal dismissed the insurer's appeal, holding that the duty to defend is determined by the pleadings and the policy, and that extrinsic evidence cannot be used to make premature findings of fact on matters at issue in the underlying tort litigation.