Ontario's top court has revived a greenhouse operator's bid to recover insurance for a tomato crop wiped out by carbon monoxide.
In a decision released May 11, 2026, the Court of Appeal for Ontario sent Green Rise Foods Inc. v. N.V. Hagelunie back for trial, faulting the lower court for taking too narrow a view of what actually caused the loss - a question that sits at the heart of how insurers analyze claims that flow from a series of events.
The story starts shortly after Green Rise bought a large greenhouse operation on February 1, 2021. Like most commercial growers, the company used natural-gas boilers to heat its greenhouses and to pump in carbon dioxide that accelerates photosynthesis. A condenser unit was supposed to scrub the flue gas before it reached the plants, and a Sercom Monitor was meant to sound the alarm if carbon monoxide climbed above 25 to 30 ppm.
Both safeguards failed. A displaced internal burner diffuser caused one boiler to emit excess carbon monoxide, and the monitor never tripped. By the time the problem was traced on March 17, 2021, roughly 23 acres of tomato plants were gone.
N.V. Hagelunie, the insurer behind the greenhouse horticultural policy, denied the claim. It pointed to the policy's exhaust gas exclusion - which states the insured is "never insured for any loss or damage... caused by, arising from, or in connection with... any exhaust gas" - and to a machinery breakdown exception baked into the initial grant of coverage. A motion judge agreed and, in November 2024, granted summary judgment to the insurer along with $157,377.37 in costs.
The Court of Appeal saw it differently. Writing for a unanimous panel, Justice L.B. Roberts found the motion judge had latched onto the most immediate event - the carbon monoxide poisoning - while ignoring the malfunctioning boiler, the malfunctioning monitor, and whatever caused those machines to fail. That, she wrote, was an error in principle. The right approach, drawing on Supreme Court of Canada authority including Derksen and Ledcor, is to identify the "effective cause" of a loss, which is not always the cause closest in time.
The decision also flags a thorny onus issue. The motion judge never spelled out who had to prove that the machinery breakdown exception applied - a gap the appeal court called a significant analytical omission, especially on summary judgment where each side is required to put its evidentiary best foot forward. Findings on what actually disabled the boiler and the monitor are now genuine issues for trial.
For carriers writing standard-form property and crop policies, the ruling is a reminder that coverage analysis in chain-of-causation and concurrent-cause scenarios demands more than a snapshot of the final event. It also revives questions about how broadly an exhaust gas exclusion can sweep when a pollution exclusion sits beside it in the same policy - particularly where the gas in question entered the greenhouse through the carbon dioxide flue-gas distribution system rather than through ordinary exhaust venting.
The appeal court remitted the entire action for trial and ordered the insurer to pay $70,000 in appeal costs.
