A $30,000 damages claim was not enough to compel Beneva Insurance to defend its policyholders, Quebec's Court of Appeal has ruled.
In a decision handed down on April 30, 2026, Justice Eric Hardy dismissed an application for leave to appeal a lower court ruling that had rejected a so-called Wellington-type application - the legal tool available in Quebec that allows policyholders to force their insurer to pick up the cost of their defence in a lawsuit.
The dispute began with a residential property sale. Roxanne Joubert-Eusanio and Mathieu Cryans Kirouac bought a home from Simon Lamontagne and Jean-Sébastien Bergeron. The buyers later filed a latent defects action against the sellers, seeking the annulment of the sale, the return of the purchase price, and $30,000 in damages for inconvenience, trouble, and disruption, subject to adjustment. The buyers alleged they had been victims of fraudulent representations.
Facing that lawsuit, Lamontagne and Bergeron turned to their insurer, Beneva Insurance Company Inc., for a defence. When Beneva declined, the sellers filed a Wellington-type application to compel a defence. On February 12, 2026, Superior Court Justice Suzanne Ouellet dismissed that application. Her finding: the $30,000 damages claim was merely ancillary to a claim that was not a claim for damages.
The sellers then sought leave to appeal. At the April 28, 2026 hearing before Justice Hardy, they conceded a key point - the claims for annulment of the sale and restitution of the purchase price were not covered by their insurance policy. Their entire Wellington-type claim, they admitted, rested strictly on the $30,000 damages claim for inconvenience, trouble, and disruption - a claim that was attached to the principal action for annulment.
Justice Hardy acknowledged that the procedural threshold for leave was met - a ruling that rejects a Wellington-type application is the kind of decision likely to cause the insured harm that a final judgment cannot remedy. But that alone was not enough. He found the proposed appeal had "no reasonable chance of success" and that the lower court's conclusion presented "no apparent weakness." The application for leave to appeal was dismissed with court costs.
For insurers and claims teams across Canada, the decision sends a clear signal. When the principal claim in a lawsuit falls squarely outside policy coverage, a modest damages claim tacked on to that action may not, on its own, be enough to trigger the duty to defend. Quebec courts have shown they are willing to look past the label on a claim and examine whether the real dispute is one the policy actually covers. If it is not, an ancillary claim riding alongside will not change the outcome.
