British Columbia's top court has backed Wawanesa's decision to deny a fire claim, after adjusters stumbled onto an undisclosed marihuana grow operation.

The case goes back to 2015, when a couple bought a house in Abbotsford with a detached outbuilding about 200 feet from the main home. Wawanesa insured the property that July and renewed the policy twice more before a fire broke out in a bedroom on March 1, 2018. The blaze, sparked by a prayer candle, hurt no one but damaged the house.

When an adjuster walked through the property days later, she found a marihuana grow operation tucked into the outbuilding's basement. Wawanesa voided the policy retroactive to July 2016, citing a rule baked into every BC property policy: insureds have to promptly flag any change that's material to the risk and within their control, or the coverage tied to that change is void.

The couple admitted the plants were there when the fire happened. What they denied was knowing about it - they told the trial judge they'd never set foot in the outbuilding since buying the property. That story ran into a wall of photos showing a long-established grow operation, plus the fact that both of them had once held licences to grow marihuana themselves - evidence the judge said “makes it nearly impossible” to accept they had no knowledge of it.

They also had a card to play: a 2017 form asking their broker to drop the outbuilding from coverage because it was leaking. If Wawanesa had actually gotten that form, the couple argued, it counted as notice under the statutory condition, since notice can reach the insurer through its agent. The trial judge didn't buy that the form ever made it to Wawanesa. Underwriting witnesses testified that any grow operation, dormant or not, is a material risk for a reasonable property insurer no matter how close it sits to the house, and that a request like this one would have been flagged and investigated, not rubber-stamped. The outbuilding, meanwhile, kept getting insured at the same premium the whole time.

On appeal, the couple argued two things: that their broker counted as Wawanesa's agent, and that the trial judge got it wrong in finding Wawanesa never saw the form. The BC Court of Appeal skipped the agency question entirely. Justice Horsman, writing for a unanimous three-judge panel, found that even treating the broker as Wawanesa's agent, the form only mentioned a leak - it said nothing about what was actually growing inside. The panel also found plenty of evidence backing the trial judge's call that the outbuilding was never really dropped from the policy, from the unchanged premium to the broker's own silence.

The Court of Appeal dismissed the appeal on September 15, 2026, leaving Wawanesa's denial in place. For underwriters, it's a simple point: telling the right person the wrong reason still isn't disclosure.