It had to dig deep for precedent, but the Court of Appeal for British Columbia used an 81-year-old Supreme Court of Canada decision to rule against The Wawanesa Mutual Insurance Company over a disputed residential fire claim.
The ruling overturned a 2012 decision by a lower court in favour of Wawanesa, involving a claim by Scott Peebles and Tor Quinn, who owned a house in Surrey, B.C. that was completely destroyed by fire in an explosion on April 26, 2008.
The appeal court cited the Supreme Court of Canada's 1932 ruling in the case of J. Donald Davidson versus The Laurentian Insurance Company.
In August 1928, Laurentian wrote a three-year policy on Davidson's farm, which was destroyed by fire Mar. 21, 1930. On Feb. 20, 1930, Davidson had moved to Newmarket, Ontario with the intention of living there permanently and selling his farm. He had not given notice to Laurentian that his property became vacant.
At the time, Ontario Statutory Condition 5 (d) stated that an insurer shall not be liable for loss to an insured property that is "vacant or unoccupied for more than thirty consecutive days." (continued.)
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“Evidence was offered at the trial to show that the vacancy of the property was a change material to the risk,” wrote Mr. Justice Sir Lyman Poore Duff, in the Supreme Court of Canada’s ruling, released Mar. 24, 1932, against Laurentian. "But there was no evidence of any change material to the risk in addition to the bare fact of vacancy."
"We are of opinion that, by virtue of clause (d) of condition 5 in the policy, vacancy for a period of thirty days was one of the risks contemplated by the policy ..."
Wawanesa argued that the Supreme Court of Canada's 1932 decision in Laurentian versus Davidson could not be applied to its dispute with Quinn and Peebles, contending there is a distinction between the terms ‘vacant’ and ‘unoccupied’ in common law.
But the Court of Appeal for B.C. noted that Peebles and Quinn’s house in Surrey did remain ‘occupied’ in the usual sense of the word.
Wawanesa contended at the time that the loss was excluded from coverage because the fire occurred after the house had been vacant for more than 30 consecutive days. The insurer also contended the policyholders had failed to advise it of a change in its occupation and use, which it regards as material to the risk insured.
Justice Peter Willcock of the Supreme Court of British Columbia agreed with Wawanesa in a decision in the spring of 2012, that the policyholders had indeed failed to notify Wawanesa of a material change in risk. (continued.)
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Quinn and Peebles had bought the house in 2006, with the intent that Quinn would live in it. However, the following year, Quinn was staying at his girlfriend's house some of the time and in early 2008 was offered work on a mine in the Northwest Territories. At that point, the owners had also put the house up for sale.
According to court records, “He was away from the Lower Mainland from February 7-27; from March 4-26; and from April 1-23, 2008.”
Quinn had contended he spent one night in March at the property, in his sleeping bag, less than 30 days before the explosion and fire – answering the challenge that there was no bed at the house, proving no occupancy.
The overturning of the 2012 ruling was based on the vacancy exclusion in Wawanesa's policy permitted “reduced occupancy.”
