William and Susan Kennedy requested that Intact Insurance defend them in a lawsuit arising from a slip-and-fall incident on their property. The plaintiff was on the premises for a business purpose related to a third party, Judith Kennedy. The Kennedys' home insurance policy with Intact included personal liability coverage.

The court addressed four key issues:

1. Duty to Defend: The court ruled that Intact Insurance had a duty to defend the Kennedys. The possibility of personal liability was sufficient to trigger this duty.
2. Business Pursuits Exclusion: Intact failed to prove that the incident fell under the policy’s business exclusion. The business activity conducted by Judith Kennedy was not shown to be "continuous or regular" as required by the exclusion clause.
3. Home Based Business Extension: The extension did not cover Judith Kennedy's business, as it only applied to businesses operated by the Kennedys.
4. Material Change in Risk: Intact did not establish that Judith Kennedy’s business constituted a material change in risk that would void the policy.

The Kennedys were awarded full indemnity for legal costs, following precedent from Lombard General Insurance Co. v. Crosbie Industrial Services Ltd., 2006 NLCA 55. Amount was not specified.