3 Feb 2025
904950 Ontario Limited v. Dominion of Canada General Insurance Company
Key Issues:
- Whether the insurer (Dominion of Canada General Insurance) was responsible for covering water damage under the policy.
- Interpretation of an exclusionary clause regarding water entering through basement walls.
Background:
- A watermain burst, causing flooding in the respondent’s (policyholder's) property.
- The insurance policy excluded coverage if water entered the property through basement walls.
- The insurer denied coverage, arguing that the water entered through a pipe that transected the basement wall.
- The motion judge ruled in favor of the respondent, finding that the pipe was distinct from the wall.
Court of Appeal’s Decision:
- The appeal was dismissed, affirming that the exclusion clause did not apply.
- The court found that:
- A wall serves to enclose and protect a property, while a pipe enables fluid entry.
- The policy did not explicitly exclude water entering through pipes.
- Any ambiguity must be resolved against the insurer (contra proferentem rule).
- The appellant failed to prove the exclusion clause applied.
Outcome:
- Appeal dismissed.
- Insurer must cover the damage.
- Costs of $8,000 awarded to the respondent.