Case information

Insurance — Property insurance — Insured’s house destroyed when tenant’s attempt to extract resin from marijuana resulted in explosion and fire — Insurers relying on marijuana production exclusion clause to deny coverage to insured — Insured claiming applicability of legislative amendment limiting the application of exclusion clauses for criminal and intentional activity to claims of those who caused the loss or who knew about or consented to the activity that caused the loss — Courts holding legislative amendment not applicable to loss occurring before its enactment — Whether the interpretation of the legislative amendment should be applied retroactively, retrospectively, or prospectively from the date of its enactment — Whether denying coverage under the policy because the date of loss occurred before the remedial legislation was proclaimed is a proper and fair application of the legislative amendment consistent with the rules of statutory interpretation – Whether it is fair for the courts to permit the mortgagee to be entitled to indemnity while denying coverage to the insured where the insured is not involved in the illegal activities causing the loss — How are the principles of retrospective, retroactive and prospective application of legislation to be applied when there is remedial legislation based on loss or damage caused prior to the date of enactment? —Insurance Act, R.S.O. 1990, c. I-8, s. 129.1.

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant, Mr. Lin, owned a property and had a home insurance policy with the respondent Aviva General Insurance Company, and its predecessor, RBC General Insurance Company (“insurers”). The applicant’s tenant burned down the house while trying to extract marijuana resin in the basement. The applicant did not know the tenant was doing this. The insurers denied coverage based on two exclusion clauses in the policy: a marijuana production exclusion clause and an illegal activity exclusion clause. The applicant commenced an action against the insurers. While the applicant’s action was outstanding, the legislature amended the Insurance Act, R.S.O. 1990, c. I.8, by adding s. 129.1, a provision that limits the application of criminal and intentional activity exclusion clauses to the claim of a person who caused the loss or who knew about or consented to the activity that caused the loss. The applicant amended his statement of claim to plead reliance on the legislative amendment. The motion judge found that the legislative amendment did not apply retrospectively to insurance policies entered into before the date of its enactment. He awarded summary judgment to the insurers. The Court of Appeal dismissed the appeal.