Cannabis exclusion in home insurance policies may not be effective when tenants’ grow-op causes loss

Despite the efforts of insurers to exclude coverage in habitational insurance policies for losses caused by cannabis cultivation or production, a recent Alberta case serves as a reminder that coverage may, nevertheless, apply where an insured’s tenant’s grow-op causes a loss.[1] This is due to the existence of so-called “innocent insured” provisions in the Insurance Acts of Alberta, British Columbia and Manitoba.

Background

Home insurance policies have traditionally excluded coverage for losses caused by illegal activities. Many have also specifically excluded coverage for losses arising from illegal drug activity. With the Cannabis Act having come into force on October 17, 2018, Canadians may now legally cultivate up to four cannabis plants at a time in their dwelling-house.

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Analysis of Weir Jones and its Application in BF

Overview:

The Alberta Court of Appeal provides clarification of the test for summary judgment applications in Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49 [“Weir”]. The Court of Appeal notes the rift that had emerged in case law while discussing the standard of proof that is required in a summary judgment application.[1] In particular, decisions of Can v Calgary Police Service, 2014 ABCA 322, and Stefanyk v Sobeys Capital Incorporated, 2018 ABCA 125, demonstrate the divergence in the application of the standard of proof that is required for summary judgment.[2] The Court mentioned that “it is now possible to find a quote in the case law to support virtually any view of the test to be used in summary judgment”.

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Doctrine of unjust enrichment may deprive named beneficiaries of life insurance proceeds

Designated beneficiaries of a life insurance policy have traditionally been entitled to a high degree of certainty that they would be entitled to the policy proceeds upon the death of the insured. This certainty has been jeopardized in a recent Supreme Court of Canada (“SCC”) decision, Moore v Sweet, 2018 SCC 52.

The facts

Michelle Moore (“Michelle”) continued to pay the premiums of a life insurance policy on the death of her ex-husband (the “Policy”), Lawrence Moore (“Lawrence”), after the couple separated. This was in accordance with an oral agreement between Michelle and Lawrence. In exchange, Michelle would be entitled to the Policy proceeds upon Lawrence’s death.

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