The Manitoba Court of Appeal, in dismissing the Plaintiff’s appeal, held that the trial judge had correctly applied the law with respect to the Insurer’s onus to prove arson

Kerkowich v. Wawanesa Mutual Insurance Co., [2005] M.J. No. 67, Manitoba Court of Appeal

The Plaintiff made a claim under a policy of homeowner’s insurance after his home was damaged by a fire. The Insurer denied the claim, alleging that the fire was caused by the intentional act of the Plaintiff. The trial judge found in favour of the Insurer based on expert evidence that the fire was set deliberately. The Plaintiff appealed, on the basis that the trial judge misapplied the law with respect to the Insurer’s onus to prove arson.

The Court of Appeal, in finding that the trial judge had correctly applied the law, confirmed that once the Insured establishes that a loss by fire has occurred, the onus of proof shifts to the Insurer to plead and prove that the fire was caused by the wilful act of the Insured. The Insurer must show that it is more probable than not that the fire was set deliberately by or on behalf of the Insured. In the absence of direct evidence, the Insurer needs to prove that (a) the fire was of incendiary origin, (b) the Plaintiff had the opportunity to set the fire or to cause it to be set, and (c) the Plaintiff had sufficient motive for setting the fire.

The Plaintiff argued on appeal that the Insurer had the onus of disproving all possible origins of the fire, including the possibility that it started as a result of spontaneous combustion. The Insurer’s experts concluded that the fire was deliberately set. The Plaintiff did not call any expert opinion evidence at trial to counter the evidence of the Insurer’s experts. The Court of Appeal commented that while the onus was on the Insurer to establish that the fire was of incendiary origin, it did not follow that the Insurer had not met its onus where the Plaintiff had suggested another theoretical possibility, but offered no proof. The Court of Appeal, in dismissing the appeal, held that the trial judge weighed all the evidence and was clearly alive to the standard of proof required in a civil action where a defence depends upon proof that the opposite party has committed a criminal offence. The Court of Appeal found no overriding or palpable error that would justify appellate intervention.

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