The Court of Appeal dismissed the appeal by an Insured from the dismissal of his action against the Insurer for insurance coverage of a rental house that was destroyed by fire. The Insurer was entitled to rely on a vacancy exclusion in the policy.

Wright v. Canadian Northern Shield Insurance Co., [2005] B.C.J. No. 2630, British Columbia Court of Appeal

In June of 1999, tenants informed the Plaintiff’s partner that at the beginning of July they would be moving out of the house they were renting from him. The tenants moved out as planned but occasionally returned to visit the solarium on the premises to pick vegetables. In September 1999, a fire occurred on the premises destroying the house. The trial judge found that an exclusion clause in the policy applied which stated that coverage would not be available to the Plaintiff Insured if, to his knowledge, the premises were vacant for a period of more than 30 consecutive days. The trial judge did not accept the Plaintiff’s evidence that he was unaware that the tenants had moved out.

In order to rely successfully on the exclusion clause, the Insurer was required to prove two things: that the house was vacant; and that the Insured knew it was vacant. The sole issue before the Court of Appeal was a factual one: whether the premises were vacant or not.

The Court cited case law which held that sporadic inspection of premises would not found a conclusion of occupation by the Insured. In addition, the Court found that the occasional visitations by the tenants to the home did not change the state of the premises from being vacant to being occupied. This was so because the visits did not manifest any intention to exercise dominion over the house. Furthermore, the house was vacant to the knowledge of the Insured at the relevant time. Accordingly, the Insurer was entitled to deny coverage on the basis of the vacancy exclusion and the appeal was dismissed.

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