The Court of Appeal set aside boomerang summary judgment that had denied a greenhouse operator coverage for tomato crops destroyed by carbon monoxide from a malfunctioning boiler that went undetected by a malfunctioning monitor, and remitted the whole action for trial. Applying the correctness standard to this standard form policy, the Court held the motion judge erred in his causation analysis by fixing on the most immediate cause, the carbon monoxide poisoning, instead of determining the effective cause or causes through the proper chain of causation or concurrent cause framework, given his own finding that the loss flowed from a series of events including the boiler and monitor failures.
The Court also held he mishandled the machinery breakdown exception in the initial grant of coverage by never deciding who bore the onus on it and never making the factual findings about why the boiler and monitor failed, and that he erred on the exhaust gas and pollution exclusions by treating “exhaust gas” as plainly unambiguous, wrongly dismissing the duty to defend pollution cases as irrelevant, and failing to consider whether, on concurrent causes, the exclusion was worded clearly enough to oust all coverage under Derksen. Because the effective cause, the onus and factual findings on machinery breakdown, the meaning and application of the exclusions, and the admissibility of a key witness’s evidence all remained unresolved, these were genuine issues requiring a trial.