McGregor v. Wawanesa Mutual Insurance Company, 2025 ABKB 227
Reading time: 4 minutes (approx.)
By: Hayley Gardner (Articled Clerk)
This dispute arose from a fire that started while one of the Plaintiffs, Mr. McGregor, was attempting to produce cannabis oil in his detached garage in 2017. The production of cannabis was still illegal in Canada at this time and Mr. McGregor later pled guilty to criminal charges for the unlawful possession of cannabis and for causing the fire. Mr. McGregor was insured under a homeowner’s policy by the Defendant, Wawanesa Mutual Insurance, at the time of the loss.
As part of his criminal plea, Mr. McGregor admitted that the fire was caused by the ignition of butane gas, which was used in the production of the cannabis oil, and that the fire caused burn injuries to himself and two friends who were visiting at the time. One of the visitors would later sue the Plaintiffs for bodily injury, leading the Plaintiffs to seek liability coverage from Wawanesa.
Mr. McGregor filed a claim with the Alberta Court of King’s Bench seeking a declaration that he was entitled to liability coverage under his homeowner’s insurance policy. Wawanesa denied coverage and sought to have the action dismissed. Both parties agreed to proceed by summary trial.
Wawanesa argued that the Plaintiffs were not entitled to coverage because the bodily injury claims in the action against them were caused by criminal acts. Wawanesa cited an exclusion clause in the liability section of the policy which excluded coverage for losses “caused by any intentional or criminal act” committed by the insureds. The Plaintiffs argued that the clause was not applicable because the insurers had not demonstrated that Mr. McGregor had subjectively intended to cause the fire or any bodily harm.
The key issue of contention was whether the clause excluded loss or damage caused by unintentional criminal acts. The Court reviewed a number of previous decisions interpreting similar exclusion clauses and determined that proof of subjective intent is generally only required if the clause is not sufficiently clear and unambiguous in its exclusion of all losses arising from any intentional or unintentional criminal acts.
The Court relied particularly on the decision in Eichmanis v. Wawanesa Mutual Insurance, 2007 ONCA 92, where the Ontario Court of Appeal interpreted the same criminal act exclusion clause and found that it was unambiguous in its exclusion of all criminal acts, regardless of intent.
In this summary decision, the Court also found that the exclusion clause was clear and unambiguous in its exclusion of coverage for claims arising from bodily injury or property damage caused by any criminal acts committed by the Insured. The Defendants were not required to demonstrate subjective intent to rely on the clause. Mr. McGregor had admitted that the fire was caused by his criminal act of producing cannabis oil, and he was therefore not entitled to liability coverage for the action launched against him by the injured visitor.
