O'Brien v. Security National Insurance Company, 2023 NSSC 376

SUPREME COURT OF Nova Scotia Citation: O'Brien v. Security National Insurance Company , 2023 NSSC 376 Date: 20231123 Docket: 486726 Registry: Halifax Between: Sarah O'Brien and David O'Brien Applicants and Security National Insurance Company, a body corporate, TD Insurance Direct Agency Inc., a body corporate Respondents DECISION ON APPLICATION Judge: The Honourable Justice Ann E.

Smith Heard: June 27 and 28, 2023, in Halifax, Nova Scotia Counsel: Ian Dunbar and Liza Myers, for the Applicants Daniel MacKenzie and Calvin DeWolfe, for the Respondents By the Court: Introduction [ 1 ] This Application is about whether Sarah O’Brien and Dr. David O’Brien are entitled to damages flowing from the decision of their home insurer, Security National Insurance Company (“Security National”), to deny their claim for water damage to their property.

The case is also about whether the representative for TD Insurance Direct Agency Inc. (“TD Insurance” or “TD”) was negligent when she placed coverage on the residence. Background [ 2 ] The O’Briens are residents of Halifax, Nova Scotia. Sarah O’Brien is a teacher with the Halifax Regional Centre for Education and David O’Brien is an orthopaedic surgeon with the Nova Scotia Health Authority.

In 2018, the O’Briens had lived in their home at 6721 Oakland Road, Halifax, for more than ten years. [ 3 ] In September 2018, the O’Briens noticed that their neighbours directly across the street at 6262 Oakland Road had listed their house for sale (the “Property”). The O’Briens had been inside the Property several times, and had always admired it. The Property, which was more than a century old, had been well maintained, retaining many of the original finishes. [ 4 ] The O’Briens approached the neighbours and expressed their interest in purchasing the Property.

Following some negotiation, they made a successful offer to purchase the Property on October 11, 2018. The closing date was November 30, 2018. [ 5 ] The O’Briens were aware that they had to place home insurance on the Property prior to the closing. Their existing home and cottage were insured under a policy issued by Security National (the “Policy”). The Policy provided comprehensive coverage, including coverage for water damage. [ 6 ] On November 27, 2018, Sarah O’Brien called TD Insurance to add the Property to the existing Policy. Ms. O’Brien spoke with

TD’s telephone representative, May Ebotoke. During the call, which lasted nearly an hour, Ms. Ebotoke placed Ms. O’Brien on hold to seek advice from more senior TD team members. [ 7 ] Before the call ended, Ms. O’Brien received a copy of the Policy by e-mail, and satisfied herself that the Property had been added as an insured location. The Property purchase closed as planned on November 30, 2018. [ 8 ] On January 1, 2019, at approximately 3:15 pm, Dr. O’Brien discovered significant water damage at the Property. The O’Briens immediately called TD Insurance to report the damage.

On January 4, 2019, the O’Briens were informed by Security National that the Policy did not provide coverage for the water damage. In a denial letter of January 7, 2019, Security National stated: Your policy does not cover water damage to your property when vacant. We refer you to the Perils Excluded

Section of you [ sic ] policy which states: 26 Water Damage direct or indirect caused by: F.

Occurring while the building is under construction or vacant , even if permission for the construction orvacancy [ sic ] has been given by us . [ 9 ] “Vacant” is defined under the Policy as follows: Vacant refers to the circumstances where, regardless of the presence of furnishings: 1. all occupants have moved out with no intention of returning and no new occupant has taken up residence; or 2. in the case of a newly constructed house, no occupant has yet taken up residence. [ 10 ] The O’Briens have filed this Application alleging that the loss is covered under the Policy because the Property was not “vacant” at the time of the water damage.

They claim in the alternative that if coverage for water damage is excluded in the circumstances, the lack of coverage is attributable to Ms. Ebotoke’s negligent performance of her responsibilities as a telephone agent for TD Insurance. The O’Briens say that if Ms.

Ebotoke had given them the appropriate information about the policy exclusions, they would have taken the necessary steps to ensure that they had full coverage over the Property. [ 11 ] The Respondents maintain that the Property was “vacant” at the time of the loss, and that water damage that occurs while the insured property is vacant is excluded from coverage under the Policy. In response to the allegations of negligence, the Respondents say that at the time Ms. O’Brien purchased coverage for the Property, she explicitly represented that the Applicants would be occupying the Property after purchasing it.

As a result, Ms. Ebotoke had no obligation to explain a vacancy exclusion which would not have applied based on the information provided by Ms. O’Brien. [ 12 ] The parties have agreed that damages can be quantified at $225,145.71, exclusive of prejudgment interest, costs, and disbursements. Issues [ 13 ] There are two issues on this Application: 1. Was the Property “vacant” as defined in the Policy at the time of the loss? 2.

If the Property was “vacant”, are the Respondents liable to the Applicants for failing to properly place coverage and communicate information material to their coverage, whether as a matter of negligence or as a breach of the implied warranties contained in the Consumer Protection Act , S.N.S. 1989, c. 92? The Evidence [ 14 ] The Applicants filed two affidavits of Sarah O’Brien – an initial affidavit sworn on November 1, 2019, and a response affidavit sworn on February 26, 2020. They also filed two affidavits of Dr.

David O’Brien – an initial affidavit sworn on November 1, 2019, and a response affidavit sworn on February 26, 2020. [ 15 ] The Respondents filed an affidavit of May Ebotoke, Contact Centre Representative with TD Insurance, sworn on February 5, 2020, and an affidavit of Matthew Pike, Senior Specialist, Complex Claims with Security National, sworn on January 29, 2020. [ 16 ] All the affiants were cross-examined. The Applicants tendered three exhibits during Ms.

Ebotoke’s cross-examination. [ 17 ] Before summarizing the evidence of each witness, I will review the transcript of the underwriting call between Sarah O’Brien and May Ebotoke, which was attached as an exhibit to each of their affidavits. The Call [ 18 ] On November 27, 2018, Ms. O’Brien called TD Insurance to have the Property added to the existing Policy. The call began with Ms. O’Brien advising Ms. Ebotoke of the purchase of the Property: MS. O’BRIEN : I’m just calling because we have home insurance with you guys …

MS. EBOTOKE : Uh-huh. MS. O’BRIEN : … and we’ve just purchased another home. MS. EBOTOKE : Oh nice, congrats. MS. O’BRIEN : We hav- … we haven’t sold this home but we purchased another home, we close on Friday. [ 19 ] Ms. Ebotoke asked Ms. O’Brien about her plans for the two homes: MS. EBOTOKE : So you’re … are you going to eventually sell this place at 6271 Oakland Road? MS. O’BRIEN : We are. Yes, we’re going to sell this one and … MS. EBOTOKE : And when are you planning on moving in? MS. O’BRIEN : Right now we’re not going to move in … MS. EBOTOKE : Uh-huh. MS. O’BRIEN : Right away. MS. EBOTOKE : Uh-huh. MS.

O’BRIEN : It’s actually just across the street. MS. EBOTOKE : Oh. MS. O’BRIEN : Yeah, is it better if one of us stays there, like how does that affect … I mean we can just walk across the street every day. MS. EBOTOKE : It’s just because I’m trying to figure out if we’re going to need the … like a vacant … like a vacant home. MS. O’BRIEN : Okay. Well it’s not really vacant because we’ll go over every day. MS. EBOTOKE : Uh-huh. MS. O’BRIEN : Because we’re going to renovate. MS. EBOTOKE : Okay. MS. O’BRIEN : So it won’t really be vacant in the sense that noone will be in it.

Someone will be in it every day. [ 20 ] In response to this information, Ms. Ebotoke placed Ms. O’Brien on hold while she sought an internal consultation from TD Insurance’s Central Resource Team (“CRT”). Ms. Ebotoke had the following exchange with a CRT representative named “Donald” while Ms. O’Brien waited on hold: DONALD : All right, what’s going on? MS. EBOTOKE : And they … so I’m speaking with Sarah and she said that they bought a new house. DONALD : Uh-huh. MS. EBOTOKE : And they … they’re closing on Friday. DONALD : Okay. MS. EBOTOKE : So I said you’re adding it a second location?

She’s like yes because we haven’t sold this one yet. So I was like, so when are you planning on moving in? DONALD : Uh-huh. MS. EBOTOKE : And her answer was, I’m not sure yet because we’re going to be renovating. So I was like, so how long, you know, like what are you trying to do there exactly because it’s right across the street. Like I see it and I can walk to it every day. DONALD : Okay. MS. EBOTOKE : And then she’s like, asks us why. I said because I’m kind of tempted to … I told her I’m kind of tempted if it’s … how long is it going to be vacant for.

And if we need to apply for like, you know, the vacant permit or renovation or you know? DONALD : Sure. MS. EBOTOKE : Because she was like, okay. I said let me consult, I’ll be back. I have no idea how to tackle this one. DONALD : Okay, so …

MS. EBOTOKE : So she asked would it be better for … DONALD : Uh-huh. MS. EBOTOKE : … one of us to stay there. She’s like we literally will be there every day because it’s right across the street. DONALD : Okay. So, you know, to live in a house, it has to … I mean, first of all, it has to be legal to live in it. For like a new construction you have to have your occupancy permit and stuff but that wouldn’t be the case here. MS. EBOTOKE : Uh-huh. DONALD : You … you know, it’s got to be furnished and someone’s got to actually like occupy it, live there, you know, have their stuff there … MS. EBOTOKE : Uh-huh.

DONALD : … whatever. Even just a couple of days a week is fine. MS. EBOTOKE : Uh-huh. DONALD : But here’s the thing, if a house is vacant and they’re paying for a homeowner place … MS. EBOTOKE : Uh-huh. DONALD : … let’s say … let’s say they … they lie to us and they say, Yeah, I’ll be there all the time … MS. EBOTOKE : Uh-huh. DONALD : … and then we set them up with oil spill coverage, right? MS. EBOTOKE : Uh-huh. DONALD : But that would be an exclusion for a vacant property and then an oil spill happens and then we show up and there’s no furniture there, there’s no nothing there, obviously noone’s living there.

MS. EBOTOKE : Uh-huh. DONALD : We would deny the claim and they would have paid us a bunch of money for nothing. MS. EBOTOKE : Uh-huh. DONALD : Yeah. So that’s the main thing is that … MS. EBOTOKE : Exactly. DONALD : … you know, it should … a vacant … putting it as a vacant property prevents them from paying for things that they don’t need. Now of course we charge a vacancy permit because a vacant house is, you know, more risky than a regular house. MS. EBOTOKE : Uh-huh. DONALD : So we charge more money for it.

But … I, you know, I think you’re generally, you know, in a good zone thinking you should get all of your details together before you call us. MS. EBOTOKE : Uh-huh. DONALD : You know, to … the homeowner. I see they have two houses already. Is this going to be location three? MS. EBOTOKE : She said she’s selling the 6271 … she’s selling that. … DONALD : So, yeah, I mean it would be nice to figure out what they want to do with it. If, though, they’re not going to move into it within the first 60 days, for sure, you should put a vacancy permit on it. MS. EBOTOKE : My concern is that she says they’re renovating.

DONALD : Okay, did you … MS. EBOTOKE : So if they’re renovating, what procedure would I foll- … because that’s where I’m stuck right now at what procedure … [ 21 ] Donald explained that Ms. Ebotoke’s next steps in the quoting process depended on whether the intended renovations were “major” or “minor”. A “major” renovation, according to TD, is one where the total value of the renovation is more than 20 percent of the home’s value, or the total cost of the renovation is more than $50,000.

Donald said there were three possible options for renovations: 1) minor renovation; 2) major renovation – customer is living in home; or 3) major renovation – customer is not living in home. Ms. Ebotoke thanked Donald and returned to Ms. O’Brien. The following exchange then occurred:

MS. EBOTOKE : Thank you so much for your patience there. MS. O’BRIEN : No problem. MS. EBOTOKE : All right, so I got it all figured out now. Now I have a few questions for you on my end. MS. O’BRIEN : Okay. MS. EBOTOKE : Now you have both 6271 Oakland and 337 Kings Road, right? MS. O’BRIEN : Yes. MS. EBOTOKE : So this would be the third location we’re adding until you sell one of them. MS. O’BRIEN : Yes. No, well we’re not selling the Kings Road, it’s a cabin. MS. EBOTOKE : It will be 6271, right? MS. O’BRIEN : Yes. MS. EBOTOKE : Perfect, okay. So let’s get that going here and let’s add that location first.

And then how many … how much renovations are you going to be doing like how … Is it like more than 20 percent of the value of the home? MS. O’BRIEN : Probably. MS. EBOTOKE : Okay. And you said you’re moving in on Friday the 30 th or you’re closing … MS. O’BRIEN : Yeah, well on the 1 st . MS. EBOTOKE : … on the 30 th ? MS. O’BRIEN : We close on the 30 th . MS. EBOTOKE : On the 30 th . So do you want your policy to be active as of the 30 th ? MS. O’BRIEN : I think yeah, definitely. MS. EBOTOKE : Okay, so let’s … MS. O’BRIEN : Because I’m pretty sure we sign over the papers then, so it will become ours. MS.

EBOTOKE : Okay, perfect. … MS. EBOTOKE : Okay. So how soon after are you going to move in after your closing date? MS. O’BRIEN : My husband’s going to on Saturday. MS. EBOTOKE : Oh okay. So are you going to, like, move your furniture and stuff over? MS. O’BRIEN : Yeah, like a bed and stuff like that. MS. EBOTOKE : Okay perfect. And are you going to be the owner of the property and all the contents, you and your husband? MS. O’BRIEN : Yes. … MS. EBOTOKE : And it’s going to be occupied by you guys, right? MS. O’BRIEN : Yeah. MS. EBOTOKE : Not renting it or anything? MS. O’BRIEN : No. … MS.

EBOTOKE : … So how … how long, excuse me, how long do you know … do you think that the renovations are going to take? MS. O’BRIEN : We don’t really know for sure. I can’t answer that, I’m sorry. Should we just like make up a number? MS. EBOTOKE : No, I’m just trying to determine if it’s going to go under ma- … minor renovations or major renovations. Now is the cost more … the cost for it is going to be more than 50,000?

MS. O’BRIEN : Yes. MS. EBOTOKE : Okay. Okay. So let’s do a few a questions here to determine the house … It’s single-family home? MS. O’BRIEN : Yes. MS. EBOTOKE : Okay. And it’s detached? MS. O’BRIEN : Yes. MS. EBOTOKE : Okay. And are you going to be living in that home during the renovations or not? MS. O’BRIEN : Yes. MS. EBOTOKE : Yeah, you will be? MS. O’BRIEN : I think so, yeah, that’s my husband’s plan. MS. EBOTOKE : Okay. I’m just trying to see here why it’s giving me that error for. Do you mind if I just place you on a quick hold? MS. O’BRIEN : No, not at all. [ 22 ] After placing Ms. O’Brien on hold, Ms.

Ebotoke connected with a CRT representative named Dave: DAVE : All right. What can I do for you today? MS. EBOTOKE : So this client is adding a third location. DAVE : Okay. MS. EBOTOKE : She’s trying to sell her first location. DAVE : Okay. MS. EBOTOKE : And now this is where I’m torn in between. DAVE : Okay. MS. EBOTOKE : I was doing the quoting process … DAVE : Okay. MS. EBOTOKE : … but she said her husband is … they’re closing on Friday. DAVE : Okay. MS. EBOTOKE : Her husband is moving in on Saturday. DAVE : Okay. MS. EBOTOKE : And … DAVE : Sorry, they’re closing when? MS. EBOTOKE : Friday, the 30 th .

DAVE : On the new house, on the 30 th , okay. MS. EBOTOKE : Yeah, and her husband is moving in there on Saturday. DAVE : 31 st , okay. MS. EBOTOKE : And that house is going to be renovated. That sparked my interest right away. I said, How long is it going to be renovated for, how much is the cost, you know? DAVE : Okay, yeah, all good questions to ask, yeah. MS. EBOTOKE : So, she said it’s going to be more than 20 percent of the cost of her house. DAVE : Okay. MS. EBOTOKE : And it’s going to cost more than 50,000. DAVE : Okay. MS.

EBOTOKE : But now I’m trying to follow the procedure for the … in eSpace “building under construction or renovation”.

DAVE : Okay. MS. EBOTOKE : And then under “major renovations”, “ customer is living in home during renovation or construction ”. … DAVE : Well, I think I’ll set it up … I’m just going to get caught up with you here first. Building under construction or renovation so … MS. EBOTOKE : Uh-huh. DAVE : … so he’s actually … so they’re … so he … they’re moving in all their furniture … so number one, May, I’d be asking, who’s doing the renovations. Is it the … it’s probably not the husband because he’s a doctor but … MS.

EBOTOKE : No, but she says she’s literally across the street and he’s going to be there, sleeping there and moving a bed in there for him and whatever. But … like she’s being extremely … DAVE : Okay. MS. EBOTOKE : … to be honest, extremely vague. Everything I … I don’t know, I may be, I don’t know, probably, possibly, I’m … well I need an answer. Is it … DAVE : Okay. MS. EBOTOKE : … a “yes” or a “no”. DAVE : Okay, so I’m going to take you a step back again though. MS. EBOTOKE : Uh-huh. DAVE : So they’re buying a house. MS. EBOTOKE : Uh-huh. DAVE : (Inaudible) it’s going to be fully furnished. MS.

EBOTOKE : Uh-huh. DAVE : That’s what you need to ask … MS. EBOTOKE : Uh-huh. DAVE : With the guy or is it just a bed. MS. EBOTOKE : Uh-huh. DAVE : So you said it’s … what did you just say it being across the street? It’s across the street from their current home? MS. EBOTOKE : (Inaudible). Exactly. DAVE : Yeah, so no, so he … he’s … he may have a bed there. I would imagine that it’s not furnished. MS. EBOTOKE : Uh-huh. DAVE : Okay. MS.

EBOTOKE : Especially where it’s major renovations like … DAVE : So then right … so realistically this is what a lot of people say, yeah, he’s going to … they … they get, you know, they think that just because they’re going to be there every day means that they’re living there and that’s … that’s not living there. Living there is living there. MS. EBOTOKE : Uh-huh. DAVE : So you got your TV, you take your groceries there, you’re doing your laundry there, all this good … MS. EBOTOKE : Uh-huh. DAVE : … actually a fully furnished house is living there. MS. EBOTOKE : Uh-huh.

DAVE : But just taking a bed, you know, and being there well, you know, overnight, it would still be considered not occupied. So it would be a home, though, you would follow the … “building under construction major renovation” process. MS. EBOTOKE : Not living there though, is that right?

DAVE : Not living there so it’d be like the $500 charge. MS. EBOTOKE : Okay. And I have to do that 2B thing. And now do I finish the R … DAVE : Yeah, now you still need to ask the questions just to confirm. Just a bed is not living there. MS. EBOTOKE : Uh-huh. DAVE : If that’s all it is, then you … if it’s just a bed and he’ll be there every, you know, sleeping there every night … MS. EBOTOKE : Because to be honest I already had this argument almost with her because I asked and had said, Are you guys going to move everything in there? Well, it’s across the street. Because she won’t answer me.

I said, Well, I understand but are you guys going to move in there? Well my husband is. I said, Are you guys going to put furniture in there? Well a bed. I said … DAVE : Yeah, okay … MS. EBOTOKE : … no, no, like … DAVE : … yeah, so … MS. EBOTOKE : … furniture, furniture but she just won’t answer me. DAVE : So that’s not living there then. MS. EBOTOKE : No. DAVE : Then you follow the “not living in the …” process. MS. EBOTOKE : Yeah. So my question is, I started with the quoting process, I stopped it halfway through because … DAVE : Uh-huh. MS.

EBOTOKE : … I can’t really go past in general contents in your home, Do you own any items that would require extra coverage? Because she’s not really having anything in there. DAVE : Right, so the answer would be no. [ 23 ] Following additional discussion about the quoting process for major renovations, Ms. Ebotoke returned to Ms. O’Brien: MS. EBOTOKE : The only thing that is kind of getting us held back is that renovation side of things. We need to figure out … MS. O’BRIEN : We don’t know when we’re going to start the renovations so don’t even like … you can just take that out of there.

We’re going to live in the house for now so … MS. EBOTOKE : Okay. MS. O’BRIEN : … when we start the renovations we can talk to you guys about it. It’s not even on like our radar right now, like it’s an eventual thing. So … MS. EBOTOKE : Oh, it is … MS. O’BRIEN : … you had just asked me so I, you know, we might not even do it but … MS. EBOTOKE : Uh-huh … MS. O’BRIEN : … that would be my hope is that we’re going to do that but totally … MS. EBOTOKE : (Inaudible) … MS. O’BRIEN : … but yeah. MS. EBOTOKE : Okay, so … MS. O’BRIEN : My husband just texted me and he said, No major renovations in the next while. MS.

EBOTOKE : No, okay, fair enough. MS. O’BRIEN : So … MS. EBOTOKE : Fair enough. And the total living area space, not including your basement, is how much? MS. O’BRIEN : I think they said it was 34. … MS. EBOTOKE : Perfect. All right. And additional to general contents in your home, do you own any items that require extra

coverage such as jewelry, artwork, wine collection, or bicycles? MS. O’BRIEN : No. … MS. EBOTOKE : And are you renting any part of your home? MS. O’BRIEN : No. [ 24 ] After Ms. Ebotoke completed entering the information necessary to obtain the quote, she stated: MS. EBOTOKE : No? Please inform us of any changes that happen in the future like leaving your home vacant, finishing the basement, adding any detached structures or doing any renovations. [ 25 ] Ms. O’Brien agreed to the premium of $768 per year to insure the Property. Before ending the call, Ms. Ebotoke sent the revised Policy to Ms. O’Brien by e-mail.

Sarah O’Brien [ 26 ] In her affidavit, Sarah O’Brien stated that when she called TD Insurance on November 27, 2018, her intention was to have the Property added to their existing Policy, and to determine whether their future plans for the Property would impact their insurance coverage. She stated at paragraphs 14-17 of her affidavit: 14. I asked several questions during my call with Ms. Ebotoke in an attempt to ascertain how our future plans for the Property could affect our insurance coverage. I advised her first that we would be renovating the Property before moving in.

I asked her whether the Property could be checked daily, or if it would need to be lived in. 15. Despite our extensive discussion, at no point during the call did Ms. Ebotoke identify any vacancy clause in the Policy, or advise me on how it could impact coverage. 16. Although I specifically communicated to Ms. Ebotoke that our plans for the Property were uncertain, Ms. Ebotoke did not advise that our future use of the Property could have significant coverage implications or even result in us losing our coverage over the Property if our plans changed with respect to the use of the Property. 17.

When my call with Ms. Ebotoke ended, I believed that we had full insurance coverage on the Property. Based on my discussion with Ms. Ebotoke, I believed that it would not present any difficulty if David or I regularly visited the Property to check on it for a brief period after closing. [ 27 ] Ms. O’Brien said the Property closed as planned on November 30, 2018. On December 1, 2018, she and her husband moved a sofa and some other items into the Property. [ 28 ] According to Ms.

O’Brien, starting December 2, 2018, she or her husband attended the Property almost daily to check on it, take measurements, discuss their plans for renovations, and otherwise make plans for their eventual move into the Property. She also often took their puppy to the Property to run around inside and outside, and the O’Briens hid their children’s Christmas presents there as well. Ms.

O’Brien said her husband frequently took his computer to the Property to do medical dictations, as it was quieter there than in their home with the children. [ 29 ] Throughout December 2018, the O’Briens set the Property’s thermostat at 13 degrees Celsius to ensure that the pipes did not freeze. Ms. O’Brien said they had always set their existing home at this temperature whenever they went away, without issue. [ 30 ] Ms. O’Brien said the Property was heated by oil furnace, and that the O’Briens had the oil tank filled on December 20, 2018, to ensure that the Property would continue to be heated. [ 31 ] Ms.

O’Brien stated at paragraph 26 of her affidavit: 26. During this period of time, David and I discussed whether we would live in the Property, renovate it, or rent it, in both the short and long term. [ 32 ] On December 7, 2018, the O’Briens posted an online ad on Kijiji to gauge interest in rental of the Property. On December 31, 2018, a potential tenant responded to the online ad. The O’Briens, along with their puppy, attended the Property later that day to prepare it for a viewing. They observed no issues. [ 33 ] Ms. O’Brien’s evidence was that on January 1, 2019, at approximately 3:15 pm, Dr.

O’Brien visited the Property. He came outside as she was walking up the walkway to the Property. He told her that something was wrong, due to some sort of water leakage. Dr. O’Brien said there was water all throughout the main and upper living areas, and water pooled in the basement. [ 34 ] At this point, Ms. O’Brien said, they both realized something was terribly wrong. Dr. O’Brien turned off the water in the basement and they both ran home to get towels and buckets. When they got back with the supplies, they realized it was too big of a job for towels. Dr.

O’Brien turned off the electricity and they both ran back home to call TD Insurance. [ 35 ] Ms. O’Brien reported the water damage via telephone call to TD Insurance, because she intended to make a claim for loss under the Policy. TD told her that First General Services (“FGS”) would attend the Property immediately. While Ms. O’Brien was on the phone with TD Insurance, Dr. O’Brien was going back and forth between their home and the Property to assess the damage and make sure the water had stopped. He also got on the phone with TD during the call.

[ 36 ] On the evening of January 1, 2019, FGS attended the Property. Ms. O’Brien met with Matthew Pike of TD Insurance and FGS the following day. Ms. O’Brien said Mr. Pike informed her that TD was investigating whether or not the loss was covered under the Policy. He told her that he was 99% sure that it would be covered, and said FGS would take steps to dry the structure and prevent further damage. At that point, Ms. O’Brien advised Mr. Pike that she was unsure if they wanted to pay for FGS without first knowing whether they had coverage from TD Insurance. After consulting Dr.

O’Brien by telephone, and relying on Mr. Pike’s suggestion that coverage would likely be approved, Ms. O’Brien agreed to allow TD and FGS to begin remediation of the Property. FGS set up dryers. [ 37 ] Ms. O’Brien said she learned from speaking with FGS and Mr. Pike that the pipes had frozen and then burst, which caused water to leak from the hot water boiler radiators on both the upper and main levels of the Property. [ 38 ] Ms. O’Brien stated that, to her surprise, on January 4, 2019, Mr. Pike called her and advised that the Policy did not provide coverage for water damage at the Property.

On January 16, 2019, Mr. Pike emailed a copy of TD Insurance’s written denial to Dr. O’Brien, with a copy to Ms. O’Brien. Mr. Pike also confirmed in his email that TD would only pay FGS for the dates leading up to TD’s decision to deny coverage (January 1, 2019 to January 4, 2019). [ 39 ] In her response affidavit, Ms. O’Brien stated that at no point during her call to place coverage on the Property did Ms. Ebotoke advise her that her understanding of “vacant” was incorrect or otherwise mistaken. She further stated: 11. At the time of my call with Ms.

Ebotoke, 6271 Oakland Road was insured as our primary residence. I also told Ms. Ebotoke that we were not intending to sell it right away. 12. Despite the fact that TD knew we were attempting to insure two homes as primary residences, Ms. Ebotoke did not ask me what we intended to do with 6721 Oakland Road. Specifically, she did not mention that our policy would only cover one home at a time and would consider the other one to be vacant. … 14. I do not agree with Mr. Pike’s evidence that the Property was “vacant”. After closing, David and I spent a lot of time at the Property.

At the Property, we planned our renovations, listened to music, streamed shows, and checked on the Property in general. It was right across the street. It was not vacant. [ 40 ] On cross-examination, Ms. O’Brien testified that the O’Briens were not considering renting the Property at the time she spoke with Ms. Ebotoke. Their plan was to move into the Property as soon as they sold their existing home. About a week or so after closing, with their existing home still not selling, they began to consider renting the Property to tenants for a short term.

They placed the ad on Kijiji and, in the interim, they continued to use the Property for various purposes: as “an extension” of Dr. O’Brien’s home office; as a place to go during viewings of their existing home; as a hiding spot for Christmas presents; and so on. Ms. O’Brien repeatedly emphasized that although their intention for the Property remained uncertain, they were “using” the Property almost every day, in one way or another. [ 41 ] When Ms. O’Brien was asked if she knew, at the time she spoke with Ms.

Ebotoke, whether an insurance policy for a vacant home would be more expensive than one for an occupied home, Ms. O’Brien said she did not know either way, and that she “honestly didn’t think about that at the time.” [ 42 ] Ms. O’Brien was asked several questions about the following exchange with Ms. Ebotoke during the November 27, 2018 call: MS. EBOTOKE : Okay. So how soon after are you going to move in after your closing date ? MS. O’BRIEN : My husband’s going to on Saturday . MS. EBOTOKE : Oh okay. So are you going to, like, move your furniture and stuff over? MS.

O’BRIEN : Yeah, like a bed and stuff like that. [Emphasis added] [ 43 ] Ms. O’Brien agreed that the transcript was accurate. She testified that when she said, “My husband’s going to on Saturday”, she meant that her husband was going to move a bed and other stuff into the Property on Saturday, not that he was going to “move in” or “live there.” When it was put to her that they did not, in fact, move a bed in, Ms. O’Brien agreed. She testified that they had an extra bed available, but on the day after the call, the woman who sold them the Property asked if they wanted a couch that would not fit into her moving van.

The O’Briens said “sure”, and moved the couch back into the house. Ms. O’Brien said moving the sofa back in was a lot easier than moving one of the beds over to the Property, and it would still give Dr. O’Brien a place to do work and lay down while he was dictating. She added that they had also moved some rugs, pillows, blankets, a lamp, and some toilet paper into the Property. [ 44 ] Ms. O’Brien was taken through Mr. Pike’s

summary of the “statement” he obtained from her during their meeting on January 2, 2019, and was asked to confirm or deny the accuracy of each piece of information. Mr. Pike’s

summary was as follows: Met with insured Sarah O’Brien and secured statement earlier today. She and her husband and their family reside and [ sic ] 6271 Oakland Rd. They have have [sic] done so since they built there [ sic ] home in 2008. The [ sic ] purchased the house at 6262 Oakland Rd with a closing of November 30, 2018. The previous owner left the house at this time. The insured has not yet taken up residence in the house. They have listed their house at 6271 Okland Rd. The intention was to move into to [ sic ] 6262 after Christmas once 6271 sold or if it took some time for 6271 to sell they would rent 6262.

They actually had been contacted by a potential tenant in late December 2018. They were last in the house on December 31, 2018. There was no signs of an issue. They were checking as the prospective tenant was interested in seeing the house. The last time they were in the house prior to the 31 st was December 27 as friend of Sarah wanted to visit and see the new house. The house is heated by oil fired boiler. They do not have oil at 6271, they called Discount Fuels and had the tank

filled on December 20. The heat was set at 13 degress [ sic ] C. This is the same temperature that they leave 6271 when they are away from the house. 6271 Oakland is a modern build and 6262 is approximately 100 years old. Unknown what upgrades may have been done with regards to insulation. They had not moved any furniture into the house. Non waiver was secured. [ 45 ] Ms.

O’Brien disagreed with the sentence, “The insured has not yet taken up residence in the house”, stating, “We were using the house every day.” She also said the sentence, “The last time they were in the house prior to the 31 st was December 27 as friend of Sarah wanted to visit and see the new house” was only true with respect to her, and not Dr. O’Brien. She said her husband had been in the Property every day during that period doing work. [ 46 ] The final sentence Ms.

O’Brien disagreed with was, “They had not moved any furniture into the house.” She reiterated that they had moved a couch into the house, along with some rugs. Ms. O’Brien further testified that on the day before Mr. Pike arrived, they had moved almost everything out of the house except the couch, which had been soaked with water and was too heavy to carry. Dr. David O’Brien [ 47 ] Dr. David O’Brien’s affidavit evidence mirrored that of his wife in most areas. Dr. O’Brien stated that the previous owners of the Property listed it for sale in September 2018.

The O’Briens liked the idea of purchasing a more historic home while continuing to live in the same neighbourhood. They purchased the Property through a private sale on October 11, 2018, with a closing date of November 30, 2018. [ 48 ] Dr. O’Brien said he and his wife knew that the Property needed some renovations before they moved in. He stated that they had no real timeline or moving date in mind, but that they definitely planned to stay in their existing home for the immediate future.

They considered either selling their existing home or renting it out once they were ready to relocate to the Property, but that was also undecided. [ 49 ] Dr. O’Brien said he did not personally participate in the call with TD Insurance on November 27, 2018, but Ms. O’Brien texted him throughout the conversation. In that text conversation, they agreed that renovations would not start right away, but would remain an eventual plan for the future. After the call, Ms. O’Brien told him that the Property had been successfully added as another location under the existing Policy.

He confirmed this himself when he reviewed the Policy. [ 50 ] On December 1, 2018, the day after the closing, Dr. O’Brien and his wife moved a sofa and some furnishings into the Property. He said that once they took possession, one of them would go to the Property almost every day to check on it. He echoed his wife’s evidence that they would go to the Property to take measurements and talk about renovations; that they hid the Christmas presents there; and that Ms. O’Brien would take the puppy over to run around inside and outside for exercise. Dr.

O’Brien said he used the Property as a place to do some work, especially medical dictations. He stated in his affidavit, “I frequently took my laptop over there for this purpose, as the wifi from our Home was accessible at the Property.” [ 51 ] Dr. O’Brien stated that leading up to Christmas 2018, he and his wife decided to hold off on moving for the time being and discussed the possibility of renting the Property to tenants in the interim. They posted an online ad on Kijiji on December 7, 2018. On December 31, 2018, they received a response from someone who wanted to view the Property. Dr. O’Brien and Ms.

O’Brien attended the Property together later that day to prepare it for a viewing. There were no issues observed at that time. [ 52 ] Dr. O’Brien’s evidence about what happened the following afternoon is consistent with that of his wife. He went to the Property on January 1, 2019, at approximately 3:15 p.m. As soon as he entered the Property, he realized that something was wrong. He saw water pooled across the main floor. He walked through the house and saw that there was water all throughout the main and upper living areas, and water pooled in the basement. Dr. O’Brien left the Property and met Ms.

O’Brien out front as she walked toward the house with the puppy. They went into the Property together and he showed her the water. He shut off the water in the basement, and they both went home to get towels. They went back to the Property but realized there was too much water for them to clean up themselves. Dr. O’Brien turned off the electricity, and they returned home to call TD Insurance to advise them of the water damage. [ 53 ] While Ms. O’Brien was on the phone, Dr. O’Brien went back to the Property a few times to make sure that water was not continuing to leak into the Property.

He said he also spoke to TD Insurance himself at one point during the call, and he was told that FGS would be sent to the Property. [ 54 ] Dr. O’Brien said FGS arrived that night and he met with them. He walked through the Property with the FGS representative to assess the initial damage. They left the Property with the water still turned off, and Dr. O’Brien suggested that they also leave the power off. [ 55 ] Dr. O’Brien stated that Ms. O’Brien met with Matthew Pike from TD Insurance the next day. FGS also attended the meeting. Dr.

O’Brien was at work, but his wife called him during the meeting to advise that TD had not committed to covering the damage. She told him that Mr. Pike thought it was unlikely that coverage would be denied, but that it was a possibility. [ 56 ] The O’Briens decided to proceed with the remediation. FGS set up dryers to mitigate the damage. Mr. Pike and FGS told the O’Briens that the pipes had frozen and burst, causing the hot water radiators to leak into the Property. [ 57 ] Dr. O’Brien said that on January 4, 2019, Ms. O’Brien told him that she had had a telephone call with Mr.

Pike, and he said that water damage at the Property was not covered by the Policy. Dr. O’Brien received a copy of TD Insurance’s written denial by email from Mr. Pike on January 16, 2019. Although the letter was dated January 7, 2019, he had not received a copy prior to the date of Mr. Pike’s email. In the email, Mr. Pike also confirmed that TD would only pay the costs for FGS between January 1 and January 4, 2019. [ 58 ] Dr. O’Brien stated that on January 31, 2019, he received a call from Ms. Ebotoke at TD Insurance. She left a message and asked him to return her call. He called her back the next day. Ms.

Ebotoke told him the purpose of the call was to follow up on questions she should have asked when the coverage was first approved. She asked him a number of questions about the Property. Dr. O’Brien said he told her that he was upset due to the flood and TD’s coverage decision. She said she was surprised that coverage had been denied, as

she believed that a house is not deemed to be vacant until at least 45 days after coverage is placed. [ 59 ] On cross-examination, Dr. O’Brien testified that when his wife called TD Insurance on November 27, 2018 and spoke with Ms. Ebotoke, he was in the operating room in Hants Community Hospital. Ms. O’Brien texted him a few questions during the call, and he responded between cases. He emphasized that it was not a typical back and forth text conversation – he simply fired off responses to his wife’s texts when he could find time between patients. [ 60 ] Dr. O’Brien confirmed that he texted Ms.

O’Brien to say that no major renovations would be occurring at the Property for a little while. He added that purchasing the Property was a “major stressor” in their lives. They were carrying two mortgages and decided not to do anything right away, but they knew they had to make some plans. [ 61 ] Dr. O’Brien was asked about the following portion of the call transcript: MS. EBOTOKE : Okay. So how soon after are you going to move in after your closing date? MS. O’BRIEN : My husband’s going to on Saturday . MS. EBOTOKE : Oh okay. So are you going to, like, move your furniture and stuff over? MS.

O’BRIEN : Yeah, like a bed and stuff like that. [Emphasis added] [ 62 ] Dr. O’Brien explained that it was never their intention that he would move into the Property on his own. They had discussed that they were going to use the Property as an extension of their existing house, like a “man shed” or a “garage kind of thing .” He testified that he never said he was going to sleep and live in the Property. Cross-examination continued as follows: MR. DEWOLFE : So again, Dr. O’Brien, I understand that there was a further exchange. And to be fair to the transcript, Ms.

O’Brien does say that you’re moving a bed and stuff like that. But previous to that, she responds and says you’re going to move in on Saturday. Again, then, at paragraph 25 of your affidavit, you said you decided to hold off on moving. So it’s a fairly simple question, sir. Something has changed since the call with Ms. Ebotoke, do you agree? DR. O’BRIEN : Uh, the change in the way I remember, and the way I read as well, is that we’re sweating it hard about whether we can sell the house and that we’re going to change tactics to maybe put it up to see January 1, can we rent this or not? Remember… MR.

DEWOLFE : That’s fine, sir … DR. O’BRIEN : … we don’t know if there’s a rent… MR. DEWOLFE : That’s responsive, that’s fine. So is it fair to say that, y’know, about a month after the phone call your wife had with Ms. Ebotoke, in December 2018, you were undecided about your use of the property? DR. O’BRIEN : Um, with respect to us living there or renovating it, or all of the above, because that’s what it is. It’s all of the above. Um, so, I think we had no idea right from the get go, again, because, when opportunity comes to go, you go.

And our initial thought was, let’s get this house sold, it’s not selling, so if we can’t… like… if, if, someone comes to us and says we’re going to buy your house and we’re gonna, like sometimes you want to close and wait for the summer to go, blah blah blah, and sometimes you want to go right at it. And y’know, are we going to go right into this house? Like, yeah, we need out, we can’t carry multi-million dollar homes, we cannot afford this. And so absolutely, things are evolving based on, holy cow this is costing a lot of money to us.

So absolutely, in the beginning, can we sell our house, can we get there, let’s give ‘er a go. It’s starting to look bleak, we’re going into winter. All this, you know, everyone talks about real estate markets and spring selling, holy cow. We’re having to carry mortgages. So absolutely, it’s a swirling turmoil in our home, and I’m the one who looks a lot at the books on numbers, definitely things are changing. [ 63 ] Dr. O’Brien testified that he had very little experience procuring insurance.

He could not recall if he had ever made a phone call to place home or auto insurance, as his wife typically made the calls. So while he had had conversations with Ms. O’Brien about the need to obtain insurance coverage in the past, he could not recall ever making the phone call himself. [ 64 ] Dr. O’Brien confirmed that he had no conversations with Matthew Pike, other than through email. He could not confirm or deny whether his wife made any of the statements attributed to her by Mr. Pike during their conversation on January 2, 2019.

May Ebotoke [ 65 ] May Ebotoke is a former Contact Centre Representative with TD Insurance. She graduated from Mount Saint Vincent University in Halifax in 2014 with a Bachelor of Arts in Strategic Human Resources Management. [ 66 ] Ms. Ebotoke began her career in the insurance industry in the summer of 2018, when she worked for two months with Manulife in its Group Benefits division. She started working for TD Insurance on August 17, 2018. At that time, her role was called Insurance Analyst or Insurance Advisor.

Once hired, she spent six to eight weeks undergoing training before taking her first calls from customers in early November 2018. [ 67 ] In her affidavit, Ms. Ebotoke outlined the responsibilities of her role with TD Insurance: 5. In this role, one of my responsibilities is to answer incoming calls from existing or prospective TD Insurance customers. 6. As a Contact Centre Representative at TD Insurance, I conduct all quoting and binding of insurance policies subject to my granted authority and in accordance with TD Insurance’s internal policies and guidelines, including the TD Homeowner Underwriting Quoting

Procedure, the TD Homeowner Underwriting Binding Procedure and the TD Underwriting Manual. … 9. Pursuant to TD Insurance’s quoting procedure for homeowners policies, I am required to determine whether a property is going to be vacant or undergoing renovations in order to place the appropriate coverage and any applicable endorsements or permits. [ 68 ] With respect to the call with Ms. O’Brien, Ms. Ebotoke said it lasted 47 minutes and 18 seconds. She attached an audio recording of the call and a transcript as exhibits to her affidavit. [ 69 ] Ms. Ebotoke stated that Ms.

O’Brien initially advised her that she and her husband were not planning on moving into the Property “right now.” Instead, their intention was to do renovations and visit the Property on a daily basis. Based on that information, Ms. Ebotoke placed her on hold and sought an internal consultation from TD Insurance’s CRT to confirm whether the intended use of the Property would require a vacancy permit or a renovation permit. After this consultation, Ms. Ebotoke spoke with Ms. O’Brien again to clarify their plans for the Property. At that time, Ms.

O’Brien advised that her husband was going to move into the Property immediately following the closing date. Ms. Ebotoke cited the following portion of the call: MS. EBOTOKE : Okay. So how soon after are you going to move in after your closing date? MS. O’BRIEN : My husband’s going to on Saturday . MS. EBOTOKE : Oh okay. So are you going to, like, move your furniture and stuff over? MS. O’BRIEN : Yeah, like a bed and stuff like that. [Emphasis added] [ 70 ] Ms. Ebotoke indicated that in accordance with the quoting procedure, she also asked Ms.

O’Brien if she and her family would be the occupants of the Property, and whether they would be renting the Property. Ms. O’Brien confirmed that they would be occupying the Property and would not be renting it out. Ms. Ebotoke then asked Ms. O’Brien if they would be living in the Property during the renovations, and she confirmed that that was her husband’s plan. At that point, Ms. Ebotoke said, she placed Ms. O’Brien on hold again to consult internally with a member of the CRT as to the correct way to complete the quoting process in light of the information provided.

She spoke with a CRT representative who confirmed that the policy would need to reflect if the Property was going to be vacant or undergoing renovations. When she returned to the call, Ms. O’Brien informed Ms. Ebotoke that she and her husband did not have any immediate plans to undertake any major renovations to the Property and that they were “going to live in the house for now.” [ 71 ] Ms. Ebotoke said that based Ms.

O’Brien’s statement that she and her husband would be living in the home and that no renovations would be taking place at that time, she determined that it was not necessary to further pursue a vacancy or renovation permit for the Property. Accordingly, she proceeded to place coverage for the Property as an owner-occupied dwelling . [ 72 ] While on the phone with Ms. O’Brien, Ms. Ebotoke emailed her a Brokerage Coversheet and a Residential Binder Letter confirming that coverage was in place on the Property. Prior to concluding the call, she asked Ms.

O’Brien to please inform TD Insurance of any further changes regarding the Property, including leaving the home vacant or undertaking renovations. She indicated that she had no further communication with either of the O’Briens regarding any change to their actual or intended use of the Property prior to the date of loss. Ms. Ebotoke also said she reviewed TD Insurance’s customer service system and did not identify any record of either of the O’Briens advising TD of a change in use or status of the Property between the placement of coverage and the date of loss. [ 73 ] Ms.

Ebotoke stated that in accordance with TD Insurance’s practice, a copy of the Policy was generated and sent to the O’Briens by mail on November 27, 2018. [ 74 ] Ms. Ebotoke added that on February 7, 2019, she called Dr. David O’Brien for the purpose of completing an additional questionnaire that was required due to the Property being older than 75 years old. She attached an audio recording of the call as an exhibit to her affidavit. The questionnaire was not related to the reported loss or denial of coverage, and was a standard requirement in the placement of coverage for homes of that age. Ms. Ebotoke said Dr.

O’Brien advised her during the call about the water damage loss at the Property and inquired about the basis for the denial. In response, Ms. Ebotoke reviewed the claims notes on file and explained that the denial was made on the basis that the Property was found to be vacant, and coverage for water escape was excluded during any period of vacancy. I note that Ms. Ebotoke’s evidence as to the date of the call with Dr. O’Brien differs from his evidence, but this minor discrepancy is irrelevant to the issues on this Application. [ 75 ] On cross-examination, Ms. Ebotoke confirmed that her call with Ms.

O’Brien took place during Ms. Ebotoke’s first month of taking calls from customers. She agreed that she did not disclose this information to Ms. O’Brien, but denied that there is any obligation to do so. She further agreed that part of her job with TD Insurance was to answer questions from existing and prospective customers about their coverage, and to make recommendations if the customers are uncertain as to the best coverage option in their situation. [ 76 ] Ms. Ebotoke agreed that while speaking to a customer, she would be using her computer screen to look up and enter information.

She agreed that the CRT is basically a helpline that she could call if she needed assistance while on a call with a customer, and that, in some cases, she would connect the customer with the CRT directly. Ms. Ebotoke said there was no need to do that in Ms. O’Brien’s case. [ 77 ] Ms. Ebotoke was shown a copy of TD Insurance’s Homeowner Quoting Procedure , which was entered as an exhibit. She agreed that the procedure consists of a series of steps, some of which included boxes which she would be required to “click” before proceeding to the next step. Ms.

Ebotoke agreed that she followed the Homeowner Quoting Procedure during her call with Ms. O’Brien. The first set of steps required Ms. Ebotoke to obtain sufficient information from Ms. O’Brien to access her file with TD Insurance and verify her identity. Once she had accessed Ms. O’Brien’s file and verified her identity, Ms. Ebotoke proceeded to steps 8 and 9:

8. Ask customer what date they will take ownership of the property? 9. Ask customer what date will they be moving into the new property? • If less than 60 days between the closing and move-in date, tell customer o Exclusions during the vacancy: water damage, glass breakage. Vandalism (and theft in QC). Tell customer these exclusions will not be applicable as soon as they occupy the new home.

Notepad customer was advised of exclusions . o If the delay changes to over 60 days, customer has to inform us since building will be considered vacant and will require a vacancy permit • If more than 60 days between the closing and move-in date, follow Vacant Property procedure for adding the vacancy permit after Quoting has been completed. • If applicable, refer to UW manual and Vacant Property or Building Under Construction or Renovation . [Emphasis added] [ 78 ] Ms. Ebotoke confirmed that Ms.

O’Brien initially told her that the Property was across the street from their current home; that the O’Briens were selling their current home; that they were not going to move into the Property right away; that they would be doing renovations; and that the Property would not really be vacant because they would go over there every day. Ms. Ebotoke agreed that, based on this information, she did not know whether to follow the quoting procedure for Vacant Property or Building Under Construction or Renovation. Ms. Ebotoke then called CRT and was connected with Donald. During the conversation, Donald responded to Ms.

O’Brien’s question to Ms. Ebotoke about whether it would be better for one of them to stay at the Property: MS. EBOTOKE : So she asked would it be better for … DONALD : Uh-huh. MS. EBOTOKE : … one of us to stay there. She’s like we literally will be there every day because it’s right across the street. DONALD : Okay. So, you know, to live in a house, it has to … I mean, first of all, it has to be legal to live in it. For like a new construction you have to have your occupancy permit and stuff but that wouldn’t be the case here. MS. EBOTOKE : Uh-huh.

DONALD : You … you know, it’s got to be furnished and someone’s got to actually like occupy it, live there, you know, have their stuff there … MS. EBOTOKE : Uh-huh. DONALD : … whatever. Even just a couple of days a week is fine. MS. EBOTOKE : Uh-huh. [Emphasis added] [ 79 ] Ms. Ebotoke agreed that when she returned to Ms. O’Brien, she did not convey to her anything that Donald had told her about vacancy. She said the information was irrelevant at that time, because they had not gotten to that discussion yet.

She said she needed to ask clarification questions to determine whether they needed to have the vacancy discussion, renovation discussion, or building under construction discussion. She agreed that she was effectively restarting the quoting process with Ms. O’Brien. [ 80 ] Ms. Ebotoke agreed that Ms. O’Brien had given her the closing date of Friday, November 30 th , which was responsive to step number 8 of the Homeowner Quoting Procedure. The following exchange then took place: MR. DUNBAR : And then you move on, and you get the address of the new location. Top of page 18.

And then at line 17 through 22, you say to Sarah, “How soon after are you going to move in after your closing date?” MS. EBOTOKE : Yes. MR. DUNBAR : Okay. And Sarah tells you, her husband’s gonna move a bed and stuff like that in on Saturday. MS. EBOTOKE : Yes. MR. DUNBAR : And so, Saturday is the day after the closing, right? MS. EBOTOKE : Yes. MR.

DUNBAR : So in other words, if the insurance is active on the 30th, there’s going to be at least 24 hours, or, at least, whatever period of time between the Friday closing and the Saturday moving in, where the property is, according to TD and the position it’s taken in this litigation, vacant, right? MS. EBOTOKE : I’m not an adjuster, so I would assume…

MR. DUNBAR : But it’s a period of time less than 60 days, right? MS. EBOTOKE : Yes. MR. DUNBAR : And so, according to your procedure, that is a period of time which you should have said “Hey, even if just for that one day, you’re not covered for water damage.” MS. EBOTOKE : Yes. MR. DUNBAR : And, in fact, the other part of the document we were looking at, as far as your procedures are concerned, says that, um, you would tell the customer these exclusions will not be applicable as soon as they occupy the new home. MS. EBOTOKE : Yes. MR.

DUNBAR : But you didn’t ever have a discussion with Sarah about exclusions that would or wouldn’t apply when they occupy the new home, right? MS. EBOTOKE : Right, because it was clearly stated and made very clear that it will not be vacant, by Ms. O’Brien. COURT : I’m sorry, you, you have to speak up a little bit. MS. EBOTOKE : Oh, sorry. COURT : I didn’t hear that answer. You said, “It was clearly stated …” MS. EBOTOKE : By Ms. O’Brien that the property will not be vacant. MR. DUNBAR : You mean because she’d be visiting there every day? MS. EBOTOKE : No, she said it would not be vacant. Those were her words. MR.

DUNBAR : Okay, do you wanna … Let’s go back. Do you mean the passage that we already looked at? MS. EBOTOKE : Yes. MR. DUNBAR : Okay, sure. So that’s at page 5, line 20. So you’ll see Sarah says, “Okay. Well it’s not really vacant because we’ll go over every day.” And then she said, “So it won’t really be vacant in the sense that no one will be in it. Someone will be in it every day.” So is that what you’re referring to? MS. EBOTOKE : Exactly. MR. DUNBAR : Okay. And so based on that, you were satisfied that the property wouldn’t be vacant so you didn’t need to have that discussion with her? MS. EBOTOKE : Exactly.

MR. DUNBAR : So, because you don’t have that discussion, you don’t have a discussion with Sarah about the water damage exclusion will only apply until you occupy the new home? That discussion’s never happened? MS. EBOTOKE : No. [ 81 ] Applicants’ counsel then took Ms. Ebotoke to her second call to CRT, when she was connected with Dave. Counsel pointed out that Ms. Ebotoke had told Dave, “No, but she says she’s literally across the street and he’s going to be there, sleeping there and moving a bed in there for him and whatever”, when “sleeping there” had never been mentioned by Ms. O’Brien.

She responded, “Moving there to me is moving there. As in he’s sleeping there.” She agreed, however, that the words “sleeping there” were never used by Ms. O’Brien, and that she had assumed that Ms. O’Brien meant that Dr. O’Brien would be sleeping at the Property. Ms. Ebotoke agreed that she never discussed it with Ms. O’Brien. She also agreed that, notwithstanding her comment to Dave that Ms. O’Brien was being “extremely vague”, she never told Ms. O’Brien, “You need to make up your mind what you’re going to do with this property and call us back”, or words to that effect. Cross-examination continued: MR.

DUNBAR : And … you don’t … But you don’t tell Sarah, at any point, that any of this information is going to affect her insurance coverage, right? MS. EBOTOKE : No. MR. DUNBAR : So although you’re telling Dave, no problem, that she’s very vague, “possibly, I don’t know, probably, possibly”, you didn’t tell her, “Hey, this is material information to your coverage”, right? MS EBOTOKE : Mmhmm. You’re right. [ 82 ] Mr. Dunbar then read out the following portion of Ms. Ebotoke’s conversation with Dave: DAVE : Okay, so I’m going to take you a step back again though.

MS. EBOTOKE : Uh-huh. DAVE : So they’re buying a house. MS. EBOTOKE : Uh-huh. DAVE : (Inaudible) it’s going to be fully furnished. MS. EBOTOKE : Uh-huh. DAVE : That’s what you need to ask … MS. EBOTOKE : Uh-huh. DAVE : With the guy or is it just a bed. MS. EBOTOKE : Uh-huh. DAVE : So you said it’s … what did you just say it being across the street? It’s across the street from their current home? MS. EBOTOKE : (Inaudible). Exactly. DAVE : Yeah, so no, so he … he’s … he may have a bed there. I would imagine that it’s not furnished. MS. EBOTOKE : Uh-huh. DAVE : Okay. MS.

EBOTOKE : Especially where it’s major renovations like … DAVE : So then right … so realistically this is what a lot of people say, yeah, he’s going to … they … they get, you know, they think that just because they’re going to be there every day means that they’re living there and that’s … that’s not living there. Living there is living there. MS. EBOTOKE : Uh-huh. [Emphasis added] [ 83 ] Before continuing, Mr. Dunbar asked, “Now, just pausing there, you agree with me that’s exactly what Sarah O’Brien told you, at the outset, was the reason the property wouldn’t be vacant, right?” Ms. Ebotoke agreed.

Cross-examination continued: MR. DUNBAR : Okay. And so Dave goes on to say, “So you got your TV, you take your groceries there, you’re doing your laundry there, all this good …” And Dave says, “… actually a fully furnished house is living there.” MS. EBOTOKE : Exactly. MR. DUNBAR : So, back to what TD says about furnishings not mattering, I guess Dave is saying on this call to you that a fully furnished house to him is living there. MS. EBOTOKE : That’s exactly what I said, too. To you. MR. DUNBAR : Okay.

And Dave says, “But just taking a bed, you know, and being there well, you know, overnight, it would still be considered not occupied.” That’s what he says. MS. EBOTOKE : Yes. MR. DUNBAR : Alright. So, effectively, what Dave has told you is that a lot of people think that living in a property is being there every day. MS. EBOTOKE : Okay. MR. DUNBAR : That’s what he says, right? Sorry, do you agree with me that that’s what he says in that paragraph, starting at 4? He says, “… that’s what a lot of people say … they think that just because they’re going to be there every day means that they’re living there”? MS.

EBOTOKE : Yes. MR. DUNBAR : That’s what he says, okay. So a lot of people think that, and that’s not living there, right? MS. EBOTOKE : Yes. MR. DUNBAR : And, just flipping ahead then, to when you go back on the phone with Ms. O’Brien, at page 36. And this is where, y’know, the renovations, are they going to renovate, are they not going to renovate, that’s material to you because it changes the form you’ve gotta deal with, right? On your end? MS. EBOTOKE : The whole procedure, yes.

MR. DUNBAR : The procedure. And so, you say that so much at line 2, “The only thing that is kind of getting us held back is that renovation side of things.” And then Ms. O’Brien says, “We don’t know when we’re going to start the renovations so don’t even like … you can just take that out of there. We’re going to live in the house for now so … when we start the renovations we can talk to you guys about it. It’s not even on like our radar right now, like it’s an eventual thing.” So she’s saying the very thing that Dave has just told you people are… misapprehend… living in the property, right?

She says “we’re going to live in the house for now.” MS. EBOTOKE : Yeah, so they’re living there. MR. DUNBAR : And Dave just had told you that a lot of people think living in the house means visiting there every day, right? MS. EBOTOKE : But she didn’t say that in that statement. She said, “We will be living there right now.” MR. DUNBAR : Okay. Suffice to say, you didn’t go back to Ms. O’Brien and say, “Dave just told me … what does living there mean to you? What do you think living there is?” MS. EBOTOKE : So I have to question every client who asks … says that we’re living there, what does that mean to you? MR.

DUNBAR : Well no. I’m suggesting you didn’t have any conversation with her about what it meant. MS. EBOTOKE : There was no reason to ask that question of what it meant to her. MR. DUNBAR : Okay. And there was no reason to follow up and say, “Just so you know, living there isn’t even going to be sleeping there with a bed, according to us”? MS. EBOTOKE : It’s like me saying to someone, “Just so you know, because you have a car, you can tow something behind it, too.” There is no need to have that conversation if she clearly stated to me that they’re living there, and they will let us know if anything changes. MR.

DUNBAR : Okay, but that hasn’t happened. Anything changing is down the road, that hadn’t happened at this point. MS. EBOTOKE : Exactly. MR. DUNBAR : Okay. So, at this point in time, you’ve been told Sarah thinks visiting there every day means the property’s not vacant. Right? We’ve been over that. MS. EBOTOKE : What do you mean? MR. DUNBAR : That’s what she said to you … she said that, we can go back to the transcript but she … MS. EBOTOKE : No no, restate your question, I don’t understand your question. MR. DUNBAR : I’m just making sure we’re on the same page.

Sarah has told you that the property won’t be vacant because she’s going to visit there every day, right? MS. EBOTOKE : Yes. MR. DUNBAR : And she said her husband is going to move a bed and stuff like that in. MS. EBOTOKE : Yes. MR. DUNBAR : She never told you, “We’re going to have a fully furnished house.” MS. EBOTOKE : No, but then she said, “We’re going to renovate.” So that completely changed the whole topic altogether, and the procedure altogether. MR. DUNBAR : I recognize it’s in your ques … but if you could just answer that one question.

She didn’t tell you that they were going to move all their furniture into the house, right? MS. EBOTOKE : Not before Dave, no. … MR. DUNBAR : And so you didn’t go back to her and say, “You’ve gotta move all your furniture in, according to Dave”? MS. EBOTOKE : No. MR. DUNBAR : And Dave has just told you a bed and staying there overnight is not enough. And that’s the other thing that you’d discussed with Sarah about her plans. And you didn’t go back to her and say, “That’s not enough either”, right? MS. EBOTOKE : Okay. Yes. [ 84 ] Mr.

Dunbar then reviewed the following portion of the transcript: DAVE : Yeah, now you still need to ask the questions just to confirm. Just a bed is not living there. MS. EBOTOKE : Uh-huh.

DAVE : If that’s all it is, then you … if it’s just a bed and he’ll be there every, you know, sleeping there every night … MS. EBOTOKE : Because to be honest I already had this argument almost with her because I asked and had said, Are you guys going to move everything in there? Well, it’s across the street. Because she won’t answer me. I said, Well, I understand but are you guys going to move in there? Well my husband is. I said, Are you guys going to put furniture in there? Well a bed. I said … [ 85 ] Ms.

Ebotoke agreed that she never actually asked, “Are you guys going to move everything in there?” When asked whether the transcript showed any question that Ms. O’Brien refused to answer, she replied, “Not directly.” Mr. Dunbar pointed out that Dave said, based on the information Ms. Ebotoke had given him about the husband moving in and the bed, “That’s not living there then.” When it was put to her that she never went back and shared that information with Ms. O’Brien, Ms. Ebotoke agreed. [ 86 ] It was suggested to Ms. Ebotoke that Ms.

O’Brien’s answers to her questions – her “vagueness” – was consistent with her not knowing what she and her husband planned to do with the Property. Ms. Ebotoke initially disagreed, but changed her response to “yes” after she was referred to her discovery evidence on the point. She agreed that she did not tell Ms. O’Brien, at any point, that her coverage could be affected by her plans for the Property, nor did she tell her that it was important who sleeps in the Property and how often. [ 87 ] Ms. Ebotoke confirmed that she told Ms.

O’Brien to advise them of any future changes, including leaving the home vacant, on a single occasion during the call. She agreed that she did not tell Ms. O’Brien what “vacant” meant, or that she was wrong when she said the Property would not be vacant because she would be visiting it every day. [ 88 ] Ms. Ebotoke was then taken to item number 70 on the Homeowner Quoting Procedure, which states: For customer moving to new location, verify the occupancy of current location; if not already discussed. [ 89 ] Ms. Ebotoke said she did not need to ask Ms. O’Brien about the occupancy of the current location because Ms.

O’Brien had already told her that she would be occupying the existing home while they attempted to sell it, and Dr. O’Brien would be moving into the Property. [ 90 ] Applicants’ counsel provided Ms. Ebotoke with a copy of TD Insurance’s Underwriting Manual, which refers to both “vacant” and “unoccupied” residences. Ms. Ebotoke explained that the two terms are different, and that the difference relates to the insured’s intent. She provided the example that if she left her home to go to Florida for six months, but intended to come back, the property would be unoccupied, not vacant.

She said, “Vacancy is leaving and not intending to come back.” [ 91 ] Near the end of Ms. Ebotoke’s cross-examination, Applicants’ counsel played a portion of the recording of her telephone conversation with Dr. O’Brien that occurred several weeks after the loss. In it, Ms. Ebotoke explained to Dr. O’Brien that coverage for almost every peril is excluded when a property is vacant. The only perils covered are lightning, fire, and explosion. When it was put to her that she did not have any conversation with Ms. O’Brien about the vacancy exclusions, Ms. Ebotoke agreed. Ms.

Ebotoke’s cross- examination concluded as follows: MR. DUNBAR : Now, as of the date of your discovery, Ms. Ebotoke, my understanding was that you had changed your process? MS. EBOTOKE : Yes. MR. DUNBAR : And so you stayed … to give the court some context, you stayed in your role with TD and were still in that role as of the date of your discovery in September 2020? MS. EBOTOKE : Yes. MR. DUNBAR: But recognizing you’d been in it for almost two years, at that point in time. MS. EBOTOKE : Yes. MR.

DUNBAR : Now what you told me is, you then, at least as of September 2020, asked customers, “Would the home be unoccupied for any period of time?” MS. EBOTOKE : That’s our new policy question. MR. DUNBAR : Okay. And you told me at discovery that that was something you had learned from doing your job for a longer period of time? MS. EBOTOKE : Yes, but also it became part of our … like the steps that we have now, that would be part of the question. MR. DUNBAR : And if fact …exactly. You say “now”, but you’re no longer with TD right?” MS. EBOTOKE : No, but my brother still is, so … (laughs) MR.

DUNBAR : And so you told me that TD had in fact modified the procedure to start asking that question? MS. EBOTOKE : Yes. Matthew Pike [ 92 ] Matthew Pike is a Senior Specialist, Complex Claims with Security National, which is part of TD Insurance. He has been in

that position since 2014. Mr. Pike has worked for TD Insurance in some capacity since 1999. [ 93 ] In his affidavit, Mr. Pike explained that he is responsible for handling and adjusting property damage claims arising from policies underwritten by TD Insurance, within his granted authority. [ 94 ] Mr. Pike was assigned to investigate a loss reported by Ms. O’Brien on January 1, 2019, regarding water damage that occurred at her insured property at 6262 Oakland Road. At the time of Mr.

Pike’s assignment, FGS had been dispatched to the Property on an emergency basis to mitigate the loss, which included providing temporary heat to the Property. [ 95 ] Mr. Pike attended the Property on January 2, 2019, to conduct an initial site visit. He took numerous photographs, which he attached as an exhibit to his affidavit. Mr. Pike stated: 9. As demonstrated in the photographs, I observed the Property to be completely devoid of any furnishing or personal effects that would be necessary for occupancy of the Property, save one sofa in the living room. 10.

Specifically, there was no other furniture anywhere in the Property, no clothing, no personal items in any of the bathrooms, on television or any other appliances, no items in the kitchen drawers or shelves, and the fridge was completely empty and cleaned out, as was the dishwasher and the garbage bins. [ 96 ] During his site visit, Mr. Pike was advised by representatives of FGS that water inside the cast iron radiators which heated the home had frozen, causing water to escape from the radiator system.

Every radiator on the Property’s second level had ruptured, as well as at least three radiators on the main level. The water damage was present throughout all three levels of the Property. [ 97 ] Mr. Pike said he met with Sarah O’Brien and obtained a statement from her with respect to the circumstances surrounding the loss. He attached a

summary of the information obtained from Ms. O’Brien as an exhibit to his affidavit. He said he explained to Ms. O’Brien that TD Insurance’s investigation of the claim did not constitute a waiver of its right to ultimately deny coverage. Ms. O’Brien agreed to sign the non-waiver agreement, which was also attached as an exhibit to Mr. Pike’s affidavit. [ 98 ] Based on his observations of the Property and the information provided by Ms. O’Brien, Mr. Pike determined that the Property was vacant at the time of the loss pursuant to the definition of vacancy in the Policy.

He said the Policy excludes coverage for water damage occurring while the building is under construction or vacant, even if permission for construction or vacancy has been granted by TD Insurance. Accordingly, he said, he determined that there was no coverage available under the Policy for the water damage that occurred at the Property. [ 99 ] On January 4, 2019, Mr. Pike called his supervisor, Kevin Law, Group Manager for Complex Claims, Eastern Canada at Security National to discuss the claim. He relayed the results of his investigation and coverage analysis to Mr. Law, and Mr.

Law agreed that coverage for the loss was not available. Immediately following this conversation, Mr. Pike called Ms. O’Brien to advise that coverage would be denied for the claim. He explained to her that their review of the matter confirmed that coverage was placed based on the information she provided. He further explained that since the Property was vacant there was no coverage available for water damage, and noted that this would be the case whether or not a vacancy permit was in place. Mr. Pike advised Ms.

O’Brien that a letter would be forthcoming confirming the denial of coverage in writing. [ 100 ] On January 7, 2019, Mr. Pike sent a letter to the O’Briens via registered mail confirming the denial of coverage. On January 15, 2019, he received an email from Dr. O’Brien requesting clarification on the status of the claim and the continuation of FGS’s remediation work at the Property. Mr. Pike responded by email on January 16, 2019, and attached a copy of the denial letter that had been sent by registered mail. He advised Dr.

O’Brien that the letter reiterated the coverage denial decision that had been previously communicated to Ms. O’Brien on January 4, 2019. With respect to the remediation services, he confirmed that TD Insurance would cover the cost of the work completed from the initial assignment on January 1, 2019 to January 4, 2019, when Ms. O’Brien was advised of the denial of coverage. [ 101 ] On cross-examination, Mr. Pike confirmed that it was his decision to deny coverage. After being taken to the definition of “vacant” in the Policy, Mr. Pike was asked about the words, “regardless of the presence of furnishings”: MR.

DUNBAR : So you’ll see looking at that definition, the first line says “Vacant refers to the circumstance where, regardless of the presence of furnishings” … So just stopping there, is it TD’s position that it does not matter what is in the house? MR. PIKE : That’s what it says, yes. Regardless of the presence of furnishings. MR. DUNBAR : So you could have a fully furnished house, and it’s still vacant? MR. PIKE : If you’ve left, yes. MR. DUNBAR : So in other words, you’re not looking at that at all. Doesn’t matter if it’s a couch, a bed, a desk – it’s not important to you? MR. PIKE : No, it’s not. MR.

DUNBAR : So when… if you look at paragraphs 9 and 10 of your affidavit, you’d agree with me that you’re looking, you’re talking about furnishings, personal effects, other furniture, that’s what those paragraphs are talking about? In those paragraphs? That’s what you observed. MR. PIKE : That is correct, yes. [ 102 ] Mr. Pike agreed that the phrase “taken up residence” (part of the definition of “vacant) is not defined in the Policy. He confirmed

that there is nothing in writing, internal to TD Insurance, that assists in determining the meaning of the phrase, and that nothing was given to the O’Briens to advise them of how TD interprets it. [ 103 ] Mr. Pike testified that he relies on his own judgment in determining what taking up residence is, and that his judgment is based on his work experience in the insurance industry and his knowledge of claims handling. He agreed that, as far as he was aware, neither of the O’Briens had similar claims handling or insurance experience. [ 104 ] Applicants’ counsel directed Mr.

Pike to a transcript of his discovery evidence concerning how he determines whether a person has “taken up residence” in a Property. That evidence was as follows: Q. So how, then, do you decide if someone has taken up residence or not? A. If there’s evidence that they actually live there, they sleep there, they cook there. They go to work, and they come home and stay there all night, and they get up and they go to work the next working would be – then you’re taking up residence. I mean, simply coming and sitting there and working for a couple hours is not taking up residence.

Pre-COVID, I would go to a coffee shop and do work there but I certainly didn’t take up residence there. [ 105 ] Mr. Pike testified that he still has the same understanding of “taking up residence.” He agreed that TD Insurance does not tell insureds that information. [ 106 ] Mr. Pike was then asked about things he does not consider material to whether a house is or is not vacant: MR. DUNBAR : You don’t consider whether the insureds check on the house, at all? MR. PIKE : In terms of it being vacant? No. MR. DUNBAR : Doesn’t matter to you at all? MR. PIKE : No. MR.

DUNBAR : You don’t consider whether the house was being visited by the insureds. That’s not something you consider? MR. PIKE : No. MR. DUNBAR : You don’t consider whether the heat’s on? MR. PIKE : No. MR. DUNBAR : You don’t consider whether the property owners might live nearby? MR. PIKE : No, that’s not a factor we consider. MR. DUNBAR : Or across the street, as the O’Briens did? MR. PIKE : No. [ 107 ] Mr. Pike was referred to the following portion of the transcript of the phone call between Ms. O’Brien and Ms. Ebotoke: MS. O’BRIEN : Okay. Well it’s not really vacant because we’ll go over every day. MS.

EBOTOKE : Uh-huh. MS. O’BRIEN : Because we’re going to renovate. MS. EBOTOKE : Okay. MS. O’BRIEN : So it won’t really be vacant in sense that noone will be in it. Someone will be in it every day. [ 108 ] Mr. Pike agreed that Ms. O’Brien’s explanation for why the Property would not be vacant was “completely wrong”, and not consistent with how TD Insurance interprets the definition of vacanc

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