Summary
The Supreme Court rejected an insurance claim for demolition damage because the policy excluded destruction by order of a lawfully constituted authority. The insured’s own pleadings established that the Municipal Corporation carried out the demolition. The exclusion concerned action under that authority, rather than a prior determination that its demolition was lawful. The separate civil suit challenging the municipal action remained unaffected.
Issues
- Whether the municipal-demolition exclusion applied despite non-production of a formal demolition order and the insured’s challenge to legality of the action.
Held
- The insurer bore the burden of establishing the exclusion, and genuine ambiguity would favour the insured. Here the admitted pleadings established that the demolition was carried out under the Municipal Corporation’s authority; the absence of a produced formal order did not justify allowing the claim. (¶¶ 10, 11, 14)
- In this policy, “by order of” meant under the authority of government or a lawfully constituted authority. The Municipal Corporation’s statutory status and the admitted demolition brought the loss within the exclusion. (¶¶ 12, 13, 14)
- The exclusion was unambiguous. Principles resolving genuine uncertainty against the insurer could not be used to manufacture ambiguity where the policy’s scope was clear. (¶ 15)
- The Court decided insurance coverage alone and did not determine the validity of the municipal demolition. The insured’s civil suit against the Corporation remained open on its merits. (¶¶ 9, 17)
Result
Insurer’s appeal allowed; High Court judgment and insurance award set aside, and consumer complaint dismissed. Insured’s appeal dismissed. No costs; merits of the separate civil suit unaffected.