The Supreme Court of Canada has written the final chapter in one of the most important title-insurance cases of this generation.
The story began when Paul and Stefanie Macdonald bought a Toronto house that had been badly renovated by a prior owner.
During their own renovations, the couple discovered that load-bearing walls had been removed without the required building permits. As a result, the second floor of the house became unsafe to use.
Eventually the City of Toronto issued a work order requiring remedial steps to support the unsafe floors.
The Macdonalds did the work themselves at a cost of $75,000 and made a claim for the costs under their insurance policy with Chicago Title. The policy provided coverage to the owners if the title was unmarketable, which means that a buyer could refuse to complete a purchase agreement.
Chicago Title denied the owners’ claim on the basis that it was not covered by the policy.
In October 2014, the Macdonalds asked the Superior Court for a declaration that they had coverage under the policy for the remedial work and repairs, and that the insurer was obligated to compensate them.