Fridays with Rogers Partners

At our weekly meeting, Amanda Chiu discussed the recent decision of the Ontario Court of Appeal in Green Rise Foods Inc. v. N.V. Hagelunie, 2026 ONCA 334. The decision provides important guidance on “proximate cause” in insurance coverage disputes, particularly where multiple events contribute to a single loss and the application of coverage exclusions depends on how those causes are characterized.

Facts and Procedural History

Green Rise’s tomato crop was destroyed after a defective boiler emitted excessive carbon monoxide into its greenhouses and a faulty monitor failed to detect it. The insurer denied coverage based on the policy’s exhaust gas exclusion and machinery breakdown provisions. The motion judge found that carbon monoxide was the “direct cause” of the loss, held that the exhaust gas exclusion barred coverage, and alternatively found that machinery breakdown placed the loss outside the initial grant of coverage.

Analysis 

The Court of Appeal held that the motion judge erred by treating the carbon monoxide poisoning as decisive simply because it was the most immediate cause of the crop loss. The Court clarified that, in insurance coverage disputes, “proximate cause” means the effective or substantive cause, not the cause closest in time. Relying on Boiler Inspection & Insurance Co. of Canada v. Sherwin-Williams Co. of Canada Ltd., 1951 CanLII 306 (UK JCPC), the Court confirmed that causation is assessed on “common sense principles” by asking what was “in substance the cause” of the loss. The analysis therefore had to consider not only the excessive carbon monoxide, but also the malfunctioning boiler and monitor, and their roles in producing the damage.

The Court further held that, where several events contribute to a loss, the coverage analysis must first determine whether there was a chain of causation, with one effective cause leading to the loss, or concurrent causes, with multiple effective causes producing an indivisible loss. Under the concurrent-cause framework discussed in Derksen v. 539938 Ontario Ltd., 2001 SCC 72, coverage is not necessarily defeated simply because one contributing cause may fall within an exclusion, particularly where another effective cause may be covered and the policy does not clearly displace coverage in that situation. The “effective cause or causes of the loss” would determine coverage, including any exclusion or exception, and further findings were required on the boiler and monitor malfunctions before that analysis could be completed.

Conclusion and Takeaways

The Court of Appeal allowed the appeal, set aside the summary judgment and costs order, and remitted the action for trial.  The decision underscores that causation in insurance coverage disputes is a substantive inquiry, not a mechanical exercise focused on the event closest in time to the damage. In multi-event losses, courts must determine whether the loss resulted from a single effective cause or concurrent effective causes before applying policy exclusions and exceptions.