Boris and Natasha Badenov eloped from Russia to Canada in 2010. They got married in Vancouver and settleddown.BorishadbeenasuccessfulvodkadistillerinRussia,andhewasabletopayforahousein cash. But Boris had left Russia under a cloud: he owed money to his partners in the business and was afraid that they might be able to find him. So when it came time to close the house deal, Boris had title in the house put in Natasha's name only.Boris is a prudent man, so he protected himself by having Natasha sign a trust agreement which said that she held title in the house as a trustee for Boris alone.

NatashaalsosignedavalidBCmarriageagreement,whereshesurrenderedanyclaiminthematrimonial home if they divorced.

BothoftheBadenovshavelimitedEnglish.Whentheyboughtthehouse,theycalledtheirfriendVladimir Sonovavitch to help them get insurance. Vladimir had just landed a job as an insurance agent, and he was happy to be bringing his own client to the firm that hired him.

Before the house deal closed, Vladimir met with Boris and Natasha to complete the application for insurance. Because Natasha was on title, the insurance was taken out in her name alone. Vladimir translated the questions for them and then recorded their answers. One of the questions was whether Natasha had had any previous insurance claims in the past 6 years. Natasha answered No to this question,eventhoughshehadlostherhomeinRussia inafire.Shehadmadeaclaimonherinsurance, but the insurer had successfully defended her claim on the basis of arson. She explained all this to Vladimir, and he told her that since the insurer had not paid for the loss, the correct answer was No.

Turns out Boris was right to be concerned about the prospects of the marriage failing. One day while Boriswasatwork,Natashahackedhisemailaccountandfoundoutthathehadbeenhavinganumberof affairs around town. Enraged, she threw all of his belongings on the street and brought a locksmith in to change the locks. When Boris got home that night to discover the situation, he tried to break in to the house. He couldn't get into the house, but he did get into the garage. Natasha was inside but he couldn't get her to open the door to let him in.

That'swhenBorishadabrilliantidea.Hesawagasmaininthegarageanddisconnectedthelinesothat gas leaked out. He intended to scare Natasha into coming out of the house once she smelled the gas.

Once she opened the door, he intended to repair the leak and have it out with Natasha face to face. However, Boris - never the brightest of bulbs let out so much gas that he passed out.The gas kept flowingasBorisslept.Natashadidsmellthegasandgotoutofthehousejustbeforeitexploded.Boris never knew what hit him, but it was large, heavy, and moving fast.

Thehousewasdestroyedintheexplosion.Natashabroughtaclaimagainstherinsurerforthedamage. The insurer has denied the claim, arguing that:

1. Natashahadnoinsurableinterestinthe house.
2. Natasha'sincorrectansweraboutpreviousclaimsrenderedthepolicyvoid.
3. ThelosswasnotcoveredbythepolicybecauseofBoris'actions.(Importanthint:therearetwo separate interpretation issues that the wording creates)

TheapplicableSectionofthemulti-perilinsurancepolicyisSectionI,entitled"PropertyInsurance",which said in part:

We insure you for any loss or damage to the property unless the loss is excluded from coverage in the Exclusionssectionofthepolicy."You"and"your"meantheperson(s)namedasInsuredontheSchedule page and, while living in the same household, his or her husband or wife, the relatives of either or any person under 21 in their care.

IntheexclusionssectionofthePolicy,itreadsin part:

Wedonotinsurelossordamageresultingfromanyintentionalorcriminalactorfailureto act by any person insured by this policy