A B.C. Supreme Court Justice has found a Victoria Day 2007 fire that destroyed a downtown building was not deliberately set by its owner and has ordered his insurer to pay his company slightly more than $200,000 for damages.
Intact Insurance Company had denied owners Shawn and Rose Millns claim for coverage, saying the blaze that struck the Caine building at Second and Quebec was deliberately set, possibly by placing a portable heater near combustibles in a basement
storage room.
The Millns countered with expert testimony that the cause could also have been electrical arcing from a severely damaged double-pole breaker in an electrical panel also located in the storage room.
In a 61-page decision issued last week, Justice Susan Griffin sided with the Millns, finding that on balance of probabilities, the fire was accidental. Although Griffin found some of Shawn Millns's evidence was inconsistent, he had no motive to deliberately set a fire because the building was still worth more standing than burned down.
Intact had raised concerns about the fact that Shawn Millns had put one of the building's tenants up in a hotel on the night of the fire and was in the building just before the fire broke out on the evening of May 21, 2007, suggesting he wanted to burn it down without anyone inside.
Millns responded that he had previously turned the building's power off while dealing with an electrical problem and the tenant, after spending one night relying on candles for light, told Millns he wanted access to hot water and a shower and so, paid for a hotel room.
When Millns learned he had to return to Vancouver for a family matter, he went back into the building and turned the electricity back on because he did not want his other tenants, which included a tattoo parlour and a massage studio, to complain about lost business.
Shortly after Millns left for the trip back to the Lower Mainland, Prince George Fire Rescue was called to the scene, raising the possibility for Griffin that the fire was caused by an electrical fault.
While the replacement cost limit on the insurance policy was $572,000, Griffin found the building's actual value was $429,000 plus another $29,000 for office contents and rental income loss. She subtracted $312,500 paid out to mortgage debt and added $59,000 for demolition and disposal costs for a total payout of $204,000.
Shawn Millns had estimated it would cost nearly $1 million to construct a new building on the site and claimed Intact's refusal to pay compromised his ability to get financing for the work.
But Griffin found that even if the Millns were entitled to the full $572,000, they still would have been left with just $259,500 once the mortgages were cleared away and they would have needed a further $740,000 to pay for the project.
Griffin said she had no evidence a reasonable businessperson or bank would consider it worthwhile to invest $740,000 to $1 million in a commercial rental building in downtown Prince George.
"There is no evidence of a business plan, for example, to suggest that a new building would have generated sufficient rental income to pay anticipated financing costs," Griffin said in the decision.
"The fact that the Millns did not present such evidence is telling."
