Executive Summary: Key Legal and Evidentiary Issues

• Scope and timing of an insurer’s duty to defend under article 2503 C.c.Q. when the insurer purports to annul the policy ab initio for alleged misrepresentation and increased moral risk.
• Procedural propriety of suspending a Wellington motion under article 49 C.p.c. pending resolution of a separate coverage/nullity action (the “Lloyd’s file”).
• Interaction between the summary nature of a Wellington motion and a more extensive merits trial on policy validity, including concerns about “a trial within a trial.”
• Application of the Landry c. Chélin factors to decide whether there is sufficient linkage, dependency, proportionality, and risk of contradictory judgments to justify a stay.
• Extent to which an interlocutory Wellington ruling on a “simple possibility” of coverage may coexist with, and later be revisited in light of, a final judgment on policy nullity.
• Availability of later recourse for an insurer (including possible recovery of defence costs) if it is compelled to defend and the policy is ultimately declared null.

Facts of the case
In March 2023, a fatal fire broke out in an immovable owned by Émile Benamor. As a result of this incident, several civil liability actions seeking damages totaling several millions of dollars were filed against him. These underlying claims allege that Benamor bears responsibility for the loss arising out of the fire. In the background stood a liability and property insurance policy (the “Policy”) subscribed at Lloyd’s, for which Benamor sought coverage and, crucially, a defence in the civil suits.

Insurance policy and alleged nullity
In September 2023, after being notified of the fire and conducting an investigation, Lloyd’s (represented by its attorney-in-fact, Marc Lipman) advised Benamor that it was annulling his Policy ab initio. The insurer based this position on alleged misrepresentations and omissions by Benamor, particularly in relation to his knowledge of the unlawful use of the building for short-term rentals, as well as an alleged increase in moral risk associated with that use. On that footing, Lloyd’s took the position that the Policy was null and that no coverage existed. In June 2024, Benamor responded by instituting an action in damages against Lloyd’s and other insurers, challenging the annulment of his coverage (the “Lloyd’s file”). In its defence, Lloyd’s formally asked that the Policy be declared null, again invoking misrepresentation, omission, and elevated moral risk as grounds for nullity. The validity of the Policy thus became the central substantive issue in the Lloyd’s file.
In parallel, the decision discusses the statutory duty of the insurer under article 2503 of the Civil Code of Québec, which requires an insurer to take up the defence of any person entitled to the benefit of the insurance and to assume legal costs and expenses over and above the insurance proceeds. The Court of Appeal reiterates that the duty to defend is distinct from the duty to indemnify and is triggered where there is at least a “simple possibility” that the claim is covered on the face of the policy wording and the pleadings, even if coverage is contested on the merits.

Procedural history and Wellington motion
In September 2024, the various civil liability actions stemming from the fire were joined to be heard together on common evidence. In January 2025, within those joined civil proceedings, Benamor filed a Wellington motion to compel Lloyd’s to “prendre fait et cause” for him—in other words, to defend him in the underlying liability suits pursuant to article 2503 C.c.Q. Faced with this motion, Lloyd’s sought a suspension of the Wellington proceedings. It argued that, because the nullity of the Policy was already in issue in the Lloyd’s file, the Superior Court should exercise its discretionary power under article 49 of the Code of Civil Procedure to stay the Wellington motion until a final judgment on policy validity was rendered in that separate action. In the alternative, if the stay were refused, Lloyd’s sought permission to file extrinsic evidence in opposition to the Wellington motion, because its nullity argument depended heavily on factual elements unlikely to appear on the record of the civil liability actions.
The Superior Court heard the suspension request on 15 May 2025 and granted it the next day in oral reasons (subsequently rectified on 30 May 2025). The judge undertook a detailed review of the Wellington jurisprudence, emphasizing a distinction between the more familiar case where an insurer simply denies that the pleaded facts fall within the coverage grant, and the present situation where the insurer invokes nullity of the policy itself. Relying on this distinction and on the fact that policy nullity was already squarely at issue in the Lloyd’s file, the judge turned to the framework for staying proceedings, including factors later summarized by the Court of Appeal in Landry c. Chélin. The Superior Court concluded that there was a strong link between the two sets of proceedings, that the outcome of the Lloyd’s file would heavily influence the Wellington motion, that avoiding duplication and the risk of inconsistent judgments favoured a stay, and that proportionality considerations also supported suspending the Wellington motion until the coverage/nullity action was decided. On that basis, the Superior Court ordered the suspension sought by Lloyd’s.

Court of Appeal’s legal analysis
Benamor obtained leave to appeal and advanced three main grounds in the Court of Appeal. First, he argued that the Superior Court erred in law in using article 49 C.p.c. to suspend the exercise of his right to specific performance of the insurer’s statutory obligation to defend under article 2503 C.c.Q. Second, he maintained that the judge had misstated the threshold applicable to a Wellington motion by effectively requiring him to prove entitlement to a defence on the merits, rather than merely establishing the “simple possibility” of coverage. Third, he said the judge misapplied the Landry c. Chélin criteria for suspension.
The Court of Appeal rejected the first argument in principle, agreeing that article 49 C.p.c. can be used to suspend, without altering, a party’s substantive right; the judge had not created a new procedural rule nor modified article 2503 C.c.Q., but only deferred its enforcement. The core error lay elsewhere.
On the second and third grounds, the Court of Appeal revisited the Landry c. Chélin factors: (i) the existence of an undeniable link between two proceedings; (ii) whether the fate of one depends, to a large extent, on the fate of the other; (iii) proportionality; (iv) the risk of contradictory judgments; and (v) the risk of proliferating unnecessary procedures and costs. While noting that not all factors need to be present, the Court stressed that a suspension is more readily granted when several are clearly met.
The Court accepted that there was a manifest link between the Lloyd’s file and the Wellington motion, since both ultimately turned on the Policy’s validity. However, it held that the Superior Court had erred by focusing almost exclusively on the judgments to be rendered on the merits in both actions and by downplaying the interlocutory nature of a Wellington motion. A Wellington ruling is given “en cours d’instance” and is meant to be a summary mechanism to secure an insurer’s defence obligation where there is a simple possibility of coverage. The Court found that the proportionality analysis was skewed because it compared full trials on the merits in each proceeding, rather than weighing Benamor’s right to an immediate interlocutory determination on the duty to defend. By treating the Lloyd’s file as the more straightforward route to resolve nullity and prioritizing it, the judge effectively deprived the insured of the core benefit of a Wellington motion—timely specific performance of the defence obligation.
Similarly, the Court of Appeal held that the Superior Court had overstated the risk of contradictory judgments. A Wellington decision is rendered on a prima facie, summary basis and does not bind the judge who later rules on policy nullity at trial. That later judge remains free to assess the evidence afresh and to conclude that the Policy is, or is not, null, regardless of any earlier interlocutory finding about the simple possibility of coverage. Thus, allowing the Wellington motion to proceed does not create a real risk of irreconcilable final judgments.
The Court acknowledged that Lloyd’s concerns were not frivolous: a nullity defence supported by evidence outside the civil liability record is more complex than a straightforward “no coverage” argument, and an insurer compelled to defend might ultimately be found never to have owed coverage. However, the Court emphasized that these concerns do not override the insured’s right to bring a Wellington motion without undue delay. It also noted that Lloyd’s objections were, in part, premature, because its request to file extrinsic evidence in opposition to the Wellington motion had yet to be decided. Lloyd’s might still be able to present sufficient prima facie evidence in that context. Moreover, the insurer’s duty to defend is “punctual” and can be revisited if new facts emerge or if a subsequent decision in the Lloyd’s file later eliminates the possibility of coverage. In such a scenario, the insurer may renew its contestation of the duty to defend, or even seek reimbursement of defence costs if the Policy is definitively declared null.

Ruling and outcome
In light of these errors, the Court of Appeal concluded that the criteria from Landry c. Chélin were not met. Although there was a clear connection between the two sets of proceedings, the outcome of the Wellington motion did not “to a large extent” depend on the final judgment in the Lloyd’s file. There was no genuine risk of contradictory judgments, given the interlocutory and prima facie nature of a Wellington ruling, and allowing both proceedings to progress in parallel was compatible with proportionality and sound case management. The Court also pointed out that nothing precluded the adoption of later case management measures to address Lloyd’s procedural concerns or the possibility of a subsequent claim by Lloyd’s for reimbursement of defence costs if the Policy were ultimately found null.
Accordingly, the Court of Appeal allowed Benamor’s appeal, set aside the Superior Court’s interlocutory judgment of 16 May 2025 (as rectified on 30 May 2025), and rendered the decision that ought to have been given. It dismissed Lloyd’s application to suspend the Wellington motion and ordered that this dismissal carry costs. As a result, the successful party in this appellate decision is Émile Benamor, who secured the right to have his Wellington motion heard without further suspension, together with an award of legal costs in his favour; however, the judgment does not specify any exact monetary amount for those costs, and it does not determine any damages or total financial recovery on the underlying civil claims or coverage dispute, so the total monetary award in his favour cannot be quantified from this decision alone.