Executive Summary: Key Legal and Evidentiary Issues

• Forgotten Treasures International Inc. (FTI) brought claims for breach of contract, negligence, and breach of fiduciary duty arising from the denial of an insurance claim for two stolen sculptures valued at over $1,000,000 and approximately $50,000.

• Central to the coverage dispute was the insurance policy's two-person accompaniment term, which excluded coverage for losses suffered while the insured property was in transit unless accompanied by a qualifying second person.

• Both groups of defendants — insurer Lloyd's Underwriters (with Endeavour Insurance Services Limited) and broker HUB International — applied to dismiss the action for want of prosecution after a total delay of over six and a half years from commencement.

• Applying the three-part Giacomini framework, the chambers judge found the delay inordinate and approximately the first five years inexcusable, but nonetheless declined to dismiss the action, describing it as a "close call."

• On appeal, the defendants argued the chambers judge made a palpable and overriding factual error in finding no evidence the defendants took issue with the pace of litigation until the summer of 2024, and also contended she gave undue weight to the absence of defence pressure while failing to properly treat the absence of public importance as a factor favouring dismissal.

• The Court of Appeal dismissed all three grounds of appeal, holding the chambers judge made no reviewable error in the exercise of her discretion.

Facts of the case

Forgotten Treasures International Inc. (FTI) organized a "treasure hunt" campaign to raise funds for cancer research. Among the prizes were two eagle sculptures: a gold one valued at over $1,000,000 and a silver one worth approximately $50,000. FTI obtained insurance for these sculptures through Lloyd's Underwriters, with the policy brokered through HUB International Canada West ULC, HUB International Limited, and their representative, Mark Loewen (collectively "HUB").

On May 29, 2016, FTI's principal, Mr. Shore, had the sculptures in his possession when he alleges he was attacked by robbers who stole them as he was placing them in his car. He further alleges that at the time, he was accompanied by another person, Ms. Merx, in compliance with the policy's two-person accompaniment term. On August 12, 2016, FTI submitted a claim for loss. Lloyd's retained an independent adjuster, Mr. Mancuso, to investigate. During his investigation, Mr. Mancuso obtained a statement from Ms. Merx calling into question whether she fit within the definition of the accompaniment term and whether she was in fact accompanying Mr. Shore at the time of the robbery. On October 12, 2016, Lloyd's denied FTI's insurance claim.

Policy terms at issue

The insurance policy included a two-person accompaniment term, which excluded coverage for losses suffered when the insured property was "in transit", unless the property was "in the close personal custody" of the insured party, together with an officer, independent contractor, designated employee, or representative of the insured party. Whether Ms. Merx satisfied this definition — and whether she was actually accompanying Mr. Shore at the time of the alleged robbery — formed a central factual dispute underlying the claim.

Litigation history and the dismissal applications

On May 25, 2018, FTI filed a claim in the Supreme Court of British Columbia against Lloyd's and HUB. The claim against Lloyd's alleged breach of contract for denial of coverage; the claim against HUB alleged negligence, breach of contract, and breach of fiduciary duty in failing to arrange effective insurance. The litigation history that followed was protracted. FTI obtained a default judgment against Lloyd's on December 6, 2018, which was set aside on April 3, 2019. FTI's appeal from that decision was dismissed by the Court of Appeal on November 30, 2020 (2020 BCCA 341). After this, FTI served a list of documents in June 2021 and filed an amended notice of civil claim in January 2023. A proposed summary trial application in the spring of 2023 went nowhere after counsel for Lloyd's indicated unavailability until November 2023. The issue was not raised again until August 2024. On October 30, 2024, Lloyd's and HUB confirmed their intention to bring applications to dismiss the action for want of prosecution, with Lloyd's filing its notice on December 10, 2024, and HUB on December 16, 2024. The applications were heard before the chambers judge on January 27, 2025.

Reasoning and analysis

The chambers judge applied the three-component framework reformulated by the Court of Appeal in Giacomini Consulting Canada Inc. v. The Owners, Strata Plan EPS 3173, 2023 BCCA 473: first, whether the delay is inordinate; second, whether it is inexcusable; and if both are satisfied, third, whether it is in the interests of justice to allow the action to proceed. The chambers judge found the total delay of six and a half years inordinate and the first approximately five years inexcusable — much of it attributable to a misguided attempt to preserve the default judgment against Lloyd's. However, she found it was nonetheless in the interests of justice to allow the action to proceed, describing her conclusion as a "close call."

In assessing the interests of justice, the chambers judge considered multiple factors, including prejudice to the defendants, the length and stage of the litigation, the impact of the delay on the defendants' professional interests, the context in which the delay occurred, the reasons for the delay, and the merits of the action. She found that while several factors favoured dismissal, they were given limited weight — for instance, she found the prejudice to the defendants in defending the case was diminished by the availability of contemporaneous documentation and the defendants' own failure to seek examinations for discovery or deliver a list of documents. Critically, she found that the defendants had put no pressure on FTI to proceed until the summer of 2024, which weighed against dismissal.

On appeal, the three grounds advanced by the appellants were: (1) that the chambers judge made a palpable and overriding factual error in finding no evidence the defendants took issue with the pace of litigation until the summer of 2024; (2) that she gave "singular" and undue reliance on the absence of defence pressure, thereby giving inadequate weight to other relevant considerations; and (3) that she erred in principle by treating the absence of public importance as a neutral factor rather than one favouring dismissal. Justice Riley, writing for a unanimous panel that included Chief Justice Marchand and Justice Abrioux, rejected all three grounds.

On the first ground, the Court found the contested finding was not palpably wrong — the April 2023 email exchange showed Lloyd's counsel resisting FTI's summary trial efforts rather than pressuring FTI to advance the action, and no deadlines or concrete steps were set out. Even accepting some error, it would not have been overriding given it was only one of many considerations. On the second ground, the Court found the chambers judge engaged in a nuanced, qualitative balancing of all relevant factors — not a simple arithmetic exercise — and that her reasons did not reveal any misdirection or failure to give due consideration to the factors bearing on the interests of justice analysis. On the third ground, the Court held that the presence of genuine public importance may weigh against dismissal, but its absence does not logically require the opposite conclusion; where broader issues of public importance simply do not arise, the court may treat the factor as having no bearing on the analysis at all.

Ruling and outcome

The Court of Appeal dismissed both appeals. The chambers judge's discretionary decision declining to dismiss FTI's action for want of prosecution was upheld in its entirety. The appellants failed to demonstrate any reviewable error. No monetary award or costs order is specified in this decision; the outcome is the survival of FTI's underlying action, which is permitted to proceed to resolution on the merits. FTI was the successful party on appeal.