When hailstones battered a Calgary home in August 2014, the owners thought their insurer would make them whole. A decade of litigation later, the Court of King's Bench of Alberta ruled against them on every count: neither the roofing contractor nor Security National Insurance had caused a drop of the water damage they attributed to them.

From hail damage to water leaks

The storm that triggered the dispute struck on August 8, 2014. Security National, which had issued the property insurance policy, confirmed the damage was covered and, thus, hired the respondent, United Roofing Inc. — one of its preferred contractors — to replace the roof. The respondent carried out the work between October 25 and 28, 2014, installing new shingles, underlayment, ridge cap, drip edge, vents, exhaust cap, flashing, limited fascia, and limited downspouts. The work did not include replacement of the roof sheathing. The respondent held no direct contract with the homeowners; it was contracted to Security National. The homeowners' deductible was $2,000; Security National would pay the remaining $7,908.32 to the respondent once the homeowners signed a Completion of Satisfaction Certificate.

Three days after the work was completed, on October 31, 2014, the homeowners reported a water leak to Security National. The respondent's project manager attended the residence the following morning with two crew members for an emergency inspection, visually inspecting both the second-storey roof and the garage roof without finding anything out of place. Over the following three months, the homeowners filed five separate claims with Security National. The insurer approved only the first — covering the original hail damage. Claims two, four, and five were denied on the ground that condensation from excessive indoor humidity, not faulty workmanship, had caused the damage. The third claim, over a broken exterior faucet allegedly struck by a piece of fascia, was treated as withdrawn. Security National then paid the respondent the outstanding balance of $7,908.29 on January 15, 2015, through an alternate process — without a signed Certificate of Satisfaction and without informing the homeowners, a decision that would later form part of the homeowners' grievances.

In late August 2015, the homeowners removed and replaced the work done by the original company through WT Roofing Inc. at a total cost of $10,983.00. The homeowners acknowledged that no leaks occurred after that re-roofing. A statement of claim was filed on August 29, 2016. The trial, heard before the Court of King's Bench of Alberta in Calgary, commenced on March 3, 2025, ran over ten days across two sittings in 2025 and 2026, and closed with argument on March 23 and 24, 2026. The decision is dated August 7, 2026.

Roofing defects or condensation?

The homeowners, who were self-represented for many years, advanced claims totalling over one million dollars. They alleged that the work done by United Roofing Inc. was defective, failing to meet industry standards and the Alberta Building Code, and that water leaked into the residence as a direct result of the respondent's poor workmanship. Specific deficiencies alleged included improper installation of drip edge, roofing felt, plumbing flashing, and step flashing, as well as disturbance of blown-in attic insulation creating a bald spot above the front bedrooms. They further alleged that Security National breached its contractual obligations under the policy, acted in bad faith in handling and denying their claims, made fraudulent or negligent misrepresentations, and was unjustly enriched through increased premiums following the denied claims.

The homeowners claimed $10,983.00 for the cost of the re-roofing, $997,479.00 for the full demolition and rebuilding of the residence, and $50,417.03 in associated expenses. They additionally sought $100,000 for mental distress arising from Security National's alleged breach of a peace-of-mind contract, $500,000 in punitive damages, restitution for unjust enrichment, and special medical treatment costs. They proposed that the appropriate date for assessment of damages was 2025, when the trial commenced.

The respondent maintained that its work was properly installed according to applicable industry standards and the Alberta Building Code 2006, which was the code in force at the time the United Work was performed. It asserted that a thorough inspection conducted on November 1, 2014, had confirmed the roof's proper installation, and that none of the alleged deficiencies — including those relating to drip edge, roofing felt, plumbing flashing, and step flashing — were present or causally connected to any water damage.

The respondent denied disturbing the attic insulation and denied ever having entered or breached the attic. It attributed the water damage entirely to condensation caused by excessive humidity generated by the homeowners themselves, pointing to factors such as the growing of tomato plants indoors, the sealing of window openings with polyethylene sheeting, and the blocking of window weeping holes.

On the contractual question, the respondent had been engaged exclusively by Security National and held no direct contract with the homeowners. It relied on that absence of privity as a basis for limiting the obligations owed to them. On the Fair Trading Act, the respondent denied any breach. It argued that its conduct — during the project and throughout the subsequent inspection — had been that of a competent, honest contractor, and that no misleading or deceptive practice had occurred.

Security National denied that any of the claims were improperly handled. It maintained that its repeated attribution of the damage to condensation was supported by multiple inspections conducted by its adjusters and its retained expert, and that its denials of Claims #2, #4, and #5 were reasonable. Security National denied bad faith, any breach of the policy, and unjust enrichment, and asserted that its payment to the respondent through an alternate process was appropriate given its independent determination that the work done by United Roofing was satisfactory.

Court points to excessive humidity

The court found that the homeowners had not proved on a balance of probabilities that any of the physical damage to the residence was caused by United Roofing’s work or by any act or omission of the respondent or Security National.

On the core question of causation, the court concluded that the most probable cause of the water damage to the front bedrooms was condensation driven by excessive indoor humidity — itself compounded by the sealing of window openings with polyethylene sheeting and the blocking of window weeping holes — together with a bald area in the attic's blown-in insulation. All these factors were the responsibility of the homeowners. The coincidence in timing between the reported leaks and completion of the building work was found not to constitute evidence of causation. The court noted that while the work done by the original roofing company may not have been perfect in every respect, none of the respondent's alleged failures were proven to be causally related to any leaks.

That finding rested in part on the limited weight given to the homeowners' principal expert. His report applied the Alberta Building Code 2014, which came into force on May 1, 2015, rather than the 2006 edition in force when the construction work was performed. He had not been informed of Security National's or the respondent's position regarding excessive humidity and condensation, nor was he aware that the homeowners were growing tomato plants inside the residence or had covered windows with polyethylene — factors he acknowledged would contribute to condensation. He was also unable to identify the location of any leaks caused by United Roofing’s work and ultimately crossed the line from expert witness to advocate for the homeowners.

As for the missing step flashing allegation, the court found that this component fell outside the respondent’s work: the scope covered neither cladding removal nor replacement, and step flashing is installed beneath cladding. There was no evidence that the respondent removed or altered any existing step flashing. None of the five separate inspections conducted by the respondent, Security National, or their representatives had noted any missing step flashing. The bald spot in the attic insulation was likewise not proven to have been caused by United Roofing’s work; there was no evidence that the respondent had ever entered the attic or breached its integrity.

The same logic extended to the garage. The court found the most probable cause of water ingress there was initially condensation spreading from the front bedrooms above, and later the sagging of batt insulation and vapour barrier that had previously separated the warmer front bedroom structure from the colder unheated garage.

Security National's handling of the file was found to be prompt and transparent at every stage: claims were opened without delay, adjusters assigned quickly, and denials communicated in plain written language with protective advice. The Claims Centre records, admitted as business records, were found to be comprehensive and contemporaneous. The allegation of tunnel-vision — that the insurer had predetermined its conclusions before inspecting — found no support in the evidence. 

The Fair Trading Act claims against Security National fell at the first hurdle: the Exemption Regulation bars the FTA's application to insurers outright. As between the homeowners and the respondent, the FTA applied — yet the evidence disclosed no breach. The payment to the respondent without a signed CSC did not rise to bad faith or oppressive conduct; Security National had independently satisfied itself that the work was complete, and the homeowners suffered no demonstrable damage from that decision. The Insurance Act allegations fared no better: no independent cause of action arose from any alleged breach of section 509, and sections 519 and 520 were left untouched by the facts.

The unjust enrichment claim was equally unavailing: no evidence established that the homeowners' premiums had been inflated above market cost, or that any absence of juristic reason had been demonstrated. Nor was either fraudulent or negligent misrepresentation proved against either defendant. With no cause of action left standing, the court turned nonetheless to quantum — addressing damages on the assumption that liability had been established.

The court determined that the appropriate date for assessment of damages was September 2015, not 2025 as the homeowners proposed. That finding rendered the April 2025 demolition and rebuilding quotes — ranging from $820,050 to $997,479 inclusive of GST — significantly outdated. Neither homebuilder witness provided evidence linking the necessity of demolishing and rebuilding the residence to damage caused by the leaks; both included items and areas never raised by the homeowners as affected by the water ingress. The court also noted that an award based on 2025 rebuilding costs would result in significant betterment, requiring a corresponding reduction. Had liability been established, the court indicated it would have assessed physical damages at $17,256, jointly and severally. That figure broke down as follows: $6,900 for the roofing portion of the re-roofing work, $356 for ten percent of the gutter replacement, and $10,000 for repairs to the front bedrooms, master bedroom, bathroom exterior wall, and garage.

The policy qualified as a peace-of-mind contract within the meaning of Fidler, but Security National was not shown to have breached it, and no medical evidence of psychological trauma supported the mental distress claim. The punitive damages claim was equally unavailing: the record disclosed no conduct departing markedly from ordinary standards of decency, no malicious or high-handed behaviour of the kind that warrants an exceptional remedy.

All claims dismissed

The court dismissed every claim brought by the homeowners against both the respondent and Security National. The only matter left open was costs. The parties were ordered to attempt to resolve the question by negotiation. Failing agreement, Security National and the respondent are to file written costs submissions by noon on September 4, 2026. The homeowners' written reply is due by noon on October 2, 2026, in accordance with Rule 10.33 and Schedule C of the Rules of Court.