of the same damage that had been identified and quantified in
2008. The Rochon repairs failed to cure a pre-existing condition.
 At first blush, this would appear to be the very situation
discussed in Alie beginning at para. 135. In adopting with
approval the reasoning of the California Court of Appeal in
Home Insurance v. Landmark, 293 Cal. Rptr. 277 (Cal. App. 4
Dist., 1988), the Ontario Court of Appeal explained the rational
for holding the insurer on risk at the time of the manifestation
liable for continuing damage, as follows.
. . . where there is ongoing damage after the first manifestation, the policy
in place at the date of manifestation of the loss is responsible for the entire
loss and any subsequent policy is not triggered. This is necessary because
once the need for replacement is known, the full loss has been crystallized at
that time and any further deterioration is caused by delay in proceeding
with the necessary replacement.
 However, in this case there is the complication of the first
and second actions and the purported settlement of the first. The
effect of the two lawsuits and the parties’ actions in response to
the first, must therefore be considered with respect to Lloyd’s
continuing responsibility to provide coverage.
 As set out at para. 7 above, the parties entered into
minutes of settlement of the first action. One component of that
settlement was a payment of $200,000 by Lloyd’s on the town’s
behalf for damages suffered by the owners. Arguably, this should
have been the end of the matter for the town. The sum (which
amounted to 85 per cent of the price the owners had paid for the
house less than six months before discovering the problem) represented the agreed quantification of damages for the town’s
negligence. In the normal course, a release would have been
obtained on payment and the town and Lloyd’s would have been
free of responsibility for any subsequent events.
 However, that is not how the settlement was structured.
The releases, although signed, were held in escrow. The town
was required to enter into a three-way contractual relationship
with its co-defendant Wilson and the owners for the repair of the
basement. Upon reviewing the minutes and the statement of
claim in the second action, I find that despite the latter’s being
couched in both the language of negligence and contract the
basis of the action is overwhelmingly the latter (see clause (d) of
the portion of the statement of claim reproduced at para. 15
above). It is this contractual relationship, and not any further
negligence on the part of the town or its agents, that forms the
basis of the second action.
 It may turn out that the town was not well served by the
counsel hired by Lloyd’s to represent it when the minutes of