Emma Nicholl

Following the dismissal of the applicants' insurance coverage application, the parties made written submissions on costs.

The respondent sought $100,000 based on a pre-hearing costs agreement, or alternatively $254,566.28 on a partial indemnity basis.

The applicants argued the agreement should not be enforced because the respondent's evolving position caused them to incur significant additional costs.

The court enforced the costs agreement, finding no breach or vitiating factors, and awarded the respondent $100,000 for the application plus $8,136 for the costs submissions.

The applicant restaurant chain sought a declaration of coverage under its commercial 'all risks' insurance policy for business interruption losses caused by government-mandated closures during the COVID-19 pandemic.

The applicant argued that coverage was triggered under the policy's civil authority and ingress/egress extensions.

The court dismissed the application, finding that the policy required 'direct physical loss or damage' to trigger coverage.

The court held that the COVID-19 virus and the resulting government orders did not cause direct physical loss or damage to the insured's property, and therefore the losses did not fall within the policy's coverage.

The applicant excess insurers sought a declaration that claims against a lawyer and his firm for negligent tax advice did not constitute a 'single claim' or 'related claims' under the respondent primary insurer's professional liability policy.

The lawyer had advised multiple clients to participate in a charitable donation tax shelter that the Canada Revenue Agency later disallowed as a sham.

While the claims shared common elements regarding the donation plan, one client also claimed negligence regarding a separate life and disability plan.

The court applied the test from Simpson Wigle and found that the advice regarding the life and disability plan was a distinct error, different in nature and kind from the donation plan error.

Consequently, the claims were not related, and the respondent's $2 million aggregate policy limit was available.

The underlying action was administratively dismissed for delay by the registrar pursuant to Rule 48.14.

The defendants subsequently brought a motion seeking their costs of the action on a substantial indemnity basis.

The court dismissed the motion, finding that Rule 48.14 does not provide for costs upon an administrative dismissal, and that the defendants could have moved for dismissal under Rule 24 if they wished to seek costs.