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 applicants sought declarations concerning insurers’ duty to defend multiple opioid class actions, the insureds’ right to select a single defending policy, allocation of defence costs, exhaustion of SIRs and deductibles, and the terms on which insurers could receive defence-side reporting.

The court held that, subject to exhaustion of the relevant SIRs or deductibles, each applicant could select any single policy under which there was a duty to defend, and the selected insurer was required to pay all reasonable defence costs associated with covered claims even if those costs also furthered uncovered claims.

Time-on-risk allocation was accepted only as an equitable mechanism among insurers with concurrent obligations, not as a basis to reduce contractual defence obligations owed to the insureds.

The court further held that pre-tender defence costs could attract relief from forfeiture, that disputed SIR exhaustion issues required a trial, and that insurers seeking privileged defence-side reporting had to maintain robust ethical screens through a defence reporting agreement because both party-based and coverage-based conflicts were present.

The Safe Harbour defendants sought to schedule a motion for partial summary judgment.

The plaintiff opposed, citing the recent Court of Appeal decision in *Malik v. Attia*, which set out three requests for judges considering partial summary judgment motions.

The court applied the "bright line rule" from *Mason v. Perras Mongenais* and *Butera v. Chown, Cairns LLP*, finding that a risk of duplication or inconsistent verdicts existed due to common issues, including the limitation period and the cause of the land re-designation.

The court also considered the cost-effectiveness of proceeding with a partial summary judgment.

The motion to schedule the partial summary judgment was refused.

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.