G. Douglas

Following a trial judgment awarding damages to the plaintiff mortgage insurer arising from fraudulent misrepresentations in a mortgage application, the court determined the appropriate costs award.

The plaintiff sought full reimbursement of legal fees exceeding $90,000 on the basis that the action involved proven fraud.

The court acknowledged that fraudulent conduct may justify substantial indemnity costs and emphasized the need for strong judicial condemnation of fraud.

However, the court considered mitigating circumstances including the defendant’s limited role in the broader scheme, bankruptcy status, and lack of financial means.

Balancing these factors, the court awarded reduced costs of $50,000 inclusive of disbursements and HST.

The plaintiff sought damages arising from alleged fraudulent misrepresentations made in a mortgage application insured by the plaintiff.

The defendant denied responsibility and claimed she had merely agreed to co‑sign for another person and was herself a victim of a fraud.

After hearing testimony from bank employees, a collections agent, and the defendant, the court found the defendant’s evidence uncorroborated and inconsistent with documentary evidence and surrounding circumstances.

The court concluded the defendant knowingly made false representations concerning her employment, income, down payment, and intention to occupy the property in order to obtain mortgage financing and insurance approval.

The lender relied on those misrepresentations and suffered loss after the mortgage defaulted and the property was sold under power of sale.

Judgment was granted to the plaintiff for the amount paid under the insurance indemnity, with interest and costs, and the debt was held to survive the defendant’s bankruptcy under the Bankruptcy and Insolvency Act.