Jamieson Halfnight

The plaintiff landlord sued its insurer after the insurer denied a claim under an employee dishonesty policy.

The plaintiff alleged its property manager stole rent money and misused a corporate credit card.

The insurer denied the claim on the basis that the property manager was an independent contractor, not an employee.

The Superior Court of Justice found that the property manager was an employee based on the level of control and the nature of the relationship.

The court awarded the plaintiff $58,761 for the stolen rent but dismissed the credit card claim, finding it was a debtor-creditor arrangement.

The court also dismissed the plaintiff's claims for bad faith and punitive damages, finding the insurer handled the complex claim fairly.

The plaintiff, Drake Holdings Ltd., brought a motion seeking a declaration that four inadvertently disclosed documents were solicitor-client privileged and an order removing the defendant's counsel, Lerners LLP.

The defendant, Chubb Insurance Company of Canada, argued that the documents were not privileged, or that privilege was waived, and opposed counsel's removal.

The court found the documents were privileged and that privilege was not waived or lost.

While acknowledging a presumption of prejudice, the court determined that remedies short of removing counsel were sufficient to protect the privilege, including orders for the return/deletion of documents, an undertaking from counsel not to relay information, and a prohibition on counsel conducting examinations of the plaintiff's witnesses.

The respondent bank sought indemnity under an insurance policy for losses arising from a Ponzi scheme operated by a customer.

The bank obtained partial summary judgment on the interpretation of the "direct financial loss" element of the fidelity coverage section.

The appellants (insurers) appealed, arguing the motion judge erred in granting partial summary judgment on a constituent element of a claim rather than on the claim itself, failed to interpret the policy as a whole, adopted a theory of liability not advanced by the parties, and misconstrued the relief sought by the appellants.

The Court of Appeal allowed the appeal, set aside the order, and directed the action to proceed to trial.

This is a costs endorsement following several motions in complex insurance litigation between TD Bank and its fidelity insurers, primarily concerning a successful partial summary judgment motion by TD Bank.

The court addressed the administrative issue of simplifying the style of cause and then considered the principles for awarding costs, emphasizing the "culture shift" towards efficient litigation.

The court confirmed costs in the cause for an earlier production motion and awarded TD Bank $330,000 in all-inclusive costs for the motion for directions and the partial summary judgment motion, to be paid jointly and severally by the defendant insurers, allocated pro rata to their policy exposure.

The defendants sought leave to appeal an order refusing their motion for summary judgment regarding a building loss claim.

The motions judge had concluded that summary judgment was not a proportionate means to achieve a just result, as the claim involved issues requiring the weighing of evidence and assessment of credibility, including the application of a covenant to insure.

The Divisional Court dismissed the motion for leave to appeal, finding that the moving parties failed to satisfy either branch of the test under Rule 62.02(4) of the Rules of Civil Procedure.

The plaintiff bank brought a motion for partial summary judgment seeking a declaration that losses it sustained due to an employee's participation in a Ponzi scheme constituted a 'direct financial loss' under its fidelity bond.

The bank had settled multiple third-party claims after victims transferred funds to the bank based on fraudulent representations by the bank's employee.

The court held that the bank received the funds subject to a constructive trust, and suffered a direct financial loss when those funds were credited to unrestricted accounts controlled by the fraudster.

The court found this narrow issue of policy interpretation appropriate for partial summary judgment and granted the declaration.

The defendants, a consortium of insurers, brought a motion to clarify TD Bank's discovery obligations regarding documents subject to solicitor-client, litigation, and settlement/mediation privilege.

TD Bank was seeking indemnity under fidelity policies for amounts paid to settle 19 underlying lawsuits related to a Ponzi scheme.

The court ruled that TD Bank had not implicitly waived solicitor-client privilege through its pleadings.

It also found that litigation privilege for documents created for the underlying litigation was not lost upon settlement, given the close connection to the current coverage dispute.

However, the court determined that TD Bank could not assert settlement privilege over documents related to the underlying settlements, as these were crucial for the insurers to assess the reasonableness and allocation of damages for coverage purposes.

The defendants brought a motion to compel the plaintiff to produce three categories of documents in its affidavit of documents.

The plaintiff argued that it was prohibited from producing these documents by United States regulatory and privacy laws, as well as US court protective orders.

The court dismissed the motion, finding that the foreign laws and orders were entitled to comity.

The court held that the plaintiff should not be compelled to violate foreign laws and directed the defendants to seek production or consent directly from the relevant US authorities or courts, with the plaintiff's reasonable cooperation.

The tenant defendants sought summary judgment dismissing a landlord’s claim for damages arising from a fire, arguing that a lease covenant requiring the landlord to maintain property insurance barred any claim against the tenants even if the loss resulted from tenant negligence.

The landlords opposed the motion, asserting that the tenants had failed to maintain the premises’ fire sprinkler system and had disabled it prior to the fire, and that multiple parties and related proceedings made summary determination inappropriate.

The court held that the circumstances raised factual issues, including credibility disputes and questions regarding the conduct surrounding the disabled sprinkler system and the scope of parties bound by the lease.

Given the multiplicity of parties and risk of inconsistent findings, the motion judge found summary judgment inappropriate.

The motion was dismissed and the matter left for trial with the other related proceedings.

The appellant, an Ontario-based multi-national enterprise, appealed a motion judge's finding that Ontario law governed its contract with the respondent, an Alberta corporation.

The contract, which lacked a choice of law clause, was for the design and sale of a fryer and oven system that allegedly caused a fire at the respondent's plant.

The Court of Appeal upheld the motion judge's application of the 'closest and most real connection' test, agreeing that the nature, subject matter, and place of performance of the contract favoured Ontario, as the system was designed and its components ordered there.

The appeal was dismissed.

The applicant insurer sought appointment of an arbitrator under a trade credit insurance policy after the insured failed to account for recoveries obtained from a delinquent foreign customer.

The respondent argued the dispute arose solely under a later release and assignment agreement that omitted an arbitration clause, and further submitted that delay and the two-year limitation period barred arbitration.

The court held the release did not extinguish the policies, but instead operated in conjunction with them, so the dispute remained one arising under the policies and within the mandatory arbitration clauses.

Applying discoverability under the Limitations Act, 2002, the court found no undue delay and held the arbitration was commenced in time.

The respondent was ordered to appoint an arbitrator by a fixed date, failing which the court appointed one.

Contractors sought indemnity under a builder’s risk insurance policy for costs incurred repairing corroded aluminum window frames during construction of a Toronto building.

The corrosion resulted from exposure to de‑icing chemicals and trapped liquid caused by construction practices.

Insurers relied on policy exclusions for corrosion and faulty workmanship.

The court held the corrosion exclusion did not apply because the corrosion was caused by a peril not otherwise excluded, namely faulty workmanship, which the policy treated as covered resultant damage subject only to deduction of the cost that would have been incurred to rectify the workmanship before the loss occurred.

Coverage therefore applied, but the precise deduction for proper workmanship could not be determined on the record and required further process.

The moving defendants brought a Rule 22 motion seeking determination of whether Ontario or Alberta law governed the plaintiff’s contractual and tort claims arising from a fire allegedly caused by a defective fryer and oven system supplied to an Alberta poultry processing plant.

The parties agreed that if Alberta law governed the tort claims, the claims would be statute‑barred under Alberta’s ultimate limitation period.

Applying the lex loci delicti rule from Tolofson v. Jensen, the court held that Alberta law governed the tort claims because the damage occurred in Alberta, and therefore those claims were dismissed as statute‑barred.

However, applying the “closest and most real connection” test for contractual choice of law, the court found the contract was most closely connected to Ontario, where the system was designed and supplied.

Ontario law therefore governed the contractual claims.

Costs were determined following the plaintiff’s unsuccessful motion for partial summary judgment in an insurance dispute.

The defendant sought substantial indemnity costs, arguing the moving party acted unreasonably in bringing the motion under Rule 20.06(a) of the Rules of Civil Procedure.

The court rejected that argument, finding the motion was brought reasonably given the complexity and uniqueness of the issues.

Applying the ordinary rule that costs follow the event on a partial indemnity basis, the court awarded costs to the responding party while directing expert fees to follow the cause at trial.

The plaintiff credit union, in liquidation, brought a motion for partial summary judgment against its insurer under a fidelity bond.

The claim arose from an internal fraud perpetrated by the credit union's general manager, who engaged in an off-book deposit scheme that disguised a significant capital shortfall.

The insurer denied coverage, arguing that the plaintiff failed to prove a direct loss caused by the dishonest acts and that the losses were indirect or consequential.

The court dismissed the motion, finding that the complex forensic accounting evidence required viva voce testimony and cross-examination at trial to determine causation and quantify the covered loss.

Following a successful appeal that dismissed the respondent's summary judgment motion, the court determined the costs of the proceedings.

The appellants were awarded fixed costs for the appeal and partial indemnity costs in the cause for the motion.

The fourth parties were also awarded fixed costs for the appeal, while no costs were ordered for or against the third parties.

The liquidator of a credit union made a claim under a fidelity insurance bond for losses caused by the dishonest conduct of its general manager and other employees.

The motion judge granted summary judgment in favour of the credit union.

The insurers appealed.

The Court of Appeal allowed the appeal, finding that while the uncontested facts supported a finding of direct loss resulting from dishonest acts, there were genuine issues for trial regarding whether the acts constituted a single scheme, and whether the bond's termination and notice conditions applied.

The insurer appealed a decision finding it had a duty to defend the respondent in an action brought by his daughter and son-in-law.

The Court of Appeal allowed the appeal, finding that the policy only covered personal injuries 'arising out of the conduct of your business'.

The underlying statement of claim alleged a family matter, and the mere fact that the plaintiffs were employed in the business was insufficient to trigger the duty to defend.

The appellants appealed an order refusing to grant a stay of Ontario proceedings on the basis of forum non conveniens.

The underlying action involved a fire at the respondent's plant in Alberta, and the respondent had commenced identical actions in both Alberta and Ontario.

The Court of Appeal found that the motion judge properly applied the factors from Amchem and Muscutt, concluding that Alberta was not a more convenient forum, particularly given a potential limitation period issue in Alberta.

The appeal was dismissed with costs.

The appellant bank sued several financial institutions and insurers for approximately $100 million arising from a massive equipment leasing fraud involving forged endorsements.

The respondent financial institutions successfully moved for summary judgment dismissing the appellant's claims for negligence, unjust enrichment, and money had and received.

The Court of Appeal allowed the appeal and set aside the summary judgment, finding that the motion judge committed two fundamental errors: reversing the onus by requiring the responding party to establish a genuine issue for trial, and deciding the motions on the assumed fact that the endorsements were forged.

The Court ordered the entire action to proceed to trial, noting that novel claims should be decided on a full evidentiary record.