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, 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 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.

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.