J. Lum-Danson

Following the dismissal of the plaintiff's action at trial, the successful defendant sought substantial indemnity costs of $112,626.70.

The defendant argued that substantial indemnity was warranted because the plaintiff made unfounded allegations of improper conduct and because the defendant made a Rule 49 offer to settle that was more favourable than the trial outcome.

The court rejected both arguments, noting that the plaintiff's allegations had some basis and that Rule 49 does not automatically grant substantial indemnity costs to a defendant whose offer is beaten by a dismissal.

The court awarded the defendant partial indemnity costs fixed at $40,000, finding the claimed amount to be grossly excessive.

The plaintiff purchased a commercial building from the defendant.

Prior to closing, the defendant provided a statutory declaration claiming uninterrupted use of an adjacent driveway without ever seeking permission.

The plaintiff subsequently sued the adjacent owner for a prescriptive easement but lost after discovering the defendant had previously sought permission via an unsigned 1987 agreement.

The plaintiff then sued the defendant for negligent misrepresentation to recover its legal costs from the unsuccessful easement action.

The Superior Court dismissed the action, finding that while the declaration contained false statements and the defendant owed a duty of care, the plaintiff did not detrimentally rely on the misrepresentations because it would have continued the easement litigation based on its counsel's advice regardless of the 1987 agreement.