Janis P. Criger

This was a costs ruling following an appeal involving the Motor Vehicle Accident Claims Fund and an insurer.

The successful responding party sought partial indemnity costs of $7,500 from total accounts of $10,072.45, while the unsuccessful party argued the appeal was not complex and proposed $5,000.

The court applied Rule 57.01 and the principle of indemnity, emphasizing the importance of the issue to both the parties and the motor vehicle insurance industry, the time spent by senior counsel, and the quality of the materials and submissions.

The court held that $7,500 inclusive of GST and disbursements was fair and reasonable.

The respondent lawyer was sued for fraud by a bank.

He sought a defence from his liability insurer.

The insurer denied the obligation to defend, relying on an exclusion clause for fraudulent acts.

The bank later discontinued the action, and the respondent sued the insurer for his unrecovered defence costs.

The Supreme Court of Canada held that the duty to defend is governed by the pleadings.

Since the pleadings only alleged fraud, which was excluded from coverage, the insurer had no duty to defend.

The appeal by the insurer was allowed.