The City of Markham applied for a declaration that Intact Insurance Company had a duty to defend the City in a main action arising from a slip and fall incident.
The City also sought an order allowing it to appoint its own counsel at Intact's expense due to a conflict of interest, and reimbursement for past legal expenses.
The court found that Intact had a duty to defend the City as an additional insured under VTA Construction Limited's policy, as the claims arose from VTA's operations.
A real conflict of interest was identified due to VTA's cross-claim attempting to shift liability to the City, thus entitling the City to independent counsel.
Intact was ordered to pay all defence costs, including past expenses, on a full indemnity basis, as it was impractical to apportion costs between covered and uncovered claims.