Court File and Parties

COURT FILE NO.: 16-67844 DATE: 2018/11/27 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: THE COMMONWELL MUTUAL ASSURANCE GROUP, Applicant AND: SHAYNE CAMPBELL, Respondent

BEFORE: MR. JUSTICE CALUM MACLEOD

COUNSEL: Cynthia Verconich, for The Commonwell Mutual Assurance Group (“CMAG”) Christine A. Powell, for Shayne Campbell David Thompson for The Guarantee Company of North America (“Guarantee”)

HEARD: Costs submissions in writing

Costs Decision

[1] On October 4th, 2018 I released my decision in regard to the application by CMAG to stop funding the defence of Mr. Campbell. I also released my decision in the parallel application (17-71324) in which Mr. Campbell sought a declaration that Guarantee must provide coverage. [^1]

[2] Mr. Campbell as the successful respondent in application 16-67844 is presumptively entitled to costs whereas Guarantee has that distinction in application 17-71324. I must now determine the quantum of costs to which Mr. Campbell is entitled, consider if there is any reason to deny Guarantee its costs, fix those costs if not, and determine if CMAG rather than Mr. Campbell should pay Guarantee’s costs.

[3] I am of the view that CMAG must substantially indemnify Mr. Campbell and must pay Guarantee’s costs on a partial indemnity scale. I have reviewed the costs outlines, bills of costs, dockets and other submissions and I have considered the submissions of each of the parties. I have fixed the costs to be paid by CMAG to Mr. Campbell at $37,000.00 and by CMAG to Guarantee at $15,000.00.

[4] A “Sanderson order” is justified in this case. As described in the October 4th decision, CMAG had undertaken the defence of Mr. Campbell pursuant to a general liability policy without any reservation of rights. The insurer was not entitled to change course after three years of litigation to attempt to deny coverage. It was only the application by CMAG which induced Mr. Campbell to bring his application against Guarantee. It is true that Mr. Campbell was not successful against Guarantee and, given that it was a motor vehicle policy with significant qualifications, conditions, exclusions and limitations, he could not have been successful in obtaining anything like full coverage. It was nevertheless a reasonable response to the application by CMAG and in my view, CMAG should pay those costs on a partial indemnity scale.

[5] As between CMAG and Mr. Campbell, substantial indemnity is appropriate for the reasons set out in M. (E.) v. Reed, (2003) CCLI (3d) 57 (Ont. CA). Guarantee is entitled to partial indemnity costs.

[6] In terms of quantum, I have considered the competing mandates of indemnity and reasonableness as well as the other factors in Rule 57.01. The amounts awarded are modestly lower than the amounts requested.

Mr. Justice C. MacLeod Released: November 27, 2018

[^1]: See 2018 ONSC 5899