Court File and Parties

COURT FILE NO.: CV-18-590210 DATE: 2019-10-01 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Traders General Insurance Company, Applicant AND: Elizabeth Gibson, Respondent

BEFORE: C. J. Brown, J.

COUNSEL: Andrew E. Steinman, for the applicant Rajiv Joshi, for the respondent

HEARD: In-Writing

COSTS ENDORSEMENT

[1] The applicant, Traders General Insurance Company (“Traders”) brought an application for a declaration that it was not required to indemnify the respondent, Elizabeth Gibson (“Ms. Gibson”) pursuant to her homeowners’ policy of insurance. The application was pertinent to a legal action commenced against Ms. Gibson and others by her daughter, Elizabeth Thompson Gibson (“Betty”), referenced as Court file number CV-14-507 76 (“the underlying action”).

[2] It was the position of Traders that the underlying action arose from an accident which occurred at the home of Ms. Gibson, which was occupied by Ms. Gibson and Betty, and that the said policy excluded coverage for claims arising from “bodily injury to you or any person residing in your household”. It was the position of Traders that Betty was a person residing in the household of Ms. Gibson at the time of the loss and that, therefore, Betty was excluded from coverage.

[3] At the hearing of the application, the respondent took the position that Betty was either a “residence employee” or “tenant” and, as such, was not excluded from policy coverage.

[4] This Court found that Betty was not a “residence employee” but was a “tenant” for the years she lived at the residence of Ms. Gibson, and was therefore covered by the Traders policy of insurance.

[5] This Court ordered that the trial continue and that Traders continued to have a duty to defend and, if the decision in the underlying action required it, to indemnify the respondent, pursuant to the policy of insurance.

[6] On September 4, 2018, the respondent had served an offer to settle the proceeding on the basis that the respondent would pay the applicant $250 in exchange for an order dismissing the application without costs. The applicant did not accept said offer.

[7] The respondent seeks its costs on a partial indemnity basis the date of service of the offers to settle in the amount of $7,840.22 and on a substantial indemnity basis thereafter in the amount of $10,101.35 pursuant to Rule 49, plus disbursements.

[8] The applicant argues that the offer of the respondent is not a proper offer and, further, that the respondent would not, pursuant to the Rules, be entitled to substantial indemnity costs.

[9] The applicant further argues that the respondent is not entitled to costs as it delayed the proceedings by seeking adjournments, that the issues were simple, and that there was divided success on the application.

[10] I am not satisfied that the respondent’s offer falls into the provisions of Rule 49.10, such as to entitle the respondent to substantial indemnity costs following service of the offer.

[11] I am satisfied that there were some complicated issues in the application which were of significant importance to the elderly 97-year-old respondent.

[12] The applicant argued that it was not required pursuant to the policy of insurance to indemnify the respondent, Ms. Gibson, as Betty, who had sued her, was a person residing in the household and therefore not covered. The applicant was not successful on this issue. Much time was devoted to this argument.

[13] The respondent raised the policy exclusions of residence employee and tenant under which coverage was available. The respondent was not successful on the first issue but was successful on the second issue such that the applicant was required to defend the action and to indemnify, if required, the policyholder, Ms. Gibson.

[14] I am satisfied that the respondent was wholly successful in defending and defeating this application.

[15] Having reviewed the reasons for adjournment obtained, and in the circumstances of this case, I am not prepared to order the insurer’s costs thrown away to be paid by the respondent.

[16] I award the respondent its costs on a partial indemnity basis throughout in the amount of $16,073.12 inclusive of disbursements.

[17] I find this amount to be reasonable and proportionate, given the applicant’s requested cost of $15,017.66. Both are comparable, such that the applicant could well have anticipated the potential costs payable.

C. J. Brown, J.

Date: October 1, 2019