COURT FILE NO.: CV-15-433-00

DATE: 20221122

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SHELLY LEGAULT Plaintiff/Defendant by counterclaim

– and –

TD GENERAL INSURANCE COMPANY Defendant

Ashu Ismail & Peter Murray, Counsel for Ms. Legault

Arie Odinocki & Victoria Dale, Counsel for TD Insurance

HEARD: May 16-20, 24-27, 30, 31, June 1-3 and 6-7, 2022

REASONS FOR JUDGMENT

HEALEY J.

OVERVIEW OF THE CLAIMS

[1] The plaintiff, Shelly Legault, owned a policy of home insurance issued by the defendant TD General Insurance Company (“TD Insurance”) with an effective date of October 23, 2013 (“the Policy”).

[2] On March 13, 2014, Legault’s home located at 200 Jephson Street, Victoria Harbour, was damaged by fire. The Policy was in effect at the time of the fire loss.

[3] There is no dispute that the cause of the loss was a fire that ignited in the kitchen, causing extensive smoke damage and rendering the residence temporarily unhabitable. TD Insurance does not allege fraud in relation to the fire.

[4] At the time of the loss, Legault was residing in the dwelling with her boyfriend, Darin Roy, her twelve-year-old daughter Haile Gibson, and Legault’s adult brother, Shannon Legault.

[5] Legault’s Policy had aggregate coverage of $642,000 to cover her dwelling, the replacement cost of contents and personal property, and additional living expenses (“ALE”). ALE is defined in the Policy as “any necessary increase in living expenses, including moving and storage expenses incurred by you, so that your household can maintain its normal standard of living”. This included the cost of temporary accommodation while Legault’s home was uninhabitable.

[6] Legault immediately reported the fire to TD. TD appointed Crawford & Company (Canada) Inc. (“Crawford”) as the independent adjuster. Linda Roberts, a senior adjuster at Crawford, was assigned to handle the claim.

[7] Legault immediately needed to find furnished housing that could accommodate the family’s two dogs. TD approved funding for Legault and her family to move into a local Best Western hotel the day after the fire. It is uncontested that they remained at the hotel for 126 days - from March 14, 2014, until July 19, 2014.

[8] Legault then arranged to move into a house located at 268 Bay Street, Midland (“268 Bay”), through the intervention of Wendi Ogden. Legault and Ogden were friends and played competitive baseball together in a mixed league. After receiving a signed tenancy agreement, TD Insurance paid Ogden $20,000 in total for four months’ rent as part of the ALE claimed by Legault under the Policy.

[9] Legault’s position is that she understood that 268 Bay was owned by Ogden. It was not; Jeff Dunn was the owner, who rented to Ogden.

[10] There is no dispute that the $20,000 was paid by two cheques each in the amount of $10,000, mailed to Legault and made payable to Ogden. It is also uncontested that both were deposited into a TD Bank chequing account 6452579 (“account 645”) opened by Ogden for that purpose. The account was opened on July 9, 2014, and the first cheque deposited that day. The second cheque was deposited on August 27, 2014. Ogden was the sole registered account holder.

[11] TD Insurance commenced an investigation into the legitimacy of the $20,000 payment in September 2014. The investigation arose after Ogden contacted TD Insurance to report an alleged scheme whereby Legault would not actually reside at 268 Bay Street but would have access to the money in account 645 through the bank card set up for that purpose.

[12] On October 2, 2014, Legault was interviewed by Trina Bourdignon, a Special Investigations Unit investigator with TD Insurance (the “SIU interview”). Bourdignon had previously interviewed Ogden on September 18, 2014.

[13] On November 24, 2014, Legault signed an interim Proof of Loss in which she claimed, in part, ALE paid to Ogden in the amount of $20,000.

[14] On March 26, 2015, Legault submitted to an Examination Under Oath (“EUO”) at the request of TD.

[15] On May 19, 2015, TD Insurance denied Legault’s claim in its entirety, having concluded that Legault made willfully false statements with respect to her claim for ALE.

[16] Legault commenced this claim on April 15, 2015, seeking $1 million in general, special and aggravated damages. Her claim seeks the replacement value of her dwelling and personal property destroyed due to the fire, as well as compensation for the additional damage that occurred to the dwelling while TD was performing its investigation.

[17] Following the fire, the dwelling remained structurally intact. ServiceMaster was engaged to perform the initial emergency work. ServiceMaster removed the furniture, appliances, and clothing from the dwelling, and discarded what could not be salvaged. Other items were taken to be cleaned, then stored in one of their warehouses. ServiceMaster also performed the tear out and removal of damaged building material and finishes, such as the kitchen cupboards, drywall and flooring.

[18] TD then arranged for two quotes for the repair work to the home, and Legault provided a quote from a builder of her choice. The parties never reached an agreement upon the final scope of the work to be done to remediate the fire damage, nor its associated cost.

[19] In the first few weeks after the fire, the basement in the dwelling was flooded by seepage of groundwater. Legault faults ServiceMaster; TD denies responsibility. TD also takes the position that any further damage caused by the flooding is covered within the scope of reconstruction work that was eventually quoted by ServiceMaster.

[20] While the investigation was underway, the home remained as it had been after the initial cleanup, with most of the drywall, insulation and interior finishes removed. As the 2014/15 winter approached, the furnace was not turned on and the home remained unheated. Each party claims that that condition is the fault of the other. As a result of being left unheated, it is uncontested that structural damage to the foundation walls and basement floor occurred to the dwelling during that winter.

[21] At the time the structural damage occurred, Legault’s Policy had been cancelled due to non-payment of the premium.

[22] The dwelling was never repaired and the mortgagee, Bridgewater Bank, sold the property under power of sale proceedings. Those proceedings were initiated because the realty taxes were in arrears, the instalment payments were in arrears, and the maintenance covenant had been breached, meaning that the property had not been maintained in a good state of repair after the fire.

[23] It is not contested that TD paid $63,476.05 for ALE listed in the interim Proof of Loss, and $144,291.79 to Bridgewater Bank pursuant to a standard mortgage clause in the Policy. TD also paid additional ALE not covered in the Proof of Loss, emergency services for the dwelling and further amounts to Legault for some of her lost contents.

[24] TD Insurance asks for a dismissal of the claim, and counterclaims for repayment of the ALE claimed in the interim Proof of Loss and the payment made to Bridgewater Bank.

[25] This case is novel because there are no reported cases in Ontario that have decided the question of whether a willfully false statement in respect of ALE, if proven, will vitiate an insured’s right to recover all benefits claimed under a homeowner’s insurance policy.

THE POSITION OF EACH PARTY

[26] Legault alleges that TD breached the Policy and its implied duty of good faith owed to her by: 1) failing to provide and/or explain the effect of a Proof of Loss to her, and more particularly, its effect on TD’s obligations, thereby prolonging the claims process; 2) failing to conduct a fair and thorough investigation into the allegation of fraud; and 3) denying her claim. The first two allegations are not contained in her Statement of Claim, but TD raised no objection to these lines of argument.

[27] Legault asks this court to find TD liable for all damages flowing from all breaches of the Policy and its implied contractual terms, including those arising from the sale of 200 Jephson Street.

[28] With respect to TD’s allegation of fraud, Legault’s evidence is that she moved into 268 Bay for approximately six weeks. Her daughter spent time there intermittently, and Roy lived there occasionally. She moved out because she learned that Ogden did not own the house, and she also suspected that Ogden was entering the home and stealing her family’s belongings.

[29] Legault denies that she had regular access to the TD bank account into which Ogden deposited the rent cheques sent from TD. According to her evidence, the only time that she used the bank card was with Ogden’s permission and under her direction. This occurred twice, when she made two $500 withdrawals on July 14, 2014. Her testimony is that she did this for the purpose of buying supplies for an end-of-season baseball party.

[30] Ms. Ismail, counsel for Legault, argued in closing that if this court finds that TD has not proven fraud, it should order that the parties submit to an appraisal process to determine Legault’s compensation under the Policy.

[31] TD alleges that Legault breached the duty of good faith owed to her insurer by misrepresenting material facts or committing fraud. She was part of a scheme whereby she led TD to believe that she was renting 268 Bay for $5,000 monthly, but never moved in. Further, the scheme extended to her having control of the bank card attached to account 645, and that she accessed that money for purposes other than paying rent. TD asserts that Legault fraudulently signed the interim Proof of Loss stating that $20,000 in ALE had been paid to Ogden, knowing it to be a false declaration. TD takes the position that Legault’s deliberate deception entitles it to deny her entire claim.

[32] Alternatively, if it fails to prove fraud, TD takes the position that Legault has not proven entitlement to indemnity beyond the $144,291.79 paid out to Bridgewater Bank. She has not proven that her damages can be quantified at more than this amount.

[33] TD also states that Legault has failed to prove that it should be held responsible for the flooding that occurred in her basement, or for any damage to the foundation that was caused during the winter of 2014/15. The latter damage, the existence of which is not challenged, was caused at a time when the plaintiff failed to pay for hydro and/or decided not to heat her home, a decision for which it should not be held liable.

[34] Mr. Odinocki, counsel for TD Insurance, disputes that the appraisal process is still available to the plaintiff at this stage.

THE ISSUES

[35] The court must determine the following issues:

1. If fraud in relation to ALE is proven, is TD entitled to deny all indemnity under the Policy?

2. Has TD proven that Legault committed fraud in her claim for ALE?

3. If fraud is not proven, is it within the court’s jurisdiction to order an appraisal?

4. If fraud is not proven, what are the plaintiff’s damages?

(i) Who is responsible for the flooding in the basement after the fire?

(ii) Did the basement flooding result in additional damage not covered in the scope of work prepared by ServiceMaster?

(iii) Is TD liable for the structural damage that occurred the following winter?

(iv) Is TD liable for the power of sale proceedings?

(v) Is Legault entitled to indemnity under the Policy?

WHETHER A FRAUDULENT CLAIM WILL RESULT IN COMPLETE FORFEITURE

[36] The Policy contains the statutory conditions required by s.148 of the Insurance Act, R.S.O. 1990, c. I.8.

[37] Statutory condition no. 6 sets out the duties and obligations of the insured upon the occurrence of a loss or damage to the insured property, including providing TD with a proof of loss verified by a statutory declaration. Condition no. 6 lists the items that are required to be addressed in the proof of loss, such as giving a complete inventory of the destroyed and damaged property along with details substantiating value. ALE is not one of the items listed in statutory condition no. 6.

[38] Statutory condition no. 7 states: “A fraudulent or willful false statement in a statutory declaration in relation to any of the above particulars shall vitiate the claim of the person making the declaration”.

[39] Legault signed the statutory declaration contained in the interim Proof of Loss after consulting with a lawyer. She did not fill in the printed parts of the form but made edits in his presence. The original type was inserted Roberts, acting under the direction of TD. Roberts confirmed that TD insisted that the document be signed and would not proceed with Legault’s claim until it was provided.

[40] The form as originally drafted included an ALE payment to Legault in the amount of $6,000, an ALE payment to Best Western in the amount of $37,476.05, and an ALE payment to Ogden in the amount of $20,000. Legault struck out the $6,000 because at the time she could not recall that she received initial advances from TD that added up to $6,000. At trial it was established that she did receive the $6,000, in two installments, shortly after the fire. The amounts on the proof of loss total $63,476.05.

[41] If Legault’s claim under the ALE provision in the Policy for rent to Ogden was made for an ulterior purpose, Legault will have signed a false declaration.

[42] It is a long-entrenched principle at common law that a fraudulent insurance claim submitted by an insured in a proof of loss results in no recovery by the insured under the policy: Alavie v. Chubb Insurance Company of Canada, 2005 CanLII 5331 (ON CA), 195 O.A.C. 7 (Ont. C.A.), at para. 5; Sagl v. Chubb Insurance Company of Canada, 2009 ONCA 388, 72 C.C.L.I. (4th) 193, at para. 76; Royal Insurance Canada v. Dimario (1987), 26 O.A.C. 370, at para. 7. At para. 76 of Sagl the Court of Appeal stated: “once fraud is established, no matter the amount, the entire claim under the proof of loss is forfeited”.

[43] Ms. Ismail’s alternative position, if this court finds that TD has established fraud, is that particulars of ALE are not required to be provided by the statutory conditions and, accordingly, even if falsely provided, would not trigger statutory condition no. 7. In support of this proposition, she relies on a line of fire loss cases that began with Goring v London Mutual Insurance Co. (1885), 10 O.R. 236, followed by Patterson v. Oxford Farmers Mutual Fire Insurance Co. (1912), 23 O.W.R. 122, and Sokolowsky v. Fire Assn. of Philadelphia, 1938 CanLII 410 (BC SC), [1938] 3 W.W.R. 148. In each case, the insurer relied on a statutory condition like Ontario’s no. 7. The courts held that where the statutory condition subsumed in the policy did not contain a requirement to provide the specific particular, the accuracy of that particular was held not to affect the claim. For example, in Patterson the insured falsely stated in a proof of loss that no one except his own family members were present when he returned to his home on the night of the fire. Because this was not a particular that was required to be furnished under the applicable statutory condition, it was not defeated by the condition that “any fraud or false statement in a statutory declaration in relation to any of the above particulars shall vitiate the claim”.

[44] These cases were analyzed by Anderson J. in Dorosh v. Co-operators General Insurance Co., 1991 CanLII 7614 (SK QB), [1991] 6 W.W.R. 539 (Sask. Q.B.). He rejected the underlying premise in each, and I agree with his reasoning. Anderson J. noted that in Goring, no authority is cited for the reasoning advanced, or conclusion reached, and none of the cases mentioned the contrary line of English authorities. For example, the law stated in Britton v. Royal Insurance Co (1866), 4 F. & F. 905, at p. 909 is as follows:

The contract of insurance is one of perfect good faith on both sides, and it is most important that such good faith should be maintained. It is the common practice to insert in fire policies conditions that they shall be void in the event of a fraudulent claim, and there was such a condition in the present case. But a condition is only in accordance with legal principle and sound policy...if there is a wilful falsehood or fraud in the claim, the insured forfeits all claim whatever upon the policy. See also Thurtell v. Beaumont (1823), 1 Bing. 339 (fire insurance); Goulstone v. Royal Insurance Co. (1858), 1 F. & F. 276 (fire insurance) per Pollock, C.B., at p. 279: If the claim was fraudulent, the plaintiff cannot recover.

[45] Anderson J. also noted that the Goring line of cases gave no consideration to the phrase “in relation to” in condition no. 7 or its equivalent. He stated, at para. 21:

Nothing was cited and I have not found any authority dealing specifically with stat. con. 7 and the expression "in relation to." This is so apparently notwithstanding that these statutory conditions are not unique to Saskatchewan. Ontario has exactly the same conditions as quoted above and, in fact, even numbered the same. It is in my view important to note that No. 7 of the statutory conditions does not simply refer to a wilfully false statement "of any of the above particulars" but instead uses the expression "in relation to any of the above particulars." This and the fact that the form of proof of loss is not prescribed leaves it to the insurer to ask for anything relevant and reasonable.

[46] I agree with this analysis, but add that in order to vitiate recovery the incorrect statements made by the insured must be material, meaning that they must be “capable of affecting the mind of the insurer, either in the management of the claim or in deciding to pay it”: Craig Brown et al., Insurance Law in Canada, (Toronto: Carswell, 2022), § 9:14, citing Gilchuck v. Insurance Corp. of British Columbia (1993), 1993 CanLII 1127 (BC CA), 82 B.C.L.R. (2d) 145 (B.C.C.A.), at para.18; also see Skuratow v. Commonwealth Insurance Co., 2005 BCCA 515, 46 B.C.L.R. (4th) 52, cited in Harris v. Home Trust Company, 2009 CanLII 55694 (Ont. S.C.), at para. 18.

[47] TD relies on Duffus v. Wawanesa Mutual Insurance Co., 2006 BCSC 2078, a case directly on point. Duffus was a fire loss case, and like this one, the insured had a valid policy. The issue in Duffus was whether the plaintiff made willfully false statements about ALE and building contents, and whether statutory condition no. 7 set out in the Insurance Act, R.S.B.C. 1996, c. 226 s. 126, operated to preclude her from obtaining payment under her insurance policy. Statutory condition no. 7 in the B.C. Insurance Act contains the exact wording as condition no. 7 in Legault’s Policy. The only distinguishing feature in Duffus is that the plaintiff admitted that she made a willfully false statement in relation to her living expenses, although argued that that should not invalidate all of her claims. The court relied on Inland Kenworth Ltd. v. Commonwealth Ins. Co. (1990), 1990 CanLII 548 (BC CA), 48 B.C.L.R. (2d) 305 (C.A.), which contains the same principle found in Alavie, Sagl, and Dimario: a false statement that is material can result in a denial of the insured’s entire claim. The plaintiff’s claim was dismissed.

[48] There can be no doubt that the claim for ALE was a significant part of Legault’s claim. The evidence shows that TD paid out a total of $157,231.46 on account of ALE up to the date that Legault’s claim was denied, comprised in large part of hotel and rental housing costs.

[49] TD knew that it had an obligation under the Policy to cover substitute housing costs for Legault and her family while they were displaced. Legault’s representation that she had found suitable housing at 268 Bay was certainly material to their decision to pay rent to Ogden. If this court finds that Legault represented to TD that the money was required for rent at 268 Bay, but instead used it to her benefit and for a different purpose, she will have made a false claim. If intentional, such a falsehood will result in complete vitiation of her right to recovery under the Policy. In short, if fraud in relation to her ALE claim is proven, her claims will be dismissed.

FRAUD

[50] The burden of proof to establish fraud rests on the insurer, on a balance of probabilities: Hanes v. Wawanesa Mutual Insurance Company, 1963 CanLII 1 (SCC), [1963] S.C.R. 154, at para. 21; Brandiferri v. Wawanesa Mutual Insurance Co., 2012 ONSC 2206 (C.A.), 11 C.C.L.I. (5th) 279, at para. 185.

[51] Fraud requires some form of intention to mislead or deceive: Gregory v. Jolley (2001), 2001 CanLII 4324 (ON CA), 54 O.R. (3d) 481, at para. 15 (Ont. C.A.), application for leave to appeal dismissed, [2001] S.C.C.A. 460.

[52] At para. 186 of Brandiferri, Lauwers J. explained how fraud is established, and its effect:

The law is that if the claimant makes an "intentionally false claim" the claim should be dismissed: Daver v. Chubb Insurance Co. of Canada, [1996] O.J. No. 3164, (Ont. C.A.) at para. 3-4. A false statement will violate statutory condition 7 if it is made knowingly, without belief in its truth, or recklessly without caring whether it is true or not: Voloudakis v. Allstate Insurance Co. of Canada, [1998] O.J. No. 354, (Ont. Gen. Div.) at para. 65, 68-9. The intention to mislead can be inferred from even a small or proportionally small breach: Fotinos v. Pitts Insurance Co., [1981] O.J. No. 224 (Ont. H.C.) at paras. 14-15, Montini Foods Ltd. (Trustee of) v. General Accident Insurance Co. of Canada, [1997] O.J. No. 1333 (Ont. Gen. Div.) pages 13-15.

[53] In examining the allegation of fraud, this court must attempt to resolve the factual question of whether Legault used the money provided for rent for other purposes and to her own benefit, as part of a deliberate scheme involving Ogden.

[54] The primary witnesses on this issue are Legault and Ogden. Legault and Ogden provided opposite evidence on every key issue in this trial. After a thorough review of their evidence, this court has determined that it would be unsound to place much reliance on the evidence of either one of them to determine the issue of fraud. I am led to the overall conclusion that neither was candid with this court about the arrangements that went on between them during the summer of 2014.

[55] In addition to having strong reservations about their credibility, I find that both had a very poor recall of sequencing and details of major events. While this is partially understandable given that the events occurred eight years ago, some obvious gaps in their testimony on key events is hard to reconcile. Neither of them was careful about giving precise testimony. Both resorted to conjecture, and each frequently seemed to be saying whatever first popped into her mind. This artful guesswork and speculation was unhelpful and only served to highlight that their evidence was not always based in personal knowledge or reality. At other times they professed to have a keen recall for conversations and details that served to support their version of events.

[56] Legault also tended to overstate or misstate in her evidence. For example, her assertion that she was given one day to retrieve their belongings from storage after TD decided to stop paying storage costs was contradicted by an email showing that her lawyer was given at least 20 days’ notice. Her claim that Roberts accused her of having a marijuana “grow-op” at a subsequent rental property appears to have been her own interpretation of an email sent by Roberts that asked reasonable questions about an increase in hydro costs. Her allegations of Roberts’ carelessness about arranging a meeting at one of ServiceMaster’s locations is contradicted by an email showing that it was Legault who went to the wrong location. When this kind of misinformation and embellishment is provided in a witness’ evidence, caution is warranted toward the reliability of their evidence overall.

[57] It was hoped that the SIU investigation would be of significant assistance in resolving the differences between the opposing stories told by these two individuals. Unfortunately, this was not so, as TD conducted a myopic investigation that fell well short of an attempt to seek reliable, independent verification of either version of events.

[58] In total, 30 witnesses testified at this trial, including Legault. I have considered the evidence of each. Because of the findings that I have made, it was unnecessary to refer to some witnesses’ evidence in these reasons.

[59] For the following reasons, this court has concluded that there was some sort of arrangement struck between Legault and Ogden that involved Legault living, to a limited degree, at 268 Bay. I will never be able to sort out what that arrangement was and believe that its details were fluid. The best conclusion that I can draw from the evidence is that they likely shared the dwelling, with Legault, Roy and Haile spending very few nights there during the period between July 19 and August 30. The evidence supports that there were opportunities for the home’s primary occupants – Ogden, her sister Tracy and Ogden’s daughter Ricki – to be elsewhere from time to time.

[60] But pinning down that arrangement with any certainty is not required, because the decision in this case ultimately turned on their treatment of the TD bank account. This court has been convinced on a balance of probabilities that a key aspect to the arrangement was to obtain money from TD under the guise of rent. Further, this court is certain that both Ogden and Legault have lied about their access to and use of the money that TD provided for rent. I find that some time before Legault left the Best Western, the two had decided that this was an arrangement that could financially benefit them both. Together, they and Roy spent the $20,000.

[61] I find that it was a deliberate and intentional plan to obtain money from TD for purposes other than strictly for rent, which was fraudulent.

[62] I will first discuss the evidence relating to the rental arrangement, to demonstrate why it is not possible to agree with TD’s position that Legault never lived at 268 Bay.

268 Bay

Living at the Hotel

[63] In June and July 2014, Legault was a very busy person, and under a great deal of stress. She had separated from Haile’s father approximately 14 months earlier and was working through their financial arrangements. She was trying to help Haile cope with the relationship breakdown and the loss of her home due to the fire. She was working full time as an administrative assistant for Parkbridge Lifestyle Communications Inc., which involved a daily commute to Wasaga Beach. She was the owner of two Boxer dogs and was expecting their next litter of puppies that summer. At the time of the fire the dogs had a litter of puppies that she had to find homes for immediately.

[64] There is no question that Legault, her family and pets needed more suitable housing than the Best Western. I believe Legault’s evidence that staying at the hotel was extremely stressful.

[65] Legault played baseball on both Sunday and Monday night in a women’s league. On Tuesday she and Roy coached Haile’s team, which had games on Wednesday nights. On Thursday and Friday night she and Roy played in a mixed league. On Saturdays throughout the summer, she and Roy had tournaments both locally and out of town. Tournament locations ranged from Parry Sound to Owen Sound to Kitchener. On Sundays they coached Haile’s little league team in the afternoons.

[66] A claim note dated June 5, 2014, indicates that TD had calculated its ALE exposure at $12,000 per month based on the hotel cost of $300 per night plus meals and mileage. Once begun, the repairs to 200 Jephson were anticipated to take three to four months to complete. The note reads “We are nearly three months post occurrence ALE: this is a family of four with two large dogs…insured has a realtor searching of a suitable rental property. They have a place lined up for July 1, 2014. I’ve contacted Insurance Housing Solutions who are now searching as well. This is a remote part of Ontario with limited options….”

[67] The first evidence that TD or Roberts were taking any active steps to help locate housing appears in early June. Roberts could not explain why it took so long, although noted that options for furnished rentals in that area were extremely limited.

[68] Around June 21, 2014, Legault was informed by management at the Best Western that they would be required to move out because the hotel had not yet received any payment from TD. The evidence bears out that Roberts followed up with TD and learned that a cheque had been released the previous week but had not yet been received by Crawford.

[69] As she testified, Legault was very distressed by these events and about the amount of time that she and her family had to spend at the hotel. She was anxious to leave.

[70] To make matters worse, during their stay at the hotel Legault and Roy were both arrested. The condensed version of how this came to pass is this: A couple known as Briar and Chad were also staying at the hotel. Legault, who described herself as a “people person”, became friendly with the couple. An occasion arose where Briar and Chad gave up their room temporarily and then returned to find that it would not be available until the following day. Legault agreed that they could stay in Haile’s room for the night, as Haile was at her father’s home for the weekend. As it turned out, Chad and/or Briar had been under police surveillance for drug related offences. That night, police entered all three rooms and located drugs in the room occupied by Chad and Briar. Because the room was in Legault’s name, she was also arrested. Roy was arrested under an accusation that he possessed brass knuckles. Legault and Roy hired criminal lawyers and, years later, the charges against them were withdrawn.

Formation of the “Arrangement”

[71] According to Legault, it was Ogden who brought 268 Bay to her attention. In June, Ogden informed her that she had bought a house that had an upstairs and downstairs apartment, and that she was doing some renovations to it.

[72] There is a conflict in the evidence as to when Ogden began to lease 268 Bay. Ogden’s evidence is that she moved in on May 1, 2013. When Dunn was asked when Ogden moved in, his evidence was that it “could be” May 2014. In the statement that he provided to TD in February 2015, he unequivocally said that he had been renting to Ogden since May 2014. Tracy Ogden testified that she moved to Bay Street on May 1, 2013. However, in an earlier statement provided to TD and dated April 1, 2015, she claimed to have moved in on May 1, 2014, and to have lived there for almost one year. Her trial evidence was that the date included in her written statement was an error.

[73] Ogden’s daughter Ricki also testified. In the summer of 2014, she was 14 years old. She said that she and her mother moved to Penetanguishene when she was in the middle of grade 7. Ricki recalled having a Boxer puppy when they lived in Penetanguishene, which they did not keep. That puppy, according to Legault’s evidence, came from the litter for which homes had to be quickly located following the fire. Legault said that she sold a puppy to Ogden, who did not pay for it and gave it away. This evidence also suggests that when the fire occurred, Ogden was likely not yet living at 268 Bay Street.

[74] From the preceding evidence, I find that Ogden had only begun to rent 268 Bay in May 2014. Shortly thereafter, she began to engage in the discussions with Legault that are part of the subject matter of this litigation.

[75] Legault and Roy went to view the house with Ogden. Legault testified that Ogden first showed them the upstairs apartment, which Ogden told them was unoccupied but used occasionally by her sister, Tracy. This is in direct contradiction to Legault’s SIU interview, where, after telling Bourdignon that there was an upstairs apartment where Ogden resided, she answered a question with the following: “I never went up there, so I don’t know”. Dunn said that Ogden did not have a key to the upstairs apartment in 2014 but may have been given one later for the purpose of cleaning it once. The evidence is that the upstairs apartment had a separate, exterior entrance.

[76] Ogden then showed them the main level, which they found to be suitable.

[77] Legault’s understanding at that time was that Ogden and Ricki lived on the main floor and that Tracy was “in and out”. Ogden told Legault that she would be able to live at her boyfriend’s if Legault moved in.

[78] Ogden’s evidence confirmed that she and Legault were contemplating an arrangement whereby Legault, Roy and Haile could live on the main level. She said that Legault approached her, saying that the three of them had no place to stay and needed accommodation. Ogden expressed sympathy for Haile in particular, who she considers to be family even though they are only distantly related through marriage. Ogden said that she had an opportunity to advance her cleaning business at that time by staying in new homes that were being built by a company called Wyecliffe. Somehow this involved the possibility of her residing in a model home, although Ogden’s evidence was vague. She explained that she told Legault that she might be able to let Legault stay at her home for a short time while she looked for other accommodation. They discussed this “for a while” prior signing a rental agreement.

[79] Ogden said that she and Legault had many conversations throughout June about Legault moving into 268 Bay, discussing who would move in and “how it was going to be”. But during her SIU interview in September 2014, Ogden told Bourdignon that Legault came to her in July and began to talk about renting 268 Bay, and they did not sign anything until August. She also told Bourdignon that they agreed that Legault would move in in August, that her initial intention was that she and her family would move upstairs to the smaller apartment, and after that Tracy alone would occupy the upper apartment and she would move to one of the model homes. The arrangement that she and Legault discussed could last up to six months. Asked to clarify these discrepancies at trial, she explained that Legault was “all over the place” with dates, and that Ogden herself may have been confused about dates when speaking to Bourdignon. Ogden said that she had difficulty recalling dates generally.

[80] There is no evidence that Ogden ever discussed the idea of occupying the upper storey with Dunn, and his evidence leads no doubt that she did not get his approval to sublet the main floor. Dunn testified that he would never have let Ogden sublet to someone that he did not know, and that when he rented to her the issue of subletting never came up. I find that in 2014 Dunn never knew about the arrangement, or the lease.

[81] Just like the plan to move upstairs, I expect that Ogden’s notion of living in the model home was fanciful thinking, as Ogden testified that she decided not take the job even though it involved steady income. And her evidence that she was motivated by sympathy for Haile is suspect, as she later told Bourdignon during her SIU interview that Haile was not permitted to live with Legault or be around Roy at that time in 2014. That contention proved to be unsupported by evidence heard from a child protection agency representative.

[82] Ogden testified that in June, as she was talking to Legault, she thought that the upstairs apartment was vacant. According to Ogden, at that time she asked Tracy if she would be willing to move upstairs, but Tracy did not want to. Ogden said that she discussed the concept of Legault moving into 268 Bay with Tracy at the time that she and Legault began to have disagreements, which was toward the end of June and prior to signing the lease. This disagreement occurred because things were not going “according to plan”. She explained that this conflict occurred because Legault wanted to “keep Roy around” and have him move in also.

[83] Later in her testimony, Ogden contradicted herself by stating that she had not talked to Tracy before signing the lease on June 29, 2014. That, I find, is the case.

[84] Tracy was kept completely in the dark about the discussions that were occurring between her sister and Legault. She testified that it was years later, in 2018, when she finally asked Ogden about what occurred between her and Legault. It was only then that she learned that there had been discussions about Legault occupying the residence. She testified that there was never any discussion between she and her sister in 2014 about moving upstairs or about having Legault and her family move in. I accept Tracy’s evidence on these points.

[85] I find that the evidence does support that part of this arrangement, at least in Ogden’s mind, was for someone in the Ogden family to use the upstairs. However, a wrench in the plan occurred when Dunn rented it to Amy Hanratty for July 1, 2014. I find that Hanratty moved in on July 1 and left on July 20. She did so, I find, because of a concerted campaign waged by Ogden to create dissension between Hanratty and Dunn. This culminated when Hanratty returned to the residence on July 19 to find her apartment door open. She left immediately, only returning the next day to retrieve some belongings. Hanratty testified that it was clear to her that “the sisters” did not want her there.

[86] Hanratty was a completely believable witness; it was clear that the events she had been subjected to at 268 Bay had been disturbing to her and remained imprinted in her memory. Hanratty does not know Legault, and other than her interactions with Ogden in 2014, has no relationship with her.

[87] Ogden said that she was not concerned about the fact that Hanratty was occupying the upstairs apartment because, according to her, the arrangement with Legault never got to the point where Legault would be moving in. I do not accept that that is true. I accept Hanratty’s evidence that Ogden made two complaints about trifling matters to Dunn within the first week that she was there. And find that she did so because she wanted Hanratty to be evicted.

[88] In finding that Hanratty moved out permanently on July 20, I reject the evidence of Dunn. Dunn gave evidence that Hanratty did not move out until October 2014. An order issued by the Landlord and Tenant Board provides that the tenancy is terminated as of October 1, 2014, and that Hanratty was to move out by that date. Dunn applied to the Board for an eviction order on July 22, 2014, just days after a heated text exchange with Hanratty. The texts leave no doubt that he was motivated to evict her. When Dunn applied for the eviction order Hanratty’s rent was paid, and so he claimed to need the unit for his personal use just 22 days after renting it. At trial he said that he was having marital discord and thought he might need it. I do not accept this evidence given his conflict with Hanratty. The Certificate of Service filed with the Board indicates that he served Hanratty with the notice of termination by placing the document in the door jam. In his evidence, he said that he placed it in her mailbox. Hanratty attended the Board hearing, but she was not questioned at trial about how she knew it was occurring. She testified that by the date of the hearing, she was already out. Dunn also kept handwritten notes that he claims support that the police came to the house on August 4 in relation to Hanratty but had no recollection of why they were called or what the conflict was about. Where their evidence conflicts, I accept that of Hanratty over Dunn.

[89] The timing of Hanratty’s presence at the property is only important because TD relies on her tenancy as evidence supporting its claim that Legault never lived at 268 Bay, because Legault testified that she never saw Hanratty.

The Lease Agreement

[90] Ogden and Legault signed a lease for 268 Bay. Both admit that they signed it on June 29, 2014. The lease identifies Ogden as the landlord/owner and Legault and Roy as the tenants/residents. Its terms provide for a month-to-month tenancy at a cost of $5,000 per month due on the 12th day of each month, commencing July 12, 2014. Either party was required to give 30 days’ written notice of intention to terminate. The lease permits occupancy by Legault, Roy, Haile and Shannon and permits the dogs to be at the house. The lease also provides that the residents acknowledged receipt of four keys for “rental house & garage (2 car)”.

[91] Sometime later, in handwriting that differs from that on the lease, an unidentified person wrote “changed to July 19”.

[92] Ogden testified that even before she signed the lease on June 29, 2014, she already knew from prior discussions that Legault would not actually be moving in. By the date they signed the lease they were having disagreements. Ogden said that this was because she was adamant that she was not letting Roy or the two dogs move into her house. With respect to Roy, she said “I didn’t like him and I knew what he was about”.

[93] I reject Ogden’s trial evidence as untruthful. During her SIU interview with Bourdignon, she specifically acknowledged that she was giving permission to Legault, Roy and Haile to move in when she signed the lease.

[94] Additionally, during that interview Ogden said that she knew that she was not going to get any money at the time that she signed the lease. When Bourdignon asked her how she knew that, Ogden gave this answer:

Because she said that she ah needed to get some money. She bought a trailer so I knew that she wasn’t going to pay rent there, or that she bought a trailer with the first cheque she got, so how was she supposed to pay me.

[95] Based on the lease being signed 10 days before the receipt of the first cheque, her answer does not make sense.

[96] Despite those alleged disagreements, Ogden said that she just took the lease when Legault presented it to her and signed it without even looking at it. Ogden said that she knew that doing so was wrong but did it anyway.

[97] At trial Legault could not remember the date that they left the hotel and moved into 268 Bay, other than it was around the middle of July. She stated that they had to wait for the approval and rent money from TD because Ogden would not let them move in until she had the money. On July 3, four days after signing the lease, she sent an email to Roberts stating that Ogden would hold 268 Bay for them and permit them to move in as soon as she received first and last months’ rent. Legault informed Roberts that she had told Ogden that the cheque should arrive by “next Friday” so the move in day would change to Saturday, July 19. The next Friday would have been July 11, so this does not explain why the move in had to be delayed a further week, particularly in the context of Legault’s evidence that she was desperate to leave the Best Western.

[98] On cross-examination Legault agreed that she must have received the rent cheque sometime before July 9, 2014, as that was the date that the first cheque was deposited. She could not explain why the move-in date was delayed until July 19. I find that it may well have been connected to the occupancy of the upstairs by Hanratty, and further illustrates the fluidity of the arrangement that was in the works between Legault and Ogden.

[99] Roberts confirmed that TD required a signed lease agreement before ALE could be paid. At the time that she signed the lease, Legault said that the prediction from Roberts was that her home would not be ready for occupancy until the spring of 2015 at the earliest.

[100] Legault said she found the form on the Internet, and she and Ogden filled it out together. She said that the rental price was determined by Ogden.

[101] Ogden’s testimony is that Legault told her that the lease was required in order that she could get ALE, and that Legault included the maximum number of people so that she could get as much money as possible.

[102] Legault did not utilize the garage. When asked why the garage was included in the lease, her response was that she and Ogden just wanted to include everything that was on the property. Dunn’s evidence, which I do accept, was that the garage at 268 Bay has always been used by him, and no renter has had access.

Occupancy of 268 Bay

[103] Legault said that her neighbour, Elise Maitland, helped her to move in on July 19 because Maitland owned a truck. Roy said that he also participated. They made two trips to 268 Bay on the same date, the first being to transfer plastic totes full of belongings. The second trip was to move a wicker outside furniture set from 200 Jephson Street. This set contained a two-seater wicker loveseat and two chairs, two small tables and a glass topped table/bar with six chairs. Legault claims to have purchased this furniture just the year before. She put the loveseat and two chairs in the front sunroom at 268 Bay, and the table and chairs on the back deck.

[104] Legault admits that they only spent a few nights at 268 Bay. During that summer she stored her neighbour Maureen’s pop-up trailer on her property, with permission to use it. Legault also used it when she and Roy went away for baseball, rather than staying at a motel. The trailer had no amenities other than beds. She had a second trailer on her property that she utilized that summer, which was owned by Maitland. Maitland had asked Legault to help her to sell it. Roy testified that it was Maitland’s trailer that they would use when they went for tournaments. Maitland confirmed this evidence and said that the trailer was sold by the end of summer or possibly fall.

[105] However, during her SIU interview, Legault only reported that there was one trailer on her property that summer, which was owned by “Doreen” (as it sounds on the recording), who asked her to put it on her front yard so that it could be cleaned. I believe this is the same person as “Maureen”.

[106] Nor was Legault frequently at 268 Bay during the day. Legault opened her pool in June and maintained it during the summer of 2014. She spent time at her home maintaining flower gardens, a vegetable garden in the backyard and cutting the grass. Additionally, she testified that she wanted to keep a close eye on 200 Jephson.

[107] She was also rarely at 268 Bay in the evenings on weeknights because of her baseball schedule. Depending on the day of the week and the location of the game, she would arrive back at 268 Bay or 200 Jephson between 11 p.m. and midnight.

[108] Legault was not aware of who lived in the upstairs apartment following her move in. She said that Ogden was dating a man in Port McNichol and told Legault that she was staying there. She could not say if Ogden and her daughter or Tracy lived upstairs because she was not there much. She never encountered Hanratty, which on my findings, would be true.

[109] But she did occasionally encounter Tracy. During her SIU interview she said Tracy was “in and out” but did not live on the property. When asked why she would see Tracy, she answered “because Tracy was, she walks a lot, and I’d see Tracy there”. Bourdignon asked, “but she doesn’t live there?”. Legault’s response is telling:

I have no idea what goes on in that house, because I to this day, when we moved in, I was under the understanding that Wendy owns that house and that she renovated it. So when I see Tracy come in, “hey Tracy how’s it going”, she was picking up mail, she was doing whatever, I’m not home a lot, I played baseball four nights a week, I, Haile’s in sports, Darin plays sports, Darin works, so I mean, I’m not, some nights I’m coming in at 10 o’clock at night.

[110] Legault’s trial evidence is that Shannon never moved into 268 Bay. He went to live with their aunt in Port Severn. During her SIU interview she said that he was there for the move-in on July 19 and occupied one of the rooms, but that he stayed there infrequently. Shannon testified, saying that he never lived at 268 Bay. Roy confirmed that he never saw him there.

[111] Legault said that Roy usually commuted out of town and was away a lot due to work. He was working in unionized jobs doing steel framing and drywall, and sometimes was required to live out of town at motels. He also travelled for baseball during the week and played in a men’s league during the summer, which occupied him two to four nights each week. Roy confirmed that he only slept at 268 Bay Street on three to four occasions, otherwise he stayed in the tent trailer, or at his mother’s home in Midland. His evidence was that “it was awkward to be at someone else’s place” and he did not want to be there.

[112] Haile did not spend a lot of time at 268 Bay. School was out and she spent most of her time at the home of her older sister, Natasha, including overnights. After the fire, Haile spent more time with her father. Legault said that Haile also had lots of sleepovers with her girlfriends. Legault thought it was possible that Haile may not have slept at 268 Bay at all and spent very little time there during the day. She could not estimate the amount of time that she and Haile were together at the house.

[113] Haile was 11 years old at the time of the fire. She remembered “staying at Wendi’s” but did not know the address. Haile could not recall anything about the layout of the house and said that she only kept a change of clothes there. She recalled that she only went there to sleep, and that it was always dark out when she arrived because they went there after baseball. She did not see Wendi or her daughter Ricki, who she knows, when she was there. She recalled that her usual babysitter, Destiny Maitland, came there once or twice to care for her. Her recollection was that this occurred during the evening, that they did not go outside, and that Destiny was there at her bedtime.

[114] Destiny Maitland, daughter of Elise Maitland, testified. She is now 27 years old. She babysat for Legault many times, as the families lived just a few houses apart on Jephson Street. I found her to be credible, as she readily admitted to not knowing or recalling certain details. She did not know exactly when she went to Bay Street to look after Haile, or the exact address. Her evidence differed from Haile’s in that she described that on the occasion that she went to Midland to look after Haile, it was daylight and they spent most of their time outside. I do not consider these differences to be consequential given that Destiny began her babysitting career at age 13, looked after many children, and had cared for Haile possibly as many as 100 times by then. Either Haile or Destiny could have been honestly mistaken in her recollection. Nor am I prepared to find that Haile was being untruthful because she could not recall the layout of a house that she spent only a few nights at eight years ago at a time of turbulence in her life. But most compelling was Destiny’s evidence that this was the single time that she went into Midland to babysit Haile, whereas all other occasions had been at locations outside of Midland. There was a reason that it stands out in her memory.

[115] Several witnesses were called who identified seeing Legault at 268 Bay, dropping her off or going to the property but not entering – Philip Robitaille, Carrie-Ann Boucher, and Tina St. Amand. This evidence of “sightings” can be given minimal weight, because Ogden and Legault agreed that it was not unusual for Legault to have spent time at 268 Bay before July because of her relationship with Ogden and their joint participation in baseball.

[116] However, Boucher’s evidence goes further. She was aware that Legault lived on Bay Street one summer. She and Legault talked a lot, as they were very close and played baseball together at that time. Legault told her that she had moved into Ogden’s house. While Boucher did not recall the dates, she knew that Ogden was “there with [Legault] for a while”. And Ogden told her that Legault and Roy were moving in. She testified, “as far as I know, Wendi Ogden was to live there also”.

[117] Sometime in July 2014, the date never having been clarified in her evidence, Legault’s Boxers had a litter of puppies. At trial Legault said that the dogs were placed in the yard at Jephson Street “in July” because the female boxer was close to giving birth and Legault wanted to establish a nesting area for her. There was no specific date given. During her SIU interview, Legault claimed to have the dogs with her at 268 Bay on the date that she moved in. Her trial evidence rings more true – it makes no sense for her to have kept dogs and puppies at a location that she was rarely at herself.

[118] What Legault did with the dogs, I find, was to seek the help of her neighbour, Peggy LeMay, to care for them when she could not. LeMay testified that it was about two months after the fire that Legault asked her to care for the dogs and paid her for doing so. She recalls Legault telling her that she was moving to Bay Street. There was no one living in the house or in the backyard when she was checking on the puppies. Although her memory had clearly faded on some of the details that occurred eight years ago, there was nothing about the core of LeMay’s evidence that was unreliable, nor was there any serious attack on her credibility. While LeMay was a former neighbour of Legault’s, the relationship between the two has not been an enduring one and there is no reason to suspect that LeMay was tailoring her evidence to assist Legault.

[119] Kevin McCarthy, who was a child protection worker in the Town of Midland in 2014, testified. He was tasked with arranging to interview Legault and Haile due to the drug-related arrest. Ultimately the protection agency determined that Haile was not at risk. Although McCarthy was able to meet with Legault on July 10 at the Best Western, he was unable to secure a home visit with Haile until Sept 4, 2014. During his contact with Legault in July and August, he did not ask Legault where she was residing. She told him that Haile was primarily residing with Natasha. Many attempts were made to meet Legault for that home visit, which she kept rescheduling for various reasons. On that day he conducted the interview at 39 Hearthstone Drive in Waubaushene, which was a rental home that Legault secured in the fall of 2014.

[120] Kandace Brockett used to be a very close friend of Legault’s, describing that they were like sisters. She met her 20 years ago, through playing baseball in Victoria Harbour. Their friendship ended in 2016. I do not consider the reasons to be important but find that due to what occurred, the severance was final and that they have not been part of one another’s lives since that time.

[121] In 2014, Brockett played on the same mixed league team as Legault and Roy. Her trial evidence was that she was aware that Legault had moved to Bay Street and went to visit her a couple of times. She could not recall the months, but that it was during the summer. She knew that Legault moved there after leaving the Best Western. She recalled that they sat on the patio, listened to music and had drinks.

[122] On July 8, 2016, Brockett met with Bourdignon. Brockett had previously called Ogden and told her that she was going to support Ogden’s position that Legault had never lived with her. Ogden facilitated the setting up of a meeting between Bourdignon and Brockett. Brockett signed a statement at that interview that contradicts her trial evidence. To summarize her statement, Brockett wrote that she has never known Legault and her family to reside at Ogden’s house on Bay Street, not even for a day, and that she was aware of an account set up at Legault’s request for insurance cheques issued for rent. She had attended places occupied by Legault, including the Best Western, a pop-up trailer on Jephson Street, and two different residences in Waubaushene. The statement goes on to say that she knows that Ogden and her family reside on Bay Street, as she has been to this location several times and has not seen Legault reside there.

[123] It is interesting that Brockett used the phrase “not even for a day”, which has been a phrase repeated by Ogden several times, a phrase parroted by Bourdignon during her interview of Brockett.

[124] Brockett’s interview repeats a theme heard throughout this trial; this case involving the opposing stories of Ogden and Legault has been the subject of much gossip and speculation, particularly within the formerly closely-knit group who played baseball. When Bourdignon asked Brockett what her understanding was of the “arrangement that was put out there”, referring to the rent/bank account arrangement, Brockett said: “I don’t know too much about it…to be honest with you, I know, like after talking, like, there was conversations about, oh you know, you need to say that I lived there, it was like…and it just kinda snowballed. Like (inaudible) I hear people, all these different people are writing statements for her”.

[125] At trial, Brockett recanted both her written statement and her remarks that Legault and her family never lived at 268 Bay. She said that they were not true, and that she provided the statement in retaliation for a wrong that she perceived had been done to her by Legault. Further, although she recalled sitting down with Bourdignon, she had no recollection of what she said in that statement, as she was using crack cocaine at that time in her life and was under its effects during that interview. She only knew that what she said was untrue because she was compelled to lie to hurt Legault. She testified that she began to use cocaine after February 2015, having been introduced to it by her boyfriend at the time, and would be awake for days at a time when bingeing. She is no longer a user.

[126] Mr. Odinocki on behalf of TD asks that this court reject this retraction as unreliable, along with Brockett’s allegation that she was under the influence of drugs at the time that she gave her statement to Bourdignon. His submission is that Brockett now feels regret for how she treated Legault and is attempting to right that wrong by now supporting Legault’s story.

[127] Bourdignon recorded her interview of Brockett. I agree that Brockett sounds lucid and coherent on that tape. Bourdignon testified that Brockett seemed friendly, confident in what she was saying, believable and forthcoming. She was well groomed, attentive and responsive. She did not appear nervous, but rather, relaxed. At the time, Brockett’s stated motivation in coming forward was that she felt that Legault was being dishonest.

[128] Despite the recantation of her earlier statement, Brockett was, in my view, a believable witness. I reject the submission that she was motivated to lie by guilt or seeking to repair her relationship with Legault. There is no evidence that she attempted to fix their relationship during the six years preceding the trial following the rupture in their friendship. When it was suggested to her that she would do anything for Legault, Brockett denied it and stated that her only motivation was to tell the truth. I accept that this was her motivation for recanting from her July 8 statement.

[129] Regardless of Bourdignon’s observations and how Brockett comes across on the recording, I accept that Brockett is being truthful when she says that she does not remember giving this statement because her drug use at that time in her life affected her memory, and that she was repeating to Bourdignon what Ogden had told her, and what Bourdignon wanted to hear.

[130] These conclusions about Brockett’s credibility are reached in part based on this court’s finding that Brockett sought no advantage or favour from Legault for providing the testimony that she did. Brockett testified with raw candour. While this court is cautious about placing too much emphasis on a witness’ demeanour, in this case there was no escaping the conclusion that Brockett feels enormous shame about her past drug use and the conduct that led to the demise of her relationship with Legault. I find that she was truthful with the court, for the sole purpose of catharsis.

[131] Correspondence from the Midland Police Service (as it was formerly constituted) is also part of the evidence. As a term of their release following arrest, Legault and Roy were required to notify the police of any changes in their address. The correspondence states that on July 22, 2014, Legault informed them that she was moving from the Best Western Inn to 268 Bay. On September 10, 2014, she informed them that she moved from 268 Bay to 39 Hearthstone Drive, and on October 9, 2014, she informed them that she was moving to 3 Tucker Lane.

[132] Legault testified that their outstanding charges had not been resolved by the time they moved into 268 Bay, and that they were required to inform the police of every address that they lived at, and the police did compliance checks. When Legault moved to 268 Bay, she said that she went to the police station to change the address. When she left 268 Bay she again had to inform the police. It was her evidence that the police checked to ensure that she was living at 268 Bay, and then at subsequent rentals on Hearthstone Drive and then Tucker Lane in Waubaushene. Legault’s evidence was vague about when the police performed the compliance check at 268 Bay. Roy testified that the police came by 268 Bay once, and only Tracy was there.

[133] Tracy confirmed that during a time when Ogden was away at a baseball tournament in Parry Sound, the police came to knock on her door. She was not questioned further about the purpose of that visit. The only purpose for police to attend that arises from the evidence in this trial was to check on the occupancy of the residence by Legault and Roy.

[134] Tracy said that in 2014 she occupied the front bedroom of the house. It was her testimony that she lived there continuously in 2014. Tracy has a son and daughter living in Mississauga and she went to visit them some weekends. Her daughter would pick her up on Thursday or Friday and drop her off on Sunday. She also had a boyfriend with whom she would sometimes spend weekends. She never saw Haile or Roy at the house but acknowledged that Legault “came around” in 2014. Tracy was not working in 2014. She denied Legault or any of her family members moved in in July or August, 2014, and denies that she, Ricki or Ogden lived elsewhere.

[135] One of the contentious issues in this trial was the allegation that Tracy and Ogden abused prescription drugs. This is only relevant to the reliability of their evidence pertaining to the summer of 2014. On Tracy’s candid evidence alone, I find that she was heavily medicated in the summer of 2014, including use of Tylenol 3. Tracy said that she moved to Midland to live with her sister because she was addicted to Tylenol 3, and in 2014 she continued to ingest 4 or 5 pills each day. In addition, Tracy was taking a long list of medication to treat depression, migraines, seizures and sleep disorder. She admits that the Tylenol made her sleepy. She had been diagnosed with severe depression by 2014 and said that this disorder affects her memory and ability to concentrate. While I find that Tracy generally testified truthfully, I also find that her personal circumstances affected her ability to be fully alert to what was occurring around her in 2014. It is a strong possibility that any changes within the household, even additional people coming and going, may not have fully registered with her.

[136] Ricki Ogden is now 22 years old. I find that her mother kept her in the dark about the arrangements struck with Legault, just as she had Tracy. I have reservations about Ricki’s testimony as it relates to her presence at 268 Bay in the summer of 2014. This is because she adamantly testified that she spent the entire summer at the house, and never spent a single overnight anywhere else. She claimed to have never visited relatives at any time, taken trips or gone to summer camps. She did recall going to a summer camp the following summer. Ogden could not recall which summer Ricki went to camp. The duration of the camp was never specified. Ricki also said that her mother never spent the night away from home for baseball tournaments. This conflicts with her mother’s evidence. Ogden testified that she went overnight to tournaments, which was corroborated by all the other witnesses who played baseball. Ricki’s father lives in Toronto. Ogden said that when she was away at a tournament Ricki would often spend time with her father, and that otherwise during the summer of 2014 she went to Toronto to spend time with her father. While she could not give a number, Ogden said that this occurred more than twice during that summer. Ricki also had no idea who lived upstairs in July 2014, did not see anyone move in on July 1, and said that she never saw a young mother with a child i.e., Hanratty, at the property during July.

[137] Ogden was adamant at trial that neither Legault nor anyone in her family spent even a single night at 268 Bay. She agreed that when she called TD to report the fraud she intended to tell the truth, and did. She was referred to a claim note dated September 11, 2014, made by Sylvia Jones, which records that when Ogden called she identified herself as the owner of 268 Bay Street. She further reported that Legault was getting paid for staying at her home, but she stayed for one night only. Another note of the same date recorded by Costa Tsatsos indicates that he spoke with Wendy, who claimed that the insured had only stayed with her once.

[138] Ogden denied ever talking to Jones or Tsatsos, saying that she only spoke to a “Robert”. The claims note from Robert Gulas dated September 11, 2014, states that he spoke with Ogden, who advised him that Legault only stayed at the property for one night. Ogden says that he is mistaken that she told him that Legault was there for a night. Despite those three notes in the claims file, Ogden denied ever telling TD that Legault stayed one night.

[139] Given my negative view of the reliability of Ogden’s evidence, I find that the notes in the claims file accurately reflect what Ogden told TD on September 11.

[140] Ogden also told Gulas that Legault had been renting a small cottage in Waubaushene. Ogden admitted that she did not know when Legault’s rental of the cottage in Waubaushene began, although other evidence supports a finding that by the time that Ogden placed the call, Legault was living at a cottage on Hearthstone Drive in Waubaushene. Ogden claimed that she did not know where Legault moved after she left the Best Western. Ogden also testified that she and Legault were very good friends before their relationship deteriorated. Given her description of their closeness at that time, and how frequently they saw one another for baseball, it is not believable that she did not know where Legault went to live after leaving the motel.

[141] By the same token, Legault’s evidence that she is not entirely sure where Ogden lived after renting to her is equally suspect. These were two women who were in contact with one another regularly and who were part of a baseball team which, according to the description of several team members, was each another’s main social contact. The members treated one another “like family”.

[142] Dunn gave evidence supporting Ogden’s position that Legault never moved into 268 Bay. In 2014, Dunn worked fulltime, doing continental shiftwork for twelve-hour periods interspersed with one eight-hour shift. His parents lived on George Street, about a one minute drive from 268 Bay Street. He said that he visited them up to four times per week during his non-working days. He utilized the garage at 268 Bay, where he kept his tools, car and electrical and plumbing supplies, and occasionally entered the house to access items in the basement. He stated that he was there a minimum of three times per week, possibly up to three times per day in July and August 2014. It was his practice to pick up the rent from Ogden in person. She would contact him to let him know a convenient time to pick it up. He said that he was in the house approximately twice a month, to pick up the rent and potentially perform maintenance. He never saw dogs.

[143] Dunn was adamant that he did not see any unfamiliar vehicles on the property at 268 Bay. He said he paid attention to the cars because he was going to evict Hanratty.

[144] The reliability of Dunn’s evidence is in question given the findings I have previously made about him. However, even if everything that he testified to was true, his work schedule alone could account for never seeing an unfamiliar vehicle, especially given how infrequently Legault and Roy were there. I accept that he did not see dogs, as Legault’s evidence that she brought them there is ambiguous at best. He could not have lived the life of a shift worker doing eight- or twelve-hour shifts and still have kept a close eye on everything transpiring at 268 Bay. This was illustrated by the fact that he never saw the wicker furniture placed on the front lawn of 268 Bay that September, yet there are photographs showing that this happened.

[145] Much time was spent in this trial on the issue of the wicker furniture that made its way from 200 Jephson to 268 Bay. There is a significant amount of conflicting evidence about it – whether it was new or used, whether it was gratuitously given to Ogden, what shape it was in when it was moved and later picked up, and who moved it. The only importance of the furniture to the issues in this trial is to potentially give support to Legault’s case that she moved into 268 Bay, lending legitimacy to the lease agreement. Pages of this decision could be devoted to summarizing the evidence in respect of it, but ultimately, whether I find that Legault’s version is truthful would not change my view of the evidence related to the bank account. Legault may very well have moved her furniture there and it is clear that she tried to retrieve it after having had a series of disagreements with Ogden, but that will not alter the court’s view of the fraud perpetrated with respect to the rent money paid by TD.

[146] Legault’s trial evidence about the occupancy of 268 Bay departs in many respects from what she told Bourdignon during her SIU interview. She said that everyone - Shannon, Darin, Haile, herself and the two dogs - moved in. She said that her brother occupied one of the rooms. She then said that he stayed there maybe two or three times. Legault did not tell Bourdignon that Darin was there infrequently. She repeatedly told Bourdignon that the dogs were there.

[147] The court must question why Legault was so intent on portraying to Bourdignon that all four of them moved in, with the dogs, when that was a series of untruths and half-truths according to her trial evidence. I find that she did so because she wanted to avoid explaining the real arrangement that occurred between herself and Ogden, which, whatever it was, the signed lease did not accurately capture.

Leaving 268 Bay

[148] Similarly, there was conflicting evidence concerning Legault’s explanation for moving out of 268 Bay.

[149] Legault first said that she moved out of 268 Bay in the first few days of September, and then later said August 30, a period of less than 6 weeks from when she moved in.

[150] The reason for the move was that she became concerned after noticing that upon returning to the house after being away, their belongings would be out of order, as though someone had moved them. Then Haile started to complain about things going missing. Legault had clothes that went missing but could not recall what those items were, and a necklace that had sentimental value.

[151] Legault suspected Ogden. She asked Ogden whether she was entering the property, because Legault knew that she had a key. According to Legault, Ogden admitted that she was coming in but denied going through Legault’s belongings. Then, two of Haile’s electronic items went missing: first, an MP3 player and then an Android “iPad” tablet. Although Legault referred to the tablet as an iPad during past questioning, she indicated that this was an innocent mistake in terminology. Around the same time, Legault overheard Ogden asking Haile in the dugout at the ballpark about hypothetical passcodes that she might choose. Several minutes later, Haile came to her mother, upset at having found that Ricki had her tablet in her possession.

[152] Haile recalled that her tablet was lost while they were at 268 Bay but had no recollection of the circumstances surrounding it.

[153] Legault confronted Ogden about the tablet and Ogden denied stealing it. Legault stated that at this time she was exhausted and just wanted to leave Ogden’s house. She put out the word to her teammates that she needed to find a new property as soon as possible, which is how she located the cottage on Hearthstone Drive.

[154] She never notified the police of these suspected thefts because she had no proof, nor did she report these problems to Roberts. She explained that TD had done nothing to help her get out of the hotel, so she did not think that there would be any point in raising a concern about missing items.

[155] Legault testified that it also came to her attention within that same timeframe that Ogden did not own the house. She stated at trial that she learned toward the end of August from the neighbour who lived across the street, P.J. Robitaille, that the house was owned by Jeff Dunn. She tried to locate Dunn but then decided against doing so and confronted Ogden instead. During her interview with Bourdignon she told a different account. Legault recounted that once she learned that Ogden was only subletting the house to her, she talked to the property owner “who wasn’t happy with her and the police were involved…”. When asked about this difference at trial, she stated that she spoke to his brother, Bruce, and asked for Jeff’s number but Bruce would not provide it. When Legault confronted her, Ogden asserted that she had a rent-to-own arrangement.

[156] During her SIU interview, the only reason she provided for why she left 268 Bay was because she and Roy found out that Ogden did not own the house.

[157] She told Ogden that she would no longer be renting and wanted the money back. Arguments ensued between the women. Ogden insisted on receiving the 30 days’ notice under the lease. According to Legault, Ogden believed that rent was owed for September because Legault had left her furniture there after moving out. Legault felt Ogden should have repaid everything because “… We technically moved in late July. We were really only there for the month of August and we moved out before - just a couple of days in September.”

[158] Legault did not notify Roberts that they were leaving 268 Bay and moving to Hearthstone Drive. She explained that she did not believe that she had to tell the insurance company everywhere she went, particularly because she was not asking for them to pay the rent at that next address. As will be discussed later, Legault said that she eventually received about $5,000 back from Ogden.

[159] Ogden of course denied any thefts and denied ever representing that she owned the property. Ogden denied ever telling anyone at TD when she called on September 11, 2014, that she owned the home at 268 Bay. There is a claim note entered by Bourdignon indicating that TD was in receipt of information that 268 Bay Street was owned by Dunn. Bourdignon then confirmed with Ogden, at which time “she revealed that she has a ‘rent-to-own’ agreement with Jeff Dunn, who is officially still on title for this property”. Ogden does not remember this conversation with Bourdignon and does not believe it to be an accurate recording of anything that she said. She denied saying that she was in a rent-to-own agreement.

[160] Ogden’s word cannot be trusted. I find that she did represent to the world that she was the owner of this property, and that Legault may have been misled. While I am not prepared to go so far on the evidence to find that Ogden stole belongings from Legault, I am satisfied that the belief that she did do so, as well as the discovery that Ogden did not own the house, were part of the motivation for Legault to leave. I say “part” of the motivation because, not being able to fully ascertain what the arrangement was, there may have been other reasons why Legault had to find a different place to live by September.

[161] The fact that Legault may not have known until late August that Ogden had lied to her about owning the house does not alter my view that at the time that she signed the lease she and Ogden had agreed that they would both use the rent money.

[162] I find that there was a combination of factors that led to the demise of Legault and Ogden’s relationship and the termination of their living arrangement: allegations of theft made by Legault, a confrontation about ownership of the house, and arguments about the return of “rent” money to Legault, which also led to a dispute over a vehicle, as will be explained below.

Conclusion

[163] After considering all this conflicting and confounding evidence, as earlier stated, I find that there is insufficient evidence to conclude that Legault never resided at 268 Bay. To the contrary, there is evidence that I do accept that points to the conclusion that she spent some of her time there during the six-week period, and Haile and Roy to a much lesser extent. But I also find that there was some sort of house-sharing arrangement struck with Ogden, who, together with Tracy and possibly Ricki if she was not at camp, also lived there when she was not with her boyfriend in Port McNichol. Accordingly, even though Legault needed to rent that house, especially for the six month period initially contemplated, Legault never told TD some pertinent details, particularly that this was to be some sort of house sharing arrangement, that Shannon would not be residing there, that Roy and even Haile would not be regular occupants, and that she was not paying for use of the garage. I find that when the lease was created and signed, it was designed to appear to create be a legitimate tenancy but did not. As the following section explains, the lease was part of a sham created by both women for the purpose of securing payment from TD for alternate uses.

Account 645

[164] Because Ogden and Legault’s evidence is unreliable, the court must look to independent evidence to examine the issue of fraud.

[165] The main item of independent evidence is the banking record for TD account 645, showing the transaction history from July 9, 2014, to September 9, 2014. These are the dates on which the account was opened and closed.

[166] Video evidence exist of some of the transactions in that account. These are:

• July 9, 2014, at 4:20 p.m., Ogden withdrew $300

• July 11, 2014, at 4:35 p.m., Ogden withdrew $100

• July 14, 2014, at 12:17 a.m., Legault withdrew $500

• July 14, 2014, at 8:14 a.m., Legault withdrew $500

• July 25, 2014, at 1:26 p.m., Roy withdrew $240

• September 4, 2014, at 9:49 a.m., Roy withdrew $1,000

[167] Banking records for Legault and Roy’s joint TD Canada Trust chequing account for the period July 4, 2014, to September 8, 2014, were also marked as an exhibit. Legault had a line of credit at the same time; no evidence was provided from that account.

[168] Banking records for Ogden’s National Bank account for the period July 31, 2014, to September 17, 2014, were marked as an exhibit.

[169] Ogden also had a BMO account in 2014. Ogden referred to a BMO account during the SIU interview and admitted that she had two bank accounts. At trial she initially refused to admit that she had both the National Bank account and the BMO account at the same time, then later changed her evidence. Even when it was pointed out to her that the transaction history for her National Bank account did not include the regular monthly $535 deposit for Ricki’s child tax credit payment, her response was that the transaction history was incomplete. I find that she did have a BMO account during the relevant period in 2014, but no evidence of its transaction history was provided.

[170] Bourdignon did not attempt to seek the complete transaction histories for all the accounts held by Ogden and Legault for the period July 9 to September 9, 2014. By failing to obtain those records, TD both failed to eliminate the possibility that cash deposits were made to Ogden’s or Legault’s accounts from money withdrawn from account 645, and failed to obtain a complete picture of the financial circumstances that may have been motivating either one of them. Regardless of that gap in the evidence, sufficient evidence exists to enable this court to decide who benefited from some of the withdrawals made from the account.

Motive to Commit Fraud

[171] I find that both women needed money at that time in their lives.

[172] Ogden worked as a house cleaner. She was a single mother to Ricki. Tracy had no income other than what she received from the Ontario Disability Support Program. Some of Tracy’s limited money was being used to purchase Tylenol 3 on the street. Ogden and Tracy split the rent at 268 Bay; each paid $550 and utilities were included. Ogden also had the expense of a cell phone, food and gas. It was her evidence that sometimes she had to ask Tracy to pay more than half of the rent, and she used the food bank frequently.

[173] After being taken through the 2014 calendar on which she recorded most of her cleaning jobs, Ogden admitted that between January and September she earned only a few hundred dollars a month, maximum, from cleaning. She agreed that there was no income from cleaning recorded on the calendar for June, and only $90 in July. The transaction history provided for her National Bank account does not show a balance but shows that her debit transactions never exceeded $30. She testified that she also received Ontario Works sometime in 2014, although vacillated on when that benefit was received.

[174] Dunn testified that when Ogden first moved in, she would frequently be unable to pay all of her rent on the first of the month and would have to make up the difference in the following weeks. I have previously found that her tenancy began in May 2014.

[175] Legault also needed money. She had to continue paying the carrying costs of 200 Jephson, which included mortgage payments. Additionally, shortly after they began to live at the hotel, hotel management refused to allow them to charge food to their room because of TD’s failure to make timely payment. She had to purchase food and wait to be reimbursed by TD. Legault was also in the middle of a marital separation and had retained a criminal lawyer after being charged.

[176] The transaction history for her and Roy’s joint account shows multiple NSF fees in July and August 2014. Her pay from Parkbridge was automatically deposited and ranged from $868 to $929 every two weeks. She was fired from this job sometime in July; her final pay in the amount of $159 was deposited on August 1. The account was frequently overdrawn. Legault acknowledged that she was in default of her home insurance premiums since at least July 2, 2014, and that her homeowner’s insurance was cancelled on September 12, 2014 due to nonpayment.

[177] Evidence was received about the history of Legault’s mortgage payments, from counsel representing Bridgewater Bank, Doug Bourassa. He testified that there were a few payments intermittently missed before the fire, which were made good. After the fire, three payments were missed during the spring and summer, but were also made good. The mortgage was in good standing in the fall of 2014, but defaults began in December 2014. Bourassa also gave evidence that the realty taxes were in default; on August 13, 2014, a tax arrears certificate was registered on 200 Jephson.

[178] Roy testified that they experienced financial hardship following the fire. They borrowed money from his mother and friends. St. Amand testified that Legault was selling some of her possessions following the fire, such as her skidoo, because she told St. Amand that she needed the money. According to St. Amand, Legault also sold a “quad” and put up her boat for sale.

The Arrangements for Account 645

[179] As earlier stated, account 645 was opened on July 9, 2014, and the first $10,000 cheque deposited on that date. Ogden alleges that she and Legault conspired in this wrongdoing, a central feature of which was that Legault would be the one to control and have access to the funds.

[180] In deciding whether Ogden’s claim had merit, Bourdignon placed great significance on the fact that account 645 was opened for the purpose of depositing the cheques, instead of Ogden using one of her own accounts. Bourdignon testified that this added cogency to Ogden’s allegation that the funds were intended to be used by Legault. I agree with TD’s closing submission that the cross-examination of Ogden did not establish any reason why Ogden could not have deposited the cheques into one of her existing accounts. Despite that, TD has not established that this arrangement was solely Legault’s idea, and the evidence does not establish that only Legault accessed the money.

[181] Ogden’s explanation for opening the account was that Legault did not have a bank account. When Ogden was asked why she opened the account for Legault, her answer was that they did not discuss it, although she recalled that perhaps Legault asked her to do so. Ogden was asked whether she questioned Legault’s request. At first she stated that she just assumed that Legault could not open her own account. She then changed her answer to state that she did ask Legault why the account had to be in her name, but could not remember Legault’s explanation.

[182] During her SIU interview, Ogden’s evidence on this point was different:

And er, that was basically it. So then I needed to open a bank account for her. I don’t know why she couldn’t do it. We never got into that – why she couldn’t open the bank account. So I opened a TD bank account for her. Under my name. But I gave her the Interac card.

[183] The evidence is improbable. Ogden’s first answer was that Legault, a person who owned a home and held a job, did not have a bank account. Her second answer was that they did not discuss why the account would be opened in Ogden’s name, which is also what she told Bourdignon during her interview. Her third answer at trial was that it was discussed, but for reasons that escaped her, Ogden agreed to open the account in her name.

[184] Three discrepant answers provided on a key issue on three occasions is a good indication that a person is making up a story.

[185] According to Ogden, Legault and Roy met her in the parking lot at TD Bank in Midland on July 9, 2014. Legault had the first cheque from TD with her.

[186] Ogden went into the bank by herself. She said that she had Legault “on” her cell phone at the time and asked Legault what PIN she wanted. She set up the bank card with that PIN. She said that she allowed Legault to dictate the PIN because Legault was to control the account and the card. Ogden said that she knew at the time that if Legault wanted to take out an amount that was greater than $1,000, she would need Ogden to go into the bank to withdraw that amount with the assistance of a bank teller. Ogden then claims that Legault texted further instructions to her while she was in the bank.

[187] None of these text messages or phone records were provided by Ogden. Bourdignon testified that she asked Ogden for those text messages, but no follow up was undertaken by TD. We will never know whether these could have corroborated Ogden’s claim. Ogden denied that TD asked her for her phone records. At no time during the investigation was Legault told about Ogden’s allegations surrounding the opening of the bank account, so that she could have had the opportunity to produce her own phone records.

[188] Further evidence was received by Ogden about the vehicle being driven by Legault during this first meeting at the bank, the possibility of which Legault disputed. Given the unreliability of both of their evidence, I do not give any weight to their respective evidence about the vehicle allegedly being driven by Legault.

[189] When it was suggested to her that July 9, 2014, was a Wednesday and Legault would have been working in Wasaga Beach at that time, Ogden hypothesized that Legault could have left work to meet her at the bank. She acknowledged that it is a 35-minute drive from Wasaga to Midland. Legault testified that her work hours were Monday to Friday, 9:00 a.m. to 5 p.m. Irreconcilably, Legault also testified that she recalls leaving Midland at 6:00 a.m. while she was living at 268 Bay, stopping for coffee on her way to work in Wasaga Beach. Given the ambiguity in Legault’s evidence, no significance one way or the other is placed on the fact that this transaction, and later ones, occurred on weekday afternoons.

[190] Given the unreliability of Ogden’s evidence, TD has not proven that Legault was present that day and sent Ogden instructions from the parking lot. But that does not end the inquiry as to whether Legault ever had access to that account for her own purposes.

[191] Legault’s evidence is that she had no further involvement with the first cheque that was mailed to her from TD to cover first and last month’s rent at 268 Bay after giving it to Ogden either at a baseball diamond or one of their homes, and she had no information about the account, or bank, at which Ogden negotiated that cheque. As the following will show, that is not true.

[192] What follows is a detailed examination of the transaction history of account 645.

July 9, 2014

[193] On the day that account 645 was opened, the account history shows a cash withdrawal of $2,000 and a TD ATM withdrawal of $300. These bear different transaction descriptions. The first is “CASH WITHDRAWAL” and the second is “TD ATM W/D”.

[194] As previously stated, on this day Ogden said that Legault instructed her to withdraw $2,000 from the teller and put the corresponding receipt inside an envelope from the teller. Legault then instructed her to take out $300 from the ATM. The reason for the separate transaction was so that Roy would not see the receipt and know how much money she had withdrawn. Legault allegedly told her that she did not want Roy to see the money because he had a drug habit.

[195] Ogden said she left the bank and gave the envelope containing $2,000 to Legault, who passed it to Roy. While he was distracted, Ogden testified that she passed an envelope containing the smaller amount to Legault. Once this initial transaction was over, Ogden gave the bank card to Legault.

[196] TD has photographic evidence from the bank showing Ogden withdrawing $300 from the account at 4:20 p.m. on July 9, 2014. Ogden was holding onto a combined cell phone holder/wallet in the video, into which she agreed that she placed the $300. This was the same $300 that she said that she surreptitiously passed to Legault moments later, in an envelope.

[197] When Ogden gave this evidence at trial, she had the bank transaction record for account 645 in front of her. It was clear that she was looking at the account history when she provided her evidence of the amounts that Legault asked her to withdraw. Similarly, when she provided this same evidence to Bourdignon during her SIU interview, I find that she was referencing the account history at the same time, rather than providing an account from memory.

[198] In addition to the inconsistency regarding the envelope containing $300, during her SIU interview Ogden told Bourdignon that she took $100 from Legault “that day” because she was collecting on a debt of that same amount owed to her by Legault. Besides the fact that Ogden’s financial situation in 2014 makes it unlikely that she was loaning such sums, Ogden completely omitted that detail from her testimony at trial.

[199] Had TD obtained a complete history for both of Ogden’s accounts during the period in question, this court would be better equipped to draw inferences about who might have been using the bank card for account 645 between July 9 to September 9, 2014. For example, there are several vendors in account 645 that also appear in Roy and Legault’s joint TD account, such as Walmart #3645 and Foodland #6357. If it was not Ogden’s habit to use a debit card in either of these establishments, that could have helped with the inference that Roy or Legault were using the card at stores they used habitually. But the court does not have the evidence of all of Ogden’s accounts and I am unable to decide that these transactions should be attributed to Legault and Roy without it.

[200] Finally, as of July 9 and 10 Legault and Roy’s own account remained overdrawn. If Legault and Roy received $2,200 that day as alleged, they did not deposit any of it to prevent their account from being overdrawn and to avoid the NSF fees that occurred in the following days.

[201] TD has not proven that Legault performed or benefitted from any of the transactions on July 9.

July 10, 2014

[202] The following day, July 10, there are two transactions. One of these is noted as “CASH WITHDRAWAL” for $150. This is the same notation that appears beside the $2,000 cash withdrawal the day before, and later large cash withdrawals, differentiated from a “TD ATM W/D” or a NON-TD ATM W/D”. Accordingly, I infer that this withdrawal of $150 was done in person inside TD Bank as opposed to at an ATM.

[203] The Midland TD bank branch manager, Jackie Stott, testified that if a withdrawal is conducted inside the bank, no one must sign anything at the time of the withdrawal as long as it is “PIN-verified”.

[204] It is, I find, highly unlikely that Legault or Roy would have performed this transaction. Had it been possible for them do such a thing, Ogden would not have had to attend personally to withdraw larger sums, as she testified that she did only two days later. It makes more sense for Legault or Roy to have used an ATM for a withdrawal of this size. Even taking into account that cash withdrawals only needed to be PIN-verified, Legault and Roy would risk being questioned about why they were accessing someone else’s account.

[205] I find that Ogden had the ATM card for account 645 in her possession on July 10, 2014 and performed this transaction.

July 11, 2014

[206] The only transaction in the bank account that Ogden admits that she benefited from is the next one in the account history, which occurred on July 11, 2014, at an establishment called “The Hock King”. Mr. Odinocki asked her why the initials “W.O.” were beside the transaction on the bank statement. The evidence that she provided in relation to this transaction is an example of the quality of testimony that she often provided to the court:

“probably because I might’ve got something from the Hock Shop. I cleaned Shelley’s house a few times. In one of the times I brought my sister with me to help me clean and, I don’t know, and she didn’t pay me that day when I finished cleaning her house. So I had a discussion with her, I don’t know if it was in the morning, noon or night or whatever, but I said there something at the hock shop that I’d really like. And, aah, I don’t know if she came with me or what but, I think she came with me, or she told me to go get it or whatever, but I purchased something from the hock shop. I think I did.”

[207] The court can deduce from this testimony that Ogden does not retain a clear memory of the event. But what she said at her SIU interview, when the event had occurred only two and a half months previously, was:

Ogden: The Hock King is mine, she probably gave me the card to go in there and do that, that’s mine.

Bourdignon: So you would have to meet up with her and get the bank card then.

Ogden: No, I think that day, when I made a deposit, or had to take money out for her, I might have said Shelly I need to go to Hock King and I don’t have the money on me so that’s how it probably came about, but I always gave her the card. As soon as I made the transactions. She would actually come to the bank with me.

[208] This answer mistakenly overlooked that the Hock Shop transaction did not occur on the day that the account was opened. Based on my finding that Ogden had the card in her possession the previous day, I find that she did not have to “meet up with” Legault to complete the transaction at the Hock Shop.

[209] Ogden testified that July 11 was the next time that she met Legault in the TD bank parking lot. There is another cash withdrawal for $3,500, and a TD ATM withdrawal for $100. Again, with reference to the bank statement that was in front of her, Ogden said that she withdrew these amounts at the request of Legault. Legault wanted the money to buy a trailer. After attending at the teller, Ogden went to the ATM and withdrew $100. This latter transaction occurred at 4:35 p.m. on July 11, 2014.

[210] These instructions were said to have been delivered by text message from Legault, who was again allegedly in the parking lot.

[211] As she claimed to have done on the previous occasion, Ogden passed the bank card with the larger sum to Legault in the driver side of the vehicle and slipped the other envelope containing $100 to her when Roy was not looking.

[212] This is as good a time as any to discuss Ogden’s portrayal of Roy, her characterization of Legault’s secrecy about the money due to Roy’s alleged drug habit, and her allegation that both Legault and Roy used drugs.

[213] During TD’s investigation, Ogden assisted Bourdignon by helping her to contact various individuals. As previously discussed, one of the people that she sent in Bourdignon’s direction was Brockett. At the time that Ogden did this, she said that Brockett was getting herself off crack cocaine because she was no longer hanging out with Legault. Ogden alleged that Brockett told her that she got involved with drugs through Legault and Roy. Ogden alleged that Roy does cocaine and has a very bad drug habit. This allegation was based strictly on seeing a white powder in Legault’s fridge. During her SIU interview, Ogden said that she “couldn’t be for sure” but inferred that Roy was Legault’s supplier.

[214] When Brockett testified, she made very clear who introduced her to drugs, and it was not Legault or Roy. As earlier explained, I found Brockett to be a credible witness and accept her evidence that it was a former boyfriend who introduced her to crack cocaine.

[215] Even without Brockett’s evidence, I find that Ogden’s evidence was wildly assumptive and given solely to cast Legault and Roy as discreditable characters. Legault had a daughter who was an IV drug user, who tragically died last year. Legault and Roy both provided evidence about the lengths to which they went to help Krista, her partner and their children, including having her grandchildren live with them after reporting their parents’ drug use to the Children’s Aid Society. I find that Legault would not personally use drugs nor tolerate a partner who used drugs, and that Ogden’s allegations are untrue.

[216] Accordingly, I reject the premise behind Ogden’s explanation for why separate withdrawals were made on July 9 and 11.

[217] Returning to Ogden’s evidence that Legault wanted the $3,500 to purchase a trailer, TD has not proven that Legault ever bought a trailer. During her SIU interview Ogden advised Bourdignon that Legault bought a pop-up trailer for $3,500 with the first cheque that she received, which she lived in in her back yard before moving to Waubaushene. Ogden told Bourdignon that she received the first cheque on August 27 and that she withdrew the $3,500 so that Legault could buy the trailer. During trial she corrected herself and said that the money for the trailer was taken out after depositing the first cheque in July. The second cheque issued by TD was deposited on August 27, and another $3,500 withdrawn, but it is again clear that Ogden had no independent recollection of these events without reference to the account history.

[218] Ogden also admitted at trial that she assumed that Legault bought the trailer but had no direct knowledge of such purchase other than seeing a trailer at 200 Jephson.

[219] Finally, as of July 11, Legault and Roy’s own account remained overdrawn. If Legault and Roy received $3,600 that day as alleged, they did not deposit any of it to prevent their account from continuing to be overdrawn.

[220] TD has not proven that Legault is responsible for any of the transactions on July 11.

July 14, 2014

[221] There are several debit transactions this day. The most significant transactions, however, and a central focus of this trial, are two withdrawals made on July 14 by Legault.

[222] TD has photographic evidence showing that Legault accessed this account with the associated card on two back-to-back occasions, the first at 17 minutes after midnight on July 14, a Monday, and then at 8:14 the next morning. On both occasions, $500 in cash was withdrawn.

[223] On the same date, a deposit of $800 was made into Legault and Roy’s personal account, after running a negative balance for several days. Legault’s evidence was that any cash deposits came from borrowing against her line of credit, cleaning boats or cash deposits for puppies. None of this was corroborated by contemporaneous records. As earlier stated, no records were produced for her line of credit and no records from the cleaning business were produced to support such a deposit. Legault’s evidence was that that her boat cleaning business was pursued only after she lost her job at Parkbridge, but no job records were produced to confirm her last day of work at Parkbridge. Again, the evidence as to when the puppies were born in the summer of 2014 is inconclusive, although occurred sometime after leaving the hotel.

[224] Legault’s explanation for these withdrawals is that she was instructed by Ogden to go to the TD Bank to withdraw money to buy supplies for a year-end baseball party that she was holding for the team at 200 Jephson Street the following weekend. That would have the date of that weekend party being either July 19 or 20. Legault, Brockett and Roy were to pick up alcohol and food and everything that was needed for the party. Ogden gave her the card and the PIN number. All of this was denied by Ogden.

[225] Legault testified that Ogden held money for both baseball and bowling, including team fees for entering tournaments and any winnings. On a few occasions, Ogden gave Legault and others on the baseball team a list of items to pick up for her. Legault recalled that on another occasion Ogden had given her a debit card for the Bank of Montréal and asked Legault to withdraw cash to pay a bill for her.

[226] This handling of money by Ogden is a significant part of Legault’s story, but scant details were provided. It was never made clear by Legault why Ogden was chosen for the role of handling money and the team’s captain was never identified.

[227] Carrie-Anne Boucher is Legault’s cousin and described her as a very good friend. She testified that in 2014, baseball was a large component of their lives and their main social connection. Boucher played full time on what she identified as “Shelly’s team” and on a co-ed team. She said that Legault had three to four teams at the time. It was Boucher’s experience that when the team won prize money, it went into a “pot”. Legault would often pay her entry fee. When asked who collected the money, her answer was “mostly Shelly”. This “pot” would pay for rooms, food or alcohol for the team. Boucher could not recall if Ogden collected money.

[228] Roy’s testimony is that either Ogden or Legault handled the finances for the baseball team, which I understood to be the co-ed team, both collecting membership fees, tournament fees and winnings. He was not sure which of them was collecting in 2014.

[229] Ogden denied that she ever collected money for the co-ed team, or retained their winnings. She referred to the baseball team during her testimony as “Shelly’s team”.

[230] Legault testified that it was not abnormal for those on her baseball team or close friends to ask one another to use their debit card if they were going out to pick up items such as food, cigarettes or beer, especially during tournaments. She described this as being a common occurrence.

[231] Brockett, whose evidence I do find reliable, also stated that various members of the baseball team, who at that time were like family, would give their bank cards to whoever was “running to town” for supplies during the day. PINs would be given out or written down. She listed the individuals who participated; included in this list were Roy and Ogden.

[232] Ogden denied that this was a regular occurrence; she saw cash being exchanged but not debit cards. She brought her own food to tournaments and did not participate in this practice.

[233] Legault was asked why she did not tell Bourdignon about the two withdrawals during her SIU interview on October 2, 2014. While there are many examples of Legault’s general vagueness in answering questions, her explanation for why she did not provide a candid answer to Bourdignon’s questions about her card use is typical:

“Well I didn’t, I guess, disclose like that, because I didn’t understand why they were asking me about people’s bank cards, and where I was living, or my insurance, so at the time, I thought- or maybe I clearly wasn’t thinking that I you know, should have answered with - and, and told them, yes, I have used people’s bank cards. But I didn’t think it was kind of anyone’s business if I borrowed something, to disclose it to the world whose stuff I borrowed or who gave me what, you know, like….”

[234] Bourdignon did ask her about whether she was involved in an arrangement to open an account at TD to deposit the cheques. Legault told her that she had no idea where Ogden did her banking, and professed no knowledge about any transactions or a PIN associated with a TD account other than her own accounts. Bourdignon did not specifically ask her about the two $500 withdrawals from July 14, and did not show her the transaction history from account 645 during the questioning. What was patently not true, though, was Legault’s comment that she did not know where Ogden banked. She had been to the TD Bank to make these two withdrawals with “Wendi’s card”. And in September, only a month before her interview, Legault testified that she met Ogden in the parking lot at TD Bank for the purpose of having some of the rent money returned to her. Legault, I find, was not confused, but rather was attempting to dissociate herself from any connection to account 645.

[235] Legault submitted to an EUO on March 26, 2015, in the presence of her counsel. She testified that she was confused at that time whether they were just questioning her about the rental properties, or about money. She was not sure whether she was shown any pictures taken at the TD ATM. During the EUO she denied having any access to Ogden’s bank account. These questions were posed in clear language:

Q: Did you have access to Wendy Ogden’s TD Bank account?

A: No.

Q: Have you ever been given the interac card, the bank access card to Wendy Ogden’s account?

A: No.

Q: Were you ever told what Wendy Ogden’s PIN number was for her bank account card?

A: No.

[236] These answers were obviously untrue. When asked to explain why she made these denials, Legault admitted that she lied. She stated that she was flustered, under a lot of stress, and was not clear about what she was doing there and why certain questions were being asked. She also said that she was not going to disclose someone’s personal information and was protecting the fact that Ogden had given her debit card. This explanation makes no sense in the context of Legault being investigated due to Ogden’s allegations. On further cross-examination, she said that she did not know what she was thinking at the time and does not know why she lied.

[237] Later during the EUO Legault did discuss the fact that Ogden had given her, Roy and Brockett a bank card at some point, but she was not sure whether it was a green card or a blue card. As Legault described it, Ogden asked the three of them to pick up a list of things from the LCBO. She thought the supplies were for a tournament in August. She did not mention that this involved going to the bank to make withdrawals. And contrary to her trial evidence, this did not have anything to do with an end-of-year party, but rather, with a tournament.

[238] Even when presented with the bank statements from Ogden’s account during her EUO, she did not identify either of the $500 withdrawals as being attributed to her.

[239] Legault said that she had written down the PIN before making the withdrawals. I find the video of the first withdrawal inconclusive as to whether Legault checked any written aid before inputting the PIN into the ATM. During the second transaction, although Legault does appear to be holding a piece of paper in her hand, she could not say conclusively whether she remembered the PIN from the night before, or what she was holding in her hand.

[240] Legault was unable to recall why she needed to make two withdrawals but hypothesized that it had something to do with the daily withdrawal limit for the account. This too makes no sense given that both withdrawals were made on the same date.

[241] Legault testified that they were still playing baseball into the month of September. This raises further doubt that arrangements were being made for an “end-of-year” party in mid-July.

[242] Based on Brockett’s corroboration, I can accept that an occasional practice of sharing debit cards and PINs went on between members of the baseball team during the summer of 2014. But looking at all the evidence related to the two withdrawals on July 14, particularly Legault’s evasiveness about the topic, I do not accept that these withdrawals were part of this practice. I reject that it was for the purchase of supplies for a year end party, for several reasons: it was not the end of the baseball season, the evidence of who used the money, and for what, is vague, and Legault gave contradictory evidence at trial around the date of that party, which will be discussed later. Further, I am not persuaded by the evidence that it was Ogden who was charged with handling the team’s money; on the evidence the more likely candidate is Legault.

[243] I find that TD has proven that Legault withdrew this money on July 14, for purposes other than what she told the court.

July 17, 2014

[244] On July 17, 2014, there is a debit transaction for $100, based on “Chq#00001”. It is the only cheque negotiated during the period at issue. Ogden denies receiving cheques at the time that she opened the account, although she does acknowledge that it was a chequing account. Ogden’s evidence is that she has no information about that cheque.

[245] Bourdignon did not follow up with the bank to ascertain the details of that cheque. Absent evidence of forgery, as the sole account holder Ogden must have signed the cheque.

July 22, 2014

[246] Ogden did not have a swimming pool at 268 Bay. Legault had an above-ground pool at 200 Jephson, which she opened and maintained that summer. A transaction took place on July 22 at Huronia Pools for a purchase costing $13.14. Legault and Ogden both denied that the transaction was hers. Roy denied that it was his.

[247] At her EUO, Legault was asked whether she has bought anything from that store and responded affirmatively. The TD account that she held jointly with Roy shows a transaction at Huronia Pools on July 21, 2014. She testified that the store sells merchandise such as gardening supplies, plants and furniture, in addition to pool supplies.

[248] Monique Moreau, the director of operations at Huronia Pools Leisurescapes, testified with respect to that transaction. It was for the purchase of two pool-related parts. Payment was made with a debit card ending in “5206”, which corresponds to the last four digits of the debit card issued for account 645.

[249] Moreau has worked at Huronia Pools for the past 25 years. She confirmed that the store sells pool and spa supplies, outdoor furniture and barbeques, but not plants or gardening supplies.

[250] The store maintains customer information in its database. The store does not maintain a profile for Ogden, but does for Legault. The invoice that was produced for the purchase that occurred on July 22 shows the customer information as “Shelly/Darin Legault/Roy”, but the email and cell phone attached to the account is that of Legault’s former partner, Gibson. Moreau was unable to tell when account profile changes were made. Legault denies changing the customer profile information to include Roy. Even though they had resided together for over a year at that point, all household bills remained in her name.

[251] Moreau testified that the drain cap kit and sand filter that were purchased could be for either an in-ground or above-ground pool.

[252] No evidence was heard about whether Gibson has a pool where he now resides.

[253] The invoice from Huronia Pools was produced for the first-time during trial, and Legault was permitted to call reply evidence related to it. She testified that the products purchased triggered a memory for her. In July 2014 she had a new pool liner installed in preparation for the end of year baseball party in July. Roy was helping to install the liner. She attributes Roy as being the one to make the purchase on July 21, 2014, from their joint account, when he bought filter sand. Ogden was also involved in preparing for the party by performing clean up in the backyard for that party.

[254] Legault said whoever went into Huronia Pools on July 22, 2014, updated some of the information on the Huronia Pools account. She had no recollection of doing that, and said that she would not have added Roy’s name. The premise of this evidence is that the account information was changed by whoever conducted the transaction, but there is no way to prove when the account information was changed. Legault said that she did not buy the product nor return it the next day. She cannot explain how Ogden’s card appears on the bill, other than that she hypothesized that Ogden was the one who went there in preparation for the party. She has never asked Roy whether he asked Ogden to go to Huronia Pools to buy or return anything, and Roy did not provide such evidence.

[255] As indicated earlier, Legault’s evidence about preparations for the year-end party conflicts. According to Legault’s evidence about the two withdrawals of $500, the party was to have occurred on July 19/20, the weekend before the purchase was made at Huronia Pools. According to her evidence about the backyard preparations, the party was to occur sometime after this purchase was made on July 22.

[256] I also find that it is highly unlikely that Ogden, a person who did not operate a pool, would have been asked to go to the store to buy these parts even though two days later, the drain cap was exchanged for one of a different size. Nor would she have any interest in changing the account information. Legault’s evidence that Ogden made the purchase and altered the account is conjecture that is not supported by any evidence.

[257] It is unclear whether Legault was still working at Parkbridge on the Tuesday when the parts were purchased. She said that she was not part of the backyard preparations because she was working. But again, without having more reliable evidence about her likely whereabouts that day, I must reach the conclusion that it was either Legault or Roy who had control of the card for account 645 at that time.

[258] I find that TD has proven that either Roy or Legault had the card in their possession on July 22 and performed this transaction.

July 25, 2014

[259] It is undisputed that Roy is responsible for the next significant transaction, being a cash withdrawal of $240 from the TD ATM in Midland. Roy testified that he does not know why he made the withdrawal, offering only a vague statement that it would have been for baseball or bowling.

[260] Roy also discussed the practice of sharing bank cards and PINs by baseball team members, given out when the person had no cash. If he was the one being asked to pick up supplies, he would put the PINs in the Notes application in his phone instead of keeping a written note. He would also go to a bank if a person wanted him to, to withdraw money for alcohol or tournament fees. He believed that he had used Ogden’s card in the past.

[261] Based on the amount of the withdrawal and its location, I draw the inference that this was not part of an “away” tournament or a simple run into town to buy some food and beverages.

[262] Roy submitted to an SIU interview on October 17, 2014, and was questioned about his knowledge of account 645. He denied ever using the bank card associated with that account to withdraw money. He later changed that evidence when admitting to a later, larger withdrawal using the same card.

[263] Having already determined that Ogden was not the person to handle the team’s funds in the summer of 2014, coupled with the size of the withdrawal, Roy’s vague evidence about its purpose, and his initial false denial about accessing the account, I find that TD has proven that Roy had the card in his possession on July 25 and used it to withdraw money for purposes other than that for which he testified.

July 28, 2014

[264] There is another cash withdrawal of $40, not conducted at an ATM. For the same reason that I drew the conclusion that Ogden conducted the cash withdrawal transaction on July 10, I find that Ogden had the ATM card for account 645 in her possession on July 28, 2014 and conducted that transaction.

August 27, 2014

[265] Account 645 became overdrawn on July 31 and no further activity occurred in it until the second $10,000 cheque from TD was deposited on August 27.

[266] Ogden said that Legault called her and told her that she had received another cheque for her living allowance. Ogden said that they again met in the TD Bank parking lot. After depositing the cheque, on Legault’s instructions she withdrew $3,500 from the teller and gave the money and the debit card to Legault in the parking lot. There was no ATM withdrawal that day.

[267] Ogden believed that she asked Legault on that occasion, but was not sure, about when the cheques were going to stop. According to her, they had discussed the arrangement being short-term and she knew that Legault was not staying at her house. Ogden could not recall what Legault said but recalled that she was upset by it. This conflicts with what Ogden told Bourdignon about the arrangement possibly being for as many as six months.

[268] There are various debit purchases made this day and the following, but like other such purchases, it is not possible to know who made the transaction.

August 29, 2014

[269] There is another transaction marked as “Cash withdrawal” for $1,200, and a TD ATM withdrawal of $200. For the same reasons previously stated, I find that Ogden is responsible for the cash withdrawal.

[270] TD did not obtain video evidence of the ATM transaction and has not proven who was responsible.

September 2, 2014

[271] There is a withdrawal of $300 from a TD ATM. TD did not obtain video evidence of this transaction and has not proven who was responsible.

September 4, 2014

[272] It is not disputed that Roy is responsible for withdrawing $1,000 on September 4. The video evidence proves that he attended the Midland TD Bank branch and withdrew the money from the ATM at 9:49 a.m.

[273] As stated earlier, he denied conducting any transactions in account 645 when questioned by Bourdignon on October 17, 2014.

[274] According to Roy’s trial evidence, he took this money shortly after he and Legault left 268 Bay because their belongings had gone missing. Specifically, he was angry over the fact that he believed that Ogden had stolen Haile’s tablet. He went back to 268 Bay, intent on taking a car that he said belonged to Legault. Instead, he took the keys from where they were stored in the gas cap, entered the car, saw a wallet, took out the card, then went immediately to the bank to withdraw the money. He had the PIN recorded in his phone. He used the money to buy Haile a used tablet and took her shopping. He reasoned that between the tablet, which was worth $300, and what Ogden owed Legault for the car, he was justified in doing so.

[275] Much evidence was heard both about the alleged theft of the tablet, as discussed earlier, and Roy’s allegation that he obtained the card from the car. It is not a useful or necessary exercise to decide whose version of events most closely resembles the truth, if anyone’s, as I have already determined that by this date, Roy had had possession of the card, accessed the account, and was not candid about how he used the money. And by this date, the evidence is also clear that both Legault and Ogden had the card at different times.

[276] Mr. Odinocki submitted that this court should find Roy to be an entirely discreditable witness given his past lies. I agree that his evidence should be treated no less cautiously than that of Legault or Ogden.

[277] Roy said that at some point Legault asked him whether he had taken this money and he denied it. When she became aware that there was video evidence proving that he lied to her, she ended their relationship, although they later reconciled.

[278] Ogden says that Legault reported this $1,000 theft to her. She described that on a Thursday, while she was cleaning a home in Victoria Harbour, Legault called her and told her that she needed to cancel the card because Roy had stolen it, along with her Jeep, and told her that Roy had taken money from the account. Ogden told her that as soon as she was done cleaning, she would go cancel that bank card and get a new one issued to give to Legault. Ogden says that she did just that. When she was at the bank getting a new card, she inquired whether any money had been taken out and learned that $1,000 had been withdrawn from the TD ATM in the early morning hours.

[279] Ogden recounted that she is not sure whether she took the new card to Legault where she was living in Waubaushene, or whether Legault picked it up from her at baseball. At trial she did not say whether this occurred on the same day that the new card was issued. However, during her interview with Bourdignon she said that it was on September 6, when she was playing a tournament in Victoria Harbour, that she took the card to Legault in Waubaushene.

[280] On this same day there is another “CASH WITHDRAWAL” in the amount of $400. For the same reasons previously discussed, I attribute this to Ogden.

[281] Sometime after allegedly giving the new card to Legault, she heard a rumour that she was being accused of stealing the money. Exactly what amounts, and when, she did not specify. She decided to close the account and told Legault why she was doing it.

[282] It is impossible for this court to determine which one of these stories about the $1,000 withdrawal is even close to the truth. Given that I have found that Ogden had the card in her possession at times, Roy may very well have gone into her car to remove the card. Given that I have found that there was a live issue between them about Haile’s tablet being stolen, Roy’s stated motivation may be truthful. Ogden may have received a call from Legault, or it may have been during a bank transaction that she discovered $1,000 was missing. Or Ogden may have called Legault, after which Legault may have asked Roy if he took the money.

[283] I do find, however, that it is likely that Legault and Roy’s split came about because Roy initially lied to Legault. However, I do not accept that Legault’s reason for “kicking him out” was because, in principle, Legault took opposition to him accessing the money. By this time, Legault and Roy had both used the account and given their relationship, I infer that this involved sharing the card with one another as well as sharing it with Ogden.

September 5, 2014

[284] There is a non-TD ATM withdrawal of $301.50. If Ogden was accurate in telling Bourdignon that she cancelled the card on September 4 and had the card in her possession until September 6, this transaction would be attributed to Ogden.

September 8, 2014

[285] Among other transactions, there is a payment to Tay Hydro in the amount of $378.86. Bourdignon did not investigate to determine whose account was paid.

[286] Dunn’s evidence was that the rent charged to Ogden in 2014 included utilities. He stated that there would be no reason for a utility or hydro bill relating to 268 Bay to be paid to Tay Township in 2014. All utilities related to 268 Bay were paid to the Town of Midland. I accept these facts.

[287] I can make no findings about who paid this account. Based on the evidence of Dunn, I can only find that it was not paid for hydro services at 268 Bay.

September 9, 2014

[288] The account was closed and the final balance of $963.70 was withdrawn.

[289] Legault said that she talked to Ogden over the phone a few times to address the issue of the return of rent money. She also said that she attempted to involve Roberts, who could not help her. This of course conflicts with her evidence that she did not think that she had to tell Roberts that she was moving. Roberts denied that Legault notified her. There are no emails or claims notes to corroborate Legault’s evidence that she involved TD in the issue of obtaining the return of rent money from Ogden.

[290] On the day that Ogden closed the account, she recalled that she withdrew the remaining balance of 900-and-some dollars. Ogden said that Roy and Brockett were in the parking lot that day with Legault. She threw the money at Legault and told her that the account was closed.

[291] Legault did not explain how arrangements for this encounter came to pass. Legault testified that Ogden went into the bank and then came out and started screaming and name-calling and threw an envelope in Legault’s face. The envelope contained money. Legault was not positive about how much money was in the envelope but believed that there was an elastic around some of it that contained “I don’t even know like 900 maybe”. Then there were additional bills, and she thought that the total was approximately $5,000.

[292] She said that she used the money to pay for her next housing, which was the Hearthstone Drive rental. The cost of the rent was $1,000 per week. She did not ask TD to cover the cost of this housing for the next month because of having received the money from Ogden.

[293] Legault had lived at 268 Bay only six weeks, for which, according to her evidence, TD had paid $15,000. At the most, Ogden should have received only $10,000. Legault said that Ogden insisted on receiving 30 days’ notice as provided in the lease. The idea that Legault would permit Ogden to rely on the notice clause in a lease after learning that Ogden had no authority to enter such a lease is not believable. The fact that she did not involve Roberts in recovering additional money suggests to this court that Legault did not want her to start asking questions of Ogden. I find that that is the real reason why she did not contact Roberts, rather than her fabrication that she received close to $5,000 from Ogden that went to cover rent at Hearthstone.

September 10, 2014

[294] A significant event occurred the day after the account was closed. Legault, accompanied by Brockett, went to 268 Bay for the purpose of removing the license plate from a red Pontiac Sunfire vehicle that was being driven by Ogden. A physical altercation occurred between the two women. The police were called.

[295] When asked why she did not take the car with her when she left on August 30, Legault’s answer was that the car was “probably” not on the property.

[296] Legault testified that in addition to addressing the issue of the Sunfire, she returned to 268 Bay to retrieve her belongings. Her evidence was that Ogden threw some clothes at her, and that Ogden was screaming and yelling. She would not let Legault enter the house. Why Legault did not take all her personal belongings with her at the time that she moved out days earlier was never explained.

[297] There is no dispute in the evidence that the license plates on the Sunfire belonged to Legault. Of course, the two have conflicting evidence about why Legault’s plates were on the Sunfire.

[298] Legault says that it is because she borrowed money to pay for the vehicle on behalf of Ogden, and that she wanted to ensure that the vehicle was in her name until Ogden paid her back. It was purchased from Rachel Lepine for Ogden because Ogden did not have the money. Ogden asked Legault for a loan. Ogden was supposed to repay Legault. No details were provided of the terms of this loan, either with respect to a repayment schedule or interest. Legault says that this transaction occurred while she was still at the hotel, sometime in June or July. She was unsure of the exact cost and put it in the range of $1,000 to $1,500. Legault also paid to have it insured. A temporary automobile liability insurance card indicates that the vehicle was insured by Legault effective July 30, 2014.

[299] Ogden says that she was unable to register a vehicle in her name because of a crime perpetrated against her by her brother years earlier, which resulted in him fraudulently registering a series of vehicles in her name. There is independent evidence to corroborate Ogden’s evidence about her brother’s fraud. However, Ogden was adamant that she had purchased the vehicle for $800 from Rachel Lepine, trading the cost of the car for cleaning services throughout 2014. Ogden was vague about whether she reimbursed Legault for the cost of insurance, saying only that she “would have” done so. Ogden claims to have obtained a bill of sale from Lepine, which she provided to a subsequent purchaser.

[300] I find that neither Legault nor Ogden has proven that she paid for the car. Neither party called Lepine as a witness. Legault did not produce her line of credit statements, and the available evidence of her strained financial situation in the spring and summer of 2014 makes it hard to believe that she would extend credit to Ogden. Given my unfavorable view of Legault’s credibility, independent corroboration would have been required. Ogden produced a calendar showing dates that she cleaned for Lepine, indicating the amount “earned” and applied to pay for the car. Given my unfavorable view of Ogden’s credibility, independent corroboration from Lepine would have been required for me to accept that these amounts relate to the purchase of a car.

[301] What I do accept was proven is that Ogden later committed fraud when she had the Sunfire put in the name of another person, whom she described as a friend. It was her evidence that she just went to the Ministry and a new ownership was created. This evidence is not believable. In the usual course, the Ministry’s records would have shown that the car’s VIN was registered to Legault and Legault’s signature would have been required for any new ownership or transfer.

[302] However, nothing turns on who gave Lepine money for the car; it is the altercation that is the significant event. Because the next day, Ogden called TD to “blow the whistle” on Legault.

Conclusion

[303] I find that all the deposits into account 645 were comprised of the rent money issued by TD for the rental of 268 Bay. There are many transactions in the account that have not been proven to be specifically attributable to Legault or Roy. While Ogden’s evidence is thoroughly unreliable, there is still a sufficient basis, without Ogden’s input, for this court to find that Legault had access to and used some of the money in that account for her own benefit, for purposes other than rent. While these amounts are a small part of the overall sum, the transactions that have been proven to be attributable to Legault and Roy demonstrate that it was not, as Legault alleged, a straightforward tenancy arrangement. I find that there was mutual sharing of the bank card between Ogden, Legault and Roy and that this was part of a deliberate, intentional arrangement for both women to have access to extra money.

[304] Accordingly, when Legault signed the proof of loss and agreed that $15,000 was paid to Ogden for rent, she knowingly made a false declaration. Regardless of who drafted that form, Legault knew that the $20,000 had not been used for rent, and deliberately concealed or misrepresented that fact.

[305] The test for fraud has been met.

[306] In reaching this conclusion, I have given considerable thought to Ms. Ismail’s forceful arguments that TD conducted an inadequate investigation. There were many junctures at which TD did not follow up on points that might have made this case more straightforward, only some of which I have pointed out in these reasons. But in the end, TD has proved its case and filling any of the investigative gaps would not alter that conclusion.

[307] I have also given considerable thought to Ms. Ismail’s submissions that TD did not treat Legault with utmost good faith when it failed to explain the effects of a Proof of Loss, when it asked her to sign the interim Proof of Loss that had been prepared under the direction of TD, and/or failed to be transparent with her about why she was being asked to submit to an EUO. I have found it unnecessary to evaluate the effect of these acts or omissions after finding that the money was requested and used for purposes other than rent. Legault’s fraud renders insignificant any failings on the part of TD.

[308] Even though Legault has no right to recovery under the Policy, I will proceed with an assessment of her damages in the event of review by a higher court. I will leave for another court the question of whether an appraisal would have been available to the plaintiff at this stage, as I was not provided with any authorities to assist in determining this question.

DAMAGES

(i) Who is responsible for the flooding in the basement?

[309] Legault’s position is that the cause of the flooding was first, hydro being turned off in the home following the fire, thereby disabling the sump pump, and next, the pump being unplugged when ServiceMaster plugged in drying fans during their emergency services. TD denies that ServiceMaster is responsible for the pump’s failure.

[310] I conclude that the flooding in the basement was caused by the sump pump being disabled by lack of hydro on two occasions.

[311] Roberts met with Legault at 200 Jephson Street the day after the fire to review the loss and investigate the damage. Both testified that they walked through the property. Legault testified that during that walk through there was no water in the basement and no water is noted in Roberts’ claims notes.

[312] Roberts testified that ServiceMaster was also on site on March 14 for the walk through and to assess the damage, which is supported by the documentary evidence.

[313] Legault signed a Work Authorization on March 17, 2014, that permitted ServiceMaster to perform emergency services necessitated by the fire. The Authorization provides for monitoring, as follows: “I understand that ServiceMaster will require regular access to my property to monitor and/or continue the progress of disaster remediation”.

[314] The dwelling was outfitted with a sump pump, located in the laundry room in the basement. It was uncontroverted that the property is situated in an area with a high water table and that a sump pump had been in regular use at the property. Gibson had installed it a couple of years before the fire to replace an older pump. Legault testified that it was an expensive pump, which had never malfunctioned.

[315] Roberts’ evidence was that during their walk through after the fire, ServiceMaster noticed that the power to the kitchen had not been discontinued, and so brought in an electrician to do so. There is no evidence that anyone else had reason to access the electrical panel after the fire.

[316] Legault and Roy regularly checked the house after the fire. Within the first week or two they noticed that there was water on the basement floor. Legault said approximately four inches; Roy said there was about a foot. They stated that this first incidence of water damage occurred because the main power switch had been turned off by someone at the time of the fire. Both Legault and Roy testified that Roy turned the breaker back on at the time of discovering the water and the sump pump began to drain the standing water.

[317] The available evidence leads to the conclusion that it was an electrician engaged at the behest of ServiceMaster who, on a balance of probabilities, was the cause of the main power switch being turned off, which led to the sump pump having no power.

[318] Legault and Roy’s evidence is that they observed a second occurrence of water in the basement, which they attributed to ServiceMaster unplugging the sump pump to plug in industrial fans. According to Roy, this was three to four days after the first flood. His testimony is that there was a lot more water that time, close to two feet, with items floating in it.

[319] Roberts testified that she was only aware of one flood, which occurred because the sump pump had been physically unplugged for the fans.

[320] Although Roberts testified that ServiceMaster never admitted that they had unplugged the sump pump, and that TD did not authorize any further investigation into the cause of the floods, her second report to TD dated May 14, 2014, states unequivocally that it was during the emergency repairs that ServiceMaster unplugged the sump pump in order to plug in their drying equipment. It is also clear from her third report to TD that ServiceMaster used “six air movers and one dehumidifier” running in the basement for a period of three weeks. She also stated that since the basement carpet was going to be removed anyway there was no additional cost associated with the flooring, however “ServiceMaster has been advised that if their failure to plug in the sump pump resulted in any additional damage they will be responsible for the costs to repair same”.

[321] I conclude that there were two incidents of flooding. There would be no reason for ServiceMaster to install industrial fans and a dehumidifier unless they were attempting to dry out the basement from prior water infiltration.

[322] In the absence of any direct evidence from ServiceMaster, I conclude that the second flood was caused when ServiceMaster left the sump pump unplugged.

[323] Both incidents happened when ServiceMaster had control of the premises to effect emergency services and should have been overseeing the mechanical and electrical systems in the dwelling. Through the negligence of ServiceMaster or its agent (the electrician), there was no hydro running to the pump on two occasions. It is reasonably foreseeable that a failure to keep the sump pump operating could result in basement flooding.

[324] Accordingly, Legault is not responsible for any additional damage caused by the flooding. This leaves open the thornier question of whether the legal responsibility for any damage belongs to ServiceMaster or TD. However, because of the determinations made on the next issue, it is not necessary for me to resolve the question of liability.

(ii) Did ServiceMaster’s scope of work include water damage to the basement?

[325] This issue refers only to any damage that may have occurred before the cancellation of the Policy.

[326] A representative of ServiceMaster was not called as a witness at trial, and so all evidence about what may have been included in the scope of work prepared by them was provided by other witnesses.

[327] Both Legault and Roy testified that when the flooding occurred, the drywall and the insulation had not yet been removed from the basement walls. They observed that the drywall was wet after the floods. Legault said that it was swelling and bubbling at the bottom, and that the basement smelled damp and musty. Roy saw the paint peeling and the drywall bubbling as high as three feet off the ground by the time of the second flood. At that time Roy worked as a unionized drywall contractor. He had done work for ServiceMaster in the past. It was his observation that the drywall had been cut and removed to a height of approximately two feet after the first flood, and that the insulation remained. He saw that it was wet and beginning to turn black with what he recognized to be mold. He could also smell the wet insulation, describing it as a strong odour that he was familiar with from his work. When faced with this problem in his work, his approach was to remove all of the drywall and insulation to the ceiling, and if there was mold on the wood, to treat it with a special paint to seal the mold.

[328] These observations are taken into consideration, but during his testimony this court ruled that Roy could not give opinion evidence even as a participant expert because as Legault’s partner, the evidence could not meet the requirements of being impartial, independent and unbiased. This includes the issue of the development of mold. Accordingly, I cannot conclude from his testimony that mold had developed during those early weeks, or that the studs or other wooden building material had become compromised by the water to the point that mold had developed.

[329] I would not however, as Mr. Odinocki requested that I do, reject the entirety of Roy’s evidence because of admissions made by him that he has lied in the past when providing information to TD. The subject matter of his questioning on those instances was on the unrelated issue of whether he had taken money from Ogden’s account. There is an obvious basis for his motivation to lie, which is to avoid criminal liability. But on the issue of what he observed in the basement, I find no reason to reject the reliability his testimony.

[330] There is no evidence of the extent to which these steps taken by ServiceMaster to install the fans and dehumidifier remediated the issues identified by Legault and Roy, if at all.

[331] It was Roberts’ advice to Legault that she would have to make a second claim for any water damage arising from the sump pump failure. Legault explained that she did not follow that advice, as she considered that it all resulted from the aftermath of the fire.

[332] Legault said that TD eventually agreed that it would perform tear out in the basement only. I find that this is inaccurate; as Roberts’ testified, the tear out in the basement was part of the smoke damage and was included in the scope of work prepared by ServiceMaster.

[333] After they took out the material, Legault saw black specs on the concrete exterior basement walls, and on the interior stud walls.

[334] Michael Ostertag of Ostertag Carpentry came to the property and provided a restoration quote for Legault. The exact date of his attendance is unknown but his quote is dated June 2, 2014. His quote addresses the issue of the wet basement by stating “supply materials and labour to clean mold/moisture issues in the basement. Taking proper precautions to avoid further mold issues”. However, during his testimony he was not asked any questions about mold, what steps he intended to take, or how much of his quote related to the remediation of the wet basement. The comments in the Ostertag quote are insufficient to satisfy this court that mold developed from the flood. It may be that Ostertag saw mold, or it may be that he was providing an allowance for any mold issues that he might encounter if he secured the job. His testimony revealed that his was not a final and fixed quote.

[335] ServiceMaster submitted three detailed quotations for the rebuild work. The first is dated June 2, 2014. It provides for work to be done on all areas of the basement: two bedrooms, the storage/laundry room, the recreation room, a brick fireplace wall, stairs and landing. Within this quote, an actual cash value of $2,645.09 is allotted for “seal stud wall for odor control (shellac)” in the basement. Another one of TD’s preferred vendors, Winmar, provided a quote for the rebuild work. In its quote dated June 3, 2014, Winmar also included $2,645.09 for “seal stud wall for odor control (shellac)”. Neither one makes reference to mold remediation. I infer that the work in the quotes relates to preventing smoke odour, as opposed to addressing water damage.

[336] However, it is clear from all of ServiceMaster’s quotes that an allowance has been made for insulation, drywall, plus finishing in each room on the basement. Missing from the quotes, however, is flooring.

[337] Jean-Paul Cappuccitti, who held the position of complex claims adjuster at TD at the time of this loss, testified that Winmar was asked to quote without reference to the drywall and insulation damage resulting from the sump pump failure. A review of the quote shows that it includes, insulation, vapour barrier, drywall and painting in each of the basement rooms. Again, flooring is missing.

[338] After receiving the Ostertag quote that noted the issue of mold, Roberts testified that ServiceMaster was asked to return to determine if there was any mold or moisture related damage. We do not have the benefit of the findings made by ServiceMaster, if any, although Roberts testified that they did return to inspect.

[339] Observations of the basement were made by Stephen MacDougall, an engineer, who inspected the basement one year after the fire, on March 13, 2015. He noted that the interior finishes in the basement had been mostly removed, except for the top stud wall sections of the foundation walls, which included drywall. MacDougall was not questioned about whether he saw insulation remaining behind the drywall, whether he noticed any evidence of ongoing wetness on insulation or drywall, or whether he detected the smell or sight of what could be mold.

[340] In the final result, this court has no firm basis upon which to conclude that mold developed in the basement, or that additional damage was caused by the sump pump failures not already included in the quotes obtained by TD. Accordingly, there is no reason to conclude that the scope of work covered in the ServiceMaster or Winmar quotes should have included an allowance for mold remediation, or should have required services or materials beyond the amounts allowed for the basement rebuild.

[341] What is not included is the cost of replacement flooring. It appears that 5/8” plywood sheathing was included; I infer that this was for the subfloor. However, the final finish was not included.

[342] The onus is on Legault to establish her loss: Sagl. She has not established that the two incidents of flooding increased her damages by creating mold or other problems related to the water infiltration.

[343] Further, even if the growth of mold or related problems had been established on the evidence, the plaintiff has offered no basis upon which this court can assign a monetary amount for any additional problems caused by the water infiltration.

[344] This still leaves the omission of the basement flooring, which I find should have been included. It is reasonable to conclude that it would need to be replaced after two severe incidents of water damage. It is possible to calculate a reasonable amount based on a combination of the Ostertag quote and the detailed measurements taken by ServiceMaster. Ostertag quoted $2.99 per square foot to install new flooring in the entire home. ServiceMaster measured the total basement floor area at 612.08 ft/sq, including the landing on the stairs. I find that replacement costs in 2014 was $1,830.12 for the basement flooring.

(iii) Is TD liable for the structural damage

[345] At the time the structural damage occurred, Legault’s Policy had been cancelled due to non-payment of the premium, effective September 12, 2014. Accordingly, Legault bases her claim for contractual damages on the theory that this loss results from the fire loss, and specifically, the failure of TD to keep the home heated.

[346] Stephen MacDougall was retained by TD to investigate the cause of the damage. When he inspected the property on March 13, 2015, he found that the home was unheated.

[347] The evidence bears out, and is undisputed, that the cause of the structural damage in the basement floors and walls arose from the home being left unheated, permitting water in the ground underneath the home to freeze. This was MacDougall’s opinion, which I accept.

[348] Payment of an insured’s utilities is not provided by the Policy, and usual expenses of maintaining the Property are not covered in ALE.

[349] The debate over responsibility arises from an exchange between Legault and Roberts over “winterizing” the property. It began with an email from Legault to Roberts on October 27, 2014, where she wrote:

Linda in spite of the investigation my home needs to be sealed up & pipes drained there is no heat and the animals will be making my house theirs not to mention if the pipes freeze they will burst. Please advise as to what will be done with these potential issues.

[350] Roberts wrote back the next day, indicating that arrangements would be made to have a plumber attend. There is no mention of the lack of heat. She wrote:

TD Insurance has agreed to make arrangements through a plumber to have the building winterized as a courtesy. As of approximately September 19th your policy was cancelled meaning they no longer insure you and any future claims would not be covered by them. TD did suggest that I pass along their strong recommendations that you keep the doors to your home closed and locked at all times to reduce the potential for future claims.

[351] This email exchange shows that Roberts was only focused on having a plumber winterize the pipes. No promises were made about heating. Roberts agreed that she did not tell Legault to heat her home. This is of no consequence however, as Legault and Roy both made clear that they believed that heating a home in which the insulation had been removed would cause further problems, and that they had no intention of doing so. Yet it is clear from Legault’s email that she was aware that the heat was not on. And even though the scope of work covered replacement of the furnace, no evidence was led that the furnace had been removed or was non-functioning.

[352] Mr. McDougall was the only witness from whom expert evidence was provided on this issue of heating a house in this state. He testified it is possible to heat an uninsulated building. Such a building requires only enough heat to prevent freezing from occurring below the foundation. He also testified that even if the house had been fully insulated, the lack of heat would still be the main problem.

[353] I find that TD did not represent that they would heat the home, nor did they have an obligation under the Policy to do so. Legault may have had a claim for any increase in hydro necessitated by heating an uninsulated home as part of ALE, but it is unnecessary to decide that issue given her deliberate decision not to heat it at all. TD is not liable for this decision; the financial consequences of the structural damage cannot be claimed against TD.

(iv) Is TD liable for the power of sale proceedings?

[354] As Bourassa’s uncontested evidence made clear, unpaid realty taxes and default in mortgage payments were part of the cause of Bridgewater initiating enforcement proceedings. A tax arrears certificate had already been registered in the summer of 2014, and default in interest payments occurred throughout 2014 but remained unremedied after December 2014.

[355] The evidence of TD, supported by the documentary evidence, is that TD paid for Legault’s rent up until her claim was denied. I accept her evidence that sometimes she had to cover costs, and wait for payment from TD, but the payments were eventually made. The claims notes show that a total of $27,580.61 was paid to Legault directly for contents and expenses prior to her claim being denied, and a total of $77,020.19 was paid to third parties on account of ALE, including the amounts paid to Ogden. Legault has not proven that the power of sale proceeding arose from the TD’s approach to adjusting the claim.

[356] TD cannot be held responsible for Legault’s financial condition. The evidence is that she no longer had a steady job after July 2014. There is evidence that as of November 2014 she and Roy were applying for assistance from Ontario Works. Since then, Legault has successfully created a boat cleaning business. There is no evidence of the income that that business may have been generating in 2014. Legault’s banking records from the summer of 2014 have already been described in detail and reveal no large deposits.

[357] I find that TD cannot be held responsible for Legault losing the property at 200 Jephson.

(v) Indemnity under the Policy

[358] Legault does not claim for more payments on account of ALE. And even though pled in her claim, I find that she has not advanced or particularized a claim at trial for lost or damaged contents and personal items. The evidence advanced in respect of contents was vague and general and never quantified.

[359] With respect to her dwelling, no expert report was provided by Legault. She also did not call any witnesses from ServiceMaster to explore any omissions or inaccuracies in their repair quotes beyond the absence of flooring previously discussed.

[360] Legault provided a repair quote from Michael Ostertag in the sum of $205,660 inclusive of HST. As his testimony revealed, his quotation was based on a price per square foot as opposed to pricing individual items, and he allowed for some “cushion” in the quote. He understood that the quote was for an insurance claim and admitted that he was quoting with a view to the payor being an insurance company. He could not recall taking measurements, and none are referenced in his quote. He also agreed that some of the Building Code deficiencies referenced in his quote are not related to the fire loss.

[361] There are uncertainties in the soundness of the Ostertag quote. Legault subsequently obtained a second quote, this one from Mike Bouhuis Carpentry and dated November 16, 2014. Bouhuis was not called as a witness. The quote is for $144,291.79 inclusive of tax, created specifically to match the final quote from ServiceMaster.

[362] Beyond that, Legault has provided no further evidence of her damages other than hearsay regarding a sale listing price of 200 Jephson at the time of trial, which I disregard.

[363] TD paid the sum of $144,291.709 to Bridgewater Bank, being the amount of ServiceMaster’s final quote. Legault has not established that she would be entitled to any greater indemnification.

COUNTERCLAIM

[364] TD has counterclaimed for payment of the total of the indemnity and expenses paid by TD that were included in the interim proof of loss, in the amount of $63,476.05. Based on the law reviewed above, Legault has forfeited her right to recovery, and, accordingly, that sum should be repaid to TD.

[365] The Standard Mortgage Clause in the Policy provides:

Right of Subrogation – Whenever the Insurer pays the Mortgagee any loss award under this policy and claims that – as to the Mortgagor or Owner – no liability therefore existed, it shall be legally subrogated to all rights of the Mortgagee against the Insured; but any subrogation shall be limited to the amount of such loss payment and shall be subordinate and subject to the basic right of the Mortgagee to recover the full amount of its mortgage equity in priority to the Insurer; or the Insurer may at its option pay the Mortgagee all amounts due or to become due under the mortgage or on the security thereof, and shall thereupon receive a full assignment and transfer of the mortgage together will all securities held as collateral to the mortgage debt.

[366] In Farmers' Mutual Insurance Company (Lindsay) v. Pinder et al., 2009 ONCA 831, [2009] 100 O.R. (3d) 200, the Court of Appeal clarified the preconditions that give rise to the insurer’s right of subrogation. The first is that the insurer must pay the loss award, or a portion of it, to the mortgagee, which was done in this case. There was ample evidence provided by Doug Bourassa that his client was paid $144,291.79 pursuant to the standard mortgage clause. The second precondition is that the insurer is required to establish that the insured has voided the insurance policy: paras. 24-26. Having proven fraud, this second precondition has been met by TD.

[367] When the requirements of the standard mortgage clause are met, the insurer becomes legally subrogated to all the rights of the mortgagee against the insured to the extent of the payment it has made to the mortgagee: Farmers’, at para. 20.

[368] TD has established its entitlement to judgment on the counterclaim in the amount of $207,767.84 plus interest.

JUDGMENT

[369] This court orders that the claim is dismissed, and the counterclaim granted in the amount of $207,767.84 plus prejudgment interest. Judgment shall issue accordingly.

COSTS

[370] If the parties are unable to agree upon the issue of costs, they may provide written submissions of no more than 5 pages in length, plus a Bill of Costs and any offers or authorities relied on. TD’s are due by December 15, 2022, Legault’s by January 13, 2023 and any reply by January 18, 2023 . Counsel may alter this schedule by agreement in writing, to be communicated to the court for approval.

HEALEY J.

Released: November 22, 2022