The applicant sought advancement and indemnification of legal costs under an employment contract while facing disciplinary proceedings arising from an internal workplace investigation.
The court considered whether the matter could proceed by application under Rule 14.05 of the Rules of Civil Procedure and whether the contractual indemnification clause applied to costs incurred during the investigation stage.
The court held that the presumption of good faith applies and that the respondent had not established a strong prima facie case of dishonesty sufficient to trigger the contractual exclusion.
Interpreting the contract broadly, the court found that the internal investigation and related disciplinary process constituted a “proceeding” within the meaning of the indemnification clause.
The respondent was therefore obligated to advance and reimburse the applicant’s legal costs pending the outcome of arbitration.
