Victoria Dale

The appellant, Shelly Legault, appealed a trial decision that dismissed her action against TD General Insurance Company for denial of a homeowner's insurance claim following a fire.

The trial judge found that Legault had made a fraudulent declaration regarding additional living expenses (ALE), leading to forfeiture of coverage, and granted TD damages on a counterclaim, plus costs.

The Court of Appeal dismissed the appeal, upholding the trial judge's findings that the appellant's fraud vitiated the policy, that the payment of professional witnesses was permissible, and that the costs award was within the trial judge's discretion.

This is a costs ruling following a 16-day trial where the defendant, TD General Insurance Company, was the successful party, having proven fraud against the plaintiff, Shelly Legault.

The defendant sought substantial indemnity costs of over $366,000.

The court, exercising its discretion under the Courts of Justice Act and Rule 57.01, found the plaintiff's conduct (perpetrating fraud, suing for $1M, and prolonging litigation for seven years) warranted substantial indemnity costs.

While acknowledging some excessive time spent by defendant's counsel due to inadequate investigation, the court ultimately fixed the costs payable by the plaintiff to the defendant at $289,609.84, inclusive of fees, disbursements, and HST, balancing reasonableness and proportionality.

The plaintiff sued her home insurer after it denied her claim for a fire loss.

The insurer denied the claim on the basis that the plaintiff committed fraud in her claim for Additional Living Expenses (ALE) by submitting a fake lease and using the rent money for other purposes.

The court found that the plaintiff and her purported landlord engaged in a deliberate scheme to obtain money from the insurer under the guise of rent.

Because the plaintiff made a willfully false statement in her proof of loss regarding the ALE, her entire claim was vitiated.

The plaintiff's action was dismissed, and the insurer's counterclaim for repayment of amounts already paid out was granted.

During a trial regarding an insurance claim denial, the plaintiff brought a mid-trial motion to exclude the testimony of two of the defendant's witnesses.

The plaintiff argued that the defendant's financial compensation of these witnesses for their preparation time and trial attendance constituted an abuse of process.

The court found that the witnesses, who were former employees and agents of the defendant, were 'professional' fact witnesses who required extensive preparation time to review voluminous documents.

The court held that compensating such witnesses for their preparation time is reasonable and does not automatically taint their evidence.

The motion to exclude the testimony was dismissed.

The applicant insurer sought a declaration that the respondent insurer had a duty to defend and indemnify the insureds in an underlying slip and fall action.

The underlying plaintiff slipped on ice on the driveway of premises owned by the insureds, which also served as the head office for their business.

Applying the pleadings rule, the court found that the allegations in the statement of claim triggered coverage under both the applicant's homeowner policy and the respondent's commercial policy.

The court ordered both insurers to share the costs of defending the action equally.