Full Indemnity - Re: Notice of Application
|Caselaw.Ninja, Riverview Group Publishing 2021 ©|
|CLNP Page ID:||1649|
|Page Categories:||[Cost Awards]|
|Citation:||Full Indemnity - Re: Notice of Application, CLNP 1649, <3u>, retrieved on 2022-10-07|
Coventree Inc. v. Lloyds Syndicate 1221 (Millenium Syndicate) (Costs), 2011 ONSC 6660 (CanLII)
 The claim for costs on a full indemnity scale is based on the understanding that "where an insurer wrongfully denies its duty to defend, it will be liable to pay substantial indemnity costs" (Axa Insurance (Canada) v. Ani-Wall Concrete Forming Inc., 2007 CanLII 56478 (ON SC),  O.J. No. 4975, at para. 30 referring to E. M. v. Reed,  O.J. No. 1791 (C. A.); and, Godonoaga (Litigation Guardian of) v. Khatambaksh (2000), 2000 CanLII 16891 (ON CA), 50 O. R. (3d) 417 (C.A.). To put the insured in the same position it would have been in had the contract of insurance been performed, the insured would have to recover full indemnity costs. The case before the court is not one based on the duty of the insurer to provide a defence to a claim that may fall within the policy (College of Massage Therapists of Ontario v. Frank Cowan Company Ltd.,  I.L.R. I-4979 (S. C. J.) at p. 3). It is one where the costs of the defence were claimed as an item insured under the policy. Where an insured has been required to go to court to obtain the costs of a defence, as a claim under the policy, costs of the requisite application have been awarded on a full indemnity basis (Deloitte & Touche Inc. v. Bennett,  O.J. No. 2797, at paras. 11 and 17).
 This is not invariably the case. This court has refused to grant costs on a full indemnity scale when the issue raised was not one of a duty to defend (Caneast Foods Ltd. v. Lombard General Insurance Co. of Canada,  O.J. No. 3253, at para. 4; and, Axa Insurance (Canada) v. Ani-wall Concrete Forming Inc, supra, at paras. 36 and 40)). In the case being considered here, the issue did not concern whether, in the normal course, the insurance contract would respond to the claim made. It was acknowledged by both parties that the claim was a “Claim", a "Loss" and represented "Costs of Defence", as those terms were defined in policy. Rather, the issue was whether, during the process of negotiating the contract, the insurer had agreed to waive its right to rely on a notice of the claim provided to another insurer, under a earlier policy, as a basis to deny coverage. This was a legitimate question with respect to the interpretation of the policy that the insurer should be able raise without incurring an exposure to substantial indemnity costs (Solway v. Lloyd's Underwriters,  O.J. No. 5465 (S.C.J.) as referred to in Axa Insurance (Canada) v. Ani-wall Concrete Forming Inc, supra, at paras. 37 and 38).
Hobbs v. Hobbs, 2008 ONCA 598 (CanLII)
 On January 25, 2008, the motion judge ordered Mr. Hobbs to pay his wife the costs of the motion for contempt against him on a full indemnity scale in the total amount of $26,572.17, including disbursements and GST.
 Since I would not allow Mr. Hobbs’s appeal on the merits of the motion for contempt, he requires an order for leave to appeal the costs order. See Courts of Justice Act, R.S.O. 1990, c. C.43, s. 133(b).
 Mr. Hobbs accepts that his wife is entitled to costs on a full indemnity scale but claims the quantum ordered by the motion judge is excessive.
 In order to succeed on an application for leave to appeal an award of costs, strong grounds must be shown. In Brad-Jay Investments Ltd. v. Szijjarto (2006), 2006 CanLII 42636 (ON CA), 218 O.A.C. 315 at para. 21 (C.A.), leave to appeal to S.C.C. refused, 2007 CanLII 67861, this court said:
- Leave to appeal a costs order will not be granted save in obvious cases where the party seeking leave convinces the court there are “strong grounds upon which the appellate court could find that the judge erred in exercising his discretion”.
 As to the grounds upon which an appellate court should set aside a costs order, Arbour J. said in Hamilton v. Open Window Bakery Ltd., 2004 SCC 9 (CanLII),  1 S.C.R. 303 at para. 27:
- A court should set aside a costs award on appeal only if the trial judge has made an error in principle or if the costs award is plainly wrong. (Duong v. NN Life Insurance Co. of Canada (2001), 2001 CanLII 24151 (ON CA), 141 O.A.C. 307, at para. 14).
 While the quantum of the costs award is on the high side I cannot find that there are strong grounds upon which to conclude the motion judge erred in exercising his discretion. I may well have come to a different conclusion on the quantum. However, that is not enough. I cannot say that the quantum is so high that a court could find that it constitutes error in principle or is plainly wrong.
 I would not grant leave to appeal the costs award.
Marcus v. Cochrane, 2014 ONCA 207 (CanLII)
 At trial, the appellant’s claim against the respondent solicitor and her firm for solicitor’s negligence was dismissed. The trial judge found that, in the circumstances of this case, the respondent solicitor did not breach the standard of care owed to the appellant, her client. The trial judge also found that, in any event, the appellant suffered no damages due to the respondent’s conduct. Finally, the trial judge awarded costs to the respondents on a full indemnity scale in the amount of $160,706.99.
 The third issue before us is the award of trial costs on a full indemnity scale. The trial judge concluded that this was justified because the appellant’s conduct of the trial was “reprehensible”. She based her conclusion on two reasons, neither of which is sustainable in my view.
 The first concerned two emails that the respondent solicitor sent to the appellant. After admitting on discovery that she received them, the appellant gave evidence at trial that she had not received them or thought it unlikely that she did, because the emails had no date and time stamp. The IT information she received led her to believe they were “invalid”. The trial judge found that the appellant was in effect suggesting that the respondent had falsified documents for trial and was calling her honesty into question, thus justifying full indemnity costs. In my view, the appellant’s evidence cannot be taken that far. I cannot read the appellant’s evidence as suggesting any deliberate conduct, let alone dishonesty, on the part of the respondent solicitor.
 The second reason was that the appellant failed to call expert evidence on the standard of care and misstated her damages “when she knew or ought to have known that she suffered no damages”. The failure to call expert evidence is normally a decision of trial counsel. There is nothing here to suggest otherwise, let alone to lay the responsibility for it at the feet of the appellant. While counsel’s decision may have been unwise, it is hardly reprehensible conduct justifying full indemnity costs against the appellant. The same is true of trial counsel’s decision to advance a theory of damages (namely that the appellant could have negotiated a vastly superior equalization payment) that the trial judge ultimately rejected. I see no basis on this record to say that the appellant ought to have known that this would happen, or that she in fact knew it would happen.
 Since neither of the trial judge’s reasons can be sustained, I conclude that it was an error in principle to fix trial costs on a full indemnity basis. In order to bring a merciful end to these proceedings, this court should determine the appropriate trial costs order rather than remit the issue to the trial court.
 In my opinion, there is no basis on this record to depart from the usual partial indemnity scale in fixing trial costs.
Heston-Cook v. Schneider, 2015 ONCA 10 (CanLII)
 Having regard to the submissions made, we make one further comment. It is trite law that an appeal is always from the order of the court and not the reasons. In dismissing the appeal, the motion judge stated in obiter that, “[T]he respondent should have the right to assert any limitation period defences that may also arise as a result of the need to commence a new action in view of the defective action commenced by the applicant.” Any motion invoking a limitation period defence will have to be determined on the basis of the proceedings and pleadings as they stand at the time that motion is heard and the motion judge’s comments should not be taken to be determinative of the outcome of that issue.
 The appellant also seeks leave to appeal the costs order of the motion judge against her in the amount of $12,000. She submits that there is no general rule that costs are to be awarded on a full indemnity scale against her on the basis that the successful party is an estate trustee or executor and her conduct of the proceeding is not such as to merit an award of full indemnity costs against her.
 The estate trustee successfully defended her removal as estate trustee and we agree that she is entitled to be fully indemnified. This does not mean that the unsuccessful party should pay more than costs on a partial indemnity scale in bringing the proceeding when his or her conduct would not otherwise merit such an award. A blended award, in which costs on a partial indemnity scale are awarded against the unsuccessful party and the remainder of the costs are paid from the estate would appear to strike the appropriate balance. See e.g. Sawdon Estate v. Watch Tower Bible and Tract Society of Canada, 2014 ONCA 101 at para. 96. In our opinion the motion judge erred in principle in ordering the appellant to fully indemnify the respondent.
 Accordingly, we allow the appeal and order that the appellant pay partial indemnity costs of the motion fixed at $7,500 and that the respondent recover the balance of her costs from the estate.
 In all other respects the appeal is dismissed.
- Coventree Inc. v. Lloyds Syndicate 1221 (Millenium Syndicate) (Costs), 2011 ONSC 6660 (CanLII), <https://canlii.ca/t/fprl9>, retrieved on 2021-09-14
- AXA Insurance (Canada) v. Ani-Wall Concrete Forming Inc., 2007 CanLII 56478 (ON SC), <https://canlii.ca/t/1v9b9>, retrieved on 2021-09-14
- Godonoaga v. Khatambakhsh, 2000 CanLII 16891 (ON CA), <https://canlii.ca/t/1fbd4>, retrieved on 2021-09-14
- Hobbs v. Hobbs, 2008 ONCA 598 (CanLII), <https://canlii.ca/t/20hz4>, retrieved on 2021-09-14
- Brad-Jay Investments Limited v. Village Developments Limited, 2006 CanLII 42636 (ON CA), <https://canlii.ca/t/1q6nj>, retrieved on 2021-09-14
- Brad-Jay Investments Limited and Village Developments Limited v. Mel Greenglass, also known as Melvin Green Glass, Triple A Property Management, 350052 Ontario Ltd. carrying on business as the Rexdale Lottery Boutique and 719931 Ontario Ltd., 2007 CanLII 67861 (SCC), <https://canlii.ca/t/204dt>, retrieved on 2021-09-14
- Hamilton v. Open Window Bakery Ltd., 2004 SCC 9 (CanLII),  1 SCR 303, <https://canlii.ca/t/1ggz8>, retrieved on 2021-09-14
- Duong v. NN Life Insurance Company of Canada, 2001 CanLII 24151 (ON CA), <https://canlii.ca/t/1fbmf>, retrieved on 2021-09-14
- Marcus v. Cochrane, 2014 ONCA 207 (CanLII), <https://canlii.ca/t/gdz58>, retrieved on 2021-09-14
- Heston-Cook v. Schneider, 2015 ONCA 10 (CanLII), <https://canlii.ca/t/gfwp5>, retrieved on 2021-09-14
- Sawdon Estate v. Sawdon, 2014 ONCA 101 (CanLII), <https://canlii.ca/t/g2zcq>, retrieved on 2021-09-14