High-Handed Conduct (Tort)

OMJ Mortgage Capital Inc. v. King Square Ltd., 2020 ONSC 3922 (CanLII)

[4] Substantial indemnity costs may be warranted where a party has engaged in reprehensible, scandalous or outrageous conduct in the proceeding: Davies v. Clarington (Municipality) (2009), 100 O.R. (3d) 66 (C.A.), 2009 ONCA 722, at paras. 28-29. The Court of Appeal has repeatedly stated that substantial indemnity costs are reserved to those rare and exceptional case where a party has engaged in egregious or high-handed conduct warranting an expression of the court’s disapproval.

[5] While I found that KSL’s failure to disclose that it obtained further loans from the lender that OMJ had introduced breached the duty of good faith, a finding of bad faith does not necessarily warrant costs on a substantial indemnity basis. There was no egregious, malicious or high-handed conduct, in the proceeding or otherwise, that would warrant an award of substantial indemnity costs before the date of the offer to settle.

[6] OMJ’s costs until its offer to settle are to be determined on a partial indemnity basis.