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Civil Litigation Dicta - Costs - Novelty of Cause of Action. Legault v. TD General Insurance Company
In Legault v. TD General Insurance Company (Ont CA, 2024) the Ontario Court of Appeal dismissed an insurance appeal where the trial court held the policy forfeit for the insured's claim fraud, here for "a false declaration with respect to her living expenses while residing outside her home".
Here the court considered the 'novelty' of the issues argued as a factor in assessing costs:[34] In this case, the appellant argues that the trial judge exercised her discretion “incorrectly”. According to the appellant, the trial judge permitted TD to claim excessively high fees due to the novelty of the issues in the case. (The trial judge noted being aware of no reported cases in Ontario that had decided the question of whether a willfully false statement in respect of ALE, if proven, vitiates an insured’s right to recover all benefits claimed under a homeowner’s insurance policy.) The appellant argues that the novelty factor may be used to reduce a losing party’s fees, not to increase a successful party’s fees.
[35] While it is open to a trial judge to reduce the losing party’s costs on the basis of novelty, it is certainly not an error in principle for a judge to recognize the added costs to a successful party in addressing novel issues as well. In either context, the trial judge’s discretion with respect to costs is entitled to deference. . Davies v. Clarington (Municipality)
In Davies v. Clarington (Municipality) (Ont CA, 2023) the Court of Appeal considered the novelty of a cause of action as it influences a cost award:[88] The trial judge refused to award costs on the basis that the issue was novel, which is an accepted principle on which a judge may make a no costs disposition: Przyk v. Hamilton Retirement Group Ltd. (The Court at Rushdale), 2021 ONCA 267, 70 C.P.C. (8th) 219, at para. 35.
[89] The trial judge referred to the correct principles about how to assess whether an issue is novel, and how to apply that assessment to a discretionary decision concerning costs, as articulated by this court in Das v. George Weston Limited, 2018 ONCA 1053, 43 E.T.R. (4th) 173, leave to appeal refused, [2019] S.C.C.A. No. 69. As that decision explains, whether an issue is novel is not a bright line but a matter of degree, and the effect on costs is a question of where the court considers the case to fall along a spectrum. The trial judge was intimately familiar with the nature of the issues and arguments before him and thus well positioned to decide where on the spectrum of novelty this case fell.
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