He ordered substantial indemnity costs against the plaintiff on the grounds that his
conduct was worthy of sanction as he had fabricated his testimony to fit his claim
for the increased paid-up values in the policy. The plaintiff appealed the dismissal
of his claim and applied for leave to appeal the costs order.
Held, the appeal and application for leave to appeal should be dismissed.
The trial judge’s conclusion that the parties had reached a prior agreement
based on the quote was supported by the evidence. The trial judge’s finding that
the plaintiff never requested inflation protection was not challenged on appeal.
The true agreement between the parties was in accordance with the terms of the
quote. The remedy of rectification was available to the defendant. That remedy
was not barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. The
defendant’s request for rectification was a claim and not a mere defence, so the
Limitations Act applied to it. Section 16( 1)(a) of the Limitations Act, which provides that there is no limitation period in respect of “a proceeding for a declaration if no consequential relief is sought”, was unavailable to the defendant
as it was seeking consequential relief. The critical issue was when the limitation
period for the rectification claim began to run. It did not begin to run in 2007,
when the defendant discovered the error in the policy, as the defendant did not
know that the plaintiff would seek to resile from the parties’ common understanding that the paid-up values were per $5,000 of the face amount coverage,
not per $1,000 as mistakenly indicated in the policy. The defendant only knew
that injury, loss or damage had occurred when the plaintiff sought a declaration
that the erroneous paid-up values were correct. The claim for rectification was
not made after the expiry of the limitation period.
The trial judge was entitled to find that the plaintiff’s conduct was worthy
of sanction and that this was an exceptional case where elevated costs were
Cases referred to
Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R.
(3d) 291,  O.J. No. 2634, 188 O.A.C. 201, 48 C.P.C. (5th) 56, 132 A.C. W.S. (3d)
15 (C.A.); Brad-Jay Investments Ltd. v. Szijjarto,  O.J. No. 5078, 218 O.A.C.
315, 154 A.C.W.S. (3d) 226 (C.A.); Canada (Attorney General) v. Fairmont Hotels
Inc.,  2 S.C.R. 720,  S.C.J. No. 56, 2016 SCC 56, 404 D.L.R. (4th) 201,
 1 C.T.C. 149, 58 B.L.R. (5th) 171, 2016 D.T.C. 5135, 2016EXP-3860, J.E.
2016-2123, EYB 2016-273668, 272 A.C. W.S. (3d) 525; Davies v. Clarington (
Municipality) (2009), 100 O.R. (3d) 66,  O.J. No. 4236, 2009 ONCA 722, 312 D.L.R.
(4th) 278, 254 O.A.C. 356, 77 C.P.C. (6th) 1, 182 A.C. W.S. (3d) 291; Farrant (
Litigation guardian of) v. Low,  O.J. No. 449, 53 O. T.C. 272, 1 C.C.L.I. (3d) 137,
77 A.C.W.S. (3d) 419 (Gen. Div.); Gilmore Farm Supply Inc. v. Waterloo Mutual
Insurance Co.,  O.J. No. 2431, 6 C.C.L.I. 288 (H.C.J.), varg on other grounds
 O.J. No. 222, 3 C.C.L.I. 221 (H.C.J.); Joarcam, LLC v. Plains Midstream
Canada ULC,  A.J. No. 282, 2013 ABCA 118, 90 Alta. L.R. (5th) 208,
227 A.C.W.S. (3d) 670; Lauzon v. AXA Insurance (Canada),  O.J. No. 4956,
2013 ONCA 664, 235 A.C. W.S. (3d) 510; McConnell v. Huxtable (2014), 118 O.R. (3d)
561,  O.J. No. 477, 2014 ONCA 86, 41 R.P.R. (5th) 1, 42 R.F.L. (7th) 157,
370 D.L.R. (4th) 554, 315 O.A.C. 3, 237 A.C. W.S. (3d) 505
Statutes referred to
Insurance Act, R.S.O. 1980, c. 218 [rep.], s. 199
Insurance Act, R.S.O. 1990, c. I. 8, s. 222 [as am.]
Limitations Act, 2002, S.O. 2002, c. 24, Sch. B [as am.], ss. 4, 5( 1)(a)( i), ( ii), ( iii),
(2), 16( 1)(a)