The Duty to Defend and the Apportionment of Defence Costs Tedford v. TD Insurance Meloche Monnex – Case Comment


This recent decision of the Ontario Court of Appeal considers the duty of an insurer to defend its insured and the circumstances in which that insurer can seek to apportion the costs of the defence where some, but not all, claims made in a lawsuit are covered by that policy of insurance.

Mr. Tedford (“Tedford”) was sued by the purchaser of his home (the “plaintiff”) who alleged that Tedford made negligent misrepresentations in the Seller Property Information Statement completed at the time of the sale. The plaintiff claimed against Tedford for the costs of repairing the home and alleged that due to these unforeseen repair costs, she suffered anxiety, stress, sleep disturbances, fatigue, headaches and depression. While the plaintiff’s claim for repair costs represented the substantial majority of the damages claimed, the claim for damages arising from her health consequences was considerably more modest. Tedford was insured under a homeowner’s policy issued with TD Insurance Meloche Monnex (“TD”). The policy provided coverage for liability imposed by law upon the insured “…because of Bodily Injury or Property Damage”. While Tedford asked TD to defend the action on his behalf, TD denied that it had a duty to defend.

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