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Generative AI
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Canada | Publication | April 2020
In Roussy v Savage, the British Columbia Supreme Court dismissed the plaintiff’s claims of fraud and breach of fiduciary duty. In considering costs, the defendant sought increased costs. The law in Canada is consistent in this matter: where a plaintiff alleges a defendant has engaged in dishonest conduct (such as fraud), the court may order increased costs against the plaintiff when those claims are not proven. However, the result of increased costs in favour of the defendant is not automatic, and the court will carefully analyze the particular circumstances, including the conduct of both the plaintiff and the defendant.
The Roussy v Savage decision to deny increased costs on the basis of fraud is noteworthy, not because of its consideration of the law, but on its factual application of that law. As is the ordinary case, the court assessed the plaintiff’s knowledge of any potential dishonest conduct at each step of the litigation, to determine whether the plaintiff’s conduct in bringing the claim was reprehensible or deserving of rebuke. However, it is noteworthy the court also considered how the defendant’s conduct affected the plaintiff’s knowledge and suspicions of fraudulent conduct in order to determine whether it was reasonable for the plaintiff to continue with the claims.
In finding there was a prima facie case for fraud at the outset of the litigation, the court noted that:
The court found that steps taken by the plaintiff to move the matter to trial were justified, noting in particular the defendant’s conduct:
After balancing these factors, the court dismissed the defendant’s claim for special costs.
This decision is a reminder that disproving allegations of dishonest conduct does not guarantee the defendant an award of special or increased costs. Courts will assess the conduct of both parties throughout the litigation to determine whether the plaintiff acted in a manner that was not reprehensible or deserving of rebuke. Defendants will not benefit in an increased costs application where their own conduct contributed to the plaintiff’s continued pursuit of the claim.
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