Catherine Powell

Following dismissal of a counterclaim alleging wrongful dismissal and breach of contract and seeking $11.8 million in damages, the successful defendant by counterclaim sought substantial indemnity costs exceeding $299,000.

The court considered Rule 57 of the Rules of Civil Procedure and the principles governing cost awards under the Courts of Justice Act, including the effect of an unaccepted Rule 49 settlement offer and allegations of uncooperative litigation conduct.

Although the court accepted that some conduct of opposing counsel created additional expense, it declined to award substantial indemnity costs.

Applying the objective of fairness and reasonableness to the unsuccessful party, the court fixed costs on a partial indemnity basis.

A software developer and his corporation brought a counterclaim against a securities trading firm alleging wrongful dismissal and breach of contract following termination of his role as chief technology officer.

The court first determined that despite a services agreement structured through a corporation, the relationship functioned as employment, applying the multi‑factor test from Sagaz Industries.

The court held that a prior service agreement had been fully released by mutual release and could not ground claims.

It also rejected the claimant’s assertion that he was entitled to commissions based on algorithmic trading profits, finding the agreement applied to traders and not to a software developer who neither created strategies nor executed trades.

The court further found just cause for termination where the employee inserted malicious code into the firm’s trading platform, removed source code access, attempted to market competing software, and breached confidentiality obligations.

The counterclaim for wrongful dismissal and breach of contract was dismissed.