J. M. Sanderson

Following a successful wrongful dismissal trial, the court determined the appropriate costs award.

The plaintiff sought substantial indemnity costs relying on settlement offers, including a global offer combining arbitration and the civil action.

The court held that the global offer did not constitute a valid Rule 49 offer because it combined two separate proceedings and did not allow the defendants to evaluate liability separately.

Costs were therefore fixed on a partial indemnity basis in the amount of $225,000 plus HST and disbursements.

The court also declined to award costs to a discontinued individual defendant after drawing a negative inference from the refusal to disclose whether those costs were indemnified under the Ontario Business Corporations Act or insurance.

The plaintiff brought an action for wrongful dismissal after being terminated for alleged cause from a senior executive position following the sale of his company’s assets to the defendant.

The employer alleged misconduct including abusive language, conflict of interest, and dishonesty regarding the employment of an individual facing fraud charges.

The court found these allegations were exaggerated or unsupported and that the employer had failed to follow progressive discipline contemplated in its employee handbook.

The dismissal was found to be without cause and motivated in part by a dispute over financial adjustments under an asset purchase agreement.

Damages were awarded pursuant to the employment contract together with punitive damages for the employer’s bad faith conduct, and the employer’s counterclaim for fiduciary breaches was dismissed.