Court File and Parties

Court File No.: CV-08-367470
Date: 20121019
Superior Court of Justice – Ontario

Re: Washington Olivares, Plaintiff

And:
Canac Kitchens Ltd., a division of Kohler Ltd., Defendant

Before: S. Lederman J.

Counsel:
Allison Greene, for the Plaintiff
Geoff Moysa, for the Defendant

Heard: By written submissions

Endorsement as to Pre‑Judgment Interest and Costs

[ 1 ] Two matters remain outstanding, namely the question of pre-judgment interest and costs. Counsel have addressed these issues by way of written submissions.

Pre-Judgment interest on the award of general damages

[ 2 ] The plaintiff claimed pre-judgment interest in both his statement of claim and notice of motion and, in the normal course, would be entitled to it in accordance with the Courts of Justice Act, RSO 1990, c. C.43.

[ 3 ] The defendant, Canac Kitchens Ltd. (“Canac”) takes the position that the initial Endorsement granting summary judgment to the plaintiff did not award pre-judgment interest and, accordingly, the plaintiff is not entitled to such.

[ 4 ] The Endorsement on the summary judgment motion was silent on this matter simply because it had not been argued by counsel. Accordingly, it is properly addressed at this time and, in the circumstances, the plaintiff should be awarded pre-judgment interest.

[ 5 ] The defendant has submitted, in the alternative, that if pre-judgment interest is awarded, it should be on an instalment basis and not a lump sum basis.

[ 6 ] It seems that in wrongful dismissal actions, there have been two competing approaches to the assessment of pre-judgment interest. Under the “instalment approach”, pre-judgment interest accrues on the damages as they would have been paid had employment continued during the notice period; while the “lump sum” approach assesses pre-judgment interest on the full value of the damages upon dismissal.

[ 7 ] The Ontario Court of Appeal in Stevens v. The Globe & Mail (1996), 28 O.R. (3d) 481 at para. 33 acknowledged that the lump sum approach had a logical basis and was in general accord with other wrongful dismissal cases. ( Chang v. Simplex Textiles Ltd ., [1985] O.J. No. 16 (C.A.) ). On the other hand, the Saskatchewan Court of Appeal in Janke v. Cenalta Oil Well Servicing Ltd ., [1997] 3 W.W.R. 406 felt that the lump sum approach would place the employee in a better position than if he had remained employed, stating at para. 30: “He received his wages plus interest on them before the Globe & Mail would have been required to pay him if he had remained employed.” The Saskatchewan Court of Appeal favoured the instalment approach because the damage suffered by a wrongfully dismissed employee accrued throughout the notice period and, therefore, required periodic assessment along the way. (para. 32).

[ 8 ] In Lowndes v. Summit Ford Sales Ltd ., 2006 ONCA 14 , the Ontario Court of Appeal, at para. 23, stated that “it is unnecessary for the disposition of this appeal to determine whether an award of pre-judgment interest on a lump sum basis is generally appropriate in a wrongful dismissal case.” (italics added). In that case, it overturned the trial court’s application of the lump sum approach as conferring an “impermissible windfall” on the plaintiff and awarded pre-judgment on an instalment basis instead. The Court held that a lump sum approach was inappropriate in the circumstances of that case where the employee received notice in the form of a salary continuance.

[ 9 ] I am of the view that in the particular circumstances of this case, the lump sum approach is appropriate. The plaintiff received only a lump sum payment equal to his entitlement under the Employment Standards Act, 2000 , S.O. 2000, c.41. The evidence indicated that, at the time of the termination of employment, the defendant was closing its operations in Canada. If proper notice had been given, the plaintiff would have received pay in lieu of notice in a lump sum. The plaintiff should be compensated for what he has actually lost by reason of the defendant’s failure to give an adequate lump sum payment in lieu of notice.

[ 10 ] Accordingly, the plaintiff is to be awarded pre-judgment interest at the statutory rate of 3.3% on all unpaid damages, including the $4,500 awarded for lost benefits as of the date of dismissal. The total pre-judgment interest owing amounts to $10,522.18.

The Costs of the Action

[ 11 ] Having been successful, the plaintiff seeks costs of the motion in the amount of $17,500 plus disbursements and HST.

[ 12 ] This amount is significantly higher than a partial indemnity award. The plaintiff submits that he made an offer to settle of $90,000.00 and although the judgment amount fell a little short of the offer, it was essentially close enough to warrant an upward adjustment, as was made by Justice D.M. Brown, in Moldovanyi v. Canac , 2009 ONSC 9369

[ 13 ] However, even with an upward adjustment as suggested by the plaintiff, I find that the plaintiff’s request for $17,500 costs to be excessive in the circumstances because:

(a) this matter was disposed of by way of a motion for summary judgment by agreement of the parties with a view of keeping costs down;

(b) the affidavit of documents of each party listed only a few documents;

(c) no discoveries or interlocutory motions took place;

(d) no cross-examinations on the affidavits were conducted; and

(e) the motion took less than half a day to argue.

[ 14 ] The background of this matter is quite similar to both Moldovanyi , supra and Mahesuram v. Canac, 2009 ONSC 1139 both involving Canac as the employer. The issues and the number of hours spent by counsel in those two cases were almost the same as in the instant case. In Moldovanyi , Justice Brown awarded $9,500 in costs which included his “significant upward adjustment”. In Mahesuram , Justice O’Marra awarded $10,000 in costs. Even though in each of those cases, the plaintiff and defendant were represented by the same law firms who each used standard template affidavits and relied on the same authorities when arguing the case, the instant case was part of a series of cases involving the same employer and the situations were analogous. Accordingly, there should be consistency in the costs awards in these similar motions.

[ 15 ] In these circumstances, and having regard to the factors set out in rule 57.01(1), an appropriate order for costs on a partial indemnity basis is $10,500 all-inclusive and Canac is ordered to pay this amount to the plaintiff within thirty days.

Lederman J.

Released: 20121019