SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-11-426288
DATE: 20121205

RE: Jin Mo, Plaintiff

AND

Eric Johnson, Defendant

BEFORE: Morgan J.

COUNSEL:
Joseph Kary, for the Plaintiff

Lou Brzezinski and Lea Nebel, for the Defendant

DATE HEARD: October 19, 2012

S U P P L E M E N T A R Y C O S T S E N D O R S E M E N T

[ 1 ] On October 19, 2012, I heard oral submissions with respect to the costs of a summary judgment motion argued on August 13, 2012. I released my Costs Endorsement on November 6, 2012, granting costs on a substantial indemnity scale to the Defendant.

[ 2 ] On November 16, 2012, I received a letter from counsel for the Defendant indicating that the Defendant’s legal fees in this matter were paid by his employer rather than by him. This was relevant to my Costs Endorsement, as I had stated at paragraph 13 that retaining counsel “was no doubt a burdensome expense” for the Defendant. Mr. Brzezinski and Ms. Nebel explained in their letter that the question of who paid the Defendant’s legal expenses had not appeared to be relevant until they read paragraph 13 of my Costs Endorsement.

[ 3 ] On November 29, 2012, I received submissions in response to this point in the form of a letter from counsel for the Plaintiff. He submits that this new information changes matters and should result in there being no order as to costs or, alternatively, a reduction of the costs to a partial indemnity rather than a substantial indemnity scale. Mr. Kary argues that the fact that the Defendant had the resources to retain a large law firm and to exhaust the Plaintiff financially effectively turns the scales on the costs analysis.

[ 4 ] I appreciate that Mr. Brzezinski and Ms. Nebel were so forthright in disclosing the information regarding payment of the Defendant’s legal expenses once they saw my Costs Endorsement. As Mr. Kary also noted, it is to their credit that they brought this to the court’s attention at this stage.

[ 5 ] That said, I do not regard this new information as changing my reasoning in any substantial way. It is not the same kind of burden on an employee if his employer pays his legal costs rather than the employee paying them himself, but it is nevertheless a burden. An employer is not an insurer, and even making a request for coverage of such expenses could potentially put an employee in a difficult position. In addition, nothing in the recent correspondence changes the burden that the Defendant had to assume simply by being a Defendant and being exposed to the pressures and vagaries of litigation.

[ 6 ] Mr. Kary contends that the fact that the Defendant’s fees were covered by his employer “explains the defendant’s intransigence with respect to settlement.” With respect, however, the only thing that it explains is why the Defendant did not collapse under the weight of an otherwise specious lawsuit. I would expect the employer to be every bit as economically rational as the personal Defendant, and if there is a fair and justifiable settlement in the offing the employer can be expected to encourage it as much, if not more, than the employee/Defendant. The fact is that here both the Defendant and his employer would have been rational in thinking that the only fair and justifiable settlement is for the claim to be dismissed with costs.

[ 7 ] Most importantly, the award of costs to the Defendant on a substantial indemnity scale was based more on the conduct of the Plaintiff than on the Defendant’s economic situation. I stated in paragraph 19 of my Costs Endorsement that, “it appears to me that the Plaintiff used his professional knowledge to lash out at what he might have anticipated would be a hapless Defendant.” The newly disclosed information does not change that assessment; it simply emphasizes that the Plaintiff picked on the wrong person. The Plaintiff’s bad luck in suing a Defendant who, unpredictably, was able to access the resources necessary to properly defend himself, does not alter the reasons for awarding substantial indemnity costs.

[ 8 ] The award contained in my Costs Endorsement of November 6, 2012 therefore remains unchanged.

Morgan J.

DATE: December 5, 2012