COURT FILE NO.: 10-48138

DATE: 20141003

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MARGUS VIST, Plaintiff

AND

BEST THERATRONICS LTD, Defendant

BEFORE: Blishen J.

COUNSEL: Christopher Rutherford, Counsel for the Plaintiff

Siobhan M. O’Brien, Counsel for the Defendant

HEARD: by written submissions

COSTS ENDORSEMENT

Introduction

[1] The two day trial of this matter involved Mr. Vist’s claim for:

(a) damages for wrongful dismissal based on nine months’ pay in lieu of reasonable notice and severance pay;

(b) damages for the loss of pension contributions during the period of reasonable notice;

(c) pre- and post-judgment interest; and

(d) costs.

[2] The central issues at trial were: the appropriate period of reasonable notice of termination and the duty to mitigate.

[3] The defendant argued that a five week total period of salary in lieu of notice and severance pay which is the minimum pursuant to the Canada Labour Code, R.S.C., 1985, c. L-2 (the “Code”), was adequate under all the circumstances. It was further argued that Mr. Vist did not attempt to mitigate his damages in a role comparable to the position he held when terminated.

[4] In my judgment released May 29, 2014, I concluded six months was reasonable notice for termination in this case. Although I did not find Mr. Vist’s length of service with Best Theratronics and its predecessors cumulative, I did find him to be a long term employee and gave some weight to his previous years of service. I also found Mr. Vist did his utmost to mitigate his losses.

[5] Given that I did not have sufficient detailed evidence at trial, I requested counsel calculate the precise amount of damages for wrongful dismissal based on six months’ pay in lieu of reasonable notice of dismissal and severance pay; the amount of damages for loss of pension contributions during the six months’ reasonable notice period; and the amount of pre-judgment interest.

[6] Unfortunately, the parties were not able to agree on the calculation of damages and interest and I therefore requested further written submissions.

[7] After exchanging and providing the court with their written submissions, it appeared the parties in fact agreed on:

(a) wrongful dismissal damages of $22,602.63;

(b) loss of pension contributions in the amount of $2,321.66; and

(c) the method of calculating pre-judgment interest.

The only remaining dispute between the parties was as to the applicable interest rate to be applied, which I found to be the 1.11 per cent average rate. Pre-judgment interest of $1,370.41 was ordered.

[8] Therefore, at the end of the day, I ordered $24,924.29 in damages for wrongful dismissal and loss of pension contributions plus pre-judgment interest of $1,370.41 for a total of $26,294.70.

[9] It is also to be noted that two business days prior to trial, the defendant acknowledged incorrectly taking the position that the plaintiff’s pension had not vested at the time of termination. Therefore the pension administrator made a payment to the plaintiff’s RRSP provider in the amount of $5,766.34 in satisfaction of the employer’s portion of the plaintiff’s pension contributions plus interest.

Liability for Costs

[10] Pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”), the court has a general discretion to determine the extent of costs. That section is subject to the Rules of Civil Procedure, O. Reg. 575/07, s. 6 (1) (the “Rules”). Rule 57.01 of the Rules lists a number of factors for the court to consider in addition to the primary emphasis on the result in the proceeding and any written offers to settle.

[11] The starting point for determining costs is success. Therefore, ordinarily the plaintiff who was the successful party in this case would be entitled to an award of costs against the defendant Best Theratronics.

[12] The defendant however argues the amount recovered by the plaintiff was within the monetary jurisdiction of the Small Claims Court and therefore pursuant to sub-Rule 57.05(1), the plaintiff should not recover any costs, or, in the alternative, should recover costs no greater than those he would have been entitled to in the Small Claims Court. Pursuant to s. 29 of the CJA, 15 per cent of the maximum Small Claims Court claim of $25,000 would result in a maximum of $3,750 in costs.

[13] In this case, I granted judgment for damages and pre-judgment interest totaling $26,294.70 which takes this matter outside the monetary jurisdiction of the Small Claims Court. In addition, settlement in the plaintiff’s favour of the issue as to whether the plaintiff’s pension was vested on termination resulted in the plaintiff recovering a further $5,766.34.

[14] Even if the amount recovered by the plaintiff was within the monetary jurisdiction of the Small Claims Court, denial of costs to a successful plaintiff under sub-Rule 57.05(1) is not automatic, see for example, Hunt v. TD Securities Inc., 2003 48369 (ON CA), [2003] O.J. No. 4868 (Ont. C.A.) and Burton Meats Retail Inc. v. Igloo Refrigeration Ltd. 2014 ONSC 3453 (“Burton Meats”).

[15] In Burton Meats, Stinson J. states at para. 3:

Despite the fact that the plaintiff recovers an amount less than $25,000, the court retains the discretion to make an award of costs. This has been done in light of the complexities of the case (see Greenland v. Ogunkoya [2009 CarswellOnt 2138 (Ont. S.C.J.)], 2009 29198) or where to deprive a successful plaintiff of an award of costs for a multi-day trial would be a draconian result (see Blow v. Brethet, 2010 ONSC 6332 (Ont. S.C.J.)).

[16] In any event, in this case I find Mr. Vist commenced his action within the appropriate monetary jurisdiction under the Simplified Rules (under $100,000).

[17] Although he was not 100 per cent successful as he did not obtain damages for nine months’ pay in lieu of notice, Mr. Vist was the successful party. He obtained damages for six months and was found to have done all he could to mitigate his losses. As the successful party he should recover costs from the defendant.

Offers to Settle

[18] Offers to settle are of particular importance and can provide a yardstick by which to measure success. Both parties should deliver offers covering in detail all aspects of the case. Even when a case appears unreasonable, an offer can promote settlement of some issues or narrow issues, resulting in a saving of time and effort for all parties.

[19] Rule 49.10 of the Rules is intended to promote settlement and avoid trials. It provides:

49.10 (1) Where an offer to settle,

(a) is made by a plaintiff at least seven days before the commencement of the hearing;

(b) is not withdrawn and does not expire before the commencement of the hearing; and

(c) is not accepted by the defendant,

and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer to settle was served and substantial indemnity costs from that date, unless the court orders otherwise.

(3) The burden of proving that the judgment is as favourable as the terms of the offer to settle, or more or less favourable, as the case may be, is on the party who claims the benefit of subrule (1) or (2).

[20] In this case, the defendant never served an offer to settle.

[21] Mr. Vist served two offers, the first on May 29, 2013 for $40,000 and the second on October 11, 2013 for $28,000, both inclusive of damages, costs, legal fees and disbursements. The first offer did not include interest, although the second did.

[22] A potential costs award, the quantum of which is disputed and discretionary, should not be included in comparing offers to settle with recovery. I do not find the plaintiff to have obtained a judgment as favourable or more favourable than the terms of either of his offers to settle and therefore the requirements under Rule 49.10 of the Rules for substantial indemnity costs from the date of service of the offer to settle, have not been met.

[23] Nevertheless, the failure of the defendant to serve any offer to settle is an important factor to consider under subrule 57.01(1) in exercising discretion as to the quantum of costs.

Quantum

[24] The plaintiff argues that given the conduct of the defendant, the factors listed under Rule 57 and the discretion of the court pursuant to s. 131 of the CJA, the plaintiff is entitled to substantial indemnity costs of $25,954.57 inclusive of fees, disbursements and HST, which is 80 per cent of the actual costs of $31,475.58. Partial indemnity costs would be $22,255.49 which is 66.6 per cent of the actual costs.

[25] The amount of costs claimed by the plaintiff is almost as much as the amount of his recovery. Therefore, the principle of proportionality does need to be considered along with the other relevant factors under Rule 57.01.

[26] An award of costs even in excess of the amount of recovery is not prohibited. In Burton Meats, the plaintiff’s net recovery was approximately $23,000 and costs were fixed in the all-inclusive amount of $27,500.

[27] With respect to other factors under Rule 57.01 I note the following:

(1) Based on the plaintiff’s Bill of Costs, his claim is based on indemnity as the amounts claimed are less than those actually incurred and accurately reflect the hours spent and rates charged, which I find to be reasonable given the nature of the case and the experience of counsel involved.

(2) The plaintiff was the successful party and although he did not recover an award (exclusive of costs) in an amount the same as or greater than his offers, he did serve two offers to settle which remained open to trial in an ongoing attempt to resolve the issues without a trial. The defendant did not serve any offer to settle and maintained the unreasonable position that the plaintiff was only entitled to the minimum notice of five weeks as provided under the Code.

(3) It was not until the eve of trial that the defendant agreed that the plaintiff’s pension had vested at the date of termination. Given the late admission trial preparation time was spent on this issue.

(4) Post-judgment, the defendant did not respond to the plaintiff’s proposal regarding the calculations of damages and interest until serving its written submissions which in fact agreed with the plaintiff on the calculation of damages and pointed out a calculation oversight by the plaintiff. Most of the time for preparation of formal written submissions could have been avoided.

(5) The defendant argues that costs claimed are excessive and lack proportionality but has not provided a Bill of Costs. I find this to be a relevant consideration pursuant to subrule 57.01(1)(i).

[28] In Risorto et al. v. State Farm Mutual Automobile Insurance Company, (2003) 2003 43566 (ON SC), 64 O.R. (3d) 135, Winkler J. states at para. 10:

The attack on the quantum of costs, insofar as the allegations of excess are concerned, in the present circumstances is no more than an attack in the air. I note that State Farm has not put the dockets of its counsel before the court in support of its submission. Although such information is not required under Rule 57 in its present form, and the rule enumerates certain factors which would have to be considered in exercising the discretion with respect to the fixing of costs in any event, it might still provide some useful context for the process if the court had before it the bills of all counsel when allegations of excess and “unwarranted over-lawyering” are made. In that regard, the court is also entitled to consider “any other matter relevant to the question of costs”. (See rule 57.01(1)(i).) in my view, the relative expenditures, at least in terms of time, by adversaries on opposite sides of a motion, while not conclusive as to the appropriate award of costs, is still, nonetheless, a relevant consideration where there is an allegation of excess in respect of a particular matter.

Conclusion

[29] There must be flexibility and discretion in examining the factors listed under sub-Rule 57.01(1). As the Ontario Court of Appeal noted in Zesta Engineering Ltd. v. Cloutier, (2002), 2002 25577 (ON CA), 21 C.C.E.L. (3d) 161:

In our view, the costs award should reflect more what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant.

[30] Taking into account the success of the plaintiff, the amount recovered, the failure of the defendant to serve an offer to settle and the other relevant factors outlined above, I fix the plaintiff’s costs inclusive of disbursements and HST at $23,000.

Blishen J.

Date: October 3, 2014

COURT FILE NO.: 10-48138

DATE: 20141003

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: MARGUS VIST, Plaintiff

AND

BEST THERATRONICS LTD, Defendant

BEFORE: Blishen J.

COUNSEL: Christopher Rutherford, Counsel for the Plaintiff

Siobhan M. O’Brien, Counsel for the Defendant

COSTS ENDORSEMENT

Blishen J.

Released: October 3, 2014