COURT FILE NO.: CV-15-519137
DATE: 20150805
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TREVOR PAQUETTE
Plaintiff
– and –
TERAGO NETWORKS INC.
Defendant
Andrew Monkhouse for the Plaintiff
Kimberley D. Pepper for the Defendant
HEARD: In writing
PERELL, J.
REASONS FOR DECISION - COSTS
[1] The Plaintiff Trevor Paquette was dismissed without cause by the Defendant TeraGo Networks Inc. (“TeraGo”). Mr. Paquette brought a summary judgment motion in his wrongful dismissal action. The parties ultimately agreed that the case was appropriate for a summary judgment, and I fixed the notice period at 17 months, and I awarded Mr. Paquette damages of $163,267.90, broken down as follows: (a) $157,051.33 for salary ($10,416.67 x 17 - $20,032.06); (b) $6,216.57 ($410.21 x 17 - $757.00) for benefits; and (c) $0 for bonuses. I directed that mitigation be dealt with by employing the “Trust and Accounting Approach.” See Paquette v. TeraGo Networks Inc., 2015 ONSC 4189.
[2] Based on the delivery of an unaccepted Rule 49 Offer to Settle, Mr. Paquette claims $46,388.23 in costs comprised of partial indemnity costs until May 18, 2015 and substantial indemnity costs thereafter. The resulting breakdown is: (1) $38,041 for fees; (2) $4,945.33 for HST on fees; and (3) $3,401.90 for disbursements.
[3] In the alternative, Mr. Paquette claims $37,785.54 for costs on a partial indemnity basis. The resulting breakdown of the partial indemnity costs is: (1) $30,428 for fees; (2) $3,955.64 for HST on fees; and (3) $3,401.90 for disbursements.
[4] In his written submissions, Mr. Paquette also claims pre-judgment interest of $1,135.27 and post-judgment interest from June 29, 2015. These claims seem to have been overlooked on the motion for summary judgment.
[5] Apart from the appropriateness of advancing the interest claims at this juncture, TeraGo acknowledges that Mr. Paquette would be entitled to claim and receive pre- and post-judgment interest. I, therefore, allow these claims, and the judgment, which I understand may not have been taken out, should be altered or amended accordingly.
[6] Turning then to the matter of costs, the first issue to determine is what effect, if any, should be given to Mr. Paquette’s Rule 49 Offer to Settle, which he made on May 19, 2015, less than a month before the summary judgment motion.
[7] The Offer to Settle stated:
The Plaintiff, Trevor Paquette, offers to settle this action on the following terms:
(1) This offer is made to the Defendant and is an offer to settle the claim against the Defendant;
(2) The Defendant shall provide the monetary equivalent of 14 months’ salary, minus any amounts paid to date of acceptance to the Plaintiff;
(3) The value of a month’s pay is to be agreed or assessed by the Court;
(4) The Defendant shall pay the partial indemnity costs, as agreed or assessed, of the Plaintiff to the date of acceptance;
(4) [sic] The payments in paragraphs 2 to 4 will be in lieu of all claims and interest in claim CV-15-519137;
(5) The action shall be dismissed;
(6) This offer is open to acceptance until five (5) minutes after the commencement of trial, which shall be five (5) minutes after calling the first witness.
[8] I agree with TeraGo’s submission that this offer is too indeterminate to be useful.
[9] The costs consequences of a Rule 49 Offer to Settle made by a plaintiff are not triggered unless the principle amount that the defendant, the recipient of the offer, would have to pay to settle the action is an immediate known or a knowable at the time of any acceptance.
[10] The amount of any costs that the defendant may have to pay may be an unknown and have to be assessed later, but in order to attract costs consequences, i.e. in order for the rule to function, the amount to be paid to settle the plaintiff’s claim must be something fixed and determinable so that the defendant can contemplate whether to accept or reject the offer. See: Yepremian v. Weisz (1993), 1993 5483 (ON SC), 16 O.R. (3d) 121 (Gen. Div.); Schumacher v. Toronto Dominion Bank, [1997] O.J. No. 4639 (S.C.J.); Diefenbaker v. Young (1995), 1995 2481 (ON CA), 22 O.R. (3d) 641 (C.A.).
[11] In the case at bar, the amount that TeraGo would have had to pay to settle the action was unknown. Accepting the offer would not resolve the litigation, which would have had to continue for the purposes of determining Mr. Paquette’s entitlements for compensation for a wrongful dismissal, which is precisely what occurred when the vague offer was understandably not accepted by TeraGo.
[12] There is no basis for comparing the unknown economic value of Mr. Paquette’s Offer to Settle with the economic value of the judgment, which is now known. By making all sorts of assumptions, Mr. Paquette attempted to show that the offer ought to have been accepted because he says that the judgment outcome exceeded the value of the offer, but his jumping through hoops of assumptions just makes the point that Mr. Paquette’s offer was dysfunctional for the purposes of Rule 49 costs consequences.
[13] I, therefore, conclude that the costs should be assessed on a partial indemnity basis.
[14] Putting aside the matter of the parties’ dustup about whether to have a mediation session after Mr. Paquette had launched a summary judgment motion and putting aside the matter of the disbursement for travel costs ($1,119.95) incurred by his counsel to attend in Calgary for Mr. Paquette’s cross-examination on his affidavit for the summary judgment motion, the assessment of costs on a partial indemnity basis becomes a conventional assessment of costs in accordance with the normal factors that guide the court’s discretion with respect to costs.
[15] In my opinion, the disbursement for travel costs is reasonable. TeraGo, which carries on business in both Alberta and Ontario, objected to the disbursement because Mr. Paquette, who lives in Alberta, could have sued in Alberta. I do not see this as a reason not to allow a reasonable disbursement in the Ontario action, which Mr. Paquette was entitled to bring.
[16] The dispute about the scheduling of a mediation session, in my opinion, is just an element of the normal assessment of costs and the determination of whether the costs claimed are reasonable and within the reasonable expectations of the unsuccessful party.
[17] On a partial indemnity scale, Mr. Paquette requests $37,785.54, all inclusive. TeraGo submits that the costs claimed are disproportionate to the complexity of the action and to the ultimate recovery and that the appropriate award should not exceed $20,000, all inclusive.
[18] Having reviewed the Bill of Costs and the costs submissions of both parties, in my opinion, the appropriate award is $31,000, all inclusive.
[19] Orders accordingly.
Perell, J.
Released: August 5, 2015
COURT FILE NO.: CV-15-519137
DATE: 20150805
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TREVOR PAQUETTE
Plaintiff
– and –
TERAGO NETWORKS INC.
Defendant
REASONS FOR DECISION – COSTS
PERELL J.
Released: August 5, 2015