ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-12-451806
DATE: 20151020
BETWEEN:
JONATHAN KIELB
Plaintiff
– and –
NATIONAL MONEY MART COMPANY
Defendant
J. Hopkins, for the Plaintiff
Susan Crawford for the Defendant
S.A.Q. Akhtar J.
Introduction
[1] The plaintiff Jonathan Kielb was employed by the defendant, National Money Mart from December 2008 to April 2010 when he was dismissed without cause. He brought an action against Money Mart for breach of contract resulting in unpaid salary and bonus payments. After a two day trial, I dismissed Kielb’s claims. Money Mart now seeks costs of the action.
Position of the Parties
[2] Money Mart relies upon its offer, made on 7 April 2015, to settle the action by paying Kielb the amount of $45,000.00 in exchange for Kielb’s signature on a full and final release document. Kielb’s rejection of this offer, argues Money Mart, triggers an elevated award of costs incurred subsequent to the date of the offer.
[3] Kielb opposes any award of costs on a substantial indemnity basis and submits that there is no basis in law for this request.
The Legal Principles
[4] Factors governing the award of costs are to be found in Rule 57.01(1) of the Rules of Civil Procedure R.R.O. 1990, Reg. 194. I do not intend to recite those factors other than recognise their importance in awarding costs in this case.
[5] The award of costs where an offer to settle has been made is subject to the rules contained in Rule 49.10 which provides as follows:
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(b) is not withdrawn and does not expire before the commencement of the hearing; and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. R.R.O. 1990, Reg. 194, r. 49.10 (1); O. Reg. 284/01, s. 11 (1).
(2) Where an offer to settle,
(a) is made by a defendant 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(b) is not withdrawn and does not expire before the commencement of the hearing; and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 plaintiff,
and the plaintiff obtains a judgment as favourable as or less favourable than the terms of the offer to settle, the plaintiff is entitled to partial indemnity costs to the date the offer was served and the defendant is entitled to partial indemnity costs from that date, unless the court orders otherwise.
[6] Rule 49 applies only where a plaintiff has been successful and is silent on offers to settle made by the defendant where a plaintiff’s action is dismissed.
[7] Money Mart acknowledges this fact in its submissions, and relies instead upon Rule 49.13 - which permits a court awarding costs the discretionary power to take into account any offer to settle made in writing prior to trial – in conjunction with Rule 57.01.
[8] The leading case of S. & A. Strasser Ltd. v. Richmond Hill (Town) (1990), 1990 6856 (ON CA), 1 O.R. (3d) 243 (C.A.) lends support to the view that in cases where a successful defendant had made a prior offer to settle, Rules 49.13 and 57.01 could operate to permit the award of partial indemnity costs prior to the offer and substantial indemnity costs thereafter. A number of cases followed this principle: H.L. Staebler Company Ltd. v. Allan (2008), 2008 64396 (ON SC), 92 O.R. (3d) 788 (S.C.J.); Dunstan v. Flying J Travel Plaza, 2007 819 (ON LRB), [2007] O.J. No. 4089 (S.C.J.); Alie v Bertrand & Frere Construction Co. (2002), 62 O.R. (3d) 645. Money Mart argues that these principles favour the award of costs on a partial/substantial indemnity basis in this case.
[9] The difficulty is that a more recent appellate decision appears to have clarified the Strasser principles. In Davies v. Clarington (Municipality), 2009 ONCA 722, Epstein J.A. noted that Strasser’s broad nature had already been restricted by the comments of Austin J.A. in Scapilliti v. A. Potvin Construction Ltd. (1999), 1999 1473 (ON CA), 44 O.R. (3d) 737 (C.A.) which appeared to indicate that substantial indemnity costs against an unsuccessful plaintiff was justified only when that party had been found to have committed conduct that could be characterised as egregious. To end any doubts on the issue, Epstein J.A. commented, at para. 40:
In summary, while fixing costs is a discretionary exercise, attracting a high level of deference, it must be on a principled basis. The judicial discretion under rules 49.13 and 57.01 is not so broad as to permit a fundamental change to the law that governs the award of an elevated level of costs. Apart from the operation of rule 49.10, elevated costs should only be awarded on a clear finding of reprehensible conduct on the part of the party against which the cost award is being made. As Austin J.A. established in Scapillati, Strasser should be interpreted to fit within this framework - as a case where the trial judge implicitly found such egregious behaviour, deserving of sanction.
Should Substantial Indemnity Be Awarded Against Kielb?
[10] Using the Clarington test, I could only accede to Money Mart’s request if I found Kielb guilty of any egregious behaviour which required appropriate sanction. On review, I find none.
[11] This was not a frivolous case in which Kielb lengthened or delayed matters unnecessarily. On the contrary, it is a reflection of both parties and their counsel that the case was streamlined and completed in a matter of two days.
[12] I find that this is not a case which warrants the award of substantial indemnity costs.
[13] Moreover, as Money Mart points out, this was a novel case in which its restrictive employment clause was tested for the first time. Using the factors enunciated in Rule 57.01(1) of the Rules, I find that Kielb had a reasonable expectation of success in the case and was successful in persuading the court of his position that the bonus at the heart of the case was part of his total compensation, a position strongly opposed by Money Mart. I also note that both parties, in impressive fashion, co-operated in a manner that streamlined the trial that took place.
[14] In my view, the appropriate award of costs is the sum of $35,000 all inclusive.
[15] I therefore fix that sum to be paid by Kielb forthwith.
S.A.Q. Akhtar J.
Released: October , 2015
COURT FILE NO.: CV-12-451806
DATE: 20151020
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JONATHAN KIELB
Plaintiff
– and –
NATIONAL MONEY MART COMPANY
Defendant
REASONS FOR JUDGMENT
S.A.Q. Akhtar J.