COURT FILE AND PARTIES

COURT FILE NO.: CV–13-491048

DATE: 20151116

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DORU MANASE and MANASE CORPORATION, Plaintiffs

AND:

TORONTO DISTRICT SCHOOL BOARD, Defendant

BEFORE: Sean F. Dunphy, J.

COUNSEL: Andrew H. Monkhouse, for the Plaintiffs

Kimberly D. Pepper, for the Defendant

READ: November 16, 2015

COSTS ENDORSEMENT

[1] The plaintiff made a claim for more than $700,000 in damages against the defendant in 2013 arising from the termination of his consulting arrangements with the defendant. The statement of claim alleged that the plaintiff was an employee and not, as he had been characterized for several years, a contract consultant retained by the defendant from an agency. In addition to asking for salary in lieu of notice of termination, the plaintiff claimed significant unpaid overtime wages over a span of several years.

[2] Immediately prior to the commencement of the hearing, the plaintiff accepted the defendant’s offer to settle under R. 49 of the Rules of Civil Procedure made approximately one month beforehand. The accepted amount was $84,042 plus the plaintiffs’ costs to the date of the offer to be assessed if not agreed. This is my disposition of the matter of costs.

[3] I have reviewed the costs submissions of both parties and considered carefully the criteria established by R. 57.01 of the Rules of Civil Procedure. The plaintiff seeks partial indemnity costs to the date of the offer of $57,423.71 inclusive of fees, disbursements and HST. The defendant submits that partial indemnity costs of $40,000 - $44,000 all-inclusive would be more appropriate.

[4] I am of the view that the defendant’s arguments are persuasive.

[5] The plaintiff persisted with a claim that sought to “shoot the moon” and ultimately settled for a very small fraction of the original claim. The amount accepted was well within the simplified rules parameters (Rule 76 of the Rules of Civil Procedure). Pursuant to R. 76.13, the plaintiff could have been deprived of costs or even ordered to pay all or part of the defendants’ costs had the case been heard and proceeded to judgment for the settlement amount or less. Plaintiffs generally accept settlement offers because they have a reasonable fear that, on the facts of their case, the prospect of doing worse than the offer proposes after a hearing on the merits weighs heavier in the balance than the possibility of doing better.

[6] It is in my view quite appropriate to have regard to the principles underlying Rule 76 and in particular R. 76.13 when assessing costs arising out of an accepted settlement offer. Here as in any assessment of costs, the court retains an overriding discretion to disregard such considerations where they appear unhelpful.

[7] Rule 76 of the Rules of Civil Procedure represents a significant evolution of our Rules to accomplish the overriding objective of ensuring that access to justice remains feasible, efficient and proportional. The decision of the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 is another. The litigation landscape is evolving lest justice become unavailable to the public it is intended to serve. Plaintiffs should have regard to the Rule and possible costs consequences in assessing how to advance their claims realistically and efficiently. Defendants should not be penalized for making Offers to Settle under Rule 49 when the accepted offer amount falls well within the rule as was the case here.

[8] The plaintiff has been very fortunate on the facts of this case that the defendant did not press hard for a harsher outcome on costs. The alleged complexity driving the high costs claimed by the plaintiff was significantly of the plaintiff’s own confection. Much of it could have been mitigated under the simplified procedures of Rule 76.

[9] I would accept the submissions of the defendant and award costs of $40,000 - the lower end of the range proposed by the defendant. As it is, such an award amounts to almost half of the amount of the settlement, a relatively high ratio. I am of course not to be taken as implying that there is a hard and fast rule on the ratio costs may bear to the amounts at issue. It is a factor but not necessarily a dispositive one. Some cases require the expenditure of time, effort and thus costs to obtain a satisfactory result that might nevertheless seem out of proportion to the amounts at issue. This is not such a case.

[10] Had the defendant brought a more modest and proportional claim from the outset, the matter may have settled much sooner or might have been prepared for trial at a fraction of the time and expense incurred in this one. The plaintiff and defendant both would have been spared considerable stress, expense and time.

[11] These considerations must find some reflection in the award of costs that I make beyond a mere mechanical tallying of hours and rates with a debate about which hours should not have been incurred.

[12] Accordingly, the plaintiff is awarded costs in the total amount of $40,000.

Sean F. Dunphy, J.

Date: November 16, 2015