ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-09-393658
DATE: 20151221

BETWEEN:

ROBERT B. SHEWCHUK
Plaintiff

– and –

BLACKMONT CAPITAL INC.
Defendant

Joseph Groia, Kevin Richard, & David Sischy, for the Plaintiff

Nigel Campbell, Doug McLeod, & David Badham, for the Defendant

s.a.Q. akhtar j.

[1] The plaintiff, Robert Shewchuk, brought an action against his former employer, Blackmont Capital Inc. (now Richardson GMP), alleging a litany of breaches of his employment agreement with the company. After a hard fought trial, his action was dismissed in its entirety. Blackmont now seeks its costs of the action.

[2] Prior to trial, Blackmont made three separate offers to settle the action, all of which were refused by Shewchuk. The first of those offers was made on 25 September 2014. An initial trial date of 24 November 2014 was vacated through no fault of the parties. The trial proceeded on the second trial in February 2015.

[3] Blackmonts submits that it is entitled to substantial indemnity costs for the action from 25 September 2015, the date upon which its first offer to settle was declined.

[4] Rule 49 of the Rules of Civil Procedure R.R.O. 1990, Reg. 194, provides for situations in which a successful plaintiff makes an offer to settle or refuses an offer made by the defendant. It reads 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(b) is not withdrawn and does not expire before the commencement of the hearing; and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(b) is not withdrawn and does not expire before the commencement of the hearing; and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.

[5] Most notably, Rule 49 does not cover the situation in which a defendant, who has made an offer to settle, defeats the plaintiffs claim outright.

[6] Blackmont relies upon S.A. Strasser Ltd. v. Richmond Hill (Town) (1990), 1990 6856 (ON CA), 1 O.R. (3d) 243 (C.A.) where the court indicated that substantial indemnity costs might be awarded in cases where a defendant, entirely successful in an action, had previously made an offer to settle. In such cases a court may award partial indemnity costs until the date of the offer and substantial indemnity costs thereafter. The Strasser analysis was followed in a series of other cases: 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.

[7] I find, however, that Strasser has been overtaken by recent decisions of the Court of Appeal for Ontario namely, Davies v. Clarington (Municipality), 2009 ONCA 722, where Epstein J.A. clarified the position on substantial indemnity, at para. 40, in the following way:

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.

[8] In light of this passage, substantial indemnity would only be available if I found that Shewchuk had committed “egregious behaviour, deserving of sanction.” I find no evidence of any such conduct. As I have already observed, the trial was hard fought with two sets of very able counsel. Both parties co-operated to ensure that the trial proceeded in the most expeditious manner possible. The action, even though unsuccessful, was not frivolous and, the legal issues that arose during the course of the trial required adjudication and were dealt with expeditiously by both sides. I therefore conclude that this is not an appropriate case in which to award substantial indemnity costs.

[9] Having reviewed the costs submissions of both parties, I also agree that the vacation of trial date of 24 November 2014 cannot be laid at the plaintiff’s feet. Consequently, I find the submission that trial preparation had to be “repeated” to carry very little weight.

[10] Having regard to the factors outlined in Rule 57.01 of the Rules, I take the view that the amount requested by Blackmont is too high. In my view, the amount of $375,000 all inclusive is the most appropriate award.

[11] Accordingly, I order that $375,000 be paid by the plaintiff to Blackmont forthwith.

[12] I thank both counsel for their submissions.

S.A.Q. Akhtar J.

Released: 21 December, 2015

COURT FILE NO.: CV-09-393658

DATE: 201512--

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ROBERT B. SHEWCHUK

Plaintiff

– and –

BLACKMONT CAPITAL INC.

Defendant

COSTS JUDGMENT

S.A.Q. Akhtar J.