Court File and Parties
COURT FILE NO.: CV-15-529111 DATE: 20161004 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Rajnish Johar, Plaintiff AND: Best Buy Canada Ltd., Defendant
BEFORE: Justice Edward P. Belobaba
COUNSEL: Andrew Monkhouse and Samantha Lucifora for the Plaintiff / Moving Party Marc A. Rodrigue for the Defendant / Responding Party
HEARD: August 22, 2016
Costs Award
[1] In a decision released on August 31, 2016, I found that the plaintiff had been wrongfully dismissed by Best Buy and I granted his motion for summary judgment. [1] I awarded $55,796.29 in damages (in lieu of 11 months reasonable notice) and costs.
[2] As the hearing began, I asked each side for their costs estimate on a partial indemnity basis should they prevail. Both sides advised that if they succeeded on the motion, they would ask for $35,000 in costs. At the conclusion of the hearing, however, both sides asked that they be given an opportunity for further submissions to deal with settlement offers and provide other relevant information. I acceded to this request with the admonition that these additional submissions be “brief written submissions.”
[3] The plaintiff’s cost submission was relatively brief, about four written pages with some attached documentation. The defendant’s submission consisted of a thick volume with 23 pages of argument and 28 tabs of additional documentation. Hardly a “brief written submission.”
[4] In any event, the parties are no longer agreed that $35,000 is a fair and reasonable costs award. The plaintiff says he is entitled to costs on a substantial indemnity scale in the amount of $52,000 and the defendant suggests a “nominal” costs award in the range of $5000 to $10,000.
[5] Each side accuses the other of prolonging the litigation unduly either by perpetuating and litigating multiple causes for the dismissal right up to the motion (the plaintiff’s accusation) or by breaching the rules of pleading and document disclosure and otherwise increasing parties’ costs unnecessarily (the defendant’s accusation). There is no need to go into any detail. It is sufficient to note that there is some merit in each side’s criticism of the other. In my view, the litigation was unduly prolonged and made more expensive by both sides. I therefore think it is fair and proper, as a first step, to lower the initially suggested $35,000 costs estimate to $30,000.
[6] Next, I must ensure that the plaintiff’s cost outline complies with the hourly rates that are set out in the well-known Grid. I note that the $210 hourly rate charged by Mr. Monkhouse must be reduced, given his three-year call, to $170; and the $150 rate charged by Mr. LeMesurier must be reduced, given his 2016 call, to $140. The $30,000 quantum is therefore adjusted downward by $2000 to $28,000.
[7] There is yet another adjustment that is required. Early on in this litigation, the plaintiff decided to proceed under the “simplified procedure” as set out in Rule 76. This decision has a costs consequence. The case law is clear that where an action is brought under the simplified procedure, the costs award must be “reasonable and proportionate to the amount recovered.” [2] The amount recovered in this action was just over $55,000. In terms of proportionality, a costs award of $27,500 is probably the most that can reasonably be awarded. This is $500 less than the re-adjusted amount of $28,000 just noted. I am therefore inclined to award $27,500 on a partial indemnity basis.
[8] The plaintiff, however, asks that the costs be awarded on a substantial indemnity basis (that is 1.5 times partial indemnity [3]) because a valid Rule 49 settlement offer was rejected by the defendant.
[9] In my view, the plaintiff’s Rule 49 settlement offer of $45,000 does not trigger substantial indemnity for two reasons: (1) the offer was made on the basis that a portion of the settlement amount would be “allocated” to “human rights” which I assume suggests a violation of the provincial Human Rights Code [4] - but a human rights claim was never pleaded; and (2) as the defendant points out, the after-tax value of the $55,796 judgment is $39,058 and the after-tax value of the $45,000 settlement offer as “allocated” is $38,250. In my view, the differential of $807 is not that much less “favourable” so as to trigger or merit substantial indemnity.
[10] Having considered the factors set out in Rule 57.01(1), I find it fair and reasonable to award $27,500 in costs. Costs are therefore fixed at $27,500 all-inclusive payable forthwith by Best Buy Canada to Rajnish Johar.
Belobaba J. Date: October 4, 2016
[1] Johar v. Best Buy Canada, 2016 ONSC 5287.
[2] Trafalgar Industries of Canada Ltd. v. Pharmax Ltd., (2003) 64 O.R. (3d) 288 (S.C.J.)
[3] Rule 1.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.