CITATION: Lawrence v. Norwood, 2016 ONSC 6632
COURT FILE NO.: C-776-13
DATE: 2016-10-25
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Kenneth Dexter Lawrence and Sylvia Ethel Lawrence
v. Norwood Industries Inc.
BEFORE: The Honourable Mr. Justice G. E. Taylor
COUNSEL: Bernard Verbanac and Monica Machado, for the Plaintiff
Dave J.G. McKechnie, for the Defendant
COSTS ENDORSEMENT
[1] After a six day trial, I dismissed the plaintiff’s claims for damages for constructive dismissal from their employment with the defendant. I found that the plaintiffs had failed to discharge their onus of proving on a balance of probabilities that any conduct on the part of the defendant, when viewed objectively, constituted a fundamental change to the terms of employment to justify a conclusion that they were constructively dismissed from their employment.
[2] I have now received written submissions with respect to costs.
[3] The defendant submits that the cost consequences of Rule 49.10 of the Rules of Civil Procedure ought to apply in its favour because it made an Offer to Settle dated December 10, 2014, which remained open until the commencement of the trial and was for a lump sum payment to the plaintiffs in the amount of $4,000. The defendant made a second Offer to Settle dated July 28, 2016 providing for a lump sum payment to the plaintiffs in the amount of $10,000. This offer was withdrawn prior to the commencement of the trial.
[4] Based on the Offer to Settle dated December 10, 2014, the defendant submits that it ought to be entitled to partial indemnity costs to the date of the Offer and substantial indemnity costs thereafter.
[5] In Scapillati v. A. Potvin Construction Ltd., 1999 1473 (ON CA), [1999] O.J. No. 2187, the Ontario Court of Appeal stated that Rule 49 has no application when a plaintiff’s claim fails (paragraph 63). Recently, the Court of Appeal confirmed that decision in Davies v. Clarington (Municipality), 2009 ONCA 722 at paragraph 40.
[6] The plaintiffs rely on an Offer to Settle dated August 10, 2016 pursuant to which Kenneth Lawrence offered to accept the sum of $28,000 in settlement of his claim and Sylvia Lawrence offered to accept the sum of $22,000 in settlement of her claim. The Offer also required the defendant to contribute $10,000 towards the plaintiffs’ legal expenses.
[7] The plaintiffs submission on this issue is put as follows:
The plaintiffs further submit that in addition to their genuine belief in their grounds to pursue their claim, the plaintiffs felt they had no choice but to see to proceed to trial without a reasonable offer to consider. The defendant put forth two nominal offers to settle: one on December 10, 2014, for a lump sum of $4,000.00, and the second offer on July 28, 2016, for a lump sum of $10,000.00. The plaintiffs submit that it was reasonable for them not to accept such nominal offers which provided no contribution towards costs and were well below the minimum severance and termination entitlements under the Employment Standards Act (“ESA”).
No authority was cited in support of this proposition.
[8] I reject this submission. There is no obligation on a defendant to make any Offer to Settle in advance of the trial, let alone one which must be perceived to be reasonable from the perspective of the plaintiff. Litigation is inherently risky. Parties are entitled to take risks. Sometimes they are successful. Sometimes they are unsuccessful. In this case the plaintiffs had the opportunity to resolve the action by accepting the payment of $10,000. They chose not to do so. The law is quite clear that a successful party is entitled to its costs. I see no reason to relieve the plaintiffs from that obligation after they willingly assumed the risks inherent in proceeding to trial and the outcome was not to their liking.
[9] The defendant is therefore entitled to its partial indemnity costs of defending this action.
[10] The defendant seeks an award of partial indemnity costs totaling $60,950, which includes disbursements and HST. The plaintiffs accept as reasonable the hourly rates listed in the defendant’s Bill of Costs. But the plaintiffs submit that the time spent by counsel for the defendant with respect to some aspects of this litigation is excessive.
[11] The factors to be considered in fixing costs are set out in Rule 57.01 (1). This action was not complex. The case was important to the parties and particularly to the plaintiffs. The amount at issue was modest, but the action had to be defended appropriately. The case was presented by both sides vigorously but fairly. In my view, the two most important factors are the principal of indemnity and the amount of costs that the plaintiffs could reasonably have expected to be ordered to be paid in the event they were unsuccessful.
[12] Notwithstanding the submissions made by the plaintiffs, I find the time spent by counsel for the defendant in defending this action was reasonable. I accept also that the plaintiffs are people of modest means. That said, they must have realized that if they were unsuccessful in their claims that they were constructively dismissed from their employment, they would be facing an award of costs against them in a significant amount.
[13] I am not assessing costs. I have come to the conclusion that a fair and reasonable award of costs to be paid by the plaintiffs to the defendant is $50,000, plus HST, for a total of $56,500.
“G.E. Taylor”
G.E. Taylor J.
DATE: October 25, 2016