Stephanie Ozorio v. Canadian Hearing Society, 2016 ONSC 6679

CITATION: Stephanie Ozorio v. Canadian Hearing Society, 2016 ONSC 6679

COURT FILE NO.: CV-15-542335

DATE: 20161107

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Stephanie Ozorio, Plaintiff/Moving Party

AND:

Canadian Hearing Society, Defendant/Responding Party

BEFORE: Mr. Justice A.J. O’Marra

COUNSEL: Daniel A. Lublin, for the Plaintiff/Moving Party

Kimberly D. Pepper, for the Defendant/Responding Party

HEARD: In Writing

COSTS ENDORSEMENT

[1] The plaintiff, Stephanie Ozorio received summary judgment against the defendant, Canadian Hearing Society for wrongful dismissal: (see reasons for judgment released August 30, 2016, ONSC 5440).

[2] The plaintiff aged 60, had been the defendant’s Regional Director of its Toronto Region when she was dismissed without cause, November 30, 2015. She had been in the employ of the defendant for 30 years, Regional Director since 2004. She was dismissed without cause as a result of a corporate restructuring process undertaken due to significant operating deficits that year. Originally she was offered a 12 month notice period, which she declined. However, the defendant continued to pay her regular base salary as required under the minimum statutory entitlement of the Employment Standards Act, 2000 (ESA) for 34 weeks. On summary judgment, she was awarded a notice period of 24 months, with adjustments for payments made under the ESA from the termination November 30, 2015 to July 27, 2016.

[3] The parties were directed to make written costs submissions if they were unable to agree as between themselves. I have received their submissions and respective Bill of Costs. The following is my costs endorsement.

[4] The plaintiff seeks full indemnity costs in the amount of $31,484.42, or in the alternative, substantial indemnity costs in the amount of $25,741.76, these amounts are inclusive of disbursements and HST. Counsel submits that the defendant caused the plaintiff to incur unnecessary litigation costs to obtain a reasonable severance after 30 years of service.

[5] The defendant submits that the plaintiff should be granted costs on a partial indemnity basis in the range of $10,000 to $15,000 as in other similar termination of employment cases. Costs on a full indemnity or substantial indemnity basis are not warranted in a non-complex summary judgment matter.

[6] Pursuant to s. 131(1) of the Courts of Justice Act, costs of and incidental to a proceeding are at the discretion of the court. The court should consider factors set out in Rule 57 of the Rules of Civil Procedure, in addition to the result of the proceeding, and any offers to settle in the award of costs:

(i) The complexity of the proceeding;

(ii) The importance of the issues;

(iii) Whether any step in the proceeding was improper, vexatious or unnecessary;

(iv) The conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;

(v) Rates charged and hours spent for the party entitled to costs.

[7] In considering the issue of costs, I am mindful that I must adhere to the principles set out by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON CA), [2004] O.J. No. 2634, that the overall objective of fixing costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant.

[8] The amount in which costs are to be fixed is not simply a mathematical function and dependent on the number of hours worked and the hourly rates employed but, rather, the party paying the costs should be subjected to an order which is fair and predictable. In other words, the party required to pay costs must not be faced with an award that does not unreasonably reflect the amount of time and effort that it was warranted by the proceeding (see: Moon v. Sher, 2004 39005 (ON CA), [2004] O.J. No. 4651 (C.A.) at para. 30).

[9] Counsel for the plaintiff submits that the defendant engaged in behaviour that is worthy of sanction having “unnecessarily lengthened the proceedings” and that its conduct was improper causing the plaintiff to incur unnecessary legal expenses. The improper conduct alleged by the defendant is set out in its costs submissions as follows:

(a) Upon termination, the defendant only offered Ms. Ozorio 12 months’ pay which was clearly insufficient. Upon the verge of the hearing, the defendant conceded that Ms. Ozorio should be paid 18 to 20 months.

(b) Throughout the course of the litigation, and until its concession at the outset of the hearing, the defendant’s formal position was that Ms. Ozorio was entitled to 12 months’ pay. However, despite holding this amount of severance out as reasonable, the defendant did not even pay this amount to Ms. Ozorio, instead only paying approximately 34 weeks’ severance.

[10] Elevated costs on a full indemnity or substantial indemnity basis are awarded only in two circumstances. The first involves the operation of an offer to settle under Rule 49.10 where substantial indemnity costs are explicitly authorized. The second is where the losing party has engaged in sanction worthy behaviour that is characterized as being reprehensible, scandalous or outrageous.

[11] In my view, there is nothing in the conduct of the defendant in this case that could be considered improper, vexatious or unnecessary. The action for wrongful dismissal was not overly complex. The matter was disposed of by way of a two hour summary judgment motion July 5, 2016. The parties consented to the simplified process. There were no unnecessary steps or any prolongation of proceedings, which in this case involved an exchange of affidavits of documents, preparation of motion records, (one affidavit each, facta and book of authorities), attendance of the plaintiff for cross-examination and preparation for the hearing.

[12] There were only two issues in dispute: (i) the period of reasonable notice, and (ii) the method of adjusting the award, made before the expiry of the reasonable notice period, to fairly reflect the plaintiff’s duty to mitigate loss to the defendant.

[13] The plaintiff’s conduct did not prolong the proceeding and none of its conduct amounted to acting in bad faith. The plaintiff rejected the defendant’s original offer as she was entitled to do and absent a signed release it was not bad faith for the defendant to refuse to pay the plaintiff severance in excess of her statutory entitlements under the ESA, 2000. Further, no steps were taken that prevented the hearing of the motion within the period during which the plaintiff was receiving her regular base salary.

[14] Notwithstanding the plaintiff’s assertion that she was vulnerable and depended on her income to care for herself, mother and an ill son, I accept the plaintiff’s submission that there is no evidence of any undue hardship caused to the plaintiff as a result of the conduct of the defendant. Moreover, the plaintiff received a substantial award in this matter, which included salary and benefits.

[15] Full indemnity or substantial indemnity costs are not warranted in this matter.

[16] The plaintiff submits that counsel’s partial indemnity rate, inclusive of fees, disbursements and HST is $19,044.71, and the defendant submits a Bill of Costs on a partial indemnity basis in the amount of $13,196.74 inclusive of disbursements and HST. The plaintiff’s costs are premised on a total of almost 70 hours, whereas the defendant’s bill of costs claims almost 40 hours, which, in my view, more reflective of the straightforward nature of the proceeding.

[17] In the context of a straightforward summary judgment motion for wrongful dismissal, the fair and reasonable partial indemnity costs for an unsuccessful party to pay is $14,000, inclusive of disbursements and HST.

[18] In the result, the defendant is ordered to pay the plaintiff costs in the amount of $14,000, payable within 30 days of this order.

A.J. O’Marra J.

Date: November 7, 2016