Court File and Parties

COURT FILE NO.: CV-15-527180 DATE: 20170629 ONTARIO SUPERIOR COURT OF JUSTICE

RE: PETER CUMMING, Plaintiff AND: QUANTUM AUTOMOTIVE GROUP INC., Defendant

BEFORE: Mr. Justice M. D. Faieta

COUNSEL: Jordan Reiner, for the Plaintiff Morris Cooper, for the Defendant

C O S T S E N D O R S E M E N T

BACKGROUND

[1] I dismissed the plaintiff’s action against the defendant for wrongful dismissal for reasons dated April 6, 2017 following a two day trial.

[2] The plaintiff claimed $117,000.00. If I had found that he had been wrongfully dismissed, I would have awarded damages in the amount of $42,956.69 in lieu of reasonable notice for a six month period rather than the 14 months’ notice claimed. Having found “wilful misconduct” on his part, I also dismissed the plaintiff’s claim for nine weeks of severance pay and termination pay under the Employment Standards Act, 2000, S.O. 2000, c. 41.

[3] The defendant claims costs, on a substantial indemnity basis, in the amount of $70,851.70 inclusive of $1,780.45 in disbursements. Amongst other things, the plaintiff submits that the costs claimed by the defendant are excessive given that this claim proceeded under the Simplified Rules under the Rules of Civil Procedure.

ANALYSIS

[4] The fixing of costs is governed by s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43 and the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Rule 57.01 is the primary rule governing costs. It enumerates various matters to consider when fixing costs. Rule 1.04(1.1) of the Rules of Civil Procedure, whose purpose is to promote access to justice, is also applicable. It provides that,

In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.

[5] In fixing costs, the objective is to ascertain “an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding”. Although a successful party is usually indemnified for its costs by the unsuccessful party, the principle of indemnity is but one of many considerations in fixing costs. In order to promote access to justice, the reasonableness of the amount of costs claimed must also be considered: Boucher v. Public Accountants Council (Ontario) (2004), 71 O.R. (3d) 291 (C.A.), at paras. 26, 37; Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66, at paras. 50-52; Elbakhiet v. Palmer, 2014 ONCA 544, 121 O.R. (3d) 616, at para. 38, leave to appeal refused [2014] S.C.C.A. No. 427.

[6] I now turn to the various relevant considerations in assessing costs in this matter.

Offers to Settle

[7] On February 7, 2017, the plaintiff made an offer to settle in Form 49A to settle this matter on the basis that the defendant pay to the plaintiff the sum of $35,000 less statutory deductions and an additional $10,000 for the plaintiff’s legal costs.

[8] The defendant made non-Rule 49 compliant offers to settle this action, either orally or in its pre-trial conference briefs, on three occasions – at the mandatory mediation held on October 19, 2016, at a pre-trial conference held on November 25, 2016 and at a second pre-trial conference held on March 10, 2017 – on the basis of a consent to the dismissal of the action without costs. The defendant states that it warned the plaintiff that if he rejected these offers, the defendant would seek substantial indemnity costs if it was successful at trial.

Principle of Indemnity

[9] The defendant did not disclose his hourly rate other than to state that his client claims $750 per hour on a substantial indemnity basis and $400 on a partial indemnity basis.

[10] The plaintiff submits that the defendant did not make a Rule 49 compliant offer to settle and thus the defendant “… should not be entitled to costs or in the alternative, the cost award should be minimal”. The plaintiff does not challenge the defendant’s claim for disbursements.

[11] The plaintiff further submits:

… the defendant’s Bill of Costs is vague and wholly exaggerated. It does not provide any specific breakdown of the hours expended on each task and no time dockets were provided. Therefore, it is difficult for the Plaintiff to properly assess how the defendant’s time was spent. It appears that the defendant is claiming that it took his experienced counsel nearly eight hours to review the pleadings and yet it took plaintiff’s counsel a fraction of the time. The defendant’s counsel appears to be claiming it took him 8.5 hours to prepare for and attend a two-hour discovery. This is unreasonable given the defendant counsel’s level of experience. The defendant has twice claims costs for “Preparation for Trial” first, in the “Prepare for Trial” section and then again in the “Attendance at Trial” section where he has included “including preparation for and attendance at Court”.

[12] I have calculated that the defendant claims a total of 86 hours. The plaintiff’s Bill of Costs shows a total of almost 52 hours.

The Amount that an Unsuccessful Party could Reasonably Expect to Pay

[13] The plaintiff filed a Bill of Costs which claims a partial indemnity rate of $220.00 (as opposed to $400.00 claimed by the defendant) and a substantial indemnity rate of $350 (as opposed to $750.00 claimed by the defendant). It also shows a total of almost 52 hours in time spent on this matter (as opposed to 86 hours claimed by the defendant).

[14] Had the plaintiff been successful, his Bill of Costs would have been $19,248.87, inclusive of $1,586.97 in disbursements.

The Amount Claimed and the Amount Recovered

[15] The plaintiff claimed $117,000.00. He recovered nothing.

The Complexity of the Proceeding

[16] This proceeding was not complex. It turned largely on the assessment of the credibility of the witnesses.

The Importance of the Issues

[17] While the issues raised by this trial are of importance to the parties, they do not have significant jurisprudential importance.

The Conduct of any Party that Tended to Shorten or Lengthen Unnecessarily the Duration of the Proceeding

[18] Neither party suggests that the conduct of the other party tended to shorten or unnecessarily lengthen the duration of this proceeding.

Whether any Step in the Proceeding was Improper, Vexatious or Unnecessary, or Taken through Negligence, Mistake or Excessive Caution

[19] Neither party suggests that other party took a step that was improper.

A Party’s Denial of or Refusal to Admit Anything that Should Have Been Admitted

[20] Neither party suggests that other party refused to admit anything that should have been admitted.

Any Other Matter Relevant to the Question of Costs

[21] The defendant has not established that this is a case for substantial indemnity costs. It is neither engaged by Rule 49 nor has it shown that the plaintiff’s conduct in this action was egregious or reprehensible.

[22] The parties agree that Rule 76 (Simplified Procedure) of the Rules of Civil Procedure governed this action. As the name suggests, it places limits on all steps that would otherwise be available in a proceeding in order to promote access to justice. Thus, an award of costs in an action under the Simplified Procedure Rules should not only be proportionate to the amounts in dispute, given Rule 1.04(1.1) of the Rules of Civil Procedure, but also reflect the reasonable expectations of the parties that have engaged the use of Rule 76.

[23] I agree with the views expressed by Justice Wilson in Trafalgar Industries of Canada Ltd. (c.o.b. Canadian Custom Packaging) v. Pharmax Ltd. (2003), 64 O.R. (3d) 288 (S.C.J.), at paras. 11-12:

When fixing costs in a simplified trial, one must bear in mind the objectives of the Simplified Procedures. In Impex v. Nasr Foods Inc., [1999] O.J. No. 3360 (Quicklaw) (S.C.J.) at para. 9, Lamek J. confirmed that one of the objectives of the simplified procedures was “to curb the crippling cost of litigating small claims”. In McLean v. 721244 Ontario Ltd. (c.o.b. Paint Shoppe Services), [2000] O.J. No. 3507 (Quicklaw) (S.C.J.), Hill J. observed at para. 2 that “an action conducted under the Simplified Procedure is meant to be cost effective. As a general rule, this straightforward and streamlined process is not intended to be as expensive as trial by ordinary procedure.”

I agree with these views expressed. It is clear that cost effectiveness is a key component to cases proceeding under the Simplified Procedures.…

Conclusions

[24] In light of the considerations described above, I find that it is fair and reasonable to award the plaintiff the sum of $25,000 in respect of its costs of this action, inclusive of disbursements and HST, payable by the defendant.

Mr. Justice M. D. Faieta Released: June 29, 2017