COURT FILE NO.: 16-68458
DATE: 2018/05/22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JOHN DAVID ARISS
Plaintiff
– and –
NORR LIMITED ARCHITECTS & ENGINEERS
Defendant
Alayna Miller, for Plaintiff
Albert G. Formosa, for the Defendant
HEARD: In writing
Costs endorsement
COrthorn J.
Overview
[1] The plaintiff’s claim arose from the termination of his employment in January 2016. The parties disagreed as to (a) the basis for notice of termination (the terms of an employment agreement or at common law), (b) whether the plaintiff’s service with a predecessor company was continuous with his service with the defendant corporation (“NORR”), (c) whether the plaintiff resigned from his employment with NORR in 2013 by changing from full-time to part-time hours, (d) the amount of severance pay to which the plaintiff was entitled, (e) the plaintiff’s entitlement, if at all, to ancillary benefits, and (f) if applicable, whether the plaintiff had taken reasonable steps to mitigate his damages.
[2] Ariss brought the motion for summary judgment. On the return of the motion, NORR’s position was that not all issues were appropriate for determination by way of summary judgment. I concluded that the issues were capable of determination on the motion.
[3] Three issues were critical to the outcome of Ariss’ claims. The first was whether Ariss’ years of service with the predecessor company to NORR were continuous with his years of service with NORR. On that issue, Ariss was successful.
[4] Second was whether Ariss was entitled to common law notice of termination or his entitlement to notice was, because of a written employment agreement, restricted to the provisions of the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”). On that issue, NORR was successful.
[5] The third critical issue was whether Ariss resigned from his employment with NORR in 2013 when he changed from full-time to part-time hours. Ariss was successful on that issue; I found that he did not resign.
[6] The outcomes on the other issues essentially flowed from the determination on the three critical issues.
Positions of the Parties
[7] Ariss submits that the overall outcome of the motion amounts to divided success as between the parties. NORR argues that it was “substantially” successful on the motion. In the alternative, NORR submits that even if success on the motion was divided, it is still entitled to its costs, on a partial indemnity basis, of the motion in its entirety.
[8] Offers to settle were exchanged. Ariss concedes that on the basis of strict arithmetic, the outcome on the motion was less favourable to him than the terms of NORR’s offer to settle (the “Offer”). Ariss submits that in the circumstances it would be appropriate to deviate from the costs consequences that would otherwise flow from sub-rule 49.10(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. NORR argues that, at a minimum, it is entitled to the benefit of those cost consequences.
[9] Ariss submits that the issues raised on the motion for summary judgment were novel and that the novelty of the matter is a factor to be considered in determining entitlement to costs. NORR argues that the subject matter was not novel and that there is nothing to suggest that there was an element of novelty in the decision on the motion.
[10] Ariss seeks partial indemnity costs of $8,195 to the date of the Offer (Nov. 2016) or in the amount of $11,470 (to Jan. 2017, the date of release of a particular decision on the second of the two critical issues). NORR does not dispute the figure of $8,195 for partial indemnity costs to the date of the Offer.
[11] NORR seeks its costs of the motion for summary judgment in its entirety in the amount of $35,000 and submits that Ariss is not entitled to any costs of the motion. In the alternative, NORR submits that it is entitled to costs on a partial indemnity basis from the date of the Offer ($28,585). If those costs are off-set by the $8,195 claimed by Ariss for the period to the date of the Offer, then NORR’s claim for costs is reduced to $20,390.
[12] The parties are in agreement that costs, if payable, are to be paid on the partial indemnity scale.
The Issues
[13] The issues to be determined are (a) entitlement to costs, and (b) quantum of costs.
Issue No. 1 - Entitlement
[14] The factors to be considered in the exercise of discretion to award costs are set out in Rule 57 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Those factors include the result in the proceeding, the principles of indemnity and proportionality, the amount that the unsuccessful party could reasonably expect to pay, the amount claimed and recovered, the complexity of the proceeding, the importance of the issues, and the conduct of the parties that impacted (negatively or positively) the duration of the proceeding.
[15] I have considered the factors set out in r. 57.01(1)(a)-(i). The factors most relevant to the exercise of my discretion in awarding costs are discussed below. I find that Ariss is entitled to his costs of the summary judgment motion on a partial indemnity basis. That entitlement ends, however, as of the date of the Offer.
[16] I see no reason to deviate from the costs consequences of r. 49.10(2). I find that NORR is entitled to its costs, on a partial indemnity basis, from the date of the Offer to and including the hearing of the motion for summary judgment.
• Result in the proceeding (r. 57.01(1))
[17] As I have already noted, Ariss was successful on two of the three critical issues on the motion. Ariss’ success on those issues had a significant impact on the amount of severance pay to which Ariss was entitled.
[18] NORR’s success on one critical issue leads to the result that, on the basis of strict arithmetic, the costs consequences of rule 49.10(2) are triggered unless I order otherwise. Those costs consequences are addressed below.
[19] In summary, I agree with Ariss’ description of the success on the motion as being divided. I find, however, that Ariss was the more successful of the two parties when the substantive issues alone are considered.
• Importance of the issues
[20] NORR’s position is that the approach taken at the time of Ariss’ termination was based on its “understanding of the duration of Mr. Ariss’ employment at the time.” NORR’s approach was found to be in error. In the context of the determination of costs, NORR cannot rely on an erroneous approach in that regard. It is specifically because of NORR’s approach that Ariss was required to pursue the matter as far as he did.
[21] Had Ariss not pursued the matter, he would have been denied the compensation to which he was entitled after a career of several decades at NORR and its predecessor company.
• Conduct of the parties
[22] At no time prior to the return of the motion for summary judgment did NORR attempt to narrow the issues to be determined. It maintained its defence on all of the claims advanced by Ariss. NORR was within its rights to do so. That conduct, however, is a factor to be considered in determining costs.
• Novelty of the issue(s)
[23] Ariss submits that the issue of whether he was entitled to notice at common law or had contracted out of that entitlement (and was therefore restricted to notice pursuant to the ESA), although not novel per se, was novel in the circumstances because of uncertainty in the case law. I disagree. In deciding this issue, I applied the law as set out in Machtinger v. HOJ Industries Ltd. (1992), 1992 CanLII 102 (SCC), [1992] 1 S.C.R. 986. As a result, novelty of the issue(s) is not a factor in determining entitlement to costs of the motion.
• NORR’s offer
[24] Ariss concedes that from a strictly monetary perspective, the result achieved was not as favourable as the terms of the Offer. I see no reason to deviate from the costs consequences that arise pursuant to r. 49.10(2). NORR is entitled to its costs of the motion on a partial indemnity basis from the date of the Offer to and including the date of the hearing of the motion.
Issue No. 2 - Quantum of Costs
[25] Neither party takes issue with the quantum of costs submitted by the other. Ariss seeks and is entitled to partial indemnity costs to the date of the Offer in the amount of $8,195. NORR seeks and is entitled to costs on a partial indemnity scale in the amount of $28,585 from the date of the Offer through the hearing of the motion. The end result is that NORR is entitled to costs on a partial indemnity scale in the amount of $20,390 ($28,585 - $8,195).
Disposition
[26] In summary, I order that Ariss pay to NORR costs on a partial indemnity scale in the amount of $20,390.
[27] The costs payable are subject to post-judgment interest in accordance with the provisions of the Courts of Justice Act. In the event the parties are unable to agree upon the post-judgment interest rate or the amount payable (if any) with respect to costs, they may arrange to make further submissions in that regard.
Madam Justice Sylvia Corthorn
Released: May 22, 2018
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JOHN DAVID ARISS
Plaintiff
– and –
NORR LIMITED ARCHITECTS & ENGINEERS
Defendant
COSTS ENDORSEMENT
Madam Justice Sylvia Corthorn
COURT FILE NO.: 16-68458
DATE: 2018/05/22
Released: May 22, 2018