Court File and Parties

COURT FILE NO.: CV-17-572463 DATE: 20180821 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DEMETRI ANDROS, Plaintiff/Moving Party AND: COLLIERS MACAULAY NICOLLS INC., Defendant/Responding Party

BEFORE: Dietrich J.

COUNSEL: Andrew Pinto and Jonas Granovsky, for the Plaintiff/Moving Party Matthew R. Vella and Sara Yousefi, for the Defendant/Responding Party

HEARD: By written submissions

Endorsement on Costs

[1] Summary judgment was sought by the plaintiff in his wrongful dismissal action. I delivered written reasons for judgment on May 9, 2018. I invited counsel to make written submissions if they were unable to agree on costs. Counsel for each party filed written submissions on costs, including reply submissions by the plaintiff. I have considered all of the written submissions.

Preliminary Matter

[2] The parties are agreed that at the time of trial the plaintiff had been compensated for 20 weeks’ notice, as opposed to the twelve weeks’ notice referred to in the reasons. Clause 1. of paragraph 65 of my reasons shall therefore be revised to read: “His base salary at the time of termination for the balance of the notice period (being the difference between eight months’ notice and the twenty weeks’ notice for which he has already been compensated).”

Overview

[3] The plaintiff was employed by the defendant for nearly seven and one-half years (from 2009 to 2017). He had also been employed by the defendant for nearly three years between September 2001 and August 2004, when he chose to leave the company to pursue other opportunities. During his second period of employment with defendant, the plaintiff worked first as a Senior Associate and then was promoted to a Managing Director.

[4] The plaintiff was dismissed on January 19, 2017 and given twenty weeks’ notice. He was not paid a bonus for 2017. He brought an action claiming a bonus for the period in 2017 during which he worked. He also claimed a bonus for the period of one year following termination, which he argued was the proper notice period. The plaintiff also claimed damages in lieu of employment benefits during the proper notice period.

[5] The defendant disputed that the plaintiff was entitled to a bonus, which, it argued, was discretionary. It further argued that it had paid the plaintiff for the proper notice period, which was twenty weeks, in accordance with the Employment Standards Act 2003, S.O. 2000, c. 41; and that the plaintiff had no right to damages in lieu of employment benefits for a longer notice period.

[6] I found that the plaintiff was entitled to eight months’ notice and a pro-rated bonus for the period from January 1, 2017 to January 19, 2017 as well as a bonus for the eight month notice period that followed. I did not award damages in lieu of employment benefits for the additional notice period. The total of the judgment, exclusive of interest, is $106,883.02.

Position of the Plaintiff

[7] The plaintiff submits that he was successful on nearly every issue on his motion and the action. He asks that costs on a mixed partial and substantial indemnity basis be fixed at $71,701.63 for fees and disbursements, including HST. The plaintiff’s request is based, in part, on the offer made by him pursuant to rule 49 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the Rules). The plaintiff served this offer on the defendant on May 26, 2017.

[8] The plaintiff seeks costs on a partial indemnity basis up to May 26, 2017 of $9,954.00 plus HST of $1,294.02; fees on a substantial indemnity basis following May 26, 2017 of $51,921.00 plus HST of $6,749.73; and disbursements in the amount of $1,621.49 plus HST of $161.39.

[9] The plaintiff submits that prior to commencing his action he attempted to negotiate with the defendant. Specifically, he raised the unenforceability of the termination clause in the employment contract drafted by the defendant; the plaintiff’s entitlement to a bonus for the period from January 1 to 19, 2017; and a bonus for the common law reasonable notice period. The plaintiff also provided jurisprudence in support of his position. The defendant did not concede and the plaintiff commenced his action.

[10] The plaintiff submits that his offer to settle was made at least seven days prior to the hearing; was not withdrawn; did not expire before the hearing; and it was not accepted by the defendant. The plaintiff obtained a judgment more favourable than the terms of the offer to settle.

[11] With reference to the factors listed in rule 57.01 of the Rules, the plaintiff submits that the issues were of utmost importance to the plaintiff, who was left without income beyond his minimum entitlement under the Employment Standards Act, and involved multiple questions of law on which experienced employment counsel prepared a comprehensive written record and submissions, citing extensive relevant jurisprudence. The plaintiff also submits that he was successful on almost all of the contested issues, including the unenforceability of the termination clause in his employment agreement and his entitlement to accrued bonus compensation through the reasonable notice period. He submits that his position on entitlement to compensation for employment benefits was reasonable. The plaintiff also submits that the defendant’s steadfast refusal to acknowledge that the plaintiff was entitled to his accrued bonus compensation and bonus compensation over the reasonable notice period necessitated substantial effort by the plaintiff’s counsel in written and oral argument. The plaintiff notes that both parties were represented by two counsel each, both with similar levels of expertise. Finally, the plaintiff submits that the defendant ought to have expected the plaintiff to vigorously pursue the action and, having refused to settle, ought to have expected to pay a significant costs award if unsuccessful.

Position of the Defendant

[12] The defendant submits that the quantum of costs sought is excessive and out of proportion to the defendant’s costs. The defendant argues that the principal issues, being the enforceability of the termination clause and the plaintiff’s entitlement to a bonus are not complex. The defendant notes, in particular, the time spent on the preliminary pleadings and attendance at Civil Practice Court. The defendant submits that the time spent (67 hours) preparing the motion materials is excessive. The defendant further submits that the amended factum submitted by the plaintiff was unnecessary and that the points raised therein ought to have been covered in the oral submissions. The defendant makes the same submission regarding the plaintiff’s Supplementary Brief of Authorities delivered on the eve of trial seeking to introduce several new cases which, in the defendant’s view, added nothing of precedential value and only added needless time and expense in trial preparation. Accordingly, the defendant submits that the costs of preparing and filing supplementary materials should not be borne by the defendant. The defendant further submits that the time spent by plaintiff’s counsel (a seasoned litigator with 23 years’ experience) preparing for a half-day motion is excessive. The defendant notes that, contrary to rule 57.01(5) of the Rules of Civil Procedure the plaintiff did not provide his counsel’s dockets.

[13] Finally, the defendant notes that the motion proceeded in an efficient manner and there were no cross-examinations. The points argued were not novel and therefore do not justify fees in excess of $71,000 for a half-day motion. The defendant submits that an amount of $20,000 in fees, inclusive of disbursements and HST is more appropriate in this case.

[14] In reply, the plaintiff provided detailed dockets of the time spent by counsel and reiterated his submission that the issues are complex and, at the pleading stage, required a broad review and analysis of an area of law in which the jurisprudence demonstrates a wide range of outcomes that generally turn on the specific wording of individual termination clauses. Further, an important case in the area, Wood v. Deeley, 2017 ONCA 158 was released on February 23, 2017 while the pleadings were being prepared. The plaintiff submits that, in preparing the pleadings, much time was required to analyze this case, and the lower court decisions that followed.

Analysis

[15] The plaintiff was successful at trial on all issues other than his claim for reimbursement for employment benefits during the additional notice period.

[16] The court is granted a wide discretion when determining the appropriate quantum of costs. Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides as follows:

Subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.

[17] Rule 57.01(1) of the Rules identifies the factors a court may consider when exercising its discretion to award costs:

(1) In exercising its discretion under section 131 of the Courts of Justice Act to award costs, the court may consider, in addition to the result in the proceeding and any offer to settle or to contribute made in writing,

(0.a) the principle of indemnity, including, where applicable, the experience of the lawyer for the party entitled to the costs as well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(a) the amount claimed and the amount recovered in the proceeding;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

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

(f) whether any step in the proceeding was,

(i) improper, vexatious or unnecessary, or

(ii) taken through negligence, mistake or excessive caution;

(g) a party’s denial of or refusal to admit anything that should have been admitted;

(h) whether it is appropriate to award any costs or more than one set of costs where a party,

(i) commenced separate proceedings for claims that should have been made in one proceeding, or

(ii) in defending a proceeding separated unnecessarily from another party in the same interest or defended by a different lawyer; and

(i) any other matter relevant to the question of costs.

[18] In determining the appropriate amount of costs to which the plaintiff is entitled, I am guided by the following principles set forth by the court in Andersen v. St. Jude Medical, Inc. (2006), 264 D.L.R. (4th) 557 (Ont. Div. Ct.), leave to appeal refused, 2006 CarswellOnt 7749 (C.A.), at para. 22:

1. The discretion of the court must be exercised in light of the specific facts and circumstances of the case in relation to the factors set out in rule 57.01(1): Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.); Moon v. Sher (2004), 246 D.L.R. (4th) 440 (Ont. C.A.); and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC (2005), 75 O.R. (3d) 638 (C.A.).

2. A consideration of experience, rates charged and hours spent (formerly a costs grid calculation) is appropriate, but is subject to the overriding principle of reasonableness as applied to the factual matrix of the particular case: Boucher. The quantum should reflect an amount the court considers to be fair and reasonable rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier (2002), 21 C.C.E.L. (3d) 161 (Ont. C.A.), at para. 4.

3. The reasonable expectation of the unsuccessful party is one of the factors to be considered in determining an amount that is fair and reasonable: rule 57.01(1)(0.b).

4. The court should seek to avoid inconsistency with comparable awards in other cases. “Like cases, [if they can be found], should conclude with like substantive results”: Murano v. Bank of Montreal (1998), 41 O.R. (3d) 222 (C.A.) at p. 249.

5. The court should seek to balance the indemnity principle with the fundamental objective of access to justice: Boucher.

[19] The Court of Appeal has made it clear that the overriding principle when fixing costs is that the amount of costs awarded be reasonable in the circumstances: Davies v. Corporation of the Municipality of Clarington, 2009 ONCA 722, 100 O.R. (3d) 66, at para. 52.

[20] In Boucher, at para. 26, the Court of Appeal noted specifically 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 proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.”

[21] I will address the rule 57.01(1) factors that are relevant to this costs determination as well as the application of the principle of proportionality: rule 1.04(1.1).

[22] The first factor under rule 57.01(1) is the principle of indemnity, including the rates charged. Mr. Pinto, who assumed carriage of this matter has 23 years of experience at the bar and seeks $290 per hour on a partial indemnity basis and $450 per hour on a substantial indemnity basis. His associate Mr. Granofsky, who attended at the trial, was called to the bar in 2015 and seeks $185 per hour on a partial indemnity basis and $300 per hour on a substantial indemnity basis. Counsel to the defendant has similar hourly rates to counsel for the plaintiff and the defendant does not suggest that the hourly rates of the plaintiff’s counsel are unreasonable. The defendant objects to the amount of time spent by the plaintiff’s counsel.

[23] Based on a review of the dockets submitted by the plaintiff’s counsel up to the time of the rule 49 offer, the time spent on meetings with the client, preparing the statement of claim, reviewing the statement of defence, preparing an offer to settle, and attending at Civil Practice Court amounts to $9,954 on a partial indemnity basis. The plaintiff seeks an additional $51,921 in costs, on a substantial indemnity basis, for the balance of the time spent preparing amended pleadings and bringing the summary judgment motion. The total costs sought by the plaintiff are $61,875 (plus disbursements and HST) as compared to the costs that the defendant claims it would have sought, according to its cost outline, on a partial indemnity basis, of $13,070.70 (plus disbursements and HST), if it had succeeded.

[24] The goal, as noted in Boucher, is to fix costs in a reasonable amount: a sum that the losing party could reasonably expect to pay, as opposed to doing a precise mathematical calculation of the costs incurred. It is doubtful that the defendant would expect to pay $71,701.63 in costs on a damages award of $106,883.02 for success on a summary judgment motion argued in half a day. In this case, I find that the time spent by the plaintiff’s counsel was disproportionate. I accept that the volume of relevant cases, including very recent jurisprudence, is considerable. However, the issues of termination clause enforceability and bonus entitlement are not particularly complex, especially for a seasoned employment lawyer such as the plaintiff’s counsel. I find that the number of hours spent by the plaintiff’s counsel amending the pleadings and preparing the motion record, factum, brief of authorities and amended factum to be in excess of what was required in this case. There also appears to be some duplication of effort. The case required a careful analysis of the law applicable to the termination clause in question, which was done by the plaintiff’s counsel. It did not, however, require the development of novel arguments.

[25] The plaintiff did make an offer to settle, early in the proceedings, on the basis of 6.5 months’ reasonable notice. He was awarded a judgment more favourable than the terms of his offer to settle: 8 months’ reasonable notice. This is a good result for the plaintiff and must be factored in to his entitlement to costs.

[26] Taking into account the relevant factors enumerated in rule 57 and the principle of proportionality applied to the facts of this case, I am of the view that fees in the sum of $35,000 plus HST, and disbursements of $1,621.49 plus HST, is both appropriate and reasonable. I fix the costs of the plaintiff in that amount.

Dietrich J. Date: August 21, 2018