Court File and Parties
Court File No.: CV-18-593804 Date: 2019-05-01 Superior Court of Justice - Ontario
Re: Colin Walter, Plaintiff And: Jobstart, Defendant
Before: Cavanagh J.
Counsel: Miguel D. Mangalindan, for the Plaintiff Jonathan A. Maier, for the Defendant
Heard: By written submissions
Costs Endorsement
Background
1In this action, the plaintiff claimed damages for early termination of a fixed term contract of employment, and related relief. The plaintiff claimed amounts which do not exceed $100,000. The action was brought under the simplified procedures provided for in Rule 76 of the Rules of Civil Procedure.
2The plaintiff brought a motion for summary judgment. On the return of the motion, the parties advised that the action was settled other than with respect to costs. The parties have been unable to reach agreement on the issue of costs, and they have made written submissions.
Plaintiff's Position
3The plaintiff seeks costs on a partial indemnity scale for the period to October 26, 2018, the date of the defendant’s offer to settle. This offer was accepted on February 11, 2018. The offer to settle provides that the defendant shall pay to the plaintiff the amount of $10,000 less all deductions required by law together with prejudgment interest and costs to the date of the offer on a partial indemnity scale, as agreed upon or, failing agreement, after assessment.
4The plaintiff requests costs in the amount of $24,615.80 inclusive of HST and disbursements. The plaintiff submits that as of October 26, 2018, the following steps had occurred:
a. Pleadings were closed. b. Documentary discovery including exchanges of Affidavits of Documents had been completed. c. Examinations for discovery had been conducted. d. Work had been completed towards answering undertakings. e. The parties had conducted a mediation.
5The plaintiff has provided a costs outline in which costs are calculated on a partial indemnity scale at 60% of the full indemnity costs.
Defendant's Position
6The defendant submits that significant restraint should be exercised when awarding costs in this case. The defendant submits that costs awarded in actions brought under the simplified procedure in Rule 76 have historically been lower than costs awarded in ordinary actions. In support of this submission, the defendant relies upon the decision of Wilson J. in Trafalgar Industries of Canada Ltd. v. Pharmax Ltd., [2003] O.J. No. 1602. In Trafalgar, Wilson J. addressed the issue of costs under the simplified procedures:
The Simplified Procedures were introduced to promote affordable access to justice. Streamlined procedures, a lower threshold for summary judgment, and the summary trial were incorporated to promote these dual goals.
Cost awards under the Simplified Procedures, historically, have been significantly lower than they would be under the ordinary procedure [citations omitted].
A lower cost award serves two important functions. First, it allows cases involving smaller amounts to go to trial without crippling costs consequences. However, the litigants are required to be reasonable in their conduct. Second, it is an additional incentive to the party with the upper hand to settle the case. Even if the party is successful at trial, he or she would still likely have to pay a significant proportion of his or her own lawyer’s fees.
Costs incurred under the Simplified Procedures, and in all cases, must be reasonable and proportionate to the amount recovered. These principles underpin the important issue of access to justice.
7I agree that the fact that an action was brought under the simplified rules is a factor to be considered in respect of costs. The amount claimed and the amount recovered are also factors to be considered under r. 57.01(1).
8The defendant submits that the plaintiff pursued many allegations that he abandoned at or before his summary judgment motion and, as a result, the defendant spent much time and effort addressing these claims before they were abandoned. The defendant submits that at the summary judgment stage, the only remaining matters in dispute were (1) the interpretation of a contractual provision concerning termination entitlements, and (2) an accompanying claim for phone allowance. The defendant submits that neither of these issues was complicated.
9The defendant also submits that the plaintiff’s conduct prolonged the litigation in that the plaintiff did not engage in meaningful efforts to resolve the action. In support of this submission, the defendant points to the only offer to settle made by the plaintiff which was delivered after mediation on October 10, 2018 in the amount of $39,585.33 plus partial indemnity costs.
10The defendant submits that the plaintiff’s demand for costs is unreasonably high. The defendant compares the plaintiff’s costs outline with the defendant’s Bill of Costs which, the defendant submits, shows that the amount of time expended by the plaintiff’s counsel for pleadings, production and discoveries, mediation and preparation for the motion for summary judgment was approximately three times the amount of time expended by the defendant’s counsel and that the costs claimed by the plaintiff ($20,094) substantially exceeds the costs incurred by the defendant on a partial indemnity scale ($12,856.50).
11The defendant submits that costs should be ordered in the amount of $5,000, inclusive of HST, plus the plaintiff’s disbursements in the amount of $1,295.99.
Analysis
12The fixing of costs is not a mechanical exercise and does not begin and end with a calculation of hours times rates. The introduction of a costs grid was not meant to produce that result, but rather to signal that this is one factor in the assessment process, together with the other factors in Rule 57.01 of the Rules of Civil Procedure. In addition to the factors in Rule 57.01, the court must consider the amount that would be fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than the amount fixed by the actual costs incurred by the successful litigant: Boucher v. Public Accountants Council for the Province of Ontario, 2004 CarswellOnt 2521 (C.A.) at para. 26.
13I do not agree that the plaintiff should be penalized in costs for abandoning some of his claims before the motion for summary judgment. I also do not agree that the plaintiff should be penalized in costs for making an offer to settle following the mediation which was significantly higher than the amount of the offer to settle which was accepted just before the hearing of the motion for summary judgment. Although the amount of time expended by counsel for the plaintiff substantially exceeded the amount of time spent by counsel for the defendant, it is not unreasonable to expect that the plaintiff, who has the onus of proof, may spend more time on a file than counsel for the defendant. The difference in this case is, however, more than I would expect because of this fact, alone.
14I have reviewed the costs outline submitted by the plaintiff. The plaintiff accepts that the total amount of time shown on the costs outline, 175.8 hours, is incorrect and that the correct amount of time should be 153.3 hours. I regard some of the time spent as being more than the defendant would have reasonably expected, including time spent by separate counsel on the same tasks at the early stages of the litigation.
15When I consider the factors in Rule 57.01(1), the fact that the action was brought under the simplified rules, the amount recovered by acceptance of the offer to settle, the reasonable expectations of the defendant with respect to costs based, in part, upon its Bill of Costs, and the principles in Boucher, I fix fees to be paid by the defendant to the plaintiff in the amount of $12,000 which, together with HST, is $13,560. I fix disbursements at $1,295.99. I fix the plaintiff’s total costs at $14,855.99 all-inclusive.
Cavanagh J.
Date: May 1, 2019