Court File and Parties

COURT FILE NO.: CV-17-882 DATE: 2020/04/22 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: John Hucsko, Plaintiff AND: A.O. Smith Enterprises Limited, Defendant

BEFORE: Justice G.E. Taylor

COUNSEL: Pamela Krauss and Holly Gomes, Counsel for the Plaintiff Paul Boshyk and Kristen Pennington, Counsel for the Defendant

Costs Endorsement

[1] The plaintiff obtained judgment after an eight day trial in the amount of $187,000 plus prejudgment interest. The judgment was based on my finding that the plaintiff was entitled to 20 months notice of termination based on his salary on the date on which he was dismissed from his employment. The position of the defendant was that the plaintiff’s employment had been terminated for just cause. The plaintiff’s claims for aggravated and punitive damages and for reimbursement of expenses incurred in seeking alternate employment were dismissed. The parties have made written submissions about costs. This is my Endorsement on the issue of costs of this proceeding.

[2] The Plaintiff seeks partial indemnity fees to July 24, 2019 in the amount of $25,112.50 exclusive of HST and substantial indemnity fees subsequent to July 24, 2019 in the amount of $114,760 exclusive of HST. The plaintiff made an Offer to Settle dated July 24, 2019 which provided that the defendant pay the sum of $160,000 plus pre-judgment interest and partial indemnity costs to the date of the Offer and substantial indemnity costs thereafter. The Offer was open for acceptance until five minutes after the commencement of the trial. The plaintiff also seeks reimbursement for disbursements in the amount of $3,304.91 inclusive of HST.

[3] The defendant’s position is that the plaintiff is not entitled to substantial indemnity costs subsequent to the date of his Offer to Settle. The defendant submits that the plaintiff’s costs should be limited to a maximum of $115,000 presumably inclusive of disbursements. It is unclear from the defendants Costs Submissions whether the suggested maximum amount of costs is also inclusive of HST.

[4] My task is to fix the plaintiff’s costs of this proceeding. I am not assessing costs. That said, I would have benefited from more complete information from both plaintiff and defendant regarding how fees, in particular, were calculated. In a Costs Outline I have been provided with the partial indemnity, substantial indemnity and actual hourly rates of counsel for the plaintiff together with a per diem rate for trial attendance. I have not been given any detail about the actual work performed by lawyers and law clerks representing the plaintiff. I note that form 57A in the Rules of Civil Procedure specifies: “In support of the claim for fees, attach copies of the dockets or other evidence.”

[5] The Costs Outline provides a general description of the work performed and a global amount of hours spent by lawyers and law clerks for the period of time prior to the date of the Offer to Settle, subsequent to the date of the offer to settle and for each of the eight days of trial. This information is not particularly helpful.

[6] The defendant provided no information about the time spent by its counsel in connection with this file.

[7] The plaintiff’s Offer to Settle was that the defendant pay the sum of $160,000 plus pre-judgment interest and partial indemnity costs to the date of the Offer and substantial indemnity costs thereafter. The Offer was open for acceptance until five minutes after the commencement of the trial. I am satisfied that the plaintiff’s Offer to Settle complies with Rule 49 of the Rules of Civil Procedure. The judgment obtained by the plaintiff is more favourable than the Offer to Settle.

[8] The defendant argues that the plaintiff should not be awarded substantial indemnity costs after the date of the Offer to Settle on the basis that the claims for aggravated, punitive and special damages were dismissed. The defendant says that a significant portion of time spent in preparation for trial and at the trial focused on the claims of the plaintiff which were unsuccessful.

[9] In my view, this trial was necessitated by the defendant’s unwavering position that it was entitled to terminate the employment of the plaintiff, a 20 year employee with no history of discipline issues, with cause and with no notice or severance pay. I find nothing improper on the part of the plaintiff, who had to proceed to trial in order to obtain compensation arising out of the termination of his employment, also seeking damages in other areas, even when those claims were not successful.

[10] There is no reason why the cost consequences of Rule 49(10) should not apply. Therefore, I find that the plaintiff is entitled to partial indemnity costs to July 24, 2019 and substantial indemnity costs thereafter.

[11] My difficulty arises from the fact that both parties have chosen to provide me with very little assistance as to an appropriate amount at which to fix costs. With very little supporting documentation or information the plaintiff seeks an award of costs in excess of $160,000 inclusive of disbursements and HST. The defendant says that the cost award sought by the plaintiff is disproportionate and unreasonable on the basis that the percentage of counsel’s actual hourly rate used to calculate a partial indemnity rate is excessive and that a junior counsel fee at trial should be disallowed. I can find no basis in the Costs Submissions of the Defendant to assist me in discerning how the suggested cost award of $115,000 was determined.

[12] I agree with the submission of the defendant that junior counsel for the plaintiff played virtually no role in the trial. However, I also note that this case was deemed of sufficient importance to the defendant that it not only engaged senior and junior counsel but also had a lawyer present from the head office in the United States throughout most of the trial.

[13] I have come to the conclusion, based on the submissions, information and documentation provided by the parties that a fair and reasonable amount at which to fix the plaintiff’s costs of this action is $145,000 inclusive of disbursements and HST.

[14] With respect to prejudgment interest, I see no reason to depart from the rate determined by the applicable provisions of the Courts of Justice Act. From their respective submissions, it appears that the parties are in agreement that the prejudgment interest rate for actions commenced in the third quarter of 2017 is 0.8%. Accordingly, the plaintiff is entitled to interest on the amount of the judgment at the rate of 0.8% from the date of commencement of the action to the date of judgment.

G. E. Taylor, J. Date: April 22, 2020