Court File and Parties

Court File No.: CV-18-598123 Date: 2021-02-17 Superior Court of Justice – Ontario

Re: BHOUMICK SANGHVI, for the Plaintiff And: NORVIC SHIPPING NORTH AMERICA INC. and NORVIC SHIPPING INTERNATIONAL LTD., for the Defendants

Before: Davies J.

Counsel: Lindsay Gluck, for the Plaintiff Stephen Bernofsky, for the Defendants

Heard at Toronto: in writing

Corrected Reasons for DECISION (DAMAGES AND COSTS)

DAVIES J.

[1] Mr. Sanghvi was a Senior Vice-President at Norvic Shipping North America Inc. from May 2014 until February 2018 when he was terminated without cause. Mr. Sanghvi sued Norvic for wrongful dismissal and brought a motion for summary judgment. On December 23, 2020, I granted Mr. Sanghvi’s motion. I found that the termination clause in his employment contract was not enforceable and he was entitled to eight months’ notice at common law plus his bonus and benefits during the notice period (see Sanghvi v. Norvic Shipping North America, 2020 ONSC 8068).

[2] The parties are unable to agree on the calculation of damages and each made brief written submissions on the issue. Mr. Sanghvi also seeks costs in the amount of $29,948.20. These reasons address both issues.

A. Calculation of Damages

[3] Norvic does not take issue with Mr. Sanghvi’s calculation of the amount he is owed for pay in lieu of the common law notice, for his bonus in 2017 and in 2018 or for his benefits during the notice period. However, Norvic argues that Mr. Sanghvi should not be reimbursed for his cell phone and internet costs during the notice period.

[4] Damages for wrongful dismissal typically include all compensation and benefits the employee would have earned during the notice period: Paquette v. TereGo Networks Inc, 2016 ONCA 618 at para. 16 and Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26 at paras. 49-54. Mr. Sanghvi’s Letter of Appointment set out his compensation in detail. His compensation included monthly reimbursement for cell phone, residential phone and internet costs “related to business activities.” Prior to his termination, Mr. Sanghvi was reimbursed $45.29 per month for his cell phone and $69.95 per month for internet costs. Because Mr. Sanghvi did not work for Norvic during the notice period, he would not have incurred phone and internet expenses “related to business activities” during that time for which he should now be reimbursed. In my view, compensation for these expenses should not be included in the damages calculation.

[5] Based on my original reasons and these supplementary reasons, Mr. Sanghvi is entitled to the following damages:

Description	Amount (in USD)
Pay in lieu of notice (8 months)	$ 112,000.00
2017 Bonus	$ 33,000.00
2018 Bonus	$ 25,427.09
Benefits	$ 4,937.36
SUBTOTAL	$ 175,364.45
Deductions for amount paid on termination and mitigation income	$ 30,275.27
TOTAL DAMAGES	$145,089.18

[6] Under s. 128(1) of the Courts of Justice Act, Mr. Sanghvi is also entitled to pre-judgment interest on the damages calculated at a rate of 1.5% annually.

B. Costs

[7] Mr. Sanghvi seeks costs on a partial indemnity basis to the date he served a rule 49 offer and thereafter on a substantial indemnity basis. In total, Mr. Sanghvi seeks $29,948.20, inclusive of HST and disbursements. Norvic argues that the costs should be fixed at $20,000.

[8] Mr. Sanghvi made a formal rule 49 offer to settle on August 28, 2019 for $105,765 USD plus costs. My judgment is more favourable to Mr. Sanghvi than his offer to settle. Under rule 49.10, Mr. Sanghvi is, therefore, entitled to partial indemnity costs to August 28, 2019 and substantial indemnity costs thereafter, unless I order otherwise.

[9] Notwithstanding rule 49.10, my cost award must be “fair and reasonable” and must balance the goals of compensating a successful party with fostering access of justice: Boucher v. Public Accountants Council of Ontario. Cost awards are not intended to reflect an exact measure or percentage of the actual costs incurred by the successful litigant: Zesta Engineering Ltd. v. Cloutier, [2002] O.J. No. 4495 (C.A.) at para. 4, Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3rd) 291 (C.A.).

[10] Rule 57.01 sets out several other factors the Court may consider in exercising its discretion to award costs, including the time spent, the experience of counsel, the results achieved, the complexity of the matter, the conduct of the parties and the amount the unsuccessful party could reasonably expect to pay.

[11] In my view, the rates claimed by Mr. Sanghvi’s counsel are reasonable in light of their years of experience.

[12] Ms. Gluck spent 25.7 hours preparing for the summary judgment motion. Other members of her firm, including less experienced lawyers and a paralegal, spent a further 38 hours. Having more junior counsel and paralegals conduct research and draft materials is to be encouraged because it reduces the overall costs, which promotes access to justice. Norvic did not submit a Bill of Costs. I do not know the hourly rate or number of hours its counsel charged by way of comparison. In my view, the hours claimed by Mr. Sanghvi’s counsel are reasonable given the number and complexity of the issues raised in this application.

[13] Mr. Sanghvi argues that I should assess partial indemnity costs at 65% of his actual costs. Partial indemnity costs are ordinarily fixed at 60% of full indemnity costs: Chandra v. CBC, 2015 ONSC 6519 at para. 62. However, the Court can fix an amount that is higher or lower than 60% of the actual costs if the circumstances warrant a departure from the norm.

[14] Mr. Sanghvi argues that a slightly higher costs award is justified, in part, because of Norvic’s conduct during the litigation. Mr. Sanghvi argues that Norvic prolonged the litigation, increased costs and caused him financial hardship. Norvic did bring an unsuccessful motion to enforce the arbitration clause in Mr. Sanghvi’s contract. Norvic had every right to pursue that motion and Mr. Sanghvi was awarded costs associated with that motion. Otherwise, the summary judgment motion proceeded efficiently. There were no cross-examinations on the affidavits and the motion was argued in less than a day. In my view, there is no basis to find that Norvic’s conduct justifies an increased costs award in this case. Further, I find that the partial indemnity costs to August 28, 2019 should be calculated at 60%.

[15] Having regard to all the circumstances, Norvic is ordered to pay costs in the amount of $29,000 inclusive of HST and disbursements.

[16] Counsel for Mr. Sanghvi may submit a draft Order for my consideration in accordance with these reasons.

Davies J.

Released: February 17, 2021