Court File and Parties

COURT FILE NO.: CV-19-00628429 DATE: 20210305 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: MELVIN YEE, Plaintiff AND: HUDSON’S BAY COMPANY, Defendant

BEFORE: G. Dow, J.

HEARD: In Writing

COUNSEL: Daniel A. Lublin and Simone Ostrowski, lawyers for the Plaintiff Elisha Jamieson-Davies and Danika L. Winkel, lawyers for the Defendant

Endorsement on Costs

G. DOW, J.

[1] This wrongful dismissal matter proceeded to trial before me on December 15, 2020. My Reasons, released January 18, 2021 awarded the plaintiff, Melvin Yee, 16 months of base salary, his unpaid 2019 AIP Bonus, the value of 16 months of group benefits and pension contributions which I totaled to be $255,576.25. This was reduced by $159,907.49 already paid in severance by the defendant, Hudson’s Bay Company (“HBC”). I also awarded pre-judgment interest on the net amount owing. I dismissed Melvin Yee’s claim for bad faith damages.

[2] Despite my urging, the parties were unable to agree on costs and I received written submissions from both parties on the February 12, 2021 deadline as I requested.

[3] HBC opposes Melvin Yee’s claim for full indemnity or substantial indemnity costs, the latter of which is claimed at $70,177.50 plus HST of $9,122.08 and disbursements of $2,755.05 (including HST) for a total of $82,055.63.

[4] HBC served three Offers to Settle during the proceeding, dated September 4, October 7 and November 3, 2020, none of which were “as favourable” as the trial decision and thus Rule 49.10(2) is not applicable.

[5] The strength of Melvin Yee’s submission for a higher than partial indemnity costs arises from HBC’s failure to disclose or produce a “Transfer Offer Letter” dated April 2, 2018 until in or about October 13, 2020 as part of delivering its Affidavit of Documents. This letter, appointed Melvin Yee, Director, Product Design and Development, and clearly stated it would:

a) “governing your relationship of employment with the company”; b) “supersede and render void any prior verbal or written representations concerning the conditions of your employment with the company”; c) gave Melvin Yee the opportunity to “review the agreement and obtain independent legal advice”; and d) “this document constitutes a contract”.

[6] The letter noted it was copied to Melvin Yee’s human resources file and signed by him on April 5, 2018. Instead, When HBC terminated Melvin Yee on August 28, 2019, it relied on its previous contract with Melvin Yee, a letter dated June 19, 2015 which specified payments in the case of termination. This was how the pleadings were framed (Statement of Claim issued October 2, 2019 and Statement of Defence dated November 4, 2019) until the April 2, 2018 letter was produced. Production of this letter resulted in amendments to both pleadings, Melvin Yee adding the claim for bad faith damages and HBC withdrawing its reliance on the terms of the June 19, 2015 letter.

[7] The evidence at trial of how this occurred included the admission by Melvin Yee’s boss that she had indeed signed the April 2, 2018 letter but had no recollection of it. She agreed it would have been copied to Melvin Yee’s human resources file. The Senior Manager, H.R. Solutions Group and Associate Relations gave evidence that she did not see the April 2, 2018 letter when she searched the file but admitted it was possibly there all along. Of greater concern was her evidence that Melvin Yee’s termination letter was prepared from a template and that Melvin Yee’s termination letter would have been prepared on the basis of the June 19, 2015 document regardless.

[8] Rather than express any regret as to the incomplete and delayed production of relevant documents, counsel for HBC submitted that its “primary position” was that the proper determination of costs was that each party bear its own costs on the basis of Melvin Yee’s divided success. That is, while Melvin Yee was successful in obtaining a result at trial greater than any offer made to him, his claim for bad faith damages was dismissed. I was referred to Lowndes v. Summit Ford Sales Ltd. where the principle was stated: “where success on appeal is substantially divided” (at paragraph 3) this would be the proper disposition of costs. I would note this matter was not an appeal. To the contrary, it was not until after the April 2, 2018 document was disclosed (more than 11 months after service of the Statement of Defence and two months before trial) that a claim for bad faith damages was raised.

[9] Counsel for HBC also relied on the statement in British Columbia (Minister of Forest) v. Okanagan Indian Band, 2003 SCC 71 (at paragraph 26) to consider costs award as “a disincentive to those who might be tempted to harass others with meritless claims”. However, that paragraph began with the traditional approach to costs and to address “the broad concern to ensure that the justice system works fairly and efficiently”. It is clear this matter would have moved forward more “fairly and efficiently” had the April 2, 2018 document been relied on by HBC upon as of its termination of Melvin Yee.

[10] In its alternative submission, counsel for HBC sought Melvin Yee be awarded only “a significantly reduced partial indemnity amount” based on:

a) HBC’s efforts to settle by virtue of its written offers (which it acknowledged it was $30,000.00 lower than the award at trial); b) the amount claimed greatly exceeded the amount recovered by comparing the prayer for relief of $367,000.00 to the $95,667.97 of additional recovery to that already paid while again, acknowledging Melvin Yee opted for Simplified Procedure and waived any claim in excess of $200,000.00; and c) the circumstances in this matter did not meet the legal requirement to award substantial indemnity costs under Rule 49.10 or (from paragraph 12 of HBC’s written submissions) “where the losing party has engaged in reprehensible, scandalous or outrageous conduct in the proceeding” relying on Davies v. Clarington (Municipality), 2009 ONCA 722.

[11] I do not accept these submissions. I reject the making of Offers to Settle that do not result in the application of Rule 49 to be relevant in these circumstances. The first two offers predated the disclosure of the April 2, 2018 document. The second offer was almost double (from $35,812.00 to $66,188.00) the first Offer to Settle. The third Offer to Settle was only modestly higher ($67,079.02) than the second Offer to Settle.

[12] I do not agree that the amount claimed in the prayer for relief should be the basis upon which to determine the level or quantum of costs in these circumstances. It is not a factor raised in Rule 57.01. Rule 57.01 does raise the conduct of any party that tended to unnecessarily lengthen the proceeding as a relevant factor as appears to have occurred in this matter given the efforts expended by both sides joining issue on the basis of the June 19, 2015 document which was subsequently not applicable.

[13] Further, Rule 57.01(1)(f) raises consideration of steps “taken through negligence, mistake or excessive caution” which, and I rely on the evidence of the apparent “mistake” made by HBC which occurred here.

[14] Regarding the second circumstance upon which to award substantial indemnity costs and reliance on what is actually in paragraph 29 of the Court of Appeal decision in Davies v. Clarington (Municipality), supra, the court reviews the statement in Young v. Young, [1993] 4 S.C.R. 3 where, at page 134, the Court makes that statement. The quotation relied on by counsel for HBC does not include the preceding words that the higher level of costs “are generally awarded only where”. I prefer the wording of the Court of Appeal in Davies v. Clarington (Municipality), supra, “where the losing party has engaged in behaviour worthy of sanction” (at paragraph 28).

[15] I agree with the submission of counsel for HBC that full indemnity costs are not appropriate.

[16] In its final submission, counsel for HBC raised the claim for substantial indemnity fees of $70,177.50 to be excessive. It pointed to the matter being a one day trial in a Simplified Procedure matter where no examinations for discovery occurred. Counsel again relied on the submission that much of the additional time was spent on pursuing the claim for bad faith damages. This was an issue on which Melvin Yee was unsuccessful. I disagree with that submission. HBC’s failure to locate and produce the single most relevant document upon Melvin Yee’s termination for more than 13 months after termination is behaviour worthy of sanction. It was made worse by HBC’s reliance on the June 19, 2015 document. HBC’s position is not assisted by its inability to provide any explanation how this “mistake” occurred. It is further compounded by the evidence of the Senior Manager, H.R. Solutions Group and Associate Relations that the termination letter was prepared from a template and Melvin Yee’s termination letter would have been prepared based on the June 19, 2015 document regardless.

[17] I agree that the total amount of time claimed by Melvin Yee’s counsel, a senior, experienced litigator who specializes in the wrongful dismissal field is excessive. I am mindful of the direction given in Boucher et al v. Public Accountants Council for the Province of Ontario et al, [2004] O.J. No. 2634 that the “objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in a particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant” (at paragraph 26).

[18] In support of this I note that the hours claimed by counsel for HBC and her associate appear to total less than 50% of what is claimed by counsel for Melvin Yee and his associates. However, I cannot be overly critical of the time expended by Melvin Yee’s counsel when it appears counsel was required to meet conduct by HBC worthy of sanction. After consideration of all of the above factors and the discretion afforded to me under Section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43, I conclude the appropriate award of reduced substantial indemnity costs to be $60,000.00 for fees, $7,800.00 for HST, and disbursements of $2,755.05 (inclusive of HST) for a total of $70,555.05. I award same payable by HBC to Melvin Yee, forthwith.

Mr. Justice G. Dow Released: March 5, 2021