Court File and Parties

COURT FILE NO.: CV-19-623251-0000

DATE: 2021-06-21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Merida Lake

AND:

La Presse (2018) Inc.

BEFORE: J.T. Akbarali J.

COUNSEL: Dorian N. Persaud, for the plaintiff Sébastien Lorquet and Véronique Champoux, for the defendant

HEARD: In writing.

ENDORSEMENT

[1] On May 21, 2021, I released reasons in a summary judgment motion in this wrongful dismissal action. I found that the plaintiff was entitled to eight months’ notice, and that her compensation should include the loss of her bonus. However, I also concluded that she failed to take reasonable steps to mitigate her damages, and as a result, I reduced her reasonable notice period by two months: 2021 ONSC 3506. In the result, the plaintiff’s award amounts to about $97,500 (rounded), after deduction is made for the amounts the plaintiff already received on dismissal.

[2] This endorsement addresses costs of the litigation.

[3] The defendant seeks costs on a substantial indemnity scale in the amount of $43,399.18 all inclusive, or alternatively, costs on a partial indemnity scale in the amount of $30,435.82 all inclusive, on the basis that it has beaten its offer to settle.

[4] The plaintiff’s bill of costs discloses full indemnity costs in the amount of $74,669.27 in fees and HST, plus disbursements, including HST, of $3,123.88.

[5] The three main purposes of modern costs rules are to indemnify successful litigants for the costs of litigation, to encourage settlement, and to discourage and sanction inappropriate behaviour by litigants: Fong v. Chan (1999), 1999 CanLII 2052 (ON CA), 46 O.R. (3d) 330, at para. 22.

[6] Subject to the provisions of an Act or the rules of court, costs are in the discretion of the court, pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The court exercises its discretion taking into account the factors enumerated in r. 57.01 of the Rules of Civil Procedure, including the principle of indemnity, the reasonable expectations of the unsuccessful party, and the complexity and importance of the issues. Overall, costs must be fair and reasonable: Boucher v. Public Accountants’ Council for the Province of Ontario, 2004 CanLII 14579 (Ont. C.A.), 71 O.R. (3d) 291, at paras. 4 and 38. A costs award should reflect what the court views as a fair and reasonable contribution by the unsuccessful party to the successful party rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier, 2002 CanLII 25577 (ON CA), 2002 CarswellOnt 4020, 118 A.C.W.S. (3d) 341 (C.A.), at para. 4.

[7] In this case, shortly after the action was commenced, and before filing a statement of defence, the defendant served a r. 49 offer to settle for $107,000 (in addition to the amounts already paid on the plaintiff’s dismissal).

[8] The plaintiff did not accept the offer; she countered with her own r. 49 offer, seeking $186,266.

[9] These are the only offers that qualify as r. 49 offers.

[10] As noted, the plaintiff’s recovery was approximately $97,500, or almost $10,000 less than the offer that the defendant made on July 25, 2019, almost two years before the reasons on the motion were released, and before the bulk of the parties’ litigation costs were incurred.

[11] Under r. 49.10(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, when a plaintiff recovers less than a r. 49 offer made by the defendant, the plaintiff is entitled to partial indemnity costs to the date the offer was served, and the defendant is entitled to partial indemnity costs thereafter, unless the court orders otherwise.

[12] The defendant argues that an award of substantial indemnity costs in its favour is appropriate because it made a serious and early effort to resolve the dispute, but the plaintiff’s behaviour was unreasonable, in that she maintained her refusal to budge from her claim to a twelve-month reasonable notice period. It argues that costs sanctions are necessary in this case to further the policy of encouraging parties to seriously consider offers to settle.

[13] For her part, the plaintiff seeks an order that the parties bear their own costs, arguing that both parties had some success on the motion, and the court should exercise its discretion to find that the plaintiff is not liable for costs. She notes she remains unemployed more than 24 months after being dismissed. She points to the unequal financial position of the parties.

[14] The starting point is the presumption that I have noted above, in r. 49.10(2), which would entitle the plaintiff to partial indemnity costs up to the date of the offer, and entitle the defendant to its partial indemnity costs throughout the litigation, given the early stage at which its offer was served. The question is whether either party has persuaded me that I should exercise my discretion to depart from this presumption.

[15] I am not persuaded that an award of substantial indemnity costs is appropriate here. The presumption in r. 49.10(2) is already designed to further the policy that costs awards should encourage parties to consider seriously offers to settle. The plaintiff’s refusal to negotiate her position that she be entitled to twelve months’ reasonable notice may have been frustrating to the defendant, and it may have been unwise, but it is not unreasonable conduct of the type that demands sanction beyond that set out in r. 49.10(2).

[16] Equally, I see no basis to make an award of no costs. The policy behind encouraging parties to consider seriously offers to settle has application in this case. The plaintiff had a better offer in hand at a time when she had spent far, far, less in costs than she has today. Her net recovery had she taken the offer would have been significantly better than it is at the end of the litigation. The parties’ and the court’s resources would have been put to better use. The plaintiff’s position on settlement was rigid. She was entitled to make the decisions she made, but decisions have consequences. In this case, the likely consequences if the defendant beat its offer to settle were easy to discern; they are set out in r. 49.10(2).

[17] Accordingly, I conclude that an award of partial indemnity costs to the defendant accords with the purpose of costs awards in this case, and is appropriate.

[18] With respect to the quantum of costs, I note that the plaintiff’s partial indemnity costs, (calculated at 60% of her full indemnity costs) before HST and disbursements would be $39,647.40. In contrast, the defendant’s partial indemnity fees, before HST and disbursements, are $22,944.00. The defendant’s fees are thus significantly lower than the plaintiff’s fees, and as such, would be well within the plaintiff’s reasonable expectations. Counsel’s partial indemnity rates and the time spent are reasonable.

[19] The issues in the litigation were not complex. The litigation never should have gotten as far as it did; it should have been possible to settle it. As things stand now, no one comes out of this litigation a winner.

[20] In this case, I find that the partial indemnity costs claimed by the defendant, $30,435.82, all inclusive, are reasonable. However, some deduction to costs is warranted to reflect the plaintiff’s entitlement to costs up to the date of the defendant’s offer. In my view, costs of $27,000 all-inclusive are fair and reasonable in the circumstances.

[21] The plaintiff shall pay costs of $27,000 all-inclusive to the defendant within thirty days.

J.T. Akbarali J.

Date: June 21, 2021