Court File and Parties

COURT FILE NO.: CV-20-287 DATE: 20220912 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Blair Lewis, Plaintiff AND: Blue Star Ford Lincoln Sales Ltd., Defendant

BEFORE: Justice D.A. Broad

COUNSEL: Dennis Touesnard, for the Plaintiff Michel Castillo, for the Defendant

COSTS ENDORSEMENT

[1] The parties have been unable to settle the issue of costs and have each delivered written submissions on costs.

[2] The plaintiff seeks costs on a partial indemnity basis in the sum of $14,946.31 comprised of fees in the sum of $12,172.23, HST on the fees in the sum of $1,582.30 and disbursements, including HST on taxable disbursements, in the sum of $1,191.70.

[3] The plaintiff states that the proceeding was unnecessarily extended by the defendant’s meritless allegation of just cause for his termination. He asserts that the amount awarded was $140,936.83, less mitigation income, plus prejudgment interest. He relies upon the principle of indemnification of the successful litigants, the objective of discouraging frivolous positions and the encouragement of settlements.

[4] The defendant submits that the plaintiff’s request for costs is excessive and that the award of costs to him should be in a nominal amount or alternatively in the range of $3,500 to $5,250.

[5] The defendant says that the result in the proceeding was within the jurisdictional limit of the Small Claims Court, calculated as follows:

Income during the notice period: $114,805.13 Less mitigation income (79,473.00) Less statutory deductions (19,844.41) Plus benefits 1,742.30 Plus dental expenses 1,068.00 Plus interest 250.52 TOTAL $ 22,904.23

[6] The defendant maintains that the plaintiff cannot reasonably expect to receive $14,946.31 in costs for a claim in which he will receive payment of $22,904 23.

[7] The defendant denies that its allegation of cause was found by the court be meritless, but rather the court found insufficient cause based on the evidence.

[8] The defendant also points out that the plaintiff was unsuccessful on his claim for moral damages

[9] Finally, the defendant asserts that the plaintiff’s failure to make full and timely disclosure of information respecting his mitigation served to lengthen the proceeding and to increase the costs.

Guiding Principles on Costs Generally

[10] Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that "subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the cost shall be paid."

[11] The factors to be considered by the court, in the exercise of its discretion on costs, are set forth in sub-rule 57.01(1), including, in particular, the principle of indemnity at para. (0.a) and the amount of costs that an unsuccessful party could reasonably expect to pay at para. (0.b).

[12] The usual rule in civil litigation is that costs follow the event and that rule should not be departed from except for very good reasons (see Gonawati v. Teitsson [2002] CarswellOnt 1007 (Ont. C.A.), 2002 41469 and Macfie v. Cater, 1920 401 (ON SC), [1920] O.J. No. 71 (Ont. H.C.) at para 28).

[13] It is well known that the overall objective in dealing with costs is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular circumstances of the case, rather than an amount fixed by the actual costs incurred by the successful party. The expectation of the parties concerning the quantum of costs is a relevant factor to consider. The court is required to consider what is "fair and reasonable" having regard to what the losing party could have expected the costs to be (see Boucher v. Public Accountants Council (Ontario), 2004 14579 (ON CA), [2004] O.J. No. 2634 (Ont. C.A.) at para. 26 and Coldmatic Refrigeration of Canada Ltd. v. Leveltek Processing LLC, 2005 1042 (ON CA), [2005] O.J. No. 160 (Ont. C.A.)) The amount awarded for costs must reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Mason v. Smissen, [2013] O.J. No. 4229 (Ont. S.C.J.) at paras. 5 and 6 and the cases therein referred to).

Discussion

[14] I am not satisfied that, in considering the result in the proceeding, it is appropriate to take into consideration statutory deductions from the amount awarded to the plaintiff for pay in lieu of reasonable notice. The obligation of defendant employer to deduct and remit amounts for income tax, Employment Insurance and Canada Pension Plan exists by statute apart from the litigation process. The amounts deducted and remitted are on behalf of the plaintiff employee and do not represent a reduction of the defendant’s liability.

[15] I am therefore not satisfied that the plaintiff’s claim was within the jurisdiction of the Small Claims Court.

[16] I agree that the plaintiff’s lack of success on his claim for moral damages is a factor to be taken into account on costs.

[17] Taking into account the principles of proportionality and indemnification, I find that an award of costs in the sum of $10,000 inclusive of fees, disbursements and HST would be an appropriate disposition on costs and would have been within the reasonable expectation of the defendant.

Disposition

[18] It this therefore ordered that the defendant pay to the plaintiff costs fixed in the sum of $10,000 within 30 days hereof.

D.A. Broad, J.

Date: September 12, 2022