Court File and Parties

COURT FILE NO.: CV-20-650903

DATE: 20221003

ONTARIO SUPERIOR COURT OF JUSTICE

RE: Darren Pohl, Plaintiff

-and-

Hudson’s Bay Company, Defendant

BEFORE: Robert Centa J.

COUNSEL: Robert G. Tanner, for the plaintiff Edward J. O’Dwyer and Fatimah Khan, for the defendant

HEARD: October 3, 2022 (in writing)

Costs ENDORSEMENT

[1] This endorsement addresses the costs of the proceeding. In reasons released on September 15, 2022, I awarded Mr. Pohl $149,662.50 in damages comprising damages for wrongful dismissal, moral or aggravated damages, and punitive damages: Pohl v. Hudson’s Bay Company, 2022 ONSC 5230. I have now received written submissions of the parties.

[2] Mr. Pohl seeks his full indemnity costs of the proceeding, calculated at $42,425, or, in the alternative, substantial indemnity costs of $38,445. Mr. Pohl submits that he achieved a result more favourable than a Rule 49 offer he served on February 15, 2021. On that date, Mr. Pohl offered to accept a full settlement in the amount of $90,766.94, plus partial indemnity costs to the date of the offer and substantial indemnity costs thereafter. In the further alternative, Mr. Pohl seeks costs on a partial indemnity scale to the date of his offer and substantial indemnity costs after that date in the total amount of $35,529.75.

[3] HBC submits that Mr. Pohl is entitled to his costs of the proceeding, but that a proportionate award is $30,000.

General principles

[4] Fixing costs is a discretionary decision under section 131 of the Courts of Justice Act, R.S.O. 1990, c C.43. In exercising my discretion, I may consider the factors listed in rule 57.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg 194. These factors include the result achieved, the amounts claimed and recovered, the complexity of and importance of the issues in the proceeding, the principle of indemnity, the reasonable expectations of the unsuccessful party, as well as any any other matter relevant to costs.

[5] In Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, at paras. 59 to 66, the Court of Appeal for Ontario recently restated the general principles to be applied in the court’s exercise of its discretion to award costs. A proper costs assessment requires the court to undertake a critical examination of the relevant factors as applied to the costs claimed and then “step back and consider the result produced and question whether, in all the circumstances, the result is fair and reasonable”: Apotex, at para. 60, Restoule v. Canada (Attorney General), 2021 ONCA 779, 466 D.L.R. (4th) 1, at para. 356, citing Boucher v. Public Accountants Council (Ontario) (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), at para. 24. The overarching objective is to fix an amount of costs that is objectively reasonable, fair, and proportionate for the unsuccessful party to pay in the circumstances of the case, rather than to fix an amount based on the actual costs incurred by the successful litigant: Apotex, at para. 61; Boucher, at para. 26.

[6] While the reasonable expectation of the parties concerning the amount of a costs award is a relevant factor that informs the determination of what is fair and reasonable, it is not the only, determinative factor and cannot be allowed to overwhelm the analysis of what is objectively reasonable in the circumstances of the case. To hold otherwise would result in the means of the parties artificially inflating costs with the concomitant chilling effect on access to justice for less wealthy parties: Apotex, at para. 62.

[7] Costs that are reasonable, fair, and proportionate for a party to pay in the circumstances of the case should reflect what is reasonably predictable and warranted for the type of activity undertaken in the circumstances of the case, rather than the amount of time that a party’s lawyer is willing or permitted to expend: Apotex, at para. 65. The party required to pay the successful party’s costs “must not be faced with an award that does not reasonably reflect the amount of time and effort that was warranted by the proceedings”: Gratton-Masuy Environmental Technologies Inc. v. Building Materials Evaluation Commission (2003), 2003 CanLII 8279 (ON SCDC), 170 O.A.C. 388 (Div. Ct.), at para. 17.

[8] The party seeking costs bears the burden of proving them to be reasonable, fair, and proportionate. The absence of dockets is not an automatic bar to proving or receiving an award of costs: Leonard v. Zychowicz, 2022 ONCA 212, 75 E.T.R. (4th) 21, at para. 33. However, absent dockets, a description of the activities for which fees and disbursements are claimed must be sufficient to permit for the kind of close scrutiny that the court is required to undertake. The material provided for the assessment must allow the court to come to a conclusion as to the amount of time reasonably required by the party seeking costs to deal with all aspects of the proceedings for which costs are claimed, including whether there was over-lawyering or unnecessary duplication of legal work: Apotex, at para. 66; Restoule, at para. 355.

[9] I keep all of these principles in mind as I consider the appropriate costs award in this case.

Scale of costs

[10] Mr. Pohl seeks his full indemnity costs of the proceeding, calculated at $42,425. Although I am authorized by rule 57.01(4) to award costs in an amount that represents full indemnity, I do not think that such an award is appropriate in the circumstances of this case.

[11] Full indemnity costs are an exception to the general rule and awarded only under special circumstances, where a party makes allegations or engages in conduct that is "reprehensible, scandalous, or outrageous": 1238915 Ontario Limited v. Nothdurft, 2022 ONSC 5250, at para. 9; Baryluk v Campbell, (2009), 66 C.C.L.T. (3d) 160 (S.C.J.) at paras. 8-10.

[12] I do not think HBC’s conduct in the litigation itself merits an award of costs on a full indemnity basis. I have already weighed HBC’s misconduct toward Mr. Pohl surrounding the termination of his employment in assessing the moral or aggravated damages and punitive damages I awarded to him.

[13] In my view, this is an appropriate case for costs on a partial indemnity scale to the date of Mr. Pohl’s Rule 49 offer and substantial indemnity costs thereafter. HBC concedes the appropriateness of costs on this scale.

Quantum of costs

[14] Mr. Pohl calculates his costs on a partial indemnity scale to the date of his Rule 49 offer and substantial indemnity costs thereafter as totalling as $35,529.75.

[15] HBC does not quarrel with this calculation but submits that this amount is “not reasonable or proportionate” and $30,000 is the appropriate amount of costs to award. HBC submits that it would not have expected to pay $35,529.75 in costs for a proceeding terminating in a one-day summary judgment motion. This is surprising, since HBC delivered a bill of costs listing its own fees on a substantial indemnity basis at $48,825.95 and a partial indemnity basis of $31,618.86.

[16] HBC submits that Mr. Pohl’s “higher than expected costs simply reflect a failure to appropriately delegate work.” It is true that all of the work done on Mr. Pohl’s file was done by one lawyer. This contrasts with the defendant who had four lawyers, four students, and a law clerk work on the file at various times. But there are many ways to organize legal work efficiently and effectively. Looking at the work done by Mr. Pohl’s counsel, it appears to have been done very efficiently, even taking into account his higher hourly rate, which it itself appropriate for a lawyer with 43 years of experience. I do not accept that the differences in how these files were staffed should mean that Mr. Pohl should receive less on a blended substantial indemnity / partial indemnity scale than HBC would have sought on a partial indemnity basis if it was successful.

[17] In this proceeding, Mr. Pohl was entirely successful. He recovered a very significant proportion of the amounts he claimed in his statement of claim. The issues raised in this proceeding were of critical importance to his dignity and his economic future.

[18] HBC submits that this was “not a complex proceeding” and that “only issues in dispute at trial were (1) the period of reasonable notice; and (2) bad faith/aggravated/punitive damages.” One can only say this was a two-issue case by bundling several issues together. The reasons for decision on the motion for summary judgment reflect the breadth and complexity of the issues raised.

[19] In my view, it is reasonable, fair, and proportionate for HBC to pay $35,529.75 in legal fees of this proceeding. Given HBC’s own bill of costs, this award, in the circumstances of this case reflects what is reasonably predictable and warranted for the type of activity undertaken in the circumstances of the case. It does not merely reflect the amount of time that Mr. Pohl’s lawyer was permitted to expend: Apotex, at para. 65. It reflects the factors listed in rule 57.01 and the fact that this litigation was hard fought.

[20] Stepping back and assessing the matter as a whole, the amounts claimed by Mr. Pohl are reasonable and proportionate in all of the circumstances of this case. I award Mr. Pohl costs as follows:

a. Legal fees on a partial indemnity basis to February 15, 2021, and on a substantial indemnity basis thereafter fixed in the amount of $35,529.75, including HST; plus

b. Disbursements in the amount of $2,626.50, including HST.

Robert Centa J.

Date: October 3, 2022