Court File and Parties

Date: 2023-04-04 Superior Court of Justice - Ontario

Re: AFTIM NASSAR, Plaintiff And: ORACLE GLOBAL SERVICES ULC, Defendant

Before: VELLA J.

Counsel: Ryan Edmonds and Christopher Gibson, for the Plaintiff Maciej Lipinski, for the Defendant

Heard In Writing: April 4, 2023

Endorsement

[1] This endorsement will address two issues. First, the appropriate resolution of costs and, second, a request by both counsel for clarification regarding the quantum of the damages I awarded.

[2] This matter arises from a wrongful dismissal summary judgment motion. I granted summary judgment in favour of the plaintiff.

[3] I will first deal with costs.

Scale of Costs

[4] The plaintiff seeks costs on a substantial indemnity basis and relies on r. 20.06 and r. 49.10. The plaintiff submits that he obtained an award that is greater than the amount reflected in his r. 49 offer.

[5] The defendant seeks costs on the basis of its own r. 49 offer to settle. It submits that the plaintiff’s award was less than its offer to settle.

Plaintiff’s Offer to Settle

[6] By offer dated July 14, 2021, the plaintiff offered to settle this matter on various terms including payment of damages for pay in lieu of notice in the sum of $70,420 and prejudgment interest less statutory deductions and amounts already paid by Oracle. This offer was withdrawn and acknowledged not to qualify as a r. 49 offer. However, the plaintiff relies on it as a factor for consideration under r. 57.

[7] The seminal offer is dated January 4, 2022 and provided that if accepted before 4:30 p.m. on January 14, 2022, payment by the defendant of the all-inclusive sum of $70,000 as general damages and legal costs. If accepted after January 14th, then the defendant was to pay $64,478.00 “less statutory deductions, plus pre-judgment interest calculated from February 9, 2021, less any amounts for pay in lieu of notice that were already paid” under the Employment Standards Act, 2000, together with the plaintiff’s share of mediation fees and “remaining costs on a partial indemnity basis as of the date of acceptance to be agreed upon or assessed”.

[8] I granted summary judgment in the sum of $63,819.79. This amount reflects damages in lieu of notice of 5 months less four days deducted by way of mitigation for pay, commission, and benefits.

[9] The plaintiff received $7,649.70 in payments under the Employment Standards Act, 2000.

[10] The plaintiff submits that he the award exceeds his offer, which he values at $56,828.30 accounting for the statutory deduction of $7,649.70 received by way of the payment under the ESA. Therefore, the plaintiff says that he beat the offer when compared to the judgment of $63,819.79.

[11] The defendant replies that damages awards for wrongful dismissal actions are always reduced by the amount of statutory termination payments payable to the dismissed employee. Therefore, the value of the judgment is $56,170.09.

[12] In determining whether a judgment is more favourable than a r. 49 offer, the court must compare the terms of the offer with the terms of the judgment, in their entirety (Rooney (Litigation Guardian of) v. Graham, 144 O.A.C. 240, at para. 57).

[13] I agree with the defendant that damages awarded for wrongful dismissal are subject to a reduction by way of statutory termination payments paid to the employee (Stevens v. The Globe & Mail (1996), 90 O.A.C. 361 (C.A.), cited with approval in Kerzner v. American Iron & Metal Company Inc., 2018 ONCA 989 at para 52. See also Boland v. APV Canada Inc. (2005), 250 D.L.R. (4th) 376, at para. 20).

[14] The deduction of ESA entitlements are an implied term of the damages award and, accordingly, when comparing all of the terms of the offer to settle with all of the terms of the judgment, the plaintiff did not obtain a result more favourable than the damages awarded.

[15] Furthermore, I do not agree that as a “near miss” the plaintiff is entitled to the elevated scale of costs under r. 49.10(1). This does not preclude, however, the court from taking into consideration the two offers to settle as a factor in exercise of the court’s discretion in fixing costs.

[16] I have also considered r. 20.06 and see no reason for applying cost sanctions against the defendant under that rule.

[17] Furthermore, this is not one of those rare and exceptional cases in which substantial indemnity costs are warranted.

Defendant’s Offer to Settle

[18] The defendant submits that its offer for a lump sum payment of $55,000 as general damages, without reductions and in addition to statutory termination payments already paid is more generous than the damages awarded and therefore it is entitled to the cost consequences set out in r. 49.10(2).

[19] The defendant states that if the court deducts the 30% withholding rate required by s. 153(1)(c) of the Income Tax Act on income, together with the amount already paid to the employee under the ESA, then the real value of the damages award is $39,319.06.

[20] I disagree with the defendant’s proposition. The tax consequences of a damages award is not a relevant consideration in an analysis under r. 49.10. As stated in Lemyre v. Residential Energy Savings Products Inc., 2020 ONSC 7866 at para. 44, “the point is the damages won, not the tax consequences”. In the event that tax deductions were to be factored in to calculate the net value of a damages under a r. 49 analysis, this would give rise to a complexity since, contrary to the defendant’s submissions, the tax percentage required to be withheld can be changed from time to time by the government and is not within the control or prediction of the employee and employer. In any event, these sorts of tax deductions do not benefit the employer in wrongful dismissal cases, but rather is reflects amounts owing to the Canadian Revenue Agency.

[21] Therefore, the defendant’s offer of $55,000 was exceeded by the court award when the deduction of the ESA statutory payment is factored into the analysis ($56,170.09).

[22] Therefore, the plaintiff is entitled to his costs on a partial indemnity basis.

Quantum of costs

[23] The court, in exercise of its discretion under s. 131(1) of the Courts of Justice Act, will consider the factors under r. 57.01 and the principle of proportionality.

[24] I do not agree that the plaintiff met with “mixed success” warranting a reduction in what would otherwise be a fair and reasonable award. Similarly, I do not agree that the defendant was unreasonable in its conduct, save for the defendant’s refusal to acknowledge that the plaintiff had withdrawn his claims based in human rights and occupational health and safety approximately 3.5 months after the defence was delivered. The defendant argued that the motion for summary judgment was in actuality a motion for partial summary judgment based on this refusal. That was not a tenable argument to make and led to some waste of court time and preparation, though in my view this amounted to a negligible amount within the context of this motion. Furthermore, while I ruled against the defendant premised on the termination clause (which I found was unenforceable), it was reasonable for the defendant to raise that argument at the time of the hearing. It was only after the hearing, the Court of Appeal released its decision in Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451 and while the defendant maintain its position in the course of brief written submissions which I invited, again the amount of time expended in the course of those written submissions was modest.

[25] I have also considered the competing offers to settle which in my view cancel each other out from a merit standpoint, both having just missed the mark in terms of the outcome of this motion.

[26] The plaintiff seeks $27,059.66 ($25,038.54 fees and HST) and disbursements of 2,021.12. The defendant’s partial indemnity costs as advanced are $23,614.88 for fees and HST alone.

[27] The hourly rates and time of the plaintiff’s lawyers are reasonable.

[28] Factoring in the reasonable expectations of the defendant, I am fixing costs payable to the plaintiff in the sum of $27,000 all inclusive. This amount is fair and reasonable considering all of the circumstances and the factors in r. 57.01.

Value of the Judgment

[29] The parties cannot agree as to how much is owing under the judgment. As evident by my preceding reasons, the net value of the judgment, after deduction of the ESA statutory entitlement paid to the plaintiff is deducted, is $57,170.09. Prejudgment and post judgment interest must also be added in accordance with the Courts of Justice Act plus costs now fixed.

Justice S. Vella Date: April 4, 2023