Court File and Parties
COURT FILE NO.: CV-22-677690 DATE: 2023 10 03
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: DAVID MOSKOWITZ, Plaintiff - and - TORONTO TRANSIT COMMISSION, Defendant
BEFORE: Associate Justice Todd Robinson
COUNSEL: G. Agostino, for the defendant (moving party) B. Markusoff, for the plaintiff
HEARD: September 29, 2023
REASONS FOR DECISION (Leave to Amend Statement of Defence)
[1] This is a wrongful dismissal action. The defendant, Toronto Transit Commission (“TTC”), moves for leave to amend its statement of defence. The plaintiff, David Moskowitz, does not oppose the amendments, but insists on being paid costs thrown away as a term of the amendment, which is disputed by TTC. In responding to this motion, Mr. Moskowitz has also asked that the court impose a litigation timetable to complete examinations for discovery and assign this proceeding to case management.
[2] Mr. Moskowitz’s claim for costs thrown away arises from two cancelled discoveries: TTC’s examination of Mr. Moskowitz, which was cancelled by TTC’s counsel less than one business day beforehand, and Mr. Moskowitz’s examination of TTC’s representative, which was cancelled by Mr. Moskowitz’s counsel by reason of TTC providing a draft amended defence mere days before the examination. Mr. Moskowitz also seeks costs thrown away of having to amend his reply pleading and potentially having to serve a supplementary affidavit of documents.
[3] After hearing the parties’ submissions, I granted the motion for leave to amend, but denied the plaintiff’s request for costs thrown away as a term of the amendment. I further denied the plaintiff’s request for case management, but confirmed I would be imposing a litigation timetable in accordance with the one proposed by the plaintiff. I advised counsel that my reasons for that decision would follow. I now provide those reasons and my decision on costs.
Analysis
[4] There are three issues to be decided on this motion: (i) whether the plaintiff should be awarded costs thrown away as a term of granting leave to TTC to amend its statement of defence, (ii) whether this action is appropriately assigned to case management, and (iii) whether a litigation timetable to complete discoveries should be fixed.
Issue 1: Should costs thrown away be awarded a term of granting leave to amend?
[5] Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) provides that the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. The rule requires the court to grant leave to amend unless the responding party would suffer non-compensable prejudice; the amended pleadings are scandalous, frivolous, vexatious or an abuse of the court’s process; or the pleading discloses no reasonable cause of action: 1588444 Ontario Ltd. v. State Farm Fire and Casualty Co., 2017 ONCA 42, at para. 25.
[6] Granting leave for TTC to amend its statement of defence is undisputed. The only genuine dispute between the parties is whether the plaintiff’s claimed entitlement to costs thrown away from the cancelled discoveries should be ordered as a term “as is just”. Mr. Moskowitz argues that awarding costs thrown away is just in the circumstances of this case. TTC disagrees.
[7] As of May 31, 2023, Mr. Moskowitz was seeking $5,250 plus HST in costs thrown away or, alternatively, an acknowledgement that he was entitled to costs thrown away with the quantum of costs to be determined by the court. Mr. Moskowitz’s costs claim is now $5,572.50 plus HST, supported by a costs outline submitted in the responding affidavit of Mr. Moskowitz’s primary lawyer. An additional claim is made for anticipated costs of amending the reply pleading and for a supplementary affidavit of documents, which are estimated at $1,416 plus HST.
[8] Costs thrown away are intended to indemnify a party for reasonably necessary steps that were rendered useless by the conduct of the other party. In reviewing a claim for costs thrown away, I must be mindful that not all preparation work is properly viewed as costs thrown away because some of it will inevitably still be of use at a later date. The onus is on the party asserting costs thrown away to establish that the steps taken were necessary, to identify which costs were thrown away, and to show that those steps have been rendered useless: Legacy Leather International Inc. v. Ward, 2007 ON SC 2357, [2007] OJ No 373, 154 ACWS (3d) 794 (SCJ [Comm List]) at paras. 9 and 19.
[9] In my view, there are three components to making out a claim for costs thrown away: (i) the step for which costs thrown away are claimed was reasonably necessary; (ii) fees and/or disbursements for the step were wasted or rendered useless; and (iii) conduct of the other party occasioned the wasted or useless costs. Notably, though, demonstrating all three elements does not guarantee an award of costs thrown away. Costs of any step in a proceeding are always in the discretion of the court.
[10] On the first component, preparation for discoveries is evidently a necessary step in advancing this litigation to trial. I am also satisfied that amending the reply will be a reasonably necessary step following the proposed amendment. I am less convinced that the record supports that a supplementary affidavit of documents will be necessary. There is no cogent evidence that supplementary productions will, in fact, be required and what they would entail.
[11] On the second component, Mr. Moskowitz has the onus of establishing that his claimed costs were wasted or rendered useless. In my view, he has not met his onus. The claim for costs thrown away is unsubstantiated on the record before me. The responding affidavit, sworn by the plaintiff’s senior lawyer, states baldly, “The Plaintiff’s costs thrown away related to the adjourned examinations are $6,409.93.” Appended to the affidavit is a costs outline, which sets out 9.8 hours of senior lawyer time and 3.7 hours of junior lawyer time totalling $5,672.50 plus HST. Most of that time (7.9 hours) is claimed for preparing for attendances at the two examinations for discovery. There is also 2.6 hours of aggregate time for meetings with the plaintiff and reviewing materials, pleadings and records, as well as a further 3 hours of senior lawyer time on correspondence. There is no division of time as between the two examinations.
[12] Significantly, nothing in the supporting affidavit details how the time claimed was incurred and why it should all be viewed as being wasted or “thrown away”. For example, the fact that two lawyers spent an aggregate of 7.9 hours preparing for examinations does not necessarily mean that there was no value to that time and they will thereby be forced to spend a further 7.9 hours when discoveries proceed. Nothing before me supports that the claimed preparation time represents wasted time for which there is no future value. I accept TTC’s submission that it appears to be a total cost claim for all preparation time, without accounting for what portion of the time will be usable again, such as draft questions, notes from the preparations, any document briefs or highlighted documents that will still be usable, etc.
[13] The distinction between the costs outline block dealing with meetings with the plaintiff and reviewing “materials, pleadings and records” and the block dealing with preparing for attendances at the examinations is unclear. There is also no evidence on what comprises the 3 hours of correspondence. That is needed for me to assess whether that time is properly viewed as costs thrown away or costs of the action. Correspondence to opposing counsel and the court seems more likely to be costs of this motion or of the action, rather than costs thrown away. Absent more cogent evidence on how the time claimed was incurred and why it is properly viewed as being wasted or redundant, I am unable to accept that the significant figures claimed are genuinely costs thrown away.
[14] With respect to the prospective costs of amending the reply pleading and a supplementary affidavit of documents, I agree with TTC’s submission that I should have regard for the stage of this proceeding. Examinations for discovery have not yet occurred. A revised reply is possible as is a potential expansion of documentary discovery to address the amended defence allegations. However, I am not convinced that those costs will be as substantive as Mr. Moskowitz estimates them to be. Moreover, I agree with TTC’s submission that this is not a case where the existing pleadings must be completely revisited. Had TTC pleaded its current allegations from the outset, Mr. Moskowitz would always have incurred costs of pleading in reply to them. I do not agree that there will clearly be redundant or wasted costs of amending the reply to address TTC’s amendments.
[15] I note also that the plaintiff’s position is that the amendments dealing with specific mitigation allegations were unnecessary, since mitigation was previously pleaded and was always in issue. In my view, it follows from that submission that the particulars of the plaintiff’s failure to mitigate should not result in any new productions that were not already relevant at the time of the plaintiff’s production. I acknowledge that there are other amendments dealing with the bona fides of Mr. Moskowitz’s medical leave. Regardless, there is no cogent evidence that there will be a supplementary affidavit of documents. In my view, it is not appropriate to order prospective costs thrown away for a hypothetical step. I thereby need not address Mr. Moskowitz’s position that TTC is withdrawing an admission in its amendments that will change whether the legitimacy of his medical leave is an issue in dispute. There is no evidence that further productions on that issue are expected or even likely.
[16] On the third component, in assessing whether it was reasonable for TTC to cancel discoveries, I have considered the communications between the parties after the cancellation. Notably, TTC requested supplementary productions and, ultimately, a supplementary sworn affidavit of documents was provided. It was accompanied by a letter that expressly stated the relevance of the documents was disputed. However, Mr. Moskowitz signed the affidavit, in which he attests to relevance of the documents. Doing so seems to be conceding that relevant documents in the possession, control or power of the plaintiff had not been produced. That is inconsistent with the position taken by his lawyers in the letter.
[17] Regardless, I find it difficult to accept the position that documents supporting that Mr. Moskowitz was working and receiving income from other sources is not relevant in a wrongful dismissal claim where a mental breakdown has been alleged impacting his ability to work. In my view, the production of these additional documents tends to support that TTC’s concerns about the plaintiff’s productions being incomplete were valid.
[18] Mr. Moskowitz argues that TTC ought to have proceeded with the examination for discovery, since the supplementary productions demonstrate nothing more than nominal income. However, nothing before me supports that TTC reasonably had any knowledge of that fact until receiving the productions. What it did know was that Mr. Moskowitz had represented ongoing work through his LinkedIn profile that was not reflected in his productions.
[19] Mr. Moskowitz’s also asserts that cancelling TTC’s examination was reasonable because of the timing of the draft amended statement of defence. I am not convinced that it was. I say this for two primary reasons.
[20] First, TTC correctly points out that most of the proposed amendments particularize instances of alleged mitigation. The businesses that Mr. Moskowitz is alleged to have operated and other employment he is alleged to have had were previously identified to Mr. Moskowitz’s counsel. To the extent that TTC may have been examined on them, they were not a surprise.
[21] Second, I am not convinced by Mr. Moskowitz’s argument that TTC’s amendments sought to withdraw an admission that his medical leave was bona fide and, as a result, the amendments required consideration and instructions. The impugned allegation is that Mr. Moskowitz owned and operated a business during the period of his alleged mental breakdown, which TTC alleges “belies his claim that he had a mental breakdown which forced him to take a leave from TTC.” I was directed to no paragraphs in the existing statement of defence supporting any legally binding admission that the medical leave was bona fide. TTC refers to the medical leave and mental breakdown in a few paragraphs of the statement of defence, but does not state anything about TTC agreeing that Mr. Moskowitz did, in fact, suffer a mental breakdown or acknowledging that his medical leave was legitimate. Factually, it is undisputed that Mr. Moskowitz took one. I am not convinced that the existing pleading goes further than that.
[22] Ultimately, as already noted, awarding costs at any stage of a proceeding is always in the court’s discretion. Rule 26.01 affords me the discretion to grant leave to amend on such terms as I deem just in the circumstances of this case. For the foregoing reasons, I am not convinced that the justness of this case requires an order of costs thrown away as a term of the amendment.
Issue 2: Should this action be assigned to case management?
[23] Mr. Moskowitz seeks an order for case management of this action. I have jurisdiction to order case management, whether or not on consent of the parties, provided that I have considered all relevant circumstances, including those outlined in subrule 77.05(4) of the Rules.
[24] Specifically, as set out in subrule 77.05(4), I am to consider all relevant circumstances, including any or all of the following: (i) the purpose of case management as set out in subrule 77.01(1); (ii) the complexity of the issues of fact or law; (iii) the importance to the public of the issues of fact or law; (iv) the number and type of parties or prospective parties, and whether they are represented; (v) the number of proceedings involving the same or similar parties or causes of action; (vi) the amount of intervention by the court that the proceeding is likely to require; (vii) the time required for discovery, if applicable, and for preparation for trial or hearing; (viii) the number of expert witnesses and other witnesses; (ix) the time required for the trial or hearing; and (x) whether there has been substantial delay in the conduct of the proceeding. No specific submissions were made on any of these matters.
[25] This case does not require formal case management. There is nothing overly complex about this case, which is a two-party wrongful dismissal dispute. There is nothing before me supporting a likelihood that regular court intervention will be required. Last minute discovery cancellations, poor communication, and the delay arising from the dispute that led to this motion being opposed are not themselves sufficient to warrant case management. They are, however, sufficient to warrant imposing a timetable.
Issue 3: Should a litigation timetable be imposed to complete discoveries?
[26] TTC advanced good arguments for why a court-ordered timetable is not necessary. I agree that the record supports that TTC has not refused to agree to move forward and that this motion has been an impediment to doing so. Nevertheless, I was convinced to impose a timetable to complete the discovery process, which will ensure this action moves forward expeditiously to trial readiness.
[27] Mr. Moskowitz proposed a timetable to complete examinations for discovery by January 1, 2024, answer undertakings per the Rules, and bring any motions arising from the examinations within thirty (30) days thereafter. TTC took no issue with that timetable. Other than adjusting the discovery completion date so as not to fall on a holiday, that is the timetable I am ordering.
Costs
[28] After advising counsel orally of my decision on the motion, for reasons to follow, I heard the parties’ submissions on costs. TTC seeks its partial indemnity costs of $15,860.00. Despite TTC’s success on the motion, Mr. Moskowitz still seeks his costs on a substantial indemnity basis in the amount of $12,352.50.
[29] Mr. Moskowitz argues that I should give weight to case law holding that the wording of Rule 26.01 is such that, on a motion to amend a pleading, a compensatory award of costs to the responding party will frequently be appropriate, even if the responding party was not successful in opposing the motion to amend: Yeoman v. Meyer, 2015 ONSC 716, at para. 13; Kings Gate Developments Inc. v. Colangelo, 1994 ONCA 416. I agree that there are cases in which such a compensatory costs award may be appropriate. This is not such a case.
[30] Mr. Moskowitz’s position on costs is, in my view, misguided. Arguing this motion was a gross waste of judicial resources occasioned entirely by Mr. Moskowitz’s staunch and unflinching position that he was entitled to costs thrown away, which I have rejected. That was pursued relentlessly even in face of reasonable alternative proposals.
[31] During costs submissions, TTC pointed me to an exchange in which its counsel confirmed TTC’s willingness to leave the issue of Mr. Moskowitz’s entitlement to costs thrown away and the quantum of costs to the end of the proceeding. TTC was unwilling to concede that Mr. Moskowitz was entitled to costs thrown away as a term of amendment. Nevertheless, Mr. Moskowitz insisted on TTC agreeing that he was entitled to costs thrown away and opposed this motion solely on the basis of seeking a determination on his entitlement to those costs.
[32] The position taken by Mr. Moskowitz through his counsel made this motion necessary. Since pleadings were already closed, TTC required the plaintiff’s consent or leave of the court to amend its statement of defence. Mr. Moskowitz withheld consent unless TTC agreed to pay costs thrown away that TTC felt it was not required to pay. No doubt the motion costs could have been avoided entirely if TTC had simply paid Mr. Moskowitz the requested costs. However, TTC’s position has been vindicated by the result of this motion. In my view, the court should not be encouraging parties to make payments against their interests without any obligation to do so, simply because it is less expensive than bringing the matter to court.
[33] Positions like the one taken by Mr. Moskowitz are precisely the kind of positions that result in unnecessary use of judicial resources that only serves to exacerbate the civil motion backlog in Toronto Region. Mr. Moskowitz forced TTC to incur the costs of a two-hour opposed amendment motion in circumstances where TTC was offering to reserve Mr. Moskowitz’s entitlement to the trial judge. Importantly, that is a point in the litigation by which actual costs thrown away would have crystallized. Despite that reasonable proposal, Mr. Moskowitz maintained his opposition to this motion and has incurred actual legal fees that are over double the quantum sought for costs thrown away. “Disproportionate” is the politest word I can think of to describe how the plaintiff opted to proceed.
[34] Costs awards should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant having regard to the expectations of the parties concerning the quantum of costs: Davies v. Clarington (Municipality), 2009 ONCA 722, at para. 52; Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 ONCA 14579, 71 O.R. (3d) 291 (C.A.), at paras. 26 and 38.
[35] There is no question in my mind that Mr. Moskowitz should not be awarded costs of this motion. Pursuant to subrule 1.04(1.1) of the Rules, I am to make orders and give directions that are proportionate to the importance and complexity of the issues and to the amount involved in the proceeding. Condoning Mr. Moskowitz’s disproportionate response to TTC’s request to amend its statement of defence would, in my view, be contrary to that principle.
[36] Mr. Moskowitz did not oppose TTC’s amendments. When TTC refused to pay costs thrown away, Mr. Moskowitz had a choice: dig in and deal with costs or defer the issue to the trial judge. Importantly, it is well within a trial judge’s jurisdiction and discretion to assess costs thrown away from discoveries at the conclusion of trial. Rather than insisting on payment of costs now, Mr. Moskowitz could have consented to the amendments on the terms proposed by TTC, namely without prejudice to claiming costs thrown away in any event of the cause. Had Mr. Moskowitz simply taken no position, it would likely still have remained open to him to raise costs thrown away when dealing with costs of the action.
[37] TTC was forced to unnecessary time and expense bringing and arguing this motion. It was entirely successful. TTC is entitled to its costs of the motion. Frankly, in the circumstances of Mr. Moskowitz’s disproportionate response, had TTC requested substantial indemnity costs, I would have seriously considered it.
[38] Mr. Moskowitz submits that TTC’s partial indemnity costs are disproportionate and that, if I award costs against him, they should be comparable to his own partial indemnity costs of $9,264.39. I do not agree. TTC’s materials were well-prepared and included appropriate case law necessary to a fair disposition of this motion. Notably, significant time was incurred reviewing the responding materials and preparing for this hearing. Mr. Moskowitz relied on thirteen cases, which TTC’s counsel evidently carefully reviewed to be able to make succinct submissions on why each case was distinguishable. That said, I do find some of the hours claimed to be high given the nature and complexity of the motion. It is also unclear why the costs outline was not prepared by a clerk or student rather than TTC’s lawyer.
[39] On the day of the motion hearing, when vetting my list, I provided my preliminary comments on the seemingly complete lack of proportionality between the amount of costs thrown away in dispute and the parties’ aggregate costs per their costs outlines. The parties engaged in settlement discussions out of the courtroom. I have been provided with an email confirming that TTC offered to pay Mr. Moskowitz costs thrown away of $2,000 and that each party would bear their own costs of the motion. That offer was not accepted.
[40] Pursuant to Rule 49.13 of the Rules, in exercising my discretion with respect to costs, I am permitted to take into account any offer to settle made in writing, the date the offer was made, and the terms of the offer. Both of TTC’s offers to defer the entitlement dispute to the end of the proceeding and to pay $2,000 in costs thrown away would have been more favourable results for Mr. Moskowitz. I have considered both offers in deciding what is fair and reasonable in the circumstances of this case.
[41] Having weighed the factors in subrule 57.01(1) of the Rules, TTC’s offers, and the result, I fix TTC’s partial indemnity costs of the motion in the amount of $13,000, all-inclusive.
Disposition
[42] For the foregoing reasons, I ordered as follows:
(a) Leave is hereby granted for TTC to amend its statement of claim in the form of draft amended statement of defence at Tab 7 of the motion record.
(b) The parties shall adhere to the following discovery timetable, which shall be subject to the parties’ agreement to vary it:
(i) Examinations for discovery shall be completed by December 29, 2023;
(ii) Answers to undertakings and positions on advisements, if any, shall be given within sixty (60) days from the date of the examination; and
(iii) Motions arising from discoveries shall be booked (but not necessarily heard) within thirty (30) days after answers are due to be given.
[43] The plaintiff shall further pay to TTC its costs of this motion in the amount of $13,000, all-inclusive, payable within thirty (30) days. Order accordingly.
ASSOCIATE JUSTICE TODD ROBINSON