The Ontario Superior Court of Justice has awarded $30,000 in legal costs in a wrongful dismissal case that was settled before it went to trial.
The plaintiff (worker) and defendant (employer) couldn’t come to an agreement on costs after settling on a $15,000 payment to the plaintiff.
A good settlement or not? Court can’t say
The court said the parties “settled for the amounts when they did for their own reasons.”
“Those reasons are privileged and are rightly not before me,” it said.
“I do not know, for example, if the plaintiff capitulated for fear of losing the mitigation argument or if the defendant chose to make a final offer that was not inclusive of costs, to avoid intrusive investigation of its business or if it was always willing to pay far more and brilliantly negotiated the plaintiff down.”
In short, the court could not determine if the $15,000 settlement was “great or terrible for either side.”
It agreed with the plaintiff that it reflected a settlement in the reasonable range of expectation from the Bardal factors. But it also agreed with the defendant that this point shows the case could have been brought in small claims court.
“From 30,000 feet, it also appears the defendant fought the case very aggressively,” it said. “It too knew the likely range of outcomes as the Bardal factors are objective and there are books and charts and websites available that give a fairly accurate assessment of outcomes based on those inputs.”
Costs are normally awarded to the successful party in Ontario, it said. The defendant, in this case, sought costs despite losing because it had a “succession of offers to settle and the plaintiff accepted the least of them,” it said.
The court said that was technically true, but the initial offers were all “inclusive of costs.” Only the final offer was exclusive of costs.
“It is disingenuous to say that the final offer is worth less than the prior offers,” it said. “It is not.”
In a case where the costs will match or exceed the principal payout, the treatment of costs in the offer to settle cannot just be ignored.
“This argument itself tells me something about the defendant’s approach,” it said.
The defendant also argued the plaintiff drove up the cost of the proceeding due to a “misrepresentation” about a second job she had while working for the defendant. She continued in that role after termination and took the position that she had not obtained new employment for the purposes of mitigation.
“This is just mudslinging and focusing tightly on a single tree rather than viewing the forest as a whole,” it said.
It considered awarding no costs in this case but said it would “not be just.”
“A plaintiff whose employment is terminated without cause is entitled to pay in lieu of reasonable notice. Employers should not be incentivized to low-ball and then force a plaintiff to sue to obtain what everyone knows is justly due,” it said.
“Costs and delay are horrible risks to a plaintiff who finds herself sitting at home having to spend thousands of dollars, while unemployed and vulnerable, to chase money that is obviously due from a well-funded employer.”
Too much procedure, but it takes two to tango
This case had far too much procedure compared to the amounts in issue, it said.
“That falls as much or more on the defendant as the plaintiff. The defendant’s affidavit of documents may have been a “document dump” to cause costs. The amount of back-and-forth positional emails on every step and even on and after the settlement was noteworthy,” it said.
It found the rates claimed by the plaintiff’s counsel to be well within the market. It made a 20 per cent reduction for the plaintiff’s own overkill — “recognizing it takes two to tango.” And it settled on $30,000 all inclusive.
“Once the lawyers knew that the case was going away for $15,000 plus costs and were just debating details, all other work ought to have stopped,” it said.
This is net of the costs of the last several days that the parties agreed would go to the defendant on a substantial indemnity basis, it said.
“I assess those costs at $3,000. While counsel says he was preparing for examinations, the settlement was near finalized by that time. The defendant should be paid for finalizing the settlement as agreed,” it said.
For more information see Janmohamed v. Dr. M. Zia Medicine Professional Corporation, 2022 ONSC 6561 (CanLII)