$120,000 in Partial Indemnity Costs for a 2.5 Day Trial :

In Battiston v Microsoft ( 2021 ONSC 1341) Faieta J. awarded wrongful dismissal damages of $567,000 after a trial lasting 2.5 days.

In the course of the award, the following interesting  points were made:

1) The fact that the Plaintiff did not win on every disputed issue was not relevant in determining the quantum of costs.

This is what the judge said:

Who was the Successful Party?

[8]               A successful party is presumed to be entitled to their costs.

[9]               The defendant submits that costs awarded to the plaintiff should be reduced by 20% as it was successful on some of the issues – namely, the issue of the plaintiff’s bonus, merit increase and performance incentives issued in the final year of his employment as well as the valuation of the plaintiff’s bonus and merit increase during the notice period.   

[10]           In my view, it makes little sense to find that success was divided when the amount awarded by this court exceeded the offers to settle made by the plaintiff.

2) For the losing party to not submit their own Bill of Costs when attacking the winners is a dangerous technique. This what the Judge said :

  Similarly, although there is no obligation to do so, the defendant did not file its own Bill of Costs to illustrate what amount of costs it would have reasonably expected to have been incurred by the plaintiff: as necessary to incur to respond to this claim: Smith Estate v. Rotstein, 2011 ONCA 491 (Ont. C.A.), para. 50. Given its failure to deliver its own bill of costs, the Applicant’s challenge regarding the amount of costs claimed by the Respondent is “no more than an attack in the air”, as former Chief Justice Winkler stated in Risorto, at para. 10.

When I was in that situation as the winning lawyer and the loser said that he spent less time on the file  than me , I would respond ” Well maybe that is why I won and you lost.”

2) Where the Plaintiff tenders a Rule 49 Offer to Settle, but upon inquiry by the Defendant, refuses to set out a number for costs , the Court may exercise its jurisdiction to not award substantial indemnity costs even though the Plaintiff beat their own Rule 49 offer.

This is what the Judge said:

[18]           The defendant submits that the Rule 49 offers to settle were “rendered improper” as a result of the plaintiff’s refusal to provide an estimate of its costs.  On November 28, 2019, Ms. Lucifora advied Mr. Gorsky that their Rule 49 was still open for acceptance and offered to provide a quote for their legal fees.  Mr. Gorsky requested that information.  On the following day, Mr. Monkhouse responded that both parties exchange their current partial indemnity costs.  Mr. Gorsky refused to provide such information.  The plaintiff did not provide its costs to Mr. Gorsky.

[19]           In Rooney (Litigation Guardian) v. Graham (2001), 2001 CanLII 24064 (ON CA), 53 O.R. (3d) 685 the Ontario Court of Appeal concluded that an offer to settle was a valid Rule 49 offer even though its terms included a provision for ongoing partial indemnity costs that introduced “some measure” of uncertainty.  However, the court stated, at para. 51, that:

A party to whom an offer is made must be able to evaluate the offer at any time after it is made in order to decide whether to accept it. Thus, the party making the offer must be forthright and candid in disclosing the amount of solicitor- and-client costs incurred. A failure to cooperate may be dealt with by the trial judge’s overall discretion on costs.

[20]           I find that the plaintiff failed to be forthright when asked to disclose the amount of costs requested under the plaintiff’s Rule 49 offer.  Such conduct does not promote settlement and thus is inconsistent with the purpose of a Rule 49 offer.  In the circumstances, it would not be advancing the interests of justice to award substantial indemnity costs to the plaintiff in respect of either Rule 49 offer.

My Comments :

What the Judge maybe did not appreciate is that if the Plaintiff had put forward a number for costs before the Defendant had accepted the Rule 49 offer , then the Defendant would have been in position to try to negotiate a total settlement without deciding whether or not to accept the offer. Rule 49 offers can be accepted without agreeing on costs because you can accept the offer and if you cannot later agree on costs then the Court will decide.

This is the type of bargaining and negotiation that goes on the the real world.

I do not think it is necessarily appropriate for the Court to involve themselves in this discussion. Remember that the Defendant also refused to tell the Plaintiff how much he had already billed his client.

The Plaintiff probably wanted to know what the Defendant had been billed, and if that amount was reasonable then the Plaintiff would have agreed with that amount. In that situation it would be hard for the Defendant to argue that the Plaintiff’s bill was excessive .

Note that even before the Judge, the Defendant refused to tell the Court how much they had been billed. Why, you may ask?

If you want a copy of this case, email me at barryfisher@rogers.com .