RUDKO v INSIGHT CANADA INC

A former employee of the Defendant, Insight Canada Inc. (“Insight”), sued Insight for wrongful termination and damages. Insight conceded that the Plaintiff was entitled to his bonus. The remainder of the Plaintiff’s claims were dismissed after the Court found that he had introduced fabricated documents at Trial.

The parties returned to Court to dispute costs. Insight sought party-and-party costs pursuant to column 5 of Schedule C with a five times multiplier as well as double costs pursuant to Rule 4.49. Insight had served a Formal Offer pursuant to Rule 4.24 which was more favourable for the Plaintiff then the outcome at Trial. Justice Angotti considered the wording of Rule 4.29(4), which provides that Rule 4.29 does not apply when the Court orders costs in amounts other then those prescribed in Rule 10.31(1)(b). The Court found that the use of a multiplier should not negate the application of Rule 4.29.

The Plaintiff argued that Insight’s failure to pay his bonus was a refusal to admit, contrary to Rule 10.33(2)(b). The Court held that the bonus claim was a peripheral claim in the lawsuit and thus Insight’s delayed admission was a “minor transgression” in the whole of the litigation. Angotti J. considered the definition of “reasonable and proper costs” pursuant to Rule 10.31 and McAllister v Calgary (City), 2021 ABCA 25, finding that party-and-party costs cannot exceed full indemnity costs.

Justice Angotti held that the assessment of which column of Schedule C to apply should be made in the context of the whole action pursuant to the considerations set out at Rule 10.33. The Plaintiff’s misconduct was found to be relevant pursuant to Rule 10.33(2). Ultimately, the Court balanced the Plaintiff’s misconduct with the fact that he did have an arguable case and awarded Insight half of their claimed full indemnity costs and half of their reasonable party-and-party costs. Angotti J. determined reasonable party-and-party costs by applying a two times multiplier to column 5 of Schedule C, holding that failure to apply a multiple would result in an insufficient costs award pursuant to the factors set out in Rule 10.33. Further, all steps following the Formal Offer were doubled over and above the multiplier. After GST and disbursements, total costs were awarded in the amount of $492,112.