Employer Pummelled By Punitive Damage Award Wacked Again By Huge Cost Award

The inglorious defeat that befell Altus Group and its lawyers that resulted in Altus being ordered to pay $100,000.00 in punitive damages has turned into an unmitigated disaster. The cost award for Gordon v Altus, 2015 ONSC 6642 has just been released and Altus has been ordered to pay $225,000.00 plus HST plus disbursements of $37,722.29.

I previously wrote about the trial decision which saw the trial judge order Altus to pay $100,000 in punitive damages because Altus had fabricated allegations that it had cause to dismiss Gordon. That decision is a warning to any employer tempted by the strategy of fabricating allegations of cause in order to avoid having to provide a dismissed employee with a severance package.

Gordon followed up his trial victory by asking the judge to award him $500,000 in substantial indemnity costs. Justice Glass rejected Gordon’s request and instead ordered $250,000 in partial indemnity costs to compensate Gordon for the legal costs he had incurred throughout the litigation that had concluded with a seven-day trial. In reaching his decision Justice Glass wrote:

I am not surprised that much time is at stake here. I conclude that a reasonable client would expect that costs would be very considerable because of the contentious nature of this litigation as exhibited by both sides. There is no likelihood that costs of a few dollars would be expected by either client. When I looked at the materials filed in this action, I could not help but conclude that this litigation was an all-out battle until the last person was the only one standing. The costs outline by Plaintiff’s counsel is very detailed and is criticized by Defence counsel as being excessive. Interestingly, Defence counsel did not provide an outline of their costs for their client but acknowledges that they too are very high. Refusing to divulge their own bill of costs while criticizing the other side appears to be the pot calling the kettle discoloured. I am convinced that both clients were prepared to go to the wall in these proceedings and expected to have significant legal costs in doing so.

The award of $250,000 is very high for a wrongful dismissal action but perhaps not unexpected given that this litigation is better described as a war. 

I suspect that this is not the last we have heard of Gordon v Altus.  The next battle is likely to be before the Ontario Court of Appeal.