Labour & Employment Law Blog

Litigation Misconduct Disentitled Party to Costs Despite Success at Trial

Litigation Misconduct Disentitled Party to Costs Despite Success at Trial

We have already written a blog about the Ontario Court of Appeal case of Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310 (“Render”) which focused on how an employee terminated “for cause” may still be entitled to statutory benefits like termination or severance pay. That blog can be found here.

However, there is another important issue at play in Render that we would like to discuss. To remind our readers about the facts of the case, in Render, the appellant employee was employed by the employer for 30 years as a manager. He was fired for cause over a single incident that had occurred where the employee had slapped a female co-worker on the buttocks with his hand. It was accepted that the atmosphere of the workplace of the employer was inappropriately social. Co-workers made regular jokes and participated in banter that often included overtly sexual statements and even gestures. The female co-worker (“complainant”) made a complaint to the employer about what had occurred, and appellant employee was fired for cause. In response, the employee brought a claim against the employer for damages for his termination.

The trial judge held that the termination for cause was justified. However, the trial judge expressed serious concerns about the litigation conduct of both the employer and complainant. In particular, the trial judge was concerned that the complainant had breached her witness exclusion order by participating in interviews with the press after her examination-in-chief at trial but before her cross-examination. She had also exchanged text messages with others about her evidence. The trial judge had found that the employer had both facilitated and promoted the complainant’s breach of the witness exclusion order. The trial judge also set out that the employer’s hiring of a media consultant during the trial was inappropriate. The media consultant had sent out a press release to various media outlets prior to trial and that the press release contained what the court felt was sensationalist and inflammatory allegations that were not yet proven at trial. The trial judge felt that this press release may have been put in place to potentially influence the employee or even the court. As a result, the trial judge decided that there should be a cost consequence because of this behaviour and ordered that the costs of the employer be reduced by 50%.

In Render the employee appealed the judgement of the trial judge. While the Ontario Court of Appeal dismissed the appeal with respect to the finding by the trial judge that the appellant employee’s firing for cause was justified, the Court agreed with the appellant employee and allowed the appeal with respect to access to statutory benefits and costs. Again, we discuss the issue of entitlement to statutory benefits in our earlier blog here. In this blog we would like to discuss the costs issue and how that issue was dealt with by the Ontario Court of Appeal. It is our view that the Court’s approach ought to be seen as a cautionary tale for parties in any civil litigation matter.

The Court of Appeal granted leave to appeal the costs award. The Court confirmed that punitive damages are on the table to deal with serious litigation misconduct. However, in this case the trial judge had decided to deal with this issue through costs, and as such, the Court of Appeal set out that the trial judge’s decision deserves deference. Then the Court of Appeal went on to make clear that the litigation misconduct on the part of the employer was so egregious that they were completely disentitled to their costs and overturned the trial judge’s decision to award costs but at a 50% reduction. The Court of Appeal set out that what the employer had done was to undermine the fairness and integrity of the judicial system and that this cannot be tolerated or condoned.

Our Thoughts

The Render decision makes it very clear that parties to litigation need to be very cautious about making statements containing allegations to media or the press during a trial. If a party decides to do so, the party risks being held by the court to have engaged in litigation misconduct and that this can have serious consequences. Further, while the trial judge had decided to sanction litigation misconduct via costs, the Court of Appeal made it clear that punitive damages are also on the table. A party must be very careful about statements made as a litigant to a civil dispute with respect to allegations about the matter to press or media made before or during trial. The party risks being heavily sanctioned by the court in response to that conduct.

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, if you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere. We represent clients in the Greater Toronto Area including Toronto, North York, Markham, Vaughan, Thornhill, Newmarket, Aurora, Brampton, Mississauga, Barrie, Ajax, Whitby, Pickering and Oshawa.