It is fair to assume that if one behaves poorly, their actions are more likely going to result in poor consequences. In the legal realm, courts can penalize parties for their bad behaviour with cost decisions. This was perfectly exemplified in the Gracias v. Dr. David Walt Dentistry decision released on July 12, 2022.
Gracias v. Dr. David Walt Dentistry: The Facts
The Plaintiff, Sonia Gracias, was dismissed without cause from her job as a dental hygienist with the Defendant, Dr. David Walt Dentistry Professional Corporation (“Walt Dentistry”). As a result, she sued Walt Dentistry for: (a) $50,000 in damages for discrimination for contraventions of the Ontario Human Rights Code; (b) $50,000 for common law damages for wrongful dismissal; and (c) $50,000 in punitive damages.
Walt Dentistry denied the human rights discrimination claim and also pleaded that it could have fired Ms. Gracias for egregious employee misconduct. In other words, The Defendant is alleging Ms. Gracias engaged in conduct that could have resulted in her termination for cause.
Following examinations for discovery, Ms. Gracias abandoned her human rights claim (without substantiating the allegations) and claim for punitive damages. Only a wrongful dismissal claim for a 7-month notice period compensation remained. The Plaintiff believed she was entitled to common law damages in lieu of notice because the employment contract unlawfully contracted out of the Employment Standards Act. Likewise, Walt Dentistry amended the Statement of Defence, abandoning the allegation of employee misconduct. The Defendant’s main argument was that the terms of her employment contract barred Ms. Gracias from claiming more than her Employment Standards Act entitlements.
Both Sides Behaved Poorly
Justice Perell described the two sides as dogs released in a litigation war. The Plaintiff and the Defendant were going for each other’s jugular. The persistently poor behaviour Ms. Gracias and Walt Dentistry engaged in was outlined by the court.
The following is a summary of the Plaintiff’s poor behaviour:
- Gracias made very serious allegations of Ontario Human Rights Code violations without substantiating them whatsoever;
- Gracias ultimately received an award of $17,587. This amount is within the monetary jurisdiction of the Small Claims Court (under $25,000), which means the Court may order that the Plaintiff shall not recover any costs. Yet, she still asked for partial indemnity costs of approximately $35,000; and
- Gracias did not take her important responsibilities to produce documents and answer undertakings seriously.
The following is a summary of the Defendant’s poor behaviour:
- Walt Dentistry submitted that Ms. Gracias falsified her evidence of mitigation efforts with fabricated records of the job applications she made over the internet. The Defendant provided no evidence of this;
- Walt Dentistry “had the nerve” to request its costs be paid in the amount of $17,387.88, which would have essentially ‘set-off’ the award to Ms. Gracias; and
- Walt Dentistry alleged that Ms. Gracias engaged in egregious misconduct worthy of termination with cause, without providing any evidence of this.
The Order and Main Takeaway
Justice Perell was unimpressed with the behaviour of the two sides. As a result of their actions, he decided it was appropriate that there should be no order as to costs.
The language Justice Perell used to describe the parties behaviour gave a clear indication of his feelings. Language such as ‘releasing the dogs of litigation’, ‘going for the jugular’, ‘chutzpah’, ‘audacity’, ‘gall’, and ‘the nerve’, make it evident that the actions of both parties were unacceptable.
As one can see, there are serious consequences for nonsense allegations and other poor conduct that parties may attempt to use in order to raise potential damages awards. Both clients and lawyers should keep this in mind while moving through litigation process.