Court of Appeal for Ontario

Date: 2001-07-03 Docket: C29279

Re: Robert McAlpine Ltd. (Plaintiff/Appellant) v. Byrne Glass Enterprises Limited, The Guarantee Company of North America and PPG Canada Inc. (Defendants/Respondents) – AND – Robert McAlpine Ltd. (Plaintiff/Appellant) v. Woodbine Place Inc. and National Bank of Canada (Defendants/Respondent)

Before: Osborne A.C.J.O.

Counsel: John Ritchie for Woodbine for the appellant Christopher Worth for the respondent

Heard: June 19, 2001

Endorsement

[1] This Court’s judgment in McAlpine’s appeal from the trial judgment of Wein J. was released on February 9, 2001. Problems have arisen with respect to the form of the judgment. Counsel have resolved some of them. Two issues remain. One concerns costs related to the letter of credit that Woodbine was required to obtain and keep in place and the other the post-judgment interest rate applicable to the costs of the trial.

[2] As I advised counsel, I think that costs related to the letter of credit which Woodbine was required to keep in place until McAlpine’s appeal was disposed of should, consistent with Doherty J.A.’s interlocutory order, be borne by McAlpine, but only to February 9, 2001 when this Court’s judgment was released. I agree with McAlpine’s submissions that the cancellation of the letter of credit, which I am told came due about a month after the release of this Court’s judgment, should be McAlpine’s responsibility only until the release of this court’s judgment.

[3] Counsel also raised the issue of the post-judgment interest rate as related to costs of the trial and the appeal. It arises in this limited context. Woodbine was awarded costs of the trial. The applicable post-judgment interest rate, determined administratively having regard to the relevant provisions of the Courts of Justice Act, was 5%. On the appeal, the trial judge’s costs order in favour of Woodbine was not disturbed. Because McAlpine achieved substantial success on the appeal, it was awarded costs of the appeal. The applicable post-judgment interest rate on those costs was 7%. Woodbine takes issue with being required to pay 7% on the appeal costs, but being limited in its entitlement to interest on its trial costs to 5%. Thus, it seeks to vary the post-judgment interest as related to the trial costs from 5% to 7%, as of February 9, 2001, the date when McAlpine’s entitlement to post-judgment interest on its appeal costs crystallized.

[4] For purposes of settling the order, I accept, but do not decide, that “the Court” has authority to vary the post-judgment interest rate. I should, however, say that I question whether this Court has jurisdiction to vary a post-judgment interest rate imposed by the trial court in circumstances where no error is shown in respect of post-judgment interest by the trial court. Because I am of the view that there is no proper basis to vary the post-judgment interest rate with respect to the trial costs, I need not decide the issue of jurisdiction.

[5] The rationale for post-judgment interest is entirely compensatory. The obligation to pay, and the entitlement to, post-judgment interest recognizes that the payor in theory has the benefit of the funds in question and the payee is denied the benefit of those funds. The Courts of Justice Act establishes a coherent scheme for determining the applicable post-judgment interest rates. It is not perfect. Perfection is sacrificed in the interest of consistency and certainty. There will, of course, be cases where circumstances will require a change in the post-judgment interest rate. These cases will be exceptional. See Eastwalsh Homes Ltd. v. Anatal Development Corp. (1995), 1995 CanLII 7240 (ON SC), 26 O.R. (3d) 528.

[6] In my view, prima facie, the statutory post-judgment interest rate should apply unless there are compelling and exceptional circumstances to change the interest rate. There are none in this case as I see it. Both the 5% trial post-judgment interest rate and the 7% Court of Appeal post-judgment interest rate reflect the bank rate at the end of the first day of the last month of the quarter preceding the quarter in which the order attracting post-judgment interest falls. See Courts of Justice Act, s. 127(1).

[7] I acknowledge that adjusting the post-judgment interest rate at some reasonable intervals in response to interest rate changes, up or down, would more precisely compensate the beneficiary of post-judgment interest. The same can be said of using compound, instead of simple, interest. However, the Legislature has chosen to follow a different path. There is a prima facie entitlement to the statutory pre and post-judgment interest rates. See Andani v. Peel (Regional Municipality), [1993] O.J. 1604. I see no basis upon which to depart from the statutory post-judgment interest scheme. Put another way, there is nothing exceptional about this case that would justify the post-judgment interest change that Woodbine seeks.

[8] I would, therefore, not accede to Woodbine’s submission that the post-judgment interest rate on Woodbine’s trial costs be varied to 7% as at February 9, 2001.

[9] I think this disposes of the issues that were of concern to counsel. Assuming that it does, counsel can prepare a draft judgment reflecting their agreement on matters with respect to which there was a consensus and the reasons.

“C.A. Osborne A.C.J.O.”