DATE: 20060915

DOCKET: C39680 & C39679

COURT OF APPEAL FOR ONTARIO

CRONK, ARMSTRONG and LANG JJ.A.

B E T W E E N :

TERRY PLESTER and CECILE PLESTER

Hans J.B.A. Dickie Q.C. for the appellant and cross-respondent

(Plaintiffs) Respondents Cross-Appellants

• and -

WAWANESA MUTUAL INSURANCE COMPANY

Alfred M. Kwinter Q.C. for the respondents and cross-appellants, Terry and Cecile Plester and Andrew C. Murray for the respondents, Randy Plester as Estate Trustee of The Estate of Norman Plester and The Oak House Importing Company

(Defendant) Appellant Cross-Respondent

A N D B E T W E E N :

RANDY PLESTER AS ESTATE TRUSTEE OF THE ESTATE OF NORMAN PLESTER and THE OAK HOUSE IMPORTING COMPANY

(Plaintiffs) Respondents

• and -

WAWANESA MUTUAL INSURANCE COMPANY

(Defendant) Appellant

Heard: November 21, 2005

On appeal from the judgment of Justice William A. Jenkins of the Superior Court of Justice, sitting with a jury, dated January 17, 2005.

ADDENDUM TO REASONS FOR JUDGMENT

[1] The court released its reasons for judgment in this matter on May 31, 2006. After the release of those reasons, counsel brought to our attention that we had overlooked the fact that counsel had agreed that the trial judge had erred in computing the damages owing to Terry and Cecile Plester. The trial judge had apparently failed to give consideration to certain amounts that Wawanesa had paid to the Plesters’ mortgagees following the fire. Our reasons should therefore be amended to the effect that the amount owing to the Plesters for the damages to the building should be reduced by $152,262.67.

[2] We have also been advised, since the release of our reasons, that counsel for Terry and Cecile Plester seek prejudgment interest on the award of aggravated damages. The trial judge awarded aggravated damages of $175,000 in accordance with the verdict of the jury. Counsel for the Plesters did not seek prejudgment interest on that award and he concedes that at the time he did not think such prejudgment interest was available. Further, counsel for the Plesters did not cross-appeal on the issue of prejudgment interest on the aggravated damages.

[3] In this court, we allowed the appeal of Wawanesa, in part, by reducing the award of aggravated damages to $50,000. Counsel for the Plesters now seeks prejudgment interest on the aggravated damages of $50,000 on the basis that such damages are compensatory.

[4] Counsel for Wawanesa makes three submissions on the issue of prejudgment interest as follows:

(i) Counsel for the Plesters sought prejudgment interest only on the amounts awarded by the jury for building loss, contents and business interruption. No request was made for prejudgment interest on aggravated or punitive damages. Counsel for Wawanesa asserts that the Plesters got exactly what they asked for.

(ii) Counsel for the Plesters did not raise the issue of prejudgment interest on the aggravated damages by way of cross-appeal.

(iii) Section 128 (4)(a) of the Courts of Justice Act R.S.O. 1990, C. 43 provides that prejudgment interest is not to be awarded on exemplary or punitive damages. Counsel for Wawanesa submits that while aggravated damages are compensatory in part, they are exemplary as well and hence do not attract prejudgment interest.

[5] Dealing with the third issue first, the weight of authority is to the effect that exemplary and punitive damages are one and the same thing.

[6] In Denison v. Fawcett, 1958 119 (ON CA), [1958] O.R. 312 at 325, relied upon by counsel for Wawanesa, this court appears to treat punitive and aggravated damages as the same. However, we note that in Vorvis v. Insurance Corporation of British Columbia, 1989 93 (SCC), [1989] 1 S.C.R. 1085 at 1099 the Supreme Court made clear the distinction between punitive and aggravated damages:

Before dealing with the question of punitive damages, it will be well to make clear the distinction between punitive and aggravated damages, for in the argument before us and in some of the materials filed there appeared some confusion as to the distinction. Punitive damages, as the name would indicate, are designed to punish. In this, they constitute an exception to the general common law rule that damages are designed to compensate the injured, not to punish the wrong-doer. Aggravated damages will frequently cover conduct which could also be the subject of punitive damages, but the role of aggravated damages remains compensatory. The distinction is clearly set out in Waddams, The Law of Damages (2nd ed. 1983), at p. 562, para 979, in these words:

…The expression “aggravated damages”, though it has sometimes been used interchangeably with punitive or exemplary damages, has more frequently in recent times been contrasted with exemplary damages. In this contrasting sense, aggravated damages describes an award that aims at compensation, but takes full account of the intangible injuries, such as distress and humiliation, that may have been caused by the defendant’s insulting behaviour. The expressions vindictive, penal and retributory have dropped out of common use.

[7] It is clear that aggravated damages are compensatory. Ordinarily, one would expect that the Plesters would be granted prejudgment interest on the award of aggravated damages.

[8] However, in respect of the first two issues raised by counsel for Wawanesa, we are concerned that counsel for the Plesters has raised this issue of prejudgment interest at such a late stage in the proceedings. Finality to litigation between parties to a lawsuit has always been recognized as one of the hallmarks of a just result. There is nothing to be gained by dragging out litigation in a series of interminable procedures. Therefore, in the circumstances of this case, we dismiss the application for prejudgment interest on the aggravated damages.

RELEASED:

“SEP 15 2006” “E.A. Cronk J.A.”

“EAC” “Robert P. Armstrong J.A.”

“S.E. Lang J.A.”