Court of Appeal for Ontario

Date: 2025-05-14
Docket: COA-24-CV-1013
Coram: Trotter, Thorburn and Wilson JJ.A.

Between:
Zeljko Rajic
Plaintiff (Appellant)

and

Marc G. Spivak, Mark A. Klaiman, Dejan Ristic, and Devry, Smith, Frank, LLP
Defendants (Respondents)

Appearances:
Karl Arvai for the Appellant
Myle Nguyen for the Respondents

Heard: 2025-05-05

On appeal from the order of Justice Barbara A. MacFarlane of the Superior Court of Justice dated September 9, 2024.

Reasons for Decision

Introduction

[1] The appellant moved for judgment pursuant to a settlement agreement reached on November 6, 2023. The only contentious issue between the parties was whether the appellant was entitled to post-judgment interest from the date of settlement. The motion judge held that he was not. He appeals that decision.

Background

[2] The appellant sued his former counsel for his alleged negligence in handling the appellant’s personal injury claim arising from a motor vehicle accident. On November 6, 2023, the appellant accepted the respondents’ offer to settle the action. The parties agreed to a sum of $100,000 for all damages including interest, plus costs to be agreed upon or assessed.

[3] The parties’ counsel discussed costs, but could not agree on an amount. They also did not agree on the form of the release to be signed by the appellant. The respondents sent three draft releases to the appellant, but none were acceptable. The appellant insisted that the release include a term stipulating that the respondents would pay post-judgment interest on the settlement. The respondents did not agree that post-judgment interest was a term of the settlement.

[4] On March 19, 2024, the appellant served a motion record seeking judgment in accordance with the settlement and an order for post-judgment interest from the date of settlement. In the motion record, the appellant included a form of release that he was prepared to sign, which included payment of interest on the settlement funds.

[5] When this appeal was heard, the appellant had not yet executed a release and the respondents had not yet forwarded the settlement funds.

The Motion Judge’s Decision

[6] Section 129(1) of the Courts of Justice Act, RSO 1990, c C.43 provides that:

129 (1) Money owing under an order, including costs to be assessed or costs fixed by the court, bears interest at the postjudgment interest rate, calculated from the date of the order.

[7] The parties agree that payment of post-settlement interest was not an express term of the settlement. This is not a case where a dispute arose about the terms of the settlement or where one party attempted to resile from the agreement. No one disputed that as an implied term of the settlement, the appellant would execute a full and final release, and that in due course, an order dismissing the action would be taken out on consent.

[8] But when counsel could not agree on costs, the appellant demanded post-judgment interest, which the respondents were not prepared to pay. The appellant refused to execute a release unless it included the payment of post-judgment interest. The respondents would not send the settlement funds for the claim until they had an executed release.

[9] The motion judge held that s. 129(1) applies where the court has made an order for payment of funds and the payment has not been made at all, or not in a timely fashion. Because the parties settled the case and no order had been made, the motion judge found that the appellant was not entitled to post-settlement interest under s. 129.

[10] We see no error in her analysis and we agree with it.

[11] The appellant also submits that the motion judge erred in failing to order payment of interest on the costs. We do not accept this submission. The November 6, 2023 settlement required the respondents to pay costs as agreed upon or assessed. By February 2024, it was clear not only that the parties did not agree on the quantum of costs, but that their positions were far apart.

[12] Since then, the appellant has taken no steps to have the issue of costs determined. He could have obtained a date for an assessment of his costs, or he could have requested that the costs be fixed by one of the judges who had been involved in the case, given that there were several pretrial conferences. The onus was on the appellant to move that issue forward. It is unreasonable to expect that the respondents would pay interest on costs that have not been determined.

[13] Section 129(4) of the Courts of Justice Act provides that:

(4) Where costs are assessed without an order, the costs bear interest at the postjudgment interest rate in the same manner as if an order were made for the payment of costs on the date the person to whom the costs are payable became entitled to the costs.

[14] The motion judge observed that s. 129(4) provides for payment of interest on costs from the date of any assessment of those costs. So, because the costs remained outstanding, no post-judgment interest was payable. We see no error in her interpretation of s. 129(4), or in her application of it to the facts of this case.

Disposition

[15] It is regrettable that despite an agreement to resolve this matter in November 2023, it has still not been finalized. At oral argument, counsel advised that they agreed that the respondents will pay $100,000 for the claim, including pre-judgment interest to the appellant’s solicitor, and that the appellant would execute a release for that amount, which does not include the costs that are still to be determined.

[16] For these reasons, the appeal is dismissed. The appellant shall pay the respondents costs of the appeal fixed in the sum of $9,838.45, all-inclusive.

“Gary Trotter J.A.”
“Thorburn J.A.”
“D.A. Wilson J.A.”