ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 2144/07
DATE: 20120622
B E T W E E N:
HER MAJESTY THE QUEEN
Aimee Gauthier , for the Applicant/Crown
Applicant
- and -
DEREK SANKAR
On his own behalf
Respondent
- and -
SNC-LAVALIN PROFAC INC.
KATHRYN J. MANNING AND ERIN HOULT , on behalf of SNC-Lavalin Profac Inc.
A person claiming an interest in property
- and -
PICARD FOODS LTD.
MERVIN L. RIDDELL , on behalf of Picard Foods Ltd.
A person claiming an interest in property
ADDENDUM TO THE JUNE 15, 2012 RULINGS ON
APPORTIONMENT OF FUNDS AND COSTS APPLICATION
Durno J.
[ 1 ] On June 13, 2012, counsel were advised of the amount owing to Picard, that interest was payable at 10% per annum from June 21, 2008 and that there would be no costs order. This was to permit counsel to determine the final figures for the orders before the June 15 th Court appearance. Counsel were advised that the Reasons would be provided on June 14 or 15. If counsel were unable to agree on the figures, the issues were to be addressed in Court on June 15, 2012, at 2:00 p.m. when Mr. Sankar was to attend to complete his sentencing hearing. Counsel had previously said that they had completed their submissions.
[ 2 ] On June 15, 2012, before the Court appearance and before the judgment was released, Picard faxed further submissions to the Court and ProFac addressing two issues, one for the first time. During the hearing on June 15, 2012, counsel were permitted to address those issues after which all counsel were content to rely on their submissions and not file further material.
[ 3 ] The following issues arose as result of the further submissions:
(1) Is the interest payable on the funds owing to Picard compound or simple interest?
(2) What is the date of the judgment for the purposes of pre and post-judgment interest?
(3) Should there be post-judgment interest and if so, at what rate and for what time period?
Is the interest compound or simple?
[ 4 ] Mr. Sankar pled guilty in September, 2010 and notices were given regarding the forfeiture application. That application has been ongoing for over twenty months. Starting with a letter to Crown counsel in October, 2010, Picard set out its position that interest at 10% per annum was payable. Throughout the proceeding in affidavits, written submission, testimony and oral submissions there was never a reference to compound interest. [1] The agreement between Massdan and Picard referenced 10% annual interest, the statement of claim referred to 10% annual interest and the judgment references 10% annual interest. In written submissions dated April 20, 2012, Picard addressed “interest rate” without mentioning compound interest. It was only after the judgment was completed and Picard was advised that there would be no costs awarded that compound interest was first raised – after all counsel had advised that there would be no further submissions on the outstanding issues.
[ 5 ] In seeking compound interest, Mr. Riddell, relies upon Clause 6 of the Standard Charge Terms of the mortgage. That clause provides, “In case default shall be made in payment of any sum to become due for interest at the time provided for payment in the charge, compound interest shall be payable and the sum in arrears for interest from time to time, as well after as before maturity, and both before and after default and judgment, shall bear interest at the rate provided for in the Charge.” Picard submits that the difference between simple and compound interest is approximately $4,600.
[ 6 ] ProFac and the Crown submit that simple interest should be ordered given the late timing of the submission. In addition, since Picard’s entitlement to relief from forfeiture was based on the exercise of my discretion applying the equities, I am not bound by the terms of the agreement or mortgage.
[ 7 ] Whether the issue was first raised on June 15 because of an oversight, a deliberate tactic or for some other reason, I am not prepared to order compound interest for any one of the following reasons. First, compound interest does not appear in the agreement that formed the basis of the judgment, albeit it was referenced in the mortgage. Indeed, Picard’s former counsel, James Boll, testified he regarded the primary financial obligation as the agreement. Second, throughout months of litigation Picard’s position has consistently been for 10% annually without reference to compound interest. Third, that the issue was first raised after the submissions and judgment were completed. In all the circumstances, I am not prepared to exercise my discretion to order compound interest on this record.
What is the Date of the Judgment?
[ 8 ] Counsel disagree as to the date of the judgment for pre and post-judgment interest purposes. While ProFac had submitted the date was March 13, Picard had not taken a contrary position. No oral submissions were presented on that issue prior to June 15, 2012. Picard now says that the date of the judgment is when all of the material issues are determined including the final “bottom line,” exactly how much is ordered paid to Picard and how much is forfeited to the Crown. Mr. Riddell submits that will be on June 22, 2012.
[ 9 ] ProFac argues the date should be March 13, 2012, the date I ruled how the final calculations would be determined. Ms. Hoult argued that since that date ProFac has been anxious to finalize the forfeiture application and it has been Picard that sought more time to make submissions.
[ 10 ] I am persuaded the date of the judgment is June 22, 2012. It is not until that date that the parties know the final judgment including the amount subject to relief from forfeiture. It is difficult to see how the parties knew the result until the final figures were calculated. While it is unfortunate that the issues remained outstanding for so long and I agree with ProFac that it was Picard who sought longer periods within which to comply with the filing requirements on the recent issues and added a new issue after submissions were complete and the judgment completed, I am not prepared to find the date is earlier.
What is the rate of post-judgment interest?
[ 11 ] To the extent, that I assumed there was no issue regarding post-judgment interest because the issue had not been directly addressed, I was in error. In these circumstances, it is appropriate to reconsider that issue after hearing all counsels’ submissions.
[ 12 ] Picard submits that given the appeal period I should order post-judgment interest to at least 30 days from the judgment. ProFac submits that there should be no post-judgment interest but if it is ordered it should be for 30 days because of the delays caused by Picard. ProFac also submits that the post-judgment rate should be 2.322% per annum, the rate of interest paid on the funds held in Court.
[ 13 ] Counsel appear to agree that in the circumstances of this case, the post-judgment interest should be time limited. I agree. The funds held in Court are earning interest at a very low rate. The 10% interest owing to Picard is being taken out of ProFac’s funds. As Ms. Hoult argued, Picard’s interest entitlement was eating away at ProFac’s money. Given the period is short, coinciding with the appeal period; I am prepared to order the same rate for post-judgment interest.
[ 14 ] In these circumstances, post-judgment interest is ordered for 30 days from today’s date at 10%.
The Final Orders
[ 15 ] Through the combined efforts of ProFac’s and Picard’s counsel I was provided with a helpful chart outlining the calculations for the various scenarios discussed with counsel on June 15, 2012. I appreciate counsels’ cooperation in preparing the calculations.
[ 16 ] Using that interest calculation chart, and applying 10% simple interest from June 21, 2008 to 30 days after the judgment on the principal of $72,690.29, the pre-judgment interest is $29,115.95 and post-judgment interest is $836.76 for a total of $102,643.00 payable to Picard.
[ 17 ] The balance of the funds held in Court in the SNC Lavelin ProFac Inc. v. Sankar (05-CV-291451CM2) action, are forfeited to Her Majesty the Queen in the Right of Ontario.
Conclusion
[ 18 ] To summarize the ruling, the addendum, and the final orders:
The principal amount owing to Picard is $72,690.29;
Simple interest is payable at 10% from June 21, 2008 until 30 days after the June 22, 2012 date of judgment.
The total payable to Picard is $102,643.00 as of that date and I order that amount be released to Picard upon the expiry of that period.
I decline to make a costs order.
Durno J.
Released: June 22, 2012
COURT FILE NO.: 2144/07
DATE: 20120622
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Her Majesty the Queen Applicant/Crown - and – SNC-Lavalin Profac Inc. A person claiming an interest in property - and – Picard Foods Ltd. A person claiming an interest in property ADDENDUM TO THE JUNE 15, 2012 RULINGS ON APPORTIONMENT OF FUNDS AND COSTS APPLICATION Durno J.
Released: June 22, 2012
[^1]: The mortgage was in the exhibits but there was never a direct reference to compound interest apart from the exhibit.