CITATION: Ishani v. Kulasingham, 2015 ONSC 4574

COURT FILE NO.: 08-CV-352531PD2

DATE: 20150720

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: HANIF ISHANI, Applicant

AND:

RENUKA KULASINGHAM and WILLIAM HSIEH, Respondents

BEFORE: Mr. Justice Stephen Firestone

COUNSEL: Mark A. Klaiman, for the Applicant

G. Gordon Bent, for the Respondents

HEARD: In Writing

PRE-JUDGMENT INTEREST ENDORSEMENT

[1] Following the release of my Judgment in this matter the parties have been unable to agree on the interest rate to be applied in calculating pre-judgment interest.

[2] In my Reasons for Judgment dated December 19, 2014, I held that the total amount of the applicant’s s. 42 Partnerships Act claim was $16,066.94 and that total amount owing for his one-third share of Joint Therapy was $46,179.74. The total amount of my Judgment was therefore $62,246.68.

[3] In my Reasons for Judgment I indicated that if the parties could not agree on the issue of pre-judgment interest and costs I could be contacted.

[4] On May 25th 2015 I released my Costs Endorsement. On June 4th I was advised by counsel for the applicant that the parties have been unable to resolve the issue of pre-judgment interest. I have now received the parties written submissions regarding this issue.

[5] The applicant argues that pre-judgment interest should be calculated from 30 days of the date of his termination of July 31, 2007 which is August 31, 2007. He highlights that pursuant to section 127(1) of the Courts of Justice Act R.S.O.1990 c.C.43 (the “Act”), the pre-judgment interest rate is determined by looking at the bank rate at the end of the first day of the last month of the quarter preceding the quarter in which the proceeding was commenced, rounded to the nearest tenth of a percentage point.

[6] The proceeding was commenced in April 2008. Under section 127 of the Act, the applicant submits he is entitled to pre-judgment interest at the rate of 4.8 per cent per annum. He seeks pre-judgment interest on the principle sum awarded in the sum of $62,246.68 at the bank rate of 4.8 per cent from August 31, 2007 to December 19, 2014 being the date of Judgment in the sum of $21,815.33. He argues there are no special circumstances which would justify a reduction in this pre-judgment rate.

[7] The respondents submit that it would be unjust, after considering the factors in section 130 of the Act, to apply a pre-judgment interest rate of 4.8 per cent. They submit that in exercising my discretion I should apply a pre-judgment rate of 1.95 percent.

[8] In applying the factors set forth under section 130(1) of the Act, they submit that:

(a) Regarding changes in market interest rates, the interest rate reduced in the next quarter and continued reducing to 1.3 percent in the first quarter of 2011, where it has remained. The average interest rates from 2008 to 2014 respectively were 3.93, 1.2, 0.7, 1.3, 1.3, 1.3 and 1.3. They highlight that the overall average interest rate for this time period is 1.95 percent.

(b) A review of the circumstances of this case establishes that it was a relatively modest claim. They highlight the applicant’s conduct after dissolution of the partnership.

(c) They review the amount claimed and amount recovered in the proceeding. They highlight that the applicant claimed $81,463.57 for his section 42 Partnerships Act claim, and a further $100,000 for his one third interest in the partnership of Joint Therapy for a total of $181,463.57. The amount of judgment was $62,246.68 representing 34 percent of the claim. In addition, the best offer presented by the applicant was $125,000 being twice the recovery.

(d) With respect to the conduct of the applicant that tended to lengthen unnecessarily the duration of the proceeding, they highlight that the matter was set down for trial in July 2011. In October 2012 the applicant advised that their expert was unavailable until June 2013. Further, the June 17, 2013 trial date was adjourned at the applicant’s request to October 2013.

[9] The respondents submit that in considering the cumulative effect of the significantly lower average pre-judgment interest rates beginning immediately after the effective rate set out in section 128 of the Act along with the very modest recovery and the delay in the proceedings by the applicant, the court exercising its discretion should apply an average interest rate of 1.95 percent.

[10] Section 130 (1) of the Act specifically provides that the court may, where it considers it just to do so, in respect of the whole, or any part of the amount on which interest is payable under section 128 or 129 allow interest at a rate higher or lower than that provided in either section.

[11] 4.8 percent is in the high end of the rates for the relevant time period and is high when comparing it to the market interest rates in the subsequent time periods as highlighted by the respondents. As well, pre-judgment interest runs over a lengthy period of time which makes the overall market rate picture even more relevant.

[12] I have considered the submissions of counsel and the applicable law as it applies to the factual matrix of this case. I exercise my discretion under section 130 of the Act and order that the pre-judgment interest rate to be applied be fixed at 2.2 percent from August 31, 2007 to December 19, 2014.

Firestone J.

Date: July 20, 2015