SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-09-4189-00
DATE: 2015 07 31
RE: Samir Ali - and - Ali O-Two Medical Technologies Inc.
BEFORE: LeMay J.
COUNSEL:
R. Barrett, for the Plaintiff
D. Mills and J. Corak, for the Defendant
COSTS ENDORSEMENT
[1] Judgment in this case was issued in June of 2015, and the parties have made costs submissions. The Plaintiff was successful in this action, and is entitled to his costs of the action. The question that has to be resolved is whether he is entitled to partial indemnity or substantial indemnity costs.
[2] There was an Offer to Settle served by Plaintiff’s counsel, for payment by the Defendant of the sum of $100,000.00 inclusive of the claim and interest, plus costs on a partial indemnity scale to the date the offer was accepted. I granted judgment to the Plaintiff for $106,043.19, less $19,751.56 that had already been paid to the Plaintiff by the Defendant.
[3] It is common ground that the $19,751.56 that was paid to the Plaintiff by the Defendant was paid before the Plaintiff’s Offer was made. Therefore, it is not included in determining whether the Plaintiff has achieved a result that is better than his Offer. As a result, the principal that I determined was owing to the Plaintiff was $86,291.63.
[4] In order for the Plaintiff to have achieved a result that is better than his Offer, the pre-judgment interest on the claim must at least $13,708.37. If the interest is equal to or greater than this amount, then the Plaintiff will be entitled to substantial indemnity costs for the action. If the interest is less than this amount, then the Plaintiff will be entitled to partial indemnity costs for the action.
[5] The question of how much interest is owed on the claim depends on the interest rate to be applied to the claim. I now turn to that issue.
The Appropriate Interest Rate
[6] It is common ground between the parties that Section 127 of the Courts of Justice Act presumes prejudgment interest at the rate of 0.5% for the entirety of the claim, because the claim was issued in September of 2009.
[7] Mr. Barrett argues that I should exercise my discretion under section 130 of the Courts of Justice Act to allow for a higher rate of interest. He advances this submission on the basis that the Plaintiff was squeezed out of his job by the Defendant’s conduct, and was therefore not able to commence this litigation for nearly two years afterwards. Had the Plaintiff been able to commence this action in 2007, he would have been entitled to a pre-judgment interest rate of 4.8%.
[8] Mr. Barrett does not cite any authorities to support his position.
[9] Defendant’s Counsel oppose this argument on the basis that judicial discretion under section 130(1) of the Courts of Justice Act should only be exercised in exceptional circumstances. Counsel also state that there must be certainty in the determination of the period over which pre-judgment interest is to be paid. In support of their position, Mr. Mills and Ms. Corak cite a number of leading authorities.
[10] I would not exercise my discretion under section 130(1) in this case for the following reasons:
A. There is a presumption that the rate in the Courts of Justice Act will apply, and the onus is on a party seeking a different rate to justify that different rate. See Andani Estate v. Peel (Regional Municipality) 66 O.A.C. 137 at paragraph 15.
B. It was up to the Plaintiff to determine when he was going to commence this action. The fact that he did so nearly two years after the cause of action arose was his decision. He should not now be given the advantages that would have come with advancing the action earlier unless he can demonstrate some compelling reason to be granted those advantages.
C. Mr. Barrett argues that the Plaintiff could not have commenced this action any earlier because he could not afford to do so. I reject this submission because there is no evidence of it before me in this case.
D. Further, there is no evidence before me to show that there have been wild fluctuations in the prime rate since 2009. As a result, there is no basis for me to conclude that the Plaintiff has been disadvantaged by this low interest rate since he commenced his action. Indeed, it is arguable that had he commenced his action in 2007, he would be entitled to a windfall in the form of a substantially higher interest rate.
E. Finally, the risk that the Plaintiff’s offer exposed the Defendant to was dependent on the amount of interest owing The Defendant is quite right that to change the interest rate at the last instant, and without warning, would be prejudicial to the Defendants.
[11] In short, the Plaintiff has not articulated a compelling reason for increasing the interest rate above the 0.5% that is presumed by the Courts of Justice Act, and the Defendant has demonstrated that they would suffer prejudice if I were to exercise my discretion in that manner. Accordingly, I decline to exercise my discretion. The interest rate in this case is 0.5% as calculated in accordance with the provisions of section 127 of the Courts of Justice Act.
[12] The parties are in agreement that the interest owing at that rate would be $3,268.44, and I so order.
Dispositon
[13] Having determined the interest rate question, it appears that the parties are ad idem on the fact that the costs should be paid on a partial indemnity basis, and the amount of those costs. As a result, I fix costs in this matter in the sum of $25,220.00 plus HST and disbursements of $1,500.00.
LeMay J.
DATE: July 31, 2015
COURT FILE NO.: CV-09-4189-00
DATE: 2015 07 31
SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN:
Samir Ali
Plaintiff
-and-
O-Two Medical Technologies
Defendant
ENDORSEMENT
LeMay J.
DATE: July 31, 2015