Court File and Parties

COURT FILE NO.: 13-39509 DATE: 2017-01-12 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Kiera Hammond, Plaintiff AND: The Estate of Lou Anthony Ferro, Deceased, and Ferro & Company

BEFORE: The Honourable Mr. Justice D.J. Gordon

COUNSEL: Robert J. Hooper, Counsel for the Moving Party/Plaintiff William G. Scott, Counsel for the Responding Party/Defendant

HEARD: January 9, 2017

ENDORSEMENT

[1] The plaintiff, in her Rule 21 motion, seeks a determination as to applicable prejudgment interest rate, namely whether it is determined by section 46(2) of the Statutory Accident Benefits Schedule (“SABS”) to the Insurance Act or Sections 128-130 of the Courts of Justice Act.

Background

[2] This is a solicitor’s negligence action. The defendant solicitor missed a limitation period in the prior action, resulting in summary judgment dismissing the plaintiff’s claim against the insurer.

[3] The plaintiff pedestrian sustained injuries on May 31, 1997 when struck by a motor vehicle. She was then 10 years of age. On attaining the age of 16 on May 3, 2003 she was entitled to claim non-earner benefits. The defendant solicitor submitted the application to State Farm, such being denied on October 22, 2003. Mediation on June 29, 2004 was unsuccessful. An action was commenced on August 17, 2007. Arrell J. granted summary judgment dismissing the claim as being statute-barred (2010 ONSC 4059). The appeal was dismissed (2012 ONCA 704).

[4] The plaintiff commenced this action against her former solicitor on February 7, 2013. A statement of defence was served thereafter. Examinations for discovery have taken place. Mediation occurred in May 2014. The action has not been resolved. Presumably it is ready for trial.

Issues in the Action

[5] It appears the primary issue in the action is whether the plaintiff was entitled to non-earner benefits.

Prejudgment Interest Rates

[6] Section 46(1) of the SABS attracts an interest rate of 2 per cent per month compounded monthly. The prejudgment interest rate under section 128(1), Courts of Justice Act, as at May 2003 is said to be 3 per cent per annum.

[7] Pursuant to section 128(4), interest is not awarded under this section if it is payable by any other right, such as SABS.

[8] Further, the court has considerable discretion to vary the interest rate under section 130, if interest is prescribed by section 128, when it is “just”, including allowing compounding. See: Bank of America Canada v. Mutual Trust Co., 2002 SCC 43.

Is This a Rule 21 Motion?

[9] Mr. Scott challenges the ability of the plaintiff to meet the threshold issue under Rule 21, namely, “dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs”. I disagree, with respect, but only because an interest rate determination would resolve “part of the action”. There would be minimal savings and the trial would not be shortened any more than the length of submissions, here, one hour.

Discussion

[10] Counsel report that the issue regarding the applicable interest rate has not been decided. The SABS rate applies to insurers to encourage them to pay accident benefits promptly. Does that rate apply to non-insurers?

[11] Both counsel refer to Pilotte v. Gilbert, 2016 ONSC 494, also a solicitor negligence action, in this regard.

[12] Although the trial judge did not answer the question given the circumstances of the case, Mr. Hooper relies on the plaintiff’s argument on the issue saying the defendant solicitor stands in the shoes of the insurer given his negligence. Further, he submits that if the defendant solicitor can rely on the defences available to the insurer in the first instance, he should be subject to all of the SABS provisions, including interest.

[13] Mr. Scott argues the defendant is not the statutory benefit insurer but, rather, is sued for negligence and in contract. He relies on comments made in Pilotte in this regard. But, in terms of the position advanced, he refers to what I would describe as a hybrid interest rate position, as set out at para. 633 in Pilotte, namely 2 per cent per month simply interest for a reasonable time period and thereafter at the prescribed average Courts of Justice Act rate. But, he says, evidence is required to assess the appropriate disposition.

[14] While it is open to a motions judge to determine the issue, given the lack of jurisprudence, I am of the view the trial judge would be in a much better position to accurately assess the relevant factors on a full evidentiary record. There is merit in Mr. Hooper’s argument in favour of the SABS interest rate. However, success is not a certainty. But for the solicitor’s negligence, the case would have been determined long before now. It may well be that applying the SABS rate in full would be punitive, not compensatory, an issue discussed in the caselaw.

[15] On the other hand, regard to the circumstances with reference to section 130, may well lead a trial judge to consider the SABS rate as appropriate. I am most reluctant to interfere with the discretion of the trial judge if the Courts of Justice Act applies.

[16] Interest is a topic normally canvassed after determination of the trial issues, namely liability and damages. I am not persuaded that the decision regarding interest rates should be made in advance.

[17] I decline to determine the interest rate dispute and leave the same for the trial judge.

Summary

[18] For these reasons, the motion is dismissed. I expect counsel will resolve the issue of costs; failing which, brief submissions are to be delivered to my chambers in Kitchener within 30 days.

D.J. Gordon J. Date: January 12, 2017