Supplementary Reasons for Judgment

Court File No.: CV-21-00001097
Date: 2025-04-16
Ontario Superior Court of Justice

Between:
Kevin Curridor, Plaintiff
and
Millstone Homes Inc., Defendant

Appearances:
C. Bondy, for the Plaintiff
S. MacKay, for the Defendant

Heard: In Writing

Justice E. ten Cate

Introduction

[1] This decision follows my Reasons for Judgment in Curridor v. Millstone Homes Inc., 2025 ONSC 745 released on February 4, 2025, after a five-day trial.

[2] The Defendant, Millstone Homes Inc., was ordered to pay prejudgment interest (“PJI”) to the Plaintiff, Kevin Curridor, pursuant to section 128 of the Courts of Justice Act (“CJA”).

[3] The parties agree that pursuant to section 128, the PJI rate is 0.5% based upon the date the cause of action arose (March 29, 2021).

[4] The Plaintiff requests I exercise my discretion to award a higher PJI rate pursuant to section 130(1) of the CJA. The Defendant’s position is that this is not an appropriate case to do so.

Legal Principles and Analysis

[5] Section 130(1) of the CJA states that a court may, where it considers it just to do so, allow interest at a higher or lower rate than that provided in section 128 of the CJA. Section 130(2) sets out the factors the court shall consider:

• (a) changes in market interest rates;
• (b) the circumstances of the case;
• (c) the fact that an advance payment was made;
• (d) the circumstances of medical disclosure by the plaintiff;
• (e) the amount claimed and the amount recovered in the proceeding;
• (f) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; and
• (g) any other relevant consideration.

[6] In Henry v. Zaitlen, 2024 ONCA 614, the Court of Appeal dealt with the same issue, except the Plaintiff was defending the trial judge’s decision to award a 5% PJI rate on a personal injury award where rates had decreased.

[7] Roberts J., writing for the Court, confirmed that section 130(1) creates a presumption that the PJI rate is the rate established pursuant to the CJA. This presumption can be displaced, but it places the onus squarely on the party seeking to depart from the prima facie entitlement. While the court may exercise its discretion under s. 130(1) to depart from the presumptive rate of interest, it is not mandatory that it do so. The court should only exercise its discretion where “it considers it just to do so”.

[8] The rationale for this is that prejudgment interest should be viewed as part of the compensation due to the party. The prescribed interest rates should not be deviated from as a matter of course but rather where the court determines that there are unusual or special circumstances sufficient to justify such a departure, having regard to the mandatory criteria under s. 130(2) of the CJA and all other relevant considerations.

[9] The list of factors in section 130(2), which includes “changes in market interest rates” is only one of the myriad factors that the Court “shall take into account” in determining whether to exercise the discretion under section 130(1) to alter the presumptive entitlement to prejudgment interest.

[10] The various specified factors listed in s. 130(2) that may affect an award of interest are not restricted to a mere mathematical difference in market interest rates but reflect the legislative policy and purposes underlying the statutory interest scheme. These include the fair compensation of the plaintiff and the encouragement of efficiently run litigation and early settlements, having regard to such factors as the conduct of the parties and the duration of the proceedings.

[11] The law is clear that the onus is on the Plaintiff to demonstrate that any alleged under compensation is of such a magnitude that it constitutes special or unusual circumstances that in all the circumstances, it is just to deviate from the presumptive rate.

(a) Changes in Market Interest Rates

[12] In Henry, the Court of Appeal criticized the trial judge’s reasoning because he placed undue emphasis on the prospect that the plaintiffs would be overcompensated if the 5% presumptive rate was maintained, relying solely on section 130(2)(a) – “changes in market interest rates”. The Court stated:

The fluctuations in market interest rates must be unusual or amount to special circumstances sufficient to warrant the exercise of the court’s discretion to depart from the presumptive interest rates on the basis of that criterion alone. Mere fluctuations in interest rates do not warrant deviation from the prescribed rate. This would defeat the legislative purposes of the statutory interest scheme.

[13] Quoting Triten Corp. of Canada Ltd. v. Borden & Elliot, the Court agreed that “changes in market interest rates” should not be equated with changes in “prejudgment interest rate” or “bank rate”. Had the legislature intended those rates, it would have used them.

[14] The Court also pointed out that interest rate fluctuations and the concomitant possibility of over or under compensation are not new; they were well-known to the legislature that chose to set the prejudgement interest rate pursuant to the schedule to the CJA.

[15] The parties agree that “market interest rate” is not the same as the “prejudgment interest rate”. As per Henry, I am not permitted to take judicial notice of what the Plaintiff may have lost; it is incumbent upon the Plaintiff to satisfy me that market interest rates were available to him over the relevant period. For example, in Aubin v. Synagogue and Jewish Community Centre of Ottawa (Soloway Jewish Community Centre), 2024 ONCA 615, in seeking an increase in the interest rates awarded, the appellants relied on uncontested evidence of the actual rates of return earned by the respondent’s insurer as well as actual rates of interest earned on their investment portfolios, as evidence of market interest rates and changes in market interest rates.

[16] Here, the evidence at trial established that on November 1, 2021, the Defendant leased the property to a third party for $3,495 per month, or $41,940 per year to the date of trial.

[17] The parties agreed at trial that the property was valued at $1.2 million as of November 1, 2021. Annually, therefore, the Defendant earned 3.495% on the property ($41,940/$1.2 million) after it breached the APS with the Plaintiff.

[18] I am satisfied that the PJI rate of 0.5% undercompensates the Plaintiff because the best evidence of the market interest rate is the 3.495% rate of return earned by the Defendant between November 1, 2021, and February 5, 2025.

(b) The Circumstances of the Case

[19] The Plaintiff argues that had the Defendant not breached the agreement of purchase and sale (“APS”), he would have had an asset worth $1.2 million on May 29, 2021, and the ability to access the equity in the property. Because of the Defendant’s breach, he was deprived of those opportunities.

[20] The Defendant submits that any equity the Plaintiff may have accessed must be balanced against the impact of the Plaintiff’s certificate of pending litigation (“CPL”) which prevented the Defendant from leveraging the equity in the property to fund other construction projects. It argues that the Plaintiff ultimately abandoned his position that he was entitled to specific performance and that the CPL should never have been registered. Additionally, although the rent offset the carrying cost of the property, the CPL hamstrung the Defendant’s ability to conduct its usual business. Further, any loan the Plaintiff obtained using the equity in the property would have been subject to the same increasing interest rates.

[21] I do not find the Defendant’s arguments compelling.

[22] Although the Plaintiff abandoned his claim for specific performance at the outset of trial, the Plaintiff was entitled to take steps to protect his interest in the property by obtaining the CPL.

[23] The Defendant’s second argument ignores my finding that the Defendant breached the APS. Had it not done so, the property would have been transferred to the Plaintiff on May 29, 2021, and it would have received the proceeds of sale at that point which it could use to fund other projects or invest. Instead, over the 39 months between November 1, 2021, and the date of judgment, the Defendant received $139,305 in rental income to which it was not entitled.

(c) The Fact that an Advance Payment was Made

(d) The Circumstances of Medical Disclosure by the Plaintiff

(e) The Amount Claimed and the Amount Recovered in the Proceeding

[24] The parties agree these factors do not apply.

(f) The Conduct of any Party that Tended to Lengthen Unnecessarily the Duration of the Proceeding

[25] This matter was commenced on June 15, 2020, as an application, during the Covid-19 pandemic. It was converted to an action by order of McArthur J. on August 23, 2021, and set down for trial on October 6, 2021. The matter was on the list and ready for trial on January 9, 2023, September 18, 2023, and March 18, 2024. It was finally reached on October 1, 2024.

[26] The Plaintiff alleges that the Defendant’s allegation of fraud resulted in it taking a hard-line position from the outset, and that its rental of the property to a third party was intended to frustrate his ability to secure an order for specific performance. He further states that on January 19, 2023, the Plaintiff offered to settle the action by the Defendant paying him $500,000 to which he received no response. The Defendant’s failure to accept this offer, which was less than the amount awarded at trial, unnecessarily lengthened the trial by two years.

[27] The Defendant submits that the decision to commence the proceeding as an application and not an action delayed the proceedings because there were “known allegations of fraud” and credibility issues which led to the “inevitable” conversion of the application to an action. Additionally, the Defendant takes the position that the motion for the CPL caused unnecessary delay.

[28] I do not find merit in the Defendant’s arguments.

[29] First, the Plaintiff attempted to use the summary application process, presumably to save time and expense. Although allegations of fraud were made against the Plaintiff, I ultimately determined that such allegations were unfounded. If there is any delay with respect to the conversion of the application to an action, I find that the delay lies at the feet of the Defendant who made the allegations of fraud but failed to prove them at trial.

[30] Second, the Plaintiff brought a motion for a CPL based upon his claim for specific performance which was granted by George J. on August 27, 2021. On November 1, 2021, the Defendant leased the property to a third party, thereby frustrating, or at least complicating, the Plaintiff’s claim for specific performance.

[31] I agree with the Plaintiff’s position that in hindsight, an additional two-year delay was caused by the Defendant’s refusal to accept the Plaintiff’s offer to settle.

[32] I therefore find that the delay in the proceedings (other than court delay caused by the pandemic) was caused by the Defendant.

(g) Any Other Relevant Consideration

[33] The Plaintiff submits that the fluctuation of the PJI rates can be considered by the court pursuant to section 130(2)(g) under “any other relevant consideration”.

[34] In Henry, Roberts J. stated:

In my view, this means that the prescribed interest rates should not be deviated from as a matter of course but rather where the court determines that there are unusual or special circumstances sufficient to justify such a departure, having regard to the mandatory criteria under s. 130(2) of the CJA and all other relevant considerations….This is a cumulative assessment: each factor taken into account by the court does not have to by itself amount to unusual or special circumstances.

[35] The Plaintiff provided the Court with a table outlining the PJI rates under the CJA for the period Q2 2021 (0.50%) to Q1 2025 (4.00%). He argues that the appropriate PJI rate is an average rate of 3.17%.

[36] While not identical to the “market interest rate”, in my view, PJI is a proxy for the relative cost of borrowing, since it is set by the Ministry of the Attorney General and is defined in section 127(1) of the CJA as “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”. The “bank rate” is defined as the “bank rate established by the Bank of Canada as the minimum rate at which the Bank of Canada makes short-term advances to banks listed in Schedule I to the Bank Act (Canada)”.

[37] Since March 29, 2021, when the breach occurred, to the date of judgment in the first quarter of 2025, the PJI rate increased to 4.00% which is an increase of 700%. That, coupled with the fact that the Defendant earned 3.495% on the property, in my view, are very relevant considerations in the Plaintiff’s favour.

Conclusion

[38] Based on my cumulative consideration of the relevant factors in section 130(2) of the CJA, I conclude there are unusual or special circumstances warranting a departure from the PJI rate of 0.5% to 3.17%, representing the average PJI rate from the date of the breach to the date of my judgment, and that it is fair and just to increase the rate to that amount.

Order

[39] I therefore order that pursuant to section 130(1) of the CJA, the PJI rate shall be 3.17% on all damages payable by the Defendant to the Plaintiff.

Justice E. ten Cate
Released: April 16, 2025

References

[1] Curridor v. Millstone Homes Inc., 2025 ONSC 745
[2] Courts of Justice Act, RSO 1990, c C.43
[3] Henry v. Zaitlen, 2024 ONCA 614, leave to appeal dismissed at 2025 17285 (SCC)
[4] Henry v. Zaitlen, supra, at para. 21, citing Graham v. Rourke, [1991] 75 O.R. (2d) 622 (C.A.) at page 627.
[5] Henry v. Zaitlen, supra, at para. 22.
[6] Henry v. Zaitlen, supra at para. 23.
[7] Henry v. Zaitlen, supra, at para. 25.
[8] Henry v. Zaitlen, supra, at para. 32.
[9] Triten Corp. of Canada Ltd. v. Borden & Elliot, [2000] 45 O.R. (3d) 409 (Gen. Div.), motion for leave to appeal dismissed, [1998] O.J. 19984750 (C.A.).
[10] Henry v. Zaitlen, supra at para. 33.
[11] Aubin v. Synagogue and Jewish Community Centre of Ottawa (Soloway Jewish Community Centre), 2024 ONCA 615, leave to appeal dismissed 2025 17300 (SCC).
[12] Henry v. Zaitlen, supra, at para. 23.