Written by: Lindsay Charles and Savannah Snyder, Articling Student
In our previous blog, we discussed Ontario Court of Appeal’s decision of Aubin v Synagogue and Jewish Community Centre of Ottawa (Soloway Jewish Community Centre),[1] and the requirements to deviate from the statutory presumptive prejudgment interest rate via s. 130 of the Courts of Justice Act (the “CJA”).[2]
This blog looks more deeply into deviating from the presumptive prejudgment interest through the decision of Henry v Zaitlen[3], heard at the same time as Aubin v Synagogue and Jewish Community Centre of Ottawa.
The Facts
Henry v Zaitlen resulted from a medical malpractice claim. At trial, the plaintiff was awarded $204,500 in non-pecuniary general damages and the plaintiff’s late wife, who passed away before the trial, was awarded $100,000 under section 61 of the Family Law Act for loss of care, guidance and companionship.[4]
Trial Judge’s Decision
The trial judge reduced the five per cent prejudgment interest rate prescribed under section 128(2) of CJA[5] and Rule 53 of the Rules of Civil Procedure[6] (the “Rules”) to 1.3 per cent.
The trial judge reasoned that the presumptive rate would overcompensate the plaintiffs due to market interest rates being lower than five per cent.
The Ontario Court of Appeal
The Honourable Justice Roberts, on behalf of the Ontario Court of Appeal, disagreed with the trial judge,
The trial judge’s failure to consider all the factors in s. 130(2) in deciding that a lower prejudgment interest rate was just in the circumstances and his narrow focus on and misapplication of “changes in market interest rates” under s. 130(20(a) “were not in accordance with a full and balanced application of the factors set out in s. 130(2), and amounted to an error in law…”[7]
Justice Roberts explained that an analysis under s. 130(1) of the CJA should start at the presumptive entitlement to prejudgment interest of five per cent for non-pecuniary loss in an action for personal injury. However, this presumptive entitlement to prejudgment interest at the statutory rate is not an absolute or vested entitlement to prejudgment interest or to the five per cent statutory rate of interest for non-pecuniary loss because the court can deviate where it considers “just to do so”.[8]
Justice Roberts emphasized the importance of the court acknowledging the presumption at the start of the analysis under s. 130(1) of the CJA.[9] The onus is on the party seeking to depart from the prima facie entitlement.[10] Justice Roberts alluded to a high bar to meet this onus,
…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.[11]
Justice Roberts reiterated section 130(2) is a cumulative assessment and all the factors must be considered and reviewed, rather than just one factor,
Rather, the proper exercise of the court’s discretion requires an examination of all the mandatory factors, including the catchall categories of “the circumstances of the case” and “any other relevant consideration”. This comprehensive review fulfills the overarching consideration that changes to the presumptive interest rates must be in the interests of justice.[12]
Justice Roberts stated it was incorrect for the trial judge to place undue emphasis on overcompensating the plaintiffs if the five per cent presumptive rate was maintained, solely relying on s. 130(2)(a) – “changes in market rates” – and failing to consider the other factors.
Justice Roberts reiterated that it is up to the legislature to amend Rule 53.10 and the continued existence of it suggests that the legislature did not intend to change the presumptive rate for non-pecuniary damages other than non-motor vehicle contexts.[13]
In Conclusion:
The Ontario Court of Appeal explained the importance of acknowledging the presumptive prejudgment interest rate for non-pecuniary damages, and the cumulative assessment required when considering whether a deviation is appropriate.
It is important to have an experienced team of personal injury lawyers in your corner to ensure you receive the maximum amount you are entitled to.
[1] Aubin v Synagogue and Jewish Community Centre of Ottawa (Soloway Jewish Community Centre), 2024 ONCA 615.
[2] Courts of Justice Act, R.S.O. 1990, c. C.43, s. 130.
[3] Henry v Zaitlen, 2024 ONCA 614.
[4] Family Law Act, R.S.O. 1990, c. F. 3, s. 61.
[5] Courts of Justice Act, supra note 2, s. 128(2).
[6] Rules of Civil Procedure, R.R.O. 1990, Reg. 194, R 53.10
[7] Henry v Zaitlen, supra note 3 at para 13.
[8] Ibid at para 20.
[9] Courts of Justice Act, supra note 2, s. 130(1).
[10] Henry v Zaitlen, supra note 3 at para 21.
[11] Ibid at para 23.
[12] Ibid at para 26.
[13] Ibid at para 37.