By Patrick Brown, Lawyer, and Savannah Snyder, Student-At-Law
In Aubin v Synagogue and Jewish Community Centre of Ottawa (Soloway Jewish Community Centre),[1] the Ontario Court of Appeal increased the statutory presumptive prejudgment interest rates for non-pecuniary and past-pecuniary damages. The focus was on section 130 of the Courts of Justice Act (“CJA”),[2] which permits a judge to deviate from the presumptive prejudgment interest rates for awards payable under sections 128 and 129.[3]
The Facts:
This action resulted from a slip and fall resulting in a serious head injury on the defendant’s premises. At trial, damages over three million were awarded. This included non-pecuniary damages for pain and suffering, past pecuniary damages for past loss of income and out of pocket expenses, and non-pecuniary damages under section 61 of the Family Law Act for loss of care, guidance and companionship on behalf of the spouse.
The only issue in front of the Court of Appeal was the trial judge’s order regarding the prejudgment interest of non-pecuniary damages and past-pecuniary damages.
The Parties Positions and Trial Decision:
Under subsections 128(1) and (2) of the Courts of Justice Act (“CJA”),[4] the Plaintiff is entitled to have an award of damages include prejudgment interest calculated from the date the cause of action arose to the date of the order. Accordingly, the presumptive interest rate was 5% for non-pecuniary damages.[5] At the relevant time, the prejudgment interest rate applicable to past pecuniary damages was 0.8 per cent.[6]
Both parties brought competing motions asking the trial judge to exercise her discretion to deviate from the presumptive prejudgment interest rates under section 130 of the CJA. The Respondent sought to reduce the rate to 1.3% for non-pecuniary damages meanwhile the Appellants sought to increase the rate to 8.46% for non-pecuniary damages and past pecuniary damages.
Ultimately, the trial judge ordered a decrease in the prejudgment interest rate of 1.3% for non-pecuniary damages and kept the rate for past-pecuniary damages at 0.8%.
Trial Decision Overturned by the Ontario Court of Appeal:
The Ontario Court of Appeal overturned the trial judge’s ruling on decreasing the presumptive prejudgment interest rates for non-pecuniary damages. Instead, the Court of Appeal ordered an increase in the prejudgment interest rate to 8.46% for the non-pecuniary and past-pecuniary damages awarded to the Appellant.
Requirements to Deviate from the Statutory Presumptive Prejudgment Interest Rate
Subsection 130(1) permits the court to deviate from the presumptive prejudgment interest rate, setting up a rebuttable presumption. Subsection 130(1) states:
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,
(a) disallow interest under either section;
(b) allow interest at a rate higher or lower than that provided in either section;
(c) allow interest for a period other than that provided in either section.[7]
The Court of Appeal clarified that the presumptive rates should only be deviated from where the party seeking a higher or lower rate demonstrates that there are unusual or special circumstances sufficient to justify a departure.
The Court of Appeal further clarified that when considering whether a departure is appropriate, the criteria in subsection 130(2) must be considered. These criteria include:
- changes in market interest rates;
- the circumstances of the case;
- the fact that an advance payment was made;
- the circumstances of medical disclosure by the plaintiff;
- the amount claimed and the amount recovered in the proceeding;
- the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; and
- any other relevant consideration.[8]
The rationale behind this is that prejudgment interest should be viewed as part of the compensation owed to the plaintiff. The court’s exercise of discretion under subsection 130(1) must be a balanced one, based on the wide consideration of justice and not curtailed by any one particular factor. Also, the court is required to look at a myriad of factors, including the legislative purpose of the prejudgment interest scheme earlier referenced to deprive the wrongdoer of the use of the monies that should have been paid to the plaintiff.
The Appellants’ Evidence
The Appellants’ fundamental argument for a higher prejudgment interest rate was that they could have invested the damages ultimately awarded at a much higher rate than the presumptive prejudgment interest rates of 5% and 0.8%.
The Appellants proffered evidence of market interest rates from the relevant period from the date of the accident to the date of the jury verdict, including:
- The actual averaged 12.99% rate of return earned by the Respondents’ insurer, and
- The actual rate of return earned by the Appellants on their respective investment portfolios of 8.46% and the evidence that the award would have been invested in a similar manner.
Based on this evidence, the Court of Appeal decided to exercise the discretion under subsection 130(1) of the CJA to deviate from the presumptive prejudgment interest rates on non-pecuniary and past-pecuniary damages, increasing the rates to 8.46%.
In Conclusion:
The Ontario Court of Appeal clarifies the potential to deviate from the presumptive prejudgment interest rates a Plaintiff will receive under subsection 130(1). It is important to ensure a cumulative assessment is made, and all the factors are taken into consideration. Overall, the plaintiff’s entitlement to compensation that would have been earned in their investment portfolio over the course of a lengthy litigation process is acknowledged, recognizing the legislative intention to compensate the plaintiff.
When pursuing civil litigation, it is important to rely on an experienced team of personal injury lawyers to ensure your best interests are looked after and you receive the maximum amount that your claim is worth.
[1] Aubin v Synagogue and Jewish Community Centre of Ottawa (Soloway Jewish Community Centre), 2024 ONCA 615 [Aubin].
[2] Courts of Justice Act, R.S.O. 1990, c. C.43, s. 130(1).
[3] Ibid, ss. 128-129.
[4] Ibid, s. 128.
[5] Rules of Civil Procedure, R.R.O. 1990, Reg. 194, R 53.10.
[6] Aubin, supra note 1 at para 27.
[7] Couts of Justice Act, supra note 2, s. 130(1).
[8] Ibid, s. 130(2).
