Date: 20040920
Docket: T-1836-90
Citation: 2004 FC 1285
BETWEEN:
ELDERS GRAIN COMPANY LIMITED
and
CARLING O'KEEFE BREWERIES OF CANADA LIMITED
Plaintiffs
AND:
THE VESSEL M/V "RALPH MISENER" AND THE OWNERS
AND ALL OTHERS INTERESTED IN THE VESSEL M/V "RALPH MISENER"
and
MISENER HOLDINGS LIMITED
and
MISENER SHIPPING
Defendants
REASONS FOR ORDER
NADON J.
[1] On July 7, 2003, I dismissed the plaintiffs' action against the defendants and allowed the defendants' counterclaim with interest at the prime bank lending rate from June 9, 1989 to the date of the judgment, as well as post-judgment interest in accordance with subsection 37(1) of the Federal Courts Act, R.S., 1985, c. F-7. With respect to costs, I indicated in my decision that they should be spoken to.
[2] On October 7, 2003, I made an order disposing of the costs to which the defendants were entitled.
[3] On November 19, 2003, upon an application by the defendants for an order correcting my July 7, 2003 judgment, on the ground that interest, like costs, was to be spoken to, I made the following order:
The plaintiffs' action is dismissed and the defendants' counterclaim is allowed. The plaintiffs are hereby condemned to pay to the defendants the sum of CDN $91,436.71. Interest, both pre-judgment and post-judgment and costs shall be spoken to. [Emphasis added]
[4] Now before me is the defendants' application concerning the award of interest. Specifically, the defendants seek an order granting them compound interest, both pre- and post-judgment, at the prevailing commercial rates.
[5] Firstly, with respect to an award of interest at the prevailing commercial rates, there is no evidence whatsoever in regard to the prevailing rates, nor is there any agreement between the parties. I should add that there is also no evidence regarding the bank prime lending rates during the relevant period. Consequently, the defendants shall have pre-judgment interest at the legal rate of 5%. With respect to post-judgment interest, they shall have the legal rate of 5%, plus the additional indemnity under article 1619 of the Quebec Civil Code. Should the parties be unable to agree on the applicable indemnity, they shall speak to me no later than October 15, 2004..
[6] I now turn to the defendants' request for compound interest. Mr. O'Connor, on behalf of the defendants, submits that his clients are entitled to an award of compound interest and in support of that submission, he relies on a number of decisions of this Court (See Davie Shipbuilding v. The Queen, [1984] 1 C.F. 461 (F.C.A.); Monk v. Island Fertilizers (1989), 97 N.R. 384 (F.C.A.); and Ontario Bus Industries v. The Federal Calumet (1992), 150 N.R. 149 (F.C.A.)). Mr. O'Connor also relies on the Supreme Court of Canada's decision in Bank of America Canada v. Mutual Trust Co., [2002] 2 S.C.R. 601.
[7] Mr. Laurendeau, for the plaintiffs, submits that an award of compound interest should not be made in the present case, and refers me to decisions of the Federal Court (See Alcan Aluminium Ltd. V. Unican Int. S.A. (1996), 120 F.T.R. 44; Alcan v. Unican (1996), 113 F.T.R. 81; Jesionowski v. "Wa-Yas" (The) (1993), 55 F.T.R. 1; Shibamoto & Co. Ltd. v. Western Fish Producers Inc. (1991), 48 F.T.R. 176; and Engine and Leasing Co. V. Atlantic Towing Ltd. (1992), 51 F.T.R. 1). More particularly, Mr. Laurendeau refers me to that part of my decision in Alcan v. Unican (1996), 113 F.T.R. 81, where at paragraph 155, I made the following remarks:
155] I am of the view that the discretion to award compound interest should be exercised in favour of a successful party when such an award is necessary to fully compensate the plaintiff: in other words, on the basis of the principle restitution in integrum. In my view, a successful party must demonstrate that his or her loss cannot be fairly compensated in damages without an award of compound interest. In the present case, I have not been so persuaded.
[8] In support of his submission, Mr. Laurendeau, like Mr. O'Connor, also relies on the Supreme of Canada's decision in Bank of America Canada, supra.
[9] For the reasons that follow, I am not prepared to make the award sought by the defendants. For this conclusion, I need only refer to paragraph 55 of the Reasons of Major J. in Bank of America Canada, supra, where he states:
An award of compound pre- and post-judgment interest will generally be limited to breach of contract cases where there is evidence that the parties agreed, knew, or should have known, that the money which is the subject of the dispute would bear compound interest or damages. It may be awarded as consequential damages in other cases but there would be the usual requirement of proving that damage component.
[10] Although this is a breach of contract case, there is no evidence before me that the plaintiffs "agreed, knew, or should have known, that the money which is the subject of the dispute would bear compound interest as damages". Therefore, this case falls in Major J.'s second category of cases, i.e. those cases where proof of compound interest, as a component of damage, must be made. As the defendants have not adduced any proof on that count, their claim for compound interest must fail.
[11] For these reasons, my judgment of July 7, 2003 shall be modified to read as follows:
The plaintiffs' action is dismissed and the defendants' counterclaim is allowed. The plaintiffs are hereby condemned to pay the defendants the sum of $91,436.71, with pre-judgment interest at the legal rate of 5% from June 9, 1989 to the date of this judgment, as well as post-judgment interest at the legal rate of 5%, plus the additional indemnity under article 1619 of the Quebec Civil Code, the whole with costs in favour of the defendants.
"M. Nadon"
JUDGE
O T T A W A, Ontario
September 20, 2004
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1836-90
STYLE OF CAUSE: ELDERS GRAIN CO. LTD. et al v. THE "RALPH MISENER" et al.
PLACE OF HEARING: Quebec, QC
DATES OF HEARING: March 30, 2004
REASONS FOR JUDGEMENT : Nadon J.
DATED: September 20, 2004
APPEARANCES:
Normand Laurendeau FOR PLAINTIFFS
John G. O'Connor FOR DEFENDANTS
Jean Grégoire
SOLICITORS OF RECORD:
Robinson Sheppard Shapiro FOR PLAINTIFFS
Montreal QC
Langlois Gaudreau O'Connor FOR DEFENDANTS
Quebec City QC
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