Date: 20090911
Docket: T-363-85
Citation: 2009 FC 900
Ottawa, Ontario, September 11,
2009
PRESENT: The Honourable Mr. Justice Barnes
BETWEEN:
ALFRED JOSEPH, CHIEF
COUNCILLOR,
DORA B. WILSON, WALTER JOSEPH
and JACK SEBASTIAN,
BAND COUNCILLORS
ON THEIR OWN BEHALF
AND ON BEHALF OF ALL OTHER
MEMBERS OF THE HAGWILGET
VILLAGE, HAGWILGET VILLAGE
AND HAGWILGET VILLAGE COUNCIL
Plaintiffs
and
HER MAJESTY THE QUEEN
IN RIGHT OF CANADA
Defendant
REASONS FOR ORDER AND ORDER
[1]
This
is a motion by the Plaintiffs for post-judgment interest. They claim to be
entitled to interest by virtue of the Defendant's delay in remitting the
proceeds of settlement of this action.
I.
Background
[2]
On
April 24, 2009 the parties negotiated a settlement of this action requiring the
Defendant to pay to the Plaintiffs in their representative capacity the sum of
$21.5 million and costs. Because this is a representative proceeding, Court
approval under Rule 114(4) was required to give effect to the settlement.
Following a hearing in Vancouver, the Court issued an
Order which, with the exception of one provision concerning the establishment
of a settlement trust, was in the form consented to by the parties. That Order
contained the following provision concerning the payment of the proceeds of
settlement:
THIS COURT ORDERS that:
1. The settlement of this action
is hereby approved on the following terms, namely, that:
(a) the Defendant shall
pay the sum of $21.5 million dollars to the Plaintiffs forthwith by paying
those funds to Peter Grant & Associates, In Trust; …
[3]
The
evidence submitted in connection with this motion establishes that the proceeds
in settlement of the above Order were paid by the Defendant to the Plaintiffs
in two instalments. The first instalment of $10,750,000 was delivered to
counsel for the Plaintiffs on July 3, 2009. The final instalment in the same
amount was delivered to the Plaintiffs’ counsel two weeks later. The
Plaintiffs contend that they are entitled to post-judgment interest because
these payments were not made "forthwith" as stipulated in the Order.
The Defendant counters by saying that post-judgment interest is not owed
because the proceeds were payable in furtherance of a settlement. The
Defendant says that it is only where monies are payable in settlement of a
"pecuniary judgment" that s. 7(2) of the Court Order Interest Act,
R.S.B.C. 1996, c. 79 and s. 31.1(1) of the Crown Liability and Proceedings
Act, R.S.C. 1985, c. C-50 may operate to oblige the federal Crown to pay
post-judgment interest.
[4]
The
Defendant may be correct that a final order of the Court in furtherance of the
settlement of litigation may not constitute a pecuniary judgment as that term
is used in the Court Order Interest Act, above. Indeed, in many
settlements, the final order may only recite the fact of a settlement
accompanied by a bare dismissal of the proceeding. Here, however, the Court
was required to assess the reasonableness of the proposed settlement under Rule 114(4).
In such a situation any settlement is conditional upon Court approval and the
resulting order expresses the judgment of the Court. It is, therefore, a
pecuniary judgment.
[5]
The
Defendant relies, as well, upon s. 30(1) of the Crown
Liability and Proceedings Act, above, and Rule
474, the joint effect of which, it says, precludes any obligation to pay
interest on a judgment until that stipulated process has been completed. These
provisions, it says, effectively trump ss. 31.1(1) of that Act which obliges
the federal Crown to pay post-judgment interest in accordance with provincial
law. I do not agree. The purpose of s. 30 is to create a process for payment
of a judgment as an alternative to execution which cannot be had against the
Crown. There is no evidence before me that this was the process actually
followed here by the Defendant and, in any event, it would take much clearer
language to avoid the Defendant's clear obligation under ss. 31.1(1) to pay
post-judgment interest in accordance with the Court Order Interest Act,
above.
[6]
In
a representative proceeding the parties are, subject to the Court's approval,
free to deal with the terms of payment including the issue of post-judgment
interest. The Order that was agreed to by the parties in this case did address
the issue of payment by requiring the Defendant to pay the sum of $21.5 million
to the Plaintiffs "forthwith". What I am left to resolve is the
question of whether the payments made here were compliant with that term of the
Order.
[7]
The
parties agree that the term "forthwith" allows for the lapse of some
time in the settlement of the Order but they disagree rather sharply on whether
the Defendant's payments were compliant. The Plaintiffs have cited authority
which indicates that "forthwith" means "immediately".
Other authority suggests that it means "within a reasonable time"
having regard to the circumstances and that it does not mean
"instantly". Many of the cases relied upon deal with criminal or
contempt proceedings and, therefore, seem somewhat inapt. In this context, I
believe that the parties would have expected some delay in the settlement of my
Order. Unlike a casualty insurer, the federal government is not in the usual
business of settling lawsuits. Having regard to the administrative
requirements for accessing public funds, I believe that the Order contemplated
at least the amount of time that the Defendant took to make its first payment
to the Plaintiffs’ counsel. No explanation has been provided as to why it was
necessary for the Defendant to fulfill its obligation in two tranches with the
second payment being made two weeks after the first. In the absence of some
explanation, the only reasonable inference to be drawn is that the Defendant
had the capacity to fully settle the Order on July 3, 2009. In the two weeks
that followed, the Defendant had the benefit of these funds and the Plaintiffs
were correspondingly deprived. In the result, the Plaintiffs are entitled to
post-judgment interest in accordance with the Court Order Interest Act,
above, on the sum of $10,750,000 from July 3, 2009 to July 17, 2009.
[8]
The
costs of this motion in the amount of $1,500.00 inclusive of disbursements
shall be payable by the Defendant to the Plaintiffs.
ORDER
THIS COURT ORDERS that the Plaintiffs are entitled to post-judgment interest in
accordance with the Court Order Interest Act, above, on the sum of
$10,750,000 from July 3, 2009 to July 17, 2009.
THIS COURT FURTHER
ORDERS that costs of this motion in the amount of $1,500.00 inclusive
of disbursements shall be payable by the Defendant to the Plaintiffs.
“ R. L. Barnes ”
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