Simon's Legal Resources

Interest - CJA Rates (2)

. Curridor v. Millstone Homes Inc.

In Curridor v. Millstone Homes Inc. (Ont CA, 2026) the Ontario Court of Appeal allowed an APS appeal, here where "the trial judge ordered the vendor to pay the purchaser damages, pre-judgment interest, and costs - and where the central issue was whether "the APS was a valid and binding agreement".

Here the court considers the exercise of discretion under CJA 130(1-2) ['Interest and Costs - Discretion of court']:

Issue 5 Errors in ordering a Variation of the PJI Rate

[67] In my view, the trial judge committed three legal errors in exercising her discretion and increasing the statutory PJI rate pursuant to ss. 130(1) and (2) of the CJA. For ease of references, those provisions are set out below.

130 (1) 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.

(2) For the purpose of subsection (1), the court shall take into account,

(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.

No evidence of changes in market interest rates

[68] The trial judge’s first legal error arose from her use of the trial evidence relating to Millstone’s receipt of lease income on the Property during the course of this proceeding. Based on that evidence, the trial judge found: i) Millstone “earned” an annual interest rate of 3.495% on the Property; and ii) the 3.495% interest rate was the best evidence of a “change in the market interest rate” within the meaning of s. 130(2(a). Neither finding is correct.

[69] In calculating the amount Millstone “earned” from leasing the Property, the trial judge relied on the monthly amount Millstone received from leasing the Property. However, the amount Millstone received as lease income is not the amount Millstone earned from the Property. To determine how much Millstone earned from leasing the Property, the trial judge had to deduct the reasonable amounts Millstone expended in maintaining the Property. That evidence was not before the trial judge because Millstone had no notice that Kevin would advance a claim for an increase in the PJI Rate based on its receipt of lease income. The absence of timely notice raises concerns about procedural unfairness. That aside, the trial judge’s use of lease income without regard for associated expenses was not a legally acceptable basis on which to find that Millstone earned income on the Property at a rate of 3.495% per year.

[70] Further and importantly, even if the rate of interest attributed to Millstone from leasing the Property had been correctly calculated, in my view, that information does not fall within the meaning of “changes in the market interest rates” in s. 130(2)(a) of the CJA. On a plain reading of those words, they are referring to general market conditions, not idiosyncratic information based on the lease income on a single property.

Millstone’s conduct did not unnecessarily lengthen the proceedings

[71] The trial judge’s second legal error arose in finding that Millstone’s conduct unnecessarily lengthened the duration of the proceeding because: (i) Millstone “made allegations of fraud but failed to prove them at trial”; and (ii) Millstone refused Kevin’s settlement offer. Neither reason is legally sound.

[72] The trial judge’s finding that Millstone failed to prove its fraud allegations must be considered in light of her rulings that precluded Millstone from leading evidence in support of its fraud allegations. This is discussed above in relation to Issues 2 and 3 but, in short, those rulings barred Millstone from leading evidence that bore directly on whether the APS had been fraudulently created. It is not that Millstone failed to prove its fraud allegations but, rather, that it was prevented from attempting to prove them.

[73] In any event, the trial judge did not decide the matter of the fraud allegations. As she explicitly stated in her reasons for decision, she found it unnecessary to make such a determination despite having been asked to do so by Millstone.

[74] The trial judge also erred in finding that Millstone unnecessarily delayed the trial because it did not accept Kevin’s settlement offer. In my view, it is a legal error to consider the parties’ settlement offers when deciding whether to depart from the prescribed PJI rate. The consequences of failing to accept a settlement offer are governed by r. 49.10 of the Rules and relate to costs orders. It is not a matter for consideration when determining whether the prescribed PJI rate should be altered.

Improper to Consider Fluctuations in the CJA Rates

[75] The trial judge’s third reason for exercising her discretion was based on fluctuations in the statutorily prescribed PJI rates in the relevant period. However, this court’s decision in Aubin v. Synagogue and Jewish Community Centre of Ottawa (Soloway Jewish Community Centre), 2024 ONCA 615, 174 O.R. (3d) 509 provides that such an approach is legal error.

[76] In Aubin, the trial judge fixed the PJI rate based on the average of the CJA imposed rates during the relevant period. At para. 58 of Aubin, this court held that the PJI rates under ss. 127 and 128 of the CJA are not “determinative or indicative of the meaning of ‘market interest rates’ under s. 130(2)(a)”.

[77] In this case, the trial judge relied on the fluctuation in PJI rates as “other evidence” for the purpose of s. 130(2)(g). However, she used the PJI rates to inform her understanding of the market interest rates at the relevant times. She stated that the PJI rates “while not identical to the ‘market interest rate’ … [are] a proxy for the relative cost of borrowing”. Despite her characterization of the PJI rates as “other evidence”, this court’s admonition in Aubin remains applicable. Thus, she erred in considering the fluctuation in PJI rates as relevant to whether the PJI Rate in this case should have been increased.

. Alyousef v. Alyousef

In Alyousef v. Alyousef (Ont CA, 2026) the Ontario Court of Appeal (mostly) dismissed an appeal (and cross-appeal), this brought against "the trial judge’s award of damages, ordered as an oppression remedy under s. 248 of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 (“OBCA”); for breach of contract, breach of fiduciary duty and duty of loyalty; and for unjust enrichment. They also dispute the calculation of prejudgment interest and costs.".

Here the court considers prejudgment interest [under the CJA s.128-130]:

[20] As for the question of prejudgment interest, the provisions of s. 130(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, permit the trial judge a wide discretion to allow prejudgment interest as he saw fit, including under (c) to “allow interest for a period other than that provided in [s. 128]”. Absent reversible error, the trial judge’s calculation of prejudgment interest is entitled to substantial deference on appeal.

. ID Inc. v. Toronto Wholesale Produce Association [pleadings]

In ID Inc. v. Toronto Wholesale Produce Association (Ont CA, 2025) the Ontario Court of Appeal allows an appeal, here from trial orders of a declaration of breached contract and damages.

Here the court notes that when seeking to vary from the CJA-prescribed interest rates, that should be so pled:

[64] It remains the fact that if a party wishes to claim interest at a rate other than under the CJA, it must advance that claim in its pleading. A boilerplate claim for interest under the CJA does not fulfill that requirement nor does it provide a pathway for the court to award interest other than as stipulated by the CJA. Failing to plead that separate right to interest also does not comply with the requirements of r. 25.06(9) of the Rules of Civil Procedure, R.R.O., 1990, Reg. 194 which reads, in part:

Where a pleading contains a claim for relief, the nature of the relief claimed shall be specified ... .