A-465-79
Davie Shipbuilding Limited and Canada Steam
ship Lines Limited (Respondents) (Plaintiffs)
v.
The Queen (Defendant)
and
Robert Morse Corporation Limited and Colt
Industries (Canada) Ltd. (Appellants) (Third
Parties)
Court of Appeal, Pratte, Urie JJ. and Lalande
D.J.—Montreal, November 23, 1983; Ottawa,
January 12, 1984.
Practice — Judgments and orders — Motion to have Court
reconsider terms of pronouncement of judgment under R.
337(5)(b) — Judgment overlooking claim for interest lost when
bonds deposited as security for performance of contract sold
pursuant to breach of warranty — Whether claim properly
brought in third party proceedings — Failure of Court to
exercise discretion concerning award of pre-judgment interest
— Date interest to run from — Rate applicable — Federal
Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 35 — Interest
Act, R.S.C. 1970, c. I-18 — Federal Court Rules, C.R.C., c.
663, RR. 337(5)(b), 474 — P.C. 1970-4/2.
The cross-appeal from the judgment of the Trial Division in
the third party proceedings in this case was overlooked or
accidentally omitted in the judgment of this Court. This cross-
appeal concerns a claim for the interest lost when bonds
deposited as security for the performance of a shipbuilding
contract were sold, pursuant to a breach of warranty for which
the appellants were held liable, to replace a damaged engine.
Held, the cross-appeal should be allowed. Since there is a
connection of subject-matter between the cause of âction in the
counterclaim in the main action and the claim for redress
against the third party, and since the latter claim arose out of a
contractual relationship which was anterior to the main action,
the claim for lost interest is properly brought in the third party
proceedings.
The Court has discretionary power to award pre-judgment
interest. According to the principles of admiralty law which
apply in this case, interest is awarded as an integral part of the
damages suffered. The Trial Judge herein did not exercise his
discretion one way or the other even though there were no
special circumstances which might have precluded the Court
from awarding the appellants the interest lost. The appellants
are therefore entitled to the payment of interest from the
various dates upon which the bonds were sold by the defendant,
to the date of judgment in the Trial Division.
The rate to be fixed in any given case is just as much
discretionary as is the award of pre-judgment interest. In this
case, for the bonds disposed of before maturity, the rate should
be that which the bonds would have borne until maturity and,
from the maturity date to the date of judgment, interest should
be paid on the principal sum at a rate which is the average,
during that period, of ninety per cent of the average tender
rates for three-month Treasury bills.
CASES JUDICIALLY CONSIDERED
APPLIED:
Allan v. Bushnell T.V. Co. Ltd., [1968] 1 O.R. 720
(C.A.); Canadian General Electric Company Limited v.
Pickford & Black Limited, [1972] S.C.R. 52; Drew
Brown Limited v. The Ship "Orient Trader" et al.,
[1974] S.C.R. 1286; Bell Telephone Co. v. The "Mar-
Tirenno" et al., [1974] 1 F.C. 294 (T.D.); Jefford and
another y Gee, [1970] 1 All E.R. 1202 (C.A.); The
Funabashi Sycamore Steamship Co Ltd y Owners of the
Steamship White Mountain and another, [1972] 2 All
E.R. 181 (Q.B.D.).
DISTINGUISHED:
Iron Mac Towing (1974) Ltd., et al. v. Ships North Arm
Highlander, et al. (1979), 28 N.R. 348 (F.C.A.).
REFERRED TO:
Cremer and others y General Carriers SA, [1974] 1 All
E.R. 1 (Q.B.D.); B.P. Exploration Co. (Libya) Ltd. v.
Hunt, [1979] 1 W.L.R. 783 (Q.B.D.); Tate & Lyle Food
and Distribution Ltd y Greater London Council and
another, [1981] 3 All E.R. 716 (Q.B.D.).
COUNSEL:
Joan Clark, Q.C. and J. Gauthier for
respondents (plaintiffs).
No one on behalf of defendant.
Gerald Barry for appellants (third parties).
SOLICITORS:
Ogilvy, Renault, Montreal, for respondents
(plaintiffs).
Deputy Attorney General of Canada for
defendant.
Gasco, Linteau, Grignon & Barry, Montreal,
for appellants (third parties).
The following are the reasons for order ren
dered in English by
URIE J.: This is an application brought pursuant
to Rule 337(5)(b)' of the General Rules and
Orders of the Court [Federal Court Rules,
C.R.C., c. 663] by the respondents in the appeal
from the judgment of the Trial Division in the
third party proceedings, in respect of their cross-
appeal from that judgment, which cross-appeal,
they allege, was overlooked or accidentally omitted
in the judgment of this Court rendered on the 13th
day of September, 1983 [A-482-79, not yet
reported].
It is not disputed that in its counterclaim the
appellants (Davie and C.S.L.) [in appeal No.
A-482-79] claimed interest lost on the amounts
expended by the respondent [defendant] for the
replacement of the damaged engine which
amounts were derived from the sale of the bonds
deposited by them as security for the performance
of their contract.
The learned Trial Judge did not deal with the
claim for interest lost either in his reasons for
judgment or in the judgment itself. As a conse
quence, in the appeal by Morse and Colt from the
judgment of the Trial Division in the third party
proceedings counsel for Davie and C.S.L. filed a
document entitled "Notice Relating to Appeal
from the Trial Division Third Party Proceedings",
in which it was stated that upon the hearing of the
third parties' appeal
... the Respondents intend to contend that the said Judgment
be varied by adding that in addition to the sum of $322,589.23
the Respondents (Plaintiffs) do recover from the Appellants
(Third Parties) interest on the said sum calculated from the
respective times of appropriation and disposal of Respondents'
bonds by the Defendant ....
' Rule 337. .. .
(5) Within 10 days of the pronouncement of judgment under
paragraph (2)(a), or such further time as the Court may allow,
either before or after the expiration of that time, either party
may move the Court, as constituted at the time of the pro
nouncement, to reconsider the terms of the pronouncement, on
one or both of the following grounds, and no others:
(b) that some matter that should have been dealt with has
been overlooked or accidentally omitted.
Clearly, this notice to vary is in the nature of a
notice of cross-appeal and this proceeding will be
described hereinafter as a cross-appeal.
A perusal of the judgment and of the reasons for
judgment discloses that there can be no doubt that
for a variety of reasons, (the nature of which can
only be by way of explanation for the oversight
rather than a denial thereof and which are, thus,
irrelevant for purposes of this application), the
cross-appeal by Davie and C.S.L. in the third
parties' appeal was not dealt with. The motion,
therefore, in my opinion, is one which clearly falls
within the scope of Rule 337(5)(b).
It should not require reference to any authority
to state that the failure of a trial judge to deal with
an important matter raised by any party at trial,
whether or not it involves the exercise of his
discretion, ought not to preclude an appeal court
from dealing with the matter, when, as here, the
evidence and the reasons provide the Court with
all information necessary to make a decision there
on. In my opinion, the total silence of the Trial
Judge on the claim for interest does not indicate
that he had refused to exercise his discretion, as
counsel for Morse and Colt argued. Rather, it
indicates to me at least, that he overlooked it in its
entirety. Since the record in this case is such that
this Court is in as good a position as the Trial
Judge to do what he omitted to do, I propose to
decide upon the validity of the claim and if it is
found to be a proper one, the method to be used in
the calculation of the quantum thereof.
It should first be pointed out that the question of
whether or not the counterclaim in the action out
of which the main appeal (file No. A-482-79)
arose and the third party proceedings which arose
therefrom, were within the jurisdiction of the Trial
Division, was disposed of in that Division by a
judgment of Gibson J. 2 on a preliminary determi
nation of a question of law made pursuant to Rule
474. He held that the Court had jurisdiction to
hear and determine those issues. So far as we were
made aware, no appeal was taken from that judg-
2 [1979] 2 F.C. 235 (T.D.).
ment, nor was any question as to jurisdiction
raised in this appeal.
During the course of the hearing, the Court
indicated to counsel that we were troubled by the
fact that paragraph 16 of the statement of claim,
as well as the prayer for relief, alleged that the
Plaintiffs are entitled to be indemnified by the third parties
against all liability in respect of the alleged failure of the Port
Inner (No.2) Main Engine ... and to the extent of any
judgment interest and costs for which the plaintiffs may be
liable to the defendant.... [Emphasis added.]
The Court's concern was that by its nature, and
the pleadings, a third party claim might be limited
to the amount for which Davie and C.S.L. were
found to be liable to the respondent and might not
permit Davie and C.S.L.'s claim for lost interest.
Counsel was unable to refer us to any jurispru
dence on that subject and, while I was unable to
find any cases in the Federal Court to assist in
answering the question, the decision of the Ontario
Court of Appeal in Allan v. Bushnell T.V. Co.
Ltd. 3 as well as a number of other Ontario cases I
found to be helpful.
In that case a motion had been brought to strike
out a third party notice on the ground that the
main action sounded in tort while the third party
issue sounded in contract. Laskin J.A. (as he then
was) found there to be no substance to this objec
tion. More importantly, for the situation in this
case, he had the following to say about the
common thread which must exist in both the main
action and the third party proceeding to permit the
latter to proceed. I quote from page 723 of the
report:
The proper approach, in my opinion, is that reflected in the
following statement by Middleton, J., in Swale v. C.P.R.,
supra, at p. 505 O.L.R. p. 93 D.L.R.:
There is no foundation for the suggestion sometimes made,
that the right of indemnity must be for the whole of the
plaintiff's claim—it is enough if that right exists for any
separate or separable part of the plaintiff's claim.
3 [1968] 1 O.R. 720 (C.A.).
Drabik v. Harris, [1955] O.W.N. 590, in this Court expresses
the principle of the Miller case in different words but with the
same effect, as follows (at p. 591):
... it must appear that the measure of damages in the
proceedings as between the defendant and the proposed third
party is the measure of damages as between the plaintiff and
the defendant.
If this is intended to set up a requirement of exactness of
amount, then I respectfully disagree.
What, in my view, is central to resort to third party proceed
ings is that the facts upon which the plaintiff relies against the
defendant should issue out of the relations between the defend
ant and the third party. I prefer this mode of expression to
statements in the cases that there must be a common question
or common questions between the plaintiff and the defendant
and between the defendant and the third party. Since the
"relief over" of which Rule 167 speaks means relief over in
respect of the plaintiff's claim (see Dipasquale et al. v. Mus-
catello, [1953] O.W.N. 1001 at p. 1004), there must be a
connection of fact or subject-matter between the cause of the
action upon which the plaintiff sued and the claim of the
defendant for redress against the third party; and, such claim
would ordinarily arise out of relations between the defendant
and the third party anterior to those between the plaintiff and
the defendant which precipitated the main action.
Needless to say, when a third party notice is challenged the
Court is not concerned to try the merits under the pleadings;
and unless it be too plain for dispute, the substantive rights of
the parties must be left for adjudication at the trial. [Emphasis
added.]
I think that the principle expressed in that quo
tation is applicable to the third party claim for lost
interest in this case. Since there is
(a) a connection of subject-matter between the
cause of action in the counterclaim in the main
action (namely, the warranty, the guarantee and
the security provided by the bonds for the due
performance of the guarantee) and
(b) the claim for redress against the third party
(namely, the warranty and the guarantee) and
the latter claim arose out of a contractual rela
tionship between Davie and Morse which was
anterior to the main action, the claim for lost
interest which flows naturally from the connec
tion is, as I see it, properly brought in the third
party proceeding.
I now turn to the substantive questions.
1. As I have already found, this Court has the
power to deal either with a matter overlooked by
the Trial Judge or with a discretion which he
failed to exercise when, as here, there is sufficient
material on the record to enable the Court to do
what the learned Trial Judge failed to do.
2. The first question which is involved in the issue
of lost interest is whether or not the Court has the
power to award pre-judgment interest. Gibson J. in
his preliminary determination of a question of law,
supra, has found that the subject-matter of the
third party proceeding is within the jurisdiction of
the Court both on the basis that it is a question of
maritime law within the meaning of the Federal
Court Act [R.S.C. 1970 (2nd Supp.), c. 10] and is
also really ancillary to the subject-matter of the
main action which is within the jurisdiction of the
Court. That being so, the principle of law relating
to pre-judgment interest applicable in admiralty
law as opposed to the common law principles
relating thereto should apply. I need only refer to
three cases. In Canadian General Electric Com
pany Limited v. Pickford & Black Limited' Rit-
chie J. at pages 56 and 57 stated the principle in
this way:
The rule in the Admiralty Court is the same as that in force
in admiralty matters in England, and in my view the position is
accurately stated by Mr. Justice A. K. McLean [sic], sitting as
President of the Exchequer Court, in the case of The Pacifico v.
Winslow Marine Railway and Shipbuilding Company ([1925]
2 D.L.R. 162 at 167; [ 1925] Ex. C.R. 32), where he said:
The principle adopted by the Admiralty Court in its
equitable jurisdiction, as stated by Sir Robert Phillimore in
The Northumbria (1869), 3 A. & E. 5, and as founded upon
the civil law, is that interest was always due to the obligee
when payment was delayed by the obligor, and that, whether
the obligation arose ex contractu or ex delicto. It seems that
the view adopted by the Admiralty Court has been, that the
person liable in debt or damages, having kept the sum which
ought to have been paid to the claimant, ought to be held to
have received it for the person to which the principal is
payable. Damages and interest under the civil law is the loss
which a person has sustained, or the gain he has missed. And
the reasons are many and obvious I think, that a different
principle should prevail, in cases of this kind, from that
obtaining in ordinary mercantile transactions.
I think that in the exercise of the equitable jurisdiction of
this Court, and in view of the fact that the Admiralty Court
has always proceeded upon other and different principles
from that on which the common law principles appear to be
founded, that the plaintiff is in this case entitled to the claim
of interest as allowed by the Court below, in its formal order
for judgment.
[1972] S.C.R. 52.
It is thus well settled that there is a clear distinction between
the rule in force in the common law courts and that in force in
admiralty with respect to allowing a claim for interest as an
integral part of the damages awarded.
This principle was followed in the Supreme
Court of Canada decision in Drew Brown Limited
v. The Ship "Orient Trader" et al. 5
Addy J. in the Trial Division of this Court put
the principle succinctly in Bell Telephone Co. v.
The "Mar-Tirenno" et al.b at pages 311 and 312:
It is clear that this Court, under its admiralty jurisdiction,
has the right to award interest as an integral part of the
damages suffered by the plaintiff regardless of whether the
damages arose ex contractu or ex delicto.
' ... interest in these cases is not awarded to the plaintiff as
punitive damages against the defendant but as part and parcel
of that portion for which the defendant is responsible of the
initial damage suffered by the harmed party and it constitutes a
full application of the principle of restitutio in integrum.
There are other English, Canadian and Ameri-
can authorities to the same effect. The principle
seems to be accepted as a matter of discretion for
the Court, the exercise of which should be refused
only in exceptional cases. The Trial Judge did not
exercise his discretion in this case one way or the
other. I see no exceptional circumstance which
might preclude the Court from exercising it in the
normal way, by awarding the appellants the inter
est lost. This is my view notwithstanding the fact
that had the appellants been successful in their
main appeal upon the acceptance by the Court of
their theory as to the cause of the bearing failure,
they would not have been entitled to interest from
the respondent by virtue of section 35 7 of the
Federal Court Act, there being nothing in the
contract between the appellants and the respond
ent stipulating payment of interest. That theory
having been rejected it is my view that the normal
principle prevailing in admiralty cases as to the
award of pre-judgment interest should apply.
5 [1974] S.C.R. 1286, at p. 1335.
6 [1974] 1 F.C. 294 (T.D.).
7 35. In adjudicating upon any claim against the Crown, the
Court shall not allow interest on any sum of money that the
Court considers to be due to the claimant, in the absence of any
contract stipulating for payment of such interest or of a statute
providing in such a case for the payment of interest by the
Crown.
3. The next question to be answered is from what
date or dates should interest be payable? The
appellants' alternative positions are that interest
should run
(a) from the various times that bonds were sold
by the respondent to pay for the cost of replac
ing and installing the engine, or
(b) from the date which the third parties were
given formal notice of the sale of the bonds,
November 18, 1974.
In my opinion, the appellants are entitled to the
payment of interest from the various dates upon
which the bonds were sold by the respondent, to
the date of judgment in the Trial Division. The
third parties had, as early as October, 1970, been
notified of Davie's claim under its guarantee and
warranty but they had refused to concede liability.
They thereby set in motion the chain of events
leading to the eventual sales from time to time of
the bonds thus depriving Davie and C.S.L. of the
income derived from the money represented by the
bonds. Therefore, in my opinion, they should be
liable for the loss of interest from the dates of the
sales, the respondent having given credit for
accrued interest to Davie and C.S.L. up to those
dates.
4. The final question is what rate of interest should
be applied? Davie and C.S.L. claimed in their
supplementary memorandum that it should be a
rate equivalent to the commercial or prime bank
rates which have prevailed from time to time until
the date of judgment. They attempted to file evi
dence relating thereto at the hearing of this cross-
appeal although no such evidence had been
adduced at trial. It is not without significance, in
my view, that in their original submissions in
support of the cross-appeal, interest was claimed
"at the rate of 5% per annum pursuant to sections
3 and 14 of the Interest Act ...".
This Court considered the question of the rate of
pre-judgment interest to be awarded where no
evidence had been adduced as to prevailing inter
est rates in Iron Mac Towing (1974) Ltd., et al. v.
Ships North Arm Highlander, et al. 8 and conclud-
8 (1979), 28 N.R. 348 (F.C.A.), at pp. 359-360.
ed that the rate prescribed in the Interest Act,
R.S.C. 1970, c. I-18, namely 5%, should apply.
It was urged by counsel for Morse and Colt
that, in the circumstances of this case a similar
conclusion should be reached. In my view that
result should not necessarily follow. The rate to be
fixed in any given case just as much involves the
exercise of the Court's discretion as does the deci
sion as to whether or not pre-judgment interest
should be awarded at all. In the Iron Mac the
Court concluded that, in all of the circumstances,
including the absence of any material evidence to
assist it in fixing the rate, the so-called legal rate
of 5% should be applied. However, no general rule
applicable in all cases where no evidence is
adduced as to commercial lending, borrowing or
other interest rates was laid down in that judg
ment. To have done so would have improperly
fettered the exercise of the Court's discretion in
subsequent cases.
In the case at bar, in compliance with its con
tractual obligation, C.S.L. deposited with the
Department of Transport the bonds referred to in
paragraph 4 of the amended statement of claim or
declaration. According to paragraph 13 of that
document there were substituted for those bonds
Government of Canada bearer bonds having a
total face value of $360,000 payable October 1,
1976 and bearing interest at the rate of 5 1 / 2 %o per
annum payable half yearly. It seems clear, then,
that whatever rate of interest may be applicable
after October 1, 1976 until that date, the rate
should not exceed 5 1 / 2 % per annum. This is not to
say that that is the rate which should be fixed to
that date. It may be relevant but it is not neces
sarily determinative for the purpose of fixing the
applicable rate for pre-judgment interest. The
appellants chose to put up the bonds rather than
some other form of security. Morse and Colt were
not privy to that choice with the result that vis-Ã -
vis them the rate payable thereon is not necessarily
relevant and binding upon them in fixing their
liability for lost interest.
However, in view of the fact that Davie and
C.S.L. failed to adduce evidence to provide the
Court with any foundation for determining the
rate to be charged, what rate should apply in the
circumstances of this case? The practice in the
English courts in respect of the fixing of pre-judg
ment interest provides some helpful guidance in,
such circumstance. The line of cases commencing
with Jefford and another y Gee 9 are apposite.
In England, prior to 1970, the power of the
court to award pre-judgment interest in personal
injury cases was by statute, discretionary. After
1970 it became compulsory. Since the Jefford case
arose prior to 1970 the award was discretionary,
but, as pointed out by Lord Denning M.R. at page
1205 of the report, the change in the statute in
1970 did not alter the principles the court would
apply in awarding pre-judgment interest in person
al injury cases.
With regard to the rate of interest to be paid he
had the following to say at page 1210 of the report
(a passage which has been referred to in subse
quent admiralty as well as other cases):
It was suggested to us that, in principle, the rate of interest
on a debt or damages before judgment should be the same as
the rate after judgment. It would be anomalous if a defendant
paid less interest after judgment than before it.
This argument would be acceptable if the rate of interest on
a judgment debt were a realistic rate. But it is not so. It is only
4 per cent. It was so enacted in 1838 and has never been
changed since. It should be changed. We are told that steps are
being taken to increase it. But we do not think we should wait
for this to be done. We ought to award a realistic rate, even if it
does mean an anomaly. To go to the other extreme, it was
suggested that bank rate should be awarded. That stands at 8
per cent. We cannot agree with this suggestion. Bank rate
fluctuates too much.
A better guide is, we think, the rate which is payable on
money in court which is placed on short term investment
account. This is an investment which is made under the
Administration of Justice Act 1965, ss 6,7, and the Supreme
Court Funds Rules 1927 (rr 73 to 80). It was started in
October 1965. It is said in the Supreme Court Practice 1970 to
be:
.. particularly suitable for money which is unlikely to
remain invested for a long time and which may have to be
9 [1970] I All E.R. 1202 (C.A.).
withdrawn, in whole or in part, at comparatively short
notice."
The rate of interest is fixed from time to time by rules made by
the Lord Chancellor. The rates so far are as follows.
[Footnotes omitted.]
Then Lord Denning M.R. set out the rates from
October 1, 1965, which was 5% to March 1, 1970,
by which time the rate had increased to 7%, and
continued [at same page]:
The period in this case [Jefford's] is 1967 to 1969. We think
that over that period we should take a mean or average of the
rate obtainable on short term investment account. This would
be 6 per cent.
Two years later Dunn J. in the Admiralty Court
in The Funabashi Sycamore Steamship Co Ltd y
Owners of the Steamship White Mountain and
another 10 in following Jefford's case had this to
say:
It is a matter for the discretion of the court in each case and
there is no distinction in principle between interest on a limita
tion fund and interest on damages for personal injuries. The
case of Jefford y Gee is binding on all divisions of the High
Court and in the normal case the Admiralty Court will follow
the approach of the Court of Appeal in Jefford y Gee and take
the mean or average of the rate obtainable on short-term
investment account from the date of the casualty to the date of
payment into court or payment. It is likely that in future that
rate will be the same as the rate of interest on a judgment debt.
If that be so, it matters not which rate the court takes; but the
rate must be a realistic one. So in this case I take the mean or
average of the rate obtainable on short term investment
account during the relevant period. There may be exceptional
cases where by reason of the conduct of one or other of the
parties or by reason of other special circumstances the court in
its discretion will adopt a different criterion for assessing
interest on limitation fund. But there is nothing exceptional in
this case. [Footnote omitted.]
In commercial cases in England different con
siderations than those prevailing in personal injury
cases such as Jefford's case, were held to apply in
cases such as Cremer and others y General Carri
ers SA," B.P. Exploration Co. (Libya) Ltd. v.
Hunt 12 and Tate & Lyle Food and Distribution
Ltd y Greater London Council and another. 13
10 [1972] 2 All E.R. 181 (Q.B.D.), at p. 185.
[1974] 1 All E.R. 1 (Q.B.D.), at p. 17.
12 [1979] 1 W.L.R. 783 (Q.B.D.), at p. 849.
13 [1981] 3 All E.R. 716 (Q.B.D.), at p. 722.
While in Canada there is no federal statute
comparable to the English statute in respect of
pre-judgment interest, I am inclined to the view
that in the circumstance of this case, the method
used in the rate determination in Jefford's case is
the most sensible so that a rate ascertainable by
reference to that payable on moneys paid into
Court should be applied. P.C. 1970-4/2, reading as
follows, was enacted on January 14, 1970 and has
continued in force to the present time:
P.C. 1970-4/2
CANADA (T.B. REC. 692984)
PRIVY COUNCIL
AT THE GOVERNMENT HOUSE AT OTTAWA
WEDNESDAY, the 14th day of JANUARY, 1970
PRESENT:
HIS EXCELLENCY
THE GOVERNOR GENERAL IN COUNCIL
His Excellency the Governor General in Council, on the
recommendation of the Minister of Justice, the Minister of
Finance and the Treasury Board, is pleased, pursuant to the
Financial Administration Act, to approve in respect of moneys
heretofore and hereafter paid into the Exchequer Court, and on
its Admiralty side, and transferred or paid into a special
account in the Consolidated Revenue Fund as special purpose
moneys under the Financial Administration Act, that, as fixed
by the Minister of Finance,
1. interest be allowed and paid thereon from the Consolidat
ed Revenue Fund semi-annually on September 30 and March
31 in each year, and,
2. the rate of such interest be the rate that is equal to
nine-tenths of the monthly average of tender rates for three-
month Treasury bills and calculated on the minimum month
ly balance.
Accordingly, every month, the Court is notified
by the Minister of Finance of the precise figure for
90% of the tender rates for three-month Treasury
bills. The rate applicable for each month since the
various dates upon which bonds were appropriated
is easily obtainable from the Registry of the Court
and is shown in Appendix "A" hereto. The average
rate during the period is thus ascertained, and is
the rate which should be used to calculate the
interest payable by Morse and Colt on the face
values of the bonds appropriated from time to time
for the purpose of replacing the damaged engine.
Since the rate so obtained exceeds 5 1 /%, it is the
rate which should be applied only subsequent to
October 1, 1976. Until that date, interest should
be calculated at the rate of 5 1 / 2 %, the rate borne by
the bonds. I have selected this notwithstanding
that Morse and Colt were not privy to the arrange
ment to deposit the bonds as security rather than
cash. I have done so because that rate represents
the real loss of interest by Davie and C.S.L. until
October 1, 1976, if we assume, as we must because
of the absence of evidence to the contrary, that
they would have held the bonds to maturity had
they been released upon fulfillment of the contract
with the respondent.
In the result, then, the judgment of the Court
dated September 13, 1983 should be varied by
adding the following paragraph thereto and by
numbering as 1 the sole paragraph in the judgment
as it presently stands:
2. The cross-appeal is allowed and the judgment of the Trial
Division dated June 29, 1979 is varied by adding to paragraph
4 thereof the following:
"together with interest at the rate of 5 1 / 2 % per annum on the
sums hereafter set out from the dates specified to October 1,
1976:
(a) on $103,082.19 from January 11, 1972;
(b) on $25,001.03 from February 8, 1972;
(c) on $50,275.51 from March 7, 1972;
(d) on $150,242.77 from October 10, 1972 to January 14,
1974; and
(e) on $144,230.50 being $150,242.77 less $6,012.27 remit
ted to Davie and C.S.L. by the respondent on January
14, 1974, from that date;
From October 1, 1976 to the date of judgment, June 29,
1979, interest on the principal sum of $322,589.23 shall be
paid at the rate of 7.47% which is the average, during the
said period of ninety per cent of the average tender rates for
three-month Treasury bills."
In all the circumstances, I do not believe that
there should be additional costs arising from this
notice of motion for reconsideration of the
pronouncement.
PRATTE J.: I agree.
LALANDE D.J.: I agree.
* * *
APPENDIX "A"
INTEREST RATES FOR THE PERIOD
OCTOBER 1, 1976 tO JUNE 29, 1979
Interest based on:
90% of average of three-month Treasury bills
October 76 6.92
November 76 6.54
December 76 6.41
January 77 6.17
February 77 5.29
March 77 5.83
April 77 6.79
May 77 6.53
June 77 6.36
July 77 6.41
August 77 6.45
September 77 6.39
October 77 6.47
November 77 6.52
December 77 6.47
January 78 6.43
February 78 6.51
March 78 6.86
April 78 7.36
May 78 7.30
June 78 7.41
July 78 7.59
August 78 7.89
September 78 8.08
October 78 8.57
November 78 9.24
December 78 9.37
January 79 9.70
February 79 9.71
March 79 9.80
April 79 9.76
May 79 9.75
June 79 9.74
7.47% average
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.