Legal Blog

Proportionality for Costs & Interest

1157391 Ontario Inc. v. Ortiz, Tremblay, and Meridian Credit Union 2020 Ont SCJ

After a three-week construction lien trial, the plaintiff was awarded judgment of $104,210 (but had beaten its offer to settle) and claimed substantial indemnity costs of $200,000. The defendant claimed that the amount requested was not proportional to the amount at stake and noted that, had it been successful, it would have claimed costs of only $86,000. The judge awarded $181,000, holding that the principle of proportionality should not be rigidly applied to reduce costs for a wholly unmeritorious defence to a legitimate claim because, to do so, would undercompensate litigants for costs legitimately incurred and impose unfair results on wronged litigants. The judge awarded interest at 12% based on the contractual rate set out in the contract and interpreted the words “12% per annum calculated daily not in advance” as compound interest. The judge awarded interest on the non-lienable portion of the judgment award at the rate set out in the Courts of Justice Act.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.