A Commentary on Recent Legal Developments by the Opinions Group
of McCarthy Tétrault LLP
The Supreme Court of Canada released one decision this week of
interest to Canadian businesses and professions.
In British Columbia (Forests) v. Teal Cedar Products
Ltd., 2013 SCC 51, the Court held that an arbitrator
acting under the B.C. Commercial Arbitration Act
("CAA") cannot generally award either
pre-judgment or post-judgment compound interest on an arbitral
award. The Court based its decision upon the B.C. Court
Order Interest Act, which requires that a pecuniary court
judgment bear simple interest only. The Court reached
this conclusion even though the CAA does not expressly
deem an arbitrator to be a "court", and even though the
British Columbia International Commercial Arbitration Centre rules
– which are incorporated into the CAA to the extent
they are not inconsistent with it – permit arbitrators to
award compound interest. The Court also rejected the argument
that an arbitrator could award compound interest "as part
of the award" rather than on top of it, and found that an
award of compound interest was not justified by the principle of
full compensation for expropriation (upon which the arbitral claim
was based). Finally, the Court dismissed the suggestion that
the arbitrator possessed the power to award compound interest in
equity, since the arbitration agreement did not permit the
arbitrator to decide the dispute on equitable grounds (as is
required for an arbitrator to acquire equitable jurisdiction
under the CAA).
Onex Corporation v. American Home Assurance Company,
2013 ONCA 117, which was an insurance dispute
that raised issues regarding how extensively a court can make use
of the factual matrix in interpreting a written agreement.
Amyotrophic Lateral Sclerosis Society of Essex v. Windsor
(City), 2013 ONCA 254, where the issue involved the
considerations that a court should apply when making an order for
costs in the context of a class action, particularly where success
in the proceedings may have been divided.
The McCarthy Tétrault Opinions Group consists of
members of the firm's litigation department whose practices
focus on written advocacy and the provision of strategic advice and
opinions in the context of complex business disputes and
transactions. The members of the Opinions Group are Anthony
Alexander, Martin Boodman, Brandon Kain, Hovsep Afarian and Kirsten
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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