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).
The Court also denied leave to appeal this week from two cases of interest:
- 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 Thompson.
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