Federal Court Decisions

Date: 19971205

Docket: T-1545-96

BETWEEN:

T-1545-96

B E T W E E N:

MUSQUEAM INDIAN BAND and CHIEF JOSEPH RALPH BECKER, ERNIE CAMPBELL, WAYNE SPARROW, LEONA M.

SPARROW, NOLAN CHARLES, MARY CHARLES,

JOHNNA CRAWFORD, GAIL Y. SPARROW,

MYRTLE MCKAY, LARRY GRANT, and

HER MAJESTY THE QUEEN

     Plaintiffs

     - and -

MARY GLASS, HIN F. KO, MABEL W. KO,

ROY WESTWICK, GWYNETH M. WESTWICK,

KERRY-LYNNE FERRIS, STEPHEN W. FINDLAY,

NORAH C. FINDLAY, JERRY JANES, DIANA JANES,

GREGORY PAPPAS, TASIE PAPPAS, SOLON S. WANG,

PETER M. LEE, HERBERT M. LEWIS, ALEXANDER KALINOWSKI, KATARINA KALINOWSKI, JOHN W. WHITEFOOT, SHEILA M. WHITEFOOT, LISBET MACKAY, PIERRE DOW, MONA MCKINNON, WONG L. LEE, MAN-LOONG LEE, JOHN M. GLAISERMAN, JUAN L.G. CAM, ELIZABETH C. CAM, EVELYN M. MURRAY, WILLIAM T. ZIEMBA, JAMES R. THOMPSON, ANN B. THOMPSON, YUM C. LAU, IRENE LAU, JAMES Y.P. KING, TJIN K. TAN, EIJI MURAKAMI, MIYAKO MURAKAMI, THOMAS W. F. FUNG, AMY M. L. CHAN, GERTRUDE HENNEKEN, HANS T. HENNEKEN, HOWARD G. ISMAN, MARJORIE E. ISMAN, STANLEY EVANS, DOROTHEY EVANS, KHI YOENG TJIN, WEN-TIEN TAI, KUI-HSIANG HUANG, PHYLLIS WEINSTEIN, PATRICIA LAI, WILFRED E. PATTON, JEAN M. PATTON, ATTILIO GIRARDI, MARY GIRARDI, IRMA E. BOULTER, GEORGE S. BOULTER, JOHN G. CRAGG, OLGA B. CRAGG, HOWARD E. CADINHA, ARLENE B. CADINHA, MARIA C. ORMOND, DOUGLAS R. EYRL, JUDITH F. EYRL, CHEUNG K. CHOI, CHAN P.K. CHOI, CELIA KAAN, CECIL S. C. KAAN, RAMON Y. KAN, HELENA KAN, LESLIE BARA, OTTILIA BARA, ALFRED K. LEE, ESTHER K. LEE, DIANA W.C. SUNG, DONALD C. GRAHAM, WINNIFRED A. GRAHAM, RONALD J. MACKEE, ALEXANDER H. WONG, STELLA L. WONG, EDWARD B. JUYCK, DOROTHY A HUYCK, FREDERICK S. EDY, ELLEN V. EDY, VICTOR H. HILDEBRAND, JOHN E. EGAN, CHI K. CHING, SIU Y. CHAN, LAVENDER CHU, FREDERICK CHU, GEORGE E. RUSH, ANNE L. RUSH, HERTA J. NEUMANN, CORNELIUS NEUMANN, JAMES A. FORSYTHE, DIANE R. FORSYTHE, PETER J. FUNK, ELIZABETH FUNK, ELFRIEDE MACHEK, ADELHEID MACHEK, LILLIAN P. TOEWS, HUI C. KEUNG, PATRICIA H.K.S. WAH, VADILAL J. MODI, MIRA V. MODI, CHARLES H. SHNIER, ELAINE C. SHNIER, AGNES P. C. SHEN, CAROL M. LAU, DENNIS LAU, MARJORIE MCCLELLAND, ARTHUR NEE, LAURA T NEE, DONALD W. SCHEIDEMAN, KATRHYN M. SCHEIDEMAN, WILLIAM N. KING, ALLAN J. HUNTER, GRACE K. HUNTER, GRACE NG, IRVING GLASSNER, NOREEN G. GLASSNER, PRISCILLA FRATKIN, NANCY B. BERNER, GREGORY HRYHORCHUK, DARCY L. HRYHORCHUK, ASTLEY E. SMITH, BETTY ANN SMITH, LILY R. ENG

     Defendants

     REASONS FOR JUDGMENT

     [Prejudgment interest on unpaid rent]

ROTHSTEIN J.

[1]      The plaintiffs claim prejudgment interest on unpaid rent since June 8, 1995. The parties were unable to agree on the fair rent for the 20-year period commencing June 8, 1995 under the applicable land leases. Under the leases, the determination of rent was referred to this Court and reasons for judgment determining that rent were issued on October 10, 1997.

[2]      The relevant leases provide that rent is payable every year in advance. There is no doubt that since June 8, 1995 the leaseholders have had possession of the land as well as the use of the monies payable as fair rent. There is no provision in the leases for interest for late payment.

[3]      The plaintiffs claim prejudgment interest under section 36 of the Federal Court Act which provides:

36. (1) Except as otherwise provided in any other Act of Parliament, and subject to subsection (2), the laws relating to prejudgment interest in proceedings between subject and subject that are in force in a province apply to any proceedings in the Court in respect of any cause of action arising in that province.

The relevant law of British Columbia is subsection 1(1) of the Court Order Interest Act, R.S.B.C. c. 79, which provides:

1 (1)      Subject to section 2, a court must add to a pecuniary judgment an amount of interest calculated on the amount ordered to be paid at a rate the court considers appropriate in the circumstances from the date on which the cause of action arose to the date of the order.

[4]      This is a declaratory judgment that relates to money. However, it is not a pecuniary judgment within the meaning of subsection 1(1) of the Court Order Interest Act. The difficulty arises with respect to the words:

... interest calculated on the amount ordered to be paid...from the date on which the cause of action arose to the date of the order.

[5]      Webb & Knapp (Canada) Ltd. v. Crown Forest Industries Ltd., [1985] B.C.J. No. 1035, dealt with whether subsection 1(1) of the Court Order Interest Act was applicable to a determination by an arbitration board of annual rent to be paid under a lease. Spencer J. held it was not. At paragraph 13 he states:

In the case at bar there has been no order to pay. Neither has there been any wrongful conduct by the tenant because until the arbitrators fixed the proper rent no one knows how much should be paid for the lease. There is no suggestion that Webb & Knapp is guilty of any wrong behaviour or has delayed Crown in its efforts to ascertain the correct rental value. The latest similar authority in Ontario is Sapra v. Stollery (supra). There it was held that until the increased rent was set by the arbitrator the increased amount could not be said to be due.

And also see Sapra v. Stollery (1980), 18 R.P.R. 201 at 203 (Ont. S.C. [H.Ct. of Justice] ) per Maloney J., Revenue Properties v. Victoria University (1993), 101 D.L.R. (4th) 172 at 187 (Ont. Div. Ct.) per Adams J. and Shield Properties v. Anglo Overseas Transport Co. Ltd. (1986), 53 P. & C.R. 215 at 221 (H.Ct., Chancery Div.) per Wheeler D.J.

[6]      Having regard to the words in subsection 1(1) of the Court Order Interest Act:

. . .Interest calculated on the amount ordered to be paid . . . from the date on which the cause of action arose to the date of the order...

there is no amount ordered to be paid and no cause of action giving rise to such an order. The judgment here only declares the fair rent payable in each of the twenty years commencing June 8, 1995. Prior to issuance of the judgment, the amount of rent payable annually was not known. Until it was determined, the amount of rent payable could not be said to be due. This is not the case of a cause of action based on unpaid rent and a court order requiring the rent to be paid. Of course, if the plaintiffs now demand rent and it is not paid, they may seek a court order, probably in the Supreme Court of British Columbia, for payment of unpaid rent. It is a judgment in that action that would give rise to an order contemplated by subsection 1(1) of the Court Order Interest Act.

[7]      Notwithstanding the equities of the situation which clearly favour the plaintiffs (defendants having had use of both the leased land and the fair rent monies since June 8, 1995), I must agree with the approach of Spencer J. in Webb & Knapp. The judgment in this case is not one to which subsection 1(1) of the Court Order Interest Act applies and section 36 of the Federal Court Act therefore does not provide this Court with jurisdiction to order prejudgment interest.

[8]      Counsel for the plaintiffs points to other decisions of this Court in circumstances similar to this in which prejudgment interest was awarded. See Rodgers et al. v. Canada (1993), 74 F.T.R. 164 (F.C.T.D.), per Cullen J. and Canada v. Meyer (1995), 105 F.T.R. 139 (F.C.T.D.), per Muldoon J. However, it does not appear that Webb and Knapp and the other authorities to which I have made reference were argued in those cases. Counsel for the plaintiffs also cites the dicta of Seaton J.A. in Westcoast Transmission Company Limited v. Majestic Wiley Contractors Ltd. (1982), 38 B.C.L.R. 310 (C.A.) at page 314:

If the matter is at large and to be resolved as a question of policy, I would strongly favour permitting arbitrators to award interest. I can think of no valid reason why arbitrators deciding a claim should be powerless to grant a remedy that a judge hearing the same claim would be bound to grant. The claimant before the arbitrator would be severely prejudiced in this day of high interest rates. I can think of no good reason why the arbitrator should not be able to give him a complete remedy. An award in a commercial case that does not take into account the cost of money will not do justice between the parties because it will have disregarded a major cost of most enterprises.

The comments of Seaton J.A. address the situation in which arbitrators are not empowered to grant a remedy in respect of interest that a judge could grant. That is not the issue here. However, I am in full agreement with the comments of Seaton J.A. that an award in a commercial case that does not take account of the cost of money will not do justice between the parties. Unfortunately, the matter here is not at large or to be resolved as a question of policy. Nor is there discretion conferred on the Court to award prejudgment interest, which if there were, I would exercise in favour of the plaintiffs.

[9]      The application for prejudgment interest must be dismissed.

     Marshall Rothstein

    

     J U D G E

OTTAWA, ONTARIO

DECEMBER 5, 1997