In prior reasons (2012 FC 418) the plaintiff had been awarded judgment against the defendants in the amount of approximately $5 million. These reasons dealt with the outstanding issues of interest and costs. With respect to interest, the issues were: should the plaintiff be deprived of part of the interest because of delay in prosecuting the matter; from what date should interest run; what should the rate be; and, should interest be compounded. With respect to costs, the issues were: should the plaintiff be entitled to enhanced costs; should costs be reduced because the plaintiff obtained less than 50% of the damages they sought; and should a settlement offer made by the plaintiff in the amount of $4.5 million but withdrawn 8 days before trial be taken into account.
Decision: Pre-judgment interest awarded at the legal rate of 5%. Costs fixed at $85,000.
Held: In admiralty interest is a function of damages and the trial judge enjoys a wide discretion. The delays were no more caused by the plaintiff than by the defendants. In the circumstances the plaintiff should not be deprived of interest for delay. Given that a particularized claim was only given to underwriters on 10 November 2000 and aspects of the claim had to be investigated, a reasonable start date for the interest calculation is the date the defendants were served with the Statement of Claim which was 12 July 2001. The rate of interest shall be at the legal rate of 5% as the commercial rates during the relevant period had been low. Although the court may order compound interest, the evidence must show compound interest is necessary to fairly compensate the plaintiff. As no evidence is led to justify compound interest, simple interest is awarded. Enhanced costs are not awarded merely because a case is complex. There must be more such as reprehensible conduct. The costs to be otherwise awarded to the plaintiffs should not be reduced because of partial success. The general principle is that costs follow the event and in this case the plaintiff obtained judgment. Rule 420 allows the court to consider offers of settlement in assessing costs that do not fall strictly within the Rule. The withdrawn settlement offer should have a bearing on costs.