Chemtrade Electrochem Inc v Superior Plus Corporation, 2023 ABKB 186

Court of King’s Bench of Alberta Citation: Chemtrade Electrochem Inc v Superior Plus Corporation, 2023 ABKB 186 Date: 20230329 Docket: 1601 08867 Registry: Calgary Between: Chemtrade Electrochem Inc. formerly known as Canexus Corporation Plaintiff/Defendant by Counterclaim - and - Superior Plus Corporation Defendant/Plaintiff by Counterclaim _______________________________________________________ Endorsement of the Honourable Justice Johanna C. Price re Pre-Judgment Interest _______________________________________________________ I.

Introduction [ 1 ] On December 21, 2022, I issued Reasons for Decision finding that Chemtrade Electrochem Inc (“Chemtrade”) is entitled to judgment against Superior Plus Corporation (“Superior”) in the amount of $25 million, plus judgment interest: Chemtrade Electrochem Inc v Superior Plus Corporation , 2022 ABKB 858 at para 122 .

The parties informed me by letter dated February 1, 2023 that they have been unable to agree on the applicable rate of interest. [ 2 ] Pursuant to an agreement between the parties, I have received and reviewed the following: • February 15, 2023 – written submissions and authorities of Chemtrade, along with an Affidavit of Brianne Harris; • February 22, 2023 – written submissions and authorities of Superior; and • February 24, 2023 – reply written submissions of Chemtrade. [ 3 ] From my review of these materials, it is apparent that the sole issue is the applicable pre-judgment interest rate for the period January 1, 2022 to December 21, 2022.

In its initial submission, Chemtrade sought pre-judgment interest to December 31, 2022, but it now concedes that such interest is payable only up to the date of my Reasons for Decision. II. Background

[ 4 ] The rationale behind awarding pre-judgment interest on a judgment for the payment of money or a judgment that money is owing is that the winning party could not earn a return on the money in question between when the cause of action arose and the date of judgment. Pre-judgment interest is a statutory and substantive right: Gosche v Boucher , 2009 ABQB 277 at para 3 . It is provided for in the Judgment Interest Act, RSA 2000, c J-1 (the “ Act ”). [ 5 ] The rate of interest payable is prescribed in the Judgment Interest Regulation , Alta Reg 215/2011 (the “ Regulation ”).

On December 1, 2021, by Order in Council, the Lieutenant Governor prescribed the interest rate for the period from January 1, 2022 to December 31, 2022 at 0.2% per year. As at December 31, 2021, the Bank of Canada’s overnight rate was 0.25%. [ 6 ] Over the course of 2022, the Bank of Canada raised its overnight rate on seven separate occasions as follows: to 0.5% on March 3, 2022; to 1.0% on April 14, 2022; to 1.50% on June 2, 2022; to 2.50% on July 14, 2022; to 3.25% on September 8, 2022; to 3.75% on October 27, 2022, and to 4.25% on December 8, 2022.

The average overnight target interest rate for 2022 was 1.92%. Superior does not dispute these interest rates. [ 7 ] Chemtrade initially requested pre-judgment interest at this rate of 1.92%, but subsequently modified its position to account for the date of my Reasons for Decision. It now seeks interest at a rate of 1.87%. Superior proposes the Regulation rate of 0.20%. III. Law and Analysis [ 8 ] Subsection 2(3) (

b) of the Act provides that the Court may award pre-judgment interest at a rate higher or lower than the Regulation rate if it considers it just to do so “having regard to changes in market interest rates , the circumstances of the case or the conduct of the action” (my emphasis). This discretion must be exercised judicially. [ 9 ] Superior argues that Chemtrade is entitled only to the Regulation rate of interest because it did not provide any evidence of actual loss.

Superior provided several authorities where parties were seeking a rate of interest based on their cost of borrowing and/or usual rate of return. [ 10 ] Chemtrade, however, asserts that Superior’s authorities are not relevant. It cites Dow Chemical Canada ULC v NOVA Chemicals Corporation , 2020 ABCA 320 for the proposition that evidence of actual loss is not required. Its position is that s. 2(3) (

b) of the Act provides an entirely separate statutory ground for the exercise of my discretion based solely on fluctuating market interest rates. [ 11 ] No evidence was advanced by either party as to what interest they earned on amounts they held in trust pending the outcome of the trial of this matter. Nevertheless, I accept that had Chemtrade had possession of the $25 million dollars during the pendency of this matter, it could have earned some benefit from it. IV. Decision [ 12 ] I am satisfied that the rate of interest prescribed in the Regulation is not commensurate with 2022 market interest rates.

Based on the authorities provided and the circumstances of this case, particularly the level of sophistication of these commercial parties and the rapidly increasing market interest rates in 2022, I consider it appropriate to exercise my discretion to award Chemtrade pre-judgment interest at a rate of 1.87% for the period from January 1, 2022 to December 21, 2022. [ 13 ] There shall be no costs awarded to either party for this desk application. Heard via desk application by request of the parties submitted via letter dated February 1, 2023. Dated at the City of Calgary, Alberta this 29 th day of March, 2023. J.C.

Price J.C.K.B.A. Appearances: Tristram Mallett, Matthew Huys, Nathan White, and Scott Carriere for Plaintiff/Defendant by Counterclaim David Tupper, Keith Marlowe, Alyssa Duke and Tom Wagner for Defendant/Plaintiff by Counterclaim