M.P.A.N. v. J.N., 2019 ONCJ 96

ONTARIO COURT OF JUSTICE CITATION: M.P.A.N. v. J.N. , 2019 ONCJ 96 DATE: 2019 02 25 COURT FILE No.: Toronto D1499/93 B1 BETWEEN: M.P.A.N. Applicant (Responding Party) — AND — J.N. Respondent (Moving Party) Before Justice Alex Finlayson Heard on May 28, September 20 and October 1, 2018, and Reasons for Judgment released on November 1, 2018 Additional Submissions Heard on February 11, 2019 Additional Reasons for Judgment released on February 25, 2019 Maureen Bennett Henry............................................... counsel for the applicant Anthony Colangelo.................................................. counsel for the respondent ALEX FINLAYSON J.:

PART I: NATURE OF THIS SUPPLEMENTARY JUDGMENT [ 1 ] In 2018, I presided over a three day trial of a Motion to Change concerning child support for the parties’ 29 year old daughter, J.K.N. I released my judgment on November 1, 2018 (see M.P.A.N. v.

J.N. , 2018 ONCJ 769 ). [ 2 ] I found that child support for J.K.N. terminated as of April 30, 2010, that the father had overpaid child support to the mother in the amount of $40,947.39 and that he was entitled to recover this sum from the mother, but I also found that the father had not paid the mother the amounts owing pursuant to two Costs Orders of Justices Bean and Paulseth dated February 17, 2004 and March 31, 2006. I found that the mother is entitled to set off the Costs Orders from the child support overpayment that she owes the father pursuant to

section 111 of the Courts of Justice Act, R.S.O. 1990, c. C 43 as amended. However, the set off was subject to a number of unresolved questions that I had of counsel. [ 3 ] During closing submissions, the father’s counsel raised several arguments about the two Costs Orders. His primary argument was that the father had in fact paid the mother the costs, but I did not find this to be the case. In the alternative, he argued that the Court should relieve him of the obligation to pay the Costs Orders and any accrued interest.

To complicate matters further, as I explained in my Judgment of November 1, 2018, the issued and entered Order of Paulseth J. dated March 31, 2006 omitted the usual postjudgment interest clause that is generally included in an Order requiring the payment of money. As such, one of the father’s arguments about Paulseth J.’s Costs Order in particular, was that if I found the costs she ordered were still unpaid and owing, at least the interest on the

costs should not be enforced. [ 4 ] However, neither counsel was prepared with authorities to either support or refute the various arguments raised. Neither addressed, to my satisfaction, on what legal basis the Court could relieve the father of the obligation to pay the costs or interest, if the Court found that the Costs Orders were outstanding. [ 5 ] I indicated to counsel in my Judgment of November 1, 2018 that I required additional assistance on certain points. I directed counsel to submit additional written submissions and case law, and to re-attend before me to make further submissions.

The specific questions I asked of counsel are set out at paragraph 349 of my judgment ( see M.P.A.N. v. J.N. , 2018 ONCJ 769 ¶ 349 ). I heard the additional arguments on February 11, 2019. [ 6 ] One of the arguments that the father had initially raised was that the two Costs Orders and interest ought not to be enforced on the basis of laches. In my Judgment of November 1, 2018, I asked that this argument be properly explored at the re-attendance.

In anticipation, in her supplementary written submissions for the February 11, 2019 re-attendance, the mother’s counsel challenged this Court’s jurisdiction to apply the doctrine of laches. She further argued that laches did not apply for other reasons too. Then at the re- attendance, the father abandoned the laches argument. Thus, I will not address the arguments based on laches any further. I make no comment about this Court’s ability to apply the laches doctrine based on jurisdictional or other grounds. [ 7 ] What follows is my supplementary judgment concerning the other arguments.

This supplementary judgment addresses:

(1) Whether both parties’ failure to formally plead certain claims for relief is a bar to this Court making certain orders;

(2) Whether postjudgment interest should accrue on Paulseth J.’s March 31, 2006 Order, given the omission of the usual postjudgment interest clause from the issued and entered Order;

(3) Whether this Court has jurisdiction to amend Paulseth J.’s March 31, 2006 Order nunc pro tunc to include the postjudgment interest clause;

(4) If the jurisdiction to amend the Order nunc pro tunc exists, whether this Court should exercise its jurisdiction, bearing in mind that to do so would require the Court to reach back 12 years in time;

(5) Whether this Court should relieve the father of the obligation to pay the Costs Orders;

(6) Whether this court should relieve the father of the obligation to pay any interest that accrued on the Costs Orders;

(7) Whether the Court should award the father prejudgment interest on the child support of $40,947.39 that I found he overpaid; and

(8) If so, at what rate? [ 8 ] For reasons that I will explain, I find that the mother is owed $24,292.42, which is the full amount of the two Costs Orders plus postjudgment on both Orders, calculated up to February 25, 2019, the date I am releasing this decision. [ 9 ] I have already found that the father is owed $40,947.39 on account of his child support overpayment. To that amount, I would add pre-judgment interest of $7,273.54 up to February 25, 2019 for a total of $48,220.93. I have exercised my discretion to increase the prejudgment interest rate pursuant to

section 130 of the Courts of Justice Act . I have selected a rate of 5%. I will explain why I have done this. [ 10 ] After setting off these amounts, the mother owes the father $23,928.51. [ 11 ] To be clear, going forward the current prescribed rate of postjudgment interest will accrue on any unpaid amount that I have determined now to be owing, from the date of this Order. The usual postjudgment interest clause must be included in the issued and entered Order to be taken out.

PART II: ISSUES AND ANALYSIS A. Findings About the Manner In Which The Costs Orders Were Drafted [ 12 ] I do not know who was responsible for preparing the issued and entered Order of Paulseth J. dated March 31, 2006 that omitted the postjudgment interest clause. As I explained at paragraph 32 of the judgment ( see M.P.A.N. v. J.N. , 2018 ONCJ 769 ¶ 32 ) , the mother was represented at the time of this Costs Order, whereas the father was not.

But I am not prepared to assume that it was the mother’s former counsel who took out the Order, as neither party called evidence about this. [ 13 ] The absence of the postjudgment interest clause from Pauleth J.’s Costs Order gave rise to certain arguments in this case. For the purposes of comparison and to provide a backdrop of the precise problem it created, I reproduce the costs and interest provisions of both Bean J.’s and Paulseth J.’s Orders. [ 14 ] Bean J.’s February 17, 2004 Order was a default order made as a result of an uncontested trial of the mother’s initial custody and child support Application.

The resulting issued and entered Order was created using the Form 25D template for orders made at an uncontested trial. This template Order is a ‘fill in the blank’ style document. It contains a standard interest clause with blanks to be filled in, which includes a space for the interest rate to be inserted.

[ 15 ] This Order was completed fully and correctly insofar as interest is concerned. The postjudgment interest rate that applied at the time was inserted. [ 16 ] The relevant paragraphs of this Order are 15 and 17. They read: 15. THIS COURT ORDERS that costs be paid by [the father] to [the mother] fixed at $6,372.74. 17. THIS COURT ORDERS that interest be payable on amounts owing under this order at the rate of 4% per year. [ 17 ] By contrast, Paulseth J.’s Order of March 31, 2006 was not made on an uncontested basis. Therefore, the issued and entered Order was created using the regular Form 25 for orders.

There are no template ‘fill in the blank’ clauses in the body of a Form 25 Order. This form required someone to draft its terms to incorporate the provisions of Paulseth J.’s Endorsement. As I will explain later in these reasons, the Order was improperly drafted. [ 18 ] Paragraph 6 of the Order of Paulseth J., as drafted, reads: 6. Respondent father [name removed] shall pay towards the costs herein of the Applicant mother the sum of $8,000.00 plus applicable GST. [ 19 ] Unlike Bean J.’s Order, there is no separate postjudgment interest clause in this Order. B.

The Impact of the Parties’ Failure to Plead Certain Relief [ 20 ] The mother seeks to collect the principal amount of both Costs Orders owing to her, with interest. She says the omission of the postjudgment interest clause from Paulseth J.’s Order was an error, and she asks that the Court correct it nunc pro tunc as of the date of the Order. She argues that interest of 5% (which was the postjudgment interest rate at the time) should accrue on the costs that Paulseth J. ordered.

She says there is no issue about the accrued interest on Bean J.’s Order, as the interest rate of 4% is clearly set out in it. [ 21 ] While the father does not dispute that the postjudgment rate was 5% at the time of Paulseth J.’s Order, again, he says he should not have to pay it (nor for that matter should he have to pay the principal amount of either Costs Orders, nor the 4% interest that has accrued on Bean J.’s Order).

Further or alternatively, he asks for prejudgment interest on the $40,947.39 that I found to be owing to him in my November 1, 2018 judgment, which will operate to offset the interest that he owes the mother. [ 22 ] The mother says that she should not have to pay prejudgment interest. She argues that the father did not claim it. [ 23 ] Neither party included these claims in their pleadings. The mother did not include a formal claim in her Response to Motion to Change to correct Paulseth J.’s Order nunc pro tunc, (nor did she plead her request for set-off for that matter).

The father did not claim prejudgment interest on the overpayment either, nor did he articulate in his pleadings the various arguments/defenses he wishes to rely upon to avoid paying the costs or interest. In order to consider what the impact of these omissions from the pleadings should be, I begin by setting out the wording of the applicable rule and the governing statute on these outstanding points. [ 24 ] This Court’s jurisdiction to correct an order is set out in rule 25(19) (

b) of the Family Law Rules . I reproduce Rule 25(19) in full. It reads: 25(19) Changing Order – Fraud, Mistake, Lack of Notice – The court may, on motion, change an order that, (

a) was obtained by fraud; (

b) contains a mistake; (

c) needs to be changed to deal with a matter that was before the court but that it did not decide; (

d) was made without notice; or (

e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present. [ 25 ] Pre and postjugment interest are governed by sections 127 through 130 of the Courts of Justice Act .

Section 127 contains

definitions that apply to those interest provisions. Prejudgment interest is provided for in

section 128 of the Courts of Justice Act , postjudgment interest is dealt with in

section 129 , and

section 130 confers upon the Court discretion to adjust the amount of interest in appropriate circumstances. I reproduce the portions of these sections that are relevant my analysis. They read: Prejudgment and postjudgment interest rates

Definitions 127(1) In this

section and in sections 128 and 129, “bank rate” means the bank rate established by the Bank of Canada as the minimum rate at which the Bank of Canada makes short-term advances to banks listed in

Schedule I to the Bank Act (Canada) ; “date of the order” means the date the order is made, even if the order is not entered or enforceable on that date, or the order is varied on appeal, and in the case of an order directing a reference, the date the report on the reference is confirmed;

“postjudgment interest rate” means the bank rate at the end of the first day of the last month of the quarter preceding the quarter in which the date of the order falls, rounded to the next higher whole number where the bank rate includes a fraction, plus 1 per cent; “prejudgment interest rate” means the bank rate at the end of the first day of the last month of the quarter preceding the quarter in which the proceeding was commenced, rounded to the nearest tenth of a percentage point; “quarter” means the three-month period ending with the 31st day of March, 30th day of June, 30th day of September or 31st day of December.

Prejudgment interest 128(1) A person who is entitled to an order for the payment of money is entitled to claim and have included in the order an award of interest thereon at the prejudgment interest rate, calculated from the date the cause of action arose to the date of the order. Postjudgment interest 129(1) Money owing under an order, including costs to be assessed or costs fixed by the court, bears interest at the postjudgment interest rate, calculated from the date of the order. Discretion of court 130

(1) The court may, where it considers it just to do so, in respect of the whole or any part of the amount on which interest is payable under

section 128 or 129 , (

a) disallow interest under either section; (

b) allow interest at a rate higher or lower than that provided in either section; (

c) allow interest for a period other than that provided in either section. Same 130(2) For the purpose of subsection (1), the court shall take into account, (

a) changes in market interest rates; (

b) the circumstances of the case; (

c) the fact that an advance payment was made; (

d) the circumstances of medical disclosure by the plaintiff; (

e) the amount claimed and the amount recovered in the proceeding; (

f) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding; and (

g) any other relevant consideration. [ 26 ] I have already addressed the deficiencies in the parties’ pleadings, in part, in my Judgment of November 1, 2018 ( see M.P.A.N. v. J.N. , 2018 ONCJ 769 , ¶ 254-269 , and specifically 336). However, my comments there primarily pertained to the mother’s failure to plead her set-off defence.

While I did write about the state of the pleadings in certain other respects in the Judgment, to the extent that I must now address the outstanding issues, I will squarely address why it is my view that the Court should consider the parties’ competing arguments on their merits, despite the pleadings. [ 27 ] Regarding the mother’s request to correct Paulseth J.’s Order, pursuant to rule 25(19) , a request to change an order must be made on motion . It is not disputed that that process was not followed. The mother did not make a formal claim for this in writing in her Response to Motion to Change.

Rather, she asked for this specific relief orally at the trial (although as I will explain, it was clear in her trial affidavit that she was always claiming the interest on this Order). [ 28 ] The purpose of requiring a litigant to specifically claim relief in a written pleading is to provide notice to the other side, which will afford that opposing party the opportunity to respond and to fully present his or her case.

And ultimately the pleading will frame the issues for the Court at the hearing. [ 29 ] As a general comment though, the failure to properly plead claims is not always fatal to a party’s ability to ask the Court to grant relief later in the case or at the trial. It goes without saying that pleadings may be amended. [ 30 ] This case is a Motion to Change governed by Rule 15. Rue 11 of the Family Law Rules authorizes other pleadings (an Application, Answer or Reply) to be amended and sets out a process for that to happen. But the rule says nothing of Motions to Change.

[31] Nevertheless, a party must still give some form of notice of his or her claims to the other side. As a case progresses, partiessometimes refine their claims, or change their position. Just because notice of a particular claim is not given at the outset of a Motion toChange in the initiating document or response document does not mean that additional or subsequent notice of a different claim cannotbe given later. It is likely that a request to amend a pleading will be permitted. This is the case even for late in the day requests toamend, including even when a trial is already underway.

For that matter, this applies even when the trial is on the cusp of beingconcluded. [32] Rule 11(3) of the Family Law Rules says that the Court must grant permission to amend unless the amendment woulddisadvantage another party in a way for which costs or an adjournment could not compensate. I refer again to the decision of JusticeQuinn in Stefureak v. Chambers, (S.C.J.). In it, Quinn J. granted a so-called ‘hail mary’ amendment. One partyraised wished to mount a last minute defence on the last day of a 20 day trial and needed to amend the pleading to do so. Quinn J.granted permission to amend.

I note that Quinn J. was presiding over the trial of a Motion to Change. Nevertheless, he applied rule11(3), perhaps by analogy. [33] I also refer again to the decision of the Manitoba Court of Appeal in Korchinski v. Korchinski, 2006 MBCA 149 at ¶ 53-55. In that case, the trial judge refused to deal with a claim that had not been pleaded.

Although the Court held that the trial judge wasjustified in so doing, the Court of Appeal went on to deal with the issue on appeal anyway, as the evidence was available and the partieshad argued the issue before the Court of Appeal. [34] While it is of course preferable for proper pleadings to be in place early on in the case, and parties should strive to prepare thepleadings properly in the first place as a matter of course, the main thrust of these cases provides that as long as each side has notice,provided there is no prejudice that cannot be compensated by a costs order, and provided that the amendment is not sought for animproper purpose, the Court should allow an amendment, even a last minute amendment, and deal with the issue on its merits. [35] Like the mother’s claim under rule 25(19)(b), the father ought to have pleaded his claim for prejudgment interest.

Unlikepostjudgment interest, which generally accrues on orders for the payment of money as a matter of course (subject to certain statutoryexceptions and to the Court’s discretion to order otherwise), prejudgment interest must be claimed. The requirement to plead it is set outright in the wording of section 128(1).

Once it is claimed though, a litigant is entitled to prejudgment interest more or less as of right atthe prescribed rate from the date the cause of action arose, again subject only to certain statutory exceptions and to the Court’s discretionto order otherwise. [36] The impact of the father’s failure to plead a claim for prejudgment interest may be somewhat more nuanced than the comments Ihave made about the rule 25(19)(

b) relief not initially pleaded, but now sought by the mother. In this regard, I refer to Harvest HoldingsLimited v. Bohun, 1984 CarswellSask 364 (Q.B.). [37] In Harvest Holdings Limited v. Bohun, Maher J. was confronted with a request from a plaintiff for prejudgment interest. Therequest had been made in written submissions at the end of the trial, on the grounds that the payment of commission income had beenwrongfully withheld. The claim for interest was neither pleaded, nor was an amendment sought at the trial. [38] Maher J. declined to order prejudgment interest.

At ¶ 23 of the decision, Maher J. set out a three step “practice” that he saidshould be followed respecting claims for prejudgment interest:

(1) Interest should be claimed in the prayer for relief;

(2) The body of the pleading should set out facts that establish money has been improperly withheld and that it is fair and equitablethat the party who withheld the funds should make compensation by the payment of interest;

(3) The person claiming interest should assert a basis for the rate of interest, such as alleging that a certain rate was the cost ofborrowing, or alternatively that he would have received a rate of return had he invested the money[1]. [39] At ¶ 24, Maher J. said, “[w]hile compliance with each of these requirements may not be necessary in every case I am of the viewthat at the very least the claim should be included in the statement of claim or added by amendment at trial in order that the opposingparty have notice of the claim and be given the opportunity to oppose it.” [40] Although in the result Maher J. declined to award any prejudgment interest, it is clear from the decision that in Harvest HoldingsLimited v.

Bohun the plaintiff gave no notice to the opposite party before raising the issue. [41] By contrast, Weiss Air Sales Ltd. v. Bank of Montreal, 1982 CarswellOnt 148 (S.C.) appears to be somewhat conflictingauthority. At ¶25-27 of this case, Saunders J. allowed a claim for prejudgment interest from the date notice of a claim was given in themid-1970’s, even though prejudgment interest was not initially specifically pleaded. After the plaintiff launched the claim, the case wassubsequently delayed for several years.

Then about 5 or 6 years later but still prior to trial, the claim was amended to includeprejudgment interest. [42] Unlike in the Harvest Holdings case though, prejudgment interest had been pleaded prior to trial in Weiss Air Sales. Nevertheless, this still left the Court to grapple with how the deal with the 5 or 6 year period prior to 1981.

In the result, Saunders J.ordered interest back to 1975 on the ground that it was “fair and equitable” to do so. [43] In this case before me, to the extent that either party’s pleadings are deficient respecting the outstanding issues, I would not denyeither the right to proceed with their claims. In my view, the issues should be decided on their merits. [44] In saying this, I summarize and repeat what I said in my Judgment of November 1, 2018 at ¶ 262-269 (see M.P.A.N. v. J.N., 2018ONCJ 769 ¶ 262-269). Each party had notice and a fair opportunity to address the competing arguments.

The mother raised the issueof the unpaid costs and interest in her affidavit for trial sworn January 24, 2018. She tendered a chart of calculations. The fatherresponded in his trial affidavit sworn January 30, 2018 and he testified in chief about the orders. I found that there was a complete

record before the Court concerning how the costs orders came into existence. I heard evidence about the steps the mother took to enforce the orders previously, including interest. I found that the father was aware of this. [ 45 ] The father’s primary defence was that he had already paid the Orders. The father also raised alternative arguments/defences. To the extent that he ought to have pleaded those other arguments/defences and he didn’t, I do not view this as a fatal defect.

Like I said in my Judgment of November 1, 2018, this is not a situation where one party failed to call evidence believing that a claim (or defence) was not before the Court, only to be confronted with the realization to the contrary by surprise after the trial. It was known throughout the trial that the mother claimed the costs and interest as a set-off, and that the father challenged his obligation to pay.

I can see no disadvantage to either party if the Court rules on these points on their merits. [ 46 ] While the requirement to plead prejudgment interest may be slightly more nuanced, I do not reach a different conclusion. I am allowing the father to pursue it. In my Judgment of November 1, 2018, I determined that the mother owed the father money for a child support overpayment, and that the father had not paid the two Costs Orders to the mother.

But again, I had a number of questions about what should be the net result, given the father’s challenge to his obligation to pay the costs and interest. [ 47 ] The Court must make an order that is fair. This is a situation where the father failed to pay money to the mother for costs. As such, he enjoyed the benefit of not paying those funds. But the mother also kept child support to which she was not entitled. She enjoyed the benefit of additional funds. I see no real distinction between these two actions on the part of each party.

Each party benefitted from either not paying, or keeping money, that ultimately belonged to the other. If interest is chargeable on one pot of money but not the other, then I see an unfairness. I see t he father’s claim for prejudgment interest to be related to the mother’s competing claims. I will elaborate about this point later in these reasons. [ 48 ] It is also my view that there was an adequate evidentiary basis laid at the trial for the Court to address the father’s request for prejudgment interest.

Although the father did not claim interest in his pleading, the three elements from Harvest Holdings Limited v. Bohun were still presented at the trial. The mother was given notice and ample time to respond. The father’s trial affidavit (served prior to trial) and viva voce evidence established that money had been improperly withheld. And as I will explain later, the Court has before it an evidentiary basis for the Court to exercise its discretion and adjust the rate of interest pursuant to

section 130 of the Courts of Justice Act . [ 49 ] I see no prejudice to the mother of the kind that would warrant this Court denying permission to the father to amend to claim prejudgment interest, nor do I see any prejudice to the father if the mother’s not-pleaded claims are allowed to proceed. At the re- attendance on February 11, 2019, neither party persuaded the Court that either would any suffer prejudice if the Court considered any of the outstanding, but not pleaded, issues.

Neither party was able to point the Court specifically to how he or she would have called more evidence, or different evidence, or called the evidence that was tendered differently, or cross-examined differently, or in general how either would have presented his or her case any differently, had the aforementioned claims and arguments/defences been properly pleaded. [ 50 ] I do note that the father attempted to argue another form of prejudice respecting the mother’s request to amend Paulseth J.’s Order nunc pro tunc.

The father argued that he was unaware that interest was accumulating on Paulseth J.’s Order, given the omission of the postjudgment interest clause. As such, if the Court corrects the Order nunc pro tunc and allows interest on that Order now, this would be prejudicial to the father. [ 51 ] I reject this argument.

I will explain why later in these reasons when addressing, on the merits, the mother’s request to amend the Order nunc pro tunc. [ 52 ] Therefore, the mother’s Response to Motion to Change is amended to claim that the Order of Paulseth J. shall be amended nunc pro tunc to March 31, 2006, to include a postjudgment interest clause with interest at 5%. [ 53 ] The father’s Motion to Change is amended to claim an Order that he shall relieved from the obligation to pay the principal amount of the Costs Orders of Bean J. dated February 17, 2004 and Paulseth J. dated March 31, 2006, or any accrued interest, or both.

As well, his Motion to Change is amended to claim prejudgment interest at a rate to be determined, on any child support overpayment the Court finds is owing to him. [ 54 ] I will next deal with each of the claims and arguments/defences on their merits. C.

Does The Omission of the Postjudgment Interest Clause from Paulseth J.’s March 31, 2006 Costs Order Mean that Interest Is Not Payable on the Unpaid Principal Amount? [ 55 ] The omission of the postjudgment interest clause from the issued and entered order of Paulseth J. dated March 31, 2006 is not determinative that interest on the Order is not payable. [ 56 ] In saying this, I begin by referring to the Rules respecting the creation of Orders. [ 57 ] Rule 25 of the Family Law Rules, O. Reg. 114/99 as amended is the family law rule that deals with the preparation of Orders.

It is silent regarding the requirement to include a postjudgment interest clause. [ 58 ] However, rule 1(7) allows this Court to have regard to the Courts of Justice Act and the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 , as amended if a matter is not adequately covered in the Family Law Rules . [ 59 ] I note that the comparable Orders rule in the Rules of Civil Procedure , Rule 59, is more detailed than Rule 25 in various respects. It deals with interest specifically.

In particular, rule 59.03(7) requires that a person, when preparing an order for the payment of money on which postjudgment interest is payable, must set out the rate of interest and the date from which interest is payable. [ 60 ] A body of case law has developed about how readily a Court dealing with a case governed by the Family Law Rules should have

resort to the Rules of Civil Procedure. In this case, I need not refer to the Rules of Civil Procedure by analogy. The statutory provisionsregarding interest in the Courts of Justice Act apply irrespective of any silence about postjudgment interest clauses in Rule 25 of theFamily Law Rules. But incidentally, I do find the relevant rule from the Rules of Civil Procedure useful for purposes of comparison. [61] Money owing under a payment order bears interest at the postjudgment interest rate from the date of the order pursuant to section129(1) of the Courts of Justice Act.

Again, “date of the order”, as defined in section 127(1) means the date the order is made, even if theorder is not entered on that date. So in the case of Paulseth J.’s Order, this means that interest started to accrue pursuant to the Courts ofJustice Act as of March 31, 2006, regardless of when the Order later got issued and entered. [62] This raises a question about whether the omission of the postjudgment interest clause matters. In my view it does not. Myinterpretation would change if the omission of the postjudgment interest clause was deliberate on the part of Paulseth J.

But based on theevidence, I do not find that it was. [63] Paulseth J. did have the discretion to decline to order interest. As

section 130 of Courts of Justice Act states, the Court maydisallow prejudgment or postjudgment interest, adjust the interest rate, or order interest for a different period of time than provided for bysections 128 or 129 of the Act. But I heard absolutely no evidence at all to indicate that Paulseth J. did this back in 2006. To thecontrary, this current trial before me proceeded on the basis that the omission of the postjudgment interest clause was an error. [64] As such, I find that the omission of the postjudgment interest clause was an error. I will next consider whether it was the kind ofmistake that can be fixed by this Court now as contemplated by Rule 25(19)(

b) of the Family Law Rules. D. Should The Court Exercise Its Authority To Correct the Order Pursuant to Rule 25(19)(

b) of the Family Law Rules? [65] I turn to the mother’s argument that the Court should exercise its discretion to correct the error pursuant to rule 25(19)(

b) of theFamily Law Rules. [66] In Clarke v. Clarke, 2002 CarswellOnt 2759 (S.C.J.), Olah J. considered rule 15(14)(b) (the predecessor to rule 25(19)(

b) of theFamily Law Rules). Although she did not apply the Rules of Civil Procedure by analogy, she found the principles in cases decided underthe corresponding Rule 59.06(1) of the Rules of Civil Procedure[2] to be instructive. See Clarke v. Clarke ¶ 31. [67] At ¶ 32 she said the following about the scope of the mistake rule: The Rule, in my view, deals with technical mistakes due to inadvertence or oversight, and empowers the court to make sure that itsintention is accurately reflected in the order.

It does not, however, empower the court to revisit, report and re-argue the case, or to, ineffect, hear the appeal of its own decision….. [68] Boswell J. made similar comments in Gray v. Rizzi, 2010 ONSC 2858 (S.C.J.). At ¶ 37, also referring to rule 59.06(1) of theRules of Civil Procedure, Bowwell J. said this about the meaning of “mistake” in rule 25(19)(b): … In my view, however, the term “mistake” refers to the type of accidental slips or omissions referenced in Rule 59.06 of the Rules ofCivil Procedure.

It applies to circumstances where there is a mistake in the content of the order, for instance, where the order contains atypographical error, a misstatement of what was actually endorsed by the court, or a mathematical miscalculation. The Rule was not, inmy view, intended to apply to cases of alleged legal errors [which Boswell J. went on to hold were within the purview of the Court ofAppeal]…. [69] The Court of Appeal cited a portion of this passage of Boswell J.’s decision with approval in dismissing an earlier appeal in Grayv. Rizzi. See Gray v.

Rizzi, 2011 ONCA 436 , 2011 CarswellOnt 4263 (C.A.). [70] Although a non-family law civil case interpreting rule 59.06(1) of the Rules of Civil Procedure, in Millwright Regional Councilof Ontario Pension Trust Fund v. Celestica Inc., 2013 CarswellOnt 2759 (S.C.J.), Perrell J. canvassed a number of authorities regardingthe Court’s inherent or statutory jurisdiction to amend judgments containing errors. His helpful

summary of the law at ¶ 30-33 of thedecision reveals the following principles from the cases decided under the Rules of Civil Procedure. I quote portions of ¶ 30-33 almostverbatim:

(1) Generally speaking, the court’s inherent or statutory jurisdiction to amend is limited to cases of fraud, where there has been aslip in drawing up the order, or where there has been an error in the order expressing the manifest intention of the court from its reasonsfor decision;

(2) The [errors] rule is designed to amend judgments containing a slip or errors, or errors that were clerical, mathematical, or due tomisadventure or oversight;

(3) The rule is not designed to set aside judgments resulting from a slip in judicial reasoning. It is not a means to review errors inthe judge’s decision making. Rather it is designed to correct errors in memorializing the Reasons into a formal order or judgment;

(4) The rule is only operative in exceptional circumstances given the public interest in the principle of finality to the litigationprocess; and

(5) The rule permits amendments where the order obviously or indubitably does not reflect what the court intended to do, either byerror or oversight. [71] At ¶ 47 Kelly v. Kelly, 2018 CarswellOnt 18718 (S.C.J.), Howard J. referred to Perrell J.’s decision as “instructive in consideringthe informed application of subrule 25(19) of the Family Law Rules”. I too find Perrell J.’s

summary to be instructive regarding themeaning of mistake in rule 25(19)(b).

[ 72 ] These cases, combined with my reading of the interest provisions of Courts of Justice Act and the evidence I heard, leads me to find that the omission of the postjudgment interest clause from Paulseth J.’s March 31, 2006 Order is a mistake of the nature contemplated by rule 25(19) (

b) of the Family Law Rules . My finding that the omission of the postjudgment interest clause was a mistake is not tantamount to an improper review of Paulseth J.’s 2006 decision for legal error; rather, I find that the formal entered order does not reflect the Court’s manifest intention. In saying this, I also rely on ¶ 5-8 of Skiba v.

Skiba, 2000 CarswellOnt 2342 (S.C.J.) , where Vogeslang J. referred to a request to include the usual postjudgment interest clause in the body of an order that had been omitted when the order was drafted and approved as “an example of a mistake which should be rectified”. [ 73 ] My finding that the omission of the postjudgment clause was an error does not end the analysis, however. The Court must still decide whether to exercise its discretion to correct the Order under rule 25(19) . This analysis is complicated by the fact that the mother moves for this relief 12 years after the fact. E.

The Court’s Jurisdiction to Make a Nunc Pro Tunc Order [ 74 ] Nunc pro tunc is a latin expression that means “now for then”. In asking for such an order, a party is essentially asking for a backdated order. [ 75 ] This Court has jurisdiction to make a nunc pro tunc order. There is authority in the Family Law Rules to do so. According to rule 25(18) of the Family Law Rules , an order is effective from the date it is made, unless it states otherwise . Incidentally, the comparable Rule 59.01 of the Rules of Civil Procedure is identically worded. F.

The Applicable Test to Grant a Nunc Pro Tunc Order [ 76 ] The test to grant a nunc pro tunc order is summarized in Messari et al. v. Alberelli et al., 2017 ONSC 5304 (S.C.J.) . At ¶ 11-18 , Gomery J. cites the Supreme Court of Canada’s decision in Canadian Imperial Bank of Commerce v. Green, 2015 SCC 60 , and sets out the two part, multi-factor test that courts should apply. [ 77 ] The test is:

(1) First, did the party seeking the order meet the “red-line rule”. This means that the motion must be brought prior to the expiry of any limitation period. “The party seeking a backdated order must have been ready to present argument to the court prior to the deadline to obtain it”; and

(2) Second, if the “red-line rule” is met, then the Court will consider factors militating in favour of, or against , granting a nunc pro tunc order, which could include: (

i) Will the opposing party be prejudiced by a nunc pro tunc order? (ii) Would the order have been granted had it been sought at the appropriate time? (iii) Was the irregularity intentional? (iv) Will the order effectively achieve the relief sought or cure the irregularity? (

v) Was the delay caused by

an act of the court? (vi) Will the order facilitate access to justice? [ 78 ] I read Gomery J.’s use of the words “could include” at the second stage of the test to mean that the list of considerations is not exhaustive. [ 79 ] Overall, the test is one of fairness. At ¶ 15 of Messari et al. v. Alberelli et al . , Gomery J. said, “[i]n the end, the court is assessing the overall fairness of granting a backdated order by considering the diligence of the party seeking it, and potential prejudice to the opposing party if the order is granted”. G.

Does the Passage of 12 Years Matter in this Case? [ 80 ] In Messari et al. v. Alberelli et al. , the defendants sought leave, nunc pro tunc, to add a third party defendant to the proceedings, after the expiry of the time to do so without consent, and well after the expiry of a limitation period that applied to the claim against the third party (ie. the so-called “red-line rule”).

In dismissing the motion for leave to add a third party nunc pro tunc , Gomery J. held that the third party in question would be prejudiced as it would defeat his ability to raise a limitation argument. [ 81 ] Even where the limitation period hasn’t expired though, delay is still relevant. In Messari et al. v. Alberelli et al, the plaintiff had consented to the relief sought just before the expiry of the limitation period. Regarding this, at ¶ 16 of Messari et al. v. Alberelli et al. , Gomery J. said: The focus on diligence is important because of the origins and purpose of the nunc pro tunc order.

A party seeking a backdated order must persuade the court that their situation is due to factors beyond their control. They likely will not be able to do so if they let most of the limitation period pass without taking any steps to advance their rights, then sought the court’s help at the eleventh hour. [ 82 ] In this case, the mother meets the “red-line rule”. As I found at ¶ 295 and 296 of the Judgment dated November 1, 2018 ( see M.P.A.N. v. J.N. , 2018 ONCJ 769 ¶ 295 and 296 ), the mother’s request to set off the costs orders is not statute barred.

As no limitation period has expired, adding the postjudgment interest clause nunc pro tunc does not defeat any limitation defence that the father might otherwise have had. In this sense he is not prejudiced. And as the father has abandoned his laches argument, I need not consider any analogous prejudice from this angle either.

[ 83 ] But quite apart from the “red-line rule”, there remains the issue that the relief sought by the mother comes after a 12 year delay. I consider this next.

(1) Prejudice [ 84 ] The 12 year delay is best analyzed by asking whether the nunc pro tunc order will prejudice the father otherwise. The requirement to move diligently with one’s claims is not foreign to family law. While certain claims in family law are subject to limitation periods, the majority are not. Nevertheless, arguments about delay still come up regularly in family law. [ 85 ] One need look no further than to retroactive child and spousal support cases.

Whether a support payor or a support recipient acted either with diligence or delay, is usually a central theme in such cases. [ 86 ] The requirement to act diligently is not foreign to the particular context of rule 25(19) motions either. For example, in Lin v. Ha, 2017 CarswellOnt 18061 (S.C.J.) at ¶ 9 (albeit this was a motion under rule 25(19) (

e) to set aside a so-called “default order”) Kristjanson J. considered whether the moving party had brought the rule 25(19) (

e) motion promptly after learning about the default order. [ 87 ] Delay has already been considered in this particular case, but in a different way. This Court has already assessed the various arguments about delay when considering the father’s claim to recover the overpayment. Applying the factors in Meyer v.

Content, 2014 ONSC 6001 , in the November 1, 2018 Judgment this Court scrutinized and considered the father’s failure to return to Court earlier with his claim for the overpayment as well as the mother’s conduct in resisting the father’s efforts to terminate his child support obligation short of coming back to Court. [ 88 ] Once again, concerns of delay arise, now in relation to the claim for costs and interest. [ 89 ] If delay matters in motions under rule 25(19) and/or specifically in cases where a nunc pro tunc order is sought under rule 25(19) (b), even where no limitation period has passed, how should the evidence of delay be weighed? [ 90 ] In Messari et al. v.

Alberelli et al. the Court set out two ways in which delay might be considered. One is to ask whether the delay was caused by

an act of the Court. There is no evidence of that here. [ 91 ] The other way falls under the rubric of considering prejudice. In Messari et al. v. Alberelli et al. the Court found prejudice as a result of the passage of time, but that was because the expiry of a limitation period was an important, if not determinative feature. Short of a limitation period expiring, the Court should look at whether delay has caused prejudice to the other party to an extent that the nunc pro tunc order ought not be granted.

In this case, I find this not to be so. [ 92 ] At paragraph 323 and 324 of the Judgment of November 1, 2018 ( see M.P.A.N. v. J.N. , 2018 ONCJ 769 ¶ 323-324 ), I found that that mother took some steps to enforce the costs in 2006 and 2008, but then she stopped for 7 years. I also found that when she renewed her enforcement efforts in 2015, she was motivated by a desire to reduce her overpayment to the father.

Thus, I find there is evidence of some delay on her part. [ 93 ] I acknowledge that I found the mother to have engaged in blameworthy conduct, but that finding was specific to her conduct in relation to the father’s attempts to terminate his child support. ( see M.P.A.N. v. J.N. , 2018 ONCJ 769 ¶ 129-142 , 158, 176, 178 and 190- 206 ).

Even though I found she used the fact of the outstanding costs and interest inappropriately as a shield to delay the child support termination to which the father was entitled, the fact remains that she is still owed the costs and interest. [ 94 ] And, the mother’s delay was only a partial one. At times, she did pursue enforcement and when she did, she was active in her pursuit. As I found at paragraphs 172, 178 and 186 of the Judgment ( see M.P.A.N. v.

J.N. , 2018 ONCJ 769 ¶ 172 , 178, 186 ), despite being told by the FRO that it would not enforce the costs and interest, she repeatedly insisted that the FRO do so. She made multiple phone calls, she wrote letters, and she submitted statements of arrears. She retained counsel. At one point, she even succeeded in having the FRO add some of the costs to its statement of arrears, although those costs were later removed.

Even when the FRO discontinued enforcement in 2017, she continued to try. [ 95 ] While she should not have blocked the child support termination, there is nothing wrong with taking steps to enforce a Court Order. [ 96 ] In the result, I can see no prejudice to the father arising from the mother’s delay in enforcing the costs and interest. As I said earlier when dealing with the questions about the state of the pleadings, the father’s counsel attempted to establish prejudice by arguing that the father was unaware that interest was accumulating on Paulseth J.’s Order.

Therefore, he argued it would be unfair to require him to pay it now. [ 97 ] His argument is akin to arguments sometimes advanced in retroactive child support cases. Essentially he argued that the father enjoyed certainty in knowing the amount he owed under the Court Order (without interest). So if interest is ordered or becomes payable now, that financial certainty will be disturbed. [ 98 ] I fail to see how the father can argue this successfully. Even if he wasn’t aware of the interest based on the absence of the interest clause per se, he was aware that he had an obligation to pay money.

Had he paid the Costs Order in a timely fashion when it was made, interest would be a non-issue. Moreover, I do not find this argument, based on alleged lack of knowledge, to be reasonable. It should not come as a surprise to any litigant that interest accrues on unpaid money. This is the reality of the commercial world in which society operates. [ 99 ] Further, the father’s prejudice argument only pertains to a portion of one of the Costs Orders. As there was no error on the face of Bean J.’s Costs Order, he cannot make this lack of knowledge argument regarding that Order.

At best it is an argument for partial relief only.

[ 100 ] As I have already said, and as I will explain later in these reasons in more detail, except in certain circumstances, postjudgment interest accrues automatically on an unpaid order for the payment of money in the absence of an issued and entered Order. Given my finding that the Court did not exercise its discretion to depart from the norm respecting interest in 2006, I question the relevance of the father’s knowledge on this topic in any event.

It is my view that the father should not be permitted to take advantage of what I am finding to have been a mistake made in 2006, coupled with his own non-compliance by failing to pay the Costs Orders in a timely way, to argue now that he should not have to pay a component of that Order. [ 101 ] Finally, the Court must be careful to send the message that Orders are to be respected. If the Court were to relieve the father of the obligation to pay, it would be sending the wrong message. [ 102 ] In

summary, the absence of prejudice to the father militates in favour of granting the nunc pro tunc Order sought by the mother. The 12 year delay is not a bar to her claiming the relief sought in the circumstances of this case. [ 103 ] I turn next to the other discretionary factors set out by the Court in Messari et al. v. Alberelli et al.

(2) Would the Order Sought Have Been Granted Had It Been Sought At the Appropriate Time? [ 104 ] There is no question that postjudgment interest would have been granted at the time Paulseth J. made her Order, because in reality, it was granted. This is a non-issue. This militates in favour of granting the nunc pro tunc Order sought.

(3) Was the Irregularity Intentional? [ 105 ] The answer to this question is no. The omission of the clause was a mistake. This militates in favour of granting the nunc pro tunc Order sought.

(4) Will the Order Effectively Achieve the Relief Sought or Cure the Irregularity? [ 106 ] The answer to this question is yes. If postjudgment interest accrues from the date of a payment order regardless of when an order is issued and entered in the absence of a Court saying otherwise, then this is not a situation where a nunc pro tunc order creates a new state of affairs respecting the past. Rather it is just confirming what is actually, or ought to have been the case, but for the error.

This too militates in favour of granting the nunc pro tunc Order sought by the mother. [ 107 ] Theoretically, if the Court were to grant the nunc pro tunc Order only to later conclude on the merits that it should decline to enforce the costs or interest on some other ground (as the father has asked), then that might militate against making the nunc pro tunc Order sought. But as I will explain in the next

section of these reasons, I find there is no basis to decline to enforce, or to relieve the father from paying, either the costs or the interest owing under either Order.

(5) Was the Delay Caused by

an Act of the Court? [ 108 ] There is no evidence that the Court was responsible for preparing the Order with the missing clause. Regardless of who prepared the Order, the Clerk of the Court ought not to have entered the Order with this error. Nevertheless, the mother did not bring the matter back to Court until now. The delay in seeking to correct the Order does fall on the mother’s shoulders. But for reasons already explained, I would not deprive her of relief on this basis.

(6) Will the Order Facilitate Access to Justice? [ 109 ] In considering this factor, it is important to note that the omitted postjudgment interest clause relates to interest on an unpaid Costs Order. Modern costs rules are designed to foster four fundamental purposes: (1) to partially indemnify successful litigants; (2) to encourage settlement; (3) to discourage and sanction inappropriate behaviour by litigants; and (4) to ensure that cases are dealt with justly under subrule 2 (2) of the Family Law Rules ( see Mattina v.

Mattina , 2018 ONCA 867 ). [ 110 ] If costs are ordered but then go unpaid, the purposes of our modern costs rules are defeated. Not requiring costs orders to be paid operates to discourage or perhaps even prevent litigants from seeking access to justice. It could discourage a litigant from coming back to Court with a meritorious claim in the future, perhaps if he or she thinks he or she will not be indemnified. It fails to sanction the unsuccessful, or poorly behaved litigant. If the Court’s Costs Orders are not respected, the important goal of fostering and encouraging settlement is also potentially undermined.

This runs the risk of messaging to litigants that they need not be reasonable or proportional in their behaviour in a lawsuit. This would run contrary to a number of provisions in the Rules that encourage settlement. Such an approach risks increasing the cost, the length and the complexity of proceedings. All of which undermines access to justice. [ 111 ] When an order, including a costs order, goes unpaid, it is fair that interest should attach to it. I thus find that correcting the Order to include the postjudgment interest clause and requiring that it be paid enhances access to justice.

This too militates in favour of granting the nunc pro tunc Order sought.

(7) Conclusion [ 112 ] Based on my assessment of the applicable factors, I find that the Order of Paulseth J. dated March 31, 2006 should be corrected nunc pro tunc to include the postjudgment interest clause. The applicable postjudgment interest rate at the time of the Order was 5%. H. Whether the Court Should Decline to Enforce the Costs Orders or Interest On Other Grounds

[113] I will first address whether the Court should decline to enforce the principal amounts of the Costs Orders before turning to theinterest, which I will deal with separately.

(1) Principal [114] The father has pointed me to no legal basis on which the Court should decline to enforce the principal costs amounts owing undereither Order. I therefore need say nothing further about this. The principal amounts are payable.

(2) Interest [115] The father’s remaining argument is that the Court should relieve him of the obligation to pay the interest on both Orders. To doso would be tantamount to this Court varying the interest provisions of the prior Orders. [116] I find that I lack the jurisdiction to grant this relief. I - Res Judicata [117] The doctrine of res judicata precludes the re-litigation of a cause of action already adjudicated (referred to as cause of actionestopped) as well as the re-litigation of “the constituent issues or material facts necessarily embraced therein” (referred to as issueestoppel).

As Justice Binnie wrote at ¶ 18 of Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, “[t]he law rightly seeks a finalityto litigation… A litigant, to use the vernacular, is only entitled to one bite at the cherry… Duplicative litigation, potential inconsistentresults, undue costs and inconclusive proceedings are to be avoided.” [118] A party is required to bring forward his or her whole case at once. This applies even where the first action was not fully litigatedthrough negligence, inadvertence or accident.

To raise the same matter later in a second action, a party must show “specialcircumstances”, which includes new circumstances that could not have been ascertained by reasonable diligence in the first action. Thisis cause of action estoppel (see the majority decision of Ritchie J. in Grandview v. Doering, (SCC), [1976] 2 S.C.R.621). [119] Issue estoppel will apply where any right, question or fact, has been distinctly put in issue and directly determined by a Court.

Inorder for issue estoppel to apply, the same question must have been decided, the decision must have been final and the parties to thedecision or their privies have been the same as the parties now before the Court. See Danyluk v. Ainsworth Technologies Inc. at ¶ 24-25. [120] The doctrine of res judicata applies to costs orders. [121] In Smith's Field Manor Development Ltd. v. Campbell, [2004] N.S.J. No. 106, the Nova Scotia Court of Appeal applied thedoctrine to prevent the re-litigation of an order for solicitor-client costs.

Following a 38 day trial in the Smith's Field ManorDevelopment Ltd. case, the trial judge determined that Mr. Campbell was entitled to solicitor-client costs. That cost award was upheldon appeal. The costs were then sent to an adjudicator to be “taxed”. Following that process, Smith’s Field Manor launched two appealsseeking to reduce the amount of costs that had been taxed. [122] Smith's Field Manor Development Ltd. enjoyed some success on the first appeal to the Nova Scotia Supreme Court.

But then onthe further appeal to the Nova Scotia Court of Appeal, the appellants argued for a further reduction, saying that they should get credit forthe work they had done to respond to certain matters that Mr. Campbell had raised that were either wrong in law or irrelevant, andbecause they said Mr. Campbell had engaged in conduct that had prolonged the case. [123] At ¶ 30, the Court said the following: 30 In my view the answer to this issue is that these arguments made by the respondent were all known to this Court when the order forsolicitor client costs was affirmed.

This issue is res judicata, or has been merged in the original appeal decision. If there was conduct ofthe respondent or his counsel that unnecessarily prolonged the trial or needlessly complicated the legal issues raised, that was a matterfor consideration by the trial judge in the original costs order or on the appeal of the original solicitor and client costs order.

Presumably,if that were the case, the trial judge would not have ordered solicitor client costs, or the Appeal Court would either have not confirmedthe costs order, or would have ordered some sort of reduction. [124] In other words, these arguments were either dealt with, or ought to have been dealt with, when costs were considered in the firstinstance. [125] In this case, both Costs Orders were final. The time for the father to object to interest was at the time of submissions before theCosts Orders were made in 2004 and 2006.

It is my view that the question of interest is res judicata. [126] I next consider whether there is any statutory authority or rules based provision that gives the Court authority to vary interest suchthat the doctrine should not apply. II - Does

Section 130 of the Courts of Justice Act or Any Rule Authorize the Variation of Interest? [127] An exception to the estoppel doctrine would be if there is a statutory provision that gives this Court the authority to reconsiderinterest, or otherwise if there are “special circumstances”. [128] Various statutes have modified the application of the doctrine of estoppel in family law. According to D.

Lange, “The Doctrineof Res Judicata In Canada”, 3d Ed. (Markham: Lexis-Nexis Canada Inc., 2010) at page 397, statutes that permit variation of family laworders reflect the intention of the legislature to limit the application of estoppel either entirely, or only to facts determined to a point intime, but not to new factual circumstances after the Order. Such statutory provisions exist respecting custody and access orders, andsupport orders (see for example

section 29 of the Children’s Law Reform Act, R.S.O. 1990, c. C. 12 as amended

section 17 of the

Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) as amended, and

section of the Family Law Act, R.S.O. 1990, c. F.3, as amended). [129] Nevertheless, the estoppel doctrines still apply in family law. See Fillion v. Degen, 2005 MBCA 58 , [2005] M.J. No.155 (C.A.); see also Wong v. Wong, (ON SC), [2006] O.J. No. 5479 (S.C.J.); and see “The Doctrine of Res JudicataIn Canada” at pages 397 and 398. [130] While

section 130 of the Courts of Justice Act certainly bestows upon this Court the discretion to adjust prejudgment orpostjudgment interest, I read this

section as giving the Court this authority at the time an order for the payment of money is initiallymade. I do not read

section 130 as authorizing a later variation of interest, nor do I find that there is there any other statutory provision orRule upon which I could rely to vary interest in this case. [131] While there may appear to be divided authority on this point, including divided authority in the Court of Appeal, it is my viewthat the weight of the authority supports this

interpretation. And to the extent the authorities are conflicting, they can be reconciled. [132] In Bakshi v. Kouretsos, the Court issued a judgment on June 28, 1990. The issue of interest and costs was heard on July 23,1990. No submissions were made at the hearing regarding the postjudgment interest rates. Then, there was an appeal (on other points),but that was dismissed. The defendants later moved for an order under

section 130 of the Courts of Justice Act to vary the interest. At ¶13, Morrissey J. said the following: It is important to note that the discretion with respect to post-judgment interest is to be exercised by the trial judge before judgment isentered. No application respecting interest was made at that stage. There is no specific discretion in the Rules of Civil Procedure topermit the court to vary post-judgment interest after judgment. [133] Morrissey J. dismissed the motion. [134] In Koukounakis v.

Stainrod, 1996 CarswellOnt 2635 (S.C.J.), Yates J. dismissed a motion brought under rule 59.06(1) of theRules of Civil Procedure to change a term of an order for simple postjudgment interest at 14%, to have that interest calculated and paid ata compound rate. Yates J. declined to grant the relief sought as the matter had not been raised before him when he granted judgment inthe first place. On appeal to the Court of Appeal, the former Chief Justice McMurtry expressed “serious reservations” about whetherthe rule applies, and about whether Yates J. even had jurisdiction to entertain the motion in the first place.

However, the Court of Appealagreed with the ultimate result (see Koukounakis v. Stainrod, 1998 CarswellOnt 1241 (C.A.)). [135] Likewise, in L.M. Rosen Realty Ltd. v. D’Amore, 1988 CarswellOnt 446 (H.C.J.), Anderson J. refused to vary the postjudgmentinterest rate after the fact, based on a decline in interest rates after the date of the Order. At ¶ 2-5 he held that the decline in the rates wasnot a fact “discovered after the order was made” within the meaning of rule 59.06(2)(

a) of the Rules of Civil Procedure. He also heldthat the jurisdiction, the set out in the predecessor section 37(2) of the Judicature Act, to adjust the interest rate “is that of the trial Judgein his disposition of the matter” and “not a discretion to be exercised subsequently by some other judge.” He also found it “offensive tothe basic proposition that there should be finality in litigation”… “save in response to unusual circumstances”. Separately, he declined tosuspend the accrual of interest during certain periods for similar reasons. [136] In Robert McAlpine Ltd. v.

Woodbine Place Inc., 2001 CarswellOnt 5222 (C.A.), in the result, Osborne A.C.J.O. held that therewere no “compelling and exceptional circumstances” to change the interest rate. This result assumed, without deciding, that there wasjurisdiction to do so in the first place. In obiter, he questioned the jurisdiction of the Court to vary a postjudgment interest rate imposedby a trial Court in the absence of appellate error.

So while on the one hand, the Robert McAlpine decision suggests that the applicabletest to change an interest rate after the fact is “compelling and exceptional circumstances”, the decision casts considerable doubt on thethreshold jurisdictional question to begin with. [137] In 469804 Ontario Ltd. v. 723146 Ontario Ltd., 2002 CarswellOnt 1520 (S.C.J.), Cullity J. followed the approach in RobertMcAlpine Ltd. v. Woodbine Place Inc. He declined to weigh in on the jurisdictional issue, finding that there were no compelling orexceptional circumstances to justify the exercise of jurisdiction.

Postjudgment interest rates declined in the years after the date ofjudgment from 11% to 4%; this was not sufficient in this case. [138] By contrast, Eastwalsh Homes Ltd. v. Anatal Development Corporation et. al, (ON SC), [1995] O.J. No. 3133(Gen. Div.), is the only case that says there is jurisdiction in the Courts of Justice Act to vary the postjudgment interest rate. [139] In Eastwalsh Homes Ltd., Trafford J. specifically departed from the reasoning in Bakshi v. Kouretsos, holding that there isjurisdiction to vary an interest rate.

He said that in deciding whether or not to do so, a court should pay defence to the trial judge and theCourt of Appeal, consider the extent to which the issue was litigated at trial and on appeal, and consider the complexity of the case. Trafford J. also said that absent any change in circumstances, only the Court of Appeal can vary an order of a trial judge.

Otherwise, hesaid if the circumstances are exceptional it can be done, but it is preferable to return the matter to the trial judge. [140] Yet once again, in the result, Trafford J. declined to vary the interest rate, saying the extent of the change in interest rates in thatcase was not sufficiently “exceptional” to justify the intervention of the Court.

I further note that subsequently in 469804 Ontario Ltd.v. 723146 Ontario Ltd., Cullity J. cited this aspect of Trafford J.’s decision, but distinguished it, holding that fluctuations in the interestrates, while relevant, are not to be determinative. [141] At ¶ 47-52 of Woo v. Chin, (ON SC), [2007] O.J. No. 4590 (S.C.J.), Justice Herman referred to both theRobert McAlpine Ltd. and Eastwalsh Homes Ltd. decisions. She did so in relation to a request to vary the postjudgment interest rate onan equalization payment ordered more than 12 years earlier.

She too questioned the authority to rescind postjudgment interest, butdismissed the request on the basis that there were no exceptional circumstances or changes in circumstances that would warrant theCourt granting that relief. [142] I have found only one decision of the Ontario Court of Appeal, Crosbie v. Crosbie, 2012 ONCA 516, that suggests there isjurisdiction to vary interest, but it is distinguishable. In 1995, a court made an order requiring Mr. Crosbie to pay child support. In 2009,

he brought an application to change his child support obligations retroactively and prospectively based on changed circumstances. Healso asked the court to fix arrears and to forgive interest that had accrued on the unpaid amounts owing under the initial order. [143] The motions judge dismissed the application to change the support. The motions judge also dismissed the request to rescindarrears. The Court of Appeal upheld those aspects of the motions judge’s order. However, citing Robert McAlpine Ltd. v.

WoodbinePlace Inc., the Court found there were “compelling and exceptional reasons to change the interest rate. The Court of Appeal relied on thedecline in the rate from 10% to 3%, combined with the “extensive passage of time” during which the arrears had accumulated. [144] The Court of Appeal did not comment about the threshold jurisdictional question in Crosbie v. Crosbie because it did not apply. It is important to note that in Crosbie v. Crosbie and another decision it cited, MacKinnon v.

Duffy (2000), (ON SC),10 R.F.L. (5th) 336 (S.C.J.), the interest sought to be varied had accrued on an unpaid support order. The father in Crosbie v. Crosbiehad brought his variation application under section 17(1) of the Divorce Act and in MacKinnon v. Duffy it was a variation under theFamily Law Act that was before the Court. Both statutes specifically empower a Court to vary interest accrued on unpaid support. [145] Section 17(1) of the Divorce Act allows a court of competent jurisdiction to make an order “varying, rescinding or suspending,proactively or retroactively (

a) a support order or any provision thereof…” Section 37(2.1)(

b) of the Family Law Act is even morespecific. It empowers the court in child support variation cases to “relieve the respondent from the payment of part or all of the arrearsor any interest due them” in appropriate circumstances, including a change in circumstances. [146] There is no such language respecting postjudgment interest in the Courts of Justice Act. The interest in question in Crosbie v.Crosbie was subject to a different statutory framework that authorized the variation of interest.

In this case, the interest accrued as aresult of the non-payment of two non-variable costs orders. [147] To summarize the law, the Ontario Court of Appeal has twice expressed strong concerns about courts’ jurisdiction to vary anorder for interest. If there is jurisdiction, the test to be applied is “compelling and exceptional circumstances”. [148] Meanwhile, two decisions of the Superior Court have said there is no jurisdiction to vary interest. A third and conflicting decisionof the Superior Court has found there to be jurisdiction, but declined to exercise it.

The judges in two other decisions of the SuperiorCourt declined to decide the threshold issue, refusing to vary interest on the facts of the cases. [149] The only Court of Appeal decision that I am aware of which found jurisdiction to vary interest absent appellate error is Crosbie v.Crosbie. However, again, it did so without needing to comment on the precise jurisdictional question now before this Court, as itconsidered the interest question under a different legislative framework that authorized interest to be changed. [150] I find that the weight of the authority supports the conclusion that

section 130 does not authorize me to vary the interest orderedby Bean J. and Paulseth J. I would not follow Eastwalsh Homes Ltd. v. Anatal Development Corporation et. al. I do not read

section 130of the Act as providing any statutory authority to the Court to vary interest. The wording

section 130 is different from other variationsections of other statutes that do authorize variations of final orders. I am aware of no other statutory or rules based provisions thatwould allow me to vary postjudgment interest on a Costs Order. III - Are Any Special Circumstances Present? [151] Apart from the threshold jurisdictional question, these cases can otherwise be reconciled. The common theme in these cases isthat there may be some limited discretion to grant relief in “compelling and exceptional circumstances”.

I read these statements not asaffirmative statements about the power to vary, but rather as reflective of the Court’s limited discretion to decline to apply estoppel inspecial circumstances to make a fresh Order. [152] At ¶ 62 of Danyluk v. Ainsworth Technologies Inc., Binnie J. said, “[t]here is no doubt that such a discretion exists”. In Danyluk,the Supreme Court had to consider whether the dismissal of an employee’s claim by a government adjudicator under the EmploymentStandards Act, R.S.O. 1990, c. E.14 was a bar to that employee’s subsequent wrongful dismissal action on the basis of estoppel.

Ultimately, the Court permitted the employee to proceed with the civil action, holding in part that the legislature did not intend the ESA’ssummary procedure for small claims, to bar the consideration of more substantial claims. [153] Binnie J. was of the view that the discretion to decline to enforce estoppel is broader in relation to prior decisions of tribunals,given the “broad range and diversity of the structures, mandates and procedures of administrative decision-makers”. In the context ofcourt proceedings though, he said, “…such a discretion must be very limited in application” (see Danyluk v.

Ainsworth Technologies Inc.at ¶62-63; see also “The Doctrine of Res Judicata in Canada” at 224-245. [154] The discretion to decline to enforce estoppel is case specific based on all of the circumstances of the case. The Court should askwhether there is something in the circumstances of the case such that the usual operation of estoppel would work an injustice (seeDanyluk v. Ainsworth Technologies Inc. at ¶62-63; see also “The Doctrine of Res Judicata in Canada” at 224-245). [155] I do not find “compelling and exceptional circumstances” or “special circumstances” to be present on the facts of this case.

I saythis for three principle reasons. [156] First, in this case, the change in the postjudgment interest rates since the Orders is not significant. The current postjudgment rateis 3%. Since 2004 when Bean J. made the first Costs Order and then continuing after 2006 when Paulseth J. made the second CostsOrder, the postjudgment interest rate fluctuated to a high of 6% and to a low of 2%. These fluctuations are no more than 3% either wayfrom the applicable rates in the Court Orders. This is insufficient.

No decision that I am aware of has allowed the change in a rate basedon minor fluctuations of this nature. [157] Second, in Crosbie v. Crosbie, the Court seemed to suggest that something more than an interest fluctuation is required toestablish “compelling and exceptional circumstances” or “special circumstances”. The Court relied on delay coupled with a much largerchange in interest. Again, though, the interest variation was statutorily authorized. It is not clear whether the facts before the Court of

Appeal in Crosbie v. Crosbie would be “special circumstances” within the meaning of estoppel law had the variation not been authorizedby the statute. I suspect they may not have been. [158] Regardless, in this case, there are no other circumstances, when added to the small changes in interest, that come close to meetingthe test. I have already made findings about the mother’s delay regarding the costs and interest in a different context, but once again Ifind those comments apply equally here. The father did not suffer prejudice from the delay.

Neither counsel pointed me to any otherfactor. [159] The entire circumstances of this case militate in favour of the mother collecting the interest that she is due. As such, I turn next tothe father’s claim for prejudgment interest. I.

The Father’s Claim for Prejudgment Interest [160] I find that the father should be awarded prejudgment interest on the money that he overpaid to the mother for child support towhich she was not entitled. [161] While historically, interest on a judgment was imposed when a Court was of the view that a party’s conduct was deserving ofpunishment, the modern theory of judgment interest is that it should be ordered as a means of compensation (see M. Waldron, “The Lawof Interest in Canada”, Scarborough: Carswell, 1992 at pages 127-128; and see also Irvington Holdings Ltd. v. Black et al, (ON CA), [1987] O.J.

No. 56 (C.A.)) [162] In

section 128, the Courts of Justice Act recognizes the unfairness in awarding a judgment to a party at trial in the amount towhich he or she was entitled as of the date the cause of action arose, but no more for the time in between. This is because the value ofmoney decreases over time (see Bank of America Canada v. Mutual Trust Co, 2002 SCC 43 ¶ 21, 36, 39). Speaking in the commercialcontext, in Irvington Holdings Ltd. v.

Black et al., Finlayson J.A. said, “…if the plaintiff has been out of his money for a period, theusual order is that the defendant should pay interest for the time for which the sum has been outstanding.” [163] This proceeding was commenced on July 26, 2017. The prescribed prejudgment interest rate at the time was 0.8%. Because thisCourt terminated the child support obligation as of April 30, 2010 though, the father asks the Court to apply an average of the prejudgment interest rates in the past (see for example Debora v. Debora (2005), (ON SC), 14 R.F.L. (6th) 245(S.C.J.) ¶ 49-54 and Debora v.

Debora (2006), (ON CA), 83 O.R. (3d) 81 (C.A.)). For much of the time after 2010but prior to the commencement of this proceeding, the prejudgment interest rate was higher, at 1.3%. And since the proceeding began,the rate has further increased to 1.8%. Both counsel agree that the average of the rates between 2010 and 2018 is 1.13%. [164] As I set out above, the mother’s position is that no prejudgment interest ought to be awarded at all because the father did notplead a claim for it. I have already rejected this argument.

Her alternative argument is that I should only award prejudgment interestusing this average rate of 1.13% from the date of the father’s Motion to Change as a consequence. [165] I do not find either approach to be sound. [166] First, while in the November 1, 2018 Judgment, the Court terminated the child support obligation retroactive to April 30, 2010, Ialso found that the father owed arrears as of that date. The arrears he then owed were $27,009.86. After that date he made payments of$67,957.25, eventually resulting in the overpayment of $40,947.39 (see M.P.A.N. v. J.N., 2018 ONCJ 769 ¶ 125).

Based on my reviewof the FRO Statement of Arrears, it was not until February 1, 2013 that the father repaid the mother the arrears he owed her[3]. [167] The father’s calculations apply an average prejudgment interest rate on the total amount of the overpayment going back to 2010 asif the overpayment had been made in full at that time.

As it was not until February 1, 2013 that the father actually started to overpay, thisapproach is not sound. [168] Second, the FRO Statement of Arrears reveals that between February 1, 2013 and May 23, 2017, when the FRO eventuallyceased enforcement, the father made 101 periodic payments of $391.50, plus 5 other payments in different amounts. In other words, the$40,947.39 that he overpaid was an accumulation of money over time. [169] The chart that the father supplied reveals that the average prejudgment interest rate since 2013 is slightly higher at 1.16%.

Butmore problematic is that whatever interest rate is applied would not attach to the entire amount going back to 2013. Rather, to calculateit properly, interest would accrue on each individual periodic payment made after that date. As such, each payment that the father madeto the mother ended up being retained by her for a different period of time and as such each individual payment will end up accruing adifferent amount of interest. The father’s interest calculation oversimplified the true state of affairs. J. The Exercise of Discretion Under

Section 130 of the Courts of Justice Act Respecting Prejudgment Interest [170] In any case, I would exercise discretion pursuant to

section 130 of the Courts of Justice Act to increase the prejudgment interestrate to the father during the period February 2013 to February 2019. I would apply a rate of 5%. I neither find 1.13% or 1.16% to beappropriate. And I would not exercise my discretion to only allow interest as of the date of the Motion to Change, as the mother arguedin the alternative. It is fair that he be allowed interest for the time that he overpaid. [171]

Section 130 of the Courts of Justice Act gives the Court the discretion to change the interest rate provided for in the statute,disallow prejudgment interest or allow it for a period other than provided in the statute. [172] There is some guidance in the case law about how the Court should exercise its discretion. Although he was speaking about the

exercise of discretion in relation to interest under predecessor legislation, in Irvington Holdings Ltd. v. Black et al., Finlayson J.A. saidthat the discretion must be “exercised in accordance with the purposes of the statute giving the power”. That is, it must be related “to thetask of putting the plaintiff in the same position, so far as money is concerned, as he would have been if he had not suffered the loss” (seeIrvington Holdings Ltd. v. Black et al.; see also Oakville Storage & Forwarders Ltd. v.

Canadian National Railway, 1991 CarswellOnt440 (C.A.) at ¶ 7, 8). [173] As set out above, in exercising discretion, I am required to take into account the factors in section 130(2). I find sections 130(2)(b), (e), (

f) and (g), which require me to consider “the circumstances of the case”, “the amount claimed and the amount recovered in theproceeding”, “the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding” and “any otherrelevant consideration”, to be the most applicable in this case. I will deal with these factors first. [174] I begin with a consideration of the parties’ conduct in relation to section 130(2)(f). Once again, delay comes up in this context. [175] In Oakville Storage & Forwarders Ltd. v. Canadian National Railway, the plaintiff had considerably delaye

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