Ruling upholds refusal to grant appellant post-judgment interest from settlement date
The Ontario Court of Appeal has dismissed an appeal seeking post-judgment interest from the settlement date in proceedings involving an injured party’s suit alleging his former counsel negligently handled his personal injury claim.
In Rajic v. Spivak, 2025 ONCA 363, the appellant brought a personal injury claim involving a motor vehicle accident. He sued his former counsel based on alleged negligence in dealing with this claim. He accepted the respondents’ offer to settle the action on Nov. 6, 2023.
The parties agreed to a total of $100,000 for damages and pre-judgment interest, plus costs subject to an agreement or assessment. The parties’ counsel could not agree on the cost amount or the release form that the appellant should sign. The respondents sent three draft releases to the appellant, who refused to accept them.
The appellant wanted the release to stipulate that the respondents would pay post-judgment interest on the settlement funds. The respondents disagreed that post-judgment interest was a settlement term and refused to send the settlement funds until they received an executed release.
In March 2024, the appellant served a motion record seeking a judgment in line with the November 2023 settlement and an order for post-judgment interest from the settlement date. The motion record included a release form that the appellant was ready to sign, including a term on post-judgment interest.
The motion judge decided that the appellant was not entitled to post-judgment interest from the settlement date.
The judge observed that post-judgment interest under s. 129(1) of Ontario’s Courts of Justice Act, 1990, would apply in a case involving a court order for payment of funds that were not paid timely or at all. She ruled that the appellant was not entitled to post-settlement interest because this case involved a settlement and no court order.
Next, the judge noted that s. 129(4) of the Courts of Justice Act provides for payment of interest on costs from the date of a cost assessment. She held that the appellant was not entitled to post-judgment interest since the costs remained outstanding. The appellant challenged the judge’s decision.
The Court of Appeal for Ontario dismissed the appeal and ordered the appellant to pay the respondents’ appeal costs fixed in the all-inclusive sum of $9,838.45.
The appeal court noted that the parties agreed that the settlement had no express term requiring the payment of post-settlement interest but had an implied term providing that the appellant would execute a full and final release and the parties would then seek a consent order dismissing the action.
The appeal court found no error in the motion judge’s analysis regarding s. 129(1) of the Courts of Justice Act. The appeal court rejected the appellant’s argument that the judge erred by failing to order payment of interest on costs.
The appeal court deemed it unreasonable to expect the respondents to pay interest on costs yet to be determined. The appeal court noted that – while the Nov. 6, 2023 settlement required the respondents to pay costs as agreed or assessed – the parties disagreed on the amount and had opposing views on this issue by February 2024.
The appeal court found that the appellant, who had the burden of moving the issue of costs forward, took no steps toward a cost determination since then, despite several pretrial conferences. The appeal court explained that the appellant could have sought a date for a cost assessment or asked a judge involved in the case to fix the amount.
The appeal court also saw no error in the judge’s interpretation of s. 129(4) of the Courts of Justice Act or her application of the provision to the facts of this case.
The appeal court noted that the appellant had not yet executed a release and the respondents had not yet sent the settlement funds by the time of the appeal hearing. The appeal court found it regrettable that the parties had yet to finalize the agreement resolving the matter despite reaching the agreement in November 2023.
