




CITATION:
Royal Bank of
          Canada v. Slopen, 2011 ONCA 516



DATE: 20110712



DOCKET: C51189



COURT OF APPEAL FOR ONTARIO



Rosenberg, Simmons and Blair JJ.A.



BETWEEN



Royal Bank of Canada and Royal Trust Corporation of
          Canada



Plaintiffs (Respondents)



and



Jeffrey Mark Slopen and Wilson Walker LLP



Defendants (Appellants)



W. A. Kelly, Q.C., for the appellants



Milton A. Davis and J. Thomas Curry, for the respondents



Heard: May 3, 2011



On appeal from the judgment of Justice Jane E. Kelly of the
          Superior Court of Justice, dated October 6, 2009.



ENDORSEMENT



[1]

The principal submission by the appellant is that Kelly
    J. erred in failing to apply the doctrine of issue estoppel given the earlier
    finding by Abbey J. in the rectification application.  Assuming without deciding that the trial
    judge erred in that respect, that error had no effect on the outcome.  The trial judges finding, which is not
    disputed, that Mr. Slopen was negligent in failing to seek instructions on
    whether the bank wanted the mortgages to be registered on all three parcels of
    land did not depend on whether the respondents intended to have a mortgage only
    on Parcel 1 (as found by Abbey J.) or on all three parcels (as found by the
    trial judge).  The only way that the
    mortgage could be enforced is if it was registered on all three parcels of
    land.

[2]

But for the negligence of the solicitor, the
    respondents would either have not advanced the funds or would have obtained
    security on all three parcels.  In either
    case, the measure of damages is the same.  Had the respondents not advanced the funds, there would have been no
    loss.  Had the respondents decided to
    advance the funds, they would have done so only if the mortgage was registered
    against all three parcels.  Given the
    value of the three parcels, again, there would have been no loss.  The damage award cannot be limited solely to
    the value of Parcel 1.  Thus, we are
    satisfied that the trial judge did not err in finding the appellants liable and
    in her award of damages.

[3]

We have not been persuaded that the trial judge erred
    in choosing the Navigant Report over the PWC report. The trial judge explained
    why she accepted the Navigant Report and her decision was reasonable.

[4]

With respect to the interest award, the appellants
    raise two issues.  They submit that the
    trial judge erred in using the mortgage rate of 8.4 percent rather than the
Courts of Justice Act
, R.S.O. 1990, c.
    C.43 rate which, over the period, was between 2.8 and 3.3 percent and erred in
    awarding compound interest.

[5]

The awarding of interest is a discretionary matter and
    an appellate court will not lightly interfere with the trial judges exercise
    of discretion:
Air Canada v. Ontario (Liquor Control Board)
, [1997] 2 S.C.R. 581,
    at para. 86 and
Murano v. Bank of
    Montreal
(1998), 41 O.R. (3d) 222 (C.A.), at p. 253.  The appellant has not established that the
    trial judge erred in principle in using the mortgage rate and awarding compound
    interest.  She provided reasons for those
    awards, that are supported by the record.

[6]

In
Confederation
    Life Insurance Co. v. Shepherd, McKenzie, Plaxton, Little & Jenkins
(1996), 88 O.A.C. 398 (C.A.), this court refused to award compound interest in
    a solicitors negligence case in the handling of a mortgage transaction.  The court reasoned, at para. 9, that compound
    interest should be reserved for cases where the defendant wrongfully kept the
    plaintiffs money to ensure that they did not profit. In our view, that decision
    has been overtaken by the decision of the Supreme Court of Canada in
Bank of America v. Mutual Trust Co.
,
    [2002] 2 S.C.R. 601 where the court held that compound interest could be
    awarded as compensation, in that case for breach of contract.  We can see no difference in principle between
    awarding compound interest in a breach of contract case and in a solicitors
    negligence case where, as here, the negligence is rooted in a mortgage
    transaction.  Different considerations
    might well apply in other types of negligence cases.

[7]

We agree with the decision of the Alberta Court of
    Appeal in a solicitors negligence case,
Pasko
    v. Willis
(2004), 357 A.R. 215 where, at para. 10, Hunt J.A. wrote as
    follows:  The evidence established that
    if the plaintiffs instructions had been followed, they would have earned
    compound interest.  Bearing in mind the
    time-value of money, the only way to properly compensate them on these facts is
    to award compound interest.

[8]

Accordingly, the appeal is dismissed with costs fixed
    at $20,000 inclusive of disbursements and H.S.T.


Signature:      M. Rosenberg J.A.

Janet
    Simmons J.A.


R.
    A. Blair J.A.


