Core Issue: The case concerns prejudgment interest (PJI) on special damages awarded due to flooding caused by the negligence of the City of Hamilton ("City") and ArcelorMittal Dofasco Inc. ("AMD").

Key Findings:

1. Liability:

   • In a previous decision (National Steel Car Limited v. City of Hamilton, 2024 ONSC 4120), the court found the City and AMD liable in nuisance, negligence, and under the Rule in Rylands v. Fletcher.
   • Special and punitive damages were awarded; punitive damages are excluded from PJI.

2. Plaintiff's Claim:

   • National Steel Car Limited ("National") sought PJI of $936,094.29, calculated using the Canadian bank prime rate compounded annually, asserting this better reflects its costs incurred since 2010.
   • Claimed this method aligns with the compensatory goal of PJI.

3. Defendants' Positions:

   • The City took no position.
   • AMD argued for statutory PJI under the Courts of Justice Act (CJA) ss. 127-128 but agreed that annual compounding might apply.

Court's Analysis:

• Statutory Framework:

  • PJI rates under ss. 127-128 are significantly lower than commercial borrowing rates and do not fully compensate for capital costs.
  • Section 130 allows courts to deviate from statutory rates if just, considering factors like market interest rates, case circumstances, and party conduct.

• Discretion Applied:

  • The court adopted National’s approach to use the Canadian prime bank rate, compounded annually, citing:
    • Defendants' denial of liability and prolonged litigation increased costs.
    • Statutory rates undercompensate the Plaintiff and unfairly benefit Defendants.
    • Defendants avoided routine property maintenance costs for decades.

Final Decision:

• Defendants were ordered to pay PJI of $936,094.29, split equally between the City and AMD.