The court noted the city's prolonged failure to maintain its water channels
The Ontario Superior Court of Justice held the City of Hamilton liable for negligence and nuisance arising from years of flooding caused by its failure to maintain water channels on its property.
The dispute in National Steel Car Limited v. City of Hamilton, 2024 ONSC 5418 stemmed from chronic flooding that affected the plaintiff, National Steel Car’s property, caused by inadequate maintenance of water channels owned by the city and another corporation, ArcelorMittal Dofasco Inc. (AMD).
National Steel Car had sought pre judgment interest (PJI) based on the Canadian prime bank rate, arguing that standard calculations under Ontario’s Courts of Justice Act (CJA) would under-compensate it for capital costs. The company’s claim covered special damages incurred due to ongoing flooding since 2010.
While the City of Hamilton did not oppose the PJI claim, AMD argued for a lower interest calculation based on standard rates under the CJA, suggesting a total PJI of $375,848.11. However, National Steel Car contended that this calculation would fail to fully compensate for its costs.
The Superior Court agreed with National’s argument, invoking its discretion under s. 130 of the CJA, which allows for deviations from standard interest calculations in certain circumstances. The court highlighted the prolonged failure of the city and AMD to maintain their water channels, which exacerbated the flooding. The court ruled that a higher interest rate, compounded annually, was necessary to fairly compensate National Steel Car for its capital costs incurred over the years.
The court noted that applying the standard PJI rate would unjustly benefit the defendants, who had avoided the costs of maintaining their properties for over two decades. Additionally, the court found that the defendants had unnecessarily prolonged the legal proceedings by refusing to admit key facts, such as ownership of the water channels, and by contesting the cause of the flooding. As a result, the court ordered both the City of Hamilton and AMD to pay 50 percent of the total prejudgment interest.
