Fednav Ltd. v. Ontario Bus Industries Inc. - Federal Ct. of Appeal (Marceau, Decary and Letourneau JJ.A.) - 30 November 1992

Compound interest award in Admiralty action

In dismissing this appeal, the Federal Court of Appeal held, on the question of interest, that while most admiralty cases had awarded pre-judgment interest at simple rates, unlike English law, there was no express prohibition in Canadian law on granting it at compound rates. It was well established that pre-judgment interest in admiralty cases was considered to be an integral part of damages, and stemmed from the principle of restitutio in integrum or the right to full compensation as of the date of the tort or breach of the contract. On that basis, especially in a case such as the present, where an important limitation of liability was opposed against the victim, there was no reason to preclude the award of compound interest where those returns were regularly available from Canadian financial institutions.