Executive Summary: Key Legal and Evidentiary Issues

• The central dispute concerns the appropriate calculation of prejudgment interest owed to the plaintiffs following the court's August 6, 2025 judgment allowing the action against the Attorney General of Canada.
• Costs were settled separately between the parties, with the defendant agreeing to pay $6,680,632.45 to the plaintiffs, conditional on the outcome of any appeal.
• Disputed issues include the applicable start date for each plaintiff's prejudgment interest, whether the interest rate should reflect an average over the claim period, and whether interest should be compounded or calculated on a simple basis.
• The plaintiffs argued for compound interest at an averaged rate, while the defendant opposed both, advocating instead for the statutory simple rate from the date of commencement of proceedings.
• Section 130 of the Courts of Justice Act grants the court discretion to depart from the presumptive prejudgment interest rate, but only where unusual or special circumstances justify doing so.
• Conduct of the plaintiffs in amending and narrowing their claims was raised by the defendant as grounds to reduce the interest period, but the court found no basis for such a reduction.

Facts of the case

This matter arises from supplementary reasons issued by Justice Osborne of the Ontario Superior Court of Justice (Commercial List) following the primary judgment dated August 6, 2025 (2025 ONSC 4526), which allowed the action brought by Quadrangle Group LLC, QCP CW S.a.r.l., and Obelysk Media Inc. against the Attorney General of Canada. The underlying claim stemmed from Industry Canada's cancellation and revocation of the right to transfer a spectrum licence through the adoption and implementation of the 2013 Transfer Framework, which the court found constituted a breach of a duty of care. The relevant cause of action arose on June 28, 2013. These supplementary reasons deal exclusively with prejudgment interest, as the parties had separately settled the issue of costs — the defendant agreed to pay the plaintiffs $6,680,632.45 contingent on the defendant being unsuccessful on its current and any subsequent appeal.

Statutory framework and clauses at issue

The court's analysis was governed primarily by sections 127, 128, and 130 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Section 128(1) entitles a successful party to prejudgment interest calculated from the date the cause of action arose to the date of the order. Section 128(4)(b) expressly prohibits the compounding of interest under that provision. Section 130(1) grants the court discretion to disallow interest, vary the applicable rate, or adjust the period, where it considers it just to do so. Section 130(2) sets out mandatory considerations, including changes in market interest rates, the circumstances of the case, the amount claimed and recovered, and the conduct of any party that tended to shorten or lengthen the proceeding unnecessarily. The applicable prejudgment interest rate, defined in section 127, is the bank rate at the end of the first day of the last month of the quarter preceding commencement of the proceeding, rounded to the nearest tenth of a percentage point.

Reasoning and analysis

On the question of start dates, the court fixed June 28, 2013 as the start date for Obelysk's prejudgment interest. The defendant had argued that Obelysk's loss only crystallized at the closing of the Rogers transaction, since the 2013 Transfer Framework had no immediate impact on Obelysk. The court rejected this position, noting that Obelysk's damages were assessed as its original investment plus interest — not its net return from an alternative investment portfolio — meaning its claim crystallized when the 2013 Transfer Framework was enacted. For Quadrangle, both parties agreed, and the court confirmed, that the start date should be June 24, 2015, the date as of which Quadrangle's damages were assessed, in order to avoid double-counting of prejudgment interest, since the primary judgment had already included a "but for" rate of return for the period from June 28, 2013 to June 24, 2015. The prescribed rate applicable as of June 24, 2015 was 1.0%, and the rate as of the statement of claim date (September 4, 2014) was 1.3%.

On the question of averaging the interest rate, the plaintiffs argued that applying the average prejudgment rate from June 2013 would yield a rate of 1.93%, compared to the fixed rate of 1.3%, and that the higher averaged rate was still below the average inflation rate of 2.41% and the average 10-year Canadian government bond yield from 2008 to 2023 of 2.3%. The court declined to apply an averaged rate. Relying on Aubin v. Synagogue and Jewish Community Centre of Ottawa (Soloway Jewish Community Centre), 2024 ONCA 615, the court affirmed that a party's entitlement to the presumptive statutory rate creates a rebuttable presumption, and that departure is only warranted where unusual or special circumstances are demonstrated. The court found the rate fluctuation here — which did not exceed 2% over a period of eight years — was not sufficiently significant to justify departure, particularly noting that prior decisions suggested a fluctuation must exceed 4% to be considered significant.

On compounding, the court declined the plaintiffs' request, pointing to section 128(4)(b) and the general principle from Bank of America Canada v. Mutual Trust Co, [2002] 2 S.C.R. 601, that compounded prejudgment interest is generally limited to breach of contract cases where the parties agreed that compounding would apply. The court found no wrongful retention of funds by the defendant in the relevant sense — the spectrum licences had been used by Mobilicity for over five years. The court also noted that the plaintiffs' own expert reports had calculated interest on a simple basis, and that awarding compound interest at this stage, without any evidentiary foundation tested at trial, would unfairly prejudice the defendant.

On the question of whether the plaintiffs' conduct warranted a reduction in the interest period, the defendant sought a reduction of three and a half years, arguing that the plaintiffs had initially pleaded their claim broadly and only substantially amended and narrowed it approximately seven years later, rendering some production and examinations for discovery useless. The court found that while the claim was amended, the case was immensely complex and the plaintiffs had not acted egregiously. It also noted that the defendant itself acknowledged difficulty in precisely determining how much the abandoned claims delayed the action, and that the claimed reduction of three and a half years lacked particularized evidentiary support.

Ruling and overall outcome

The court ruled in favour of the plaintiffs on all disputed issues related to prejudgment interest. Prejudgment interest for Quadrangle runs from June 24, 2015, and for Obelysk from June 28, 2013. Interest is to be calculated on a simple basis at the applicable statutory rates without averaging, and the interest period is not to be reduced on account of the plaintiffs' conduct. The plaintiffs sought prejudgment interest totalling $121,889,297 for Quadrangle and $8,422,033 for Obelysk; the defendant had proposed $44,894,644 and $2,751,153 respectively. The precise final dollar amounts of prejudgment interest were not expressly specified in this decision, as the exact figures will depend on the application of the prescribed statutory rates to the confirmed start dates. Costs were separately settled at $6,680,632.45, payable by the defendant to the plaintiffs contingent on the defendant being unsuccessful on appeal.