Executive Summary: Key Legal and Evidentiary Issues

• DLA Piper (Canada) LLP sued G.H. Johnson's Trading Company Limited for unpaid legal fees totalling $265,983.49 across five invoices.
• Default judgment was sought after the defendant failed to defend the claim following personal service.
• Prejudgment interest was disputed because the plaintiff could not establish the applicable "prime" rate underlying the contractual interest clause.
• Rather than awarding the claimed $32,241.68 in prejudgment interest, the court independently calculated interest at 2% per annum from 30 days after each invoice date, totalling $14,929.78.
• Costs were fixed at the partial indemnity level despite the Retainer Agreement providing for solicitor-and-own-client costs.
• Post-judgment interest at the contractual "prime plus 2%" rate was rejected in favour of the statutory rate of 4% per annum under the Courts of Justice Act.

Facts of the case

DLA Piper (Canada) LLP, a law firm, commenced a claim against its former client, G.H. Johnson's Trading Company Limited, for unpaid legal fees. The claim was grounded in five invoices dated between December 15, 2022 and April 8, 2024, with a combined total of $265,983.49. The underlying retainer was established by a letter dated June 18, 2020, which set out a billing rate of $650 per hour. The Statement of Claim was issued on February 18, 2025, and personally served on the defendant on February 19, 2025. The defendant did not file a defence and was noted in default, thereby being deemed to have admitted the allegations in the Statement of Claim pursuant to Rule 19.02(1)(a) of the Rules of Civil Procedure. The plaintiff's Motion Record was subsequently personally served on the defendant on February 26, 2026, as confirmed by the Affidavit of Service of Norman Ng sworn on that date.

Contractual terms at issue

Two provisions of the Retainer Agreement were central to the dispute over interest. First, the agreement stated that interest would be "charged on amounts outstanding greater than 30 days at an annual rate set by us from time to time which will be shown on each invoice." Second, each of the five invoices provided for "interest at the rate of prime +2% per annum." The agreement also stipulated that the defendant had agreed to "pay the actual legal fees and costs on a solicitor and own client basis."

Court's reasoning and analysis

Justice Dow identified two key deficiencies in the plaintiff's submissions. On prejudgment interest, the plaintiff sought $32,241.68 but provided no explanation for how that figure was calculated beyond a demand letter to the defendant dated December 13, 2024. Critically, the court found no description or reference in the materials as to what the applicable "prime" rate was, making it impossible to verify the contractual interest figure. On costs, although the Retainer Agreement provided for solicitor-and-own-client costs, the draft judgment submitted by the plaintiff used partial indemnity fees instead. The court accepted the partial indemnity figure from the draft Bill of Costs rather than the higher solicitor-and-own-client rate the agreement actually contemplated.

Ruling and overall outcome

Justice Dow granted default judgment in favour of DLA Piper (Canada) LLP. Rather than awarding the claimed prejudgment interest of $32,241.68, the court independently calculated prejudgment interest at 2% per annum on each invoice from 30 days after its date to the date of judgment, arriving at $14,929.78. Post-judgment interest at the contractual "prime plus 2%" rate was also rejected; instead, the court awarded post-judgment interest at 4% per annum pursuant to sections 127 and 129 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Costs were fixed at $5,395.75 on a partial indemnity basis, inclusive of HST and disbursements. In total, judgment was granted in the amount of $286,309.02, comprising the principal of $265,983.49, prejudgment interest of $14,929.78, and costs of $5,395.75.