Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler and Mills
Supplemental Reasons
68 O.R. (2d) 641
May 24, 1989.
The Honourable Justice O'Leary
Section 4 of the Interest Act, R.S.C. 1970, c. I-18, provides that where interest is made payable by the terms of any written or printed contract at a percentage for a period less than a year, no interest is recoverable exceeding 5% per annum unless the contract contains an express statement of the annual rate. A solicitor drafted promissory notes for the plaintiffs, four of which provided for interest at an annual rate of 18% before demand and 2% monthly thereafter; the fifth provided for interest at 2% monthly. In none of the notes was the monthly rate of 2% expressed as an annual rate. The plaintiffs, having failed to recover the full interest from the makers of the notes, brought a successful action against the solicitor. Following release of the reasons for judgment against the solicitor, further argument was heard.
Held, judgment affirmed.
It was absurd to suppose that a sophisticated business person would not know the annual equivalent of two per cent per month, but it was impossible to interpret the words of s. 4 to reach any other result than that the notes were not enforceable.
See also:
Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler and Mills – Reasons for Decision
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