March, 09 1992
Richard Bogoroch was associate counsel representing the plaintiffs in an action against a firm of solicitors claiming damages for negligence.
Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler and Mills
68 O.R. (2d) 165. March 9, 1989
The Honourable Justice O’Leary
A solicitor drafted five promissory notes for the plaintiff, payable on demand, which were partially unenforceable because of their failure to comply with s. 4 of the Interest Act, R.S.C. 1970, c. I-18, which 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. Four of the notes 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 plaintiff was unable to recover the full interest provided. It brought an action against the firm of solicitors claiming damages for negligence.
Held, the solicitor was negligent and the plaintiff was entitled to recovery for its loss.
A promissory note is a “contract” within the meaning of s. 4. A reasonably competent solicitor, undertaking to draft a promissory note, should have known of, and taken account of, s. 4. Consequently, the defendant was liable for the plaintiff’s loss.
For the full decision, click to download: Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler and Mills — Text of Full Decision