The court held there was no pre-judgment interest, ordered contractual post-judgment interest from March 12, 2025, and limited JM Bay’s costs to half the trial time and one registrar day.
Default judgment was granted after Mercy Falls LLC failed to respond, with damages summarily assessed at $4,736,455 and leave to seek further assessment later.
In a foreclosure application, an associate judge held that a mortgage clause raising interest from 6% to 18.99% after maturity offended s. 8 of the Canada Interest Act.
The court held the contract’s 2% monthly compounded interest clause applied, was not a penalty, and awarded contractual indemnity for reasonable legal fees.
Court of Appeal allowed the appeal and set aside post-default contractual 60% interest, replacing it with prejudgment interest under the Court Order Interest Act.
Contract interpretation
Implied terms
Pre-judgment interest
Interest act s.4
Criminal code s.347
Standard of review - palpable and overriding error
The promissory note expressly granted JKSD entitlement to a fourth mortgage on default; the application judge erred by relying on post-contract refusal to register and alleged drafting errors to deny an equitable mortgage. The promissory note unambiguously provided 2% for the initial period and 20% per annum thereafter; the 0.02% registration entry was a typographical error. Interest on the third and fourth mortgages accrues only to the date before the closing of the property sale. Appeal allowed to declare JKSD holds an equitable fourth mortgage for $125,000 plus interest; cross-appeal dismi…
The court held that contractual fee or interest continued to accrue after December 31, 2019 on unpaid loans, with post-judgment interest governed by the Court Order Interest Act.
Summary trial allowed in a loan dispute. The court held Mr. Hardy personally liable, treated the March Note as the governing agreement, and directed recalculation of fees under s. 347 limits.
Post-trial, the court held Tarsem Bilin was the substantially successful party, awarded special costs against Hardip and HARS Ltd., party-and-party costs against Lakhwinder, and ruled the promissory note interest compounded monthly.