A recent decision from the Court of Appeal for Ontario has
reaffirmed the court's decision in Solar Power Network Inc.
v. ClearFlow Energy Finance Corp.1 that section 4
of the Interest Act2 should be interpreted in
accordance with "modern commercial
reality."3
TFS RT Inc. v. Dyck involved an appeal of a summary
judgment to enforce guarantees in favour of the respondents, which
guaranteed the obligations of Green Patch Environmental Consulting
Ltd. (the "Borrower"). The guarantors
were the directing minds of the Borrower. The Borrower and its
lenders, the respondents, had entered into a loan agreement, which
provided that interest would accrue at the rate of 2.5% per 30 days
before maturity, and at an additional rate of 0.416% per 30 days
after maturity. During the life of the loan and after maturity, the
Borrower was provided with loan statements showing that interest
was calculated at 30% prior to maturity, and 35% after
maturity.4
