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Interest

'Interest' is the normally straight-forward concept of a percentage annual fee placed on a debt or monetary judgment, although it isn't always so simple.

. 7550111 Canada Inc. v. Charles

In 7550111 Canada Inc. v. Charles (Ont CA, 2020) the Court of Appeal made some useful comments on criminal interest rate, although it declined to decide the issue due to an inadequate evidence record:
[20] With respect to the criminal rate of interest submission, the question is whether the terms of the mortgage, including the ten percent interest rate and the various fees and charges, exceed an effective annual rate of interest of 60 percent as prohibited under s. 347 of the Criminal Code. On its face, the mortgage provides for a ten percent interest rate.

[21] Under s. 347(2) of the Criminal Code, “interest” is broadly defined to include “the aggregate of all charges and expenses, whether in the form of a fee, fine, penalty, commission or other similar charge or expense or in any other form, paid or payable for the advancing of credit… but does not include any repayment of credit advanced or any insurance charge, official fee, overdraft charge, required deposit balance or, in the case of a mortgage transaction, any amount required to be paid on account of property taxes”. A “criminal rate” of interest means “an effective annual rate of interest calculated in accordance with generally accepted actuarial practices and principles that exceeds sixty per cent on the credit advanced under an agreement or arrangement”.

[22] As a result, where, as here, a mortgage does not contain on its face a criminal rate of interest, the party alleging that a mortgage contravenes s. 347 must identify the fees or other charges that it alleges are “interest”, and then provide evidence that the effective annual rate of interest calculated in accordance with “generally accepted actuarial practices and principles” exceeds sixty percent.
. Solar Power Network Inc. v. ClearFlow Energy

In Solar Power Network Inc. v. ClearFlow Energy (Ont CA, 2018) the Court of Appeal sets out the definition of interest:
[33] Solar Power does not challenge the legal test used by the application judge, at para. 20:
1. Interest is the return or consideration or compensation for the use or retention of money that is owed to another person;

2. interest must relate to a principal amount or an obligation to pay money; and,

3. interest must accrue over time: Saskatchewan (Attorney General) v. Canada (Attorney General), 1947 CanLII 32 (SCC), 1947 S.C.R. 394 at para. 47; Ontario (Attorney General) v. Barfried Enterprises Inc., 1963 CanLII 15 (SCC), [1963] S.C.R. 570, 42 D.L.R. (2d) 137 at para. 5.


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