Court interprets promissory notes, denying compound interest and escalation, but rectifies second note's mistaken terms.
The applicant brought an application to interpret two promissory notes representing a $900,000 loan from the respondent for a real estate development project.
The parties disputed whether interest should be compounded, whether an interest escalation clause was triggered, and whether the second promissory note contained a mistake requiring rectification.
The court held that there was no agreement for compound interest and that the interest escalation clause was not triggered because the project was not fully constructed.
The court also rectified the second promissory note to remove the interest escalation clause while maintaining the 20% base interest rate.
The applicant was ordered to pay the remaining $99,778 owed under the notes, and was awarded $25,000 in partial indemnity costs due to divided but primarily successful outcomes.