The appellant commenced a class action against the respondent gas utility, alleging that its five percent late payment penalty constituted interest at a criminal rate under s. 347 of the Criminal Code.
The motions judge granted summary judgment to the respondent, finding that the penalty was not an interest charge and that its payment was a voluntary act by the customer.
The Court of Appeal dismissed the appeal.
The Supreme Court of Canada allowed the appeal, holding that the late payment penalty is a charge payable for the advancing of credit under an agreement or arrangement, and therefore constitutes 'interest' under s. 347.
The Court also held that the payment of the penalty is not a voluntary act that would preclude the application of the criminal interest rate provision.
Additionally, the Court set aside a personal costs award against the appellant, as he had received financial support from the Class Proceedings Fund.
