The applicants sought an order requiring the respondent mortgagee to pay outstanding property taxes and a declaration that a Notice of Sale was invalid.
The applicants had defaulted on a first mortgage, which the respondent then purchased to protect its second-priority cross-collateral mortgage.
The cross-collateral mortgage stipulated that upon default and buyout, an 8% interest rate and a 10% administrative fee would apply to the entire principal.
The applicants argued this violated section 8 of the Interest Act.
The court dismissed the application, finding that the 8% rate applied to the entire principal, not just arrears, and therefore did not constitute a prohibited penalty under section 8.
The Notice of Sale was declared valid and enforceable.
