CITATION: Pramco II, LLC v. Boblo Developments Inc., 2010 ONCA 336
DATE: 20100507
DOCKET: C51401
COURT OF APPEAL FOR ONTARIO
Moldaver, MacPherson and Watt JJ.A.
BETWEEN:
Pramco II, LLC
Plaintiff (Appellant)
and
Boblo Developments Inc.
Defendant (Respondent)
Bryce A. Chandler, for the appellant
Myron W. Shulgan, for the respondent
Heard and endorsed: April 30, 2010
On appeal from the judgment of Justice Renee Pomerance of the Superior Court of Justice dated November 16, 2009.
APPEAL BOOK ENDORSEMENT
[1] In our respectful view, the motion judge erred in denying the appellant interest on its mortgage on the basis that the mortgage contravened the provisions of s. 6 of the Interest Act, R.S.C. 1985, c.I.-15.
[2] In our view, s. 6 of the Interest Act did not come into play here because the principal money and interest secured by the mortgage were not, by the mortgage, made payable on any of the three bases referred to in s. 6, i.e., a sinking fund plan; a plan under which payments of principal money and interest are blended; or a plan that involves an allowance of interest on stipulated repayments. It was only this third category under which the respondent sought to bring the mortgage. We do not accept the respondent’s submission. Under the terms of the mortgage, there was no allowance, apportionment or abatement of interest tied to a stipulated repayment. Hence, the third category is not met. See Aston v. Zettler, [1988] B.C.J. No. 1788 (B.C.C.A.) per MacFarlane J.A. at p. 4.
[3] This is a full answer to the applicability of s. 6. Unfortunately, the motion judge did not address it. Rather, she concentrated on the second component of s. 6, namely: the requirement that the mortgage contain “a statement showing the amount of principal money and the rate of interest chargeable on that money, calculated yearly or half-yearly, not in advance.”
[4] The motion judge found that the mortgage contravened that requirement.
[5] While we have serious reservations about the correctness of her conclusion in that regard, we need not finally decide the matter in view of our conclusion regarding the first branch of s. 6.
[6] Finally, the respondent advances an argument that it made before the motion judge, but which she did not address, namely: that the appellant did not prove that the interest it sought to recover was that to which it was entitled to charge on the loan, specifically “its prime rate for U.S. dollar loans made by the chargee in the United States.”
[7] We disagree. Mr. Sheehan’s affidavit adequately explains the substance and basis for calculation of the appellant’s prime rate and there is nothing in the record to suggest that the prime rate was not the one it used in relation to its U.S. borrowers.
[8] Accordingly, the appeal is allowed, the order below is set aside and in its place, an order will go granting judgment in favour of the appellant against the respondent in the amount of $67,140.83.
[9] We see no basis for interfering with the costs award below. Costs of the appeal to the appellant fixed at $7,500 inclusive of G.S.T. and disbursements.