The Ontario Court of Appeal’s decision in the Transport North American Express case (discussed in Issue Nos. 52, 54 and 56) is going to the Supreme Court of Canada. The Court of Appeal had rejected the lower court’s new approach of “writing down” the effective rate to the legal limit of 60%. On the appeal, the Supreme Court of Canada will consider and finally settle the issue of whether “writing down” is a permissible approach, or whether the Ontario Court of Appeal was correct.

The majority of judges of the Court of Appeal said that the conventional approach to severance is the only severance consistent with the aims of deterrence for those who violate the criminal law. This approach requires the court to disallow all interest, or in some circumstances the entirety of one type of “interest” (eg. a bonus or up front fee that falls within the extended definition of “interest” ) that takes the effective rate over the legal limit.

Read more by clicking the download button.