Legal Blog

Interest Act s. 8

Rabinowitz v. 2528061 Ontario Inc. 2026 Ont C.A.

Purchaser sought specific performance of a failed commercial real estate transaction and repayment of a six‑month mortgage that vendor had granted to secure purchaser’s deposit. Interest was 0% to the closing date and 12% on closing and the mortgage proceeds were to be applied to the purchase price. The trial judge found vendor repudiated the agreement but, holding that the property was not unique and that damages would adequately compensate purchaser, dismissed purchaser’s specific‑performance claim. The Court of Appeal agreed and refused purchaser’s attempt to amend its pleadings to claim for damages. The judge ordered vendor to repay the mortgage but refused to order the 12% contractual interest as violating s. 8 of the Interest Act. The Court of Appeal restored the 12% contractual interest, holding that the interest rate increase was not a consequence of the breach of the agreement and that s. 8 did not apply.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.