PDF version: Perennial Problem of Section 8 of the Interest Act
Case considered: Equitable Trust Co. v. Lougheed Block Inc., 2011 ABQB 193
This is one of several recent cases concerning the Lougheed Building at 604 – 1st Street SW in Calgary. The issue in this particular case was whether section 8 of the Interest Act, R.S.C. 1985, c. I-15, rendered mortgage terms providing for interest rate increases and administrative fees on default and in the final month of the mortgage unenforceable. Section 8 prohibits penalties for non-performance on loans secured by mortgages and is a statutory version of a long-standing equitable rule. This decision is of interest because the Master in Chambers, Judith Hanebury, adopts a limiting approach to section 8 which was rejected by the British Columbia Court of Appeal and because the mortgaged building, the Lougheed Building, is of historic interest. (The Lougheed Building has been designated a Historic Resource at both the municipal and provincial levels and was recently restored. Its heritage value lies in its representation of Calgary’s tremendous commercial growth prior to World War One; it is also an excellent example of the imposing Chicago Style of commercial architecture. For photos and details of the restoration, see the Canada’s Historic Places web site).