Early in 2018, lenders and their counsel were surprised and alarmed by the Ontario Superior Court of Justice decision in Solar Power Network Inc. v ClearFlow Energy Finance Corp., which threatened to disrupt a long-established consensus that section 4 of the Canadian federal Interest Act no longer posed any difficulties in sophisticated lending transactions: see our February 9, 2018, bulletin on the ClearFlow decision.
The decision was quickly appealed and heard on an expedited basis by the Ontario Court of Appeal. The Canadian Bankers’ Association was given leave to intervene. It supported the appellant lender’s submissions that the decision had misinterpreted section 4 of the Interest Act. The Court of Appeal, in reasons released on September 4, 2018, agreed and allowed the appeal.