Factual Background: Anne Graham, a business consultant, made four loans totaling $158,000 to Lifeguard Health Inc., led by Jeffrey Hardy. The loans were informally documented, primarily through text messages, and later formalized in a handwritten promissory note (March Note).

Legal Issues: The dispute centered on whether the parties agreed to an ongoing annual interest rate of 60% on the unpaid loan amounts after the due date of December 31, 2019. The trial judge initially found that this high interest rate applied, despite the appellants arguing that no such agreement existed. The judge also examined the legality of the interest under the Canada Interest Act and the Criminal Code.

Appeal Decision: The Court of Appeal found that the trial judge made a palpable and overriding error by assuming the parties agreed to a 60% interest rate post-default without sufficient evidence. The Court allowed the appeal and varied the order, awarding Anne Graham the principal amount of $158,000, with interest at 60% per annum only until December 31, 2019, and prejudgment interest at the statutory rate thereafter.

Final Award: Anne Graham was awarded $158,000 plus statutory prejudgment interest from January 1, 2020, instead of the excessive interest originally imposed.