Interest - Interest Act s.4 ('When per annum rate not stipulated'). Wu v. Chen
In Wu v. Chen (Ont CA, 2022) the Court of Appeal engaged in an interesting contractual interest analysis:
The Interest Ground of Appeal
 The appellant argues that the trial judge erred in failing to award interest on all of the promissory notes at the rate of 18 percent per year from their dates.
 Some of the promissory notes provided for interest at 1.5 percent per month. They did not express the interest as an annual rate. The other promissory notes were silent as to interest.
 With respect to the notes that provided for interest at a monthly rate, the trial judge held that the Interest Act, R.S.C. 1985, c. I-15, limited the amount payable.
 Section 4 of the Interest Act provides that (except for mortgages) whenever interest is made payable by the terms of a written contract, and no statement of the equivalent yearly rate is stated in the contract, no greater rate is payable than 5 percent per year. The word “contract” in s. 4 of the Interest Act includes a promissory note: Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler & Mills (1989), 1989 CanLII 4056 (ON SC), 68 O.R. (2d) 165 (H.C.), at p. 174, aff’d 1991 CanLII 7195 (ON CA), 3 O.R. (3d) 123 (C.A.).
 As a result, the trial judge awarded interest on these notes at the rate of 5 percent from their dates to the date that the appellant demanded payment. From that date, she awarded pre-judgment interest at 1.5 percent per month.
 The appellant argues that the trial judge erred in awarding interest at 5 percent per year from the date of the notes until demand. He submits that the Interest Act did not apply to these notes because they were preceded by an oral understanding that over-contributions would be equalized with interest, and the Interest Act only applies to written agreements. Counsel for the appellant fairly conceded that he was aware of no authority for the proposition that the Interest Act does not apply to a written agreement if it was preceded by an oral understanding.
 In any event, this argument cannot succeed. The appellant sued for payment under the notes. The language of s. 4 of the Interest Act was directly applicable to the foundation of the debt on which the appellant claimed and on which the trial judge awarded judgment, namely, the promissory notes. Arguably, the trial judge should have limited interest after demand on these notes to no more than 5 percent per year, but any error in this regard runs in the appellant’s favour. The respondents have not cross-appealed any aspect of the interest award and there is no basis for us to disturb it.
 With respect to the notes which did not specify any interest rate, the trial judge awarded interest on them at 5 percent per year from their dates until demand, and interest after demand at the rate for pre-judgment interest in the Courts of Justice Act.
 The appellant argues that the trial judge should have awarded interest on these notes at 18 percent per year, to give effect to the appellant’s evidence that 1.5 percent per month was a customary rate in the region of China from which the parties originate.
 We reject this argument. Had the parties expressly incorporated the rate of 1.5 percent per month into these notes, interest on them would have been limited to 5 percent per year by s. 4 of the Interest Act. A term may sometimes be implied into a written agreement by custom, but when that occurs it is still a term of the written agreement. We are not satisfied that the trial judge in fact found the customary rate was an implied term of the notes, but even if it were, it would be given the same effect as if it had been an express term in the written agreement.