in the mortgages at issue in Hornstein v. Orbach. No such provision is present in this action either.
 In support of their position to the contrary, the defendants
rely on the decision of the Divisional Court in O’Shanter Development Co. v. Gentra Canada Investments Inc. ((1995), 25 O.R.
(3d) 188,  O.J. No. 2546, 1995 CarswellOnt 339 (Div. Ct.)).
 In O’Shanter Development Co. v. Gentra Canada Investments Inc., a first mortgagee issued a notice of sale which contained no three-month interest charge. A second mortgagee
issued its own notice of sale, sold the property and sought
to repay the first mortgagee. However, the first mortgagee
demanded payment of three months’ interest on the basis that
the mortgage agreement had a “prepayment” clause requiring
three months’ interest to be prepaid if the default occurred prior
 The Divisional Court held that, because the mortgage was
not redeemed within the period set out in the first mortgagee’s
notice of sale, the first mortgagee was no longer bound to accept
only the amount claimed in its notice. It was instead entitled to
three months’ notice for early redemption or payment of three
months’ interest in lieu thereof, pursuant to the prepayment
clause and s. 17 of the Act. On the basis of the wording of the
mortgage contract itself, and subject to the other issues, the first
mortgagee was entitled to claim the prepayment amount (three
months’ interest) in its notice of sale.
 Several subsequent cases have cited this Divisional Court
decision as authority for allowing mortgagees to commence
a power of sale, force the repayment of principal and also charge
three months’ additional interest (see SK Properties & Development Inc. v. Equitable Trust Co.,  O.J. No. 2234, 2003 CarswellOnt 2130 (S.C.J.); Lister Property Corp., L.I.U.N.A,
Local 837 v. 810322 Ontario Ltd.,  O.J. No. 3260, 2006
CarswellOnt 9295 (S.C.J.); Mintz v. Mademont Yonge Inc.,
 O.J. No. 660, 2010 ONSC 116 (S.C.J.)).
 Commentators have criticized the decision and have
argued that it was either wrongly decided, erroneously applied
in subsequent case law, or has limited application. It has been
argued that the main problem is that the approach taken converts what was a privilege in favour of the mortgagor under s. 17
of the Act into a penalty against the mortgagor (see Jeffrey Lem,
“The ‘Final’ Word on Section 17’s Three Month Notice Bonus”,
Practice Gems: Mortgage Enforcement Essentials (Law Society
of Upper Canada, September 16, 2014); Steven I. Pearlstein,
“The Three Month Mortgage Penalty: Understanding the Principles” (2008: 5th Annual Real Estate Law Summit)).