EOS Canada Inc. v. Oppenheimer, 2022 BCPC 154

Citation: EOS Canada Inc. v. Oppenheimer 2022 BCPC 154 Date: 20220809 File No: 52468 Registry: Vernon IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (Small Claims Court) BETWEEN: EOS CANADA INC. CLAIMANT AND: RICHARD OPPENHEIMER DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE J. GUILD Counsel for the Claimant: L. Wheeler Appearing for the Defendant: No one appearing for the Defendant Place of Hearing: Vernon, B.C. Dates of Hearing: May 3 & 5, 2022 Date of Judgment: August 9, 2022 Introduction

[ 1 ] EOS Canada Inc. (EOS) is a debt collection company. In its statement of claim (Claim) filed September 10, 2021, EOS alleged it had acquired a debt from easyfinancial Services Inc. (efS), who had loaned the defendant, Richard Oppenheimer, a sum of money at an interest rate of 39.99%. EOS alleged that Mr. Oppenheimer had defaulted on payments, and sought payment of that debt (the Debt). No Reply to the Claim was filed. [ 2 ] EOS applied for a default order and on April 27, 2022, an Affidavit in support of that application (Affidavit) was filed. The Registry referred the matter to a Judge.

No reasons were provided, but it may have been referred since the Affidavit filed was sworn in Ontario, and it included averments that appeared to contradict the documents attached in support.

I presided at the default order hearing on May 3 and 5, 2022. [ 3 ] The EOS representative submitted that a default order should be made in the amount of $22,360.41, which included $11,191.68 in interest, $8,632.30 from the date of the alleged default until the day before the claim was filed, and $2,559.38 from September 10, 2021, to the day the application for a default order was filed. [ 4 ] The EOS representative failed to address the fact that EOS had previously applied for a default order on December 7, 2021.

That application was dismissed on December 14, 2021, as EOS had failed to prove service in accordance with an order for alternate service. No explanation was provided for the 4-month delay before this application was filed. [ 5 ] Of course, any delay in filing was of significant benefit to EOS as it could claim interest at 39.99%, rather than at the court ordered interest rate. EOS, though its employees, can be timely. The affidavit of service stated that Mr. Oppenheimer was served on April 4, 2022. The Application for a Default Order was made about a week after the time for filing a Reply had elapsed.

EOS also did not provide any explanation for the 22-month delay before it filed a claim, or for any other delay. [ 6 ] I dismiss the application for a default order and the Claim. These reasons explain my decisions. Law and Equity Act [ 7 ] Before an assignor of debt can sue in their own name, the requirements of s. 36(1) of the Law and Equity Act [i] ( LEA ) must be met. One requirement is that “express notice in writing” of the assignment must be given to the debtor. [ 8 ] The EOS representative referred to CIBC v. Dunne [ii] for the proposition that a lenient approach to notice should be taken.

That case was a decision with respect to striking a statement of claim. The test for doing so is that it must be plain and obvious that there is no reasonable basis for the claim. In the course of its decision, the court noted that there were competing views with respect to how strictly s. 36(1) should be applied. For the purpose of that application, a lenient approach was followed as to what might constitute express notice, and followed decisions that the statement of claim and writ could constitute express notice.

In context, that makes sense: until finally determined, there was a reasonable basis for the claim. The court specifically stated that the issue of notice could be pursued further, that is, at the trial. That decision is of some relevance and assistance, though it does not stand for the proposition put forward. The competing line of cases interpreted the LEA to require express notice of assignment before a claim was brought [iii] . [ 9 ] The EOS representative submitted that case law supported the proposition that a flexible approach should be taken to determine if notice was provided [iv] .

A flexible approach was taken in the case referred to, to the benefit of the plaintiff. Importantly, the judge found that there had been express notice of the assignment, because the assignment had come to the defendant’s attention. Despite that approach, the court held that the purported notice was ambiguous given the overall circumstances. That case does not stand as authority for the general proposition that a flexible approach should be taken. In fact, the court stated that the relevant

section of the LEA (the equivalent of s. 36(1)) mandated “express notice”, and despite the fact that on its face the notice complied with the LEA , in all the circumstances, it did not. That case fails to help EOS, and emphasizes the importance of effective notice. [ 10 ] Other recent cases [v] suggest a strict approach is required for “express notice”, but equitable considerations may moderate the strict application of the LEA . The relaxation of notice seems to amount to actual notice through the claim and pleadings.

The phrase “express notice” means there must be actual notice [vi] - so there is no ambiguity as to whether notice was received by the debtor. [ 11 ] The evidence in support of the submission that there was “express notice” was contained in paragraphs 10, 11 and Exhibit “C” of the Affidavit. The Affidavit as Evidence [ 12 ] The Affidavit was purportedly sworn in Ontario before a lawyer, stamped to show that person was a Commissioner in Ontario as a lawyer. I say purportedly because the affiant’s signature was made electronically. If it was sworn in person, it would not be an electronic signature.

The relevant aspects of the Ontario Regulations for remote administering of an oath [vii] are: 1 . An oath or declaration may be taken by a deponent or declarant without being in the physical presence of the person administering the oath or declaration, if the following conditions are met: 1. The oath or declaration is being administered by an electronic method of communication in which the person administering the oath or declaration and the deponent or declarant are able to see, hear and communicate with each other in real time throughout the entire transaction. 2.

The person administering the oath or declaration confirms the identity of the deponent or declarant. 3. A modified version of the jurat or declaration is used that indicates, i. that the oath or declaration was administered in accordance with this Regulation , and

ii. the location of the person administering the oath or declaration and of the deponent or declarant at the time of the administering. [Emphasis added] Neither the jurat nor the declaration contained what was required. Accordingly, it was not an affidavit in Ontario. [ 13 ]

Section 63 of the Evidence Act [viii] sets out requirements that must be met for affidavits sworn outside of British Columbia to have the same force and effect as an affidavit sworn within the province. The laws of this province, not Ontario, must authorize a commissioner. There is no evidence that the commissioner in the Affidavit was so authorized. If the lawyer was a notary public, that would also suffice. However, a lawyer in Ontario is not necessarily a notary public: the lawyer must apply and be appointed [ix] . The stamp used must show they are so appointed. The stamp in the Affidavit did not.

There is no evidence the lawyer who acted as an Ontario Commissioner for taking affidavits was a notary public. [ 14 ] Accordingly, the Affidavit is not admissible as an affidavit in British Columbia. [ 15 ] However, I may refer to it and accept its contents as evidence in two ways. First, s. 16(1) of the Small Claims Act [x] ( SCA ) permits me to admit as evidence in proceedings any record or writings that are credible or trustworthy and relevant. The Affidavit is relevant.

The fact that it is, on its face, an affidavit sworn in Ontario suggests it should be credible or trustworthy, but that is not the end of the analysis. [ 16 ] The second source of admissibility is a practice directive issued by the Office of the Chief Judge of the Provincial Court of British Columbia, NP-19, effective April 11, 2022. That directive said that materials filed in proceedings need not be sworn or affirmed [xi] .

I can attach whatever weight I consider appropriate to the information in the Affidavit. [ 17 ] I turn to consider whether it is credible or trustworthy, and what weight I will place on its contents. [ 18 ] There are significant contradictions between what is stated in the Affidavit and the exhibits attached in support. At paragraph 10, the affiant, Kelly Mason, swore that on November 19, 2019, efS assigned the Debt to EOS through a particular agreement, which was not attached to the Affidavit. At paragraph 11 the affiant swore that on that date, EOS sent a letter of assignment to Mr.

Oppenheimer “information [sic] the Defendant of the assignment and the commencement of efforts to collect” the Debt. I will assume that “information” was meant to be “informing”. Kelly Mason was a senior law clerk with EOS. Although professionals make mistakes, affidavits are meant to be accurate. The expectation of accuracy is higher the more legal experience and qualifications the person has. The typographical error is not of real significance. [ 19 ] Exhibit “C” was attached and said to be a copy of that letter of assignment.

The Affidavit does not state it is a true copy, or an accurate copy, but in context, that is clearly what Kelly Mason meant. Exhibit “C” appears to be a photocopy of a letter on letterhead from efS, signed by the Director of National Collections for efS (the efS Letter). It is dated “19–Nov–2021”. It is in French and English. It is addressed in English as follows: “To whom it may concern”. The French is the equivalent. There is no address for the intended recipient. It states it is in reference to Richard Oppenheimer and “easyfinancial Accounts: 8009292”. [ 20 ] The discrepancies are obvious and concerning.

The letter is from 2021, two years after the purported assignment, two years after the affiant alleged notice of assignment by way of that letter was sent to Mr. Oppenheimer, and two months after EOS filed its Statement of Claim. It is not addressed to anyone. There is no address at all, let alone an address for Mr. Oppenheimer. It is on efS letterhead, suggesting efS sent it, not EOS. [ 21 ] If, as Kelly Mason asserted in paragraph 10, efS assigned its rights, it was a different company and therefore a different legal person from EOS.

It may be that EOS had the efS Letter sent, but that letter is not proof it was sent to anyone, let alone Mr. Oppenheimer. There were problems with serving Mr. Oppenheimer with the Claim and other materials, and there were at least two possible addresses for him. Those problems led to an order for substitutional service. The Affidavit has absolutely no indication of where or how the efS Letter was sent to Mr. Oppenheimer. [ 22 ] A less obvious but equally important discrepancy is that the alleged loan agreement for which the Debt was incurred was attached as Exhibit “A”.

It stated that the account number was “2116 – 8009292”. That is not the same account number as on the efS Letter. The same person could have more than one account. The first number could differentiate those accounts. There is nothing in the Affidavit to explain the discrepancy. It would be speculation to conclude they are the same account. [ 23 ] An Affidavit must not contain hearsay, and where there are statements based on information and belief, the source of that information and belief must be given [xii] . The Affidavit is replete with references to the affiant being “advised by the Claimant”.

A company does not speak; people do. The affiant stating they were advised by a nameless representative of a corporation does nothing to assist in informing the reader where information actually came from, or how that live person would know that information. Since a company cannot “speak” or “advise”, it is hearsay information, and inaccurately described. There is no real way to evaluate the reliability or accuracy of the information allegedly provided. What is left is a bare assertion with no foundation. [ 24 ] Further, part of the Affidavit included calculations of amounts allegedly due.

Those amounts do not correspond with the category of claim (for example, interest is mixed in with the principal amount) and the totals are inaccurate (for example, the expenses claimed). Those errors also call into question the accuracy and reliability of the Affidavit. [ 25 ] Even if the Affidavit was admissible as an affidavit, I would come to the same conclusion, as there is an onus on an affiant to ensure that their sworn testimony is accurate.

Where the information is so vague and inaccurate, in such a significant way, it calls into question the bona fides and reliability of the Affidavit’s contents. [ 26 ] An application for a default order is an ex parte application. An affiant’s duty is to make full and frank disclosure, which is a high standard [xiii] . As unsworn information, with no way to evaluate it, I give the bare assertion that notice of assignment was sent to the Defendant no weight. In any event, the fact that it was sent is not proof of receipt, that is, it is not proof of “express notice”.

[ 27 ] There is no evidence of notice of assignment being given to Mr. Oppenheimer. The EOS representative argued at the default hearing that, as in CIBC v. Dunne , service of the Claim would amount to service of the notice of assignment. At best, service of the Statement of Claim, in which it is asserted that efS assigned the Debt to EOS, could constitute express notice. But that was after the Claim was filed, not before. There is no basis in equity to relax the statutory requirement in the LEA of express notice before a claim is filed.

Given all of the problems with the Affidavit on this point, the bare assertion in the Claim does not amount to express notice. Conclusion [ 28 ] Since there was no express notice, EOS cannot sue in its own name. Its application for a default order is dismissed, as it has not shown it is entitled to the Debt.

Business Practices and Consumer Protection Act [ 29 ] Even if there was express notice as required by the LEA , that does not end the matter. [ 30 ] On May 3, 2022, I raised the issue of the applicability and impact on the proceedings of s. 121 of the Business Practices and Consumer Protection Act [xiv] , ( BPCPA ) with the EOS representative, who made submissions with respect to that issue on May 5, 2022. [ 31 ] Relevant provisions of that Act are: 2

(1) Parts 6 [Credit Reporting] and 7 [Debt Collection] apply to transactions, matters or things, regardless of whether they involve a consumer. 113 In this division, "collector" means a person, whether in British Columbia or not, who is collecting or attempting to collect a debt. 121

(1) If a debt has been assigned to a collector, the collector must not (

a) bring or continue a legal proceeding for the recovery of the debt as plaintiff unless the debtor has been given notice of the assignment, or (

b) bring a legal proceeding for the recovery of the debt unless the collector first gives notice to the debtor that the collector intends to bring the proceeding. [ 32 ] There are requirements under both acts for a debt collection agency to pursue a claim. EOS’s argument that the LEA allowed notice by way of service of the Claim does not deal with the requirements of the BPCPA . The Supreme Court of Canada stated that the BPCPA “is all about consumer protection” and therefore should be interpreted in favour of consumers [xv] . Our Court of Appeal has said [xvi] : [58] The BPCPA is consumer protection legislation.

Enacted by the provincial government in 2004 to replace and harmonize predecessor consumer protection statutes, it provides a comprehensive and exhaustive code for the regulation of consumer transactions and affairs . Its legislative objectives are consumer protection, consistency and fairness for all participants in the consumer marketplace and, to this end, its provisions establish, administer and enforce statutory rights and obligations in a wide range of circumstances .

In addition to other remedies, the BPCPA provides consumers with recourse to court proceedings for recovery of damages or loss they suffer due to contraventions of its terms: Koubi v. Mazda Canada Inc. , 2012 BCCA 310 at paras. 57 , 63. [Emphasis Added] [ 33 ] Regulating debt collection is clearly a part of that broad purpose of consumer protection, and is set out in

Part 7 of the Act .

Section 121 mandates what a “collector”, EOS, must not do: start a legal proceeding unless the debtor has been given notice of the assignment; or the collector has given notice to the debtor of an intent to bring legal proceedings. If that provision has not been complied with, the collector cannot institute proceedings. [ 34 ] The only evidence regarding this point, and relied on by EOS, is in the Affidavit. There is nothing in the Affidavit that shows notice was provided before the claim was started. The only notice, if any, was after, by way of service of the Claim.

EOS has not met the requirements of the BPCPA . Conclusion [ 35 ] There is no proof of any notice as required by the BPCPA . EOS is not entitled to sue in its own name. The application for a default order is dismissed. EOS is not a Proper Claimant [ 36 ] There is a further problem for EOS. As noted, commercial debt collection is regulated by the BPCPA .

Section 125 defines a “collection agent” as a person, whether in British Columbia or not, that in the course of business takes assignment of debt for the purpose of collecting payment of the debt, or tries to collect payment for another person. EOS is a collection agent. [ 37 ] The Debt Collection and Repayment Regulation [xvii] ( Regulation ) was made pursuant to s. 142 of the BPCPA .

Section 1.1 of the Regulation makes a collection agent subject to licensing requirements, and EOS is not within the class of persons exempt from the requirement for a license, at least in this case. It was required to apply for and be granted a license, which if issued, is valid for up to

three years. Pursuant to s. 8 of the Regulation , a collection agent “must have a licence for each location” from which it conducts business in British Columbia. By filing a claim in Vernon, they are conducting business in Vernon.

There was no evidence that EOS has a license for anywhere in British Columbia. [ 38 ] It may be that EOS has such a license, but in the absence of evidence that demonstrates EOS is complying with all the requirements for a collection agent, in my view it would be improper for this court to permit a claim to proceed, and in particular grant judgment in its favour, especially in light of the other failings set out before. [ 39 ] Further, s. 171 of the BPCPA states that if Mr.

Oppenheimer suffered a loss as a result of EOS’ contravention of the Act or regulations, he could sue EOS for damages in the Provincial Court. Damages could amount to the entire debt claimed. That would result in multiple proceedings for no good reason, resulting in a contravention of s. 2 of the SCA . It would waste judicial resources. Placing the onus on EOS to show that they are entitled to make a claim would not be onerous.

Despite being alerted to the BCPCA , and its obvious requirements, EOS did not do so. [ 40 ] A pleading, and claim, can be struck if it is plain and obvious it will fail, it is unnecessary, or it would be an abuse of the court’s process [xviii] . “Judges have an inherent and residual discretion to prevent an abuse of the court’s process.” [xix] The doctrine is flexible and permits me to dismiss a claim where the court is used for an improper purpose, including judicial economy [xx] .

In addition, s. 2(2) of the SCA permits me to make any order I think necessary to achieve the purpose of the act and the related Small Claims Rules. That includes ensuring claims are resolved in a just manner. Under both sources of authority, it would be unjust and an abuse of the court’s process to permit a claim to continue when the claimant has no valid basis for commencing the action. Conclusion on Claim [ 41 ] EOS has not complied with the LEA and BPCPA . It has no lawful basis for filing a claim without first having given Mr. Oppenheimer notice as required.

There is no evidence EOS is properly licensed under the BPCPA . It would be improper for this court to permit a claim to proceed where the claimant has not met the requirements for filing a claim. I am compelled to dismiss EOS’ claim. _____________________ The Honourable J. Guild Provincial Court Judge [i] RSBC 1996, c 253 [ii] 2003 BCSC 1594 [iii] United Metal Fabrications Ltd. v. Voth Bros. Const.

(1974) Ltd. , [1987] B.C.J. No. 1916 (S.C.) [iv] TD v Crawford 1990 BCJ No 537 (BCSC) [v] Rakhra v. Jhutty , 2007 BCCA 308 ; Rakhra v.

Jhutty , 2012 BCSC 882 ; Buhecha v Impact Imaging Ltd ., 2019 BCSC 663 [vi] https://dictionary.thelaw.com/express-notice/, accessed on July 7, 2022 [vii] Administering Oath or Declaration Remotely, O Reg 431/20 [viii] RSBC 1996, c 124 [ix] https://lso.ca/getdoc/42a9dbf4-f352-4baa-bbf7-ebeef3f57643/lawyer-as-notary-public, accessed July 8, 2022 [x] RSBC 1996, c 430 [xi] https://www.provincialcourt.bc.ca/downloads/Practice%20Directions/NP%2019%20COVID- 19%20Suspension%20of%20Regular%20Court%20Operations.pdf accessed July 8, 2022 [xii] See L.A.Y. v. S.A.Y , 2019 BCSC 853 , at para’s 35-38 [xiii] Kriegman v.

Dill , 2018 BCCA 86 at para. 43 [xiv] SBC 2004 s. 121

[xv] Seidel v. TELUS Communications Inc., 2011 SCC 15at para. 37 [xvi] Finkel v. Coast Capital Savings Credit Union, 2017 BCCA 361 , <https://canlii.ca/t/h6qjk [xvii] BC Reg 295/2004 [xviii] CIBC v. Dunne [xix] Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, at para. 35 [xx] Krist v. British Columbia, 2017 BCCA 78