2018 QCCQ 3387, 2018 QCCQ 3387

Toronto Dominion Bank c. Edgington 2018 QCCQ 3387 COURT OF QUEBEC (Civil division) CANADA PROVINCE OF QUEBEC DISTRICT OF JOLIETTE N° : 705-22-017246-180 DATE : May 10, 2018 ______________________________________________________________________ PRESENT : Me Mikhail Babenko-Gofman S.C.C.Q. ______________________________________________________________________ THE TORONTO DOMINION BANK Plaintiff; c. BRENT D.

EDGINGTON Defendant; ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Court is seized of an Application in recovery of amo u nts owing pursuant to the line of credit and credit card facilities granted by the Plaintiff; [ 2 ] The Plaintiff is a chartered bank and the Defendant is an individual and consumer under the Consumer Protection Act ; [ 3 ] The claim was served by public notice on February 14, 2018 ; [ 4 ] On March 23, 2018, the Plaintiff registered a default to respond to summons against the Defendant; [ 5 ] On March 28, 2018, the Court sent a notice to the Plaintiff under s. 268 of C.c.p. asking to justify the interest rate claimed under both the line of credit and the credit card, explain the interest on overdraft and raise any objection as to the power of this Court to intervene on its own initiative on those subjects ; [ 6 ] On April 23, 2018 the Plaintiff completed his file with an additional affidavit and evidence ; Credit card [ 7 ] The Court is satisfied that the Defendant owes to Plaintiff 6,655.82$ mentioned in its statement of account produced under E-2 ; [ 8 ] The Plaintiff also claims interest at the rate of 24.99% per year ; [ 9 ] The statement of account submitted by Plaintiff mentions an interest rate of 0% ; [ 10 ] In her additional affidavit, representative of the Plaintiff explains that the bank automatically brings the rate to 0% when the debtor stops payments « completely » and asks the Court to apply the regular rate of 24,99% ; [ 11 ] Furthermore she mentions that 24,99% is the rate applicable to the Defendant’s credit card ; [ 12 ] A credit card is not a commodity with an interest rate being attached to it, constituting an element of general knowledge.

It’s a financial product governed by the applicable legal regime ; [ 13 ] It is in the nature of a contractual claim that the Claimant prove terms of the agreement undertaken by the Defendant which the Claimant now seeks to enforce ; [ 14 ]

Section 29 of the Consumer protection Act [1] exempts the Plaintiff, in case of a credit card, from having a signed paper agreement between parties. It does not, however, exempt the Plaintiff from having a written agreement, as required by s. 23 of the Act; [ 15 ] To enforce the agreement, claimant must prove the scope of obligations undertaken by the debtor as well as the fact that those obligations had entered in force under s. 33 of the Act;

[16] In the opinion of the Court, the Plaintiff didn’t fulfill its onus in this regard as no proof of a written agreement, and no proof oftransmission of its duplicate by the Plaintiff was filed in evidence ; [17] The Court would like to make a distinction between this case and Banque JPMorgan Chase, n.a. (Sears Canada Bank) c.McDougall, 2008 QCCQ 6304 and Banque de Montréal c.

Loyer, 2006 QCCQ 4453 , where, in both cases, credit cardagreements were filed in evidence, which is of paramount importance ; [18] The interest shall therefore be reduced to the legal rate ; Overdraft [19] The Court is satisfied that the Defendant owes to Plaintiff 2,373.03$ mentioned in its statement of account produced under E-4 ; [20] The Plaintiff claims interest on overdraft at the rate of 21% ; [21] When asked to justify the rate, Plaintiff produced a template of « Overdraft Protection Agreement », which indeed shows theoverdraft interest rate of 21% ; [22] The document is, however, neither filled nor signed.

The sworn declaration doesn’t affirm that such agreement was ever signed. The Court is, therefore, not satisfied that the Defendant undertook to pay the claimed interest rate on overdraft ; [23] The question of overdraft charges was specifically examined by the Courts.

It is well established that the Courts require evidenceof an agreement stipulating overdraft rate[2] : [48] La BLC réclame le remboursement du capital restant dû avec un intérêt calculé au taux de 21%. [49] Nulle part dans la convention relative aux services de paiement au point de vente ou dans d’autres documents intervenusentre les parties, il est mentionné qu’advenant un découvert, l’intérêt applicable sera de 21%. [50] En fait, on ne retrouve dans le contrat concernant le compte bancaire, que la disposition suivante : 8.2 (…) The customer shall owe to the Bank any amount so debited and shall pay on demand any overdraft as well as all interest charged thereonat the rate applicable to account overdrafts unless a specific agreement exists between the parties in this respect.

The customer undertakes to find out on its own any change of interest rate applicable to account overdrafts. [51] La Banque n’a pas fait la preuve qu’elle a mentionné à un quelconque moment à M. Abdul-Wahab que le taux applicable encas de solde négatif était de 21%.

Quant à l’obligation faite au défendeur de s’informer, elle n’est stipulée qu’à l’égard des changementsdans le taux d’intérêt. [52] Faute d’une stipulation dans la convention à l’effet que le taux en vigueur était de 21% et considérant qu’il s’agit d’uncontrat d’adhésion (art. 1379 C.c.Q.), le tribunal ne peut condamner le défendeur à payer des intérêts au taux de 21% (art. 1432 C.c.Q.). [53] Par conséquent, c’est l’intérêt au taux légal plus l’indemnité additionnelle qui sera applicable. [24] The interest on overdraft shall, therefore be brought down to the legal rate ; Line of credit [25] With regards to the line of credit, the Court is satisfied that the Defendant owes to Plaintiff 15,866.33$ mentioned in its statementof account produced under E-3 ; [26] The Plainitiff conceded in its additional sworn statement that the interest rate should be reduced from 11.45% to 7.70% and so shallbe ordered ; Date of default [27] Given that no proof of transmission of the credit card and line of credit statements was produced, the date of default shall be set toJanuary 19, 2018, 30 days after the service of notices under s. 105 of the Consumer Protection Act[3] for the credit card and the line ofcredit ; [28] As for the overdraft, the date of default shall be set to February 14, 2018, the date of service of the originating motion, when thisamount was claimed for the first time ; [29] WHEREFORE, THE COURT: [30] GRANTS the application in part ; [31] ORDERS Defendant to pay to the Plaintiff the amount of 6,655.82$ plus interest at the legal rate since January 19, 2018; [32] ORDERS Defendant to pay to the Plaintiff the amount of 15,866.33$ plus interest at the rate of 7.70% since January 19, 2018;

[ 33 ] ORDERS Defendant to pay to the Plaintiff the amount of 2,373.03$ plus interest at the legal rate since February 14, 2018 ; [ 34 ] THE WHOLE with costs against the defendant; __________________________________ Me Mikhail Babenko-Gofman SPECIAL CLERK, C.Q.