2017 QCCQ 64, 2017 QCCQ 64

Horrocks c. TD Waterhouse inc. 2017 QCCQ 64 JG2338 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF BEAUHARNOIS LOCALITY OF VAUDREUIL-DORION Civil Division No: 760-32-017180-151 DATE: January 13, 2017 ______________________________________________________________________ IN THE PRESENCE OF THE HONOURABLE CÉLINE GERVAIS, J.Q.C. ______________________________________________________________________ John HORROCKS Plaintiff v. TD WATERHOUSE INC.

Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] John Horrocks claims from TD Waterhouse inc. (hereinafter TD) the amount of $12,500, representing damages suffered after TD delayed the payment of a provincial grant further to deposits in a Registered Education Savings Plan (RESP). Mr. Horrocks also alleges the lack of information and TD’s attitude in their handling of this file. [ 2 ] TD acknowledge owing the amount of the grant to Mr.

Horrocks ($496.34), but consider that his claim is exaggerated. PROCEDURAL QUESTION : [ 3 ] Mr. Horrocks filed his Demand on October 6, 2015. It was sent to TD by registered mail, at their address in Toronto, as appears from the Registraire des entreprises du Québec ’s website (Exhibit D-1). Though it was received on October 28, 2015, no contestation was filed within the prescribed delay. [ 4 ] It is with the reception of a subpoena that TD realized that an audition by default was scheduled on January 25, 2016.

TD filed their contestation with a Motion to be relieved from the failure to file a defense, which was heard before the hearing on the merits on September 15, 2016, and strongly contested by Mr. Horrocks. [ 5 ] TD allege that they were unable to file their contestation due to a confusion between TD departments. As there were other issues between Mr. Horrocks and TD, this Demand was first considered as a continuation of the other proceedings. TD allege their diligence in filing the contestation when they realized the situation. [ 6 ]

Section 84 of the Code of civil procedure states that any time limit that is not described in the Code as a strict time limit can be extended; the Court may relieve a party from the consequences of failing to comply with the original time limit. [ 7 ] CONSIDERING that TD filed the contestation within a short delay after realizing they were in default; [ 8 ] CONSIDERING that TD has serious grounds of Defense to present related to the quantum of Mr. Horrock’s claim; [ 9 ] CONSIDERING that

section 25 of the Code of civil procedure states that failure to observe a rule that is not a public order rule does not prevent an application from being decided provided the failure is remedied in a timely manner ; [ 10 ] CONSIDERING that Mr. Horrocks’ claim would not have been granted as presented, even if he had proceeded by default; [ 11 ] TD should be relieved of the default to file their contestation within the prescribed delay. THE FACTS : [ 12 ] In 2009, Mr. Horrocks opened an RESP and contributed to it until 2013. In 2013, his deposit was $4,963.40. The contribution to such an RESP generates federal and provincial grants (namely CESG and QESI), paid every year.

[ 13 ] The provincial grant represents 10% of the contribution, for a maximum of $250 per year. It is admitted that the QESI for 2013 that was supposed to be paid to Mr. Horrocks was $496.34, considering the possibility of any “carry-forward room”, as explained in a letter sent to Mr. Horrocks by TD on September 17, 2015 (Exhibit P-12). [ 14 ] Mr. Horrocks had five accounts at TD, including the RESP. In a letter dated April 16, 2014 (Exhibit P-3), TD informs Mr.

Horrocks that they are no longer prepared to maintain his accounts with them, and ask him to arrange the transfer of his TD Direct Investing accounts to another financial institution by no later than May 16, 2014. This delay is postponed to June 30, 2014, by a letter of April 24, 2014 (Exhibit P-4). [ 15 ] In a letter of June 4, 2014 (Exhibit P-5), Mr. Horrocks confirms to TD that he has transferred all his accounts, except the RESP, awaiting the deposit of the QESI.

He complains in this letter about the fact the TD has charged him fees to transfer his accounts, contrary to the agreement stated in the April 24 letter. He also states that TD informed him that the Minister of Revenue of Quebec has delayed payment, which should be made by June 15, 2014. [ 16 ] Over the two precedent years, the QESI was paid on May 23, 2012 and May 8, 2013. [ 17 ] Having no satisfactory answers from TD, Mr. Horrocks contacted National Assembly Member Lucie Charlebois, who forwarded his demand for information to Revenu Quebec. [ 18 ] Mr.

Horrocks received news from Revenu Quebec on January 30, 2015; their letter explained that the demands received from TD, as fiduciairy, were not in order, and that TD was informed of the problem on May 8 and August 5, 2014 (Exhibit P-7) [1] . [ 19 ] Meanwhile, on January 2015, an agreement seems to have intervened between Mr. Horrocks and TD regarding the transfer fees that were charged to him. A cheque in the amount of $255.22 dated January 20, 2015 was sent to him, but was sent to the wrong address. According to Mr.

Horrocks’ email of January 26, 2015, this amount represented the transfer fees of $155.22, plus $100 as damages. The cheque was not signed, though, and Mr. Horrocks was unable to cash it. [ 20 ] It is only by a letter of May 7, 2015, that Mr. Horrocks is informed by TD that “ as a result of technical issues, our ability to process your QESI grant for your ESP account has been delayed ”.

This letter confirms that delayed QESI grant funds will be deposited no later than June 30, 2015 (Exhibit P-9). [ 21 ] This letter also states that “ in addition, we will compensate your account an amount representing an incremental investment return of 5% per annum of the funds that were delayed for this period, starting June 30, 2014 ”, which promise seems to have been forgotten. [ 22 ] As Mr. Horrocks received no news from TD, he sent a Letter of Demand on September 1, 2015 (exhibit P-10), which is answered by the Ombudsman on September 4, 2015 (exhibit P-11). Following TD’s resolution process, Mr.

Horrocks’ letter is referred to a Senior Officer, who answers Mr. Horrocks on September 17, 2015 (exhibit P-12). TD deny Mr. Horrocks’ claim of $12,000, but say they are prepared to forward the QESI grant of $496.34 plus $200 to cover the administrative fees charged to the account. Mr. Horrocks is asked to call Mr. Celis to accept the offer. [ 23 ] This Demand is filed on October 6, 2015. ANALYSIS AND DECISION : [ 24 ] At trial, Mr. Horrocks asked when the QESI grants were indeed received by TD. As TD’s representative, Mr.

Celis, did not know the answer, he was allowed to forward his answer to the Court, which was received on September 21, 2015. [ 25 ] Mr. Celis specified that TD received the QESI files from the Ministère du Revenu on May 5, June 12, July 13 and November 18, 2015, and that the monies were paid to the clients on May 15, June 16, July 14 and November 19, 2015. In his further comments, Mr. Horrocks argues that these answers were incomplete, but the Court considers them sufficient for the purposes of this judgment. [ 26 ] In Exhibit P-9, dated May 7, 2015, TD say the grants should be received before June 30, 2015.

TD’s offer of settlement dated September 17, 2015 recognizes that they are ready to deposit the funds, which means that they have been received either on June 12 or July 13, 2015. As TD deposited the monies in the customer’s accounts only a few days after they were received by the Government, one could ask why the grant was not deposited in Mr. Horrocks’ account at least on July 14, 2015 ? [ 27 ] It took a Letter of Demand by Mr. Horrocks to clarify things. If we can understand that TD contested Mr.

Horrocks’ demand for damages for $12,000, the Court can see no good reason that precluded TD from transferring the money to Mr. Horrocks, as they should have done earlier, when the grants were received. It would have been possible for TD to send a letter to Mr. Horrocks denying his claim, while paying him what was due. [ 28 ] Moreover, it would not have been possible for Mr. Horrocks to accept the offer made by TD on their September 17 letter ($496.34 + $200), as they had earlier offered a 5% compensation in June 2015, and $100 as damages in January 2015. [ 29 ] Mr.

Horrocks is entitled to the following amounts: • $496.34 QESI Grant • $200.00 Transfer fees • $100.00 Damages offered in January 2015 • $65.07 Interests at 5% from June 30, 2014 to February 12, 2017 (30 days after this judgment), as offered in TD’s letter dated May 7, 2015

• TOTAL: $861.41 [ 30 ] Mr. Horrocks’ claim for damages is as follows: • $21.00 Cost of registered mail • $90 Travel costs (gas and vehicle) • $200 Administration fees • $500 Amount of QESI grant not collected • $500 Lost investment opportunity and income • $1248 26 months at $48 NSF fees • $5000 Moral damages • $5000 Punitive damages • $6500 65 hours of time at $100/hour [ 31 ] The administration fees and QESI were already granted on paragraph 29 of this Judgment. Mr. Horrocks is also entitled to recover the registered letters fees of $21.

The amount claimed for lost investment opportunity is compensated by the interest of 5% already granted. The monthly NSF fees claimed have no legal basis. The claim for expenses for travel costs cannot be granted either, as they do not comply with

Section 1613 of the Quebec Civil Code . [ 32 ] The Court shall now determine the amount of damages that should be awarded to Mr. Horrocks, due the handling of this file by TD. It is necessary to examine first the obligations assumed by TD in their relationship with their clients. [ 33 ] Authors L’Heureux, Fortin and Lacoursière state in their treaty on banking law that a bank has the duty to act with the care of a reasonably qualified person in the same field [2] . [ 34 ] They also say the opening of a banking account includes the implicit obligation by the bank to account for their administration [3] .

They note that, although the bank decides what informations will appear on the bank statements, those statements must reflect the exact situation of the operations, and shall be presented in a way that allows the client to verify the information herein [4] . [ 35 ] The banks also have a duty of information towards their clients, which consists of correctly informing the client and acting with reasonable care and in good faith [5] .

The authors also state that the evolution of jurisprudence now obliges banks to act with more transparency towards their clients [6] . [ 36 ] The Court considers that TD has not act with transparency towards Mr. Horrocks, by withholding information regarding the real situation about the government grants. In June 2014, Mr. Horrocks received a verbal information that the QESI should be paid before June 15, 2014. [ 37 ] It takes almost a year before TD writes to Mr. Horrocks to inform him that payment should be made before the end of June 2015. Once again, this information is not accurate.

It is only by the letter sent by Revenu Quebec, further to Mr. Horrocks’ inquiry through Mrs. Charlebois, that he is informed that the problem originates from TD. [ 38 ] In addition to this, the closing of Mr. Horrocks’ account does not go smoothly either. Despite the fact that TD confirmed to him that no charge would be withdrawn, some fees were nevertheless taken. The letter with the cheque to reimburse him is sent at the wrong address; when Mr. Horrocks can finally take possession of the cheque, he realizes that it is not signed. [ 39 ] The mishandling of Mr.

Horrocks procedures in the present file, that resulted in their default to file their contestation in a timely manner, also shows that TD does not look like a well-organized corporation. [ 40 ] Exercising its discretion, the Court evaluates that an amount of $1,500 should be paid to Mr. Horrocks to compensate the errors and delays that occurred in this file, for a total of $2,382.41.

FOR ALL THESE MOTIVES, THE COURT: RELIEVES TD from the Default to file the Contestation within the delay; GRANTS partially Plaintiff's claim; ORDERS the Defendant to pay to the Plaintiff the amount of $2,382.41 plus the legal interest calculated from October 28, 2015, date of

service, and the additional indemnity payable in virtue of

section 1619 C.c.Q. ; WITH the judicial costs of $200 . __________________________________ CÉLINE GERVAIS, J.Q.C.