Marcello Parete v. Bank of Nova Scotia and Scotia Mortgage Corporation, 2017 HRTO 1677

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Marcello Parete

Applicant

-and-

Bank of Nova Scotia and Scotia Mortgage Corporation

Respondent

DECISION

Adjudicator: Bruce Best

Date: December 19, 2017

Citation: 2017 HRTO 1677

Indexed as: Parete v. Bank of Nova Scotia

APPEARANCES

Marcello Parete, Applicant

Self-represented

Bank of Nova Scotia and Scotia Mortgage Corporation, Respondent

Meighen Farris-Miles, Counsel

Introduction

1This Application was filed under s.34 of the Human Rights Code, R.S.O. 1990, c.H.19, as amended (the “Code”) on February 27, 2017.

2The allegations are primarily with respect to the applicant’s interaction with employees of the respondent Bank of Nova Scotia (“the bank”), and his subsequent complaints. The applicant also named Scotia Mortgage Corporation (“the mortgage corporation”), a subsidiary of the bank, as a respondent. The applicant explained that the mortgage corporation was included because one of the disputes he had with the bank was respecting his mortgage.

3The Tribunal sent a Notice of Intent to Dismiss (“NOID”) on May 8, 2017 indicating that it appeared the respondent bank was a federal work or undertaking, and as such the Application was outside the Tribunal’s jurisdiction. The applicant filed a response indicating that his allegations were respecting insurance and mortgage services, which he argues fall under provincial jurisdiction, and that as such the bank’s actions fell within the jurisdiction of the Tribunal.

4By Case Assessment Direction dated May 25, 2017, the Tribunal directed that a preliminary and summary hearing be held to determine whether some or all of the allegations should be dismissed as being outside the jurisdiction of the Tribunal, or as having no reasonable prospect of success.

5This application involves several allegations of discrimination. First, the applicant alleges that he attempted to cancel a credit card, and related optional credit protection insurance available to holders of the credit card which would cover minimum payments on the card in certain circumstances, including job loss, disability or death. The applicant asserts he would not have been able to take advantage of the insurance because of his age and disability. He claims that the bank told him it would cancel the card, and with it the insurance, but that they did not do so. He argues that the bank’s failure to cancel his card meant that he was forced to pay for insurance he did not want.

6Second, the applicant alleges that the bank refused to change the frequency of his mortgage loan payments, again because of his age and disability.

7Third, he claims that the bank failed to properly investigate his complaints.

8Fourth, the applicant alleges that the respondents’ took actions against him as reprisal for his having raised his Code rights.

9For the reasons set out below, I find that the application must be dismissed as the matters fall within exclusive federal jurisdiction. With respect to the credit insurance, even if I were to find that it could stand alone as an allegation that fell within provincial jurisdiction, I would in any case dismiss the allegations as having no reasonable prospect of success.

Analysis

Federal Jurisdiction

10Banking is, pursuant to subsection 91(15) of the Constitution Act, 1867, (U.K.), 30 & 31 Victoria, c. 3, under federal jurisdiction. However, not everything a bank does is “banking”. The Supreme Court held in Canadian Western Bank v. Alberta, 2007 SCC 22 (“Canadian Western”) that products such as optional credit or travel insurance may properly be regulated by the provinces, where such regulation did not impede the core element of banking. In Bank of Montreal v. Marcotte, 2014 SCC 55 (“Marcotte”) the court held that the banks were subject to provincial regulation on issues such as consumer protection statutes. These authorities have also been followed by the Tribunal. See Farquhar v. Bank of Nova Scotia, 2016 HRTO 991 (“Farquhar”), at paras. 7-8.

Credit Card and Credit Insurance Claim

11The rationale behind the above case law is that ancillary services such as optional credit insurance are incidental to the core business of banking. As noted by the trial judge in Canadian Western Bank v. Alberta, 2003 ABQB 795 (whose decision was ultimately upheld by the Supreme Court in Canadian Western, above), the sale of optional credit insurance is to banking what the sale of alcohol is to airlines, or the operation of hotels is to railways.

12The lending of money itself, however, is a core banking service, which would include a bank lending for purchases made through a credit card, or lending for purchase of a home. See Marcotte at para. 66. Even if such matters were not, constitutionally, the core to the business of banking, it is clear that the federal government has asserted jurisdiction over lending by a bank, including through credit cards and mortgage loans, under the federal Bank Act, S.C. 1991, c 46 (“Bank Act”). See Coote v. Laurentian Bank of Canada, 2017 HRTO 1529 (“Coote”) at para 19.

13As a result, a challenge to a provision, for example, restricting optional travel insurance to individuals under the age of 65 would properly fall under provincial jurisdiction, as it would not impede the core banking function of lending – the travel insurance rule does not affect whether the individual will get or keep a credit card. This was the situation in Farquhar. However, an allegation that a bank refused to issue a credit card for a discriminatory reason would fall under federal jurisdiction. This was the situation in Coote.

14In the present case, the applicant was seeking to cancel his credit card, and with it his insurance. The failure of the bank to actually cancel his credit card is, in my view, an issue that falls within federal jurisdiction. If the applicant had independently attempted to cancel just the insurance, without impacting the credit card, this may fall under provincial jurisdiction, but that is not what the applicant is saying happened.

15Despite the applicant’s best efforts to frame the allegations of discrimination as being related to provincially regulated services provided by the bank, I find that the allegation respecting the failure to cancel the credit card and credit insurance arises out of a dispute respecting the credit card itself, which falls under federal jurisdiction. It is, as such, outside of my jurisdiction to decide.

No reasonable prospect of success

16Even if I were to accept that the applicant’s dispute with the bank was over the optional insurance and fell within provincial jurisdiction, I would nonetheless find that the allegation has no reasonable prospect of success.

17As the Tribunal indicated in Forde v. Elementary Teachers’ Federation of Ontario, 2011 HRTO 1389, for an Application to continue in the Tribunal’s process following a summary hearing, an applicant must be able to point to some evidence, beyond mere speculation, accusation, and suspicion, that could make out a link to the Code. The Tribunal has repeatedly said that an applicant’s belief, no matter how strongly held, is not evidence upon which the Tribunal might find that discrimination has occurred. See Leong v. Ontario (Attorney General), 2014 HRTO 311.

18Accepting that cancelling the insurance was part of the services offered to the applicant, I do not see how failing to cancel it could amount to discrimination. The applicant’s argument is that the bank’s failure to give him access to this service was discriminatory because they were, in effect, forcing him to keep the insurance. He speculates that the reason the bank did not cancel his card was because it wanted to continue charging him premiums for insurance he did not need or want.

19For the purposes of this decision, I accept without making any finding the applicant’s claims that:

• the respondent contacted the applicant because he was over the credit limit on his credit card;

• the applicant asked the respondent to close his credit card account, and the corresponding insurance;

• the bank told the applicant it had cancelled the credit card and insurance; and

• the bank did not in fact cancel the applicant’s card or insurance, and continued to charge the applicant the insurance premium.

20Even assuming the above is true, however, in order for the Application to proceed, the applicant would have to point to evidence that could establish that the bank’s failure to cancel his card or his insurance was somehow related to a Code ground. Though it is clear that the bank was providing a service, it is not clear how the failure to cancel his card or insurance was related to the applicant’s disability or age. Though the applicant suggested that he was not eligible for the insurance because of these grounds, he did not point to any evidence that would support this claim, or that would otherwise support a finding that the failure to cancel the insurance was discriminatory.

21For these reasons, even if the failure to cancel the insurance could be parsed out from the applicant’s request to cancel the credit card, I would find that the allegation of discrimination has no reasonable prospect of success.

Mortgage

22The applicant alleges that he had inquired with the bank about renegotiating the payment frequency of his mortgage payments. He claims that he was given inconsistent or contradictory information respecting why the changes he wanted would not be approved. He alleges that their decision not to agree to his changes was discrimination on the basis of age and disability.

23The basis for the claims respecting the applicant’s mortgage are all to do with his request to change the payment frequency of the loan. A loan with a bank is squarely in the realm of “banking” for constitutional purposes, as addressed above. Mortgage loans by banks are clearly federally regulated. The question of whether the applicant was discriminated against by the bank with respect to his mortgage loan is a matter squarely within federal jurisdiction, and as such the Tribunal has no jurisdiction to address these allegations.

24The applicant made a number of arguments to challenge this conclusion, as follows.

Scotia Mortgage Corporation

25First, the applicant named Scotia Mortgage Corporation as a respondent. He did not claim to have had any dealings with the mortgage corporation, but rather appears to be assuming that because he had a mortgage with the bank, the mortgage corporation had to be involved. And, as the mortgage corporation is provincially regulated, the application is therefore within the jurisdiction of the Tribunal.

26He further relied on the following passage from the Personal Credit Agreement he signed as part of his mortgage loan:

Any of our subsidiaries, such as Scotia Mortgage Corporation, may act as our agent in any transaction or correspondence for your mortgage loan. Dealing with them is the same as dealing with us.

27He claims by stating that a provincially regulated subsidiary can act as its agent, the bank has therefore forfeited the right to claim that an application against it comes under federal jurisdiction.

28First of all, whether or not the allegations fall under provincial or federal jurisdiction is not a “right”. It is not something a party can choose. It is a question of constitutional jurisdiction. The question of whether a particular action falls under provincial or federal jurisdiction is also independent of whether an agent is involved.

29In any case, there is no indication that the mortgage corporation was in any way involved. I asked the applicant if he was able to point to any evidence that would indicate that the mortgage corporation was involved with the loan between himself and the bank. He was not able to do so. I further noted that the fact that an organization may act as an agent does not mean they are acting as an agent.

30The applicant argued that a licence was required in order to offer mortgages in Ontario, and he took the position that any mortgages offered by the bank were actually through Scotia Mortgage Corporation.

31This, however, is merely speculation by the applicant. Though he is correct that the provinces do regulate mortgage brokers and mortgage lenders, he is not correct in the assumption that this means the province regulates every aspect of a mortgage loan, or that the bank is therefore subject to provincial regulation whenever dealing with mortgages.

32In Ontario, ss. 2 and 4 of the Mortgage Brokerages, Lenders and Administrators Act, 2006, S.O. 2006, c 29 (“MBLAA”) provide that no person shall deal in mortgages or carry on business as a mortgage lender without a mortgage brokerage license, unless exempt. The MBLAA is also clear that all employees of a financial institution (which under s.1 of the MBLAA includes banks) who regularly deal in mortgages on behalf of their employer are exempt from the requirement to obtain a brokerage licence under s. 6 of the MBLAA. As such, it is not the case that bank employees dealing with mortgages are licenced provincially. They are, rather, exempt from being licenced provincially. The fact that the province regulates mortgage brokers does not mean the province regulates mortgage loans held by the bank.

33The regulations under both the federal Bank Act and the MBLAA further confirm that banks are regulated federally with respect to mortgages. Even though the regulation of mortgages may fall under provincial jurisdiction in some respects, the question of the frequency of payment of a loan, even when backed by a mortgage, does not.

34As such, I do not accept the applicant’s argument that the bank’s actions fall under provincial jurisdiction with respect to the dispute over his mortgage. If the applicant has any claim, it lays under the Canadian Human Rights Act.

Failure to Investigate Claims of Discrimination

35The applicant’s complaint does not appear to be with respect to the failure to investigate complaints of discrimination, but rather with the failure of the bank Ombudsman or the Office of the President to correct what he perceived was improper actions taken by his branch.

36The procedure for dealing with complaints against a bank arise under s. 455 of the federal Bank Act. See Coote, at para. 19, above. A claim that a complaint was not investigated properly would, as such, clearly fall under federal jurisdiction. Even if there was a complaint respecting discrimination, the applicant’s complaints appear to be about the bank’s refusal to change the frequency of his mortgage payments. A complaint about an issue that fell under federal jurisdiction would not trigger any duty under the Ontario Code.

Reprisal

37The applicant indicates that he followed the bank’s internal process to resolve the dispute respecting the mortgage. He claims that on January 24, 2017 he advised the bank’s Ombudsman’s office that if the matter was not resolved to his satisfaction he would be pursuing a human rights claim. He further claims that the following day, on January 25, 2017, the bank falsely alleged that the applicant had deposited an empty envelope in a bank machine some three weeks earlier. They adjusted the applicant’s account balance in accordance with this transaction. The allegation was apparently withdrawn following further investigation, and the money was returned to the applicant’s account on January 31, 2017, but as a result of this error the applicant had some pre-authorized payments refused based on insufficient funds which would not have occurred if the respondent not adjusted the applicant’s bank account to account for the $400 deposit.

38The applicant alleges that the timing of the false allegation of fraud gave rise to an inference that it was deliberate as a result of his having raised his Code rights with the Ombudsman the day before.

39The respondent disputes that the applicant has been able to point to any evidence to support a connection between his complaint respecting his mortgage and the allegation that he had deposited an empty envelope in a bank machine. It argues that communications with the Ombudsman are not shared with the branch employees who are the subject of the complaint.

40Again, however, the complaint process in which he alleges the reprisal arose is governed by the federal Bank Act. Given my above findings, I have no jurisdiction to consider whether the bank reprised against the applicant.

Order and Directions

41The Application is dismissed as it is outside the jurisdiction of the Tribunal.