The Cash Store Financial Services Inc. et al. v. Her Majesty the Queen in Right of Ontario, as represented by the Minister of Consumer Services et al.

[Indexed as: Cash Store Financial Services Inc. v. Ontario (Minister of Consumer Services)]

Ontario Reports

Ontario Superior Court of Justice,

Divisional Court,

Marrocco A.C.J.S.C., Pardu and Sachs JJ.

November 5, 2013

117 O.R. (3d) 786 | 2013 ONSC 6440

Case Summary

Consumer protection — Payday loans — Respondent amending Regulation under Payday Loans Act to provide that definition of "total cost of borrowing" includes any "amount that is connected directly or indirectly to the payday loan agreement" — Amendments also providing that borrower is entitled to receive cash for any advance received by way of device and prohibiting any licensee from offering or providing any service in connection with payday loan agreement other than payday loan — Application by payday lender challenging validity of [page787] amendments dismissed — Failure to provide 45-day consultation period prior to publishing amendments not breaching applicant's legitimate expectations — Doctrine of legitimate expectations not applying to exercise of Cabinet's regulation-making power — Amendments not ultra vires — Payday Loans Act, 2008, S.O. 2008, c. 9.

The applicant payday lender challenged the validity of amendments made to a Regulation under the Payday Loans Act, 2008. The challenged amendments provided that the definition of "total cost of borrowing" includes any "amount that is connected directly or indirectly to the payday loan agreement" and that is paid by the borrower or for which the borrower is obligated to pay "upon entering into the agreement". They also required that all licensees provide cash for the unused balance on a "device" if requested by the customer, and prohibited licensees from selling any other products on behalf of themselves or third parties in connection with a payday loan agreement. The applicant argued that the failure to comply with the Ontario Regulatory Policy ("ORP") by providing a 45-day consultation period before publishing the amendments breached its legitimate expectations, and that the amendments were ultra vires.

Held, the application should be dismissed.

The doctrine of legitimate expectations does not apply to the exercise of the Cabinet's regulation-making power. Moreover, the ORP was not a representation that was made directly to the applicant individually or as a member of a specific group, and was not a clear, unambiguous and unqualified representation. Finally, the applicant in fact had the opportunity to