DATE: 20040720

DOCKET: C40491

COURT OF APPEAL FOR ONTARIO

RE: The Bank of Nova Scotia (Plaintiff (Respondent)) – and – Sharon M. Baker (Defendant (Appellant))

BEFORE: McMurtry C.J.O., Borins and Feldman JJ.A.

COUNSEL: C. F. MacKewn For the appellant

S. S. Appotive For the respondent

HEARD: July 6, 2004

On appeal from the judgment of Justice John F. McGarry of the Superior Court of Justice dated April 20, 2003

E N D O R S E M E N T

[1] The appellant and her husband applied for a line of credit from the bank in April 1990. They signed an application for credit and an agreement. They originally wanted the money for home renovations, and in October 1990, they jointly applied for an increase in the line from $15,000 to $25,000, again signing an application and an agreement.

[2] Although the appellant and her husband were both customers of the bank on the line of credit, the bank addressed all of its correspondence to the husband, effectively treating him as the sole customer. In that correspondence, the bank later advised that the line of credit was being increased to $30,000 and offered an ABM card as another way to access the line. The husband took advantage of both, by using the full line and by obtaining an ABM card and accessing the line through withdrawals from the ABM. Unfortunately, the appellant’s husband embezzled funds from his employer and from the appellant and also went bankrupt.

[3] The bank did not communicate with the appellant until November 1999, when the line of credit was in default. The appellant denied that she was liable on the line of credit on the basis that the original amount borrowed had been repaid and that the bank had acted unilaterally by communicating only with the husband and by allowing him to operate the line with an increased limit and by use of an ABM card.

[4] The trial judge concluded: “While the bank can be criticized for naming the defendant’s husband as its customer, the defendant signed numerous documents which would indicate that she was fully aware of the facility being provided and accordingly is responsible at this time.”

[5] This conclusion is based on a finding of fact and a conclusion of law. In our view, the trial judge made no palpable and overriding error in his finding of fact based on the evidence, nor was he incorrect in his application of the law.

[6] The bank’s documents signed by the appellant contained clauses that allowed the bank to direct its correspondence to one of the customers, to issue ABM cards and to increase the line of credit. The appellant testified that she understood the document. There is no basis to find that the appellant is not liable to the bank in accordance with her agreement.

[7] The appeal is therefore dismissed with costs fixed in the amount of $5,000 inclusive of G.S.T. and disbursements.

“R. Roy McMurtry C.J.O.”

“S. Borins J.A.”

“K. Feldman J.A.”