ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-08-00360060
DATE: 20121012

BETWEEN:

ANTHONY GYIMAH
Plaintiff

– and –

THE BANK OF NOVA SCOTIA, SCOTIA LINE VISA, MIKE MCKEIL and AVIN SHARMA
Defendants

In person

Kate Findlay, for the Defendants

HEARD: September 24, 2012

J. Wilson, J.

Amended REASONS FOR JUDGMENT

[ 1 ] The defendants, the Bank of Nova Scotia (“the Bank”), Scotia Line Visa, Mike McKeil, and Avin Sharma, bring this motion for summary judgment seeking dismissal of the plaintiff’s claim. In this action, the plaintiff, Antony Gyimah, seeks significant damages for the improper cancellation of loan facilities, including a line of credit and a visa card, on April 11, 2008. The plaintiff claims that the defendants were negligent with respect to the handling of his accounts and that their cancellation caused significant damage for mental and emotional stress, financial hardship, and damaged his credit history.

[ 2 ] Do the facts as disclosed raise a triable issue as to whether the Bank was negligent?

[ 3 ] I conclude that neither the undisputed facts, nor the facts alleged by the plaintiff which are not conceded by the defendant, are capable of sustaining an action against the Bank in negligence. For reasons to be outlined, however, I conclude that the Bank’s handling of the file left much to be desired and contributed to this unfortunate proceeding and are therefore relevant to the issue of interest and costs.

The Undisputed Facts

[ 4 ] The plaintiff and a third party opened a line of credit and a visa account with the Bank in 2002. At the time of this dispute, the third party was no longer on the accounts, the limit on the visa account had increased to $16,000, and the limit on the line of credit was $23,000.

[ 5 ] When these credit facilities were opened, the plaintiff received a Personal Credit Agreement with respect to the visa account, and a Personal Credit Agreement Companion Booklet with respect to the line of credit. The visa account was simply approved, and the plaintiff executed a Personal Credit Agreement for the line of credit. These documents set out the terms governing the parties.

[ 6 ] The Personal Credit Agreement Companion Booklet (“the PCACB”) confirms that the Bank has the right to share credit information pertaining to the customer, and that conditions such as late payments or missed payments allows the Bank to reduce the credit limit at any time.

[ 7 ] It is undisputed that on March 3, 2008, the Bank received a routine monthly report from the Credit Bureau. It identified the plaintiff as a high risk borrower and provided information of an account outstanding with the Bank of Montreal (“the Credit Report”).

[ 8 ] Receipt of the Credit Report understandably triggered an internal review by the branch manager, Mike McKeil, as to the status of the plaintiff’s accounts.

[ 9 ] At this time, it is not disputed that the plaintiff’s accounts with the Bank were in good standing, and were in fact in a surplus position as the plaintiff had overpaid both his line of credit and visa. The manager reviewed in detail the prior history of the plaintiff’s accounts and found that there was a history of late payment of the minimum payment by a few days, and on four occasions the monthly minimum payments had not been made.

[ 10 ] In light of the Credit Report and the review of the account history, the Bank advised the plaintiff that his accounts were being reviewed, and requested an up-to-date application with current financial information.

[ 11 ] The bank manager contacted the plaintiff on March 13, 2008. The details of the discussion are in dispute, but it is not disputed that the Bank requested updated financial information from the plaintiff, and the plaintiff declined to provide updated disclosure.

[ 12 ] At the time of the review, the plaintiff’s visa and line of credit were in a surplus position. The line of credit, visa obligations, and the applicable overpayments had been paid from the proceeds of a cheque payable to the plaintiff in the amount of $71,000.

[ 13 ] As part of the review process, the Bank representative wanted to know the source of the $71,000. The plaintiff declined to provide full details, and advised the bank to contact his lawyer. In fact, the $71,000 was from a settlement of a motor vehicle action.

[ 14 ] In the letter to the plaintiff dated March 27, 2008, the Bank confirmed to the plaintiff that his accounts were being reviewed and that he must provide updated financial information is support of his application for renewal. The March 27, 2008 letter confirmed that if the plaintiff refused to provide the requested updated disclosure, his accounts would be closed effective April 27, 2008.

[ 15 ] The plaintiff attended meetings with the branch manager on April 9 and 10, 2008. The plaintiff continued to decline to provide updated financial information to the Bank. At the time, both his visa and line of credit were in a surplus position. It appears that the plaintiff received conflicting information, as the inquiries he made to the Bank’s head office about whether there was a reason to review and renew his accounts contrasted with the position taken by the manager at the Bank branch in receipt of the Credit Report.

[ 16 ] In addition to the two accounts that are the subject matter of this proceeding, the plaintiff also had two mortgages with the Bank that were in good standing and that were partially secured by a GIC held by the Bank. The plaintiff was of the view that no further disclosure to the Bank was necessary in these circumstances.

[ 17 ] The Bank manager confirmed that the updated financial information was necessary in light of the Credit Report. He advised the plaintiff to contact the credit bureau directly to obtain the Credit Report.

[ 18 ] Between April 9 and 11, 2008, the plaintiff withdrew cash in a total amount of $35,000 on his visa card and his line of credit.

[ 19 ] In response to the plaintiff’s withdrawal of these funds, the branch manager, on behalf of the Bank, confirmed in writing to the plaintiff, on April 11, 2008, that no further credit would be offered on the line of credit and visa card, and that the credit limit on both accounts was reduced to zero.

Conclusions

[ 20 ] The Bank and the plaintiff were in a relationship of creditor-debtor. There are no facts supporting a finding of a special relationship, nor is any special relationship alleged: see Bank of Nova Scotia v. 2156909 Ontario Inc., 2012 ONSC 5236, at paras. 15 to 16.

[ 21 ] There is an implied term that a Bank is required to carry out the terms of its contract with the plaintiff in a reasonable manner: see Austral Imports Inc. v. Bank of Montreal, 2006 ABQB 428, 400 A.R. 231, at paras. 12 to 14.

[ 22 ] In light of the report from the Credit Bureau, it was reasonable for the Bank to make inquiries of the plaintiff and to require him to file updated financial information in order to renew his credit card and line of credit.

[ 23 ] Further, it was reasonable, in light of the payment history and Credit Report, to make inquiries to verify the source of the $71,000.

[ 24 ] Applying the invigorated test for summary judgment reflected in the revised rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and in light of the interpretation of the revised rule in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1, this motion for summary judgment dismissing the plaintiff’s claim shall be granted. Applying the principles of the full appreciation test, I find that there is no need for a trial to determine the issues raised by the plaintiff.

[ 25 ] I conclude that the issues raised in this proceeding may be determined on this motion, including whether the Bank acted reasonably requiring updated financial information from the plaintiff in light of the Credit Report and a review of the account histories, whether the Bank acted reasonably in reducing the account limits in light of the undisputed factual chronology, and whether the there is evidence in the motion record supporting a finding of damages.

[ 26 ] In light of the Credit Report, coupled by a review of the history of the accounts, I conclude that the Bank acted reasonably in requiring a review of the accounts and updated financial information in a renewal application.

[ 27 ] The Bank had initially given the plaintiff a time limit of April 27, 2008, to provide the updated financial information. In light of the plaintiff’s withdrawals totalling $35,000 on his visa and his line of credit between April 9 and 11, 2008, the Bank acted reasonably to close his accounts and limit his credit to zero on April 11, 2008. It was the plaintiff’s actions of withdrawing large sums that triggered the response by the Bank.

[ 28 ] Finally, even if there were facts supporting a finding of negligence by the Bank (which is not my conclusion), I conclude that the motion record does not support a finding of damage for mental and emotional stress, financial hardship, or damage to the credit history as a result of cancelling these accounts.

[ 29 ] The Bank is entitled to judgment on their counterclaim in the amount of principal owing as of the date of the commencement of this action, in the amount of $18,491.23. There is no benefit to either party in allowing this matter to proceed to trial, as it is evident that the plaintiff cannot succeed in his action.

Interest and Costs

[ 30 ] The Bank was entitled to be prudent and to protect its financial interests. Unfortunately, the position s of both the plaintiff and the Bank representatives became entrenched and fuelled this litigation. It was not what the Bank employees did per se to protect the Bank’s interest, but rather, how they did it.

[ 31 ] The plaintiff was offended by the inquiries by the Bank, as all of his accounts with the Bank were in good standing, and in fact the visa account and line of credit were in a surplus position.

[ 32 ] The plaintiff complained that the nature of the Bank’s concern underlying the review of his account was a shifting target which made it difficult for the plaintiff to respond. The record, to a degree, supports his concern.

[ 33 ] Mr. Sharma suggested in cross-examination that the reason the accounts were reviewed was because they were not in good standing. That information, simply put, is not factually correct. But for the Credit Report, it appears clear that no such review would have taken place in March or April 2008, as the plaintiff’s accounts were paid in full and were in fact in a surplus position.

[ 34 ] I note that it was not until January 2012 that the Bank produced the Credit Report in this motion record. It was this document that understandably triggered the Bank’s concerns and the review of the plaintiff’s accounts. Counsel, in submissions before me, suggested that this document could not be produced to the plaintiff by the terms of the contract between the Credit Bureau and the Bank, and so the plaintiff would have to pay to obtain such a copy, because “that was how the Credit Bureau makes its money”.

[ 35 ] The Credit Report was part of the disclosure in the motion record, and counsel were able to make appropriate arrangements with the Credit Bureau to provide the document for this motion. Surely in the circumstances of this case, in March 2008, when all accounts with the Bank were in good standing, the Bank should have made the Credit Report available to the plaintiff which explained their valid concerns and their need for updated financial information.

[ 36 ] As well, the Bank did not proceed promptly with this motion, nor did the Bank attempt to limit costs by transferring the matter to the Ontario Court Provincial Division.

[ 37 ] The Bank’s refusal to provide the Credit Report until recently and the misinformation perpetuated by Mr. Sharma, that the reason for the Bank’s actions was that the accounts were not in good standing, though not capable of sustaining an action in negligence, are relevant to the issue of entitlement to interest and costs.

[ 38 ] The parties agree that after the initiation of this proceeding, the plaintiff paid the balance owing on the visa account with interest.

[ 39 ] The principal outstanding on the line of credit as of August 2008, when this proceeding commenced, was $18,491.23.

[ 40 ] At the motion, I asked for confirmation by the Bank as to the principal outstanding at the date the claim was commenced, as there was some concern expressed by the plaintiff that the Bank’s figure was not accurate. The Bank filed supplementary material after the date of the motion by way of affidavit of Michael McKeil dated September 27, 2012 going well beyond the question asked. He did confirm that the evidence in the motion record was accurate and that the principal outstanding as of the date of the commencement of the action was $18,491.23. All other material in the affidavit was beyond the simple question that I asked, was self serving, and was not properly included in the affidavit. It has not been considered by me. This supplementary material was not received by me by the deadline imposed, and before a copy of the decision was provided to the parties. In any event this material has no impact on the outcome of this case.

[ 41 ] During the argument I made it clear to counsel for the Bank that in light of all of the circumstances, I was not prepared to order interest payable, either prejudgment or postjudgment interest other than in accordance with the Courts of Justice Act.

[ 42 ] In these circumstances, I fix the prejudgment interest on $18,491.23 in accordance with the rate stipulated in the Courts of Justice Act, R.S.O. 1990, c. C.43, rather than the interest rate stipulated in the line of credit which had been cancelled by the Bank. Postjudgment interest is recoverable at the rate as stipulated in the Courts of Justice Act, as of today’s date.

[ 43 ] Similarly, I significantly curtail the Bank’s request for costs in the amount of $43,000. Taking into account the facts and circumstances of this case and the criteria stipulated in Rule 57 of the Rules of Civil Procedure, I fix costs of this motion in the amount of $2500, payable by the plaintiff to the defendants commensurate with the amount in dispute, and taking into account the Bank's conduct.

J. Wilson J

Released: as amended October 12, 2012

COURT FILE NO.: CV-08-00360060
DATE: 20121012

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ANTHONY GYIMAH
Plaintiff – and –
THE BANK OF NOVA SCOTIA, SCOTIA LINE VISA, MIKE MCKEIL and AVIN SHARMA
Defendants

AMENDED REASONS FOR JUDGMENT

J. Wilson J.

Released: October 12, 2012