Royal Bank of Canada v. King

CITATION: 2013 ONSC 3025 COURT FILE NO.: 13-39281 DATE: 2013-05-24

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Royal Bank of Canada, plaintiff AND: Leslie King, defendant

BEFORE: Mr Justice Ramsay

COUNSEL: Ms Amanda Jackson for the plaintiff the defendant in person

HEARD: 2013-05-23 at Hamilton

ENDORSEMENT

[1] The Royal Bank of Canada (RBC) moves for summary judgment on two mortgage loans, a line of credit, an overdraft loan and a credit card. The parties are in agreement that the loans were advanced. The defendant submits that a trial is required to assess his defences.

[2] First, he says that he repaid the loan. The documentary evidence shows that the defendant submitted an EFT requisition drawn on the Bank of Montreal in the amount of $275,000. The requisition, dated September 9, 2012, was delivered to the plaintiff between September 17 and October 2, 2012. As a result, the payment was posted to his account and he received a statement showing that the amount had been paid. On October 4, 2012 he met his bank manager, who gave him a printout showing a zero balance on his loans. Belinda Lund, an employee of the plaintiff, deposed by affidavit that the requisition (which looks just like a cheque) was returned by the Bank of Montreal “account closed.” She has produced the requisition, which bears a stamp “Item dishonoured” and a notice that says that it was returned because the account was closed. The day on which this happened is cut off on the copy that is available, but we do have the year and month: “2012-10.”

[3] The defendant in argument raises a number of reasons to doubt the truthfulness of Ms Lund’s deposition and the authenticity of the documents that she produces. Most of the arguments have to do with dates and timing and inconsistency with other RBC records. The arguments are easily answered as a matter of logic and common sense. The plaintiff recorded the payment and entered it into its records, produced the statement and the printout, and then got word of the fact that the payment had been dishonoured. There is nothing in the timing to give rise to any other reasonable possibility.

[4] Second, the defendant argues that the contract is void for lack of consideration. They did not give him cash money. I find that the way in which the funds were advanced, that is the usual way through bank accounts and credit cards, amounts to consideration.

[5] Third, the defendant argues that the bank misled him. They told him that he was the debtor and it the creditor, when it was really the other way around. He cites in support Foley v. Hill, [1843-60] All E.R. 16, in which the House of Lords said that the bank is the debtor and the customer is the creditor. The House of Lords was talking about a customer who deposits money, not someone who takes out a loan.

[6] Fourth, the defendant argues that the mortgages are void because they are not accompanied by a promissory note. He cites a dictum of the United States Supreme Court in Carpenter v. Longan, 83 US 271 (1873) to the following effect:

The note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.

[7] The Court was dealing with a case in which a promissory note was given, and a mortgage was given as security therefor. The case decides the rights of a subsequent holder of the note who took it in good faith without notice that partial payment had been made on the mortgage. It has nothing to do with a mortgage that is given as security for a loan without a promissory note and which is never assigned. As the Court said, “The case is a different one from what it would be if the mortgage stood alone …”

[8] Finally the defendant argues that the plaintiff has no right to sue because it is not the holder in due course of the relevant bill of exchange. This is not a bill of exchange case. There is no bill of exchange and nothing is held in the course of assignment. The plaintiff is the original creditor on all five loans.

[9] The plaintiff’s evidence demonstrates that the money was advanced and was not repaid. The defendant’s evidence raises no arguable challenge. The defendant has an obligation to repay the money under the terms of the contracts. A trial is not necessary so to determine.

[10] Summary judgment will issue to the plaintiff in the terms of paragraph 1 of the notice of motion. The plaintiff is awarded pre-judgment interest at the contractual rates and post-judgement interest at the rate fixed by law. The plaintiff is entitled to substantial indemnity for costs by the terms of the contracts, and I order the defendant to pay costs on that basis accordingly. If necessary, the plaintiff may submit a draft order to me directly for signature.

J.A. Ramsay J.

Date: 2013-05-24