ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-13-480546
DATE: 20150709

BETWEEN:

Rosen Lyubomirov Andonov

Plaintiff

– and –

The Toronto-Dominion Bank

Defendant

Bernard B. Gasee, for the Plaintiff

Eric Golden and Chad Kopach, for the Defendant

HEARD: February 11, 2015 and May 25, 2015

Pollak J.

[1] The Plaintiff, Mr. Andonov, seeks repayment of money taken from his bank account by the Defendant, The Toronto-Dominion Bank (“TD”). TD alleges that it had the right to take its payments owing on a car loan made to Mr. Andonov. Mr. Andonov denies he had a car loan with TD. He submits that his loan application to TD was cancelled before it was approved by TD, and that TD advanced money to the car dealer. Further, he submits that TD’s acceptance and approval of the loan was never communicated to Mr. Andonov.

[2] Mr. Andonov asks for repayment of the $19,618.80 withdrawn by TD for the alleged car loan payments. He also claims damages for:

(i) $30.00 paid for bank statements from TD;

(ii) $30.00 paid for courier of affidavit to TD;

(iii) $50.00 payment for swearing an affidavit.

As well as general and punitive damages for:

(i) credit history;

(ii) bank account;

(iii) breach of customer service;

(iv) breach of good faith obligations by TD, which includes Mr. Andonov’s concern that TD did not respond properly in writing or at all to his letters, and his concerns about alleged “fraud,” after he received letters and calls from the “fraud” department of TD.

[3] Mr. Andonov claims that TD harmed his credit record by reporting that he had a loan with TD that did not exist.

[4] As well, Mr. Andonov objects to the fact that the decision made by TD after investigating his complaint was communicated to him via telephone instead of in writing as he had requested.

[5] After making his complaint to TD, Mr. Andonov continued to pay for the loan “under protest” so that his credit history would not be further harmed.

[6] There are two motions for summary judgment – one brought by TD for dismissal of Mr. Andonov’s claim and one brought by Mr. Andonov for judgment against TD. Each party has the burden of proof on its motion. Both parties agree that there are no genuine issues requiring a trial and that the test set out in the Supreme Court of Canada case, Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, has been met. I agree that this is an appropriate case for summary judgment.

[7] On his motion for summary judgment, Mr. Andonov has the burden of proving that he is entitled to the relief that he is seeking. TD has the burden of proving its defence to Mr. Andonov’s claim. Mr. Andonov must prove that TD took money from his bank account without having any legal right to do so. TD’s defence is that it entered into a contract with Mr. Andonov for a loan for the purchase of a car. Mr. Andonov’s evidence is that he applied for a loan online through TD’s agent, a car dealer. However, after his application and before the Loan Agreement was entered into, he told the dealer that he did not want to buy the car and cancelled his loan application. TD admits that the car dealer was its agent for the purposes of arranging the loan. Mr. Andonov claims that TD never communicated its acceptance of his application to him and, further, that TD’s requirements for entering into the Loan Agreement were not met.

[8] The Import Motor Sales Company (“IMSC”) was a car dealership authorized by TD to assist its car buyers to get financing. TD sent $16,000 to IMSC on November 10, 2008. Mr. Andonov never bought the car. IMSC did not return TD’s $16,000.

[9] IMSC’s registration as a used car dealer was terminated by the Ontario Motor Vehicle Institute Council in September of 2009. Tibyann Inc., carrying on business and registered as Import Motors, is located in IMSC’s former premises. Amin Eltayeib, a former employee of IMSC, is a director and salesperson at Tibyann Inc.

The Loan Documents

[10] As evidence on these motions, TD relied on the Affidavit of Ms. Pauline Larose, the “team manager in advanced collections” at TD. She states as follows:

“11. Now shown to me and marked as Exhibit "4" to this affidavit is a copy of TD's electronic file for the Loan from an on-line loan placement platform called "Fiserv " (the "Fiserv Notes"). TD used the "Fiserv" platform in November, 2008 to process on-line car loan applications.

12. In November, 2008, IMSC's customers were able to apply for financing from TD online using Fiserv. Loan information would be entered into Fiserv online at the dealership, and TD's loan forms were printed at the dealership for execution by the customer. The forms would then be sent to TD for review and processing.

13. According to page 3 of the Fiserv Notes, for the Loan for the First Audi through Fiserv on or about November 6, 2008 at 1:15 p.m. The purchase price for the First Audi was $17,900.00, with a $5,000.00 down payment to IMSC. After adding taxes and other charges, the total amount owing for the First Audi was $20,792.53, and the amount to be financed by TD was $15,792.53 (the "Loan Proceeds"). The term of the Loan was to be for 60 months, and the Monthly Payments were $326.98, with an annual interest rate of 8.89%. Accordingly, the total co t of the Loan to the plaintiff was $19,618.80 ($326.98 per month, over 60 months).

14. At 1:56 p.m. that same day (i.e. November 6, 2008) the Loan was approved "with poi via noa”. I am advised by Rosa Oney, the TD employee with the Auto Finance Group ("TDAF") at the time responsible for processing the Loan application, that this note means the approval was subject to proof of income, which was to be proved by way of notices of assessment from Canada Revenue Agency.

15. At the time, TD required on-line car loan applications to be accompanied by signed application documents, which were typically sent to TD by fax. On November 6, 2008, at approximately 4:18 p.m. (according to the information in the fax banner), TD received the plaintiff’s Loan documents by way of an 11-page fax from "Import" (the "November 6 Fax") Attached hereto and marked as Exhibit "5" to this affidavit is a copy of the November 6 Fax, save for page 8. Ms. Oney advises me that page 8 to the November 6 Fax was likely a copy of the plaintiff’s driver's license, which would have been shredded once the Loan was approved.

16. The November 6 Fax included signed copies of the bill of sale for the First Audi (the "First Audi Bill of Sale") and TD's indirect credit application (the "Loan Application"). It also included an unsigned copy of a sales finance contract for the Loan (the "Loan Agreement"), and a pre-authorized debit form permitting TD to withdraw the Monthly Payments under the Loan from the Andonov Account (the "PAD Form"). Finally, the November 6 Fax included a copy of a bank draft dated November 6, 2008, in the amount of $10,000.00 made payable to "Import Motor Sales Company Ltd." (the "$10K Bank Draft"). As set out above, the plaintiff’s down payment for the First Audi was supposed to be $5,000.00.

17. Based on the Fiserv Notes, TD also received a fax on November 7, 2008, which included proof of the plaintiff’s income. TD no longer has a copy of the November 7, 2008 fax documents, as they would have been shredded once the Loan was approved.

18. The Fiserv Notes contain an entry dated November 10, 2008 at 9:45 a.m. that states, among other things, "please refax contract with seller's signature and proof of 5k downpayment returned back to customer". This note was made by Ms. Oney.

19. Ms. Oney advised me that she made this note because the Loan Agreement in the November 6 Fax was unsigned, and because the Fiserv Notes, Loan Application and Loan Agreement all referred to a down payment of $5,000.00 for the First Audi, but the $10K Bank Draft included with the November 6 Fax was in the amount of $10,000.00.

20. While the note asks the contract to be refaxed with the "seller's signature'', the note indicates “Customer/s signature/initial required”. This accords with the fact that the Loan Agreement in the November 6 Fax did not bear the plaintiff’s signature.

21. Further, Ms. Oney advises me that while TD did not require proof of down payment on its loan transactions, she made the note regarding the return of $5,000.00 because she assumed that the $1OK Bank Draft was the down payment for the First Audi.

22. On or about November 10, 2008, TD received a 6-page fax from “Import” (the “November 10 Fax”). Attached hereto and marked as Exhibit "6" to this affidavit is a copy of the November 10 Fax.

23. The November 10 Fax included a copy of the Loan Agreement signed by the plaintiff. It also included another copy of the $10K Bank Draft, but with the addition of a handwritten notation that "this deposit for other vehicle it is not belong to this deal”. The Loan was approved following receipt of the signed Loan Agreement and the explanation that the $10K Bank Draft did not relate to the Loan.

24. The Loan Agreement was signed by "Amin Eltay" on behalf of IMSC. The handwritten note on the $10K Bank Draft also appears to have been signed by "Amin Eltay", as the name beside the signature is "Amin", and the signature is the same as Amin Eltay's signature on the Loan Agreement”.”

[11] Mr. Andonov’s evidence is that he never knew that the TD Car Loan was approved or that monies had been advanced to IMSC, TD’s agent. He thought that he had cancelled the Loan Application by telling an unidentified employee of IMSC (TD’s agent) on November 6, 2008, that he was cancelling his loan application because he cancelled the purchase of the car he needed the financing for.

[12] TD admits that IMSC was an agent of TD. The evidence is that IMSC had been TD’s agent since approximately 2000 and that TD provided financing for cars that IMSC leased or sold, and paid referral fees to IMSC. Mr. Andonov submits that when he told IMSC, TD’s agent, of the loan cancellation, TD had deemed knowledge of the Loan Application cancellation. Because of the cancellation of the sale of the car, the car ownership was not transferred to or registered in Mr. Andonov’s name. IMSC returned Mr. Andonov’s $5,000.00 deposit to him and sold that car to another buyer in December 2008.

[13] Mr. Andonov submits that transfer of the ownership and car registration to Mr. Andonov were important conditions precedent for the advance of the funds to IMSC by TD, and that these conditions precedent were not met. The evidence is that these are TD’s requirements for advancing the Car Loan funds. TD should not have sent the $16,000 to IMSC. TD did not ask about or ensure that its requirements for the loan were met before it sent $16,000 to IMSC on November 10, 2008. IMSC kept this money and went out of business in September of 2009.

[14] Further, in the spring of 2011, TD removed its Personal Property Security Act, R.S.O. 1990, c. P.10 (“PPSA”) registration on the car so that a Mr. Corr could buy the car. TD had knowledge, in the spring of 2011, that Mr. Andonov never bought the car.

[15] TD investigated Mr. Andonov’s complaint and concluded that he had a valid car loan, for which he was liable.

[16] In order to prove its defence to Mr. Andonov’s claim, TD must prove the existence of a Loan Agreement to justify the withdrawals it made for Mr. Andonov’s account. To do so, TD relies on the loan application signed by Mr. Andonov on November 6, 2008. TD further relies on the fact that Mr. Andonov made 48 payments before he complained (in November, 2012) about TD’s withdrawals. The bank urges the Court to reject Mr. Andonov’s evidence that he told IMSC to cancel the application as his evidence, as a whole, is “so implausible that it cannot be believed”.

[17] Mr. Andonov did not get any documentation from TD advising him of the approval of his loan. His evidence is that he was not looking for withdrawals for loan payments in his bank account.

[18] Mr. Andonov’s evidence was that he or his wife would sometimes quickly review the TD bank statements which showed the withdrawals with a “LN” designation. He states that his wife usually paid the family bills. Either he or his wife would look at the statement quickly each month. TD submits that this evidence is hearsay, not credible and that the Court should draw an adverse inference against Mr. Andonov because he has not adduced the evidence of his wife or from IMSC employees on this motion.

[19] As Mr. Andonov did not receive anything from TD to advise him that the loan was approved and that the money was sent to IMSC, he had no reason to be looking for these bank withdrawals. Also, TD did not copy Mr. Andonov on its registered PPSA financing statements to Mr. Andonov or provide him with a loan number or contact information.

[20] TD emphasizes that Mr. Andonov reviewed his account statements and waited four years before making a complaint to TD, when IMSC had already stopped carrying on business. Neither IMSC nor Eltay are defendants to Mr. Andonov’s action. TD complains that it now has no recourse against IMSC for a claim for contribution and indemnity. TD submits that it has been prejudiced by the four year delay of Mr. Andonov to tell them that he had told IMSC that he cancelled the loan application and that he had not bought the car. It should be noted that TD could have, and did not introduce, evidence of the former IMSC employee who is now employed at Import Motors and did not do so.

[21] TD relies on the fact that Mr. Andonov signed the application for the loan which it alleges included the Loan Agreement (with the Repayment Provision). In so doing, TD establishes that the Loan was a valid loan and the payments were therefore properly deducted from Mr. Andonov’s TD bank account. As well, each payment was shown on the monthly account statement for his TD bank account. Mr. Andonov admits he got and reviewed all of his account statements.

[22] TD relies on the Loan Agreement, which provides that he agreed to make all payments under the Loan, even in the event of “…a dispute with or claim against [IMSC] with respect to the car or for any other reason.”

[23] Mr. Andonov admits he signed the Loan documents and that he did not tell TD (because he told their agent, IMSC) that he had cancelled the loan.

[24] TD also relies on an “authorization” form signed by Mr. Andonov as part of his Loan Application. This form, however, did not include the amount to be withdrawn or the timing of such withdrawals. Mr. Andonov therefore submits that this form was not a valid withdrawal authorization.

[25] Mr. Andonov submits that the alleged “credibility” issues raised by TD are on collateral issues which are unrelated to the relevant facts of this case.

[26] The only evidence on when the loan was approved by TD is in paragraph 14 of Ms. Larose’s evidence:

14. At 1:56 p.m. that same day (i.e. November 6, 2008) the Loan was approved “with poi via noa”. I am advised by Rosa Oney, the TD employee with the Auto Finance Group (“TDAF”) at the time responsible for processing the Loan application, that this note means the approval was subject to proof of income, which was to be proved by way of notices of assessment from Canada Revenue Agency.

There is no evidence that Mr. Andonov was notified of TD’s acceptance of his loan application, and no argument or submission made that, because of TD’s acceptance of the application, the Loan Agreement was in effect.

[27] Mr. Andonov’s signature on the Loan Agreement (in his application) is dated November 6, 2008. This is the same day that he testified that he told IMSC that he was cancelling his loan application.

[28] TD’s evidence included only pages 2 and 3 of the Loan Agreement, and not a copy of the entire agreement. There were no representations made on what was contained in the first page of the Agreement.

[29] TD admits that IMSC was its agent for the purposes of this financing and does not argue that IMSC was Mr. Andonov’s agent. There is no provision in the pages of the agreement produced by TD with respect to when this loan takes effect or how TD’s acceptance is to be communicated to Mr. Andonov.

[30] TD argues forcefully that Mr. Andonov’s evidence that he cancelled the loan application cannot be believed. TD has the burden of proving that a Loan Agreement was entered into with Mr. Andonov. To do so, in accordance with basic contractual principles, TD must prove there was an offer and acceptance by TD which was communicated to Mr. Andonov.

[31] TD urges the Court to infer that IMSC “must have told Mr. Andonov about the TD's acceptance” because TD’s acceptance of the offer was faxed to IMSC. The Court will not make this inference as there is no reasonable evidentiary basis to do so.

[32] Further, the evidence is that TD did not make any inquiry as to whether such condition was fulfilled, notwithstanding the fact that TD’s acceptance of the loan was conditional on proof of ownership of the car for which financing was sought. As well, TD subsequently obtained evidence that Mr. Andonov had never bought the car as TD had notice that its PPSA registration against Mr. Andonov had to be removed so a purchaser could buy that car from IMSC.

[33] In light of the above, it is not necessary for the Court to make a determination on the issue of whether IMSC, TD’s agent, was told by Mr. Andonov that he had cancelled his loan application. I find that TD has not met its burden of proving that its acceptance of Mr. Andonov’s offer to borrow money from TD was accepted by TD and communicated to Mr. Andonov.

[34] I find that TD has not been able to prove its defence that the Loan Agreement was entered into with Mr. Andonov. I therefore find that TD had no legal right to make the withdrawals from Mr. Andonov’s bank account.

[35] At the hearing, TD withdrew its alternate argument concerning the terms and conditions of Mr. Andonov’s TD bank account, from which the monies were withdrawn, regarding the obligation on Mr. Andonov to advise TD that the withdrawals were unauthorized.

[36] On the basis of the above-noted findings, I conclude that Mr. Andonov has met his burden of proof on his motion for summary judgment. He is therefore entitled to be paid for the monies withdrawn by TD from his bank account ($19,618.80), as the Loan Agreement was never in effect contractually. There is no evidence that Mr. Andonov received any of the $19,618.80 that was given to IMSC. He is also entitled to pre-judgment and post-judgment interest in accordance with the Court of Justice Act, R.S.O. 1990, c. C.43. The amounts referred to in paragraph 2, above, can be dealt with as disbursements in the cost award.

[37] I find that Mr. Andonov is not entitled to any of the further damages he claims, as he has presented no evidence of damages suffered in connection with those claims.

Costs

[38] The Plaintiff has been the successful party on this trial and is therefore entitled to a cost award. If the parties are unable to agree on the cost award, they may make brief written submissions as follows:

The Plaintiff’s costs submissions must be delivered by 12:00 p.m. on July 22, 2015; and the Defendant’s costs submissions must be delivered by 12:00 p.m. on July 31, 2015. In accordance with what the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provide, the submissions should not exceed three pages in length.

Pollak J.

Released: July 9, 2015

COURT FILE NO.: CV-13-480546
DATE: 20150709

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Rosen Lyubomirov Andonov
Plaintiff

– and –

The Toronto-Dominion Bank
Defendant

REASONS FOR JUDGMENT

Pollak J.

Released: July 9, 2015