NEWMARKET COURT FILE NO.: CV-18-00136283-00

DATE: 20190521

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Royal Bank of Canada

Plaintiff

– and –

David Pady and Sandra Pady

Defendants

N. Marconi, for the Plaintiff

O. Strawczynski, for the Defendant, Sandra Pady

HEARD: April 25, 2019

REASONS FOR DECISION ON SUMMARY JUDGMENT MOTION

CASULLO J.:

Overview

[1] This action arises from indebtedness on credit card accounts. RBC brings a motion for summary judgment against the defendant, Sandra Pady (“Ms. Pady”). David Pady (“Mr. Pady”) consented to judgment on an outstanding line of credit at a prior hearing.

[2] Mr. Pady was the primary cardholder on a Visa credit card issued by RBC. Ms. Pady was the co-applicant. On joint Visa accounts, such as the one held by the Padys, RBC issues a Visa card with a unique number to each joint account cardholder, but there is only one account.

[3] The monthly statements were addressed to both Mr. and Ms. Pady and sent to their home. The monthly statements break down each cardholder’s purchases, but provide a shared balance owing.

[4] The bank statements contain other information as well, including but not limited to the credit limit, the interest rate, the minimum payment, available credit, RBC rewards point balance, and points earned. This information is expressed as one collective number on the statement, and is not separated out for each cardholder.

[5] A review of the monthly statements demonstrates that Ms. Pady was a frequent user of her card, for both personal and household use, including charges at luxury designer stores, high-end specialty food purveyors, and upscale travel.

[6] The outstanding balance owing is $26,067.74.

Positions of the Parties

[7] RBC submits that, despite the fact that each of the Padys had a separate card, there was only one account, and each of them is liable for the balance.

[8] Each time a credit card is issued, RBC sends a cardholder agreement to its customers. The agreement sets out the terms under which cardholders may use their credit card, including the following:

When this Agreement refers to “you” or “your”, it includes each person who signed or submitted the Credit Card Application, whose name is on the Account or to whom a Credit Card on the Account has been issued (each Credit Card issued on the Account will have its own unique card number) other than an Authorized User. If this includes more than one person, “you” means each of you. All of you are, individually and together, responsible under and bound by this Agreement. This means that each of you is fully responsible for amounts owing on the Account, irrespective of which one of you incurred or which Credit Card was used to incur any particular charge. The amounts for which you are responsible include any amounts that may have been owing on your Account at the time your Credit Card issued.

And, further:

This Agreement is your promise to pay amounts owing on your Account. You should read it carefully as it explains your rights and duties. The signing, activation or use of a Credit Card on your Account number by you or an Authorized User means that you have received and read this Agreement and agree to and accept all of its terms.

[9] Each monthly statement includes information important to the cardholder. In particular, RBC advises that “Primary and Co-applicant cardholders (but not Authorized Users) are responsible for all amounts charged to the Account.”

[10] Authorized users are not liable for account balances. Unlike primary cardholders and co-applicants, authorized users do not receive monthly statements, nor do they have the benefit of accumulating or redeeming RBC reward points. There is no evidence that Ms. Pady was in fact an authorized user, or that she understood she was an authorized user.

[11] Customers are not asked to sign the agreement. The only document customers are required to sign is the back of the credit card.

[12] All Visa cards have a warning at the back where the credit card holder is to sign, alerting them to two facts:

• By using the card, they are subject to the terms of the cardholder agreement; and

• By signing the card, they acknowledge they have received the agreement.

[13] Ms. Pady agrees that she has had a supplementary card on Mr. Pady’s Visa account since 1986. However, she states that Mr. Pady, as the primary cardholder, is responsible for the outstanding account. It was he who managed the household finances, and all dealings with RBC. All mail received from RBC was opened and handled by Mr. Pady.

[14] According to Ms. Pady, not only has she never seen the credit card statements, she has never signed a credit card application.

Analysis

[15] The Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A (“CPA”) makes it clear that once a consumer uses a credit card, they are deemed to have entered into the credit agreement with the issuer of the card. Section 68(1) states:

Despite section 13, a consumer who applies for a credit card without signing an application form or who receives a credit card from a credit card issuer without applying for it shall be deemed to have entered into a credit agreement with the issuer with respect to the card on first using the card.

[16] The CPA provides a complete answer to Ms. Pady’s defence. The same conclusion has been reached by other courts in the following decisions: Royal Bank v. Lau, 2008 64679 (Ont. S.C.) , Royal Bank of Canada v. Petitclerc, 2016 ONSC 19, aff’d 2016 ONCA 716, and Royal Bank v. Kumar, 2008 CarswellOnt 9010, aff’d on other grounds 2009 ONCA 315.

[17] Ms. Pady argues that she did not apply for the credit card, and should not be liable for any charges to the card. This is not an answer that assists her – by virtue of using the card, she agreed to the terms of the credit card agreement.

[18] The credit card agreement clearly indicates that she is jointly and severally liable for all account debt.

[19] The face of the credit card statements clearly indicate that Ms. Pady is a co-applicant on the account.

[20] By using her Visa card, Ms. Pady was bound to the Visa cardholder agreement. The language is clear and unambiguous – a cardholder on the account is liable for the entire account balance.

[21] For the reasons set out above, I am satisfied there is no genuine issue requiring a trial. RBC shall have judgment against Ms. Pady in the amount of $26,067.74, together with interest at the prescribed rate of 11.99% per annum.

Costs

[22] I invite the parties to resolve the issue of costs on their own. If they are unable to do so, they are to make arrangements with the trial co-ordinator to schedule a costs hearing on a regular motions day in Newmarket. If written submissions are going to be relied upon, they should be filed by the plaintiff at least fifteen days in advance of the hearing, and by the defendant at least 10 days in advance of the hearing. No reply without leave of the court.

[23] In order to assess costs that are fair and reasonable, the reasonable expectations of the unsuccessful party are an important factor in the court’s determination. Both parties are to provide a bill of costs.

CASULLO J.

Released: May 21, 2019