Court File and Parties

COURT FILE NO.: CV-23-00703278-0000 DATE: 20230725 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

UTHAYAKUMARAN JEYANANDAN, ANUSHA UTHAYAKUMARAN, 2810050 ONTARIO LIMITED and 2522155 ONTARIO LIMITED Applicant – and – BMO WEALTH MANAGEMENT, BMO INVESTORLINE and BMO FINANCIAL GROUP Respondents

Counsel: David Marcovitch, for the Applicants Geoff Hall, for the Respondents

HEARD: July 25, 2023 Papageorgiou J.

Overview

[1] The Applicants sought to bring an urgent ex parte motion against the Respondents (“BMO”) to restrain them from closing the Applicants’ bank accounts. The Application does not appear to have been issued.

[2] Justice Vermette reviewed this matter and determined that it should proceed to a case conference on notice to BMO.

[3] Today counsel for BMO appeared having been given only two hours-notice.

[4] At the case conference before me today, the Applicants sought an interim injunction restraining the closing of their accounts coupled with the scheduling of the interlocutory injunction on an urgent basis.

[5] BMO opposed this.

[6] Although the Applicants had provided a Motion Record, they did not provide a factum and did not attend with case law in support of their position.

Decision

[7] For the reasons that follow, I am neither granting the interim injunction today nor scheduling this injunction to proceed on an urgent basis.

Analysis

[8] In arriving at my conclusion, I have considered the test for an interim injunction and interlocutory injunction which is the same:

(a) First a preliminary assessment must be made of the merits of the case. An interlocutory injunction typically requires a party to demonstrate a serious issue to be tried. However, where a mandatory injunction is sought, the moving party must demonstrate a strong prima facie case. to ensure that there is a serious question to be tried.

(b) Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused.

(c) Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits.

International Relief Fund for the Afflicted and Needy (Canada) v. Canadian Imperial Bank of Commerce, 2013 ONSC 4612 at paras 27 to 33 citing R.J.R. MacDonald Inc. Canada (Attorney General), [1994] S.C.J. No. 17, at para. 43 (S.C.C.)

[9] In International Relief Fund, Allen J. concluded that where a party seeks an injunction restraining a bank from closing an account, it is in the nature of a mandatory order which requires the moving party to demonstrate a strong prima facie case.

Have the Applicants demonstrated a strong prima facie case?

[10] I find that the Applicants have not demonstrated a strong prima facie case, although if the test was a substantial issue to be tried, I would have found that they meet that test.

[11] Counsel for the Applicants referenced s. 627.17(1) of the Bank Act, S.C. 1991, c. 46, which requires a bank to open accounts for natural persons where the individual presents with certain specified information. Section 627.18 provides that a bank need not open an account for a natural person in certain circumstances which include a reasonable belief that the account will be used for fraudulent purposes or where it is necessary to do so to protect customers or in any prescribed circumstances.

[12] Section 627.19 provides that where a bank refuses to open such account, it must provide a statement that it is not doing so as well as the information set out in section 627.65 which includes its procedures for complaints as well as the name of an external complaints body. I note that there is no requirement set out in the Bank Act that a bank must provide an explanation as to why it will not open an account, and then as a corollary, no requirement that a bank provide an explanation for a decision to close an account.

[13] The Applicants argue that there is a constitutional issue and a potential breach of s. 7 of the Charter because of the Bank Act’s failure to prescribe any requirement that a bank provide a reason for a closure as banking is an essential service.

[14] The Applicants then refer to section 989 which sets out that where a bank does not comply with any provision of the Bank Act, the complainant may seek an Order from the Court restraining the conduct complained of. Therefore, there is a basis for injunctive relief if a bank has breached the Bank Act.

[15] In response, BMO references case law which establishes that a bank is entitled to close an account upon giving reasonable notice: International Relief Fund at para 32. The Applicants made no reference to any case law which contradicted this law, even though they have been aware of this coming closure for several months and even though they have had counsel representing them since May 12, 2023.

[16] Where parties seek to bring urgent motions of this nature, they must attend with case law which supports their position. In the absence of any law to the contrary I accept the case law referenced by BMO above.

[17] Here, the Applicants’ own Motion Record sets out that BMO advised the Applicants Uthayakumaran Jeynandan and 2522155 Ontario Limited as early as April 27, 2023, that BMO would be closing these Applicants’ accounts. This triggered a complaint made by these Applicants. BMO did not close these accounts pending consideration of this complaint.

[18] On May 17, 2023, Mr. Raju Sidhi, a lawyer with BMO’s anti-money laundering and regulatory compliance department wrote to the Applicants advising that BMO was standing by its decision to close these accounts. However, he did arrange an extension of the account closures to June 1, 2023.

[19] On May 23, 2023 BMO then wrote advising that it would be closing the accounts for 2810050 Ontario Limited as of June 25, 2023. Then on June 5, 2023 it wrote advising that it would be closing Anusha Uthayakumaran’s account as of July 5, 2023.

[20] There were further extensions agreed to with BMO advising that it would close Ms. Uthayakumaran’s account by July 26, 2023 and Mr. Uthayakumaran’s personal and business accounts by July 26, 2023.

[21] Thus, the Applicants have been aware that BMO has had concerns about their accounts for several months, and they have been given several extensions.

[22] Therefore, on the law before me, I find that the Applicants have not demonstrated a strong prima facie case that the bank has failed to provide reasonable notice. It is my view that the notice provided was reasonable, particularly since as will be set out below, they have had sufficient time to open accounts with Meridian and Duca Credit Union.

[23] If the test was a serious issue to be tried, I would find that they meet that test on the basis of the materials before me since there may be some basis for an argument that a bank should provide some explanation as to why it is choosing to close an account notwithstanding the provisions of the Bank Act. This may constitute a novel argument.

[24] In any event, the Applicants’ uncontradicted evidence does not establish irreparable harm.

Have the Applicants established irreparable harm?

[25] The Applicants’ counsel asserted that BMO’s proposed closure of their accounts will freeze them out of the banking system which is an essential service. The Applicants did provide evidence that they approached TD, RBC, CIBC and National Bank, all of whom have indicated that they would not open an account for the Applicants.

[26] However, the Applicants have been able to establish accounts with Meridian and Duca Credit Union. Therefore, they will not be kept out of the banking system. They may not like it as much as banking with BMO, it may not be as advantageous, and these institutions may offer more limited services, but there is a place where they can deposit checks, pay their bills and make purchases.

[27] The evidence filed falls far short of the evidence required to establish irreparable harm.

[28] In addition, the Applicants have not provided any evidence which establishes that the alleged harm they will suffer by virtue of having to bank with Meridian and Duca Credit Union cannot be quantified or remedied in damages: International Relief Fund at para 38. Indeed, they did not even provide any information as to how banking with Meridian and Duca Credit Union is less advantageous. I note that there are allegations that BMO’s conduct is discriminatory, based upon their race, and that the proposed closure has already affected the Applicants’ credit rating. If they are able to prove these claims, they may have a claim for damages.

Have the Applicants established that the balance of convenience favours them?

[29] I conclude that the Applicants have not established a strong prima facie case or irreparable harm. As in International Relief Fund, I am influenced by the extraordinary nature of the relief requested together with the weak evidence in respect of irreparable harm. Therefore, the balance of convenience does not favour the Applicants.

[30] I add that I am concerned about the process employed by the Applicants here. They have been in communication with BMO for some time. BMO has provided extensions and they have had counsel corresponding directly with BMO since approximately May 12, 2023. The most recent notice from BMO, advising that the closure would take place on July 26, 2023, was sent to the Applicants on June 21, 2023—over one month ago.

[31] Yet they sought to bring this motion for this extraordinary relief at the eleventh hour on an ex parte basis.

[32] I agree that any urgency has been self-inflicted. There is no satisfactory explanation as to why the Applicants did not move sooner and why they chose to seek to move ex parte when they did. Had they sought to schedule the motion on notice, it could have perhaps been heard before the proposed closure, giving BMO a fair opportunity to respond with materials.

[33] At this stage, the closure is scheduled for tomorrow. As the evidence is insufficient for the Applicants to obtain an interim injunction (which test is the same as that for an interlocutory injunction) there is no point in scheduling a date for arguing an interlocutory injunction even on an urgent basis and even if the Applicants could provide better evidence in support of the relief claimed. The accounts will already be closed by the time this motion could be scheduled.

[34] Had they sought to schedule this motion when they learned these accounts would be closed tomorrow, I would have scheduled it. At this point, it is too late.

Justice Papageorgiou Released: July 25, 2023

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: UTHAYAKUMARAN JEYANANDAN, ANUSHA UTHAYAKUMARAN, 2810050 ONTARIO LIMITED and 2522155 ONTARIO LIMITED Applicant – and – BMO WEALTH MANAGEMENT, BMO INVESTORLINE and BMO FINANCIAL GROUP Respondents

REASONS FOR JUDGMENT Papageorgiou J. Released: July 25, 2023