Amex Bank of Canada v. Adams et al., (2014) 462 N.R. 277 (SCC)

• Judge: McLachlin, C.J.C., LeBel, Abella, Rothstein, Cromwell, Moldaver and Wagner, JJ.
• Court: Supreme Court (Canada)
• Case Date: February 13, 2014
• Jurisdiction: Canada (Federal)
• Citations: (2014), 462 N.R. 277 (SCC);2014 SCC 56

Amex Bank of Can. v. Adams (2014), 462 N.R. 277 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2014] N.R. TBEd. SE.005

Amex Bank of Canada (appellant) v. Sylvan Adams, Attorney General of Quebec and Président de l'Office de la protection du consommateur (respondents) and Attorney General of Canada, Attorney General of Ontario, Attorney General of Alberta and Canadian Bankers Association (interveners)

(35033; 2014 SCC 56; 2014 CSC 56)

Indexed As: Amex Bank of Canada v. Adams et al.

Supreme Court of Canada

McLachlin, C.J.C., LeBel, Abella, Rothstein, Cromwell, Moldaver and Wagner, JJ.

September 19, 2014.

Summary:

This class action was authorized respecting repayment of the conversion charges imposed by Amex Bank of Canada on credit card and charge card purchases made in foreign currencies primarily on the basis that the conversion charges violated Quebec's Consumer Protection Act (CPA). The class included both consumer and non-consumer cardholders of both credit and charge cards. Charge cards were similar to credit cards, except that the balance due at the end of the delay provided had to be repaid in full (i.e., no balance could be carried forward to the next month). The representative plaintiff was Adams.

The Quebec Superior Court, per Gascon, J., in a decision with neutral citation 2009 QCCS 2695, rejected Amex's argument that conversion charges were part of the "exchange rate" disclosed to and imposed on cardholders. As a result, he concluded that Amex violated the general disclosure requirement imposed by s. 12 of the CPA from 1993 to 2003. Gascon, J., ordered repayment of all conversion charges collected from consumer cardholders between 1993 and 2003 pursuant to s. 272 of the CPA. Gascon, J., also rejected Amex's constitutional arguments that the CPA did not apply to them due to the doctrines of interjurisdictional immunity and paramountcy. Gascon, J., also accepted Adams' argument that all cardholders, both consumers and non-consumers, were owed restitution of the conversion charges imposed during the period of non-disclosure under arts. 1491 and 1554 of the Civil Code of Québec (CCQ). Accordingly, restitution in the amount of $9,561,464 for consumer cardholders and $3,536,432 for non-consumer cardholders was ordered on a collective basis. Amex appealed.

The Quebec Court of Appeal, in a decision with neutral citation, 2012 QCCA 1394, agreed that the doctrines of interjurisdictional immunity and paramountcy did not apply to render the CPA inapplicable or inoperative. The court characterized Gascon, J.'s, conclusion that the conversion charge was not part of the "exchange rate" as a finding of fact, or at most a mixed question of law and fact. As Amex failed to demonstrate a palpable and overriding error in this conclusion, Gascon, J.'s, finding, and thus his order for restitution of a payment not due, stood. Amex appealed.

The Supreme Court of Canada dismissed the appeal. Sections 12, 219 and 272 of the CPA were constitutionally applicable and operative. There was no basis on which to overturn the trial judge's factual conclusions. Amex violated s. 12 of the CPA and had to, under s. 272(c) of that Act, reimburse the conversion charges collected from the consumer class members between 1993 and 2003 as described by the trial judge. Although the CPA did not apply to non-consumer class members, the court reasoned that there was no obligation on the part of Amex cardholders to pay the conversion charge and the receipt of a payment not due provisions of the CCQ applied (arts. 1491, 1492 and 1554). Accordingly, under art. 1699 of the CCQ Amex owed restitution of the conversion charges to the non-consumer class members.

Banks and Banking - Topic 712

Duties of banks - General - Duty re credit cards (incl. disclosure requirements) - [See Constitutional Law - Topic 2511 and Creditors and Debtors - Topic 1408 ].

Constitutional Law - Topic 2511

Determination of validity of statutes or Acts - General principles - Interjurisdictional immunity - This class action was authorized respecting repayment of the conversion charges imposed by Amex Bank of Canada on credit card and charge card purchases made by both consumer and non-consumer cardholders in foreign currencies because the conversion charges violated Quebec's Consumer Protection Act (CPA) - Charge cards were similar to credit cards, except that no balance could be carried forward to the next month - Amex claimed that the relevant provisions of the CPA were neither applicable or operative under the doctrines of interjurisdictional immunity or federal paramountcy - The Supreme Court of Canada, for the reasons given in the companion case of BMO v. Marcotte, held that the doctrines of interjurisdictional immunity and federal paramountcy did not apply - See paragraph 25.

Constitutional Law - Topic 3504

Paramountcy of federal statutes - General principles - Requirement of conflict or repugnancy - [See Constitutional Law - Topic 2511 ].

Constitutional Law - Topic 3614

Paramountcy of federal statutes - Overlapping legislation - Conflict - What constitutes - [See Constitutional Law - Topic 2511 ].

Constitutional Law - Topic 6161

Federal jurisdiction (s. 91) - Banking - General - [See Constitutional Law - Topic 2511 ].

Consumer Law - Topic 2032

Contracts of credit - General provisions - Disclosure of interest rate and other charges - [See Creditors and Debtors - Topic 1408 ].

Consumer Law - Topic 2278

Contracts of credit - Consumer's remedies - For nondisclosure of charges and fees - [See Creditors and Debtors - Topic 1408 ].

Creditors and Debtors - Topic 1408

Credit cards - General - Cardholder agreements (incl. disclosure agreements) - Conversion charges - A trial judge determined that Amex Bank of Canada failed to disclose conversion charges to cardholders on purchases made in foreign currencies between 1993 and 2003 - Therefore, the conversion charges should not have been charged to its consumer cardholders under the Quebec Consumer Protection Act (CPA) and to its non-consumer cardholders pursuant to the Civil Code of Quebéc (CCQ) - The Supreme Court of Canada held that there was no basis on which to overturn the trial judge's factual conclusions - Amex violated s. 12 of the CPA and had to, under s. 272(c) of that Act, reimburse the conversion charges collected from the consumer class members between 1993 and 2003 as described by the trial judge - Although the CPA did not apply to non-consumer class members, the court reasoned that there was no obligation on the part of Amex cardholders to pay the conversion charge and the receipt of a payment not due provisions of the CCQ applied (arts. 1491, 1492 and 1554) - Accordingly, under art. 1699 of the CCQ Amex owed restitution of the conversion charges to the non-consumer class members - See paragraphs 26 to 40.

Quebec Obligations - Topic 76

Source of obligations - Fortuitous event - Receipt of a payment not due - [See Creditors and Debtors - Topic 1408 ].

Cases Noticed:

Bank of Montreal v. Marcotte et al. (2014),  462 N.R. 202; 2014 SCC 55, appld. [para. 1].

Marcotte v. Fédération des caisses Desjardins du Québec (2014), 462 N.R. 296; 2014 SCC 57, refd to. [para. 1].

Service aux marchands détaillants ltée (Household Finance) v. Option consommateurs, 2006 QCCA 1319, leave to appeal refused, [2007] 1 S.C.R. xi, refd to. [para. 36].

International Paper Co. v. Valeurs Trimont Ltée, [1989] R.J.Q. 1187, refd to. [para. ].

Statutes Noticed:

Civil Code of Québec, art. 1491 [para. 28]; art. 1554, art. 1699 [para. 19].

Consumer Protection Act, C.Q.L.R., c. P-40.1, sect. 12, sect. 219 [para. 14]; sect. 271, sect. 272 [para. 15].

Authors and Works Noticed:

Baudouin, Jean-Louis, and Jobin, Pierre-Gabriel, Les obligations (7th Ed. 2013), pp. 624 [para. 31]; 1139 [para. 38].

Lluelles, Didier, and Benôt Moore, Droit des obligations (2nd Ed. 2012), pp. 657, 658 [para. 37]; 663 [para. 38]; 725 [para. 29]; 734, 735 [para. 31].

Counsel:

Mahmud Jamal, Sylvain Deslauriers, Silvana Conte, Alberto Martinez, W. David Rankin, Anne-Marie Lizotte and Alexandre Fallon, for the appellant;

Peter Kalichman, Catherine McKenzie and Mathieu Bouchard, for the respondent, Sylvan Adams;

Jean-François Jobin, Francis Demers and Samuel Chayer, for the respondent, the Attorney General of Quebec;

Marc Migneault and Joël Simard, for the respondent, Président de l'Office de la protection du consommateur;

Bernard Letarte and Pierre Salois, for the intervener, the Attorney General of Canada;

Janet E. Minor and Robert A. Donato, for the intervener, the Attorney General of Ontario;

Robert J. Normey, for the intervener, the Attorney General of Alberta;

John B. Laskin and Myriam M. Seers, for the intervener, the Canadian Bankers Association.

Solicitors of Record:

Osler, Hoskin & Harcourt, Montreal, Quebec, and Toronto, Ontario; Deslauriers & Cie, Montreal, Quebec, for the appellant;

Irving Mitchell Kalichman, Montreal, Quebec, for the respondent, Sylvan Adams;

Bernard, Roy& Associés, Montreal, Quebec, for the respondent, the Attorney General of Quebec;

Allard, Renaud et Associés, Trois-Rivieres, Quebec, Office de la protection du consommateur, Trois-Rivieres, Quebec, for the respondent, Président de l'Office de la protection du consommateur;

Attorney General of Canada, Montreal, Quebec, for the intervener, the Attorney General of Canada;

Attorney General of Ontario, Toronto, Ontario, for the intervener, the Attorney General of Ontario;

Attorney General of Alberta, Edmonton, Alberta, for the intervener, the Attorney General of Alberta;

Torys, Toronto, Ontario, for the intervener, the Canadian Bankers Association.

This appeal was heard on February 13, 2014, before McLachlin, C.J.C., LeBel, Abella, Rothstein, Cromwell, Moldaver and Wagner, JJ., of the Supreme Court of Canada. The following joint reasons for judgment were delivered for the court on September 19, 2014, by Rothstein and Wagner, JJ.