Cassano v. TD Bk., (2007) 230 O.A.C. 224 (CA)

• Jurisdiction: Ontario
• Judge: Winkler, C.J.O., Rosenberg and Lang, JJ.A.
• Neutral Citation: 2007 ONCA 781
• Citation: (2007), 230 O.A.C. 224 (CA),2007 ONCA 781,87 OR (3d) 401,287 DLR (4th) 703,[2007] OJ No 4406 (QL),230 OAC 231,47 CPC (6th) 209,87 O.R. (3d) 401,230 OAC 224,(2007), 230 OAC 224 (CA),287 D.L.R. (4th) 703,[2007] O.J. No 4406 (QL),230 O.A.C. 224
• Date: 03 October 2007
• Court: Court of Appeal (Ontario)

Cassano v. TD Bk. (2007), 230 O.A.C. 224 (CA)

MLB headnote and full text

Temp. Cite: [2007] O.A.C. TBEd. NO.057

Paul Cassano and Benjamin Bordoff (plaintiffs/appellants) v. The Toronto-Dominion Bank (defendant/respondent)

(C46542; 2007 ONCA 781)

Indexed As: Cassano et al. v. Toronto-Dominion Bank

Ontario Court of Appeal

Winkler, C.J.O., Rosenberg and Lang, JJ.A.

November 14, 2007.

Summary:

The plaintiffs sued the Toronto-Dominion Bank (TD) respecting foreign currency transactions conducted with credit cards issued by TD. Their central claim was that TD breached its contract with its Visa credit card holders by charging undisclosed and unauthorized fees in respect of those foreign currency transactions. Specifically, the plaintiffs alleged that there were three components to the fees that TD charged its Visa cardholders for foreign currency transactions during the putative class periods and that two of these, a "conversion fee" and an "issuer fee", were undisclosed and unauthorized under the terms of the relevant cardholder agreements. The plaintiffs sought certification of the action under the Class Proceedings Act (CPA).

The Ontario Superior Court, in a decision reported at [2005] O.T.C. 161, dismissed the motion. The plaintiffs appealed.

The Ontario Divisional Court, in a decision reported at [2006] O.A.C. Uned. 403, dismissed the appeal. The plaintiffs appealed.

The Ontario Court of Appeal allowed the appeal.

Practice - Topic 208

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - For damages - The plaintiffs sued the Toronto-Dominion Bank (TD) respecting foreign currency transactions conducted with credit cards issued by TD - Their central claim was that TD breached its contract with its Visa credit card holders by charging undisclosed and unauthorized fees in respect of those transactions - The plaintiffs sought certification of the action under the Class Proceedings Act (CPA) - The Ontario Court of Appeal held that the motions judge erred in holding that a determination of compensatory damages was unmanageable because of a need to assess how individual cardholders would have behaved had they known of the allegedly undisclosed fees - The cardholder agreement's terms gave TD an option of disclosing fees and amending the agreement, but not of presenting cardholders with a hypothetical choice of asking what they would have done if disclosure of certain fees had been made retroactively in accordance with the cardholder agreement's terms - In fashioning such an option, the motions judge engaged in a tort-like approach to assessing damages - He asked what would have happened if TD had not breached its contractual obligations, rather than asking whether TD had alternative means of complying with its existing contractual obligations - See paragraphs 26 to 37.

Practice - Topic 208

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - For damages - The plaintiffs sued the Toronto-Dominion Bank (TD) respecting foreign currency transactions conducted with credit cards issued by TD - Their central claim was that TD breached its contract with its Visa credit card holders by charging undisclosed and unauthorized fees in respect of those transactions - The plaintiffs sought certification of the action under the Class Proceedings Act (CPA) - TD objected that it would take 1,500 people about one year to identify and record the foreign exchange transactions on the cardholder statements that were available only on microfiche and that this would cost about $48,500,000 - The Ontario Court of Appeal held that the economic argument advanced by TD ignored the fact that the damages calculation would only be necessary if TD was found to have breached the contract with its cardholders - Therefore, the essence of its argument was that the recovery phase of the litigation, subsequent to a finding of liability, would cause it to incur significant expense - The court stated that "It would hardly be sound policy to permit a defendant to retain a gain made from a breach of contract because the defendant estimates its costs of calculating the amount of the gain to be substantial. A principal purpose of the CPA is to facilitate recovery by plaintiffs in circumstances where otherwise meritorious claims are not economically viable to pursue. To give any effect to the economic argument advanced by TD here would be to pervert the policy underpinning the statute" - See paragraphs 48 and 49.

Practice - Topic 208

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - For damages - The plaintiffs sued the Toronto-Dominion Bank (TD) respecting foreign currency transactions conducted with credit cards issued by TD - Their central claim was that TD breached its contract with its Visa credit card holders by charging undisclosed and unauthorized fees in respect of those transactions - Specifically, the plaintiffs alleged that there were three components to the fees that TD charged its Visa cardholders for foreign currency transactions during the putative class periods and that two of these, a "conversion fee" and an "issuer fee", were undisclosed and unauthorized under the terms of the relevant cardholder agreements - The plaintiffs sought certification of the action under the Class Proceedings Act (CPA) - The Ontario Court of Appeal held that this was an appropriate case for assessing damages on an aggregate basis under s. 24 of the CPA - See paragraphs 39 to 53.

Practice - Topic 209.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Certification - Considerations (incl. when class action appropriate) - [See all Practice - Topic 208].

Practice - Topic 209.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Certification - Considerations (incl. when class action appropriate) - The plaintiffs sued the Toronto-Dominion Bank (TD) respecting foreign currency transactions conducted with credit cards issued by TD - Their central claim was that TD breached its contract with its Visa credit card holders by charging undisclosed and unauthorized fees in respect of those transactions - Specifically, the plaintiffs alleged that there were three components to the fees that TD charged its Visa cardholders for foreign currency transactions during the putative class periods and that two of these, a "conversion fee" and an "issuer fee", were undisclosed and unauthorized under the terms of the relevant cardholder agreements - The plaintiffs sought certification of the action under the Class Proceedings Act (CPA) - The Ontario Court of Appeal agreed with the motions judge's conclusion that the requirements of ss. 5(1)(a) and (b) of the CPA were satisfied in this case (the pleadings disclosed a cause of action and there was an identifiable class of two or more persons that would be represented by the representative plaintiff) - See paragraph 24.

Practice - Topic 209.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Certification - Considerations (incl. when class action appropriate) - The plaintiffs sued the Toronto-Dominion Bank (TD) respecting foreign currency transactions conducted with credit cards issued by TD - Their central claim was that TD breached its contract with its Visa credit card holders by charging undisclosed and unauthorized fees in respect of those transactions - Specifically, the plaintiffs alleged that there were three components to the fees that TD charged its Visa cardholders for foreign currency transactions during the putative class periods and that two of these, a "conversion fee" and an "issuer fee", were undisclosed and unauthorized under the terms of the relevant cardholder agreements - The plaintiffs sought certification of the action under the Class Proceedings Act (CPA) - The Ontario Court of Appeal agreed with the motions judge's conclusion that the issue of whether TD charged its cardholders an unauthorized fee or fees when converting the debits and credits incurred in a foreign currency to Canadian dollars and, if so, when, why and what were the particulars, raised an acceptable common issue under s. 5(1)(c) of the CPA of whether there was a breach of contract - See paragraph 25.

Practice - Topic 209.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Certification - Considerations (incl. when class action appropriate) - The plaintiffs sued the Toronto-Dominion Bank (TD) respecting foreign currency transactions conducted with credit cards issued by TD - Their central claim was that TD breached its contract with its Visa credit card holders by charging undisclosed and unauthorized fees in respect of those foreign currency transactions - The plaintiffs sought certification of the action under the Class Proceedings Act (CPA) - The Ontario Court of Appeal granted the application on appeal - The motions judge's conclusion that a class proceeding was not the preferable procedure flowed from his interpretation of the contract and his finding that it would be necessary to conduct individual examinations of class members to ascertain their subjective reaction to the undisclosed fees, as well as how, if at all, their credit card use would have been affected by their knowledge of these fees - Individual assessments of cardholder behaviour were not required to determine the extent of liability, particularly where an aggregate assessment of damages under s. 24 was possible - However, even if the common issues judge determined that it was not appropriate to award aggregate damages, a class action was still the preferable procedure in light of the governing principles that applied to the preferable procedure inquiry under s. 5(1)(d) - See paragraphs 54 to 68.

Practice - Topic 209.3

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Certification - Considerations (incl. when class action appropriate) - The Ontario Court of Appeal stated that it was generally only appropriate to refer to possible defences among the list of common issues when they rose to the level of making a subclass necessary under s. 5(2) of the Class Proceedings Act - Otherwise, setting out defences as common issues had the inherent risk of compromising the defendant's position at the common issues trial - Common issues were not intended to supplant pleadings - Moreover, the defendant at the common issues trial would unquestionably raise the defences that were also common by way of response to the allegations contained in the common issues - See paragraph 71.

Practice - Topic 209.9

Persons who can sue and be sued - Individuals and corporations - Status or standing - Class actions - Appeals (incl. leave to appeal) - Plaintiffs sought certification of their action under the Class Proceedings Act (CPA) - A motions judge dismissed their motion - The Divisional Court upheld the motions judge's decision - The Ontario Court of Appeal stated that "The motion judge is an experienced class action judge. His decision is entitled to substantial deference ... The intervention of this court should be limited to matters of general principle ... However, legal errors by the motion judge on matters central to a proper application of s. 5 of the CPA displace the deference usually owed to the certification motion decision" - See paragraph 23.

Cases Noticed:

Chadha v. Bayer Inc. et al. (2001), 147 O.A.C. 223; 54 O.R.(3d) 520 (Div. Ct.), affd. (2003), 168 O.A.C. 143; 63 O.R.(3d) 22 (C.A.), leave to appeal denied (2003), 320 N.R. 399 (S.C.C.), refd to. [para. 18].

Markson v. MBNA Canada Bank, [2004] O.T.C. 692; 71 O.R.(3d) 741 (Sup. Ct.), affd. (2005), 204 O.A.C. 94; 78 O.R.(3d) 39 (Div. Ct.), revsd.(2007), 224 O.A.C. 71; 85 O.R.(3d) 321, refd to. [paras. 23, 40].

Cloud et al. v. Canada (Attorney General) et al. (2004), 192 O.A.C. 239; 247 D.L.R.(4th) 667; 73 O.R.(3d) 401 (C.A.), leave to appeal denied (2005), 344 N.R. 192 (S.C.C.), refd to. [para. 23].

Hickey-Button v. Loyalist College of Applied Arts & Technology (2006), 211 O.A.C. 301; 267 D.L.R.(4th) 601 (C.A.), refd to. [para. 23].

Blake v. Attorney-General, [2001] A.C. 268 (H.L.), refd to. [para. 27].

Bank of America Canada v. Mutual Trust Co. et al., [2002] 2 S.C.R. 601; 287 N.R. 171; 159 O.A.C. 1, refd to. [para. 27].

Withers v. General Theatre Corp., [1933] 2 K.B. 536 (C.A.), dist. [para. 31].

Hamilton v. Open Window Bakery Ltd. et al., [2004] 1 S.C.R. 303; 316 N.R. 265; 184 O.A.C. 209, reving. in part (2002), 157 O.A.C. 222; (2002), 58 O.R.(3d) 767 (C.A.), dist. [paras. 31, 34].

Hollick v. Metropolitan Toronto (Municipality) et al., [2001] 3 S.C.R. 158; 277 N.R. 51; 153 O.A.C. 279, refd to. [para. 38].

Williams v. Mutual Life Assurance Co. of Canada et al. (2003), 170 O.A.C. 165; 226 D.L.R.(4th) 112 (C.A.), refd to. [para. 71].

Kumar v. Mutual Life Assurance Co. of Canada - see Williams v. Mutual Life Assurance Co. of Canada et al.

Counsel:

Harvey T. Strosberg, Q.C. and Paul J. Pape, for the appellants;

Lyndon A.J. Barnes, Laura K. Fric and Allan D. Coleman, for the respondent.

This appeal was heard on October 3, 2007, by Winkler, C.J.O., Rosenberg and Lang, JJ.A., of the Ontario Court of Appeal. Winkler, C.J.O., released the following reasons for decision for the court on November 14, 2007.