BCSC on Prepaid Cards

A recent decision out of British Columbia drew attention to a novel situation: are prepaid cash cards issued by a financial institution deposit accounts?

All Trans Financial Services Credit Union Limited sold prepaid Visa and Mastercards to customers, who could then use the payment cards wherever Visa and Mastercard were accepted. When the Financial Institutions Commission (FIC) investigated, they determined that this was an unauthorized deposit business, contrary to s.81 of the Financial Institutions Act. The FIC  ordered All Trans to cease selling these prepaid cards within 30 days of the release of the order. All Trans appealed to the BCSC, where the order was overturned.

This decision is currently under appeal. As noted in commentary by Robert Dawkins and D. Ross McGowan of Borden Ladner Gervais: Prepaid Cards: Deposit Accounts? Or Something Else?

…  The decision on appeal may have a significant impact on financial institutions seeking to use creative FinTech approaches to expand their reach and service offerings, as well as FinTech start-ups.  Careful consideration to program design is critical to ensure that issuers and program managers structure their card products to meet the regulatory needs for their specific goals.

Other commentary:

Deposit Accounts – Payment Cards (The Lawyers Daily)

 

Case Summary – Homestead Rights

[3] …  Do joint tenants who are spouses have homestead rights?  At what point can a homestead cease being a homestead?  Do homestead rights continue after the untimely death of one of the spouses even though the spouses were separated and had engaged in a course of dealing sufficient to make it clear that they intended their property to be divided equally?

These are the issues defined by Dunlop, J. in Siwak v. Siwak, 2018 MBQB 9. The parties were married and had purchased a home in joint tenancy. They were separated and in the middle of dividing their assets when Mrs. Siwak died. A previous decision (2016 MBQB 61) had severed the property into a tenancy in common. Mrs. Siwak’s estate is seeking partition and sale of the property in order to distribute the assets to her beneficiaries. Mr. Siwak claims he has established an estate for life flowing from his initial homestead rights.

[28]      Even though Mr. Siwak and Mrs. Siwak lived separate and apart for almost one year and nine months before Mrs. Siwak died and despite the fact that they engaged in a course of dealing sufficient to sever the joint tenancy, it is clear that on a strict reading of the Act, Mr. Siwak had homestead rights at the time of Mrs. Siwak’s passing.  One of the primary goals of homestead legislation is to provide a surviving spouse with a life estate in a homestead.  Upon the death of Mrs. Siwak, Mr. Siwak realized a life estate in the property.

 

Delay and Civil Litigation

Trial delays are a long-standing issue in the justice system. The latest amendment to Manitoba’s Queen’s Bench Rules, effective January 1, 2018,  addresses that head on. A recent Alberta Court of Appeal decision, Humphreys v. Trebilcock, 2017 ABCA 116 (leave to appeal to the Supreme Court of Canada dismissed) thoroughly examines this issue. 

The plaintiffs commenced their action, a claim that the defendants engaged in fraudulent business practices, on December 14, 2006. A trial would not likely take place until 2020.

[175]      The plaintiffs have not provided a satisfactory excuse to account for their failure to press their action ahead with reasonable expedition. They do not allege that the defendants have engaged in acts either intended or having the effect of interfering with the ordinary advance of the action.

[176]      Has the inordinate and inexcusable delay for which the plaintiffs are responsible impaired an important interest of the defendants? If so, is it sufficiently important to justify an order dismissing the plaintiffs’ action?

[177]      The moving parties have proved that it is more likely than not that the nonmoving parties’ inordinate and inexcusable delay has caused them nonlitigation and litigation prejudice.

Further commentary is available on Lexology:

Unanimous Supreme Court of Canada Denies Leave on Chronic Delay Case, Dalton W. McGrath and Michael O’Brien of Blake, Cassels & Graydon LLP

 

 

ONCA on Mortgage Enforcement

When homeowners fall behind on their mortgage payments, lenders have the option of foreclosure. Judges have leeway to reach a decision that is equitable to the lender as well as sympathetic to the mortgagor. In Winters v. Hunking, the Court of Appeal overturned a default judgment ordering foreclosure.

The recent decision of the Court of Appeal for Ontario in Winters v Hunking, 2017 ONCA 909 provides an example of the court acknowledging that the mortgagor may have been within its strict legal rights to seek foreclosure on the appellant’s home, but finding that “special circumstances” made such a foreclosure unjust in the circumstances.[FN]

Winters v. Hunking, 2017 ONCA 909

[FN] Commentary by Scott McGrath, Weir Foulds LLP available on Lexology:

Lenders Should Think Twice Before Foreclosing on Sympathetic Mortgagors

 

 

 

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